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DTCC Finds 1.3 Mln Soaked Securities in Sandy-Flooded NY Vault

The Depository Trust & Clearing Corp., which processes financial transactions and stores securities, has begun the long process of recovering about 1.3 million soaked securities that were stored in a 10,000-square-foot underground vault in a lower Manhattan skyscraper flooded by Superstorm Sandy.

The Depository Trust & Clearing Corp., which processes financial transactions and stores securities, has begun the long process of recovering about 1.3 million soaked securities that were stored in a 10,000-square-foot underground vault in a lower Manhattan skyscraper flooded by Superstorm Sandy.

The company declined to disclose the value of the stocks and bonds. But it was a "very small percentage" of the $39.5 trillion of stocks and bonds that its depository stores, DTCC spokeswoman Judy Inosanto said. The percentage of securities that are handled electronically are in the "high 90s", she said.

Inosanto declined to say when the company was able to open the vault at 55 Water Street, which was flooded more than two weeks ago by surges churned by Superstorm Sandy. But when it did, DTCC found significant flooding and water damage.

"While it is premature to determine the full extent of the damage, it is essential to begin the restoration process to avoid further deterioration," the company said in a statement.

DTCC said the recovery effort is more of "an administrative and logistical challenge than an economic issue."

It maintains a vast certificate inventory file with ownership information, which can be replicated from its data centers. The company said its computer records are intact, and includes detailed inventory files of the vault's contents.

DTCC has retained disaster recovery and expert restoration firms, but declined to identify them. It said it could not yet determine how many of the physical certificates can be restored. But it expects to have a more accurate assessment of their condition in about a week. The restoration process could take months, it said.

The company said it is in discussions with various transfer agents to establish a procedure to issue replacement certificates, without requiring the original certificates to be present.

Copyright 2010 by Reuters. All rights reserved.

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rbarber109
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rbarber109,
User Rank: Apprentice
11/16/2012 | 5:30:15 PM
re: DTCC Finds 1.3 Mln Soaked Securities in Sandy-Flooded NY Vault
A vault below street level at 55 "Water" street; what were they thinking?- Mayor Bloomberg tells everyone in lower Manhattan that a storm of biblical proportions is coming.- I guess that DTCC felt that they could walk on water and didn't have to heed the consequences.- Perhaps the SEC should be auditing DTCC's Disaster Recovery & Business Continuity plan; which appears to be all wet.- Now a DTCC rep says that this is an administrative issue not an economic issue; obviously he/she is not in touch with reality.- These securities should have been moved to their Long Island facility or to class 'A' vault north of Canal Street.- The cost of moving the securities would have been less than restoration or replacement.- The cost of the this restoration should be docked from the DTCC senior executives compensation.- They should not be rewarded for stupidity.
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