Self-Regulatory Organizations; The Depository Trust Company; Order Approving Proposed Rule Change To Modify the DTC Settlement Service Guide and DTC Rules as They Relate to the DTC Net Debit Cap
Published Date: 2/3/2026
Notice
Summary
The Depository Trust Company (DTC) is updating its rules on how it sets the maximum amount of money participants can owe during daily securities settlements, called the Net Debit Cap. This change affects all DTC participants and their affiliated groups, aiming to improve risk management and keep the system safe and smooth. The new rules are approved and will take effect soon, helping protect the market without costing extra fees.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 3 costs, 0 mixed.
Net Debit Cap switches from fixed to flexible
DTC will replace the fixed Net Debit Caps of $2.15 billion per Individual Participant and $2.85 billion per Affiliated Family with a flexible cap that will not exceed DTC's available qualifying liquid resources. DTC's qualifying liquid resources include a $1.15 billion Participants Fund, a $1.9 billion committed line of credit, and up to $3.0 billion of senior notes under its Debt Issuance program; the Net Debit Cap will always be set lower than total available liquidity.
SPP needs fall for some participant families
DTC's Impact Study found that increasing the Net Debit Cap by $0.75 billion to $1.0 billion would likely reduce daily Settlement Progress Payments (SPPs) by $3.62 billion to $4.43 billion across 17 Participant families. The study indicates 17 of 179 Participant families would likely see a reduction in their need to send intraday SPPs.
DTC may add up to $3B in senior notes
DTC may issue senior notes under a Debt Issuance program in an aggregate amount not to exceed $3.0 billion to supplement and diversify its qualifying liquid resources for settlement. The Commission previously determined not to object to DTC's Advance Notice about this Debt Issuance.
More participants can be charged into Liquidity Fund
The Liquidity Fund component (currently $700 million) will no longer be funded only by Affiliated Families with Net Debit Caps over $2.15 billion; Unaffiliated Participants whose Net Debit Cap exceeds $2.15 billion will also be included in the Liquidity Fund allocation. DTC's Impact Study found that two Unaffiliated Participants would become subject to the Liquidity Fund under the change.
Affiliated Family cap blocks transactions equally
DTC updated Rule 9(B) so that a transaction will not process if it would cause any Participant in an Affiliated Family to exceed the Aggregate Affiliated Family Net Debit Cap, regardless of whether that Participant is the Instructor or the Contra Party. Transactions that would push the family over the cap will remain pending until the Net Debit Balance is reduced.
Individual participants bear full Liquidity Fund share
The Settlement Guide will state that within an Affiliated Family the Liquidity Fund allocation is split among family members by percentage, but an Individual (Unaffiliated) Participant pays the entire allocated portion assigned to that participant. The change clarifies how Liquidity Fund payments are allocated between families and individual participants.
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