Sep 01, 2010
• DTCC Connection
An Easy Way to Disseminate Cost Basis Information
When the new legislation requiring that domestic and foreign issuers report certain cost basis information to shareholders takes effect January 1, 2011, LENS will give issuers a way to disseminate this information quickly and efficiently. It will also give LENS customers a central location for cost basis information for 1099 reporting.
The legislation requires that issuers provide shareholders with a description of any organizational action that affects the basis of their shares, and the quantitative effect on the basis resulting from such action for equity securities. They must do so no later than:
- 45 days after the action, or
- by January 15 of the year following the calendar year during which the action occurred.
"We're adding 'cost basis' as a new LENS notice category so issuers can post this information, making it available to all LENS users," said Joyce Rosen, LENS product manager. "This gives issuers a way to reach a wide audience."
Financial institutions can also take advantage of DTCC's enhanced Cost Basis Reporting Service (CBRS), which enables firms to transfer customer cost basis information from one financial intermediary to another.