DTCC LIMIT MONITORING

Risk Mitigation Tool for Monitoring Credit Limits
RESOLVE THE ISSUE BEFORE IT’S TOO LATE
DTCC Limit Monitoring is a risk mitigation tool that leverages the largest aggregate equity trading information in the industry to bringusers unprecedented post-trade insights, updated in near real-time. The innovative post-trade risk monitoring tool will help clearing firms
manage exposure on their correspondents’ and their own trading activity by delivering message alerts for both early warning andbreaches of established credit limits. Clearing firms can utilize the information provided by DTCC Limit Monitoring to help determine
what action is appropriate.

OVERVIEW

Trading Systems, and a range of dark pools and liquidity destina-

Leveraging UTC’s vast universe of data, DTCC Limit Monitoring
provides its users with a continuously updated snapshot of theirtions in the U.S. submitted for clearance to NSCC.
The risk management tool provides the industry with an early

trading activities. It is designed to help clearing firms easily monitor

warning system that alerts clearing firms to trading activity that isand set trading credit limits in order to mitigate risk. These credit

nearing the credit limits they have set for their own and theirlimits will be based on industry agreed metrics and will be set bycorrespondents’ accounts, enabling them to step in and effectively

the clearing brokers.

manage potential risk. Clearing firms can utilize the information

DTCC Limit Monitoring is the only instrument in the U.S. market-generated by this risk mitigation tool to help determine what action

place that offers a single, centralized, aggregated view of allis appropriate for their executing firm.

broker-to-broker equity, listed corporate and municipal bond andGiven NSCC’s position in the marketplace, DTCC Limit Monitoring

unit investment trust trading cleared from all exchanges, Electronic

combines virtually all broker-to-broker equity, listed corporate andADVANCING FINANCIAL MARKETS. TOGETHER.™

municipal bond and unit investment trust trading in the U.S. toprovide aggregated exposure data that can be used to monitor thebehavior of market participants.

BENEFITS
Enhanced transparency and risk mitigation
DTCC Limit Monitoring leverages the largest aggregate equity
trading information in the industry to bring NSCC Members
aggregated exposure data that can be used to monitor the behaviorof their correspondents or clients. It helps firms mitigate risks byenabling clearing firms to monitor and set trading credit limits fortheir own and their correspondents’ or clients’ accounts.
The ability to see and respond to trading limit breaks
Input and update risk limits, breach alerts and start-of-day
exposure while monitoring individual daily trading limits innear-real time.
A scalable, effective solution at a low cost
The user-owned, low-cost business model allows DTCC to delivera large scale solution for a wide range of users at a low cost to ourclients. DTCC Limit Monitoring is a single, centralized risk management tool that can potentially reduce a firm’s technology costs.

HOW THE TOOL WORKS
In near real-time, the UTC platform will feed DTCC Limit Monitoring all broker-to-broker equity, listed corporate and municipal bondand unit investment trust trading cleared from all exchanges,
Electronic Trading Systems, and a range of additional dark pools
and liquidity destinations in the U.S. Users will have the ability toset limits on specific trading activities for individual clients at theexecuting broker level, including the ability to modify such limits
intraday. Users also have the ability to enter start of day exposure
information in an automated fashion. When the pre-selected “earlywarning” limit is reached or a breach on the established limit has
occurred, a standard protocol message will be disseminatedalerting the affected clearing broker.

WHO USES DTCC LIMIT MONITORING
All NSCC Member clearing firms who need to monitor correspondent firms and NSCC Member proprietary trading firms needing tomeet today’s more stringent regulatory requirements.

FOR MORE INFORMATION ON DTCC LIMIT MONITORING
Please contact your Relationship Manager.

© 2022 DTCC. All rights reserved. DTCC, DTCC (Stylized), ADVANCING FINANCIAL MARKETS. TOGETHER, and the Interlocker graphic are registered and unregistered trademarks of
The Depository Trust & Clearing Corporation.
The services described above are provided under the “DTCC” brand name by certain affiliates of The Depository Trust & Clearing Corporation (“DTCC”). DTCC itself does not provide suchservices. Each of these affiliates is a separate legal entity, subject to the laws and regulations of the particular country or countries in which such entity operates. See www.dtcc.com for a
detailed description of DTCC, its affiliates and the services they offer. (DTCC Public White) 27902_ER-052022