by Alex Broudy, Technical & Financial Writer Oct 13, 2022
This article is intended for businesses using a transfer agent, or considering switching transfer agents.
Who is DTC?
The Depository Trust and Clearing Corporation (DTC) is a post-trade clearing and settlement company that services financial companies such as broker-dealers, banks, and transfer agents. The main function of DTC is to act as a securities depository for its own broker-dealers and banks, and to facilitate the transfer and settlement of securities between other broker-dealers, banks, and transfer agents. This is done using a combination of three DTC-approved methods.
Traditionally, securities are transferred either through the Fast Automated Securities Transfer (FAST) contract platform using Deposit/Withdrawal at Custodian (DWAC) or using Direct Registration System (DRS).
Fast Automated Securities Transfer (FAST) is a contract between DTC and transfer agents which eliminates the movement of physical securities. FAST-enabled transfer agents are able to custody securities between DTC and other FAST transfer agents. By enabling transfer agents to act as custodians, the FAST program can reduce physical transfer costs and increase efficiency for the transfer and settlement of securities. There are two programs which facilitate this effort through FAST.
Deposit/Withdrawal at Custodian (DWAC) is a method of electronically transferring new shares or certificates to and from DTC using the transfer agent to distribute shares. Using DWAC with FAST, DTC participants are able to request the movement of shares to or from the transfer agent electronically.
Direct Registration System (DRS) is a system which allows securities to be held in book-entry form at the transfer agent without having a physical certificate. With DRS, the registered shareholder can transfer DRS shares electronically through FAST. Unlike DWAC, DRS shares have already been issued and are held on the books of the transfer agent. Once DWAC-approved, FAST transfer agents can apply to become DRS approved.
How Do I Obtain FAST Status?
Complete and return FAST - DWAC application
We submit your application to the DTC
DTC reviews the application for a general period of 7-10 days
Once approved, you’re DWAC FAST! If you’re not approved, you may apply in 90 days for no additional fee
If you would like to be DRS FAST, repeat steps 1-2
DRS FAST is generally a same day approval
To expedite your application:
Fully report on time without missing any reports.
Limit corporate actions and officer changes to the last 3-5 years.
Check if the company and/or officers are involved in lawsuits. If so, a detailed explanation may be required.
Avoid Reg 504D issuances or other unregistered resales.
Update OTC Markets so that there are no “Halt” or “Yield” statuses.
Reapply in 2 to 3 months if the company is rejected
Understanding Direct Registration System (DRS)
DRS offers simplicity and efficiency to both your shareholders and your organization. DRS is a system that allows securities to be held in “book- entry” form without having a physical certificate issued as evidence of ownership. These shares are, instead, registered electronically in our record keeping system. Holders of securities in DRS (book-entry form) have all the traditional rights and privileges as holders of securities in certificate form. Shareholders benefit because DRS:
Eliminates the need for shareholders to safeguard and store certificates.
Allows shareholders to avoid the significant cost of surety bonds by eliminating the effort involved in replacing physical certificate(s) that might be lost, stolen or destroyed.
Permits electronic security transactions between your broker or dealer and Securitize Transfer as transfer agent.
Securities are offered through Securitize Markets, LLC, (“Securitize Markets”) a registered broker-dealer and
FINRA/SIPC. Neither Securitize
Markets, nor any of its affiliates provide any investment advice or make
any investment recommendations to any persons, ever, and no communication through herein or in any other medium
should be construed as such. Securities offered on the Securitize Markets ATS have not been registered under the
Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable
exemption from registration requirements. Assets listed herein, such as digital assets or tokens using
blockchain, are speculative, involve a high degree of risk, are generally illiquid, may have no value, have
limited regulatory certainty, are subject to potential market manipulation risks and may expose investors to
loss of principal. Investments in private placements, start-up investments in particular, are also speculative
and involve a high degree of risk. Investors must be able to afford the loss of their entire investment.
Eligibility to buy and sell securities on the Securitize Markets ATS is determined by Securitize Markets in its
sole discretion. Offers to sell, or the solicitations of offers to buy any security can only be made through
official offering documents that contain important information about risks, fees and expenses associated with
the applicable securities available for trading on the Securitize Markets ATS. Investors should conduct their
own due diligence, not rely on the financial assumptions or estimates displayed herein, and are encouraged to
consult with a financial advisor, attorney, accountant, tax advisors, and any other professional that can help
you to understand and assess the risks associated with any investment opportunity. Past performance is not
indicative of future results. Neither the Securities and Exchange Commission nor any federal or state securities
commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of
any of the information or materials provided herein or through any references/links herein. Any financial
projections or returns shown herein are provided by the issuer of the relevant security and Securitize Markets
has not verified the accuracy. Further, there can be no assurance that any valuations provided by issuers are
accurate or in agreement with market or industry valuations. Securitize Markets and its affiliates make no
representations or warranties as to the accuracy of such information. Securitize Markets may collect certain
information about you that helps us comply with various securities regulations and rules and the USA PATRIOT
Act, a Federal law that requires all securities firms to obtain, verify, and record information that identifies
each applicant. The information also helps us more fully understand your investment profile and identify what
types of investments or strategies may be suitable for you. The term “Investors” used on this website, typically
refers to accredited investors where applicable. Please note: if we cannot verify the information you provide,
we may be required to restrict or deny your account. Trading during Extended Hours Trading Sessions carries
unique risks, such as greater price volatility, lower liquidity, wider bid/ask spreads, and less market
visibility, and may not be appropriate for all investors. There is no guarantee that a diversified portfolio
will enhance overall returns, outperform a non-diversified portfolio, or prevent against loss. By accessing this
site and any pages thereof, you agree to
be bound by our