What is DTC Eligibility?
DTC Eligibility is a term used when the securities of a public company become eligible for deposit into the DTC. DTC stands for the Depository Trust Company, which was founded in 1973 and is currently the largest depository in the world. Once securities are DTC eligible, brokers are able to easily process and clear transactions, which allows issuers to save on clearing and broker fees, enhance their liquidity, and improve their market visibility.
Before securities are eligible for DTC services, issuers are required to appoint a transfer agent who will work directly with the DTC on their behalf. This helps simplify the complicated and confusing process of obtaining DTC Eligibility, as well as ensuring your securities are registered in a timely manner.
There are many benefits of having DTC Eligible securities including:
- Allowing for stock certificate deposits into certain brokerages
- Reducing broker processing fees
- Eliminates printing excessive physical stock certificates by using electronic processing between brokers and DTC
- Eliminating excessive fees that are associated with courier shipments
- Increase funding opportunities from lenders, investment bankers, as well as investors
- Allows for the ownership of securities to be more easily transferred between broker
For more information on how Colonial Stock Transfer can meet your transfer agent needs please contact us at 801-355-5740
Date Published: October 20, 2016
Author: Colonial Stock Transfer
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Becoming a FAST/DWAC and DRS eligible issuer will allow you to eliminate risks and save costs associated with carrying physical certificates.