DTCC Protects Industry; Managing Record Volume and Volatility During Biggest Market Decline Since Sept. 11, 2001.

NEW YORK -- The Depository Trust & Clearing Corporation's (DTCC) equities clearing corporation subsidiary processed a record 76.7 million transactions worth more than $1.54 trillion on Feb. 27, a 53% increase over the peak volume in 2006.

The volume spike marked the beginning of a volatile five-day period for U.S. equity markets, when a plunge in the Chinese stock market and worries about economic growth at home and abroad sparked a sudden sell off, resulting in the highest volumes ever experienced by the clearing corporation. The Dow Jones industrials lost 416 points by market close that day, its biggest point drop since trading resumed after the Sept. 11, 2001, terrorist attacks. Transaction volumes for each of the following four trading days after Feb. 27 all substantially exceeded the peak volume in the prior year by 34%, on average.

"At DTCC, we understand that having the processing capacity to handle unpredictable spikes in trading volume and managing risk in volatile markets is critical to maintaining confidence that our markets will operate without interruption," said William B. Aimetti, DTCC's chief operating officer. "But just because this happens so seamlessly does not mean it should be taken for granted. While our role is carried out quietly behind the scenes, it's at times like this that the financial services industry is reminded of our trusted role as a leader in protecting the safety, soundness and competitiveness of U.S. capital markets."

National Securities Clearing Corporation (NSCC), the equities clearing corporation subsidiary of DTCC, provides clearance and settlement services of virtually all trades done on the New York Stock Exchange, Nasdaq, the American Stock Exchange and for all regional exchanges, electronic communications networks (ECNs) and alternative trading systems in the United States.

NSCC reports its activity by transactions processed, whereas the markets report volume based on shares traded. A single transaction can be 100 shares or over a 1,000 shares, representing either the buy-side or sell-side of a trade.

One of DTCC's core responsibilities in serving the major broker/dealers and banks that make up its customer base, as well as the marketplaces, is to ensure that there is adequate capacity in its systems to handle not only average volumes from the markets, but also unpredictable spikes in volume. DTCC regularly assesses volume patterns across the markets. In 2006, DTCC undertook an effort to increase its systems capacity to handle at least 160 million transactions a day.

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In addition to processing increased volumes during this period, NSCC effectively managed the risk that came with a volatile market. Aside from completing trade reporting and processing this activity through its Continuous Net Settlement (CNS) system, NSCC's risk management systems apply sophisticated tools to monitor the markets, identify stocks with significant price changes, and ensure that members have sufficient funds on deposit to cover intra-day price moves, all the while maintaining contact with both member firms and regulators.

Through CNS, NSCC nets down or reduces the value of trade obligations that require financial settlement, further reducing risk for the industry. Of the $1.54 trillion in total trades processed by NSCC on the peak day of Feb. 27, 98% of these obligations were netted down, requiring the actual exchange of funds for only $34 billion.

                          June 8, 2006   Feb. 27, 2007
Transactions              50.1 million    76.7 million
Value of transactions   $1.02 trillion  $1.54 trillion
Netting factor                     98%             98%
Final settlement value   $16.6 billion     $34 billion

About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's depository provides custody and asset servicing for 2.8 million securities issues from the United States and 100 other countries and territories, valued at $36 trillion. Last year, DTCC settled more than $1.5 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.