What is a chill on a CUSIP (security)?
A chill is a special restriction that can be placed on a security to prohibit certain activity or DTC services permanently or for a period of time, as in the event of a corporate action. (Also see FAQ on deposit chills).
I am attempting to make a deposit with DTC and the CUSIP (security) is chilled for deposit, what does this mean?
A CUSIP can be chilled for various reasons; some of which are listed below. In most instances the chill reason is provided in the PTS/PBS customer inquiry functions, GWIZ and/or RIPS. (Note: Chill inquiries are to be directed to Client Center Hotline at 1-888-382-2721.)
- CUSIP is chilled due to an upcoming or recent corporate action event. Most common is the security is within 30 days of its maturity date. Contact CHC at 1-888-382-2721, option for 3.
- CUSIP is a Book- Entry- Only (BEO) security, meaning inventory is represented by a global certificate or master note in DTC’s nominee of Cede & Co.; no certificates are available to beneficial holders and physical deposits and withdrawals are prohibited.
- CUSIP is a Money Market Instrument (MMI); these are BEO securities with a unique issuance process; and physical deposits and withdrawals are prohibited on MMI’s. For more information, please see MMI Overview on DTCC’s website at http://www.dtcc.com/settlement-and-asset-services/underwriting/money-market-instrument-eligibility.
- CUSIP is in custody-only status and is not eligible for DTC full services and is restricted for most security activities with the exception of custody deposits.
- CUSIP is in “limited eligibility” status and is not eligible for DTC full services and is chilled/ restricted for most security activities. Only security movements across the DTC and Canadian Depository for Securities Ltd. (CDS) interface and segregation activities are permitted (See FAQ on limited eligibility for more information).
- Compliance Chill- contact Compliance Hotline at 212-855-8030 or email firstname.lastname@example.org.
- CUSIP is chilled due to “frozen letter” generally limits deliver order (DO) activities on the security. Frozen Letter inquiries are to be directed to Operations Risk & Control (ORC) at Frozenletter@dtcc.com.
I have a security that is chilled and the reason states “Frozen Letter”, what does this mean?
A CUSIP chilled due to “frozen letter” generally limits deliver order (DO) activity on the security, which may be due to a pending corporate action. Frozen letter inquiries are to be directed to Operations Risk & Control (ORC) at Frozenletter@dtcc.com.
Can you lift the deliver-order (“DO”) chill for a limited eligibility security?
No, the chill is required on limited eligibility issues. Limited Eligibility issues are chilled for most DTC activities. Only security movements across the DTC and Canadian Depository for Securities Ltd. (CDS) interface and segregation activities are permitted. DTC deliver order (“DO”) movements and pledges are allowed on a limited basis in that the DTC delivering party and DTC receiving party must have both executed the DTC Participant Foreign Securities Blanket Letter of Representations with DTC Membership and have had their participant accounts coded accordingly. (Also see FAQ on “What is a “limited eligibility” security?”).
For more information, on how to execute a DO move on a limited eligibility security to CDS, contact DTC’s Settlement at 212-855-5800 during business hours of 7am-7pm (EST), and at 888-382-2721, option 1, then Option 6 during non-business hours.
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