The U.S. securities depository, Depository Trust & Clearing Corp. (DTCC), announced Wednesday that its securities vault in lower Manhattan suffered extensive flood damage as a result of Hurricane Sandy.
The DTCC says that it has begun the initial phase of recovering the contents of the vault, which was apparently breached by floodwaters. “Our analysis of the condition of the vault, once we were able to open it, was that significant flooding and water damage occurred throughout the facility. While it is premature to determine the full extent of the damage, it is essential to begin the restoration process to avoid further deterioration,” it notes.
DTCC says it has retained disaster recovery and restoration firms to work on the recovery effort, and it expects to have a more accurate assessment of the condition of the physical securities within a week’s time. “It is too early to determine how many of the physical certificates can be restored. The restoration process will take some time, possibly months,” it notes.
The company reports that its computer records are fully intact, including a detailed inventory of the contents of the vault. “This effort is more of an administrative and logistical challenge than an economic issue,” it says. And, it reports that it is in discussions with various transfer agents to establish a protocol for issuing replacement certificates, without requiring the presentation of the original certificates.