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CHAPTER FOUR | MITIGATING RISK, SEIZING OPPORTUNITY
Dow Jones (June 19, 1987 – January 1, 1988)
The stock market crash of October 19, 1987, saw the Dow Jones Industrial Average fall 508 points (22.6 percent), making it the largest one-day percentage drop in the index’s history. The crash would impact DTC operations when a group of banking executives and economists known as the Group of Thirty recommended shortening the settlement cycle and discontinuing use of next-day funds for settling transactions.
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Donahue thought Dentzer was more concerned with whether the turmoil and investment would be worth the end result. “Bill certainly conveyed that was his view in some of the market forums. I think it was very clear, very early on, that he was a minority of one at best.” In 1994, as part of its preparations for shortening the trade settlement cycle, DTC replaced the old Institutional Delivery (ID) System with
1995 MAY DTC’s vault and physical securities processing capabilities begin serving Participants Trust Company (PTC), which handled Government National Mortgage Associations securities. In 1998, DTC would acquire PTC.
1995 JUNE
1995 DTC announces that it will remain at its headquarter offices on Water Street in downtown Manhattan, where it will share space with National Securities Clearing Corporation (NSCC) and PTC. The decision would save the firm approximately $26.5 million in real estate taxes and electrical costs.
1995 Midwest Securities Trust Company is absorbed into DTC. In 1997, the Philadelphia Depository Trust Company would join DTC.
The US Securities and Exchange Commission mandates that DTC move to a three-day settlement process by this date.
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