Taiwan Depository & Clearing Corporation

In response to the continued growth in Taiwanese investment in U.S. securities and the U.S. market’s accelerated move toward extended trading hours, a delegation led by Taiwan Depository & Clearing Corporation (TDCC) Chairman Bing-Huei Lin visited The Depository Trust & Clearing Corporation (DTCC) on July 28. The delegation was joined by representatives from major domestic securities firms offering sub-brokerage services, including Fubon Securities and SinoPac Securities. During the visit, the delegation met with DTCC CEO Frank La Salla and teams responsible for asset servicing, digital assets, and other relevant areas. The two sides exchanged views on 24-hours a day, five-days-a-week clearing services for U.S. equities, settlement security, corporate actions, and other key issues.

Chairman Lin noted that changes to U.S. market rules and post-trade infrastructure are closely connected to Taiwan’s sub-brokerage market. As U.S. equity trading moves toward 23 hours a day while operating under a T+1 settlement cycle, the time available for post-trade reconciliation, funding arrangements, end-of-day accounting, and the processing of corporate actions that may affect the following day’s trading has been significantly compressed. Through visits to the NYSE, Nasdaq, and DTCC, the delegation obtained first-hand information on the latest developments in the U.S. market and gained a clearer understanding of changes to its post-trade infrastructure. These insights will help further improve the efficiency of custody and settlement operations for Taiwan’s sub-brokerage services.

DTCC Advances 24/5 Clearing and Establishes a New Framework for U.S. Equity Settlement

DTCC stated that, beginning June 28 this year, it extended its clearing operations to 24 hours a day, five days a week. This enables overnight trades executed during Asian hours to enter central clearing and receive central counterparty, or CCP. By capturing trades earlier, expanding netting opportunities, and bringing transactions within the protection of a central counterparty, the new arrangement can reduce counterparty risk while enhancing the transparency and resilience of overnight trading.

At present, U.S. stock exchanges are moving toward 23/5 trading, while DTCC’s clearing services have entered a 24/5 operating model. However, the delivery of securities and funds continues to follow the T+1 settlement cycle and existing cut-off times. For Taiwanese securities firms offering sub-brokerage services, it is therefore not enough simply to confirm whether their front-end systems can accept orders. They must also understand how their U.S. executing brokers handle trade-date rollovers, late-arriving trades, settlement files, and exception processing.

Chairman Lin emphasized that the real significance of extended trading hours lies not merely in giving investors more time to trade, but in ensuring that post-trade clearing, settlement, custody, and accounting processes remain secure and seamlessly connected. TDCC will continue working with domestic securities firms and overseas custodian banks to review and optimize the relevant procedures. The objective is to ensure that, as market service hours are extended, settlement security and investor protection are strengthened at the same time.

Exploring Direct Access to DTCC Data to Accelerate Corporate Action Processing

Corporate actions are among the most complex cross-border securities operations and are particularly vulnerable to time-zone differences. Events such as stock splits, reverse stock splits, mergers, share exchanges, dividend distributions, and bankruptcy restructurings frequently involve multiple conditions and different effective dates. When event ratios, security identifiers, or entitlement details are confirmed at a late stage, domestic securities firms may have less time to notify investors and make the necessary accounting adjustments.

During the meeting, DTCC explained that it is currently advancing the digitalization of issuer announcements. Under the planned framework, issuers would submit corporate action information through standardized channels. Existing PDF documents and free-text announcements would then be converted into structured, machine-readable fields. This initiative is intended to reduce repetitive interpretation and verification by market institutions. DTCC’s goal is to shorten data-processing times so that most corporate action information can be made available to the market within hours of receipt.

Chairman Lin stated that TDCC plans to deepen its cooperation with DTCC and obtain corporate action data directly from DTCC. The purpose is not merely to improve the operations of a single institution, but to transform the clearing, settlement, and data-service capabilities of the U.S. market into shared infrastructure that can benefit Taiwan’s entire sub-brokerage market.

For securities firms offering sub-brokerage services, having TDCC centrally connect to, consolidate, and standardize DTCC data would support the establishment of consistent event codes, notification formats, operational deadlines, and version-control mechanisms. Such an arrangement would reduce manual reconciliation and duplicated work, lower system-development costs and operational risks, and allow securities firms across the market to access infrastructure services of the same quality.

Chairman Lin emphasized that TDCC will continue to deepen its cooperation with DTCC, global custodian banks, and domestic securities firms offering sub-brokerage services. With security, efficiency, and investor protection as its core priorities, TDCC will continue strengthening its cross-border custody and post-trade services. The goal is to ensure that domestic investors participating in international markets not only have access to a wider range of trading opportunities, but also benefit from securities services that are more timely, stable, and aligned with international standards.

TDCC Chairman TDCC Chairman Dr. Bing-Huei Lin (right) poses for a photograph with DTCC Chairman Frank La Salla.