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THE STORY OF THE DEPOSITORY TRUST & CLEARING CORPORATION
to have records and we had microfilm,” Feuchtwanger said. “Everything had to track, and so we had to film every single piece of paper that went in and out of DTC so that we had a record.” This was an area that was prime for automation. DTC took initial steps to improve the process by turning to new technologies, such as optical scanners to remove the manual filming of documents.
Broadening Industry Support
Streamlining processes was vital. In the 1980s, several of the regional clearinghouses began to close, with settlement and depository functions moving to DTC and clearing moving to National Securities Clearing Corporation (NSCC). “Given DTC’s low fees due to its huge transaction volume and the widespread preference of banks outside of New York to use DTC, it was only a matter of time until regional exchanges tired of losing money on their depositories saw that DTC would not place them at a competitive disadvantage to NYSE,” Dentzer wrote. In 1981, the New England Depository Trust
In 1980, Wall Street was adopting more and more technology. DTC joined in by increasing its capabilities as well.
Company was folded into DTC. And in 1987, the Pacific Securities Depository Trust Company closed and its members moved over to DTC. This trend continued into the 1990s, with the Midwest Securities Trust Company being absorbed by DTC in 1995 and the Philadelphia Depository Trust Company in 1997. As the industry consolidated operations, NSCC continued to innovate. In 1985, the Automated Customer Account Transfer Service was launched to provide an efficient transfer of accounts between brokers. By the end of its first year, 100 firms were participating. The entire financial services industry was changing at the time. Several high-profile failures of government securities dealers drew federal intervention. The Government Securities Act (GSA) of 1986 was a sweeping bill that included a requirement for registration of government securities brokers and dealers. At the same time, the Treasury Department was moving away from issuing physical securities.
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