The Direct Registration System, commonly referred to as "DRS", is a registration type, created by the Depository Trust Company ("DTC"), that allows shareholders of public companies to hold their shares directly on the books of the company's transfer agent in book-entry form without issuing physical stock certificates. The DTC DRS system facilitates the movement of investor direct registration positions between financial institutions such as broker dealers and transfer agents.
Advantages to Direct Registration
- DRS doesn't require a medallion guarantee or stock power, where DWAC does.
- Issuing shares in DRS form will also reduce mailing costs, providing savings directly back to the issuer.
- Having shares held electronically reduces the cost for corporate actions. Share amounts can be adjusted without having to incur the cost of reissuing physical stock certificates.
- Issuing shares in electronic format rather than a physical certificate does not take away any of the shareholders rights. All voting and ownership rights remain equal.
- Shareholders can transfer their shares to another party without having to mail in their stock certificate. This reduces the risk of lost certificates for the shareholders and provides peace of mind that the certificate has not been forged or stolen.
- Shareholders will receive a statement when there is any activity on their shares. One will be mailed out on an annual basis.
Transferring Direct Registration Shares
As transfer agent, Colonial Stock Transfer can transfer shares in and out of Direct Registration form when requested by the shareholder as seen below.
Deposit To Broker via DTC DRS System
Shareholders can convert physical stock certificates into Direct Registration form (book-entry) by mailing the original stock certificate with instructions to deposit into their brokerage account using the DTC DRS System. Here is what we would require af
To deposit a physical stock certificate to your "street name" brokerage account via DRS, please notify your broker to initiate the transaction to Colonial. Please send the following to Colonial:
- Original Stock Certificate (no medallion guarantee required)
- Payment of Applicable Fees
Note: Shareholders will receive transfer statements in either situation.
Withdrawal From Broker via DTC DRS System
Shareholders can request a physical stock certificate from their broker using the DRS system.
To withdraw a physical stock certificate from your "street name" brokerage account via DRS, please notify your broker to push the shares to Colonial. No medallion is required by Colonial. Nothing else is required.
Requirements for DRS Transfers
- The shares must be free trading or eligible for restriction removal. (See also Restriction Removals)
- The broker must be a DTC participant.
- The Issuer must be DRS eligible.
- The broker must have access to the Participant Terminal System (PTS)/Participant Browser System (PBS)