DTC Eligibility & U.S. Electronic Settlement
For Canadian and international issuers looking to establish or strengthen their presence in the United States, DTC eligibility is an important component of an effective U.S. market access strategy.
We provide issuers with experienced guidance from initial assessment through application review and post-approval support.
New Issue DTC Eligibility
For companies completing a new public offering, exchange listing, qualifying transaction or other transaction involving newly issued securities, DTC eligibility may be pursued as part of the securities issuance process.
Planning for DTC eligibility early in a transaction can help avoid unnecessary complications as an issuer prepares for U.S. market participation.
Older Issue DTC Eligibility
Companies with existing shares already issued and outstanding may need to apply through DTC's secondary-market eligibility process, commonly referred to as an older issue application.
We work with issuers and the relevant market participants to assemble application materials, address questions and coordinate the process through to a decision.
DTC Eligibility Following Corporate Actions
Corporate actions, including name changes, share consolidations, reorganizations and changes to a security's CUSIP number, may affect existing DTC eligibility or require additional processing.
We assist companies in assessing the potential implications of proposed corporate actions and coordinating the appropriate steps with transfer agents and market participants.
Why DTC Eligibility Matters
Improved Access to U.S. Investors
DTC eligibility can make it easier for U.S. brokerage firms to hold and process a company's securities, helping reduce barriers that might otherwise limit investor participation. Individual brokerage firms maintain their own acceptance and trading policies.
Greater Trading Efficiency & Liquidity Potential
By supporting electronic settlement and reducing operational obstacles, DTC eligibility can encourage broader brokerage participation and create more favorable conditions for an active U.S. trading market. While eligibility does not guarantee increased trading volume or liquidity, it removes an important potential barrier.
Streamlined Electronic Settlement
Enables eligible securities to be held and transferred electronically through DTC's book-entry system, reducing reliance on physical share certificates and manual processing.
Reduced Brokerage & Settlement Restrictions
Without DTC eligibility, investors may encounter additional requirements, delays or limitations when depositing, transferring or trading securities through U.S. brokerage accounts. DTC eligibility can help alleviate these challenges and simplify securities processing.
Stronger U.S. Market Presence
An OTC quotation provides access to a U.S. trading market, while DTC eligibility supports the infrastructure behind the settlement of those transactions. Together, they help establish a more accessible and operationally efficient U.S. market presence.
Enhanced Cross-Border Market Access
For Canadian and international issuers, DTC eligibility supports more efficient securities transfers between market participants and helps facilitate participation in the U.S. financial system.
