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Collateralization ensures that your account has sufficient collateral for DTC to liquidate if you fail to pay your Settlement obligation and become insolvent. DTC's collateralization procedures prevent the completion of transactions that would cause your net debit to exceed the total available collateral in your account.

DTC operates on a fully collateralized basis. You are required to have sufficient collateral in your account to support net debits you incur. Transactions that would cause your net debit to exceed the total value of collateral in your account are held in a recycle (pend) queue until sufficient collateral is available.

Your primary sources of collateral are:

  • Cash deposited to the Participants Fund
  • Proprietary or firm positions (such as dealer, investment, or margin positions) that you designate as collateral
  • Securities received (and not paid for) versus payment
  • Securities added to your account and not received versus payment (such as deposits, free deliveries, free pledge releases, release of segregated securities) that you designate as collateral.

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