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DTCC stayed in action, returns to physical processing at Brooklyn center

Small sign of normalcy returning to financial sector, despite ongoing flood issues in lower Manhattan

Nov 2, 2012 @ 2:23 pm

By Davis Janowski

I took a bit of comfort in the prepared statement put out by the Depository Trust & Clearing Corporation today.

DTCC, the industry-owned utility that clears and settles securities transactions announced that it has resumed daily physical processing of securities from its Brooklyn operations center.

Just one more minor sign of quasi-normalcy returning to New York — juxtapose that against the more than block-long line snaking around the side of Grand Central Terminal I noted last night.

The cause?

Hundreds of folks in line awaiting a city bus seat home to Brooklyn from Manhattan.

I passed this on my cross-city walk home last night. And upon reaching home I looked out my window and noted the still near blackness across the Hudson in Hoboken and Jersey City, neither of which have power restored as yet.

Anyway, the DTCC announcement is welcome and shows that the organization is re-establishing some of its critical processing functions.

That despite their headquarters location in lower Manhattan having sustained significant water damage as a result of Hurricane Sandy's storm-surge-related flooding.

As noted in their release, the building remains inaccessible until power can be restored, the same goes for all of lower Manhattan.

Interestingly, they also point out that their vault was sealed prior to evacuating the building and remains submerged.

Rumors have begun to bounce all around the Interwebs that this means hundreds of millions worth of paper stock and securities certificates stored inside have been destroyed.

What no one will seem to go on the record about is whether that vault in particular is waterproof or not.

I was shocked to discover that many bank vaults are in fact not waterproof — mainly just meant to be break-in-proof/resistant and perhaps fire-resistant.

“Although sea water levels have returned to normal, the lower floors in the building remain flooded. Our computer records are fully intact, including detailed inventory files of the contents of the vault,” said Michael Bodson, chief executive of the DTCC in the statement.

Also of note, the part public, part private company did not stop operations since the storm landed.

Perhaps trying to escape any comparisons to the NYSE, which has taken a lot of heat over its contingency planning, the DTCC noted that they had seamlessly “…shifted clearing, settlement and other processes to multiple out-of region operations facilities.”

It's other subsidiaries including the DTC, FICC and NSCC, including Mutual Funds Services, Alternative Investment Products services, and Insurance & Retirement Services have continued to follow their normal processing schedules for all transactions and applications, the statement noted.

For additional information pay a visit to the DTCC' site online

Related stories:

Markets expected to open tomorrow, big banks will shift to other locations, some despite lack of serious damage

SEC OK latest boost for alts clearing service

Cost basis on mutual fund assets updated in DTCC system

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