The following procedures are an addition to DTC’s Procedures for Pledgees.
- Any participant may establish a shared control account at DTC and may designate any DTC pledgee to be the pledgee for that shared control account. A participant may deliver securities (or other financial assets) by a free pledge from any of its DTC accounts (the “original account”) to its shared control account in order to grant a security interest or other interest in the securities to the pledgee. The shared control account is an account of the participant and is identified with a separate account number from any other account of the participant. A participant may establish multiple shared control accounts, but only one pledge can be designated for each shared control account.
- Except as modified by these procedures, the operation of a shared control account is identical to the operation of a DTC pledge account and all DTC procedures applicable to pledge accounts are applicable to shared control accounts. No deliveries vs. payment, pledges vs. payment, or physical deposits can be made to a shared control account and no deliveries vs. payment, pledges vs. payment, or physical withdrawals can be made from a shared control account. A participant should not deliver securities to another participant’s shared control account. In the instructions for a delivery of securities to a shared control account, the mandatory hypothecation code field should be completed in the same manner as it is for a delivery to a pledge account. The DTC fees and charges for a transaction involving a shared control account are the same as the fees and charges for a transaction involving a pledge account. The DTC monthly account usage charges applicable to a shared control account are charged to the participant. The DTC reports and statements to the participant and the pledge for a transaction involving a shared control account are the same as the reports and statements for a transaction involving a pledge account.
- As with a pledge account, voting rights on the securities credited to a shared control account are assigned to the participant. Cash dividend and interest payments and other cash distributions on such securities are credited to the original account. Distribution of securities for which the ex-distribution date is on or prior to the payable date or in which the distribution is payable in a different security are also credited to the original account. Any stock splits or other distributions of the same securities for which the ex-distribution date is after the payable date are credited to the shared control account.
- The securities credited to a shared control account cannot be designated as or included in the collateral for any obligation of the participant or the pledgee to DTC. DTC has no lien or other interest in any securities credited to a shared control account.