U.S.A.: New restriction on Microcap securities
Clearstream Banking1 would like to inform customers that, effective
immediately
a new requirement applies to Deposits/Withdrawals at Custodian (DWAC) on Microcap securities defined as shares priced at less than 1.00 USD.
The new requirement, imposed by the Depository Trust Company (DTC), is for customers to include the shareholder registration name when instructing on a share priced less than 1.00 USD for electronic book-entry deposits of eligible securities to Citibank’s DTC account, using a FAST (Fast Automated Securities Transfer service) transfer agent.
This new requirement is in addition to Clearstream Banking’s tightening up of the eligibility criteria of Microcap shares as announced in our announcement L15079, dated 7 May 2015.
Impact on customers
Clearstream Banking customers must include the shareholder registration name when instructing on a share priced less than 1.00 USD for electronic book-entry deposits of eligible securities to Citibank’s DTC account.
Note: Although DTC's requirement only concerns shares with a market value below 1.00 USD, due to an error in their algorithm, bonds are currently also impacted. DTC will rectify this, effective 23 October 2015. During the interim period, we recommend customers include the wording "shareholder registration name not applicable" in the narrative field of their DWAC instructions (see table below) for DWAC deposit on bonds, in order to avoid the rejection of their instruction at DTC's end due to a missing registration name.
The shareholder registration name must be included in the free text field of the instruction as follows:
| Media | Field | Narrative |
| SWIFT | :70E::SPRO// | /DWAC deposit/shareholder registration name |
| COL | Settlement Processing Narrative | /DWAC deposit/Shareholder registration name |
Electronic book-entry deposits of eligible securities to Citibank’s DTC account that do not contain this information for microcap securities will be rejected by DTC. These instructions should be reinstructed by customers with the required information for further settlement.
The shareholder registration name will continue to be optional for any withdrawal and for deposits of securities priced at 1.00 USD and above. We recommend that customers pay special attention to the share price and consider including the registration details even if the price of the shares, according to their source of information, is above 1.00 USD.
Further information
For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.