How DTC eligibility opens US markets for Canadian issuers

Full-service DTC eligibility enables an issuer’s securities to be deposited at DTC and transferred electronically between brokerage accounts.

For Canadian issuers, becoming DTC eligible makes it much easier to access US investors and markets. While the Canadian Depository for Securities (CDS) handles securities in Canada, DTC operates within the US system, and the two work together to support cross‑border trading. DTC eligibility is required for companies listing on US national exchanges, and while it is not strictly required for all markets, most US broker‑dealers prefer securities that settle electronically through DTC.

Transfer agents, like Computershare, work closely with DTC to support everyday securities activity. They maintain the issuer’s official shareholder records, while DTC holds securities electronically for brokers and investors. When new shares are issued, the transfer agent works with DTC to register them in DTC’s nominee name, Cede & Co.

Transfer agents also handle dividends and corporate actions, providing DTC with the details so payments and entitlements can flow through to brokers and investors. On an ongoing basis, both sides reconcile records to keep ownership and entitlements accurate.

Transferring securities: FAST vs. non-FAST

FAST (Fast Automated Securities Transfer) and non‑FAST describe how securities are processed between transfer agents and the Depository Trust Company (DTC), specifically whether securities are handled electronically or through physical and manual processes.

FAST is an electronic program that allows DTC to hold and transfer securities without the need for physical certificates. Under this model, the transfer agent is approved as a FAST agent and maintains a balance of securities registered in DTC’s nominee name, Cede & Co.

Key characteristics of FAST include:

• Securities are held in book‑entry (electronic) form
• Transfers between DTC and the transfer agent occur electronically
• Supports the Direct Registration System (DRS), allowing investors to hold securities directly with the transfer agent without certificates

As a result, FAST significantly improves processing speed, reduces operational risk, lowers costs, and supports more efficient settlement and corporate action processing.

Non‑FAST applies to Issuers that are not participants in the FAST program. In these cases, securities are processed using physical certificates or manual workflows.

Key characteristics include:

• Physical certificates may be required for deposits and withdrawals
• Transfers between DTC and the transfer agent involve manual processing
• Processing is slower and more resource‑intensive

In short, FAST enables streamlined, electronic processing with greater efficiency and lower risk, while non‑FAST relies on physical or manual methods that can be slower, more costly, and less scalable.

Early planning, careful coordination with your transfer agent and legal advisors, and a focus on electronic processing through FAST, are key to a smooth and successful DTC eligibility process.

To learn more about this process and the benefits for your company, contact me, David Cavasin, or your relationship manager.

Computershare is not providing, and does not intend to provide, any legal, tax or investment advice.