Series 99: 2.1.4.3 Settlement Service Providers

2.1.4.3  Settlement Service Providers

The National Securities Clearing Corporation (NSCC) is the largest provider of settlement services in the U.S. for broker-to-broker trades. The NSCC communicates with the selling and the purchasing broker-dealers and provides them with reports of net positions. While funds are transferred between buyers and sellers through the Federal Reserve System, no actual securities or certificates change hands. All shares are recorded using electronic book entry for each broker-dealer.

DTCC’s Omgeo provides settlement services for institutional traders.

The Fixed Income Clearing Corporation (FICC) clears and settles most government securities transactions. The FICC also clears and settles repurchase agreements. A repurchase agreement (repo) is a short-term contract to sell a security and buy it back later at a set, usually higher price. The securities that are subject to repurchase agreements are typically government debt, such as U.S. Treasurie