For participating organizations, DTC’s Corporate Actions Processing Service for Redemptions works as follows:
- For maturities, DTC makes the maturity information available to participants and presents certificates/instructions to the redemption agent for payment.
- For all other redemption events, DTC receives notification of the event from the agent or the agent’s authorized vendor. The data is received and processed into DTC’s systems. In cases where a lottery is required (e.g., partial call, partial pre-refunding) DTC runs a systemic, impartial lottery to determine the amount that DTC participants will be called for, if any.
- On payment date of the redemption, DTC collects the proceeds from the agent, allocates to the participants and reduces the participants’ position on DTC’s records.
- For Redemption Cancellations and Revisions, upon written instruction from the agent, DTC may rescind or adjust a redemption. Participants’ positions and allocations will be adjusted in accordance with the instructions received from the agent.
As funds are paid to DTC to support cash entitlements, matched funding (i.e., funds received by 3:00 pm and identified at a CUSIP level) is allocated to participants in batches running approximately every 20 minutes from approximately 8:30 am to 3:30 pm. These allocation totals appear on the DTC Participant Settlement Statement. Participants can receive updates on their intraday allocations through several means including intraday cash settlement files, ISO 20022 messages, on-line inquiries and, if eligible, can also request intraday withdrawals of these funds. If not withdrawn intraday, these entitlements are settled through the combined DTCC Settlement process.