Legal Definitions - Depository Trust Corporation

The Depository Trust Corporation (DTC) is a central clearing agency for securities transactions on public markets. It is responsible for settling trades and holding securities in custody for its participants.

For example, when an investor buys or sells a stock, the transaction is processed through the DTC. The DTC ensures that the trade is settled properly and that the securities are transferred to the appropriate parties.

The DTC is an important part of the financial system because it helps to ensure the smooth functioning of the securities markets. By providing a centralized clearing and settlement system, the DTC helps to reduce risk and increase efficiency in the trading process.