The Direct Registration System (DRS) provides registered owners with the option of holding their assets on the books and records of the transfer agent in book-entry form.

Overview

The Direct Registration System (DRS) provides registered owners with the option of holding their assets on the books and records of the transfer agent in book-entry form. Through DRS, assets can be electronically transferred to and from the transfer agent and broker/dealer. Instructions to transfer shares are sent via the NWT1 system to establish a DRS account and the DRS Profile Modification System to close out a DRS account.

Who Can Use the Service

Issuers who act as their own transfer agent, transfer agents and DTC participants can use the service. Issuers and transfer agents apply for DRS eligibility. To request the movement of an asset through the DRS process, the requesting user is required to participate in either a DTC Surety or Insurance program, or provide proof of similar coverage from an approved surety/insurance provider to provide indemnification against false instructions.

Benefits

DRS:

• Provides accurate, quick and cost-efficient transfers between issuers or their transfer agents and broker/dealers.
• Ensures secure electronic transfer.
• Reduces the risk associated with physical securities processing of paper, including turnaround delays, mail losses and risks associated with stolen, forged or counterfeit securities.
• Supports the industry's move to a dematerialized security environment and shortened settlement timeframes.

How the Service Works

Through the NWT1 function or file transfer protocol, a participant transmits registration instructions to DTC, who forwards them to the transfer agent. The submitting participant/broker-dealer selects an "S" for statement on the instructions. When the instructions are received by the transfer agent, he or she establishes a book-entry account for the investor on their records and mail a transaction advice to the investor.

Through the DRS Profile system, an investor's broker requests securities to be transferred from their book entry DRS account at the issuer or their transfer agent to the investor's broker's account at DTC. The request to transfer the securities is entered via the Participant Terminal System (PTS)/Participant Browser System (PBS) or via the Depository's file transfer protocol. The user enters proprietary information about the registered account, including the customer's account number, account registration, share quantity, tax ID number, etc. A valid surety or insurance number must be submitted with the instructions from the initiating organization. The receiving institution validates the information and responds with a corresponding deliver order through DRS.

For More Information

Please contact Relationship Management at 800-422-0582.