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Deposit/Withdrawal At Custodian (DWAC)

Deposit/Withdrawal At Custodian (DWAC)

What Does Deposit/Withdrawal At Custodian Mean?

Deposit/withdrawal at custodian (DWAC) is a method of electronically transferring new shares or paper share certificates to and from the Depository Trust Company (DTC) utilizing a Fast Automated Securities Transfer (FAST) service transfer agent as the distribution point. The DWAC is one of two different ways of transferring between broker/vendors and the DTC, the other being the Direct Registry System (DRS) method. Both empower investors to hold securities in registered form on the books of the transfer agent, as opposed to in physical form. DRS is not the same as DWAC in that frame of mind in DRS have proactively been issued and are held electronically on the books of the transfer agent.

Grasping Deposit/Withdrawal At Custodian (DWAC)

The DWAC cycle offers a number of benefits to investors, including time, cost savings, and lower risk.

As an electronic system, DWAC takes into consideration immediate transfer to a brokerage account. There is no time required for physical delivery so the settlement interaction is made more efficient and essentially accelerated. It likewise saves money on costs associated with printing a physical certificate and mailing it.

Since there are no physical certificates transferred, there is no risk of loss or damage while moving and dealing with such certificates.

While not ordinarily a concern of investors, there are several requirements for the DWAC. Shares must be free trading or eligible for restriction removal. The broker must be a DTC participant and the issuer must be DWAC eligible.

What is FAST?

The Fast Automated Securities Transfer Program (FAST) is a contract among DTC and transfer agents by which FAST agents act as custodians for DTC. It dispenses with the movement of physical securities.

The FAST program works with the business' dematerialization efforts and assumes a huge part in diminishing the costs associated with delivery certificates to and from agents as well as those connected with printing and processing certificates. The FAST program doesn't have any significant bearing to money market securities.

Requesting and Delivering Physical Certificates

While this cycle is electronic, shareholders can in any case pull out their stock from their brokerage accounts and request a physical stock certificate by either having the broker start the request through DTC or by having their broker send the shares electronically directly to the transfer agent through the DWAC system. There might be fees for this service. The withdrawal of DWAC shares as physical certificates generally require Medallion Signature Guarantee - a certification stamp that guarantees the signature on a share certificate is credible.

Shareholders can deposit their stock into a brokerage account by either sending their physical stock certificate to their broker or by having the transfer agent send the shares directly to the broker through the DWAC system.

To deposit your shares to your broker by means of DWAC, shareholders must give original stock certificate(s), the DWAC deposit form, and applicable fees.

Features

  • It offers the benefits of speedier processing and negligible loss or damage to the shares (since they are in electronic format).
  • DWAC is a transfer method of transferring certificates between broker/vendors and the Depository Trust Corporation (DTC) utilizing FAST.