The First Stop for Securities | DTCC Issuer Services

DTCC strives to provide issuers and their investors with new and better ways to boost efficiencies, reduce risk and drive down costs.

For more than 50 years, DTCC has worked to automate and streamline the processing of eligible securities across the entire lifecycle.

DTCC helps ensure that an issuer’s dividends are paid on time, stock offerings are processed quickly and cost-effectively, and that issuers have the tools they need to communicate effectively with their shareholders.

Serving a diverse audience of issuers of equity, debt, exchange traded funds (ETFs), mutual funds and structured securities, DTCC tailors its services to meet the different needs of each issuer to better serve their shareholders.

What's
Next?

DTC's Issuer Services provide an array of central communication and information resources for depository- eligible securities that facilitate outreach by issuers to shareholders.

Through its efficient, cost-effective and risk-mitigating offerings, Issuer Services help achieve timely and accurate communication among interested parties with respect to securities held and serviced at DTC. Once an issuer has made a security DTC eligible, they can take advantage of the following services:

Security Position Reports

Security Position Reports (SPR) provides issuers with the critical first step needed to contact shareholders directly about corporate events.

Reports available through SPR enable issuers, trustees, and authorized third-party agents the ability to see the closing positions of DTC participants, in an issuer’s security, as of a specified time period.

The position reports also include contact information, which issuers use to notify DTC participants regarding events such as annual meetings. DTC participants are then responsible for distribution of this information to their customers, the beneficial owners.

Nearly 10,000 issuers have used SPR to access reports on over 30,000 securities.

SPR allows issuers to authorize various third party agents to access their account as they deem fit.
Reports are available for a fee via subscription or by special request as needed.
Issuers who are registered for SPR receive their Omnibus Proxy electronically through the application, saving time and eliminating problems associated with hardcopy mailings.

Proxy Services

DTC's Proxy Services provide an essential link between DTC participants and issuers of eligible securities by supporting communication from issuers on matters such as shareholder meetings. Meeting and Record Date notifications should be sent electronically to DTCC via email [email protected], a hardcopy of the materials is not necessary.

The Legal Notice System (LENS)

The Legal Notice System (LENS) – Is a comprehensive online library of notices concerning DTC eligible securities. This system provides issuers, their agents and the courts with a means of communicating with shareholders on a range of topics including notice to holders, bankruptcies, class actions, defaults, dissents, changes in transfer agents and tax information. LENS enables users to search for notices by CUSIP, keyword, notice type or LENS document number. Once the user locates the desired notice, they may view, download or e-mail it. Notices can be disseminated via LENS at no cost by sending them to [email protected]

Behind the
scenes

DTCC offers a wide range of services providing global custody and asset servicing for securities issues

Underwriting and Issue Eligibility

Underwriting is the entry point for depository and book-entry transfer services at DTCC, for both new and secondary issues.

For new issues, the process begins when a company that wishes to raise capital contacts one or more underwriting firms, typically the investment banking division of a broker/dealer, to act as lead underwriter for the new issue.

DTCC works with the underwriter to make the security DTC-eligible, enabling the underwriter to distribute the securities quickly, safely and economically via electronic book-entry delivery and settlement. The securities are then available for the full range of depository services.

For older issues, the Secondary Market Eligibility program allows clients to submit eligibility requests for already-issued, outstanding securities that were not previously made eligible for depository and book-entry services.

Operational Arrangements is the document that outlines what legal steps are necessary for securities to become and remain eligible for DTC services. All issuers of securities deposited at DTC, Agents and Underwriters are required to adhere to the requirements stated in these Operational Arrangements.
The Blanket Issuer Letter of Representations (BLOR) is an important legal document that must be completed by the issuer and co-issuer(s), if applicable, in order to make a security DTC-eligible in order to make a book-entry-only security DTC-eligible.

While some securities are still issued in physical form, the elimination of paper certificates through dematerialization helps the industry reduce costs and mitigate risks

The Direct Registration System (DRS) helps facilitate dematerialization by giving investors a choice: they can hold securities in physical certificate form or use book entry form directly with the issuer, which leverages DTC’s connectivity with the Fast Automated Securities Transfer Program (FAST) transfer agents.

Corporate Actions

DTCC offers a wide array of services for processing corporate action events for the approximately 1.3 million active securities eligible at the depository.

These services include announcing details of upcoming events and providing clients with information about their entitlements, accepting and acting on their instructions, and collecting, allocating, and reporting payments across various corporate action event types, including distributions, redemptions, and reorganizations.

In the event of a reorganization, DTC handles the transfer of cash and stock to the appropriate investment bank or broker/dealer, which then passes it on to their investors. By centralizing corporate actions processing, including the receipt and allocation of cash and stock entitlements, DTCC’s Corporate Actions Processing services leverages economies of scale and experience to provide processing efficiencies and cost savings to issuers, agents and participants – and ultimately to securities’ beneficial owners.

The service enables a single payment by an agent or issuer to be seamlessly translated into multiple allocations, eliminating the need for separate payments to multiple firms across the financial industry.

To help ensure timely allocation of a corporate action by DTCC, it is critical that the Issuer or its Agent notifies DTC well in advance of the upcoming corporate action.

It is the responsibility of the issuer undertaking a corporate action to provide evidence that the new security resulting from that action satisfies DTC’s eligibility criteria. DTC will advise whether an opinion of counsel may be required to substantiate the legal basis for eligibility. In that case, DTC will usually provide a template for the required opinion, and the delivery of a satisfactory opinion from counsel acceptable to DTC will be a condition of eligibility.

At a
glance

Follow the path from issuer to investor.

STEP 1: Issuer

When a company decides to raise capital, DTC supports the underwriting process that brings the new issue to market.

STEP 2: Investment Bank

The issuer hires an investment bank to structure and underwrite the offering.

STEP 3: DTC Eligibility Process

DTC works with the underwriter to make the security DTC-eligible, enabling the underwriter to distribute the securities quickly, safely and economically via electronic book-entry delivery and settlement. The securities are then available for the full range of depository services.

STEP 4: Underwriter

Underwriters sell the issue to investors.

STEP 5: Electronic Shares

On the closing date, the shares or bonds are electronically created on DTC'S books and electronically delivered by book-entry to the DTC accounts of Participants serving the purchasing investors. DTC records Participant ownership on its books and Participants record investor ownership (beneficial owner) on their books. The securities are registered in DTC's nominee name, Cede & Co. Participants record investor ownership (beneficial owner) on their books.

PARTICIPANT 1
10,000 Shares

DTC
PARTICIPANT 1
BANK

Investor
5,000 Shares

PARTICIPANT 2
40,000 Shares

DTC
PARTICIPANT 2
BANK

Investor
10,000 Shares