DTC Eligibility and Electronic Stock Transfer of Your Stock [Guest Post]
Guest Post By: Seth FarbmanElectronic trading is the standard in today’s financial markets, and becoming DTC eligible greatly simplifies the process of trading and exchanging an issuer’s common stock.
What is DTC?
The Depository Trust Company (DTC) is one of the world’s largest securities depositories. DTC, which was founded in 1973 and is based in New York City, is organized as a limited purpose trust company and provides safekeeping through electronic record-keeping of securities balances.
Why It Is Important To Be DTC Eligible?
The Depository Trust Clearing Corporation (“DTCC”) facilitates electronic trading of securities in the U.S. through its central depository system known as the Depository Trust Corporation (DTC). DTC system allows participating brokerage firms to electronically settle trades with other member firms. This is accomplished by holding securities in “street name,” which means that they are held electronically at the brokerage firm that has deposited the securities into its account with DTC. This eliminates the need for buyers and sellers holding securities in street name to produce physical certificates to settle the trades. The Depository Trust Corporation’s automated clearing and settlement system automatically transfers the “net” trades between participating firms. This allows for a dramatic reduction in the costs associated with trading securities.
The benefits of being DTC Eligible include:
– Increased ease of trading the Company’s securities
– Lower trading costs
– Improved liquidity in the Company’s securities
– Potential higher valuation
To obtain general information as to how we can assistance your company in making its securities DTC Eligible, please feel free to call us 212 828-8436 or visit us at www.dtceligibility.com.
About Seth Farbman
Seth Farbman has built a career in servicing private and public companies. Mr. Farbman was the Co-Founder and President of Vintage Filings which he sold to PR Newswire in 2007. In this role, Mr. Farbman serviced over 3,000 publicly traded companies to provide SEC EDGAR and financial print services related to IPOs, Proxy Statements, Annual Reports, Shareholder Meetings and all aspects of compliance filings. Mr. Farbman was a founding partner and a Co-Chairman of Vcorp Services which he sold in October 2016 to Wolters Kluwer. Mr. Farbman currently serves as the Chairman and President of Vstock Transfer, with a focus on pre IPO, Nasdaq and NYSE MKT listed issuers. Mr. Farbman is also the Chairman of Vcheck Global (www.vcheckglobal.com), a background and due diligence services company and http://www.eSignatureGuarantee.com, an online resource for medallion signature guarantees. Prior to starting Vintage Filings, Mr. Farbman served as a securities attorney at a New York Law Firm with a concentration on securities regulation.
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