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The Participants Fund and the Participants Preferred Stock Investment create liquidity and collateral resources to support the business of DTC and to cover losses and liabilities incident to that business.  For this purpose, every Participant has a Required Participants Fund Deposit and a Required Preferred Stock Investment.  Additionally, a Participant may make a Voluntary Participants Fund Deposit, to further support its activities. The Required and Voluntary Participants Fund Deposits must be in cash, which, if a Participant fails to settle for any reason, are available to DTC as immediate liquidity to complete settlement and collateral to support any borrowing against DTC lines of credit.

 

Amounts


Each Participant must make a minimum deposit of $7,500 to the Participants Fund. Many Participants are required to deposit additional amounts based upon a 60 business day rolling average of the Participant’s six highest intraday net debit peaks. A Participant’s portion of the Participants Fund is in direct relation to the liquidity requirements generated by the Participant and its Affiliated Family, if any, as more fully described below.

The aggregate Participants Fund includes four component amounts, as set forth below: the “Core Fund,” the “Base Fund,” the “Incremental Fund” and the “Liquidity Fund.” The Core Fund is set by DTC at an aggregate amount of $450 million and is comprised of the Base Fund and the Incremental Fund. The Base Fund is the sum of minimum deposits by all Participants, i.e., the amount that is $7,500, times the number of Participants, at any time. The Incremental Fund is the balance of the Core Fund up to $450 million; this is the amount that must be ratably allocated among Participants that are required to pay more than a minimum deposit.1 The Liquidity Fund component (set at $700 million) applies to Participants whose Affiliated Families have Net Debit Caps that exceed $2.15 billion.

The Required Preferred Stock Investment of a Participant must be in a minimum amount of a par value of $2,500. A Participant’s actual Required Preferred Stock Investment is calculated on a substantially similar basis to the calculation of the Required Participants Fund Deposit.

 

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1 Those Participants whose “PF Averages” (as defined below) exceed the total amount of the Base Fund are required to make a Deposit to the Incremental Fund.

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