DTCC to Relocate its Storm-Damaged Vault
November 29, 2012
The Depository Trust and Clearing Corporation plans to re-locate the vault that held $35 trillion worth of paper securities at its headquarters in lower Manhattan, when the storm surge from Hurricane Sandy hit at the end of October.
The headquarters vault will be moved to another location, according to Judith Inosanto, vice president of communications for the securities industry’s clearing and settlement utility.
Where the new vault will be located won’t be disclosed, to protect the security of the securities it holds from physical threats. The existing vault, 40 years old, suffered significant water damage, Inosanto said.
The strong room stored roughly 1.3 million physical securities. DTCC is currently in an extensive restoration effort, trying to salvage the certificates.
But, in the great majority of cases, the value and ownership of the certificates won’t be lost, if the document itself can’t be restored. DTCC officials said that the vast majority of certificates, probably more than 95 percent, are backed up in electronic form, elsewhere. Meanwhile, DTCC officials are mopping up the physical damage.
“We are currently in the restoration process to avoid further deterioration. It is too early to determine how many of the physical certificates can be restored and the restoration process will take some time, possibly months,” according to Inosanto.
Still, DTCC officials said electronic records of all the certificates are secure. “DTCC,” the utility said in a press release, “maintains a robust certificate inventory file with ownership information that can be replicated from our multiple data centers.”
DTCC said that the certificate recovery process is “more of an administrative and logistical challenge than an economic issue.”
The building in which DTCC is housed has been ill-starred in the past month. Besides being inundated by Sandy, fire broke out in the basement last Friday while workers were trying to effect repairs.
Twenty-seven of the workers were treated for smoke inhalation. All were working on repairs.
DTCC’s workers and executives have not yet returned to 55 Water Street. There was no impact on DTCC or its employees as a result of the fire. But a power inspection as well as a full health and safety inspection will need to be completed before DTCC can look to return.
“Our headquarters remain inaccessible,” says Inosanto. “The building cannot provide an exact date at this time on a return to our offices,” she said.
The headquarters of ratings agency Standard & Poor’s also are located in 55 Water Street. None of its records were affected by the fire and that none of its personnel was in the building at the time.
S&P operations are going on in various parts of the New York, New Jersey and Connecticut region. The firm has "been up and operational since about a week after the storm," spokesman Ed Sweeney said.
Some workers at housed at parent company McGraw-Hill Companies facilities in midtown. When any employees will move back to Water Street has not been determined.
Also remaining displaced is the Security Traders Association, which represents 4,200 individuals involved in trading equities and equity options.
Operations usually housed at the STA headquarters at 80 Broad Street remain relocated at a temporary headquarters site at Penn Plaza in midtown Manhattan.
“We hope to be able to return to Broad Street in January,” said James Toes, president and chief executive officer of STA.
“We haven’t lost any of our records. This has been just been an inconvenience. In many ways, we have been lucky when you compare us to others,” Toes said.