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  • About Collateral Loans

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    The Collateral Loan Program allows you to pledge securities from your general free account as collateral for a loan or for other purposes (such as Letters of Credit) to a pledgee participating in the program. You can also request the pledgee to release pledge securities back to your general free account. These pledges and releases can be free (when money proceeds are handled outside DTC) or...
  • Demand of Collateral

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    A demand of collateral takes securities that you pledged to a pledgee and places them in the general free account of a DTC Participant designated by the pledgee. Pledgees can enter demand of collateral instructions by using the Demand of Collateral function or by making special arrangements with DTC's Settlement Department. A pledgee that is a DTC Participant can move securities to its DTC...
  • FRB Pledge Eligibility

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    Pledgor Eligibility : All DTC bank Participants that are members of the Federal Reserve are automatically eligible to pledge securities to FRBs that are DTC pledgee banks using the Participant/non-participant pledge facility. Non-Participant Eligibility : DTC allows non-participants to pledge collateral to FRBs through DTC bank Participants. Bank Participants and non-participants must provide...
  • FRB Pledging Purposes

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    Any securities you pledge to the FRB through the Collateral Loan Program are deemed pledged to the FRB (as fiscal agents of the United States for its principal, the Treasury Department) when pledged for: Treasury Tax and Loan: Collateral for Treasury Tax and Loan account balances under 31 C. F. R. Part 203 (Treasury Circular No. 92) Public Purposes: Collateral for deposits of public money under...
  • Categories of Securities To Be Pledged

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    DTC-eligible securities are generally good for all services provided by DTC. However, the FRB must approve securities pledged to FRBs under the subheading Pledging Purposes. You should contact the appropriate FRB to determine whether the securities pledged are accepted and to inquire about particular instructions for indicating the purpose of the pledge.
  • Issues Not Acceptable To FRBs

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    The FRB may not permit the pledging of certain securities that might be DTC-eligible. If a pledge is made in an issue not accepted by the FRB, the FRB will initiate the release of the pledge after receiving pledge notification.
  • FRB Pledge Inquiries

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    Pledgors can monitor all pledges, releases (Participant and non-participant) and current collateral loan inquiries intraday using the Activity Inquiry functions.
  • Pledges to The Options Clearing Corporation

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    A Participant writing an option on any options exchange may fully collateralize that option by pledging the underlying securities by book-entry through DTC to the Options Clearing Corporation (OCC). If the option is called (exercised), the securities may be released and delivered to the holder of the call. If the option contract is not exercised, OCC validates a release of the pledged...
  • Rollover of Collateral

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    After an option contract has expired, the option writer may rollover or continue to use the original collateral for subsequent contracts. By following an OCC procedure, you may rollover the collateral without preparing a Release of Collateral form and a new Options Depository Receipt form. Contact OCC for information about this procedure.
  • Deposits with Options Clearing Corporation

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    You can deposit securities at DTC between 8:30 a.m. and 1:00 p.m. eastern time for same-day deposit credit. You can then pledge your free position by book-entry to the OCC as follows: Segregate underlying securities supporting put and call options Pledge U. S. government securities to satisfy OCC put and call margin requirements Pledge U. S. government securities to meet clearing fund...
  • Release of Deposits with Options Clearing Corporation On Expired Options

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    OCC automatically releases securities deposited with it to cover margin requirements on an option contract when the option contract expires. The securities are then allocated to your general free account. Notification of the released securities is received via the Collateral Loan Services functionality in the Settlement User Interface or automated output. Note- OCC will begin releasing expired...
  • Deposits to The Options Clearing Corporation Clearing Fund

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    You can deposit U. S. government securities at DTC to be pledged by book-entry to OCC to meet clearing fund requirements. The term "U. S. government securities" refers to securities issued or guaranteed by the United States government and having a maturity of 5 years or less from the date of issuance. Short-term government securities: Securities maturing less than one year from the date of...
  • About The Option Exercise & Assignment Loan Program

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    Under this program, a Participant may use securities pledged at The Depository Trust Company (DTC) to meet the Options Clearing Corporation (OCC) margin requirement on these positions as collateral for a loan from an approved lender. The cash proceeds of this loan will then be credited to the Participant’s settlement account at the National Securities Clearing Corporation (NSCC). OCC, DTC, and...
  • How The Option Exercise & Assignment Loan Program Works

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    The Options Clearing Corporation Disbursement (OCCD) function has been developed by DTC and OCC to allow Participants to negotiate loans with pledgee Participants using securities pledged to OCC for margin purposes as collateral. The OCCD function allows Participants to submit collateralization requests that require approval from the pledgee and OCC. The OCCD function allows pledgee...
  • Option Exercise & Assignment Loan Program Demand of Collateral Reversals

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    In the event that a valued pledge from an OCC control account recycles to the pledgee and does not complete (drops) by DTC’s valued recycle cutoff at approximately 3:10 p.m. eastern time, DTC will reverse the associated demand of collateral transaction. The demand of collateral reversal will, in effect, “repledge” the Participant’s securities back to OCC. The demand of collateral reversal will...
  • Option Exercise & Assignment Loan Program Pledge Returns

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    Pledgees should be aware that pledge returns of valued pledges from OCC control accounts will not be permitted systemically. Requests for pledge returns to OCC control accounts should be directed to DTC’s Settlement Department. However, pledgees will be permitted to process pledge returns using the normal pledge return process once the securities are swung from the OCC control account to the...
  • Option Exercise & Assignment Loan Program Cutoffs

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    Eligible Participants are permitted to submit OCC collateralization requests until 11:00 a.m. eastern time. Eligible pledgees are permitted to approve or reject OCC collateralization requests until 1:00 p.m. eastern time, and OCC will be permitted to approve or reject pledgee-approved OCC collateralization requests until 2:00 p.m. eastern time. Participants and pledgees should refer to the OCCD...
  • About Honest Broker

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    Honest Broker is a procedure to facilitate the liquidation of security positions that have been pledged by book entry in DTC. It is exercised only in extraordinary circumstances, for example, when a pledgee is unwilling to release securities to a pledgor (typically, a broker under financial stress).
  • How Honest Broker Works

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    Following is an outline of the Honest Broker procedure. DTC will activate its Honest Broker procedure only upon a pledgor's request when pledgees are unwilling to return pledged securities directly to a pledgor and only after it consults with the concerned parties to determine that taking this action is appropriate. DTC may also activate the procedures in case of a pledgor's extended...
  • Requesting that DTC Perform the Role of Honest Broker

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    A pledgor may request that DTC perform as an honest broker for the pledgor's pledged securities. DTC's Honest Broker procedure will be activated when requested by a pledgor when pledgees are unwilling to return pledged securities directly to a pledgor, but only at DTC's option after consultations with concerned parties indicate that such action is appropriate. If the Honest Broker procedure is...

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