Have you heard the term “DTC eligibility?” If so, you may wonder exactly what this means. It’s used when the securities of any public company are eligible for deposit into the DTC. Founded in 1973, the DTC stands for Depository Trust Company. It is now the biggest depository in the entire world.
Once the securities are considered DTC eligible, the brokers can easily process and then clear transactions. This allows the issuers to save on both broker and clearing fees, while enhancing their liquidity and even improving their market visibility.
How to Become DTC Eligible
Prior to achieving DTC eligibility status, the issuers have to appoint the transfer agent who is responsible for working with the DTC on their behalf. This helps simplify the otherwise confusing and complicated process of gaining eligibility. It can also help ensure the securities are registered in a timely and efficient manner.
What Are the Benefits of Being DTC Eligible?
There are several benefits offered by achieving this status. For example, it allows for the stock certificate deposits to go to specific brokerages and reduces the processing fees for brokers. There are other appealing benefits this eligibility provides and makes it a worthwhile investment for those who are considering it.
Understanding DTC eligibility is the best way to understand what it offers and why it’s something sought after by so many companies. If you are searching for more information about this eligibility, what to do and how to do it, isit the Colonial Stock Transfer website. Here you can find information on obtaining this eligibility, regardless of your current situation.