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THE STORY OF THE DEPOSITORY TRUST & CLEARING CORPORATION
DTC had the regulatory pieces in place and had formed the core of its fiscal operations. Now, it was time for the organization to stand on its own. In early 1975, NYSE proposed selling DTC as a separate entity. One final legislative act pushed that sale forward. In 1975, Congress was ready to act on sweeping legislative changes that would impact DTC. The Securities Acts Amendments of 1975, signed into law by President Gerald Ford on June 4, established a national securities market system and a national clearance and settlement system. In October, with the runway cleared by that legislation, the SEC approved NYSE’s proposal to sell DTC. In the beginning, NYSE would maintain 61 percent ownership, with the other 39 percent divided among other exchanges. AMEX and NASD each owned 8 percent, with the remainder offered to entities based on how much they had used DTC’s services in 1974. By 1976, broker-dealers were allowed to purchase shares in DTC directly. At the decade’s end, some 55 entities owned shares in DTC, up from the 24 who initially bought in. With the passage of the Securities Acts, BASIC’s work was complete. Jaenike had returned to AMEX but had continued to serve as the committee’s recording secretary. At one of the final BASIC meetings, Dentzer recruited him to DTC as vice president, Participant Services.
An Immediate Impact
Quickly, DTC had enough participants “that people realized this is viable; this works,” said Donald Donahue, who would later become president and CEO. “After the elimination of fixed commissions, you see the acceleration in volumes that that triggered, and those much higher volumes were being accommodated in a way that, 10 years before, had been impossible and had created incredible
S. E. Canaday Jr. and William Stabenow, both of Nuveen asset management, review the benefits of same-day funds settlement eligibility for variable rate demand obligations with then-DTC Vice President Don Donahue.
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