Banking And Securities Industry Committee (BASIC)

What Is the Banking and Securities Industry Committee (BASIC)?

The Banking and Securities Industry Committee (BASIC) was laid out in 1970 to normalize, mechanize, and streamline the processing of stock certificates and options. This committee looked to uphold uniform rules and regulations with respect to the trading and settlement of securities. The Banking and Securities Industry Committee endeavored to reduce the physical exchange of stock certificates while transferring ownership. Its efforts finished in the creation of the Depository Trust Company.

Grasping the Banking and Securities Industry Committee (BASIC)

The National Association of Securities Dealers (NASD), the New York Clearing House Association, the New York Stock Exchange (NYSE) and major stock exchanges teamed up to form BASIC to determine the administrative work crisis in the securities industry coming about because of the bull market of the late 1960s.

During the late 1960s, numerous new investors entered the stock market, leading to increased trading volumes. Around then, trading included the physical trading of stock certificates. Because of these trading highs-at one point during the desk work crisis there were eight million shares traded each day-there were large measures of administrative work included. Investors required a method for smoothing out the interaction and make it more efficient.

In 1973, the Bank and Securities Industry Committee formed the Depository Trust Company (DTC), situated in New York City. The DTC is a member of the Federal Reserve and is registered with the Securities and Exchange Commission (SEC). Subsequent to converging with other security clearing companies, in 1999, the Depository Trust Company turned into a subsidiary of the Depository Trust and Clearing Company (DTCC). Today, the DTC is perhaps of the largest depository in the world and serves several unique capabilities as a manager of the financial system.

The main job of the DTC is as an electronic recordkeeper. The DTC is the clearinghouse that processes trades in both municipal and corporate securities and furthermore keeps an electronic record of information about securities. The DTC likewise gives dividend services to companies by dispensing dividends from the responsible company to the shareholders. It then, at that point, reports these payments. Last, the DTC acts as a custodian of corporate stocks and bonds, municipal bonds, and money market instruments. Because of the DTC, the New York Stock Exchange can handle billions of trades a day and there are trillions of dollars worth of securities held in the DTC.

Features

• The goal of the Banking and Securities Industry Committee (BASIC) was to reduce the physical exchange of stock certificates while transferring ownership and was laid out in response to the desk work crisis of the 1960s.
• The National Association of Securities Dealers, the New York Clearing House Association, the New York Stock Exchange and other major stock exchanges teamed up to form the Banking and Securities Industry Committee (BASIC) in 1970.
• The efforts of the Banking and Securities Industry Committee prompted the formation of the Depository Trust Company (DTC) in 1973, one of the world's largest stores and a manager of the financial system.