DTCC Connection

Jul 01, 2010 • DTCC Connection

DTCC Reaches Out to Issuers

by Edward C. Kelleher


You may not know us, but as the central depository for the United States, we hold in custody an estimated 90% of all U.S. securities valued at $33.9 trillion.”


That’s what DTCC is telling issuers in a new brochure designed to provide a greater understanding of the role DTCC plays in their businesses.


“Corporations and other issuers may only have a passing knowledge of DTCC and our businesses,” said Patrick Kirby, DTCC managing director, Asset Services. “Yet we work for many of them on a daily basis – interacting both directly and indirectly – to reduce risk and costs, while offering a range of services to help them and their business partners meet the challenges of today’s global marketplace.


“Some issuers know us because they’ve launched an initial public offering with our Underwriting Service, or because we help them contact their shareholders for an annual meeting with our Security Position Reports,” said Kirby. “That’s the extent of it. But there’s good reason it shouldn’t end there as we offer a suite of services that provide great value to issuers and their agents.”


Working behind the scenes

DTCC, through its subsidiary, The Depository Trust Company (DTC), boosts efficiencies and reduces costs for corporations and other issuers by helping to automate the entire lifecycle of a security, offering custody and corporate action services, and providing issuers with a wealth of shareholder information on depository-eligible securities as well as tax services for both domestic and international clients.


Highlights of the brochure include:


  • Underwriting Services. These services enable underwriters to distribute both primary and secondary offerings of securities quickly and economically via electronic book-entry delivery and settlement.
  • Direct Registration System (DRS). This service gives investors the option of holding their assets on the books of their transfer agent in book-entry form, eliminating the expense of issuing paper certificates as well as the risk of having those securities lost or stolen. DRS also facilitates the quick, easy and efficient sale of an investor’s securities.
  • Dividend Service. With this service, DTC plays a key role in making sure a company’s shareholders receive prompt, accurate payments on their investments. This service provides for the distribution of dividend, interest and certain principal payments for securities held at DTC.
  • Reorganization Service. DTC notifies its customers of important upcoming reorganization events, such as mergers, takeovers or bankruptcies that may affect them. DTC acts as a centralized hub, collecting investors’ instructions and communicating them to the issuer. It helps process these actions for its customers as well, which can involve transferring billions of dollars in cash and stock between companies and shareholders.
  • Tax Services. DTC has a range of tax services for both domestic and international investors. These include the TaxReliefsm Service, which enables investors in foreign issues to obtain “at-source” tax relief. This means the correct amount of tax is withheld from their dividend or interest payment. The alternative is applying for a refund for overwithheld taxes – an onerous, paper-intensive and lengthy process.
  • Security Position Reports. These reports give issuers the information they need to contact their shareholders directly about corporate events such as annual meetings.
  • Proxy Services. These services enable DTC customers to communicate with DTC-eligible issuers on a variety of proxy-related events including consent solicitation, bankruptcies, legal notices and appraisal or dissenter’s rights.
  • Legal Notice System. This service gives issuers, their agents and the courts a means of communicating with shareholders on a range of topics including information concerning a security, defaults, class actions, taxation and bankruptcies. @

[To obtain An Introduction to DTCC’s Issuer Services or to learn more about DTCC’s Issuer Services, send an email to issuerservices@dtcc.com or visit www.dtcc.com/issuerservices.]


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