Shared control accounts are available as an alternative to “agreement to pledge” arrangements.
When a Participant pledges securities to the pledgee account of a pledge at DTC (sometimes called a “hard pledge”), the securities are under the sole control of the pledgee. Only the pledgee can redeliver or release the securities. Pledgee accounts continue to be available at DTC.
Shared control accounts are available at DTC as an alternative to agreement to pledge (sometimes called “agreement to deliver”) arrangements. A pledgee has control over securities delivered by a Participant to the Participant’s shared control account at DTC since the pledge has the ability to redeliver the securities without further consent by the Participant. Until the pledgee redelivers the securities, the Participant has the flexibility to redeliver or make substitutions for the securities without obtaining the pledgee’s release of the securities.
Shared controls are separately identified in DTC’s Reference Directory. Participants interested in establishing a shared control account should contact their Relationship Manager.