Demystifying DTC: The Depository Trust Company and the Municipal Bond Market

Anyone who practices in the world of municipal securities has been there: in a closing room filled with executed documents, anxiously anticipating the funding of the transaction. Months, maybe years, of work, conference calls, drafting sessions, lack of sleep, all concluded. What then follows is a mysterious call on a speakerphone involving the underwriter, the trustee, and the Depository Trust Company (“DTC”). Some pleasantries are exchanged, the title of the securities, participant numbers and principal amounts are shared and agreed to, mention is made to “updating FRAC,” and the deal is closed. What just happened?

The complete article, co-authored by David J. Fernandez, Robert J. Coughlin, Ryan L. Pratt, S. Douglas Williams Jr., David H. Williams Jr., and Stephen E. Weyl, was published by the National Association of Bond Lawyers in March 2017.