The Depository Trust Company’s (DTC’s) Deposits Service offers participant firms a number of ways to deposit various types of eligible securities into the depository, from where they can receive a full range of processing, safekeeping and recordkeeping services.
The Deposits Service offers participants a variety of ways to make deposits of securities into the depository. The service provides centralized processing of securities deposits and enables participants to electronically track their deposits through DTC’s system.
DTC’s range of deposit options includes the Deposit Automation Management (DAM) service, whereby DTC acts as a central hub for participants and transfer agents, as well as specialized deposit functions such as the Branch Deposit Service (BDS), Restricted Deposit Service (RDS), Reorganization Deposits Service and others. See below for more detail.
Specialized deposit functions are also available to users of DTC’s Custody Service.
Who Can Use the Service
All DTC participants are eligible to use the service.
DTC gives participants the efficiency, reliability and cost savings of automated deposit services. Automation allows participants to:
- Get same-day credit of securities positions for most transfer activities.
- Eliminate manual creation of deposit tickets.
- Track deposits through DTC’s functionality.
- Faciliate removal of restrictive legends in connection with deposit of securities where associated restrictions have elapsed with a transfer turnaround usually within 3-1/2 days. For particular types of securities and circumstances, DTC also provides specialized services that cannot be fully automated but that deliver the benefits of centralized handling and safekeeping.
How the Service Works
Participants may deposit securities through one of the following four methods. Except when using FAST, participants forward the securities for deposit to DTC. After receiving the physical certificates, DTC credits deposited securities to the participant’s general free account:
- Deposit Automation Management: Using DTC’s Deposit Automation Management (DAM) system, a participant transmits deposit details via a Participant Browser System (PBS) terminal, using the Deposit Automation or DAMP function, or via file transfer protocol. The DAMP function also allows participants to consolidate deposits, research the status of a deposit, and pend a deposit for up to 10 days.
- Branch Deposit Service: Participants may submit deposits through DTC’s Branch Deposit Service, which enables clients to allow its branch office(s) or correspondents to interface directly with DTC’s deposit services and send securities for deposit directly from their branch or correspondents to DTC for deposit. This service accelerates the deposit credit while alleviating the handling of physical certificates by the main office; DTC staff a r reviews the contents of the package provided by the branch for negotiability and eligibility for deposit to DTC. The main office is provided with access to the imaged certificates processed by DTC on behalf of the branch offices. Once processed, branch received items are routed as directed by the participant. Routing instructions may be for routine deposit to the participant's DTC account, for return to the participant, or for transfer to another location for further processing. End-of-day balancing procedures will permit the participant to separate these positions as required by it for its own internal purposes.
- Restricted Deposit Services: Restricted Deposit Services allows DTC participants to use the depository for processing with respect to the removal of restrictions on securities. DTC provides negotiability and documentation review of deposited restricted securities, images and delivers them to transfer agents, and arranges for their prompt transfer into unrestricted securities. Restricted securities generally are securities purchased in private placements directly from an issuer before the company is public. They may also be stock acquired through a corporate reorganization or acquisition, in return for services, or from an original shareholder.
- Fast Automated Securities Transfer system (FAST): The FAST system eliminates the movement of physical securities certificates for transfers of securities registered in the name of DTC’s nominee, Cede & Co, on the transfer agent’s books. DTC and its FAST transfer agents reconcile the results of participants’ deposit and withdrawal activities electronically on a daily basis.
The Deposits Service also offers the following specialized services:
Reorganization Deposits Service: Reorganization Deposits Service allows users to deposit securities for transfer and for the collection of entitlements for issues that have undergone a corporate action or redemption. Allocation of Reorganization deposits may be deferred or made the next day.
Legal Deposits: Legal Deposits enables participants to deposit certificates with the accompanying legal documents needed for transfer. In an effort to avoid rejects, DTC staff may examine the documents prior to submission to the transfer agent. The Paperless Legals Program has eliminated the need for many of these transfers.
Non-Transferable Deposits: Non-Transferable Deposits allows participants to deposit certificates in issues that are no longer serviced by a transfer agent. Participants can then use the Position Removal (PREM) function in DTC’s processing system to move the position to DTC, which will destroy the underlying certificates if a transfer agent is not located within six years.
Bearer Deposits: Bearer Deposits allows participants to deposit certificates registered to bearer, where interest income is collected via presentation of attached coupons. DTC staff will clip the coupons when they are due and present to the paying agent on behalf of the depositing participant.
For more information
Please contact Client Support at 1-888-382-2721, Option 4 then Option 4.