Dividend Settlement Service (DSS) is a centralized claims-processing system that manages the collection of dividends and interest owed to participants by other participating financial institutions.

Overview

Dividend Settlement Service (DSS) is a centralized claims-processing system that manages the collection of dividends and interest owed to participants by other participating financial institutions.

DSS enables users to claim funds due them by charging other DSS participants through NSCC's clearance and settlement system. Money settlement normally occurs within five business days.

DSS is frequently used for processing three kinds of dividend and interest claims:

• Physical certificate claims for certificates held past record date by brokers or banks that represent new owners,
• Fail or stock loan claims for securities that sellers failed to deliver or that were out on loan past record date, and
• Other claims on which both participants mutually agree prior to submission.

Who Can Use the Service

All NSCC members involved in dividend and interest collection can use the service, provided they are able to settle through NSCC.

Benefits

DSS streamlines the processing and collection of dividend and interest claims, facilitating timely, safe and economical settlement:

• Through DSS, multiple dividend and interest claims can be charged simultaneously with little or no disruption in claims processing and control
• Two kinds of DSS forms (beyond the already standard Notice of Intention) standardize the processing of dividend and interest claims, ensure protection and control:
• Notice Returned is a short form that allows members to refuse to accept erroneous claims by notifying claimants.
• Reclamation is a short form that allows members to identify errors after claims have been processed and charges have been made, and to submit data to NSCC for expedited re-adjustment in DSS. 

How the Service Works

Through DSS, claimants notify other participants of dividend and interest claims by filing Notices of Intention. Copies are enclosed in DSS envelopes, which are identified by clearing numbers and sent to the appropriate brokers/banks.

Using the PTS function ECSP, users electronically enter envelope control lists that detail all dividend and interest claims filed on given dates. These lists, each of which can contain up to 15 entries, are transmitted to NSCC for processing. Notices of Intention and charges can be recorded on the same list.

NSCC documents the receipt of the dividend and interest claims and forwards claims to the indicated brokers and banks, which have five days for review. On the fifth day, claimants can submit actual charges by sending remaining parts of the claims forms, via DSS, to the brokers and banks.

DSS credits claimants and debits the designated brokers and banks, and provides both parties with reports (Final Settlement Statement) for each transaction.

Dividend and interest claims eligible through DSS are:

• Equities
• Registered corporate bonds
• Cash distribution on foreign securities
• Government and agency bonds (registered/book entry only)
• Floating rate securities
• Asset and mortgage-backed securities
• Optional dividends (cash only)
• Unit investment trusts
• Mutual funds cash payments (excluding daily accrued funds)
• Money market preferreds
• Master limited partnerships
• Cash due bill redemptions

Dividend and interest claims not eligible for settlement through DSS are:

• Claims relating to securities based in non-U.S. currencies
• Claims involving optional dividends (payable in cash or securities)
• Claims for dividends or interest on mutual funds
• Claims for which the exact rate of the dividend or interest is not known
• Claims related to third-party draft items
• Claims that are third-party items

For More Information:

Please call Relationship Management at 1 888.382.2721.