National Securities Clearing Corp.

The stable outlook on NSCC reflects S&P Global Ratings' expectation that the company's financial safeguards will continue to provide substantial protection against member default, from both a loss-absorbing and liquidity standpoint, in extreme but plausible market conditions. We could lower the ratings on NSCC if its financial safeguards materially weaken. This could be the case if liquidity uses in a stress scenario (in which one or several clearing members default) materially increase without a corresponding increase in liquid resources. We are unlikely to raise the ratings in the next two years. The rebound in U.S. economic activity remains solid. S&P Global's economists forecast full-year GDP growth of 6.7% in 2021 and 3.7% in 2022. Although GDP does not directly affect

...Very strong competitive position as the sole clearinghouse for cash equities, exchange-traded funds, and municipal and corporate bonds in the U.S. National Securities Clearing Corp. (NSCC) is an effective monopoly in clearing cash equities, exchange-traded funds, and municipal and corporate bonds in the U.S. This supports the strength of the business risk profile. NSCC has material clearing risks. Considerable losses for the clearinghouse could arise if resources within the waterfall (margins, assessment powers) are insufficient to absorb losses stemming from the liquidation of a defaulting clearing member's portfolio. We believe, however, that NSCC benefits from strong risk management controls and robust financial safeguards. NSCC is also exposed to liquidity risk should one or several clearing members default. Potential liquidity uses in a stress scenario in which one or several clearing members default jointly are typically highest at a time close to the expiration of single-name options...

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