DTC Proposes Ending Paper Forms for Security Redemptions
Published Date: 7/2/2026
Notice
Summary
The Depository Trust Company (DTC) is updating its rules to make paying out money for matured or called securities easier and faster. Agents won’t need to send certain paper forms anymore and will get automatic updates, with most having to join this new process unless they opt out. These changes aim to save time and reduce paperwork, starting once approved, with no extra costs for participants.
Analyzed Economic Effects
5 provisions identified: 5 benefits, 0 costs, 0 mixed.
No physical certificates for payouts
For eligible fully registered debt securities represented by a physical certificate held at DTC and registered in the name of Cede & Co., Agents will no longer need to deliver physical certificates or a Letter of Transmittal (LT) to receive maturity or full-call proceeds; Agents will remit proceeds to DTC relying on DTC's book-entry records.
Mandatory PWP participation with limited opt-outs
Participation in the Payment without Presentation (PWP) process will be mandatory for all eligible fully registered debt securities represented by physical certificates held at DTC and registered in the name of Cede & Co.; opt-outs are allowed only where necessary to comply with a state statute, court order, or other legal/regulatory requirement, or where the Agent is a governmental entity or authorized representative requiring physical presentment, and any opt-out must be provided in writing and limited to affected securities.
Automated payment notifications codified
DTC will codify the existing process for Agents to receive automated notifications that identify the security (including CUSIP), payment date, and amount due; Agents must opt-in to receive these notifications by sending an email to DTC's redemptions operations team.
Certificate retention and destruction rule
Under the new rules, associated physical certificates for non-FAST (certificated) bond issues will be segregated, imaged for record retention, maintained for at least 90 days following the redemption date, and then destroyed in accordance with DTC's established procedures.
Implementation deadline and short notice rule
The changes are to be implemented by December 31, 2026, with DTC required to announce the specific implementation date by Important Notice no later than 14 business days before that date.
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