It can be confusing when you have shareholders. Most people prefer to hire a transfer agent so that they can deal with most of the confusion for them. If you do utilize a transfer agent, they can use the DTC FAST program to hold certificated shares in an electronic form similar to book entries. However, you can only use this program if you work with a transfer agent and they must handle the program and store everything themselves.
Then, the shares can be transferred to or from the transfer agent from or to the broker using DWAC (Deposit/Withdrawal At Custodian). In simplified terms, the DTC Fast system allows any participants, as well as custodial banks and brokers, to move the shares to/from the transfer agent via electronic means. The DWAC option can bypass the DTC’s processing of the stock.
The goal of this program is to speed up all processing times and allow your shareholders the option to use physical or electronic certificates.
As a DWAC or DTC Fast issuer, you can eliminate the costs associated with replacement fees and lost certificates. Along with such, you eliminate all the fees associated with processing the deposits or removals because everything is done electronically. That also means you can reduce shipping costs, as you don’t have to use a bonded courier to send the stocks to the brokers or stockholders.
You also don’t have to worry about printing any stock certificates, which means you don’t pay for printer ink and specialty printers. Along with such, you may get offered other funding opportunities from investors and lenders because they know they also get to use the system and don’t have to deal with physical certificates.
How it Works
The DTC Fast program allows shareholders to deposit and withdraw shares directly. If they were issued physical certificates, they can convert them into book-entry later. Visit Colonial Stock Transfer for more info.