Series 52: 3.4.1. Clearinghouse Registration

3.4.1. Clearinghouse Registration

Most municipal bonds today are issued in book-entry form at a registered clearinghouse, without the benefit of a physical certificate. Bonds are registered and cleared through a registered clearinghouse, such as the Depository Trust Company (DTC).

Instead of a bond certificate, investors receive a written confirmation of the transaction from their broker. Registration of a new issue can take up to a month, as the clearing agency must receive and analyze a proper set of documentation about the new issue and its issuing participants before ruling on the issue’s eligibility to be held by the clearinghouse. Once the clearing agency enters the registered bonds into its records, the buyer receives the bonds and the issuer receives