CLEARING AND SETTLEMENT
Clearing Services determines the fixed income security and monetary obligations of the trading participants, particularly as to who will deliver or receive either cash or security, in a transaction. It validates and reconciles details of transactions between trading participants prior to Settlement – which is the simultaneous, irrevocable and final exchange of securities and cash.
Through PDTC, the delivery of securities and payment of cash is on a delivery versus payment mode, assuring both parties that they do not part with their cash or security until the equivalent asset is delivered
A straight-through (end-to-end) process is observed in performing securities activities in the Fixed Income, Foreign Exchange, and Repo Markets. It involves the use of a single system to automatically process or control all elements of transactions from the point of first deal to final settlement.
PDTC likewise operates the Corporate Action Auto-Claim System (CAAC) which facilitates the trades of fixed income securities in a non-restricted environment among holders of different withholding tax statuses. The system provides a facility for the issuer of fixed income securities to track trade transactions between and among holders of its securities and account for the withholding tax paid and withheld by holders arising from their trades. The details of every trade are fed into the CAAC via real-time link with the Trading System, therefore recording all transfers of security ownership in the tax-tracked environment.