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Pend Hold allows you to hold and release ("unhold") transactions. DTC will not process held transactions until the holding Participant releases the hold. Participants will be permitted to hold pending deliverer orders and pledge transactions, including reclaims of deliveries, deliveries of Initial Public Offering (IPO) positions, and pending deliveries to Continuous Net Settlement (CNS short covers). Only the initiator (deliverer or pledgor) of a transaction will be permitted to hold or release a pending transaction. Moreover, only transactions that pend for insufficient position may be held.

To give you additional flexibility DTC offers two hold options: hold with blockage and hold without blockage.

DTC maintains separate logical recycle queues for transactions pending for insufficient position and for transactions pending for insufficient IPO position. Therefore, placing a hold with blockage on a transaction pending for IPO position will block only that type of transaction. Similarly, a transaction pending for insufficient non-IPO position will block only that type of transaction.

Newly introduced transactions (including CNS exemption overrides) for securities that have transactions held with blockage will be processed using DTC's current recycle logic. That is, a new transaction that you introduce using option 1 will be processed when the transaction is received. A transaction can either complete or not complete. A transaction that cannot complete because the initiating Participant has insufficient position will be moved to the position recycle queue. There it will be mixed (in order of transaction type or settlement value) with other transactions already in the recycle queue.

New transactions that you introduce using option 2 will not be processed on receipt. Instead, they will be forwarded directly to the position recycle queue of the initiating Participant. Option 2 procedures keep transactions pending for position in FIFO order; therefore, newly introduced transactions will be placed at the bottom of the position recycle queue.

Regardless of the recycle option elected, newly introduced transactions that are placed below a transaction that is held with blockage are subject to the blockage feature. Newly introduced transactions that are placed above a transaction held with blockage are not subject to the blockage feature. DTC's hold procedures will not alter the current process of placing at the top of the position recycle queue deliver orders with reason codes 540, 560, and 570 and deliveries to CNS.

 

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