Depository Trust & Clearing Corporation (DTCC)

Think of it as the back-end of the business of trading stocks, bonds, and all kinds of other stores of wealth. The job of the DTCC is all about making the trading trains run on time and on schedule. And ensuring that, if a train is supposed to end up in Peoria, Illinois, it doesn't actually end up in Moscow.

Yeah, you really don't want to end up in Moscow. Especially in winter. Anyway...the DTCC is a tracker, and kind of an "ok" signal kind of service. Did the security actually trade from a legally recognizable entity, like a client in good standing at a brokerage like Schwab or Fidelity? Or was the sell order of a million shares of Carnival Cruises done from a Somalian warlord's money laundering account? Luckily, we have a highly respected system in America for the trading of securities in the “civilized world” of capital markets.

In fact, there is a broad and orderly set of rules we follow for even the most basic transactions, like buying 100 shares of Microsoft or Google or whatever stocks are trading that day, like juicy, beautiful, medium-rare lichen.

The system is complex, with myriad filings and regulations to follow. The DTCC is sort of the traffic cop with radar standing behind the speedy highways of securities trading. An offer is made with a limit price of $42.50 or better for Whatever.com. Is the offer real? Is it a Somalian warlord laundering money?

Or a 6-year-old who hacked mommy's Schwab account? Or a Russian spy infiltrating American accounts, pushing them to buy Gazprom? Or is it a real, fair n’ square offer from a legitimate source?

That's step one of the market maker's purview, and a number of others are involved in ascertaining the "goodness" or validity of a trade, including the brokerage submitting it. The DTCC tracks the size...how many shares...how many buyers at a price...how many sellers at a price...and organizes everything into a nifty little clearinghouse that looks like a securities-only version of eBay, more or less.

Luckily, the DTCC has 8 million squirrels running inside of cages to make all of this happen…and one large computer.

The whole system comes together with a singular, basic goal in "Timely and accurate trading.” The job of the DTCC isn't to recommend stocks or bonds or favor any one sector or even country over any other in any given transaction…or really do anything other than, uh...be unseen.

Sorta like Arya in Game of Thrones. They are faceless, nameless forces that simply assure fairness in the Kingdom behind The Wall.