IPO Tracking Information

IPO Tracking Information
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About IPO:
Overview
What is the IPO Tracking System?
The Initial Public Offering (IPO) Tracking System is a Depository Trust Company (DTC) system used
to track the movement of IPO shares for a designated period in a book-entry environment. The
system monitors the market activity associated with an IPO issue, including the sale- or "flipping"of IPO shares during a stabilization/penalty-bid period and generates daily reports for the
underwriters itemizing these activities. The goals of the system are to provide: automated tracking
of IPOs with no disruption to the normal book-entry process; accurate, comprehensive and timely
reports to the Lead Manager and Syndicate Members; and, by allowing IPOs to be distributed and
tracked in a book-entry environment, the greatest possible economic efficiency.
The IPO Tracking System monitors the movement of shares residing with Brokers and Banks in
different ways. For Brokers, tracked Initial Distribution shares are physically segregated from
Secondary Market shares in each Broker's IPO Control Account. In order for a Broker's customer to
sell Initial Distribution shares on the Secondary Market, the shares must be released from the
Broker's IPO Control Account to its Free Account.
When shares are released, they are listed on the tracking reports as "flipped. " Since, for Brokers, it
is not the sale of IPO Initial Distribution shares that registers them as "flipped," but the release
made in preparation for that sale, "flipped" on the tracking report always indicates a potential flip.
The tracking report does not indicate definitively that a Syndicate Member's customer has flipped.
Note- Once shares are released from the IPO Control Account, it is not possible to reverse the IPO
release.
The tracking system monitors Brokers' Initial Distribution shares and the subsequent sale of those
positions. It does not track any shares once they have been released from the IPO Control Account
for any reason.
DTC monitors Bank shares differently. In order to allow Banks to participate in tracking more
passively, the IPO Tracking System interfaces with DTC's Institutional Delivery (ID) System, which
monitors the Bank's transactions systemically. Banks do not have IPO Control Accounts. Both IPO
Initial Distribution and Secondary Market shares are delivered to Banks' General Free Accounts, but
they are tagged in the IPO database as IPO Initial Distribution and IPO Secondary Market shares
respectively.
During the IPO tracking period, Bank transactions (Primary and Secondary Market) are monitored
through the ID system, and potential flips of Initial Distribution shares are reported as such on the
daily reports. Tracking of all IPO shares continues until the Lead Manager terminates tracking, or
until the 90-calendar-day maximum tracking period is over.
Who is Affected by the IPO Tracking System?
All DTC Participants are affected by the IPO Tracking System. Although a Participant may not be
directly involved in a tracked offering at the time of distribution, it may receive shares that are
marked for IPO tracking into its account (e. g. , as the result of an account transfer). Therefore,
Participants must learn to use the appropriate IPO functions to direct IPO tracked shares or they will
be unable to complete their transactions successfully. Moreover, Brokers must be prepared to
recognize their IPO Control Account and to include it when balancing their internal records.
Who Uses the IPO Tracking System?
IPO Tracking System users act in one or more of the following roles:
• Lead Manager: the Broker-Dealer that organizes and leads a syndicate of underwriters in
the act of purchasing and distributing the shares of an IPO to investors.
• Co-Manager: one of two entities acting in equal capacities as Lead Manager for a single
IPO issue.
• Co-Reporter: one of two entities within a single firm that is acting as Lead Manager. The
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firm uses two Participant numbers for distribution of an IPO: one for domestic distribution
and one for international distribution.
Correspondent: a non-DTC Participant that uses a Clearing Agent to process transactions
at DTC.
Syndicate Members/Selling Group: a group of Broker-Dealers that agrees to purchase
shares of a new issue from the issuer for resale to the investment public.
Custodian Bank: a Bank that acts as a custodian for an Institutional customer's shares.
Clearing Bank: a DTC Participant that processes transactions at DTC on behalf of a
Correspondent.
Prime Broker: a Broker-Dealer that acts as a custodian for an Institutional Customer or for
a large Retail Customer that is set up like an Institutional Customer.
Clearing Broker: a DTC Participant that processes transactions at DTC on behalf of a
Correspondent.
The Tracking Period
The tracking period is the time during which the Lead Manager instructs DTC to track an IPO issue.
DTC monitors the activity of the IPO tracked issue and presents daily reports to the Lead Manager
and Syndicate Members itemizing that activity. The length of the IPO tracking period is determined
by the Lead Manager who has until 3:00 p.m. Eastern Standard Time (EST) two days before
settlement to notify DTC of its intention to track an issue, and who subsequently may notify DTC on
any day prior to 3:00 p.m. EST to end the tracking. The maximum tracking period is 90 calendar
days.
A stabilization/penalty-bid period may coincide with the tracking period. This period is also
established by the Lead Manager and the issuer. Stabilization indicates the Lead Manager's
responsibility to stabilize the market, possibly by intervening in the market to prevent the market
price of the issue from falling below the offering price. Penalty bid refers to the Lead Manager's
ability to penalize Syndicate Members whose customers have flipped shares, possibly by recovering
selling concessions.
Decisions made by the Lead Manager and issuer regarding the stabilization/penalty bid period have
no bearing whatsoever on the tracking period. Lead Managers may track IPO issues regardless of
whether or not they have established a stabilization/penalty bid period. Similarly, if a Lead Manager
has implemented both a tracking period and a stabilization/penalty bid period, the Lead Manager
may terminate the tracking period at any time before or after the stabilization/penalty bid period is
concluded. (At 90 calendar days, however, the tracking period expires automatically. )
Note- Although "penalty bid" and "tracking" refer to two separate activities, in DTC's technical
specifications, the terms are used synonymously.
At the close of business on the day IPO tracking is terminated, all shares residing in Brokers' IPO
Control Accounts are released to their Free Accounts (if special arrangements have been made,
shares may be released to a subaccount segregation location), and Bank transactions are no longer
monitored.
Participants may access the tracking status of an issue over the CCF/CCFII ELISC/A files, or via the
Participant Terminal System (PTS) functions GWIZ (Security Inquiry) and IPOI (Initial Public
Offering Inquiry- Option 1, List of Tracked Issues).
The IPO Database- Populating Customer-Level Detail
The IPO database stores customer-level detail for Lead Managers' and Syndicate Members'
Institutional and Retail customers. The database is populated differently for Institutional and Retail
customers, and Lead Managers and Syndicate Members must be aware of the procedures, options,
and requirements associated with this process.
Institutional Customers
Institutional customers are usually investment managers whose trades are executed by an
Executing Broker via the ID system and whose positions are held in a Custodian Bank's Free
Account or a Prime Broker's IPO Control Account.
Customer-Level Detail for Institutional Customers
When an Initial Distribution trade settles through the ID system, customer-level detail is extracted
automatically from each authorized ID trade identified with an IPO market code. The Agent Bank or
Prime Broker Internal Account number and the Executing Broker's Internal Account Number for the
customer must be included on the delivery instruction in order to allow the ID system to populate
the database appropriately and to make the delivery. If the Internal Account number is omitted or
inaccurately added, an Error Code of 91 will appear.
Error Code 91 will flag a missing Internal Account number three times. The first two, at confirm and
affirm time, offer the Lead Manager or Syndicate Member time to correct the error by adding or
correcting the Internal Account number; it is then possible to deliver the shares via the ID system.
If the flag appears for a third time, however, at Authorization and Exception (ANE) time, the trade
has already been excepted from the ID system and must be completed via the PTS Deliver Order (
DO or NDOM) function, or via CCF/CCFII or MDH. Lead Managers or Syndicate Members must then
enter customer-level details into the DO screen fields in order to populate the database.
Note- Customer-level detail that is extracted from an ID trade (or a DO) populates the IPO database
at the time the transaction is completed. The only exception is a Broker Custody delivery which
populates at confirm time.
Retail Customers
Retail customers are individual investors who purchase IPO shares through the Lead Manager or a
Syndicate Member, and whose positions are held in a Broker-Dealer's IPO Control Account.
Customer-Level Detail for Retail Clients
Lead Managers and Syndicate Members may populate the IPO database with customer-level detail
for their Retail customers by entering Add Customer-Level Detail transactions (over PTS, CCF, CCFII
or MDH) directly into the IPO database. This can also be performed easily at Initial Distribution by
extracting customer-level details for Retail Primary Market buys from trade files and reformatting
them in the IPO Add Customer-Level Detail machine-readable format for transmission via
MDH/CCF/CCFII, or by entering the customer-level detail via the PTS function.
Although Lead Managers and Syndicate Members are not required to populate the IPO database
with customer-level detail for Retail customers, there are several advantages to doing so. If the IPO
database is not populated, the ensuing reports will not be specific and flipping will be reported on a
Syndicate Member-level. The Syndicate Member's report will display the message "Customer-Level
Information is Unavailable" adjacent to the flipped share quantity.
Also, certain transactions (e. g. , WTs, customer account transfers) require that customer-level
detail be entered before the transactions can be processed. Lead Managers, Syndicate Members,
Clearing Brokers and Banks that have not entered customer-level detail will need to enter it in order
to perform a customer account transfer or a WT.
Customer-level detail may be submitted to DTC as early as trade date. Brokers may submit
reformatted trade files via CCF/CCFII/MDH or use the PTS IPO function to populate the IPO
database by including customer-level detail and associated share allocations. Information may be
submitted on a daily basis, and DTC accepts these files regardless of whether or not the issue is
being tracked. On closing day DTC purges the IPO database of all information pertaining to nontracked issues. After the closing date, DTC ignores customer-level detail input for non-tracked
issues but continues to accept customer-level detail for tracked issues.
Note- Once customer-level detail has been entered for one customer in the Participant's database, it
must be entered for all of that Participant's customers in order to perform subsequent transactions.
Setting Up an Issue for Tracking
Lead Managers, Co-Managers, Co-Reporters, Syndicate Members, and Clearing Brokers can all make
preparations for an IPO tracked issue before the issue closes.
Lead Manager
Lead Managers should notify DTC as early as possible that an IPO issue is to be tracked, but must
notify it in writing no later than 3:00 p.m. EST, two days before the issue closes (S-2). DTC's
Security Master File includes a tracking indicator which must be on for tracking to take place. The
indicator defaults to "on" for all IPO CUSIPs, but will be turned off if DTC is not notified in writing by
3:00 p.m. EST S-2 of the Lead Manager's intention to track. Tracking information is available over
CCF/CCFII Eligibility files (ELISC/A) and the PTS GWIZ and IPOI (Option 1, List of Tracked Issues)
functions. (Refer to Lead Manager for specific instructions. )
Initial Distribution
After the Lead Manager distributes shares to the Syndicate Members in the "Syndicate Takedown,"
the Lead Manager (s) and Syndicate Members then distribute shares to their Institutional and Retail
customers ("Initial Distribution"). Any of the following actions may occur at this point:
• Distribution of Institutional Shares to Institutions' custodians (Agent Banks or Prime
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Brokers)
Directed Concessions (Lead Manager only)
Oversubscriptions (Lead Manager only
Directed Concessions/Oversubscriptions (Lead Manager only)
Allocation to Retail Customers
Initial Distribution deliveries require customer-level detail.
Lead Managers, Co-Managers, Co-Reporters, Syndicate Members, Clearing Brokers and Banks can
set up Initial Distribution deliveries prior to the closing of the issue. These deliveries may be
performed by using either DTC's ID system or the PTS functions DO or NDOM.
Secondary Market
• Secondary Market sells can also be set up in advance by reformatting Secondary Market sell
transaction files. In order to deliver Secondary Market sells, Broker-Dealers must release
IPO shares from their IPO Control Accounts. Those releases can be set up as early as 6:00
a.m. EST trade date
Releases submitted on trade date will recycle until settlement date or for up to 30 calendar days
depending on the recycle option selected by the Participant. The system will recycle the transactions
and release positions as they become available for the duration of the recycle period. When shares
are released, they are listed on the tracking reports as potential flips.
Ending the Tracking Period
DTC ends tracking at the close of business on the 90th calendar day of tracking, or any day prior, as
instructed by the Lead Manager. Shares are moved from Brokers' IPO Control Accounts to their Free
Accounts, and are subject to DTC's normal collateralization rules. Activities chilled during the
tracking period (e. g. , CODs and Deposits) can then be performed. On ELISC/A, the tracking
indicator and end tracking date are updated to blank spaces. The PTS function GWIZ is updated to
indicate that tracking for that issue has been turned off and final tracking reports are generated for
the Lead Manager, Co-Managers, Syndicate Members, Clearing Agents, and primary Co-Reporters.
IPO Tracking System Functions
IPOU Update Functions
• Inquiry (Option 1) provides access to the IPOI Inquiry functions.
• Add Customer-Level Detail (Option 2) allows users to populate customer-level detail for
Retail shares, and allows Clearing firms to populate customer-level detail for their
Correspondent's Retail shares as well. It also allows Brokers and Clearing Firms to adjust
Retail customer-level detail.
Note- Participants cannot add customer level detail for institutional customers. These
customers are populated automatically by DTC's ID system.
• Release IPO Shares to the Free Account (Option 3) allows Brokers to release shares
from their IPO Control Accounts into their Free Accounts. Brokers can release shares on a
Syndicate Member level or on a customer level to their Free Accounts; Clearing Brokers
can release their Correspondent Retail customers' IPO shares on a Syndicate Member
(Correspondent) level or on a customer level as well.
• Customer Account Transfer (Option 4) allows users to transfer shares between
Participants and updates customer-level detail of the Deliverer's and Receiver's accounts.
Customer-level detail is required. Account transfers can be for value or for non-value.
Note- Participants must use this account transfer option when attempting to transfer IPO
positions.
• Customer-Level Adjustment (Option 5) allows users to adjust customer numbers
and/or share quantities.
• Oversubscription for Lead Underwriter (Option 6) allows the Lead Manager to move
Free shares to its own IPO Control Account for oversubscription distribution. This function
will generate two one-sided next-day journals: Free (-) and IPO (+).
• IPO Pending Transactions Cancel (Option 7) allows users to cancel "hold" releases.
• Correspondent Position Adjustment (Option 8) allows Clearing Agents to move
positions in the IPO database among Correspondents and between themselves and
Correspondents.
• Stock Loan Release (Option 9) allows Brokers to release shares from their IPO Control
Accounts into their Free Accounts for the purpose of lending the shares. No customer
account information is accepted for stock loan releases.
For additional information regarding the IPO Tracking System Update function, refer to IPOU.
IPOI Inquiry Function
• List of Tracked Issues (Option 1) displays a list of all issues that are currently being
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tracked, the Lead Manager of each issue, and the proposed date for end of tracking for
each issue.
Issues by Participants (Option 2) displays a summary of tracked issues in which the
Participant has position. Each role that a Participant plays is represented, e. g. ,
Correspondent, Syndicate Member, Prime Broker, etc.
Customer-Level Details by Participant-Issue (Option 3) displays three screens that
offer different levels of information:
• Screen 1: displays a Participant's general customer information, regardless of
which Syndicate Member delivered the shares
• Screen 2: displays customer information broken down by Syndicate Member
• Screen 3: provides detailed information for a specific customer. Custodian
relationships for that customer are also defined.
These screens can be used for accessing more detailed information by entering a specific
customer, Executing Broker, flip, and customer-type criteria in the appropriate fields.
IPO Release Transaction (Option 4) offers optional date range criteria, and lists all IPO
releases in any status
For additional information on the IPO Tracking System Inquiry function, refer to IPOI.
IPO Tracking System User's Manual Format
Chapters
Each chapter addresses the tasks that a user in a particular role may perform (Lead Manager,
Syndicate Member, Clearing Broker, etc. ). The chapters are comprehensive, providing the user with
step-by-step instructions on how to perform all IPO-related tasks. Users playing multiple roles in
one or many IPO offerings simultaneously should refer to multiple chapters. Each chapter includes
the following:
• References to all related PTS documentation. PTS instructions that appear within this text
indicate IPO-specific requirements only.
• References to CCF/CCFII and MDH appear in the sidebars on the left margin. Contact the
Participant Interface Planning Department for field specifications and other requirements.
• Instructions on how to perform all tasks within that role.
A separate chapter, "Reports," describes the reports that the Lead Manager, Co-Manager, CoReporter, Syndicate Members, and Clearing Agents receive. The reports are produced daily and are
cumulative.
Appendices
Codes
Identifies Activity Codes, DO Reason Codes and ID Market Codes used in IPO Tracking.
Glossary
Defines DTC's vocabulary particular to IPO Tracking.
Product Topics:
Clearing Bank Procedures
Receive Shares from the Lead Manager on Behalf of Correspondent
Syndicate Members
Prior to the closing date, the Lead Manager sets up deliveries of an IPO tracked issue to its
Syndicate Members using the appropriate deliver order (DO) reason codes.
By 1:15 p.m. closing date, DTC receives a call from the Lead Manager permitting the distribution of
shares to Syndicate Members. DTC then delivers shares from the Lead Manager's IPO control
account to the Clearing Bank's general free account, on behalf of the Bank's Correspondent
Syndicate Members, in accordance with the Lead Manager's DO instructions ("Syndicate
Takedown"). These shares are marked as IPO shares in the IPO database.
Clearing Banks may hold the shares or make deliveries on behalf of their Correspondent Syndicate
Members.
Note- Throughout the tracking period, all bank transactions (Initial Distribution and Secondary
Market) for the issue are monitored. All shares of the tracked issue reside in the bank's general free
account and are tagged in the IPO database as either IPO shares or Free Secondary Market shares.
Initial Distribution
Initial Distribution, the delivery of IPO shares to a Lead Manager's or Syndicate Member's customers
at Agent Banks or Prime Brokers, takes place after the Syndicate Takedown.
Although Initial Distribution shares can be delivered on or after the closing date, Clearing Banks can
set up Initial Distribution deliveries on behalf of their Correspondent Syndicate Members prior to
receiving shares from the Lead Manager.
Initial Distribution shares are delivered by using either DTC's Institutional Delivery (ID) System or
the PTS functions DO or NDOM. The Clearing Bank indicates an Initial Distribution delivery by
entering the appropriate Market Code on the Institutional Delivery Trade Input screen for ID
trades, or by entering the appropriate reason code in the Reas field of the Initial Public Offering
Deliver Orders screen for day and night DOs.
Note- Initial Distribution transactions are not settled through Continuous Net Settlement (CNS).
Distribute Shares to Agent Banks and Prime Brokers via ID
1 Enter information in the following fields of the Institutional Delivery Trade Input screen:
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Market Code: enter 11
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
(AIA) number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
The AIA number, the BIA number, and the associated Syndicate Member are extracted from ID
trades upon authorization. On closing date, the IPO database is populated.
Note- The Internal Account numbers are required for Initial Distribution transactions and must be
entered correctly in order to ensure accurate processing of the transaction.
2 Refer to IDTI for additional ID field and processing information.
Distribute Unaffirmed ID Shares via DO or NDOM
When a trade is unaffirmed, excepted or rejected from the ID system, the trade may be settled via
option 4 of the PTS function DO, or option 6 of the PTS function NDOM.
1 Enter information in the following fields of the Initial Public Offering Deliver Orders screen:
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Recv-Pt: enter the receiving Agent Bank or Prime Broker's Participant number
Reas: enter reason code 50
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account (AIA) number for
the customer
ID Agent#: enter the ID Agent number (required on all deliveries from Clearing
Banks).
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
The system captures the AIA number, the BIA number, and the associated Syndicate Member and
populates the IPO database.
2 Refer to DO or NDOM for additional DO field and processing information.
Update Customer-Level Information via IPOU
Customer-level detail in the IPO database can be added and/or updated via the PTS function IPOU.
The following sections describe some of the activities a Clearing Bank can perform via IPOU on
behalf of its Correspondent Syndicate Members.
Note- If customer-level detail has been added for any of a Correspondent Syndicate Member's
customers, it must be added for all its customers or the Clearing Bank will not be able to perform
some transactions (such as withdrawals-by-transfer (WTs), customer account transfers) for those
customers.
Refer to Appendix D for additional information regarding IPOU.
Allocate Shares to Retail Customers (Add Customer-Level Detail)
After delivering Initial Distribution shares to the Agent Banks/Prime Brokers of its Correspondent
Syndicate Members' Institutional customers, Clearing Banks can allocate the shares they retain to
their Correspondent Syndicate Member's Retail customers.
IPOU, option 2 allows Clearing Banks to populate the IPO database by adding their Correspondent
Syndicate Members' customer-level details and share allocations.
Note- Banks cannot allocate shares to Institutional customers.
1 On the IPO- Tracking System Main Menu, select option 2, Add Customer-Level Detail.
2 Enter information in the following required fields on the IPO- Add Customer-Level Detail screen:
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Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
Internal Customer: enter the Internal Account number of the customer
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Share Quantity: enter the number of whole shares, up to 13 positions
Sign: enter (+) to indicate the shares should be increased
Update Customer-Level Detail
IPOU, option 5 allows Clearing Banks to change their Correspondent Syndicate Members' customers'
Internal Account numbers and reallocate a share quantity from one customer to another.
1 On the IPO- Tracking System Main Menu screen, select option 5, Customer-Level Adjustment.
2 Enter information in the following required fields of the IPO- Customer-Level Adjustment screen:
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Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
From Internal Customer: enter the existing AIA number for the customer
Note- If a match is not found for the From Internal Customer field (AIA number), the
transaction is rejected.
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From BIA: enter the existing BIA number for the customer (optional)
To Internal Customer: enter the new AIA number for the customer; required if the
Participant wants to change the existing number to a new number
Reallocated Share Quantity: enter the number of whole shares being adjusted, up to
13 positions; required if the Participant is reallocating a share quantity from the existing
internal customer to the new internal customer
Note- Because the system overlays the share quantity information, you must input
exactly the total number of shares the To Internal Customer should have.
Transfer Customer's Position Between Participants
Clearing Banks can transfer a Correspondent Syndicate Member's customer's position to another
Participant without that transfer being recorded as a potential flip. For reporting purposes, the IPO
database moves the original Clearing Bank's Participant number, Correspondent Syndicate
Member's ID Broker-Dealer number and BIA number with each transfer of a customer's position.
Memo Segregation and Sub Account Segregated positions do not need to be released prior to
attempting any customer account transfers. IPO account transfer transactions can bypass memo
segregation.
Customer-level detail is required for account transfers.
Note- Partial transfers will not be processed.
Transfer Customer's Position via IPOU
Note- Account transfers in tracked CUSIPs must be accomplished by the IPO Customer Account
Transfer function and must be for the total (IPO and Secondary Market) position the customer has
in its account.
• On the IPO- Tracking System Main Menu screen, select option 4, Customer Account
Transfer.
• Enter information in the following fields of the IPO- Customer Account Transfer screen:
• Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
• To Participant: enter the receiving Participant number
• From Internal Customer: enter the existing AIA number for the customer
Note- If no match is found for the From Internal Customer field (AIA number),
the transfer cannot be processed.
• To Internal Customer: enter the receiving Participant's AIA number
• Share Quantity: enter the number of whole shares being transferred, up to 13
positions
• Settlement Amount: enter the settlement amount for the account transfer;
optional
• Reason Code: enter the Reason Code by which this account transfer is to be
processed
Note- The following Reason Codes may be entered for Account Transfers:
Reason Code 40-this Reason Code will not reduce the delivering Participant's memo segregation
position if the account transfer is valued; but will reduce the delivering Participant's memo
segregation position by the account transfer quantity is free of value.
Reason Code 88- this Reason code will reduce the delivering Participant's memo segregation
position by the quantity of the account transfer only if the account transfer is free of settlement
value. Use of this Reason Code will not reduce memo segregation if the account transfer is for
value.
Reason Code 95-this Reason Code will reduce the delivering Participant's memo segregation
position by the account transfer quantity regardless of whether the account transfer is valued or
free of value.
Reason Code 97- this Reason Code will reduce the delivering Participant's memo segregation
position by the account transfer quantity regardless of whether the account transfer is valued as
free of value.
Reason Code 98-this Reason Code will not reduce the delivering Participant's memo segregation
position to transact the account transfer regardless of value.
Note- Account transfers of IPO and Free secondary market shares to a broker Participant will result
in two DOs generated.
Share Movement for Customer Account Transfers- Deliveries
When a Clearing Bank transfers a Correspondent Syndicate Member's customer's position to another
Participant, DTC moves the shares in one of the following ways:
Transfer position to a Bank: All shares move to the receiving Bank's Free Account in ART. Shares
marked as IPO shares in the IPO database for the Clearing Bank are marked as IPO shares in the
IPO database for the receiving Bank and credited to the receiving Bank's general free account.
Shares marked as Secondary Market shares in the IPO database for the delivering Bank are marked
as Secondary market shares in the IPO database for the receiving Bank and credited to the
receiving Bank's general free account.
Transfer position to a Broker: Shares marked as IPO shares in the IPO database for the Clearing
Bank move to the receiving Broker's IPO Control Account in ART and are marked as IPO shares in
the IPO database. Shares marked as Secondary Market shares in the IPO database for the Clearing
Bank move to the Broker's general free account in ART. Secondary market shares are not captured
in the IPO database for broker Participants.
Share Movement for Customer Account Transfers- Receipts
Clearing Banks receive customer account transfer positions from other Participants on behalf of their
Correspondent Syndicate Members in one of the following ways:
Receive position from a Bank: All shares move to the Clearing Bank's Free Account in ART.
Shares marked as IPO shares in the IPO database for the delivering Bank are marked as IPO shares
in the IPO database for the receiving Clearing Bank and credited to the receiving Bank's general free
account. Shares marked as Secondary Market shares in the IPO database for the delivering Bank
are marked as Secondary Market IPO shares in the IPO database for the Clearing Bank and credited
to the receiving Bank's general free account.
Receive position from a Broker: All shares move to the general free account in ART. Shares
delivered from the Broker's IPO Control Account are marked as IPO shares in the IPO database for
the Clearing Bank and credited to the receiving Bank's general free account. Shares from the
Broker's general free account are marked as Secondary Market shares in the IPO database for the
Clearing Bank and credited to the receiving Bank's general free account.
Secondary Market
Secondary Market Deliveries
Free shares sold in the Secondary Market can be delivered using the current ID and DO/NDOM
Codes.
The following additional information is required to process Secondary Market sales:
• Internal Account (AIA) number
Note- Trades with unmatched AIA numbers will be rejected. (Refer to Relaxed Editing and
Resolve Internal Account Number Discrepancies in ID Sell Transactions. )
• Correspondent Syndicate Member's ID Broker-Dealer number
• Executing Broker's Internal Account (BIA) number
• ID Agent ID number
Refer to DO or NDOM for information on Deliver Orders, and IDTI for information on ID deliveries.
When delivering to other Banks (i. e. , Bank-to-Bank deliveries), the Clearing Bank enters its own
Internal Account number for its customer. The receiving Bank's database is populated with a
customer number matching its own Participant number. The receiving Bank may maintain its own
Participant number as its account number for this customer or may adjust the number to the actual
customer number. When subsequently delivering the shares, the Bank must use the account
number on the database at the time of the delivery. As with any Clearing Bank's delivery, Free
shares will be moved first; then, if needed, its IPO shares. If IPO shares are moved via a Bank-toBank delivery, the receiving Bank will receive tagged IPO shares and a flip will not be reported.
Receive Shares from Secondary Market Buys
Shares bought on the Secondary Market reside in the Clearing Bank's general free account and are
segregated in the IPO database as Secondary Market shares. For Banks, Secondary Market shares
are tracked for the duration of the tracking period.
Relaxed Editing
Clearing Banks can set up sales of their Correspondent Syndicate Members' customers' Initial
Distribution shares on the Secondary Market as early as trade date. These sales, referred to as
"turnaround" sales, will settle on the same day the issue closes (possibly before the IPO database
has been populated).
Relaxed editing allows Clearing Banks to process Secondary Market sell transactions on settlement
date without a match of the AIA number or share quantity to the IPO database. As long as the
Clearing Bank itself has received sufficient shares to cover deliveries, the Clearing Bank can process
sales of Correspondent Syndicate Members' customers' Initial Distribution shares on settlement date
without matching customer-level detail.
As soon as the Clearing Bank receives the Initial Distribution shares:
• ID deliveries that were set up for customers between trade date and the day before
settlement date (S-1) are delivered regardless of unmatched Internal Account numbers or
share quantity.
• DO/NDOM deliveries set up for customers are made until 3:00 p.m. EST on settlement
date, regardless of unmatched Internal Account numbers or share quantities.
After the trade settles, Banks can update the unmatched Internal Account number to the correct
Internal Account number via the PTS function IPOU. (Refer to Update Customer-Level Information
via IPOU. )
Each night during the relaxed editing period DTC attempts to reconcile the AIA numbers of
unmatched deliveries not adjusted during the processing day. After DTC's cutoff for deliveries and
prior to cutoff for the machine-readable customer-level detail files, the system automatically
attempts to match the AIA numbers of made unmatched deliveries to the AIA numbers populated
on the Custodian Bank's IPO database. The system attempts to reconcile these AIA number
discrepancies nightly during the relaxed editing period so that DTC can report these sales correctly
to Underwriters.
If a match is found, the system updates its records to accurately report the delivering customer and
its associated Syndicate Member. The Custodian Bank is also identified on the report as having
delivered the shares.
If a match is not found, the system is unable to identify the Syndicate Member associated with the
shares and therefore reports the delivery to the Lead Underwriter as "Unknown," indicating a
potential flip by a customer of an unknown Syndicate Member. The Custodian Bank is identified on
the report as having delivered the shares.
Clearing Banks can view unmatched transactions that settled through relaxed editing via IPOI,
option 3. The information is displayed as follows: A customer row is added displaying the
unmatched Internal Account number, an "Unknown" Syndicate Member, a negative (-) Available
Share Quantity, and a "flipped" quantity equal to the negative share quantity. (Refer to Make
Inquiries via IPOI for additional information. )
Note- After the relaxed editing period, deliveries with unmatched AIA numbers will not settle.
Resolve AIA Number Discrepancies in ID Sell Transactions
When the AIA number on a sale transaction is missing or does not match an AIA number in the IPO
Tracking database, the system generates a warning message, Error 91.
Error 91 flags an unmatched Internal Account number three times:
• ID Confirmation
• ID Affirmation
• Authorization and Exception (ANE)
Error 91 also appears on machine-readable output.
When validation occurs at Authorization and Exception (ANE) time, ANE will reject the transaction if
the Internal Account number is still unmatched or missing and the delivery will be excepted from
automated processing.
Unmatched AIA numbers can be corrected in the IPO database prior to the settlement day cutoffs
for Global processing and for Trade-for-Trade processing. This will allow the ID trade to be
authorized and settle that day through the automated settlement feature of the ID system.
Note- The ANE inquiry function and T+ 3 hard-copy report will display a code of "F" in the status
field to indicate an Initial Distribution trade that has been rejected from settlement, and an "I" to
indicate a Secondary Market trade that has been rejected from settlement. The "F" code indicates
that the AIA number on an IPO trade is missing, and the "I" code indicates that the AIA number is
missing or does not match the AIA number as stored on the IPO database. These transactions may
be reprocessed for up to 21 days.
Internal Account number discrepancies can be resolved in the following ways:
• Have the Custodian update the Internal Account number in the IPO database to match the
number on the ID transaction by performing an IPO customer-level adjustment. (Refer to
Update Customer-Level Detail. )
• Cancel the ID transaction and re-enter it in the ID system as per the Custodian's
instructions received via the PTS function IDEM. (Refer to IDTI for additional information.
)
• Have the Custodian except the ID transaction from automated settlement and enter a DO
with the AIA number as it appears in the IPO database. (Refer to Distribute Shares via DO
or NDOM. )
Withdrawals-By-Transfer
If certificate denominations are available, Withdrawals-by-Transfer (WTs) of tracked issues are
permitted starting on closing day via the PTS functions NWT1 (Night Withdrawal-by-Transfer) and
RWT1 (Rush Withdrawal-by-Transfer), as well as via CCF and CCFII. WTs are noted as separate line
items on tracking reports.
1 Enter information in the following fields of the Night W/T Data Collection screen or the Rush
Withdrawal Transfer System Add Function screen:
•
•
•
Int Cust: enter the AIA number of the customer for whom shares are being withdrawn
Corr Acct: enter the Correspondent's ID Broker-Dealer number
ID Agent: enter the ID Agent Broker Dealer number; optional
Note- Requests for WTs must include the AIA number. Also, the customer must already exist in
the IPO database or the WT is rejected.
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
DTC processes WT requests using the Clearing Bank's Secondary Market shares first. If
necessary, DTC then uses IPO shares to complete a WT request.
Stock Loans and Returns
Stock Loan Deliveries
Clearing Banks are able to process stock loans using the appropriate DO/NDOM Reason Codes.
When processing a stock loan, DTC attempts to fulfill the loan quantity with Free secondary market
shares and will satisfy the balance, if necessary, with the bank's IPO shares.
All stock loans are made on an omnibus basis. No customer account numbers are tagged to stock
loans. An AIA number entered in a stock loan delivery is ignored by DTC; however, the exception to
this is for stock loans to banks, in which case the Participant number of the receiving Bank must be
entered as the AIA number in order to allow the receiving Bank the ability to deliver borrowed
shares.
All loans of IPO shares are noted as separate line items in Lead Underwriter and Syndicate Member
Flipping Activity Reports and are categorized according to Participant type of lender and borrower.
The quantity of loaned IPO shares is prorated across all Syndicate Members that deliver initial
distribution shares to the Bank.
• Enter Reason Code 10 in the REAS field of the Initial Public Offering Deliver Orders screen.
• Refer to DO or NDOM for additional Deliver Order field and processing information.
Stock Loan Receipts
All shares of stock loans delivered to a Bank are credited to the receiving Bank's general free
account, and are considered free Secondary Market shares. DTC updates the Bank's IPO database
by using the receiving Bank's own Participant number as the default AIA number for borrowed
shares.
The receiving Bank can adjust the IPO database to attach a valid customer number to the borrowed
shares, or can maintain the shares with the default AIA number populated by DTC. Regardless, as
with all other deliveries, when delivering borrowed shares the AIA number entered by the Bank in
its delivery instruction must match the IPO database in order for DTC to process the delivery.
Stock Loan Returns
Clearing Banks can process Stock Loan Returns on behalf of their Correspondent Syndicate
Members by using the appropriate DO/NDOM Reason Codes. All stock loans are returned from the
borrower's general free account.
• Enter Reason Code 20 in the REAS field of the Initial Public Offering Deliver Orders screen.
• Refer to DO or NDOM for additional Deliver Order field and processing information.
Stock Loan Return Receipts
All stock loans are delivered to the lender's general free account as free Secondary Market shares in
the IPO database.
Pledges
Pledges of Collateral
Clearing Banks can pledge shares with or without value on behalf of their Correspondent Syndicate
Members via the PTS function COLL.
Refer to COLL for additional field and processing information.
Shares are moved to the Pledge (14) Account.
Pledge Releases
All Pledge shares are returned to the Clearing Bank's general free account.
Reclaims
Reclaim Deliveries
DTC will automatically process a matched reclamation based on the DO transaction number and
other transaction information provided until one day after settlement.
Clearing Banks can enter Matched Reclaims on behalf of their Correspondent Syndicate Members via
the PTS functions ART and DO/NDOM and via CCF, CCFII and MDH.
Partial reclaims are not permitted.
Note- When a Clearing Bank reclaims a delivery, the reclaimed DO will be matched to the original
delivery and the information in the IPO database will be reversed.
Matched Reclaim Deliveries via ART
Matched Reclaims can be made on settlement date and the day after. These reclaims cannot be
reclaimed by the original deliverer (e. g. , the Lead Manager) and are not subject to Risk
Management Controls.
• Enter R to the left of the item to be reclaimed on the ATP Activity Summary screen.
• Refer to ART for additional field and processing information.
Matched Reclaims Deliveries Via DO or NDOM
Matched Reclaims can be made on settlement date and the day after. These reclaims cannot be
reclaimed by the original deliverer (e. g. , the Lead Manager) and are not subject to Risk
Management Controls.
• Enter information in the following fields of SDFS Automatic Reclaim Deliver Orders screen:
• Trans#: enter the transaction number of the transaction being reclaimed
• Reas-Code: enter the appropriate Reason Code. (Refer to Codes in this manual for
Reclaim Reason Codes. )
• Orig-Date-Ind: enter T to reclaim a DO entered today or P to reclaim a DO
entered on the previous business day
• Refer to DO or NDOM for additional information.
Note- If made during the Matched Reclaims time frame, DTC will also match Freeform Reclaims,
provided the appropriate DO Reason Code and correct information is entered.
Unmatched/Freeform Reclaim Deliveries
Reclaims must be entered Freeform via CCF/CCFII, MDH or the PTS functions DO/NDOM if:
• The reclaim transaction number cannot be matched to an original delivery
• The reclaim occurs after the Matched Reclaim deadline has passed
Clearing Banks must input transaction details in freeform, including the appropriate Deliver Order
Reclaim Reason Code.
DTC treats these Reclaim transactions as original deliveries, which in turn can be reclaimed by the
receiver.
Reclaim Receipts
Initial Distribution deliveries that are reclaimed within the deadline (S through S+ 1) will be
returned to the Custodian Bank's general free account. IPO shares will be marked in the IPO
database.
Note- Clearing Banks can reclaim Unmatched/Freeform Reclaim Deliveries.
Memo Segregation
Clearing Banks can enter Memo Segregation instructions for tracked issues using the same
procedures currently used for non-tracked issues. Refer to MSEG for information on Memo
Segregation instruction processing.
The share quantity in the Memo Segregation instruction will be subtracted from the combined share
total of IPO and Secondary Market shares in the general free account. The resulting share total
must be greater than the quantity of any Deliver Orders entered. If the quantity is less, the Deliver
Orders will not be processed and will remain pending.
Deposits
Deposits are chilled for tracked issues during the tracking period.
DWAC (Deposit/Withdrawal at Custodian) activity is permitted on a very limited basis during the
tracking period, and only with the consent of the Lead Underwriter.
Certificates On Demand (COD's)
CODs are chilled for tracked issues during the tracking period.
Make Inquiries via IPOI
The PTS function IPOI (Initial Public Offering Tracking System Inquiry) allows Clearing Banks to
make inquiries about tracked issues on behalf of their Correspondent Syndicate Members.
The following information is provided via IPOI:
•
•
•
•
•
A
A
A
A
A
list of all tracked IPO issues
summary of tracked IPO issues in which the Participant has position
summary of customer-level details and custodian relationships by Participant-issue
summary of IPO pending/canceled/released transactions
summary of Correspondent Syndicate Members' customer's Secondary Market share
positions, obtained from Secondary Market transactions.
For additional information on the IPO Tracking System Inquiry function, refer to the Overview.
Receive Reports
DTC prepares and distributes cumulative hard-copy reports of their tracked issues for Syndicate
Members. Clearing Banks will receive reports on behalf of each of their Correspondent Syndicate
Members.
• Potential flips by Retail and Institutional customers broken down by trade date and price; if
•
•
•
•
more than one Syndicate Member delivered IPO shares to a customer, the flip quantity is
prorated
Separate line for WTs
Separate lines for Stock lending activity
Retail account transfers (showing receiving Participant number and BIA number)
Institutional account transfers (showing receiving Participant number and BIA number)
Refer to Reports for further information.
Clearing Bank Tasks
Required Field Information& DTC Output
Task:
Field Information Required:
DTC Output:
Market Code: Market Code 11
Activity Code:
26
Initial Distribution
To:
Agent Banks via ID
Agent Internal Account:
Agent Bank's Internal Account
number
Reason Code: 49
Broker Internal Account:
Executing Broker's Internal
Account number
Agent Banks via
DO/NDOM
Recv-Pt: Agent Bank's Part
number
Activity Code:
26
REAS: Reason Code 50
Reason Code: 50
Int-Acct#: Agent Bank's
Internal Account number
Bkr-Acct#: Executing Broker's
Internal Account number
Prime Brokers via ID
Market Code: Market Code 11
Agent Internal Account:
Prime Broker's Internal Account
number
Broker Internal Account:
Executing Broker's Internal
Account number
Activity Code:
49
Reason Code: 49
Task:
Prime Brokers via
DO/NDOM
Field Information Required:
DTC Output:
Recv-Pt: Prime Broker's Part#
Activity Code:
49
REAS: Reason Code 50
Reason Code: 50
Int-Acct#: Prime Broker's
Internal Account number
Bkr-Acct#: Executing Broker's
Internal Account number
Customer-Level
Updates:
Add Customer- Level
Detail via IPOU, option
2
Corresp. Account:
Correspondent Syndicate
Member's ID Broker-Dealer
number
Internal Customer: Internal
Account number
Share Quantity: Whole
number quantity
Sign: + or- to increase or
decrease shares
Update Customer-Level
Detail via IPOU, option
5
Corresp. Account:
Correspondent Syndicate
Member's ID Broker-Dealer#
From Internal Customer: Old
Internal Account number
To Internal Customer: New
Internal Account number
Share Quantity: New whole
number quantity
Secondary Market
Activity:
Sale of Secondary
Market shares via ID or
DO/NDOM
Internal Account number
Correspondent Syndicate
Member's ID Broker-Dealer
number
BIA number
ID Agent ID number
Withdrawals-byTransfer via NWT1/
RWT1
Corresp. Account:
Correspondent Syndicate
Member's ID Broker-Dealer
Activity Code:
26
Task:
Field Information Required:
DTC Output:
number
Int Cust: Internal Account
number
Agt ID: ID Agent number;
optional
Stock Loan via
DO/NDOM
REAS: Reason Code 10
Activity Code:
26
Stock Loan Return via
DO/NDOM
REAS: Reason Code 20
Activity Code:
26
Account Transfer to
Broker via IPOU, option
4
Corresp. Account:
Correspondent Syndicate
Activity Code:
IPO shares: 49
Free shares: 26
Member's ID Broker-Dealer
number
Reason Code:
40, 95 or 98
From Internal Customer:
Current Internal Account
number
To Participant: Receiving
Broker's Part number
To Internal Customer: New
Internal Account number
IPO Share Quantity: Number
of whole IPO shares being
transferred
Free Share Quantity: Number
of whole Free shares being
transferred
Settlement Amount:
Settlement amount; optional
Reason Code: Appropriate
Reason Code for delivery
Account Transfer to
Bank via IPOU, option
4
Corresp. Account:
Correspondent Syndicate
Member's ID Broker-Dealer
number
From Internal Customer:
Current Internal Account
number
To Participant: Receiving
Bank's Part number
To Internal Customer: New
Activity Code:
26
Reason Code:
40, 95 or 98
Task:
Field Information Required:
DTC Output:
Internal Account number
IPO Share Quantity: Number
of whole IPO shares being
transferred
Free Share Quantity: Number
of whole Free shares being
transferred
Settlement Amount:
Settlement amount; optional
Reason Code: Appropriate
Reason Code for delivery
Clearing Broker
Receive Shares from Lead Manager
The Lead Manager sets up deliveries of IPO shares to its Co-Managers, Co-Reporters and Syndicate
Members prior to closing using the appropriate Deliver Order Reason Codes.
By 1:15 p.m. closing date, DTC receives a call from the Lead Manager permitting the distribution of
shares to Syndicate Members, Co-Managers and Co-Reporters. DTC then delivers the shares from
the Lead Manager's IPO Control Account to the Clearing Broker's IPO Control Account, on behalf of
its Syndicate Members, in accordance with the Lead Manager's Deliver Order instructions
("Syndicate Takedown").
Note- Shares remain in the IPO Control Account for the duration of the tracking period unless
transferred, released or distributed to Institutional customers at Agent Banks or Prime Brokers.
Initial Distribution
Initial Distribution, the delivery of IPO shares to a Syndicate Member's Institutional customers at
Agent Banks or Prime Brokers, takes place after the Syndicate Takedown.
Although Initial Distribution shares can be delivered on or after the closing date, you can set up
Initial Distribution deliveries on behalf of your Correspondent Syndicate Members prior to receiving
shares from the Lead Manager.
An Initial Distribution is performed by using either DTC's ID system or the PTS functions DO or
NDOM. You can indicate an Initial Distribution delivery by entering the appropriate Market Code on
the Institutional Delivery Trade Input Screen for ID trades, or by entering the appropriate Reason
Code in the REAS field of the Initial Public Offering Deliver Orders Screen for Day and Night DOs.
Note- Initial Distribution transactions are not settled through CNS.
Distribute Shares to Agent Banks and Prime Brokers
Distribute Shares via ID
Note- Customer-level detail is required for Initial Distribution transactions.
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 11
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure accurate
processing of the transaction. If either is missing, or entered incorrectly, an error code of 91 will
appear on the Confirmation and Affirmation tickets. Refer to Resolve Internal Account Number
Discrepancies for information on how to correct the Agent Internal Account number.
Result- The AIA number, BIA number and associated Syndicate Member are extracted from ID
trades upon authorization. On closing date, the IPO database is populated.
2 Refer to IDTI for additional ID field and processing information.
Distribute Unaffirmed ID Trade Shares via DO or NDOM
When a trade is unaffirmed, excepted or rejected from the ID system, you can settle that trade via
the PTS functions DO (Option 4) or NDOM (Option 6).
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 50
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Note- The Internal Account numbers must be entered correctly to ensure accurate
processing of the transaction. DTC rejects Initial Distribution deliveries in which either
number is missing.
•
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Result- The system captures the Agent Bank/Prime Broker Internal Account number along with
the BIA number and the associated Syndicate Member and populates the IPO database.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares for Broker Custody Trades
For trades where the Executing Broker and Custodian are the same entity ("Broker Custody"), the
Lead Manager "delivers" shares to its own account via DTC's ID system.
1 Follow the Initial Distribution procedures described in Distribute Shares via ID, entering your own
Participant number as both the Executing Broker and the Custodian of the transaction.
Result- Because there is no actual movement of shares, the IPO database is populated with
customer-level detail and the associated Syndicate Member upon Confirmation of Broker Custody
trades.
Update Customer-Level Information via IPOU
Customer-level detail in the IPO database can be added and/or updated via the PTS function IPOU.
The following sections depict some of the activities a Clearing Broker can perform on behalf of its
Correspondent Syndicate Members via IPOU.
Warning! If customer-level detail has been added for any of the Correspondent Syndicate
Member's customers, it must be added for all its customers or you will not be able to perform
subsequent transactions (e. g. , WTs, customer account transfers) for those customers.
Refer to Appendix D for additional information regarding IPOU.
Allocate Shares to Retail Customers (Add Customer-Level Detail)
After delivering Initial Distribution shares to their Institutional customers' Prime Brokers/Agent
Banks, you can allocate the shares they retain to your Correspondent Syndicate Members' retail
customers.
IPOU, Option 2 allows you to populate the IPO database by adding your Correspondent Syndicate
Member's customer-level details and share allocations.
Note- You cannot allocate shares to Institutional customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter information in the following required fields of the IPO- Add Customer-Level Detail Screen:
•
•
•
•
Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the number of whole shares, up to 13 positions
Sign: enter (+) to indicate shares should be increased
3 Refer to Appendix D for additional field and processing information.
Update Customer-Level Detail
IPOU, Option 5 allows you to correct or update your Correspondent Syndicate Member's customer
Internal Account numbers and adjust the share quantities allocated to their customers.
1 On the IPO- Tracking System Main Menu, select Option 5, Customer-Level Adjustment.
2 Enter information in the following required fields of the IPO- Customer-Level Adjustment Screen:
•
•
•
•
•
Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
From Internal Customer: enter the existing Internal Account number of the customer
From BIA: enter the existing BIA number for the customer (optional)
To Internal Customer: enter the new Internal Account number of the customer;
required if the Participant wants to change it
Reallocated Share Quantity: enter the number of whole shares being adjusted, up to
13 positions; required if the Participant is adjusting the share quantity
Note- Because the system overlays the share quantity information, you must input exactly the
total number of shares the customer should have. If you are not sure of the exact total the
customer should have, refer to the following section.
3 Refer to Appendix D for additional field and processing information.
Update Customer-Level Detail Using the Add Customer-Level Detail Function
IPOU Option 2, Add Customer-Level Detail, provides an easy way for Brokers to adjust share
quantities for their customers without knowing the total number of shares each customer should
have.
This method can also be used to eliminate an old Internal Account number from the IPO database
and add a new one.
1 On the IPO Tracking system Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter Information in the following required fields:
•
•
•
•
Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the number of whole shares, up to 13 positions, you wish to
increase/decrease the account by
Sign: enter (+) to indicate shares should be increased or (-) to indicate the shares
should be decreased
Result- The system adds/subtracts the share quantities for the account and updates them
accordingly.
If the share quantity for an Account number is reduced to zero, the system drops that number
from the IPO database.
3 Refer to Appendix D for additional information.
Transfer of Customer's Position Between Participants
You can transfer your customers' positions to another Participant without that transfer being
recorded as a potential flip. For reporting purposes, the IPO database moves the original Clearing
Broker's Participant number and the Correspondent Syndicate Member's ID Broker-Dealer number
with each transfer of a customer's position.
Memo Segregation and Sub Account Segregation positions do not need to be released prior to
attempting any customer account transfers.
Customer-level detail is required for account transfers.
Transfer Customer's Position via IPOU
• For transfers that originate in NSCC's ACATS system, Participants will be notified that an
issue is tracked and will receive a trade-for-trade (Balance Order) ticket.
• The transfer must be accomplished by the IPO Customer Account Transfer function and
must be for the total position the customer has in its IPO Control and Free Accounts.
1 On the IPO- Tracking System Main Menu Screen, select Option 4, Customer Account Transfer.
2 Enter information in the following required fields of the IPO- Customer Account Transfer Screen:
•
•
•
•
•
•
•
Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
To Participant: enter the receiving Participant's number
From Internal Customer: enter the existing Internal Account number for the customer
To Internal Customer: enter the receiving Participant's Internal Account number for
the customer
Share Quantity: enter the number of whole shares being transferred, up to 13 positions
Settlement Amount: enter the settlement amount for the account transfer; optional
Reason Code: enter Reason Code by which this account transfer is to be processed
3 Refer to Appendix D for additional field and processing information.
Result- Transfers can also be performed using the PTS functions DO or NDOM. However, since
this requires manual releases to the Free Account, these transfers will be recorded as potential
flips in DTC's tracking reports.
Share Movement for Customer Account Transfers- Deliveries
When you transfer a Correspondent Syndicate Member's customer's position to another Participant,
DTC moves the shares in one of the following ways:
• Transfer position to a Bank: Both IPO Control and Free Account shares move to the
Bank's Free Account in ART. The IPO database marks the shares delivered from the your
IPO Control Account as IPO shares. Shares delivered from your Free Account are marked
as Secondary Market shares in the IPO database.
• Transfer position to a Broker: Shares delivered from your IPO Control Account move to
the Receiving Broker's IPO Control Account in ART and are marked as IPO shares in the
IPO database. Shares delivered from your Free Account move to the Receiving Broker's
Free Account in ART. These shares are not captured in the IPO database.
Share Movement for Customer Account Transfers- Receipts
You will receive a customer's position from another Participant in one of the following ways:
• Receive position from a Bank: Shares marked as IPO shares in the Bank's Free Account
move to your IPO Control Account in ART and are marked as IPO shares in the IPO
database. Shares marked as Secondary Market shares in the Bank's Free Account move to
your Free Account in ART. These shares are not captured in the IPO database.
• Receive position from a Broker: Shares from the Delivering Broker's IPO Control
Account move to your IPO Control Account in ART and are marked as IPO shares in the
IPO database. Shares from the Delivering Broker's Free Account move to your Free
Account in ART. These shares are not captured in the IPO database.
Secondary Market
Release Shares from the IPO Control Account for Secondary Market Sales
All Secondary Market sell transactions settle from the Free Account. In order to deliver shares sold
by a Correspondent Syndicate Member's customers in the Secondary Market, those shares must
first be released from the Clearing Broker's IPO Control Account to its Free Account, using the PTS
function IPOU. Failure to release shares to the Free Account could result in a CNS short, or DOs for
Secondary Market sales dropping in ART.
Releases can be performed on the individual customer level, by including the Internal Account
number of the customer on the release, or on the Syndicate Member level. Doing releases on the
individual customer level allows DTC to provide a more detailed report of flipping activity by the
Syndicate Member's customers.
Releases can be submitted as early as 6:00 a.m. Eastern Standard Time (EST) trade date through
settlement of the trade.
Note- Releases from the IPO Control Account cannot be reversed and are recorded as potential flips
regardless of whether or not delivery is made.
1 On the IPO- Tracking System Main Menu Screen, select Option 3, Release IPO Shares To The Free
Account.
2 Enter information in the following required fields of the IPO- Release IPO Shares To The Free
Account Screen:
•
•
•
•
•
Corresp. Account: enter the Correspondent Syndicate Member's ID Broker-Dealer
number
Internal Customer: enter the Internal Account number for the customer (if already
identified in the IPO database)
• The Internal Customer field (Internal Account number) is required for all
Secondary Market customer transactions if customer-level detail has been added
for any of your customers.
• If an incorrect Internal Account number is entered, the shares will not be
released and the subsequent Deliver Order will pend.
Trade Date: enter a valid business date in MMDDYY format
Contract Price: enter a number greater than zero in 9999999.99 format
Share Quantity: enter the number of whole shares, up to 13 positions.
3 Refer to Appendix D for additional field and processing information.
If you and the customer have position in the IPO database, an immediate release is processed. If
your or the customer does not have position, refer to the following sections.
Pending Releases
You and the customer must have position in the IPO database in order for a release to be
processed. If you or the customer does not have position, the release will pend ("hold") for up to 3
days after Trade Date.
If you and the customer do have position, but not enough to cover the entire release, DTC will
release shares from the your account and pend the balance of the release request ("partial hold").
Participants that do not populate the IPO database with customer-level detail can use an omnibus or
dummy account number. This allows for partial releases of their position as shares are sold.
Cancel Pending Releases
You can cancel pending releases via the PTS function IPOU.
1 On the IPO- Tracking System Main Menu Screen, select Option 7, IPO Pending Transaction
Cancel.
2 Enter information in the following fields of the IPO- Pending Transaction Screen:
•
•
CUSIP: enter the issue's CUSIP number
Date: enter a date range (From and To) in YYMMDD format. The default is the current
date.
3 Press the ENTER key.
Result- A list of pending transactions is displayed.
4 Enter "S" to the left of the selected transaction to view details.
5 Enter "C" (cancel) to the left of the selected transaction.
Result- The message "PRESS PF1/13 TO CONFIRM CANCEL" appears.
6 Press the PF1/13 key.
Result- The transaction is canceled.
7 Refer to Appendix D for additional information.
Secondary Market Deliveries
Secondary Market deliveries are performed using the same procedures currently used for deliveries
of non-tracked issues.
Note- The ID Agent number is required for Secondary Market DO deliveries to Prime Brokers and
Agent Banks. For deliveries to Banks, the ID Agent number will default to the receiving Bank's
Participant number.
Resolve Internal Account Number Discrepancies in ID Deliveries on Sell
Transactions
When the Internal Account number on a sale transaction does not match the Internal Account
number in the IPO Tracking database, the system generates a warning message, Error 91.
Error 91 flags an unmatched Internal Account number three times:
• ID Confirmation
• ID Affirmation
• Authorization and Exception (ANE)
Error 91 also appears on machine-readable output.
If the Internal Account number is still unmatched when validation occurs at Authorization and
Exception (ANE) time, ANE will not reject the transaction, because the system assumes the delivery
will use Secondary Market shares. However, an automated release will not be generated and the
delivery will pend.
Unmatched Internal Account numbers can be corrected in the IPO database prior to the settlement
date cutoffs of 10:00 a.m. EST for Global processing and 2:30 p.m. for Trade-for-Trade processing.
This allows the ID trade to be authorized and settle that day through the automated settlement
feature of the ID system.
Note- The ANE inquiry function and T+ 3 hard-copy report will display a code of "F" in the status
field to indicate an Initial Distribution trade that has been rejected from settlement, and an "I" to
indicate a Secondary Market trade that has been rejected from settlement. The "F" code indicates
that the Internal Account number on an IPO trade is missing, and the "I" code indicates that the
Internal Account number missing or does not match the Internal Account number as stored on the
IPO database. These transactions may be reprocessed for up to 21 days.
You may resolve Internal Account number discrepancies in the following ways:
• Have the Custodian update the Internal Account number in the IPO database to match the
number on the ID transaction by performing an IPO customer-level adjustment. (Refer to
Update Customer-Level Detail. )
• Cancel the ID transaction and re-enter it in the ID system. (Refer to Deliver Shares to
Agent Banks and Prime Brokers via ID. )
• Have the Custodian Except the ID transaction from automated settlement and enter a DO
for the transaction with the Internal Account number as it appears in the IPO database.
Withdrawals-by-Transfer (WTs)
If certificate denominations are available, Withdrawals-by-Transfer (WTs) of tracked issues are
permitted starting on closing day via the PTS functions NWT1 (Night Withdrawal-by-Transfer) and
RWT1 (Rush Withdrawal-by-Transfer), as well as via CCF/CCFII. WTs are noted as separate line
items on tracking reports.
• Requests for WTs must include customer-level detail.
• The IPO database must be populated prior to requesting a WT.
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
•
•
Int Cust: enter the Internal Account number of the customer
Corr Acct: enter the Correspondent Syndicate Member's ID Broker-Dealer number
Agt ID: enter the ID Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
DTC processes WT requests using shares from your IPO Control Account first. DTC generates
releases from your IPO Control Account to your Free Account.
• Since the IPO Tracking System records all manual releases as potential flips, Clearing
Brokers should not manually release shares for WT processing.
• DTC generates releases from the Clearing Broker's IPO Control Account only if the Internal
Account number already exists in the IPO database. If the Internal Account does not
exist, a release will not be generated and the WT will be assumed to be from Free shares
only.
Request a WT Using Free Shares Only
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
Int Cust: enter a "dummy" Internal Account number (one that does not exist in the IPO
database).
Note- The use of a dummy Internal Account number in the Int Cust field will default the
system to use Free shares for WT processing.
•
•
Corr Acct: enter the Correspondent Syndicate Member's ID Broker-Dealer number
Agt ID: enter the ID Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
Stock Loans and Returns
Stock Loan Deliveries
Syndicate Members are able to process stock loans using the appropriate DO/ NDOM Reason Codes.
As for all broker Participants, DTC fulfills a Syndicate Member's stock loan delivery quantity with
Free Account shares only. If insufficient shares are available in the Syndicate Member's Free
Account, the Participant must instruct DTC to process a Stock Loan Release to release IPO shares
from its IPO Control account to its Free account for the balance.
DTC distinguishes between stock loan releases and regular releases and reports each type as
separate line items on Lead Underwriter and Syndicate Member Flipping Activity Reports. All stock
loan releases are categorized according to Participant type of lender and borrower.
To dissuade Participants from using the stock loan release facility for regular releases, DTC monitors
the quantity of IPO shares moved to the Participant's Free account via stock loan releases versus
the quantity of shares loaned by the Participant on the same day and reports discrepancies to the
Lead Underwriter and appropriate Syndicate Members.
All stock loans are made on an omnibus basis. No customer account numbers are tagged to stock
loans. An AIA number entered in a stock loan delivery is ignored by DTC; however, the exception to
this is for stock loans to banks, in which case the Participant number of the receiving bank must be
entered as the AIA number in order to allow the receiving bank the ability to deliver borrowed
shares.
Stock Loan Receipts
DTC delivers all Stock Loans to the Borrower's Free Account.
Stock Loan Returns
You can process Stock Loan Returns by using the appropriate Reason Codes via the PTS functions
DO or NDOM. All stock loan returns are delivered from the borrower's Free account.
• Enter Reason Code 20 in the REAS field of the SDFS Initial Public Offering Deliver Orders
Screen.
• Refer to DO and NDOM for additional Deliver Order field and processing information.
Stock Loan Return Receipts
All Stock Loan Returns are delivered to the lender's Free Account as Free Secondary Market shares
in the IPO database.
Pledges
Pledges of Collateral
You can pledge shares with or without value from either their IPO Control or Free Account via the
PTS function COLL.
1 Enter the following information on of the Free Pledge Service Screen:
•
•
IPO: enter "Y" if the shares are being pledged from the IPO Control Account
or
Enter "N" if the shares are being pledged from the Free Account
2 Refer to COLL for additional field and processing information.
Result- Pledged IPO Control and Free Account shares are moved to the Pledge (14) account. IPO
shares are segregated in the I14 Account.
Pledge Releases
If released during the tracking period, Pledge shares are delivered back to their original accounts. In
cases where both IPO and Secondary Market shares were pledged, released (Free) shares will be
returned to the Free Account first up to the quantity of Free shares pledged. The balance of the
shares is returned to the IPO Control Account.
If released after tracking has ended, all Pledge shares are delivered to the Free Account regardless
of the account of origin.
Reclaims
Reclaim Deliveries
DTC will automatically process a matched reclamation based on the DO transaction number and
other transaction information provided until one day after settlement.
Clearing Brokers can enter Matched Reclaims via the PTS functions ART and DO/ NDOM and via
CCF, CCFII and MDH.
When you reclaim a delivery, the reclaimed DO is matched to the original delivery and the
information in the IPO database is reversed.
Note- Partial reclaims are not permitted.
Matched Reclaim Deliveries via ART
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter "R" to the left of the item to be reclaimed on the ATP Activity Summary Screen.
Matched Reclaim Deliveries via DO or NDOM
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter information in the following fields of the SDFS Automatic Reclaim Deliver Orders Screen:
•
•
•
Trans#: enter the transaction number of the transaction being reclaimed
Reas-Code: enter the appropriate Reason Code. (Refer to Codes in this Manual for
Reclaim Reason Codes. )
Orig-Date-Ind: enter "T" to reclaim a DO entered today or "P" to reclaim a DO entered
on the previous business day.
Note- If made during the Matched Reclaims timeframe, DTC will also match Freeform Reclaims,
provided the appropriate DO Reason Code and correct information is entered.
Unmatched/Freeform Reclaim Deliveries
Reclaims must be entered Freeform via CCF, CCFII, MDH, or the PTS functions DO or NDOM if:
• The reclaim transaction number cannot be matched to an original delivery
• The reclaim occurs after the Matched Reclaim deadline has passed
You must manually input transaction details, including the appropriate DO Reclaim Reason Code.
DTC treats these Reclaim transactions as original deliveries, which in turn can be reclaimed by the
receiver.
Reclaim Receipts
During the tracking period, Initial Distribution shares that are reclaimed within the Matched Reclaim
deadline (S through S+ 1) will be returned to the account from which they originated.
Reclaims performed after the Match Reclaim deadline (S through S+ 1) will be placed in the
Receiver's Free Account. These deliveries can be reclaimed.
Memo Segregation
Although position may reside in both the IPO Control and Free Accounts, you can enter Memo
Segregation instructions for tracked issues using the same procedures currently used for nontracked issues. Memo Segregation bridges the IPO Control and Free Accounts.
The share quantity in the Memo Segregation instruction will be subtracted from the combined share
total in the IPO Control and Free Accounts. The resulting share total must be greater than the
quantity of any Deliver Orders entered. If the quantity is less, the Deliver Orders will not be
processed and will pend.
Deposits
Deposits are chilled for tracked issues for the duration of the tracking period.
No DWAC (Deposit/Withdrawal at Custodian) activity is permitted during the tracking period.
Certificates-On-Demand (CODs)
CODs are chilled for tracked issues for the duration of the tracking period.
Collateralization of IPO Shares
Shares in the IPO Control Account will be considered collateral (NA) only on the day they are
received, for value, into the account. Shares received into the IPO Control Account without value
will follow the normal accounting updating rules, and will be considered NA or MA depending on the
SDFS Account Coding Instructions.
Shares in the IPO Control Account will not be considered collateral after the first day they are
received. MA/NA intra-day moves will not be permitted.
Shares in the Free Account are subject to normal collateralization rules. Refer to the Settlement
Service Guide for additional information on collateralization.
Reconcile Customer-Level Detail with Internal Records
Clearing Brokers should reconcile the customer-level detail in the IPO database with their internal
records daily using an IPOCLD machine-readable file. This file contains the Agent Bank or Prime
Broker's Internal Account numbers for all of a Correspondent Syndicate Member's customers on file
as well as the Executing Broker's Internal Account numbers for those customers.
Contact DTC's Participant Interface Planning Department or your Relationship Manager for
assistance.
Make Inquiries via IPOI
The PTS function IPOI (Initial Public Offering Tracking System Inquiry) allows Clearing Brokers to
make inquiries on behalf of its Correspondent Syndicate Members.
The following information is provided via IPOI:
•
•
•
•
A
A
A
A
list of all tracked IPO issues
summary of tracked IPO issues in which the Participant has position
summary of customer-level details by Participant-issue
summary of IPO pending/canceled/released transactions
For additional information on the IPO Tracking System Inquiry function, refer to the Overview and
Appendix E.
Receive Reports from DTC
DTC prepares and distributes daily cumulative hard-copy reports for Syndicate Members of their
tracked issues. You will receive a report for each of your Correspondent Syndicate Members. The
following information is provided:
• List of potential flips by own Retail and Institutional customers.
• Potential flips by customers broken down by trade date and price; if customer used more
than one Syndicate Member, the flip quantity is prorated.
• Separate line for WTs.
• Separate line for stock loans: quantity reported represents the net amount (outstanding
loans less returns).
• Retail account transfers (showing the receiving Participant number).
• Institutional account transfers (showing the receiving Participant number and BIA number).
Refer to Reports for further information.
Clearing Broker Tasks: Required Field Information &DTC Output
TASK:
FIELD INFORMATION REQUIRED:
DTC
OUTPUT:
Market Code: Market Code 11
Activity
Code: 48
Initial Distribution To:
Agent Banks via ID
Agent Internal Account: Agent
Bank's Internal Account#
Reason
Code: 49
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's Part#
REAS: Reason Code 50
Int-Acct#: Agent Bank's Internal
Account#
Activity
Code: 48
Reason
Code: 50
Bkr-Acct#: Executing Broker's
Internal Account#; optional
Prime Brokers via ID
Market Code: Market Code 11
Agent Internal Account: Prime
Broker's Internal Account#
Activity
Code: 47
Reason
Code: 49
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Prime Brokers via DO/
NDOM
Recv-Pt: Prime Broker's Part. #
REAS: Reason Code 50
Int-Acct#: Prime Broker's
Internal Account#
Bkr-Acct#: Executing Broker's
Internal Account#; optional
Customer-Level
Updates:
Add Customer-Level Detail
via IPOU, Option 2
Corresp. Account: the
Correspondent Syndicate
Member's ID Broker-Dealer#
Internal Customer: Internal
Account#
Share Quantity: Whole number
quantity
Sign: + or- to increase or
decrease shares
Update Customer-Level
Corresp. Account: the
Activity
Code: 47
Reason
Code: 50
Detail via IPOU, Option 5
Correspondent Syndicate
Member's ID Broker-Dealer#
From Internal Customer: Old
Internal Account#
To Internal Customer: New
Internal Account#; optional
Reallocated Share Quantity:
New whole number quantity;
optional
Secondary Market
Activity:
Release of IPO shares to
Free Account via IPOU,
Option 3
Corresp. Account: the
Correspondent Syndicate
Member's ID Broker-Dealer#
Activity
Code: 46
Internal Customer: Internal
Account#
Trade Date: Trade date
Contract Price: Contract price
Sale of Free shares
Same as for non-tracked issues.
Cancel Pending Releases
via IPOU, Option 7
CUSIP: The issue's CUSIP#
Activity
Code: 26
Date: Date range (from and to) in
YYMMDD format
Withdrawals-by-Transfer
via NWT1/ RWT1
Corr Acct: the Correspondent
Syndicate Member's ID BrokerDealer#
Int Cust: Internal Account#
Agt ID: ID Agent#; optional
REAS: Reason Code 10
Activity
Code:
IPO
shares: 48
Free
shares: 26
Reason
Code: 10
Stock Loan Return via DO/
NDOM
REAS: Reason Code 20
Activity
Code:
IPO
shares: 49
Free
shares: 26
Reason
Code: 20
Account Transfer to BrokerIPO Shares- via IPOU,
Option 4
Corresp. Account: the
Correspondent Syndicate
Member's ID Broker-Dealer#
To Participant: Receiving
Broker's Part#
Activity
Code: 47
Reason
Code: 40
From Internal Customer:
Current Internal Account#
To Internal Customer: New
Internal Account#
Share Quantity: Number of
whole shares being transferred
Settlement Amount: Settlement
amount; optional
Account Transfer to BrokerFree shares- via IPOU,
Option 4
Corresp. Account: the
Correspondent Syndicate
Member's ID Broker-Dealer#
To Participant: Receiving
Broker's Part#
Activity
Code: 26
Reason
Code: 40
From Internal Customer:
Current Internal Account#
To Internal Customer: New
Internal Account#
Share Quantity: Number of
whole shares being transferred
Settlement Amount: Settlement
amount; optional
Co-Manager
Receive Shares from Primary Lead Manager
The Primary Lead Manager sets up deliveries of IPO shares to its Co-Managers, Co-Reporters and
Syndicate Members prior to closing using the appropriate Deliver Order Reason Codes.
By 1:15 p.m. closing date, DTC receives a call from the Primary Lead Manager permitting the
distribution of shares to the Co-Managers, Co-Reporters and Syndicate Members. DTC then delivers
shares from the Primary Lead Manager's IPO Control Account to your IPO Control Account, in
accordance with the Primary Lead's Deliver Order instructions.
Note- Shares remain in the IPO Control Account for the duration of the tracking period unless
released, transferred or distributed to Syndicate Members, or Institutional customers at Agent
Banks or Prime Brokers.
This establishes your Participant number as an "Alternate Lead" for that issue in the IPO database.
All subsequent share movements (e. g. , distributions, allocations and Secondary Market
transactions) will be applied to the Alternate Lead's Participant number.
Syndicate Takedowns
Prior to receiving shares in your IPO Control Accounts, you should set up deliveries for distribution
of shares to their Syndicate Members ("Syndicate Takedown"). A Syndicate Takedown is performed
by using Option 4 of the PTS function DO or NDOM Option 6.
Note- The term "Syndicate Members" refers to selling group members as well.
Co-Managers indicate a Syndicate Takedown delivery by entering the appropriate Reason Codes, as
described in the following sections, in the REAS field of the Initial Public Offering Deliver Orders
Screen.
Deliveries to Co-Reporters and Syndicate Members receive top priority in the delivery queue.
Distribute Shares to Co-Reporter for Foreign Distribution
You can set up deliveries to their own second Participant number ("Co-Reporter") for foreign
distributions.
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen.
•
•
Recv-Pt: enter your second ("Co-Reporter") Participant number
REAS: enter Reason Code 560
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares to Syndicate Members
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Syndicate Member's Participant number
REAS: enter Reason Code 570
Corr-Acct#: enter the Syndicate Member's Participant number
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares to Correspondent Syndicate Members
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Clearing Broker or Clearing Bank's Participant number
REAS: enter Reason Code 570
Corr-Acct#: enter the Correspondent Syndicate Member's FINS number
1.
Entering the Clearing Broker/Bank's Participant number in the Recv-Pt field and the
Correspondent Syndicate Member's ID Broker-Dealer number in the Corr-Acct# field will
identify this as a Correspondent relationship in the IPO database. The system will
validate the relationship against the Broker section of the ID Master File.
If delivering to a Clearing Bank, the number entered in the Recv-Pt and Corr-Acct# fields
can be the same provided that relationship exists in the Broker section of the ID Master
File.
2.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares for Oversubscriptions
When you have less shares than you need to make your Syndicate Takedown deliveries, you can
borrow or purchase shares from the Secondary Market ("Oversubscriptions").
Shares borrowed or purchased in the Secondary Market for Oversubscription Distribution will reside
in your Free Account.
You have two options for delivering Oversubscribed shares:
• Move the shares back to your IPO Control Account via the PTS function IPOU (Option 6) and
perform a Syndicate Takedown DO/NDOM delivery.
• Deliver the shares directly from your Free Account using the appropriate ID or DO/NDOM
codes.
Move Shares from the Free Account to the IPO Control Account
1 On the IPO- Tracking System Main Menu Screen, select Option 6, Oversubscription for Lead
Underwriter.
2 Enter information in the following fields of the IPO- Oversubscription for Lead Underwriter Screen:
•
•
CUSIP: enter the issue's CUSIP number
Share Quantity: enter the number of Free shares being transferred to the IPO Control
Account
3 Press the ENTER key.
4 Refer to Appendix D for additional field and processing information.
Result- Two one-sided next-day DO journals are generated: one to decrease Free Account shares
and another to increase shares in the IPO Control Account.
5 Perform a Syndicate Takedown DO or NDOM delivery.
Distribute Oversubscribed Shares to Syndicate Members via DO or NDOM
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
Recv-Pt: enter the Syndicate Member's Participant number
•
•
REAS: enter Reason Code 540
Corr-Acct#: enter the Syndicate Member's Participant number
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Result- Shares move from the your Free Account to the Syndicate Member's IPO Control Account.
Note- Refer to Distribute Shares to Syndicate Members in this chapter for information on other
distributions to Syndicate Members.
Distribute Oversubscribed Shares to Correspondents via DO or NDOM
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Clearing Bank or Clearing Broker's Participant number
REAS: enter Reason Code 540
Corr-Acct#: enter the Correspondent Syndicate Member's FINS number
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Note- Refer to Distribute Shares to Correspondent Syndicate Members in this chapter for
information on other Correspondent distributions.
Initial Distribution
After the Syndicate Takedown, distribution to Institutional customers ("Initial Distribution") occurs
as follows:
•
•
•
•
Distribution to Agent Banks and Prime Brokers
Directed Concessions
Oversubscriptions
Directed Concessions/Oversubscriptions
Although shares can be delivered on or after the closing date, you can set up your Initial
Distribution deliveries prior to receiving shares into their IPO Control Account.
An Initial Distribution is performed by using either DTC's ID system or the PTS functions DO or
NDOM. You can indicate an Initial Distribution delivery by entering the appropriate Market Code on
the Institutional Delivery Trade Input Screen for ID trades, or by entering the appropriate Reason
Code in the REAS field of the Initial Public Offering Deliver Orders Screen for Day and Night DOs.
Note- Initial Distribution transactions are not settled through CNS.
Distribute Shares to Agent Banks and Prime Brokers
Distribute Shares via ID
Note- Customer-level detail is required for Initial Distribution transactions.
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 11
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure accurate
processing of the transaction. If either is missing, or entered incorrectly, an error code of 91 will
appear on the Confirmation and Affirmation tickets. Refer to Resolve Internal Account Number
Discrepancies for information on how to correct the Agent Internal Account number.
Result- The AIA number, BIA number and associated Syndicate Member are extracted from ID
trades upon authorization. On closing date, the IPO database is populated.
2 Refer to IDTI for additional ID field and processing information.
Distribute Unaffirmed ID Trade Shares via DO or NDOM
When a trade is unaffirmed, excepted or rejected from the ID system, you can settle that trade via
the PTS functions DO (Option 4) or NDOM (Option 6).
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 50
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Note- The Internal Account numbers must be entered correctly to ensure accurate
processing of the transaction. DTC rejects Initial Distribution deliveries in which either
number is missing.
•
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Result- The system captures the Agent Bank/Prime Broker Internal Account number along with
the BIA number and the associated Syndicate Member and populates the IPO database.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares for Broker Custody Trades
For trades where the Executing Broker and Custodian are the same entity ("Broker Custody"), you
"deliver" shares to your own account via DTC's ID system.
1 Follow the Initial Distribution procedures described in Distribute Shares via ID, entering your own
Participant number as both the Executing Broker and the Custodian of the transaction.
Result- Because there is no actual movement of shares, the IPO database is populated with
customer-level detail and the associated Syndicate Member upon Confirmation of Broker Custody
trades.
Distribute Shares for Directed Concessions
You can deliver a block of IPO shares directly to a Syndicate Member's Institutional Customer, at
the customer's request ("Directed Concession"). You are set up as the associated Syndicate Member
in the IPO database. Directed Concessions can be distributed via DTC's ID system or via the PTS
functions DO (Option 4) or NDOM (Option 6).
Directed Concession deliveries are flagged on your tracking reports with an asterisk (*) and with the
delivering custodian's Participant number. If a Directed Concession customer flips, you must check
your internal records to identify the customer's Syndicate Member.
Distribute Directed Concession Shares via ID
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 51
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure
accurate processing of the transaction. If either is missing, or entered incorrectly, an
error code of 91 will appear on the Confirmation and Affirmation tickets. Refer to Resolve
Internal Account Number Discrepancies for information on how to correct the Agent
Internal Account number.
2 Refer to IDTI for additional ID field and processing information.
Distribute Directed Concession Shares via DO or NDOM
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 530
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Note- The Internal Account numbers must be entered to ensure accurate processing of
the transaction. DTC rejects Initial Distribution deliveries in which either number is
missing.
Result- The system captures the Agent Bank/Prime Broker Internal Account number along with
the BIA number and the associated Syndicate Member and populates the IPO database with this
information.
Distribute Shares for Oversubscriptions
When you have less shares than it needs to make its Initial Distribution deliveries, it can purchase
or borrow shares from the Secondary Market for distribution ("Oversubscription").
Shares purchased or borrowed in the Secondary Market for Oversubscription Distribution will reside
in the Co-Manager's Free Account.
The Lead Manager has two options for delivering Oversubscribed shares:
• Move the shares back to its IPO Control Account via the PTS function IPOU (Option 6), and
perform an Initial Distribution ID or DO/ NDOM delivery.
• Deliver the shares directly from its Free Account using the appropriate ID or DO/NDOM
codes.
Move Shares From the Free Account to the IPO Control Account for Oversubscriptions
1 On the IPO- Tracking System Main Menu Screen, select Option 6, Oversubscription for Lead
Underwriter.
2 Enter information in the following fields of the IPO- Oversubscription for Lead Underwriter Screen:
•
•
CUSIP: enter the issue's CUSIP number
Share Quantity: enter the number of Free shares being transferred to the IPO Control
Account
3 Press the ENTER key.
4 Refer to Appendix D for additional field and processing information.
5 Perform an Initial Distribution DO, NDOM or ID delivery. Refer to Distribute Shares to Agent
Banks and Prime Brokers via ID and Distribute Shares to Agent Banks and Prime Brokers via DO
or NDOM in this chapter for information.
Distribute Oversubscribed Shares to Agent Banks and Prime Brokers via ID
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 52
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal (BIA) Account number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure
accurate processing of the transaction. If either is missing, or entered incorrectly, an
error code of 91 will appear on the Confirmation and Affirmation tickets. Refer to Resolve
Internal Account Number Discrepancies for information on how to correct the Agent
Internal Account number.
2 Refer to IDTI for additional ID field and processing information.
Result- Shares move from the Co-Manager's Free Account to the Agent Bank's Free Account (and
are marked as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Distribute Oversubscribed Shares to Agent Banks and Prime Brokers via DO or NDOM
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 540
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Note- The Internal Account numbers must be entered correctly in order to ensure
accurate processing of the transaction. DTC rejects Initial Distribution deliveries in which
either number is missing.
Result- The system captures the AIA number along with the BIA number and the associated
Syndicate Member and populates the IPO database with this information.
Shares move from the Co-Manager's Free Account to the Agent Bank's Free Account (and are
marked as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Distribute Shares for Oversubscriptions/Directed Concessions
Co-Managers can deliver oversubscribed shares directly to a Syndicate Member's Institutional
customer, at the customer's request ("Oversubscription/Directed Concession"), via DTC's ID system
or via the PTS functions DO or NDOM. The Co-Manager is set up as the associated Syndicate
Member in the IPO database.
Distribute Oversubscribed Directed Shares to Agent Banks and Prime Brokers via ID
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 53
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure
accurate processing of the transaction. If either is missing, or entered incorrectly, an
error code of 91 will appear on the Confirmation and Affirmation tickets. Refer to Resolve
Internal Account Number Discrepancies for information on how to correct the Agent
Internal Account number.
2 Refer to IDTI for additional ID field and processing information.
Result- Shares move from the Co-Manager's Free Account to the Agent Bank's Free Account (and
are marked as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Distribute Oversubscribed Directed Shares to Agent Banks and Prime Brokers via DO or NDOM
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 550
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer; optional
Note- The Internal Account numbers must be entered correctly in order to ensure
accurate processing of the transaction. DTC rejects Initial Distribution deliveries in which
either number is missing.
Result- The system captures the AIA number along with the BIA number and the associated
Syndicate Member and populates the IPO database with this information.
Shares move from the Co-Manager's Free Account to the Agent Bank's Free Account (and marked
as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Update Customer-Level Information via IPOU
Customer-level detail in the IPO database can be added and/or updated via the PTS function IPOU.
The following sections describe some of the activities a Co-Manager can perform via IPOU.
Warning! If customer-level detail has been added for any of your customers, it must be added for
all your customers or you will not be able to perform subsequent transactions (e. g. WTs, customer
account transfers) for those customers.
Refer to Appendix D for additional information IPOU procedures.
Allocate Shares to Retail Customers (Add Customer-Level Detail)
After delivering Initial Distribution shares to your Institutional customers' Prime Brokers/Agent
Banks, you can allocate the shares you retain to your Retail customers.
IPOU, Option 2 allows you to populate the IPO database by adding their Retail clients' customerlevel details and share allocations.
Note- Participants cannot allocate shares to Institutional customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter information in the following required fields of the IPO- Add Customer-Level Detail Screen:
•
•
•
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the whole number quantity, up to 13 positions
Sign: enter (+) to increase shares
3 Refer to Appendix D for additional processing information.
Update Customer-Level Detail
IPOU, Option 5 allows you to correct or update your customer Internal Account numbers and adjust
the share quantities allocated to your customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 5, Customer-Level Adjustment.
2 Enter information in the following required fields of the IPO- Customer-Level Adjustment screen:
•
•
•
•
From Internal Customer: enter the existing AIA number of the customer
From BIA: enter the existing BIA number for the customer (optional)
To Internal Customer: enter the new AIA number of the customer; required if the
Participant wants to change the existing number to a new one
Reallocated Share Quantity: enter the number of whole shares being adjusted, up to
13 positions; required if the Participant is adjusting a share quantity from existing
customers to the new customer
Note- Because the system overlays the share quantity information, you must input
exactly the total number of shares the "To Internal Customer" should have. If you are
not sure of the exact total the customer should have, refer to the following section.
3 Refer to Appendix D for additional field and processing information.
Update Customer-Level Detail Using the Add Customer-Level Detail Function
IPOU Option 2, Add Customer-Level Detail, provides a way for you to adjust share quantities for
their customers without knowing the total number of shares each customer should have.
This method can also be used to eliminate an old Internal Account number from the IPO database
and add a new one.
1 On the IPO Tracking system Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter Information in the following required fields:
•
•
•
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the number of whole shares, up to 13 positions, you wish to
increase/decrease the account by
Sign: enter (+) to indicate the shares should be increased or (-) to indicate the shares
should be decreased
Result- The system adds/subtracts the share quantities for the account and updates them
accordingly.
If the share quantity for an Account number is reduced to zero, the system deletes that number
from the IPO database.
3 Refer to Appendix D for additional information.
Transfer of Customer's Position Between Participants
You can transfer your customers positions to another Participant without that transfer being
reported as a potential flip. For reporting purposes, the IPO database moves the original Syndicate
Member's Participant number and BIA number with each transfer of a customer's position.
Memo Segregation and Sub Account Segregated positions do not need to be released prior to
attempting any customer account transfers. IPO account transfer transactions can bypass Memo
Segregation.
Customer-level detail is required for account transfers.
Transfer Customer's Position via IPOU
1. For those transfers that originate in NSCC's ACATS system, Participants will be notified that
an issue is tracked and will receive a trade-for-trade (Balance Order) ticket.
2. The transfer of shares in a tracked CUSIP must be accomplished by the IPO Customer
Account Transfer function and must be for the total position the customer has in its IPO
Control and Free Accounts.
1 On the IPO- Tracking System Main Menu Screen, select Option 4, Customer Account Transfer.
2 Enter information in the following fields of the IPO- Customer Account Transfer Screen:
•
•
•
•
•
•
To Participant: enter the receiving Participant's number
From Internal Customer: enter the existing AIA number for the customer
To Internal Customer: enter the receiving Participant's AIA number for the customer
Share Quantity: enter the number of whole shares being transferred, up to 13 positions
Settlement Amount: enter the settlement amount for the account transfer; optional
Reason Code: enter Reason Code by which this account transfer is to be processed
3 Refer to Appendix D for additional field and processing information.
Result- Transfers can also be performed using the PTS functions DO or NDOM. However, since
this requires manual releases to the Free Account, these transfers will be recorded as potential
flips on DTC's tracking reports.
Note- Account transfers of IPO and Free Secondary Market shares from a Broker Participant will
result in two DOs generated.
Share Movement for Customer Account Transfers- Deliveries
When you transfer a customer's position to another Participant, DTC moves the shares in one of the
following ways:
• Transfer position to a Bank: Both IPO Control and Free Account shares move to the
receiving Bank's Free Account in ART. The IPO database marks the shares delivered from
your IPO Control Account as IPO shares and those delivered from your Free Account are
marked as Secondary Market shares in the IPO database.
• Transfer position to a Broker: Shares delivered from your IPO Control Account move to
the receiving Broker's IPO Control Account in ART and are marked as IPO shares in the
IPO database. Shares delivered from your Free Account move to the Receiving Broker's
Free Account in ART. These Free Account shares are not captured in the IPO database.
Share Movement for Customer Account Transfers- Receipts
You will receive a customer's position from another Participant in one of the following ways:
• Receive position from a Bank: Shares marked as IPO shares in the Bank's Free Account
move to the your IPO Control Account in ART and are marked as IPO shares in the IPO
database. Shares marked as Secondary Market shares in the Bank's Free Account move to
your Free Account in ART. These Free Account shares are not captured in the IPO
database.
• Receive position from a Broker: Shares from the delivering Broker's IPO Control Account
move to your IPO Control Account in ART and are marked as IPO shares in the IPO
database. Shares from the Delivering Broker's Free Account move to your Free Account in
ART. These Free Account shares are not captured in the IPO database.
Secondary Market
Release Shares From the IPO Control Account for Secondary Market Sales
All Secondary Market sell transactions settle from the Free Account. In order to deliver shares sold
by your customers in the Secondary Market, those shares must first be released from your IPO
Control Account to your Free Account using the IPOU function. Failure to release shares to the Free
Account could result in a CNS short or DOs for Secondary Market sales dropping in ART.
Releases can be performed on the individual customer level, by including the AIA number of the
customer on the release, or on the Co-Manager (Syndicate Member) level. Doing releases on the
individual customer level allows DTC to provide a more detailed report of flipping activity by the
your customers.
Releases can be submitted as early as 6:00 a.m. Eastern Standard Time (EST) trade date through
the settlement of the trade.
Note- Releases from the IPO Control Account cannot be reversed and will be recorded as potential
flips regardless of whether or not delivery is made.
1 On the IPO- Tracking System Main Menu Screen, select Option 3, Release IPO Shares To The Free
Account.
2 Enter information in the following required fields of the IPO- Release IPO Shares To The Free
Account Screen:
•
Internal Customer: enter the AIA number of the customer (if already identified in the
IPO database)
The Internal Customer field (AIA number) is required for all customer
transactions if customer-level detail has been added for any of your customers.
2. If an incorrect AIA number is entered, the shares will not be released and the
subsequent Deliver Order may pend.
Trade Date: enter a valid business date in MMDDYY format
1.
•
Note- DTC edits to ensure that the trade date entered is no earlier than four days prior to
the issue's closing in DTC and no later than the current date. Dates entered on a release
instruction that fall outside these parameters result in DTC rejecting the release
instruction.
•
•
Contract Price: enter a price greater than zero in 9999999.99 format
Share Quantity: enter the number of whole shares, up to 13 positions
3 Refer to Appendix D for additional field and processing information.
Result- If you and your customer have position in the IPO database, an immediate release is
processed. If you and your customer do not have position, refer to the following sections.
Pending Releases
You and your customer must have position in the IPO database in order for a release to be
processed. If the customer/Co-Manager does not have position, the release will pend ("hold") for up
to 3 days after Trade Date or for up to 30 calendar days, depending on the recycle option selected
by the Participant.
If you and your customer do have position, but not enough to satisfy the entire release, DTC will
release the available shares from the customer/Co-Manager's account and pend the balance of the
release request ("partial hold").
Participants that do not populate the IPO database with customer-level detail can use an omnibus or
dummy account number. This allows for partial releases of their position as shares are sold.
Cancel Pending Releases
You can cancel pending releases via the IPOU function.
1 On the IPO- Tracking System Main Menu Screen, select Option 7, IPO Pending Transaction
Cancel.
2 Enter information in the following fields of the IPO- Pending Transaction Screen:
•
•
CUSIP: enter the issue's CUSIP number
Date: enter a date range (From and To) in YYMMDD format. The default is the current
date.
3 Press the ENTER key.
Result- A list of pending transactions is displayed.
4 Enter S to the left of the selected transaction to view details.
5 Enter C (cancel) to the left of the selected transaction.
Result- The message "PRESS PF1/13 TO CONFIRM CANCEL" appears.
6 Press the PF1/13 key.
Result- The transaction is canceled.
7 Refer to Appendix D for additional information.
Secondary Market Deliveries
Secondary Market deliveries are performed using the same procedures currently used for deliveries
of non-tracked issues.
Note- The ID Agent number must be included for Secondary Market DO deliveries to Prime Brokers
and Banks. When delivering to a Bank, the ID Agent number will default to the receiving Bank's
Participant number.
Resolve Internal Account Number Discrepancies in ID Sell Transactions
When the AIA number on the sale transaction does not match an AIA number in the IPO Tracking
database, the system generates a warning message, Error 91.
Error 91 flags an unmatched Internal Account number three times:
• ID Confirmation
• ID Affirmation
• Authorization and Exception (ANE)
Error 91 also appears on machine-readable output.
If the Internal Account number is still unmatched when validation occurs at Authorization and
Exception (ANE) time, ANE will not reject the transaction, because the system assumes the delivery
will use Secondary Market shares. However, an automated release will not be generated and the
delivery will pend.
Unmatched AIA numbers can be corrected in the IPO database prior to the settlement date cutoffs
of 10:00 a.m. EST for Global processing and 2:30 p.m. for Trade-for-Trade processing. This allows
the ID trade to be authorized and settle that day through the automated settlement feature of the
ID system.
Note- The ANE inquiry function and T+3 hard-copy report will display a code of "F" in the status
field to indicate an Initial Distribution trade that has been rejected from settlement and an "I" to
indicate a Secondary Market trade that has been rejected. The "F" and "I" codes will be displayed in
cases where the Internal Account number on an IPO trade does not match the Internal Account
number as stored on the IPO database. These transactions may be reprocessed for up to 21 days.
You may resolve Internal Account number discrepancies in the following ways:
• Have the Custodian update the Internal Account number in the IPO database to match the
number on the ID transaction by performing an IPO customer-level adjustment. (Refer to
Update Customer-Level Detail in this chapter)
• Cancel the ID transaction and re-enter it in the ID system as per the Custodian's
instructions. (Refer to Distribute Shares via ID in this chapter. )
• Have the Custodian except the ID transaction from automated settlement and enter a DO
with the AIA number as it appears in the IPO database.
Withdrawals-by-Transfer (WTs)
If certificate denominations are available, Withdrawals-by-Transfers (WTs) of tracked issues are
permitted starting on closing day via the PTS functions NWT1 (Night Withdrawal-by-Transfer) and
RWT1 (Rush Withdrawal-by-Transfer), as well as via CCF and CCFII. WTs are noted as separate line
items on tracking reports.
1. Requests for WTs must include customer-level detail.
2. The IPO database must be populated with the customer-level detail prior to requesting a
WT.
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
•
Int Cust: enter the AIA number of the customer for whom shares are being withdrawn
Agt ID: enter the ID Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
Result- DTC processes WT requests using shares from your IPO Control Account first. DTC
generates releases from your IPO Control Account to its Free Account.
1. Since the IPO Tracking System records all manual releases as potential flips, you should not
manually release shares for WT processing.
2. DTC generates releases from your IPO Control Account only if the Internal Account number
already exists in the IPO database. If the Internal Account number does not exist, a
release will not be generated and the WT will be assumed to be from Free shares only.
Request a WT Using Free Shares Only
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
Int Cust: enter a "dummy" AIA number (one that does not exist in the IPO database).
Note- The use of a dummy Internal Account number in the Int Cust field will default the
system to use Free shares for WT processing.
•
Agt ID: enter ID the Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
Stock Loans and Returns
Stock Loan Deliveries
Co-Managers are able to process stock loans using the appropriate DO/NDOM Reason Codes. As for
all broker Participants, DTC fulfills a Co-Manager's stock loan delivery quantity with Free Account
shares only. If insufficient shares are available in the Lead Manager's Free Account, the Participant
must instruct DTC to process a Stock Loan Release to release IPO shares from its IPO Control
account to its Free account for the balance.
DTC distinguishes between stock loan releases and regular releases and reports each type as
separate line items on Lead Underwriter and Syndicate Member Flipping Activity Reports. All stock
loan releases are categorized according to Participant type of lender and borrower.
To dissuade Participants from using the stock loan release facility for regular releases, DTC monitors
the quantity of IPO shares moved to the Participant's Free account via stock loan releases versus
the quantity of shares loaned by the Participant on the same day and reports discrepancies to the
Lead Underwriter and appropriate Syndicate Members.
All stock loans are made on an omnibus basis. No customer account numbers are tagged to stock
loans. An AIA number entered in a stock loan delivery is ignored by DTC; however, the exception to
this is for stock loans to banks, in which case the Participant number of the receiving bank must be
entered as the AIA number in order to allow the receiving bank the ability to deliver borrowed
shares.
Stock Loan Receipts
DTC delivers all Stock Loans to the Borrower's Free Account.
Stock Loan Returns
You can process Stock Loan Returns by using the appropriate Reason Codes via the PTS functions
DO or NDOM. All stock loan returns are delivered from the borrower's Free account.
1 Enter Reason Code 20 in the REAS field of the SDFS Initial Public Offering Deliver Orders Screen.
2 Refer to DO and NDOM for additional Deliver Order field and processing information.
Stock Loan Return Receipts
All Stock Loan Returns are delivered to the lender's Free Account as Free Secondary Market shares
in the IPO database.
Pledges
Pledges of Collateral
You can pledge shares with or without value from either their IPO Control or Free Accounts via the
PTS function COLL.
1 Enter the following information on the Free Pledge Service Screen:
•
•
IPO: enter Y if the shares are being pledged from the IPO Control Account
OR
Enter N if the shares are being pledged from the Free Account
2 Refer to COLL for processing information.
Result- Pledged IPO Control and Free Account shares are moved to the Pledge (14) Account. IPO
shares are segregated in the I14 Account.
Pledge Releases
If released during the tracking period, Pledge shares are delivered back to their original accounts. In
cases where both IPO and Secondary Market shares were pledged, released (Free) shares are
returned to the Free Account first, up to the quantity of Free Account shares pledged. The balance
of the shares return to the IPO Control Account.
If released after tracking has ended, all Pledge shares are delivered to the Free Account regardless
of what their account of origin.
Reclaims
Reclaim Deliveries
DTC will automatically process a matched reclamation based on the DO transaction number and
other transaction information provided until one day after settlement.
You can enter Matched Reclaims via the PTS functions ART and DO/NDOM and via CCF, CCFII and
MDH.
When you reclaim a delivery, the reclaimed DO will be matched to the original delivery and the
information in the IPO database will be reversed.
Note- Partial reclaims are not permitted.
Matched Reclaim Deliveries via ART
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter R to the left of the item to be reclaimed on the ATP Activity Summary Screen.
2 Refer to the Settlement Service Guide for additional ART field and processing information.
Matched Reclaim Deliveries via DO or NDOM
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter information in the following fields of the SDFS Automatic Reclaim Deliver Orders Screen:
•
Trans#: enter the transaction number of the transaction being reclaimed
•
•
Reas-Code: enter the appropriate Reason Code (Refer to Codes in this Manual for
Reclaim Reason Codes. )
Orig-Date-Ind: enter T to reclaim a DO entered today or P to reclaim a DO entered on
the previous business day
Note- If made during the Matched Reclaims timeframe, DTC will also match Freeform Reclaims,
provided the appropriate DO Reason Code and correct information is entered.
Unmatched/Freeform Reclaim Deliveries
Reclaims must be entered Freeform via CCF/CCFII, MDH or the PTS functions DO/NDOM if:
• The reclaim transaction number cannot be matched to an original delivery
• The reclaim occurs after the Matched Reclaim deadline has passed
You must input transaction details Freeform, including the appropriate DO Reclaim Reason Code.
DTC treats these Reclaim transactions as original deliveries, which in turn can be reclaimed by the
receiver.
Reclaim Receipts
IPO shares that are reclaimed within the Matched Reclaim deadline (S through S+ 1) will be
returned to the account from which they originated, provided the issue is still being tracked.
Reclaims performed after the Matched Reclaim deadline, or after tracking has ended, will be placed
in the Receiver's Free Account. These deliveries can be reclaimed.
Memo Segregation
Although position may reside in both the IPO Control and Free Accounts, you can enter Memo
Segregation instructions for tracked issues using the same procedures currently used for nontracked issues. Memo Segregation bridges the IPO Control and Free Accounts.
The share quantity in the Memo Segregation instruction will be subtracted from the combined share
total in the IPO Control and Free Accounts. The resulting share total must be greater than the
quantity of any Deliver Orders entered. If the quantity is less, the Deliver Orders will not be
processed and will pend.
Deposits
Deposits are chilled for tracked issues for the duration of the tracking period.
DWAC (Deposit/Withdrawal at Custodian) activity is permitted on a very limited basis during the
tracking period and only with consent of the Lead Underwriter.
Certificates-On-Demand (CODs)
CODs are chilled for tracked issues for the duration of the tracking period.
Collateralization of IPO Shares
Shares in the IPO Control Account will be considered collateral (NA) only on the day they are
received into the account and only if received for value. Shares received into the IPO control
account without value will follow the normal accounting updating rules, and will be considered NA or
MA depending on the SDFS Account Coding Instructions.
Shares in the IPO Control Account will not be considered collateral after the first day they are
received. MA/NA intra-day moves will not be permitted.
Shares in the Free Account are subject to normal collateralization rules.
Reconcile Customer-Level Detail with Internal Records
You should reconcile the Customer-Level Detail in the IPO database with your internal records daily
using an IPOCLD machine-readable file. This file contains the Agent Bank or Prime Broker's Internal
Account numbers of all your customers on file, as well as the Executing Broker's Internal Account
numbers for those customers.
Contact DTC's Participant Interface Planning Department or your Relationship Manager for
assistance.
Make Inquiries via IPOI
The PTS function IPOI (Initial Public Offering Tracking System Inquiry) allows you to make inquiries
about tracked issues.
The following information is provided via IPOI:
•
•
•
•
A
A
A
A
list of all tracked IPO issues
summary of tracked IPO issues in which the Participant has position
summary of customer-level details by Participant-issue
summary of IPO pending/canceled/released transactions
For additional information on the IPO Tracking System Inquiry function, refer to the Overview and
Appendix E.
Receive Reports from DTC
DTC prepares and distributes daily cumulative hard-copy reports to the Lead Manager of its tracked
issues. The following information is provided:
•
•
•
•
•
•
•
•
•
List of potential flips by customers of Syndicate Members, Correspondents.
List of own Retail and Institutional customers that potentially flipped.
Potential flips by Directed Concessions (indicated with an*).
Separate line for WTs.
Separate line for Stock Loans: quantity reported represents the net amount (outstanding
loans less returns).
Retail account transfers (showing the receiving Participant number).
Institutional account transfers (showing the receiving Participant number and BIA).
List of CNS short positions for Syndicate Members having long positions in their IPO Control
Accounts; indicating potential sales by Syndicate Members that have not yet released
shares.
List of all CNS short positions for the CUSIP.
Note- Syndicate Member customer-level information is not provided in the Lead Manager's reports.
Refer to Reports for additional information and sample reports.
Co-Manager Tasks: Required Field Information &DTC Output
TASK:
FIELD INFORMATION
REQUIRED:
DTC
OUTPUT:
Recv-Pt: Syndicate
Member Part.
Activity
Code: 47
#REAS: Reason Code
570
Reason
Code: 570
Syndicate Takedown To:
Syndicate Members via DO/NDOM
Corr-Acct#: Syndicate
Member Part#
Clearing Bank of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing
Bank's Part. #
Activity
Code: 48
REAS: Reason Code 570
Reason
Code: 570
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Clearing Broker of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing
Broker's Part. #
Activity
Code: 47
REAS: Reason Code 570
Reason
Code: 570
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Initial Distribution To:
Agent Banks via ID
Market Code: Market
Code 11
Activity
Code: 48
Agent Internal
Account: Agent Bank's
Internal Account#
Reason
Code: 49
Broker Internal
Account: Executing
Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part#
Activity
Code: 48
REAS: Reason Code 50
Reason
Code: 50
Int-Acct#: Agent
Bank's Internal Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Prime Brokers via ID
Market Code: Market
Code 11
Activity
Code: 47
Agent Internal
Account: Prime Broker's
Internal Account#
Reason
Code: 49
Broker Internal
Account: Executing
Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part. #
Activity
Code: 47
REAS: Reason Code 50
Reason
Code: 50
Int-Acct#: Prime
Broker's Internal
Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Directed Concessions To:
Agent Banks via ID
Market Code: Market
Code 51
Activity
Code: 48
Agent Internal
Account: Agent Bank's
Internal Account#
Reason
Code: 539
Broker Internal
Account: Executing
Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part. #
Activity
Code: 48
REAS: Reason Code 530
Reason
Code: 530
Int-Acct#: Agent
Bank's Internal Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Prime Brokers via ID
Market Code: Market
Code 51
Activity
Code: 47
Agent Internal
Account: Prime Broker's
Reason
Code: 539
Internal Account#
Broker Internal
Account: Executing
Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part. #
Activity
Code: 47
REAS: Reason Code 530
Reason
Code: 530
Int-Acct#: Prime
Broker's Internal
Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Oversubscriptions To:
Syndicate Members via DO/NDOM
Recv-Pt: Syndicate
Member Part. #
Activity
Code: 49
REAS: Reason Code 540
Reason
Code: 540
Corr-Acct#: Syndicate
Member Part. #
Clearing Banks of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing
Bank's Part. #
Activity
Code: 26
REAS: Reason Code 540
Reason
Code: 540
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Clearing Brokers of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing
Broker's Part. #
Activity
Code: 49
REAS: Reason Code 540
Reason
Code: 540
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Agent Banks via ID
Market Code: Market
Code 52
Activity
Code: 26
Agent Internal
Account: Agent Bank's
Internal Account#
Reason
Code: 549
Broker Internal
Account: Executing
Broker's Internal
Account#
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part. #
Activity
Code: 26
REAS: Reason Code 540
Reason
Code: 540
Int-Acct#: Agent
Bank's Internal Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Prime Brokers via ID
Market Code: Market
Code 52
Activity
Code: 49
Agent Internal
Account: Prime Broker's
Internal Account#
Reason
Code: 549
Broker Internal
Account: Executing
Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part. #
Activity
Code: 49
REAS: Reason Code 540
Reason
Code: 540
Int-Acct#: Prime
Broker's Internal
Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Oversubscription/Directed
Concessions To:
Agent Banks via ID
Market Code: Market
Code 53
Activity
Code: 26
Agent Internal
Account: Agent Bank's
Internal Account#
Reason
Code: 559
Broker Internal
Account: Executing
Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part. #
Activity
Code: 26
REAS: Reason Code 550
Reason
Code: 550
Int-Acct#: Agent
Bank's Internal Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Prime Brokers via ID
Market Code: Market
Code 53
Activity
Code: 49
Agent Internal
Account: Prime Broker's
Internal Account#
Reason
Code: 559
Broker Internal
Account: Executing
Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part#
Activity
Code: 49
REAS: Reason Code 550
Reason
Code: 550
Int-Acct#: Prime
Broker's Internal
Account#
Bkr-Acct#: Executing
Broker's Internal
Account#; optional
Customer-Level Updates:
Add Customer-Level Detail via IPOU,
Option 2
Internal Customer:
Internal Account#
Share Quantity: Whole
number quantity
Sign: + or- to increase
or decrease shares
Update Customer-Level Detail via
IPOU, Option 5
From Internal
Customer: Old Internal
Account#
To Internal Customer:
New Internal Account#;
optional
Reallocated Share
Quantity: New whole
number quantity;
optional
Secondary Market Activity:
Release of IPO shares to Free
Account via IPOU, Option 3
Internal Customer:
Internal Account#
Activity
Code: 46
Trade Date: Trade date
Contract Price:
Contract price
Sale of Free shares
Same as for non-tracked
issues.
Move Free shares to IPO Control
Account for Oversubscriptions via
IPOU, Option 6
CUSIP: The issue's
CUSIP#
Activity
Code: 26
Share Quantity:
Number of shares being
moved
Withdrawals-by-Transfer via NWT1/
RWT1
Int Cust: Internal
Account#
Agt ID: ID Agent#;
optional
Stock Loan via DO/NDOM
REAS: Reason Code 10
Activity
Code: 48
IPO
shares:
48
Free
shares:
26
Reason
Code: 10
Stock Loan Return via DO/NDOM
REAS: Reason Code 20
Activity
Code:
IPO
shares:
49
Free
shares:
26
Reason
Code: 20
Account Transfer to Broker- IPO
Shares- via IPOU, Option 4
To Participant:
Receiving Broker's Part#
Activity
Code: 47
From Internal
Customer: Current
Internal Account#
Reason
Code: 40
To Internal Customer:
New Internal Account#
Share Quantity:
Number of whole shares
being transferred
Settlement Amount:
Settlement amount:
optional
Account Transfer to Broker- Free
shares- via IPOU, Option 4
To Participant:
Receiving Broker's Part#
Activity
Code: 26
From Internal
Customer: Current
Internal Account#
Reason
Code: 40
To Internal Customer:
New Internal Account#
Share Quantity:
Number of whole shares
being transferred
Settlement Amount:
Settlement amount:
optional
Account Transfer to Bank-IPO
Shares- via IPOU, Option 4
To Participant:
Receiving Bank's Part#
Activity
Code: 48
From Internal
Customer: Current
Internal Account#:
Reason
Code: 40
To Internal Customer:
New Internal Account#
Share Quantity:
Number of whole shares
being transferred
Settlement Amount:
Settlement amount:
optional
Account Transfer to Bank- Free
shares- via IPOU, Option 4
To Participant:
Receiving Bank's Part#
Activity
Code: 26
From Internal
Customer: Current
Internal Account#
Reason
Code: 40
To Internal Customer:
New Internal Account#
Share Quantity:
Number of whole shares
being transferred
Settlement Amount:
Settlement amount;
optional
Custodian Bank Procedures
Receive Initial Distribution Shares from Lead Manager/Syndicate Members
On closing day, the Lead Manager and Syndicate Members of an IPO tracked issue deliver shares to
Custodian Banks for their Institutional Customers ("Initial Distribution") via the Institutional Delivery
(ID) system or Deliver Orders (DO or NDOM) . These shares are delivered to the Custodian Bank' s
Free Account.
Throughout the tracking period, Bank transactions for that issue are monitored through the IPO
system. All shares are stored in the Bank' s Free Account and are tagged in the IPO database as
either IPO Initial Distribution or IPO Secondary Market shares. IPO Initial Distribution shares are
broken down in the database by Syndicate Member.
When Initial Distribution shares of an IPO tracked issue are received into the Custodian Bank' s Free
Account, the IPO database automatically updates the Custodian Bank' s IPO position in the IPO
database and extracts the following customer information from the ID or DO transaction:
• Agent Internal Account (AIA) number
Note- If the AIA number has not been provided by the Executing Broker for an ID
transaction, the Custodian Bank will receive an Error Code 91 message. (Refer to Relaxed
Editing and Resolve AIA Number Discrepancies in ID Deliveries. )
• Executing Broker Internal Account (BIA) number and the associated Syndicate Member
Participant number
• Number of shares allocated to that customer
• The Custodian Bank
Note- The ID Agent number will default to the Custodian Bank' s Participant number.
Secondary Market Activity
Note- Secondary Market shares can be viewed via the "Free Available" field of IPOI, Option 3,
Customer-Level Detail.
Deliver Shares for Secondary Market Sales
Custodian Banks can deliver shares for Secondary Market sales by using the PTS functions DO or
NDOM, or by having the Executing Broker input the transaction via DTC's ID system.
If an Institutional customer has both IPO and Secondary Market shares, the system will use the
Secondary Market shares to complete a delivery before using the IPO shares. IPO shares used to
complete a delivery will be reported as potential flips.
Potential flips of Initial Distribution shares are reported as such on the daily reports to Lead
managers and Syndicate Members. Tracking of all IPO shares continues until the Lead Manager
terminates tracking, or until the 90-calendar-day maximum tracking period is over.
If a customer has received shares from more than one Broker-Dealer and then sells shares on the
Secondary Market, the system prorates the sale among the Syndicate Members servicing that
customer.
Note- Customer-level detail is required for all Secondary Market sales.
Exception: If a Custodian Bank has never received Initial Distribution shares for the tracked issue,
that Bank' s shares are not tracked, and customer-level detail is not required for those Secondary
Market sales.
Deliver Shares via DO or NDOM
Shares sold in the Secondary Market can be delivered via the PTS functions DO or NDOM using the
existing DO Reason Codes.
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
Int-Acct#:
enter the Agent Bank' s Internal Account number for the customer
Note- The Agent Internal Account (AIA) number must be entered correctly in order to
ensure accurate processing of the transaction. If the AIA number is not correct, the trade
will be rejected. (Refer to Relaxed Editing for exceptions and Resolve AIA Number
Discrepancies in ID Deliveries. )
•
Trade-Dt:
enter the Trade Date
2 Refer to DO or NDOM for additional field and processing information.
Bank-to-Bank Deliveries
When delivering to other Banks (i. e. , Bank-to-Bank deliveries), the Custodian Bank enters its own
Internal Account number for its customer. The receiving Bank' s database is populated with a
customer number matching its own Participant number. The receiving Bank may maintain its own
Participant number as its account number for this customer or may adjust the number to the actual
customer number. When subsequently delivering the shares the Bank must use the account number
on the database at the time of the delivery.
As with any Custodian Bank delivery, the customers' Free shares will be moved first; then, if
needed, its IPO shares. If IPO shares are moved via a Bank-to-Bank delivery, the receiving Bank
will receive tagged IPO shares but a flip will not be reported.
Receive Shares from Secondary Market Buys
Shares bought on the Secondary Market reside in the Custodian Bank' s Free Account and are
segregated in the IPO database as Secondary Market shares. The Syndicate Member is not captured
in the IPO database for Secondary Market transaction shares. For Banks, Secondary Market Shares
are tracked for the duration of the tracking period.
Relaxed Editing
Custodian Banks' customers can start setting up sales of Initial Distribution shares on the Secondary
Market as early as trade date. These sales, referred to as "turnaround" sales, will settle on the same
day the issue closes (possibly before the IPO database has been populated).
Relaxed editing allows Custodian Banks to process Secondary Market sell transactions on settlement
date without a match of the AIA number or share quantity to the IPO database. As long as the
Custodian Bank itself has received sufficient shares to cover deliveries, the Custodian Bank can
process sales of Initial Distribution shares on settlement date without matching customer-level
detail.
As soon as the Custodian Bank receives the Initial Distribution shares:
• ID deliveries that were set up by the Custodian Bank' s customers between trade date and
the day before settlement date (S-1) are delivered regardless of unmatched AIA numbers
or share quantities.
• DO/NDOM deliveries set up by customers of the Custodian Bank are made until 3:00 p.m.
EST on settlement day, regardless of unmatched AIA numbers or share quantities.
After the trade settles, Banks can update the unmatched AIA number to the correct Internal
Account number via the IPOU PTS function. (Refer to Update Customer-Level Information via IPOU
in this chapter. )
Each night during the relaxed editing period DTC attempts to reconcile the AIA numbers of
unmatched deliveries not adjusted during the processing day. After DTC's cutoff time for deliveries
and prior to cutoff time for the machine-readable customer-level detail files, the system
automatically attempts to match the AIA numbers of made unmatched deliveries to the AIA
numbers populated on the Custodian Bank' s IPO database. The system attempts to reconcile these
AIA number discrepancies nightly during the relaxed editing period so that DTC can report these
sales correctly to Underwriters.
If a match is found, the system updates its records to accurately report the delivering customer and
its associated Syndicate Member. The Custodian Bank is also identified on the report as having
delivered the shares.
If a match is not found, the system is unable to identify the Syndicate Member associated with the
shares and therefore reports the delivery to the Lead Underwriter as "Unknown," indicating a
potential flip by a customer of an unknown Syndicate Member. The Custodian Bank is identified on
the report as having delivered the shares.
Custodian Banks can view unmatched transactions that settled through relaxed editing via IPOI,
Option 3. The following information is displayed: A customer is added displaying the unmatched AIA
number, an "Unknown" Syndicate Member, a negative (-) Available Share Quantity, and a "flipped"
quantity to the negative share quantity. (Refer to Make Inquiries via IPOI for additional information.
)
Note- After the relaxed editing period ends, deliveries with unmatched AIA numbers will not settle.
(Refer to Resolve AIA Number Discrepancies in ID Deliveries. )
Resolve AIA Number Discrepancies in ID Deliveries
When the AIA number on an Initial Distribution buy transaction or a Secondary Market sell
transaction is missing or does not match an AIA number in the IPO Tracking database, the system
generates a warning message, Error 91.
Error 91 flags an unmatched AIA number three times:
• ID Confirmation
• ID Affirmation
• Authorization and Exception (ANE)
Error 91 also appears on machine-readable output.
When validation occurs at Authorization and Exception (ANE) time, ANE will reject the buy or sell
transaction if the AIA number is still unmatched or missing, and the delivery will be excepted from
automated processing.
Unmatched AIA numbers can be corrected by the Custodian Bank in the IPO database prior to the
settlement day cutoffs so that the ID trade may be authorized and settle that day through the
automated settlement feature of the ID system.
Custodian Banks may resolve AIA number discrepancies in three ways:
• Update the AIA number in the IPO database by performing an IPO customer-level
adjustment to match to the AIA on the ID transaction. (Refer to Updating Customer-Level
Detail via IPOU in this chapter. )
• Except the ID transaction from automated settlement. The Custodian Bank can then enter a
DO with the AIA number as it appears in the IPO database. (Refer to Deliver Shares via
DO or NDOM. )
Note- If a trade is excepted from ID settlement, the same customer-level detail fields must
be provided for DO transactions.
• Have the Executing Broker cancel the ID transaction and re-enter it in the ID system.
The Custodian Bank can notify the Executing Broker of the correct AIA number via the PTS function
IDEM.
Refer to IDEM for additional information regarding IDEM.
Note- The ANE inquiry function and T+ 3 hard-copy report will display a code of "F" in the status
field to indicate an Initial Distribution trade that has been rejected from settlement, and an "I" to
indicate a Secondary Market trade that has been rejected from settlement. The "F"code indicates
that the AIA or BIA number on an IPO trade is missing, and the "I" code indicates that the AIA
number is missing or does not match the AIA number as stored on the IPO database. These
transactions may be reprocessed for up to 21 days.
Update Customer-Level Information via IPOU
Customer-level detail in the IPO database can be updated via the PTS function IPOU. The following
sections depict some of the activities Custodian Banks can perform via IPOU.
Refer to Appendix D for additional information regarding IPOU.
Update Customer-Level Detail
This option allows Custodian Banks to change an existing customer Internal Account number and to
reallocate a share quantity from one customer to another.
1 On the IPO- Tracking System Main Menu Screen, select Option 5, Customer-Level Adjustment.
2 Enter information in the following fields of the IPO- Customer-Level Adjustment screen:
•
From Internal Customer:
enter the existing AIA number for the customer.
Note- If a match is not found for the "From Internal Customer" AIA number, the
transaction is rejected.
•
•
•
From BIA:
enter the existing BIA number for the customer (optional).
To Internal Customer:
enter the new AIA number for the customer; required if the Participant wants to change
the existing number to a new number.
Reallocated Share Quantity field:
enter the number of whole shares being adjusted, up to 13 positions; required if the
Participant is reallocating a share quantity from the existing external customer to the
new internal customer.
Note- Because the system overlays the share quantity information, you must input
exactly the total number of shares the "To Internal Customer" should have.
•
Refer to Appendix D for additional field and processing information.
Transfer Customer' s Position Between Participants
Custodian Banks can transfer customer positions to other Participants without those transfers being
reported as flips. For reporting purposes, the IPO database moves the original Syndicate Member' s
Participant number and BIA number with each transfer of a customer' s position.
Memo Segregation and Sub Account Segregated positions do not need to be released prior to
attempting any customer account transfers. IPO account transfer transactions can bypass memo
segregation.
Customer-level detail is required for account transfers.
Note- Partial transfers will not be processed.
Transfer Customer' s Position via IPOU
Note- Account transfers in tracked CUSIPs must be accomplished by the IPO Customer Account
Transfer function and must be for the total (IPO and Secondary Market) position the customer has
in its Account.
1 On the IPO- Tracking System Main Menu Screen, select Option 4, Customer Account Transfer.
2 Enter information in the following fields of the IPO- Customer Account Transfer Screen:
•
•
To Participant:
enter the receiving Participant number
From Internal Customer:
enter the existing AIA number for the customer
Note- If no match is found for the "From Internal Customer" AIA number, the transfer
can not be processed.
•
•
•
•
To Internal Customer:
enter the receiving Participant' s new AIA number
ID Agent:
enter the ID Agent ID number; optional
Share Quantity:
enter the number of whole shares being transferred, up to 13 positions
Settlement Amount:
enter the settlement amount for the account transfer; optional
3 Reason Code:
enter the Reason Code by which the account transfer is to be processed.
Note- The following Reason Codes may be entered for Account Transfers:
Reason Code 40- this Reason Code will not reduce the delivering Participant' s memo segregation
position if the account transfer is valued; but will reduce the delivering Participant' s memo
segregation position by the account transfer quantity if the account transfer is free of value.
Reason Code 88- this Reason code will reduce the delivering Participant' s memo segregation
position by the quantity of the account transfer only if the account transfer is free of settlement
value. Use of This Reason Code will not reduce memo segregation if the account transfer is for
value.
Reason Code 95- this Reason Code will reduce the delivering Participant' s memo segregation
position by the account transfer quantity regardless of whether the account transfer is valued or
free of value.
Reason Code 97- this Reason Code will reduce the delivering Participant' s memo segregation
position by the account transfer quantity regardless of whether the account transfer is valued as
free of value.
Reason Code 98- this Reason Code will not reduce the delivering Participant' s memo segregation
position to transact the account transfer regardless of value.
•
Refer to Appendix D for additional information.
Note- Account transfers of IPO and Free secondary market shares to a broker Participant will
result in two DOs generated.
Share Movement for Customer Account Transfers- Deliveries
When a Custodian Bank transfers a customer' s position to another Participant, DTC moves the
shares in one of the following ways:
Transfer position to a Bank: All shares move to the receiving Bank' s Free Account in ART.
Shares marked as IPO shares in the IPO database for the delivering Custodian Bank are marked as
IPO shares in the IPO database for the receiving Custodian Bank, and credited to the receiving bank'
s Free Account. Shares marked as Secondary Market shares in the IPO database for the delivering
Custodian Bank are marked as Secondary Market shares in the IPO database for the receiving
Custodian Bank, and credited to the receiving bank' s Free Account in the IPO database.
Transfer position to a Broker: Shares marked as IPO shares in the IPO database for the
Custodian Bank move to the receiving Broker' s IPO Control Account in ART and are marked as IPO
shares in the IPO database. Shares marked as Secondary Market shares in the IPO database for the
Custodian Bank move to the Broker' s Free Account in ART. Secondary Market shares are not
captured in the IPO database for broker Participants.
Share Movement for Customer Account Transfers- Receipts
Custodian Banks will receive customer account transfer positions from other Participants in one of
the following ways:
Receive position from a Bank: All shares move to the receiving Bank' s Free Account in ART.
Shares marked as IPO shares in the IPO database for the delivering Bank are marked as IPO shares
in the IPO database for the receiving Custodian Bank and credited to the receiving bank' s Free
account. Shares marked as Secondary Market shares in the IPO database for the delivering bank
are marked as Secondary Market shares in the IPO database for the receiving Custodian Bank and
credited to the receiving banks' Free Account.
Receive position from a Broker: All shares move to the Custodian Bank' s Free Account in ART.
Shares received from the Broker' s IPO Control Account are marked as IPO shares in the IPO
database for the Custodian Bank and credited to the receiving banks' Free Account. Shares received
from the Broker' s Free Account are marked as Secondary Market shares in the IPO database for the
Custodian Bank and credited to the receiving bank' s Free account.
Withdrawals-by-Transfer (WTs)
If certificate denominations are available, Withdrawals-by-Transfer (WTs) of tracked issues are
permitted starting on the closing day via the PTS functions NWT1 (Night Withdrawal-by-Transfer)
and RWT1 (Rush Withdrawal-by-Transfer) as well as via CCF and CCFII. WTs are noted as separate
line items on the tracking reports.
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer Screen:
•
•
•
•
•
Int Cust:
enter the AIA number of the customer for whom shares are being withdrawn.
Requests for WTs must include the AIA number.
The customer must already exist in the IPO database or the WT is rejected.
ID Agent:
enter the ID Agent ID number; optional.
Refer to NWT1 and RWT1 for additional WT field and processing information.
DTC processes WT requests using the Custodian Bank' s Secondary Market shares first. If
necessary, DTC uses IPO shares to complete a WT request.
Stock Loans and Returns
Stock Loan Deliveries
Custodian Banks are able to process stock loans using the appropriate DO/NDOM Reason Codes.
When processing a stock loan, DTC attempts to fulfill the loan quantity with Free secondary market
shares and will satisfy the balance, if necessary, with the bank' s IPO shares.
All stock loans are made on an omnibus basis. No customer account numbers are tagged to stock
loans. An AIA number entered in a stock loan delivery is ignored by DTC; however, the exception to
this is for stock loans to banks, in which case the Participant number of the receiving bank must be
entered as the AIA number in order to allow the receiving bank the ability to deliver borrowed
shares.
All loans of IPO shares are noted as separate line items in Lead Underwriter and Syndicate Member
Flipping Activity Reports and are categorized according to Participant type of lender and borrower.
The quantity of loaned IPO shares is prorated across all Syndicate Members that deliver initial
distribution shares to the bank.
1 Enter Reason Code 10 in the REAS field of the Initial Public Offering Deliver Orders Screen.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Stock Loan Receipts
All shares of stock loans delivered to a bank are credited to the receiving bank' s Free account and
are considered Free secondary market shares. DTC updates the bank' s IPO database by using the
receiving bank' s own Participant number as the default AIA number for borrowed shares.
The receiving bank can adjust the IPO database to attach a valid customer number to the borrowed
shares, or can maintain the shares with the default AIA number populated by DTC. Regardless, as
with all other deliveries, when delivering borrowed shares the AIA number entered by the bank in
its delivery instruction must match the IPO database in order for DTC to process the delivery.
Stock Loan Returns
Custodian Banks can process Stock Loan Returns by using the appropriate DO/NDOM Reason Codes.
All stock loans are returned to the lender' s Free account as Free secondary market shares in the
IPO database. It is not necessary to include the AIA number.
1 Enter Reason Code 20 in the REAS field of the Initial Public Offering Deliver Orders Screen.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Stock Loan Return Receipts
Stock Loan Returns are delivered to the Lender' s Free Account as Free secondary market shares in
the IPO database.
Pledges
Pledges of Collateral
Custodian Banks can pledge shares with or without value via the PTS function COLL.
Refer to COLL for field and processing information.
Pledge Releases
All Pledge shares are returned to the Custodian Bank's Free Account.
Reclaims
Reclaim Deliveries
DTC will automatically process a matched reclamation based on the DO transaction number and
other transaction information provided until one day after settlement.
Custodian Banks can enter Matched Reclaims via the PTS functions ART and DO/NDOM and via CCF,
CCFII and MDH.
Partial reclaims are not permitted.
Note- When a Custodian Bank reclaims a delivery, the reclaimed DO will be matched to the original
delivery and the information in the IPO database will be reversed.
Matched Reclaim Deliveries via ART
Matched reclaims can be made on settlement date and the day after. These reclaims cannot be
reclaimed by the original deliverer, and matched reclaims are not subject to Risk Management
Controls.
1 Enter R to the left of the item to be reclaimed on the ATP Activity Summary Screen.
2 Refer to ART for field and processing information.
Matched Reclaim Deliveries via DO or NDOM
Matched reclaims can be made on settlement date and the day after (S though S+ 1). Matched
reclaims can be made on settlement date and the day after (S though S+ 1). Matched reclaims are
not subject to risk management controls.
1 Enter information in the following fields of SDFS Automatic Reclaim Deliver Orders Screen:
•
•
•
Trans#:
enter the transaction number of the transaction being reclaimed.
Reas-Code:
enter the appropriate Reason Code (Refer to Codes in this Manual for Reclaim Reason
Codes).
Orig-Date-Ind:
enter T to reclaim a DO entered today or P to reclaim a DO entered on the previous
business day.
2 Refer to DO or NDOM for additional information.
Note- If made during the Match Reclaims timeframe, DTC will also match Freeform Reclaims
provided the appropriate DO Reason Code and correct information is entered.
Unmatched/Freeform Reclaim Deliveries
Reclaims must be entered Freeform via the PTS functions DO or NDOM if:
• The reclaim transaction number cannot be matched to an original delivery
• The reclaim occurs after the Matched Reclaim deadline has passed
• Custodian Banks must manually input transaction details, including the appropriate Deliver
Order Reclaim Reason Code.
DTC treats these Reclaim transactions as original deliveries, which in turn can be reclaimed by the
receiver.
Reclaim Receipts
Initial Distribution deliveries that are reclaimed within the deadline (S through S+ 1) will be
returned to the Custodian Bank's Free Account. IPO shares will be marked in the IPO database.
Note- Custodian Banks can reclaim Unmatched/Freeform Reclaim Deliveries.
Deposits
Deposits are chilled for tracked issues during the tracking period.
DWAC (Deposit/Withdrawal at Custodian) activity is permitted on a very limited basis during the
tracking period, and only with the consent of the Lead Underwriter.
Certificates-On-Demand (CODs)
CODs are chilled for tracked issues during the tracking period.
Make Inquiries via IPOI
The PTS function IPOI (Initial Public Offering Tracking System Inquiry) allows the Custodian Bank to
make inquiries about tracked issues.
The following information is provided via IPOI:
•
•
•
•
•
A
A
A
A
A
list of all tracked IPO issues
summary of tracked IPO issues in which the Participant has position
summary of customer-level details by Participant-issue
summary of IPO pending/canceled/released transactions
summary of Custodian Bank customer-level secondary share position obtained from free
Market trades
For additional information on the IPO Tracking System Inquiry function, refer to the Overview and
Appendix E.
Custodian Bank Tasks: Required Field Information &DTC Output
Task:
Field Information
Required:
DTC Output:
Int Acct#:
Activity Code:
Agent Internal Account
(AIA) number
26
Secondary Market
Activity:
Sale of Secondary Market
shares via DO/NDOM
Trade Date:
Trade Date
Net$ Amt:
Price
Withdrawals-by-Transfer via
NWT1/ RWT1
Int Cust:
AIA number
Stock Loan via DO/NDOM
Stock Loan Return via
DO/NDOM
Account Transfer to Broker
via IPOU, Option 4
REAS:
Activity Code:
Reason Code 10
26
REAS:
Activity Code:
Reason Code 20
26
From Internal Customer:
Activity Code:
Current AIA number
IPO shares: 49
To Participant:
Free shares: 26
Receiving Broker's Part
number
Reason Code:
40, 95 or 98
To Internal Customer:
New AIA number
ID Agent:
ID Agent number; optional
IPO Share Quantity:
Number of whole IPO shares
being transferred
Free Share Quantity:
Number of whole Free
shares being transferred
Settlement Amount:
Settlement amount;
optional
Reason Code:
Appropriate Reason Code for
delivery
Account Transfer to Bank
via IPOU, Option 4
From Internal Customer:
Activity Code:
26
Current AIA number
Reason Code:
40, 95 or 98
To Participant:
Receiving Bank's Part
number
To Internal Customer:
New AIA number
ID Agent:
ID Agent number; optional
IPO Share Quantity:
Number of whole IPO shares
being transferred
Free Share Quantity:
Number of whole Free
shares being transferred
Settlement Amount:
Settlement amount;
optional
Reason Code:
Appropriate Reason Code for
delivery
Lead Manager Procedures
Set Up Tracked Issues With DTC
Before an issue can be tracked, you must work with DTC's Underwriting Department to make the
issue DTC-eligible and set the issue up for tracking. The procedures are similar to those for nontracked issues.
1 Send DTC's Underwriting Department a Prospectus and a completed Eligibility Questionnaire 10
days prior to distribution.
Result- Within 48 hours, DTC will contact you to confirm that the issue can be made DTC-eligible
and to provide additional instructions.
2 Provide the Underwriting Department with the CUSIP number (s) for the issue seven days prior
to the distribution date.
Result- Once the CUSIP is received, DTC will add it to its Master File.
DTC will provide you with a denominational break down for the certificates. This will enable DTC
to have a working inventory in its vault.
3 Prepare the certificates as instructed by DTC.
4 Confirm in writing to DTC's Underwriting Department by no later than 3:00 p.m.
Eastern Standard Time (EST) S-2 that the issue is to be tracked. This should include an
estimated length of tracking; the maximum is 90 calendar days. Requests for tracking
will not be honored after the S-2 cutoff time.
Result- The Tracking Indicator is turned on for the PTS function GWIZ and the CCF file ELISCA/C
as soon as DTC makes the CUSIP eligible.
Note- The length of tracking can be modified at any time during the tracking period by written
request from the Lead Manager.
5 Deliver the certificates to DTC or the Custodian Bank no later than one day prior to the
distribution date.
Result- DTC will examine the certificates prior to the distribution date to ensure they are in good
form and to ascertain that the agreed upon specifications have been met.
6 Provide pricing information to DTC.
Receive Shares from DTC Control Account for Syndicate Takedown and Initial
Distribution
Prior to 1:15 p.m. on closing date, you and the Issuer or Issuer's Agent notify DTC that the deal has
closed and the shares can be released to you. DTC moves the shares from its Control Account
(2153) to your IPO Control Account.
• Prior to the closing, you should set up deliveries for your Institutional customers, as well as
to your Syndicate Members. These will pend until the issue closes.
• Shares remain in your IPO Control Account for the duration of the tracking period unless
they are released, transferred, or distributed to Syndicate Members or Institutional
customers at Agent Banks or Prime Brokers.
Syndicate Takedowns
Prior to receiving shares in your IPO Control Account you should set up deliveries for distribution of
shares to your Syndicate Members, Co-Managers and Co-Reporters. A Syndicate Takedown is
performed by using Option 4 of the PTS function DO or Option 6 of NDOM.
Note- The term "Syndicate Members" includes selling group members as well.
You can indicate a Syndicate Takedown delivery by entering the appropriate Reason Codes, as
described in the following sections, in the REAS field of the Initial Public Offering Deliver Orders
Screen.
Deliveries to Syndicate Members, Co-Managers and Co-Reporters go to the top of the delivery
queue.
Distribute Shares to Co-Managers and Co-Reporters
You can set up deliveries to your own second Participant number ("Co-Reporter") for foreign
distribution, or to a second Lead Manager ("Co-Manager").
Note- In a Co-Manager relationship the deliverer (the Lead Manager) and the Receiver have
different Primary Participant numbers in the Master File Entity System. In a Co-Reporting
relationship the deliverer (Lead Manager) and receiver (Lead Manager) have the same primary
Participant number.
Distribute Shares to Co-Managers
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
Recv-Pt: enter the Co-Manager's Participant number
REAS Pt: enter Reason Code 560
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares to Co-Reporters
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
Recv-Pt: enter your second ("Co-Reporter") Participant number
REAS Pt: enter Reason Code 560
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares to Syndicate Members
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Syndicate Member's Participant number
REAS: enter Reason Code 570
Corr-Acct#: enter the Syndicate Member's Participant number
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares to Correspondent Syndicate Members
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Clearing Broker or Clearing Bank's Participant number
REAS: enter Reason Code 570
Corr-Acct#: enter the Correspondent Syndicate Member's ID Broker-Dealer number
Note-
•
Entering the Clearing Broker/Bank's Participant number in the Recv-Pt field and the
Correspondent's ID Broker-Dealer number in the Corr-Acct# field will identify this as a
Correspondent relationship in the IPO database. The system will validate the relationship
against the Broker section of the ID Master File.
•
When delivering to Clearing Banks, the numbers in the Recv-Pt and Corr-Acct# fields can
be the same provided the relationship exists in the Broker section of the ID Master File.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distributing Shares for Oversubscriptions
When you have fewer shares than you need to make your Syndicate Takedown deliveries, you can
borrow or purchase shares from the Secondary Market.
Shares borrowed or purchased in the Secondary Market for Oversubscription Distribution will reside
in your Free Account.
You have two options for delivering Oversubscribed shares:
• Move the shares back to your IPO Control Account via the PTS function IPOU (Option 6)
and perform a Syndicate Takedown DO/NDOM delivery.
• Deliver the shares directly from your Free Account using the appropriate ID or DO/NDOM
codes.
Move Shares from the Free Account to the IPO Control Account
1 For Oversubscriptions on the IPO- Tracking System Main Menu Screen, select Option 6,
Oversubscription for Lead Underwriter.
2 Enter information in the following fields of the IPO- Oversubscription for Lead Underwriter Screen:
•
•
CUSIP: enter the issue's CUSIP number
Share Quantity: enter the number of Free shares being transferred to the IPO Control
Account
3 Press the ENTER key.
4 Refer to Appendix D, IPOU, for additional field and processing information.
Result- Two one-sided next-day DO journals are generated: one to decrease Free Account shares
and another to increase shares in the IPO Control Account.
5 Perform a Syndicate Takedown DO or NDOM delivery.
Distribute Oversubscribed Shares to Syndicate Members via DO or NDOM
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Syndicate Member's Participant number
REAS: enter Reason Code 540
Corr-Acct#: enter the Syndicate Member's Participant number
2 Refer to the DO or NDOM for additional Deliver Order field and processing information.
Result- Shares move from the Lead Manager's Free Account to the Syndicate Member's IPO
Control Account.
Note- Refer to Deliver Shares to Syndicate Members in this chapter for information on other
distributions to Syndicate Members.
Distribute Oversubscribed Shares to Correspondents via DO or NDOM
1 Enter information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Clearing Bank or Clearing Broker's Participant number
REAS: enter Reason Code 540
Corr-Acct#: enter the Correspondent Syndicate Member's ID Broker-Dealer number
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Note- Refer to Distribute Shares to Correspondents in this chapter for information on other
Correspondent Distributions.
Initial Distribution
After the Syndicate Takedown, distribution to Institutional customers ("Initial Distribution") occurs
as follows:
•
•
•
•
Distribution to Agent Banks and Prime Brokers
Directed Concessions
Oversubscriptions
Directed Concessions/Oversubscriptions
Although shares can be delivered on or after the closing date, you can set up your Initial
Distribution deliveries prior to receiving shares into your IPO Control Account.
An Initial Distribution is performed by using either DTC's ID system or the PTS functions DO or
NDOM. You can indicate an Initial Distribution delivery by entering the appropriate Market Code on
the Institutional Delivery Trade Input Screen for ID trades, or by entering the appropriate Reason
Code in the REAS field of the Initial Public Offering Deliver Orders Screen for Day and Night DOs.
Note- Initial Distribution transactions are not settled through CNS.
Distribute Shares to Agent Banks and Prime Brokers via ID
Note- Customer-level detail is required for Initial Distribution transactions.
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen
•
•
•
Market Code: enter Market Code 11
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure
accurate processing of the transaction. If either is missing, or entered incorrectly, an
error code of 91 will appear on the Confirmation and Affirmation tickets. Refer to Resolve
Internal Account Number Discrepancies for information on how to correct the Agent
Internal Account number.
Result- The AIA number, BIA number and associated Syndicate Member are extracted from ID
trades upon authorization. On closing date, the IPO database is populated.
2 Refer to IDTI for additional ID field and processing information.
Distribute Unaffirmed ID Trade Shares to Agent Banks and Prime Brokers via
DO or NDOM
When a trade is unaffirmed, excepted or rejected from the ID system, you can settle that trade via
the PTS functions DO (Option 4) or NDOM (Option 6).
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 50
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Note- The Internal Account numbers must be entered correctly to ensure accurate
processing of the transaction. DTC rejects Initial Distribution deliveries in which either
number is missing.
•
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Result- The system captures the Agent Bank/Prime Broker Internal Account number along with
the BIA number and the associated Syndicate Member and populates the IPO database.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares for Broker Custody Trades
For trades where the Executing Broker and Custodian are the same entity ("Broker Custody"), you
"deliver" shares to its own account via DTC's ID system.
1 Follow the Initial Distribution procedures described in Distribute Shares via ID, entering your own
Participant number as both the Executing Broker and the Custodian of the transaction.
Result- Because there is no actual movement of shares, the IPO database is populated with
customer-level detail and the associated Syndicate Member upon Confirmation of Broker Custody
trades.
Distribute Shares for Directed Concessions
You can deliver a block of IPO shares directly to a Syndicate Member's Institutional Customer, at
the customer's request ("Directed Concession"). You are set up as the associated Syndicate Member
in the IPO database. Directed Concessions can be distributed via DTC's ID system or via the PTS
functions DO (Option 4) or NDOM (Option 6).
Directed Concession deliveries are flagged on your tracking reports with an asterisk (*) and with the
delivering custodian's Participant number. If a Directed Concession customer flips, you must check
your internal records to identify the customer's Syndicate Member.
Distribute Directed Concession Shares via ID
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 51
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure
accurate processing of the transaction. If either is missing, or entered incorrectly, an
error code of 91 will appear on the Confirmation and Affirmation tickets. Refer to Resolve
Internal Account Number Discrepancies for information on how to correct the Agent
Internal Account number.
2 Refer to IDTI for additional ID field and processing information.
Distribute Directed Concession Shares via DO or NDOM
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 530
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Note- The Internal Account numbers must be entered to ensure accurate processing of
the transaction. DTC rejects Initial Distribution deliveries in which either number is
missing.
Result- The system captures the Agent Bank/Prime Broker Internal Account number along with
the BIA number and the associated Syndicate Member and populates the IPO database with this
information.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares for Oversubscriptions
When you have fewer shares than needed to makethe Initial Distribution deliveries, you can
purchase or borrow shares from the Secondary Market for distribution ("Oversubscription").
Shares purchased or borrowed in the Secondary Market for Oversubscription Distribution will reside
in your Free Account.
You have two options for delivering Oversubscribed shares:
• Move the shares back to your IPO Control Account via the PTS function IPOU (Option 6),
and perform an Initial Distribution ID or DO/ NDOM delivery.
• Deliver the shares directly from your Free Account using the appropriate ID or DO/NDOM
codes.
Move Shares From the Free Account to the IPO Control Account for
Oversubscriptions
1 On the IPO- Tracking System Main Menu Screen, select Option 6, Oversubscription for Lead
Underwriter.
2 Enter information in the following fields of the IPO- Oversubscription for Lead Underwriter Screen:
•
•
CUSIP: enter the issue's CUSIP number
Share Quantity: enter the number of Free shares being transferred to the IPO Control
Account
3 Press the ENTER key.
4 Refer to Appendix D for additional field and processing information.
5 Perform an Initial Distribution DO, NDOM or ID delivery. Refer to Distribute Shares to Agent
Banks and Prime Brokers via ID and Distribute Shares to Agent Banks and Prime Brokers via DO
or NDOM for more information.
Distribute Oversubscribed Shares to Agent Banks and Prime Brokers via ID
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 52
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal (BIA) Account number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure accurate
processing of the transaction. If either is missing, or entered incorrectly, an error code of 91 will
appear on the Confirmation and Affirmation tickets. Refer to Resolve Internal Account Number
Discrepancies for information on how to correct the Agent Internal Account number.
2 Refer to IDTI for additional ID field and processing information.
Result- Shares move from the Lead Manager's Free Account to the Agent Bank's Free Account
(and are marked as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Distribute Oversubscribed Shares to Agent Banks and Prime Brokers via DO
or NDOM
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 540
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Result- The system captures the AIA number along with the BIA number and the associated
Syndicate Member and populates the IPO database with this information.
Note- The Internal Account numbers must be entered correctly in order to ensure accurate
processing of the transaction. DTC rejects Initial Distribution deliveries in which either number is
missing.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Result- Shares move from the Lead Manager's Free Account to the Agent Bank's Free Account
(and are marked as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Distribute Shares for Oversubscriptions/Directed Concessions
You can deliver oversubscribed shares directly to a Syndicate Member's Institutional customer, at
the customer's request ("Oversubscription/Directed Concession"), via DTC's ID system or via the
PTS functions DO or NDOM. The Lead Manager is set up as the associated Syndicate Member in the
IPO database.
Distribute Oversubscribed Directed Shares to Agent Banks and Prime Brokers
via ID
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
•
Market Code: enter Market Code 53
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer
Note- The Internal Account numbers must be entered correctly in order to ensure accurate
processing of the transaction. If either is missing, or entered incorrectly, an error code of 91 will
appear on the Confirmation and Affirmation tickets. Refer to Resolve Internal Account Number
Discrepancies for information on how to correct the Agent Internal Account number.
2 Refer to IDTI for additional ID field and processing information.
Result- Shares move from your Free Account to the Agent Bank's Free Account (and are marked
as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Distribute Oversubscribed Directed Shares to Agent Banks and Prime Brokers
via DO or NDOM
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 550
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer
Result- The system captures the AIA number along with the BIA number and the associated
Syndicate Member and populates the IPO database with this information.
Note- The Internal Account numbers must be entered correctly in order to ensure accurate
processing of the transaction. DTC rejects Initial Distribution deliveries in which either number is
missing.
2 Refer to DO or NDOM for additional DO field and processing information.
Result- Shares move from the Lead Manager's Free Account to the Agent Bank's Free Account
(and marked as IPO shares in the database) or to the Prime Broker's IPO Control Account.
Updating Customer-Level Information via IPOU
Customer-level detail in the IPO database can be added and/or updated via the PTS function IPOU.
The following sections describe some of the activities a Lead Manager can perform via IPOU.
Note- If customer-level detail has been added for any of your customers, it must be added for all
your customers or you will not be able to perform subsequent transactions (e. g. WTs, customer
account transfers) for those customers.
Allocate Shares to Retail Customers (Add Customer-Level Detail)
After delivering Initial Distribution shares to Institutional customers' Prime Brokers/Agent Banks,
you can allocate the shares you retain to your Retail customers.
IPOU, Option 2 allows you to populate the IPO database by adding their Retail clients' customerlevel details and share allocations.
Note- Participants cannot allocate shares to Institutional customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter information in the following required fields of the IPO- Add Customer-Level Detail Screen:
•
•
•
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the whole number quantity, up to 13 positions
Sign: enter (+) to increase shares
3 Refer to Appendix D for additional processing information.
Update Customer-Level Detail
IPOU, Option 5 allows you to correct or update your customer Internal Account numbers and adjust
the share quantities allocated to your customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 5, Customer-Level Adjustment.
2 Enter information in the following required fields of the IPO- Customer-Level Adjustment screen:
•
•
•
•
From Internal Customer: enter the existing AIA number of the customer
From BIA: enter the existing BIA number for the customer (optional)
To Internal Customer: enter the new AIA number of the customer; required if the
Participant wants to change the existing number to a new one
Reallocated Share Quantity: enter the number of whole shares being adjusted, up to
13 positions; required if the Participant is adjusting a share quantity from existing
customers to the new customer
Note- Because the system overlays the share quantity information, you must input exactly the
total number of shares the "To Internal Customer" should have. If you are not sure of the exact
total the customer should have, refer to the following section.
3 Refer to Appendix D for additional field and processing information.
Update Customer-Level Detail Using the Add Customer-Level Detail Function
IPOU Option 2, Add Customer-Level Detail, provides a way for you to adjust share quantities for
their customers without knowing the total number of shares each customer should have.
This method can also be used to eliminate an old Internal Account number from the IPO database
and add a new one.
1 On the IPO Tracking system Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter Information in the following required fields:
•
•
•
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the number of whole shares, up to 13 positions, you wish to
increase/decrease the account by
Sign: enter (+) to indicate the shares should be increased or (-) to indicate the shares
should be decreased
Result- The system adds/subtracts the share quantities for the account and updates them
accordingly.
If the share quantity for an Account number is reduced to zero, the system deletes that number
from the IPO database.
3 Refer to Appendix D for additional information.
Transfer Customer's Position Between Participants
You can transfer your customers' positions to another Participant without that transfer being
reported as a potential flip. For reporting purposes, the IPO database moves the original Syndicate
Member's Participant number and BIA number with each transfer of a customer's position.
Memo Segregation and Sub Account Segregated positions do not need to be released prior to
attempting any customer account transfers. IPO account transfer transactions can bypass Memo
Segregation.
Customer-level detail is required for account transfers.
Transfer Customer's Position via IPOU
• For those transfers that originate in NSCC's ACATS system, Participants will be notified that
an issue is tracked and will receive a trade-for-trade (Balance Order) ticket.
• The transfer of shares in a tracked CUSIP must be accomplished by the IPO Customer
Account Transfer function and must be for the total position the customer has in its IPO
Control and Free Accounts.
1 On the IPO- Tracking System Main Menu Screen, select Option 4, Customer Account Transfer.
2 Enter information in the following fields of the IPO- Customer Account Transfer Screen:
•
•
•
To Participant: enter the receiving Participant's number
From Internal Customer: enter the existing AIA number for the customer
To Internal Customer: enter the receiving Participant's AIA number for the customer
•
•
•
Share Quantity: enter the number of whole shares being transferred, up to 13 positions
Settlement Amount: enter the Settlement amount for the account transfer; optional
Reason Code: enter Reason Code by which this account transfer is to be processed
3 Refer to Appendix D for additional field and processing information.
Result- Transfers can also be performed using the PTS functions DO or NDOM. However, since
this requires manual releases to the Free Account, these transfers will be recorded as potential
flips on DTC's tracking reports.
Note- Account transfers of IPO and Free Secondary Market shares from a Broker Participant will
result in two DOs generated.
Share Movement for Customer Account Transfers- Deliveries
When you transfer a customer's position to another Participant, DTC moves the shares in one of the
following ways:
Transfer position to a Bank: Both IPO Control and Free Account shares move to the receiving
Bank's Free Account in ART. The IPO database marks the shares delivered from your IPO Control
Account as IPO shares and delivered from your Free Account are marked as Secondary Market
shares in the IPO database.
Transfer position to a Broker: Shares delivered from your IPO Control Account move to the
receiving Broker's IPO Control Account in ART and are marked as IPO shares in the IPO database.
Shares delivered from your Free Account move to the receiving Broker's Free Account in ART. These
Free Account shares are not captured in the IPO database.
Share Movement for Customer Account Transfers- Receipts
You will receive a customer's position from another Participant in one of the following ways:
Receive position from a Bank: Shares marked as IPO shares in the Bank's Free Account move to
your IPO Control Account in ART and are marked as IPO shares in the IPO database. Shares marked
as Secondary Market shares in the Bank's Free Account move to your Free Account in ART. These
Free Account shares are not captured in the IPO database.
Receive position from a Broker: Shares from the delivering Broker's IPO Control Account move
to your IPO Control Account in ART and are marked as IPO shares in the IPO database. Shares from
the delivering Broker's Free Account move to your Free Account in ART. These Free Account shares
are not captured in the IPO database.
Secondary Market
Release Shares From the IPO Control Account for Secondary Market Sales
All Secondary Market sell transactions settle from the Free Account. In order to deliver shares sold
by your customers in the Secondary Market, those shares must first be released from your IPO
Control Account to the Free Account using the IPOU function. Failure to release shares to the Free
Account could result in a CNS short or DOs for Secondary Market sales dropping in ART.
Releases can be performed on the individual customer level, by including the AIA number of the
customer on the release, or on the Lead Manager (Syndicate Member) level. Doing releases on the
individual customer level allows DTC to provide a more detailed report of flipping activity by your
customers.
Release Shares From the IPO Control Account
Releases can be submitted as early as 6:00 a.m. Eastern Standard Time (EST) trade date through
the Settlement of the trade.
Note- Releases from the IPO Control Account cannot be reversed and will be recorded as potential
flips regardless of whether delivery is made.
1 On the IPO- Tracking System Main Menu Screen, select Option 3, Release IPO Shares To The Free
Account.
2 Enter information in the following required fields of the IPO- Release IPO Shares To The Free
Account Screen:
•
•
Internal Customer: enter the AIA number of the customer (if already identified in the
IPO database)
• The Internal Customer field (AIA number) is required for all customer
transactions if customer-level detail has been added for any of your customers.
• If an incorrect AIA number is entered, the shares will not be released and the
subsequent Deliver Order may pend.
Trade Date: enter a valid business date in MMDDYY format
Note- DTC edits to ensure that the trade date entered is no earlier than four days prior to
the issue's closing in DTC and no later than the current date. Dates entered on a release
instruction that fall outside these parameters result in DTC rejecting the release
instruction.
•
•
Contract Price: enter a price greater than zero in 9999999.99 format
Share Quantity: enter the number of whole shares, up to 13 positions
3 Refer to Appendix D for additional field and processing information.
Result- If you and your customer have position in the IPO database, an immediate release is
processed. If you and your customer do not have position, refer to the following sections.
Pending Releases
You and your customer must have position in the IPO database in order for a release to be
processed. If the customer/Lead Manager does not have position, the release will pend ("hold") for
up to three days after Trade Date or for up to 30 calendar days, depending on the recycle option
selected by the Participant.
If you and your customer do have position, but not enough to satisfy the entire release, DTC will
release the available shares from the customer/Lead Manager's account and pend the balance of the
release request ("partial hold").
Participants that do not populate the IPO database with customer-level detail can use an omnibus or
dummy account number. This allows for partial releases of their position as shares are sold.
Cancel Pending Releases
You can cancel pending releases via the IPOU function.
1 On the IPO- Tracking System Main Menu Screen, select Option 7, IPO Pending Transaction
Cancel.
2 Enter information in the following fields of the IPO- Pending Transaction Screen:
•
•
CUSIP: enter the issue's CUSIP number
Date: enter a date range (From and To) in YYMMDD format. The default is the current
date.
3 Press the ENTER key. A list of pending transactions is displayed.
4 Enter "S" to the left of the selected transaction to view details.
5 Enter "C" (cancel) to the left of the selected transaction. The message "PRESS PF1/13 TO
CONFIRM CANCEL" appears.
6 Press the PF1/13 key. The transaction is canceled.
7 Refer to Appendix D for additional information.
Secondary Market Deliveries
Secondary Market deliveries are performed using the same procedures currently used for deliveries
of non-tracked issues.
Note- The ID Agent number must be included for Secondary Market DO deliveries to Prime Brokers
and Banks. When delivering to a Bank, the ID Agent number will default to the receiving Bank's
Participant number.
About Internal Account Number Discrepancies in ID Sell Transactions
When the AIA number on the sale transaction does not match an AIA number in the IPO Tracking
database, the system generates a warning message, Error 91.
Error 91 flags an unmatched Internal Account number three times:
• ID Confirmation
• ID Affirmation
• Authorization and Exception (ANE)
Error 91 also appears on machine-readable output.
If the Internal Account number is still unmatched when validation occurs at Authorization
and Exception (ANE) time, ANE will not reject the transaction, because the system
assumes the delivery will use Secondary Market shares. However, an automated release
will not be generated and the delivery will pend.
Unmatched AIA numbers can be corrected in the IPO database prior to the Settlement date cutoffs
of 10:00 a.m. EST for Global processing and 2:30 p.m. for Trade-for-Trade processing. This allows
the ID trade to be authorized and settled that day through the automated Settlement feature of the
ID system.
Note- The ANE inquiry function and T+3 hard-copy report will display a code of "F" in the status
field to indicate an Initial Distribution trade that has been rejected from Settlement and an "I" to
indicate a Secondary Market trade that has been rejected. The "F" and "I" codes will be displayed in
cases where the Internal Account number on an IPO trade does not match the Internal Account
number as stored on the IPO database. These transactions may be reprocessed for up to 21 days.
You may resolve Internal Account number discrepancies in the following ways:
• · Have the Custodian update the Internal Account number in the IPO database to match
the number on the ID transaction by performing an IPO customer-level adjustment.
(Refer to Update Customer-Level Detail)
• · Cancel the ID transaction and re-enter it in the ID system as per the Custodian's
instructions. (Refer to Distribute Shares via ID in this chapter. )
• · Have the Custodian except the ID transaction from automated Settlement and enter a
DO with the AIA number as it appears in the IPO database.
Withdrawals-by-Transfer (WTs)
If certificate denominations are available, Withdrawals-by-Transfers (WTs) of tracked issues are
permitted starting on closing day via the PTS functions NWT1 (Night Withdrawal-by-Transfer) and
RWT1 (Rush Withdrawal-by-Transfer), as well as via CCF and CCFII. WTs are noted as separate line
items on tracking reports.
• Requests for WTs must include customer-level detail.
• The IPO database must be populated with the customer-level detail prior to requesting a
WT.
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
•
Int Cust: enter the AIA number of the customer for whom shares are being withdrawn
Agt ID: enter the ID Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
Result- DTC processes WT requests using shares from your IPO Control Account first. DTC
generates releases from your IPO Control Account to its Free Account.
• Since the IPO Tracking System records all manual releases as potential flips, you should not
manually release shares for WT processing.
• DTC generates releases from your IPO Control Account only if the Internal Account number
already exists in the IPO database. If the Internal Account number does not exist, a
release will not be generated and the WT will be assumed to be from Free shares only.
Requesting a WT Using Free Shares Only
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
Int Cust: enter a "dummy" AIA number (one that does not exist in the IPO database).
Note- The use of a dummy Internal Account number in the Int Cust field will default the
system to use Free shares for WT processing.
•
Agt ID: enter ID the Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
Stock Loans and Returns
Stock Loan Deliveries
Lead managers are able to process stock loans using the appropriate DO/NDOM Reason Codes. As
for all broker Participants, DTC fulfills a Lead Manager's stock loan delivery quantity with Free
Account shares only. If insufficient shares are available in the Lead Manager's Free Account, the
Participant must instruct DTC to process a Stock Loan Release to release IPO shares from its IPO
Control account to its Free account for the balance.
DTC distinguishes between stock loan releases and regular releases and reports each type as
separate line items on Lead Underwriter and Syndicate Member Flipping Activity Reports. All stock
loan releases are categorized according to Participant type of lender and borrower.
To dissuade Participants from using the stock loan release facility for regular releases, DTC monitors
the quantity of IPO shares moved to the Participant's Free Account via stock loan releases versus
the quantity of shares loaned by the Participant on the same day and reports discrepancies to the
Lead Underwriter and appropriate Syndicate Members.
All stock loans are made on an omnibus basis. No customer account numbers are tagged to stock
loans. An AIA number entered in a stock loan delivery is ignored by DTC; however, the exception to
this is for stock loans to banks, in which case the Participant number of the receiving bank must be
entered as the AIA number in order to allow the receiving bank the ability to deliver borrowed
shares.
Stock Loan Receipts
DTC delivers all Stock Loans to the Borrower's Free Account.
Processing Stock Loan Returns
You can process Stock Loan Returns by using the appropriate Reason Codes via the PTS functions
DO or NDOM. All stock loan returns are delivered from the borrower's Free Account.
1 Enter Reason Code 20 in the REAS field of the SDFS Initial Public Offering Deliver Orders Screen.
2 Refer to DO and NDOM for additional Deliver Order field and processing information.
Stock Loan Return Receipts
All Stock Loan Returns are delivered to the lender's Free Account as Free Secondary Market shares
in the IPO database.
Pledges
Pledge Releases
If released during the tracking period, Pledge shares are delivered back to their original accounts. In
cases where both IPO and Secondary Market shares were pledged, released (Free) shares are
returned to the Free Account first, up to the quantity of Free Account shares pledged. The balance
of the shares return to the IPO Control Account.
If released after tracking has ended, all Pledge shares are delivered to the Free Account regardless
of what their account of origin.
Reclaims
Reclaim Deliveries
DTC will automatically process a matched reclamation based on the DO transaction number and
other transaction information provided until one day after settlement.
You can enter Matched Reclaims via the PTS functions ART and DO/NDOM and via CCF, CCFII and
MDH.
When you reclaim a delivery, the reclaimed DO will be matched to the original delivery and the
information in the IPO database will be reversed.
Note- Partial reclaims are not permitted.
Matched Reclaim Deliveries via ART
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter "R" to the left of the item to be reclaimed on the ATP Activity Summary Screen.
2 Refer to ART for additional field and processing information.
Matched Reclaim Deliveries via DO or NDOM
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter information in the following fields of the SDFS Automatic Reclaim Deliver Orders Screen:
•
•
•
Trans#: enter the transaction number of the transaction being reclaimed
Reas-Code: enter the appropriate Reason Code (Refer to Codes for Reclaim Reason
Codes. )
Orig-Date-Ind: enter "T" to reclaim a DO entered today or "P" to reclaim a DO entered
on the previous business day
2 Refer to FFSP for additional information.
Note- If made during the Matched Reclaims timeframe, DTC will also match Freeform Reclaims,
provided the appropriate DO Reason Code and correct information is entered.
Unmatched/Freeform Reclaim Deliveries
Reclaims must be entered freeform via CCF/CCFII, MDH or the PTS functions DO/NDOM if:
• The reclaim transaction number cannot be matched to an original delivery
• The reclaim occurs after the Matched Reclaim deadline has passed
You must input transaction details freeform, including the appropriate DO Reclaim Reason Code.
DTC treats these Reclaim transactions as original deliveries, which in turn can be reclaimed by the
receiver.
Reclaim Receipts
IPO shares that are reclaimed within the Matched Reclaim deadline (S through S+ 1) will be
returned to the account from which they originated, provided the issue is still being tracked.
Reclaims performed after the Matched Reclaim deadline, or after tracking has ended, will be placed
in the Receiver's Free Account. These deliveries can be reclaimed.
Memo Segregation
Although position may reside in both the IPO Control and Free Accounts, you can enter Memo
Segregation instructions for tracked issues using the same procedures currently used for nontracked issues. Memo Segregation bridges the IPO Control and Free Accounts.
The share quantity in the Memo Segregation instruction will be subtracted from the combined share
total in the IPO Control and Free Accounts. The resulting share total must be greater than the
quantity of any Deliver Orders entered. If the quantity is less, the Deliver Orders will not be
processed and be pending.
Deposits
Deposits are chilled for tracked issues for the duration of the tracking period.
DWAC (Deposit/Withdrawal at Custodian) activity is permitted on a very limited basis during the
tracking period and only with consent of the Lead Underwriter.
Certificates-On-Demand (CODs)
CODs are chilled for tracked issues for the duration of the tracking period.
Collateralization of IPO Shares
Shares in the IPO Control Account will be considered collateral (NA) only on the day they are
received into the account and only if received for value. Shares received into the IPO control
account without value will follow the normal accounting updating rules, and will be considered NA or
MA depending on the SDFS Account Coding Instructions.
Shares in the IPO Control Account will not be considered collateral after the first day they are
received. MA/NA intra-day moves will not be permitted.
Shares in the Free Account are subject to normal collateralization rules.
Reconcile Customer-Level Detail with Internal Records
You should reconcile the Customer-Level Detail in the IPO database with your internal records daily
using an IPOCLD machine-readable file. This file contains the Agent Bank or Prime Broker's Internal
Account numbers of all your customers on file, as well as the Executing Broker's Internal Account
numbers for those customers.
Contact DTC's Participant Interface Planning Department or your Relationship Manager for
assistance.
Make Inquiries via IPOI
The PTS function IPOI (Initial Public Offering Tracking System Inquiry) allows you to make inquiries
about tracked issues.
The following information is provided via IPOI:
•
•
•
•
A
A
A
A
list of all tracked IPO issues
summary of tracked IPO issues in which the Participant has position
summary of customer-level details by Participant-issue
summary of IPO pending/canceled/released transactions
For additional information on the IPO Tracking System Inquiry function, refer to the Overview and
Appendix E.
Notify DTC to End Tracking
Unless notified otherwise, DTC's Underwriting Department will automatically end tracking at the end
of the 90 calendar-day maximum tracking period. However, you may end tracking of an IPO issue at
any time before that.
• · Instruct DTC's Underwriting Department in writing to end tracking no later than 4:00
p.m. the day tracking is to be ended.
DTC will end tracking on the close of business on the specified date. Shares still residing
in the IPO Control Account are moved to the Free Account and are subject to normal
collateralization rules, unless prior arrangements have been made to move shares into
the subaccount segregation account. Activities chilled during the tracking period (e. g. ,
CODs and Deposits) can be performed. The ELISCA file and PTS function GWIZ are
updated to indicate that tracking for that issue has been turned off and a final tracking
report is generated.
Receive Reports from DTC
DTC prepares and distributes daily to you cumulative hard-copy reports of your tracked issues. The
following information is provided:
•
•
•
•
•
•
•
•
•
List of potential flips by customers of Syndicate Members, Correspondents.
List of own Retail and Institutional customers that potentially flipped.
Potential flips by Directed Concessions (indicated with an*).
· Separate line for WTs.
Separate line for Stock Loans: quantity reported represents the net amount (outstanding
loans less returns).
Retail account transfers (showing the receiving Participant number).
Institutional account transfers (showing the receiving Participant number and BIA).
List of CNS short positions for Syndicate Members having long positions in their IPO Control
Accounts, indicating potential sales by Syndicate Members that have not yet released
shares.
List of all CNS short positions for the CUSIP.
Note- Syndicate Member customer-level information is not provided in your Lead Manager reports.
Refer to Reports for additional information and sample reports.
Lead Manager Tasks: Required Field Information &DTC Output
TASK
FIELD INFORMATION
REQUIRED
DTC
OUTPUT
Recv-Pt: CoManager/Reporter Part. #
Activity
Code: 47
REAS: Reason Code 560
Reason
Code:
560
Recv-Pt: Syndicate
Member Part. #
Activity
Code: 47
REAS: Reason Code 570
Reason
Code:
570
Syndicate Takedown To:
Co-Managers and Co-Reporters via
DO/NDOM
Syndicate Members via DO/NDOM
Corr-Acct#: Syndicate
Member Part#
Clearing Bank of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing Bank's
Part. #
Activity
Code: 48
REAS: Reason Code 570
Reason
Code:
570
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Clearing Broker of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing Broker's
Part. #
Activity
Code: 47
REAS: Reason Code 570
Reason
Code:
570
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Initial Distribution To:
Agent Banks via ID
Market Code: Market
Code 11
Activity
Code: 48
Agent Internal Account:
Agent Bank's Internal
Account#
Reason
Code: 49
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part#
Activity
Code: 48
REAS: Reason Code 50
Reason
Code: 50
Int-Acct#: Agent Bank's
TASK
FIELD INFORMATION
REQUIRED
DTC
OUTPUT
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Prime Brokers via ID
Market Code: Market
Code 11
Activity
Code: 47
Agent Internal Account:
Prime Broker's Internal
Account#
Reason
Code: 49
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part. #
Activity
Code: 47
REAS: Reason Code 50
Reason
Code: 50
Int-Acct#: Prime Broker's
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Directed Concessions To:
Agent Banks via ID
Market Code: Market
Code 51
Activity
Code: 48
Agent Internal Account:
Agent Bank's Internal
Account#
Reason
Code:
539
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part. #
Activity
Code: 48
REAS: Reason Code 530
Reason
Code:
530
Int-Acct#: Agent Bank's
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Prime Brokers via ID
Market Code: Market
Code 51
Activity
Code: 47
TASK
FIELD INFORMATION
REQUIRED
Agent Internal Account:
Prime Broker's Internal
Account#
DTC
OUTPUT
Reason
Code:
539
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part. #
Activity
Code: 47
REAS: Reason Code 530
Reason
Code:
530
Int-Acct#: Prime Broker's
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Oversubscriptions To:
Syndicate Members via DO/NDOM
Recv-Pt: Syndicate
Member Part. #
Activity
Code: 49
REAS: Reason Code 540
Reason
Code:
540
Corr-Acct#: Syndicate
Member Part. #
Clearing Banks of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing Bank's
Part. #
Activity
Code: 26
REAS: Reason Code 540
Reason
Code:
540
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Clearing Brokers of Correspondent
Syndicate Members via DO/NDOM
Recv-Pt: Clearing Broker's
Part. #
Activity
Code: 49
REAS: Reason Code 540
Reason
Code:
540
Corr-Acct#:
Correspondent Syndicate
Member's FINS#
Agent Banks via ID
Market Code: Market
Code 52
Activity
Code: 26
Agent Internal Account:
Agent Bank's Internal
Account#
Reason
Code:
549
Broker Internal Account:
Executing Broker's Internal
TASK
FIELD INFORMATION
REQUIRED
DTC
OUTPUT
Account#
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part. #
Activity
Code: 26
REAS: Reason Code 540
Reason
Code:
540
Int-Acct#: Agent Bank's
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Prime Brokers via ID
Market Code: Market
Code 52
Activity
Code: 49
Agent Internal Account:
Prime Broker's Internal
Account#
Reason
Code:
549
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part. #
Activity
Code: 49
REAS: Reason Code 540
Reason
Code:
540
Int-Acct#: Prime Broker's
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Oversubscription/Directed
Concessions To:
Agent Banks via ID
Market Code: Market
Code 53
Activity
Code: 26
Agent Internal Account:
Agent Bank's Internal
Account#
Reason
Code:
559
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's
Part. #
Activity
Code: 26
REAS: Reason Code 550
Reason
Code:
550
Int-Acct#: Agent Bank's
TASK
FIELD INFORMATION
REQUIRED
DTC
OUTPUT
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Prime Brokers via ID
Market Code: Market
Code 53
Activity
Code: 49
Agent Internal Account:
Prime Broker's Internal
Account#
Reason
Code:
559
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Prime Brokers via DO/NDOM
Recv-Pt: Prime Broker's
Part#
Activity
Code: 49
REAS: Reason Code 550
Reason
Code:
550
Int-Acct#: Prime Broker's
Internal Account#
Bkr-Acct#: Executing
Broker's Internal Account#;
optional
Customer-Level Updates:
Add Customer-Level Detail via
IPOU, Option 2
Internal Customer:
Internal Account#
Share Quantity: Whole
number quantity
Sign: + or- to increase or
decrease shares
Update Customer-Level Detail via
IPOU, Option 5
From Internal Customer:
Old Internal Account#
To Internal Customer:
New Internal Account#;
optional
Reallocated Share
Quantity: New whole
number quantity; optional
Secondary Market Activity:
Release of IPO shares to Free
Account via IPOU, Option 3
Internal Customer:
Internal Account#
Activity
Code: 46
TASK
FIELD INFORMATION
REQUIRED
DTC
OUTPUT
Trade Date: Trade date
Contract Price: Contract
price
Sale of Free shares
Same as for non-tracked
issues.
Move Free shares to IPO Control
Account for Oversubscriptions via
IPOU, Option 6
CUSIP: The issue's
CUSIP#
Activity
Code: 26
Share Quantity: Number
of shares being moved
Withdrawals-by-Transfer via NWT1/
RWT1
Int Cust: Internal
Account#
Agt ID: ID Agent#;
optional
Stock Loan via DO/NDOM
REAS: Reason Code 10
Activity
Code:
IPO
Shares:
48
Free
Shares:
26
Reason
Code: 10
Stock Loan Return via DO/NDOM
REAS: Reason Code 20
Activity
Code:
IPO
Shares:
49
Free
Shares:
26
Reason
Code: 20
Account Transfer to Broker- IPO
shares- via IPOU, Option 4
To Participant: Receiving
Broker's Part# From
Internal Customer:
Current Internal
Account##
To Internal Customer:
New Internal Account
Activity
Code: 47
Reason
Code: 40
TASK
FIELD INFORMATION
REQUIRED
DTC
OUTPUT
Share Quantity: Number
of whole shares being
transferred
Settlement Amount:
Settlement amount;
optional
Account Transfer to Broker- Free
shares- via IPOU, Option 4
To Participant: Receiving
Broker's Part#
Activity
Code: 26
From Internal Customer:
Current Internal Account#
Reason
Code: 40
To Internal Customer:
New Internal Account#
Share Quantity: Number
of whole shares being
transferred
Settlement Amount:
Settlement amount;
optional
Account Transfer to Bank-IPO
shares- via IPOU, Option 4
To Participant: Receiving
Bank's Part#
Activity
Code: 48
From Internal Customer:
Current Internal Account#
Reason
Code: 40
To Internal Customer:
New Internal Account#
Share Quantity: Number
of whole shares being
transferred
Settlement Amount:
Settlement amount;
optional
Account Transfer to Bank- Free
shares- via IPOU, Option 4
To Participant: Receiving
Bank's Part#
Activity
Code: 26
From Internal Customer:
Current Internal Account#
Reason
Code: 40
To Internal Customer:
New Internal Account#
Share Quantity: Number
of whole shares being
transferred
TASK
FIELD INFORMATION
REQUIRED
DTC
OUTPUT
Settlement Amount:
Settlement amount;
optional
Prime Broker
Select IPO Control Account Release Method and Notify DTC
The Prime Broker Indicator allows you to choose between two methods of releasing shares from
their IPO Control Accounts.
• Activate the indicator to elect to have the IPO Tracking system automatically release shares
from the IPO Control Account to settle Secondary Market sell transactions when
customer-level information matches.
• Do not activate the indicator if you do not want the IPO Tracking system to automatically
release shares from the IPO Control Account to satisfy Secondary Market sell transactions.
In this case you must manually release the shares by providing matching Internal Account
number information. (Refer to Release Shares from IPO Control Account for Secondary
Market Sales and Deliver Shares for Secondary Market Sales. )
Secondary Market shares are not tracked by the IPO Tracking system for Prime Brokers at this time.
Where necessary, complete an "IPO Release Indicator Form" indicating your preference and send it
to your Participant representative. The representative will forward it to DTC's Compliance
Department. Your account will be updated for the start of business the following day. Intra-day
updates are not possible.
Receive Initial Distribution Shares from Lead Manager/Syndicate Members
On closing day, the Lead Manager and Syndicate Members of an IPO tracked issue deliver shares to
Prime Brokers ("Initial Distribution") via Institutional Delivery (ID) or Deliver Order (DO or NDOM).
These shares are delivered to the Prime Broker's IPO Control Account.
Note- If the Internal Account number has not been provided by the Executing Broker, the Prime
Broker will receive an Error Code 91. (Refer to Resolve Internal Account Number Discrepancies in ID
Deliveries. )
Shares remain in the IPO Control Account for the duration of the tracking period unless they are
transferred or released for settlement of Secondary Market sell transactions.
Potential flips of Initial Distribution shares are reported as such on the daily reports to Lead
managers and Syndicate Members. Tracking of all IPO shares continues until the Lead Manager
terminates tracking, or until the 90-calendar-day maximum tracking period is over.
Secondary Market Activity
Release Shares from the IPO Control Account for Secondary Market Sales
All Secondary Market sell transactions settle from the Free Account. In order to deliver shares sold
in the Secondary Market by your customers, the shares must be released from your IPO Control
Account to your Free Account, using the PTS function IPOU.
Failure to release shares to the Free Account could result in a Continuous Net Settlement (CNS)
short, or DOs for Secondary Market sales dropping in ART. Releases are generated by DTC
automatically or performed manually by you depending on the value of the Prime Broker Indicator.
(Refer to Automatic vs. Manual Release. )
Releases can be submitted as early as 6:00 a.m. Eastern Standard Time (EST) trade date through
settlement of the trade.
Note- Releases from the IPO Control Account cannot be reversed and are recorded as potential flips
regardless of whether or not delivery is made.
Automatic vs. Manual Release
The release is generated automatically if:
• The Prime Broker Release Indicator is turned on, and
• The Internal Account number of the customer in the sale transaction matches the Internal
Account number of the customer in the IPO database and you and your customer have
sufficient shares.
Note- If the Internal Account number does not match an Internal Account number in the IPO
database, or if there are insufficient shares to cover the release, the release will be put on "Hold. "
Releases on hold will be periodically checked to see if they can be fully or partially staged. (Refer to
Pending Releases. )
The release must be performed manually by the Prime Broker via the PTS function IPOU if:
• The Prime Broker Indicator is turned off, or
• The Prime Broker Indicator is turned on and the Customer Internal Account number in the
IPO database does not match the Customer Internal Account number in the sale
transaction.
Manual Releases of Shares from IPO Control Account
Releases can be submitted as early as 6:00 a.m. EST on trade date. Prime Broker releases must be
made on an individual customer level and require customer-level detail. You can extract customerlevel details from Trade files and reformat them into IPO machine-readable format for transmission
via MDH/CCF/CCFII. You can also adjust customer-level details via the PTS function IPOU.
Note- Releases from the IPO Control Account are recorded as potential flips regardless of whether or
not delivery is made.
1 On the IPO- Tracking System Main Menu Screen, select Option 3, Release IPO Shares To The Free
Account.
2 Enter information in the following fields of the IPO- Release IPO Shares To The Free Account
Screen:
•
Internal Customer: enter the Internal Account number of the customer identified in the
IPO database
Note- If an incorrect Internal Account number is entered, the release will remain on hold
and the subsequent Deliver Order will pend. (Refer to Pending Releases. )
•
•
Trade Date: enter a valid trade date in MMDDYY format
Contract Price: enter a number greater than zero in 9999999.99 format
•
Share Quantity: enter the number of whole shares, up to 13 positions
If you and your customer have position in the IPO database an immediate release is generated. If
the customer/Prime Broker does not have position, refer to the following sections.
3 Refer to Appendix D for additional field and processing information.
Pending Releases
You and your customer must have position in the IPO database in order for a release to be
processed. If you or your customer do not have position the release will "pend" (hold) for up to
three days after Trade Date.
If you and your customer do have position, but not enough to cover the entire release, DTC will
perform a partial release from the customer's account and pend the balance of the release request
("partial hold").
Cancel Pending Releases
You can cancel pending releases via the PTS function IPOU.
1 On the IPO- Tracking System Main Menu Screen, select Option 7, IPO Pending Transaction
Cancel.
2 Enter information in the following fields of the IPO- Pending Transaction Screen:
•
•
CUSIP: enter the issue's CUSIP number
Date: enter a date range (From and To) in YYMMDD format. The default is the current
date.
3 Press the ENTER key.
Result- A list of pending transactions is displayed.
4 Enter S to the left of the selected transaction to view details.
5 Enter C (cancel) to the left of the selected transaction.
Result- The message "PRESS PF1/13 TO CONFIRM CANCEL" appears.
6 Press the PF1/13 key.
Result- The transaction is canceled.
7 Refer to Appendix D for additional field and processing information.
Secondary Market Deliveries
You can deliver shares for Secondary Market sales by using the PTS functions DO or NDOM, or by
having the Executing Broker input the trade via DTC's ID system.
Note- Customer-level detail must be included for ID, DO, or NDOM deliveries in order for a release
to be generated.
Deliver Shares via ID
Prime Brokers must instruct the Executing Broker to input the trade via ID. The following
information must be included on the Institutional Delivery Trade Input Screen:
• Broker Internal Account: Enter the Executing Broker's Internal Account number (BIA#)
• Agent Internal Account: Enter the Prime Broker's Internal Account number
Note- The Agent Internal Account number must be entered correctly in order to ensure
accurate processing of the transaction.
• Trade Date: enter the Trade Date
Note- The system generates automatic releases for ID Secondary Market sell transactions
that settle via Continuous Net Settlement (CNS) if there is a match on Internal Account
information in the database.
Deliver Shares via DO or NDOM
You can deliver shares sold in the Secondary Market via the PTS functions DO or NDOM using the
current DO reason codes. You must provide customer-level detail for DOs in order to generate the
necessary release.
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
Int-Acct#: enter the Prime Broker's Internal Account number for the customer
Note- The Internal Account number must be entered correctly in order to ensure accurate
processing of the transaction. If the Internal Account number does not match in the IPO
database the release will be put on hold. (Refer to Resolve Internal Account Number
Discrepancies in ID Deliveries. )
•
•
Trade-Dt: enter the Trade Date
Net-$-Amt: enter the Settlement Amount
Deliver Shares for Broker Custody Trades
For trades where the Executing Broker and Custodian are the same entity ("Broker Custody") the
Prime Broker "delivers" shares to its own account via DTC's ID system.
1 Follow procedures described in Deliver Shares via ID, entering your own Participant number as
both the Executing Broker and the Custodian of the transaction.
2 Refer to IDTI for additional ID field and processing information.
Resolve Internal Account Number Discrepancies in ID Sell Transactions
When the Internal Account number on a sale transaction is missing or does not match the Internal
Account number in the IPO Tracking database, a warning message, Error 91, appears.
Error 91 flags an unmatched Internal Account number three times:
• ID Confirmation
• ID Affirmation
• Authorization and Exception (ANE)
Error 91 also appears on machine-readable output.
When validation occurs at Authorization and Exception (ANE) time, ANE will not reject the
transaction if the Internal Account number is still unmatched, but a release will not be generated.
Hold releases will recycle for up to three days after trade date. (Refer to Pending Releases in this
chapter. )
Unmatched Internal Account numbers can be corrected in the IPO database prior to the settlement
day cutoffs of 10:00 a.m. EST for Global processing and 2:30 p.m. EST for Trade-for-Trade
processing. This will allow the ID trade to be authorized and settle that day through the automated
settlement feature of the ID system.
Note- The ANE inquiry function and T+ 3 hard-copy report will display a code of "F" in the status
field to indicate an Initial Distribution trade that has been rejected from settlement, and an "I" to
indicate a Secondary Market trade that has been rejected from settlement. The "F" code indicates
that the Internal Account number on an IPO trade is missing, and the "I" code indicates that the
Internal Account number is missing or does not match the Internal Account number as stored on
the IPO database. These transactions may be reprocessed for up to 21 days.
The Prime Broker can notify the Executing Broker of the correct Internal Account number via the
PTS function IDEM.
Refer to IDEM for additional information.
Prime Brokers may resolve Internal Account number discrepancies in three ways:
• Update the Internal Account number in the IPO database by performing an IPO customerlevel adjustment. (Refer to Update Customer-Level Detail via IPOU. )
• Except the ID transaction from automated settlement and enter a DO with the Internal
Account number as it appears in the IPO database. (Refer to Deliver Shares via DO or
NDOM. )
Note- If a trade is excepted from ID settlement, the same customer-level detail fields must
be provided for DO transactions.
• Cancel the ID transaction and have the Executing Broker re-enter it in the ID system.
Receive Shares from Secondary Market Buys
Shares bought on the Secondary Market reside in your Free Account. Secondary market shares are
not tracked at this time.
Update Customer-Level Information via IPOU
Customer-level detail in the IPO database can be added and/or updated via the PTS function IPOU.
The following sections describe some of the activities a Prime Broker can perform via IPOU.
Warning! If customer-level detail has been added for any of your customers, it must be added for
all your customers or you will not be able to perform subsequent transactions (e. g. WTs, customer
account transfers) for those customers.
Refer to Appendix D for additional information IPOU procedures.
Update Customer-Level Detail
IPOU, Option 5 allows you to correct or update your customer Internal Account numbers and adjust
the share quantities allocated to your customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 5, Customer-Level Adjustment.
2 Enter information in the following required fields of the IPO- Customer-Level Adjustment screen:
•
•
•
From Internal Customer: enter the existing AIA number of the customer
To Internal Customer: enter the new AIA number of the customer; required if the
Participant wants to change the existing number to a new one
Reallocated Share Quantity: enter the number of whole shares being adjusted, up to
13 positions; required if the Participant is adjusting a share quantity from existing
customers to the new customer
Note- Because the system overlays the share quantity information, you must input
exactly the total number of shares the "To Internal Customer" should have. If you are
not sure of the exact total the customer should have, refer to the following section.
3 Refer to Appendix D for additional field and processing information.
Transfer of Customer's Position Between Participants
You can transfer your customers' positions to another Participant without that transfer being
reported as a potential flip. For reporting purposes, the IPO database moves the original Syndicate
Member's Participant number and BIA number with each transfer of a customer's position.
Memo Segregation and Sub Account Segregated positions do not need to be released prior to
attempting any customer account transfers. IPO account transfer transactions can bypass Memo
Segregation.
Customer-level detail is required for account transfers.
Transfer Customer's Position via IPOU
1. For those transfers that originate in NSCC's ACATS system, Participants will be notified that
an issue is tracked and will receive a trade-for-trade (Balance Order) ticket.
2. The transfer of shares in a tracked CUSIP must be accomplished by the IPO Customer
Account Transfer function and must be for the total position the customer has in its IPO
Control and Free Accounts.
1 On the IPO- Tracking System Main Menu Screen, select Option 4, Customer Account Transfer.
2 Enter information in the following fields of the IPO- Customer Account Transfer Screen:
•
•
•
•
•
•
To Participant: enter the receiving Participant's number
From Internal Customer: enter the existing AIA number for the customer
To Internal Customer: enter the receiving Participant's AIA number for the customer
Share Quantity: enter the number of whole shares being transferred, up to 13 positions
Settlement Amount: enter the settlement amount for the account transfer; optional
Reason Code: enter Reason Code by which this account transfer is to be processed
3 Refer to Appendix D for additional field and processing information.
Transfers can also be performed using the PTS functions DO or NDOM. However, since this requires
manual releases to the Free Account, these transfers will be recorded as potential flips on DTC's
tracking reports.
Note- Account transfers of IPO and Free Secondary Market shares from a Broker Participant will
result in two DOs generated.
Share Movement for Customer Account Transfers- Deliveries
When you transfer a customer's position to another Participant, DTC moves the shares in one of the
following ways:
Transfer position to a Bank: Both IPO Control and Free Account shares move to the receiving
Bank's Free Account in ART. The IPO database marks the shares delivered from your IPO Control
Account as IPO shares and shares delivered from your Free Account are marked as Secondary
Market shares in the IPO database.
Transfer position to a Broker: Shares delivered from your IPO Control Account move to the
receiving Broker's IPO Control Account in ART and are marked as IPO shares in the IPO database.
Shares delivered from your Free Account move to the Receiving Broker's Free Account in ART.
These Free Account shares are not captured in the IPO database.
Share Movement for Customer Account Transfers- Receipts
You will receive a customer's position from another Participant in one of the following ways:
Receive position from a Bank: Shares marked as IPO shares in the Bank's Free Account move to
the your IPO Control Account in ART and are marked as IPO shares in the IPO database. Shares
marked as Secondary Market shares in the Bank's Free Account move to your Free Account in ART.
These Free Account shares are not captured in the IPO database.
Receive position from a Broker: Shares from the delivering Broker's IPO Control Account move
to your IPO Control Account in ART and are marked as IPO shares in the IPO database. Shares from
the Delivering Broker's Free Account move to your Free Account in ART. These Free Account shares
are not captured in the IPO database.
Withdrawals-by-Transfer (WTs)
If certificate denominations are available, Withdrawals-by-Transfers (WTs) of tracked issues are
permitted starting on closing day via the PTS functions NWT1 (Night Withdrawal-by-Transfer) and
RWT1 (Rush Withdrawal-by-Transfer), as well as via CCF and CCFII. WTs are noted as separate line
items on tracking reports.
1. Requests for WTs must include customer-level detail.
2. The IPO database must be populated with the customer-level detail prior to requesting a
WT.
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
•
Int Cust: enter the AIA number of the customer for whom shares are being withdrawn
Agt ID: enter the ID Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
DTC processes WT requests using shares from your IPO Control Account first. DTC generates
releases from your IPO Control Account to its Free Account.
1. Since the IPO Tracking System records all manual releases as potential flips, you should not
manually release shares for WT processing.
2. DTC generates releases from your IPO Control Account only if the Internal Account number
already exists in the IPO database. If the Internal Account number does not exist, a
release will not be generated and the WT will be assumed to be from Free shares only.
Request a WT Using Free Shares Only
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
Int Cust: enter a "dummy" AIA number (one that does not exist in the IPO database).
Note- The use of a dummy Internal Account number in the Int Cust field will default the
system to use Free shares for WT processing.
•
Agt ID: enter the ID Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
Stock Loans and Returns
Stock Loan Deliveries
Prime Brokers are able to process stock loans using the appropriate DO/NDOM Reason Codes. As for
all broker Participants, DTC fulfills a Prime Broker's stock loan delivery quantity with Free Account
shares only. If insufficient shares are available in the Prime Broker's Free Account, the Participant
must instruct DTC to process a Stock Loan Release to release IPO shares from its IPO Control
account to its Free account for the balance.
DTC distinguishes between stock loan releases and regular releases and reports each type as
separate line items on Lead Underwriter and Syndicate Member Flipping Activity Reports. All stock
loan releases are categorized according to Participant type of lender and borrower.
To dissuade Participants from using the stock loan release facility for regular releases, DTC monitors
the quantity of IPO shares moved to the Participant's Free account via stock loan releases versus
the quantity of shares loaned by the Participant on the same day and reports discrepancies to the
Lead Underwriter and appropriate Syndicate Members.
All stock loans are made on an omnibus basis. No customer account numbers are tagged to stock
loans. An AIA number entered in a stock loan delivery is ignored by DTC; however, the exception to
this is for stock loans to banks, in which case the Participant number of the receiving bank must be
entered as the AIA number in order to allow the receiving bank the ability to deliver borrowed
shares.
Stock Loan Receipts
DTC delivers all Stock Loans to the Borrower's Free Account.
Stock Loan Returns
You can process Stock Loan Returns by using the appropriate Reason Codes via the PTS functions
DO or NDOM. All stock loan returns are delivered from the borrower's Free account.
1 Enter Reason Code 20 in the REAS field of the SDFS Initial Public Offering Deliver Orders Screen.
2 Refer to DO and NDOM for additional Deliver Order field and processing information.
Stock Loan Return Receipts
All Stock Loan Returns are delivered to the lender's Free Account as Free Secondary Market shares
in the IPO database.
Pledges
Pledges of Collateral
You can pledge shares with or without value from either their IPO Control or Free Accounts via the
PTS function COLL.
1 Enter the following information on the Free Pledge Service Screen:
•
•
IPO: enter Y if the shares are being pledged from the IPO Control Account
OR
Enter N if the shares are being pledged from the Free Account.
2 Refer to COLL for additional field and processing information.
Pledged IPO Control and Free Account shares are moved to the Pledge (14) Account. IPO shares are
segregated in the I14 Account.
Pledge Releases
If released during the tracking period, Pledge shares are delivered back to their original accounts. In
cases where both IPO and Secondary Market shares were pledged, released (Free) shares are
returned to the Free Account first, up to the quantity of Free Account shares pledged. The balance
of the shares return to the IPO Control Account.
If released after tracking has ended, all Pledge shares are delivered to the Free Account regardless
of what their account of origin.
Reclaims
Reclaim Deliveries
DTC will automatically process a matched reclamation based on the DO transaction number and
other transaction information provided until one day after settlement.
You can enter Matched Reclaims via the PTS functions ART and DO/NDOM and via CCF, CCFII and
MDH.
When you reclaim a delivery, the reclaimed DO will be matched to the original delivery and the
information in the IPO database will be reversed.
Note- Partial reclaims are not permitted.
Matched Reclaim Deliveries via ART
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter R to the left of the item to be reclaimed on the ATP Activity Summary Screen.
2 Refer to the Settlement Service Guide for additional ART field and processing information.
Matched Reclaim Deliveries via DO or NDOM
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter information in the following fields of the SDFS Automatic Reclaim Deliver Orders Screen:
•
•
•
Trans#: enter the transaction number of the transaction being reclaimed
Reas-Code: enter the appropriate Reason Code (Refer to Codes in this Manual for
Reclaim Reason Codes. )
Orig-Date-Ind: enter T to reclaim a DO entered today or P to reclaim a DO entered on
the previous business day
Note- If made during the Matched Reclaims timeframe, DTC will also match Freeform Reclaims,
provided the appropriate DO Reason Code and correct information is entered.
Unmatched/Freeform Reclaim Deliveries
Reclaims must be entered freeform via CCF/CCFII, MDH or the PTS functions DO/NDOM if:
• The reclaim transaction number cannot be matched to an original delivery
• The reclaim occurs after the Matched Reclaim deadline has passed.
You must input transaction details freeform, including the appropriate DO Reclaim Reason Code.
DTC treats these Reclaim transactions as original deliveries, which in turn can be reclaimed by the
receiver.
Reclaim Receipts
IPO shares that are reclaimed within the Matched Reclaim deadline (S through S+ 1) will be
returned to the account from which they originated, provided the issue is still being tracked.
Reclaims performed after the Matched Reclaim deadline, or after tracking has ended, will be placed
in the Receiver's Free Account. These deliveries can be reclaimed.
Memo Segregation
Although position may reside in both the IPO Control and Free Accounts, you can enter Memo
Segregation instructions for tracked issues using the same procedures currently used for nontracked issues. Memo Segregation bridges the IPO Control and Free Accounts.
Refer to the Settlement Service Guide for information on Memo Segregation instruction processing.
The share quantity in the Memo Segregation instruction will be subtracted from the combined share
total in the IPO Control and Free Accounts. The resulting share total must be greater than the
quantity of any Deliver Orders entered. If the quantity is less, the Deliver Orders will not be
processed and will pend.
Deposits
Deposits are chilled for tracked issues for the duration of the tracking period.
DWAC (Deposit/Withdrawal at Custodian) activity is permitted on a very limited basis during the
tracking period and only with consent of the Lead Underwriter.
Certificates-On-Demand (CODs)
CODs are chilled for tracked issues for the duration of the tracking period.
Collateralization of IPO Shares
Shares in the IPO Control Account will be considered collateral (NA) only on the day they are
received into the account and only if received for value. Shares received into the IPO control
account without value will follow the normal accounting updating rules, and will be considered NA or
MA depending on the SDFS Account Coding Instructions.
Shares in the IPO Control Account will not be considered collateral after the first day they are
received. MA/NA intra-day moves will not be permitted.
Shares in the Free Account are subject to normal collateralization rules.
Reconcile Customer-Level Detail with Internal Records
You should reconcile the Customer-Level Detail in the IPO database with your internal records daily
using an IPOCLD machine-readable file. This file contains the Agent Bank or Prime Broker's Internal
Account numbers of all your customers on file, as well as the Executing Broker's Internal Account
numbers for those customers.
Contact DTC's Participant Interface Planning Department or your Relationship Manager for
assistance.
Make Inquiries via IPOI
The PTS function IPOI (Initial Public Offering Tracking System Inquiry) allows you to make inquiries
about tracked issues.
The following information is provided via IPOI:
•
•
•
•
A
A
A
A
list of all tracked IPO issues
summary of tracked IPO issues in which the Participant has position
summary of customer-level details by Participant-issue
summary of IPO pending/canceled/released transactions
For additional information on the IPO Tracking System Inquiry function, refer to the Overview and
Appendix E.
Prime Broker Tasks: Required Field Information &DTC Output
TASK:
FIELD INFORMATION
REQUIRED:
DTC
OUTPUT:
Customer-Level Updates:
Update Customer-Level
Detail via IPOU, Option 5
From Internal Customer: Old
Internal Account#
To Internal Customer: New
Internal Account#; optional
Share Quantity: New whole
number quantity; optional
Secondary Market
Activity:
Sale of Initial Distribution
Shares via ID (Implemented
by Executing Broker)
Broker Internal Account:
Executing Broker's Internal
Account#
Agent Internal Account:
Agent Bank/Prime Broker's
Customer Internal Account#
Activity
Code:
19 (PDQ)
26 (Next
day)
Agent Bank: ID Agent#
Trade Date: Trade Date
Sale of Initial Distribution
shares via DO/NDOM
Int-Acct#: Agent Bank/Prime
Broker's Customer Internal
Account#
Activity
Code: 26
Trade Date: Trade Date
Net$ Amt: Price
Release of IPO shares to
Free Account via IPOU,
Option 3
Internal Customer: Internal
Account#
Activity
Code: 46
Trade Date: Trade date
Contract Price: Contract price
Withdrawals-by-Transfer via
NWT1/ RWT1
Int Cust: Internal Account#
Agt ID: ID Agent#; optional
Stock Loan via DO/NDOM
REAS: Reason Code 10
Activity
Code: 48
Reason
Code: 10
Stock Loan Return via
DO/NDOM
REAS: Reason Code 20
Activity
Code: 49
Reason
Code: 20
Account Transfer to Broker
via IPOU, Option 4
From Internal Customer:
Current Internal Account#
Activity
Code:
To Participant: Receiving
Broker's Part. #
IPO
shares: 47
To Internal Customer: New
Internal Account#
Free
shares: 26
Share Quantity: Number of
whole shares being transferred
Reason
Code: 40
Settlement Amount:
Settlement amount; optional
Account Transfer to Bank via
IPOU, Option 4
To Participant: Receiving
Bank's Part. #
Activity
Code:
From Internal Customer:
Current Internal Account#
IPO
shares: 48
To Internal Customer: New
Internal Account#
Free
shares: 26
Share Quantity: Number of
whole shares being transferred
Reason
Code: 40
Settlement Amount:
Settlement amount; optional
Reports
Cumulative IPO Tracking reports for Lead Managers and Syndicate Members are issued daily in
hard-copy format, and are distributed via DTC's DD Boxes or Interface Department. The reports are
also available in machine-readable format from approximately 4:00 a.m. to 5:00 p.m. EST on the
same day.
IPO Tracking Preliminary Report- Lead Manager
The "IPO Preliminary Report of Flipping Activity for Lead Underwriter" is issued to the Lead Manager
and to Co-Managers. The report identifies the Syndicate Members (including Co-Managers and CoReporters) whose customers potentially flipped IPO shares.
It also identifies Clearing Agents and Correspondent accounts. Trades made on the same day, at the
same price, by customers of the same Syndicate Member are aggregated. The report is cumulative.
Note- In a Co-Reporting relationship, the Lead Manager uses two Participant numbers for
distribution of an IPO: one for domestic distribution, and one for international distribution. The
primary in the relationship receives the report.
This report does not include customer-level detail. To find out which of their customers have
potentially flipped, Lead Managers and Co-Managers must refer to their Syndicate Member reports.
(Refer to "IPO Tracking Preliminary Report- Syndicate Member" in this chapter. )
Fields
•
•
•
•
CUSIP: the CUSIP number of the tracked issue.
Description: the name of the tracked issue.
Tracking Period Start Date: the start of tracking (closing date of the issue).
Tracking Period End Date: the projected end of tracking.
Columns
• Synd. /Part. Number displays the following:
Syndicate Member's Participant Number: The Participant number of a Syndicate
Member.
In the case of shares that have been transferred from one Participant custodian to
another Participant custodian, this number is the Participant number of the
Syndicate Member.
In the case of a Directed Concession, this number represents the receiving
customer's custodian's Participant number, and is marked with an asterisk (*).
In the case that a Directed Concession customer flips, the Lead Manager must refer
to its internal records to identify the Customer's Syndicate Member.
"Unknown" to "Relaxed Editing" in the Secondary Market Section of Chapter 2 or 3. )
Asterisk (*)
An asterisk next to a number in the Syndicate/Participant number column
indicates a potential flip by a Directed Concession customer. In this case the
number listed is the receiving custodian's Participant number. If a Directed
Concession customer flips, the Lead Manager must check its internal records to
identify the Customer's Syndicate Member.
Synd. /Part. Description: the name of the Participant listed in the Synd. /Part. Number
column.
Correspondent Account Number: the ID Broker-Dealer number identifying the
Correspondent in the ID system. This, in conjunction with the Participant number of the
Clearing Agent (listed in the Synd. /Part. Number field), identifies the Syndicate Member.
Note- If, due to relaxed editing, the Syndicate Member cannot be identified and appears as
"Unknown" on the Lead Manager's report, the Agent Bank is identified in the Correspondent
Account Number field as having delivered the Initial Distribution shares.
• Trade Date: the date of the transaction in YYMMDD format as captured from the DO/ID
transaction or the IPO release.
• Price: the price calculated from the net amount appearing on the DO or ID transaction, or
on the IPO release.
• Share Type: Displays the types of transactions for three categories: Unknown Syndicate
Member, Syndicate Member, and Grand Total for the CUSIP.
• Share Type for "Unknown" Syndicate Members lists the following for each unknown
Syndicate Member:
• Total Flipped: total of all potentially flipped shares for an unknown Syndicate
Member.
• Total Stock Loan: the net amount of stock loans showing outstanding loans less
loan returns for an unknown Syndicate Member.
• Total Withdrawal: total will always be zero.
• Total CNS Short: total will always be zero.
• Unknown Grand Total Flipped: net amount of shares flipped for unknown
Syndicate Members.
• Unknown Grand Total Stock Loan: net amount of stock loans for unknown
Syndicate Members.
• Unknown Grand Total Withdrawal: total will always be zero.
• Share Type for Syndicate Member. The following may be listed for each Syndicate Member:
• SL Inst Unmatch Release: the quantity of the Syndicate Member's stock loan
releases for Institutional customers that exceeded the total quantity of shares
used for stock loan deliveries. This quantity should be added to the SL Custodian
To Lead or SL Custodian To Other categories since, had the custodian delivered
the shares in a timely fashion, it would represent an increase in this Syndicate
Member's IPO shares loaned by the Custodian.
• SL Retail Unmatch Release: the quantity of the Syndicate Member's stock loan
releases for Retail customers that exceeded the total quantity of shares used for
stock loan deliveries. This quantity should be added to the SL Firm To Lead or SL
Firm To Other categories since, had the custodian delivered the shares in a timely
fashion, it would represent an increase in this Syndicate Member's IPO shares
loaned by the Custodian.
• In the case in which a Syndicate Member's customer transfers its accounts to
another Participant (via IPOU, Option 4, Customer Account Transfer) the
movement is not reported as a potential flip. For reporting purposes the IPO
database moves the original Syndicate Member's Participant number and
customer BIA number with each transfer of a customer's position.
Note- Account transfers performed via PTS function DO or NDOM (Reason Code 40)
are reported as potential flips since IPO shares must first be released to the Free
Account before processing the transfers, and DTC reports releases as potential
flips.
• In the case in which a customer receives shares from multiple Broker-Dealers and
a sale occurs: the system prorates the sale among the Syndicate Members
servicing that customer.
Note- Shares potentially flipped on the same day at the same price are aggregated.
• Total Flipped: total of all shares potentially flipped for a Syndicate Member.
• Total Stock Loan: net amount of stock loans for a Syndicate Member showing
outstanding loans less returns.
• Total Withdrawal: total amount of IPO shares used to satisfy WTs.
• Total CNS Short: total CNS short position for each Syndicate Member that has a
long position in its IPO Control account. Indicates sales by Syndicate Member's
customers that are possibly not reflected by releases to enable settlement of
those sales.
• Grand Total of Shares for the CUSIP. These totals appear at the end of the report:
• Total CNS Short Shares for CUSIP: lists the present aggregate total of all CNS
short shares for the CUSIP for all Participants, regardless of whether or not they
are Syndicate Members.
• Grand Total Flipped: the grand total of potentially flipped shares for the CUSIP.
• Grand Total Stock Loan: the grand total of stock loans for the CUSIP, showing
outstanding loans less loan returns.
• Grand Total Withdrawal: the grand total of IPO shares used to satisfy WTs for
the CUSIP.
• Number of Shares: the number of shares loaned, withdrawn-by-transfer, CNS
short, or potentially flipped.
IPO Tracking Preliminary Report- Syndicate Member
An "IPO Preliminary Report of Flipping Activity for Syndicate Member" is issued daily to each
Syndicate Member. The cumulative report identifies the Secondary Market transactions for each of
the Syndicate Member's Institutional and Retail customers and includes any available customerlevel detail. Clearing Agents receive separate Syndicate Member reports for each of their
Correspondent Syndicate Members. Lead Managers and Co-Managers also receive a Syndicate
Member report detailing their customers' potential flipping activities. In a Co-Reporting relationship
(the Lead Manager uses two Participant numbers for distribution of an IPO, i. e. , one for domestic
distribution and one for international distribution), the primary in the relationship receives the
report. The activity of a Co-Reporter is reported like that of a Syndicate Member on the Lead
Manager's Report.
Fields
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CUSIP: the CUSIP number of the tracked issue.
Description: the name of the tracked issue.
Lead Underwriter: the Participant number of the Lead Manager of the tracked issue.
Name: the name of the Lead Manager of the tracked issue.
Tracking Period Start Date: the start of tracking (closing date of the issue).
Tracking Period End Date: the projected end of tracking. Issues can be tracked for a
maximum of 90 calendar days.
Note- Correspondent Syndicate Members are identified at the top of the report. The Correspondent's
ID Broker-Dealer number is listed below its Clearer's Participant number.
Columns
• Customer Number: the Custodian's Internal Account (AIA) number for the Syndicate
Member's Institutional customer at the Agent Bank or Prime Broker, or the Syndicate
Member's Internal Account number (BIA) for Retail customers.
Customer Level Information is Unavailable
In the case where the Syndicate Member has not populated the IPO database with
customer-level detail for Retail customers, the customer cannot be identified for
potentially flipped shares.
• Broker Inter. Acct. : The Syndicate Member's BIA number for its Institutional
customer at a Custodian Bank or Prime Broker, or the Syndicate Member's BIA
for its Retail customer. (For Retail customers, this number will be the same as the
Customer Number. )
• ID Agent: the number in the ID system identifying Agent Banks.
• Acct. Trans. to Part. : indicates a transfer of position from one Participant to
another. Transfers implemented via IPOU, Option 4, Customer Account Transfer,
are not reported as potential flips.
For Retail customers that transferred, the report indicates the receiving party's Participant number.
Once a Retail customer transfers, the customer's new Internal Account number is proprietary
information. However, DTC continues to display the customer's original BIA number.
For Institutional customers that transferred, the report indicates the receiving party's Participant
number. The original BIA number is still displayed. Once an Institutional customer transfers, the
customer's new Custodian Bank/Prime Broker Internal Account number is proprietary information.
Note- If an account transfer is performed using the PTS function DO or NDOM (Reason Code 40), it
must be released manually from the IPO Account to the Free Account, and those releases will mark
the shares as potential flips in DTC's tracking reports.
• Customer Type: indicates whether the customer is Institutional or Retail.
Institutional Customers
Large investors such as insurance companies, retirement systems, etc. , whose trades are executed
by an Executing Broker via the ID system and whose positions are held in a Custodian Bank's Free
Account or in a Prime Broker's IPO Control Account.
Retail Customers
Individual investors who purchase IPO shares through the Lead Manager or a Syndicate Member,
and whose positions are held in a Broker-Dealer's IPO Control Account.
Note- In order to receive a complete description of potential flipping activity, Lead Managers and
Syndicate Members must populate the IPO database with customer-level detail for their Retail
clients. If the IPO database is not populated, the Syndicate Member's report will display the
message "Customer-Level Information is Unavailable" adjacent to the flipped share quantity.
• Trade Date: the date of the transaction in YYMMDD format as captured from the DO/ID
transaction or the IPO release.
• Price: the price calculated from the net amount appearing on the DO or ID transaction, or
the IPO release.
• Share Type: Displays the type of transaction. This column lists for each customer:
• Flipped: Total of shares potentially flipped by the Customer.
• In the case in which a Syndicate Member's customer transfers its accounts to
another Participant (via IPOU, Option 4, Customer Account Transfer): the
movement is not reported as a potential flip. For reporting purposes, the IPO
database moves the original Syndicate Member's Participant number and
customer BIA number with each transfer of a customer's position.
Note- If an account transfer is performed using the PTS function DO or NDOM
(Reason Code 40), it must be released manually from the IPO Account to the Free
Account, and those releases will mark the shares as potential flips in DTC's tracking
reports.
In the case of releases: the IPO tracking system captures flips for Brokers when shares are
released from a Broker's IPO Control Account to prepare for delivery of a Secondary Market sale.
Since the release, not the actual settlement indicates a flip, flips on the Report should be considered
potential flips.
Releases can be performed on the individual customer level, by including the Internal Account
number of the customer on the release instruction, or on the Syndicate Member level. Releases
performed on the Syndicate Member level are reported on that level. The Syndicate Member's
report displays the message "Customer-level Information is Unavailable" along with the potentially
flipped shares.
For Banks, flips are captured when shares marked as IPO Initial Distribution shares are delivered to
satisfy Secondary Market sells.
Note- Shares potentially flipped on the same day at the same price by the same customer are
aggregated.
• Withdrawal: lists the shares used to satisfy WTs by the Syndicate Member's customers.
• SL Firm To Lead: stock loans in which the Syndicate Member was the lender and the Lead
Underwriter was the borrower.
• SL Firm To Other: stock loans in which the Syndicate Member was the lender and a
Participant other than the Lead Underwriter was the borrower.
• SL Custodian To Lead: stock loans in which custodians (whether an original custodian or
one receiving shares as a result of an account transfer) were the lender and the Lead
Underwriter was the borrower. The Syndicate Member is reported for these loans since it
is the Syndicate Member that originally delivered the IPO shares to the lending custodian.
• SL Custodian To Other: stock loans in which custodians (whether an original custodian or
one receiving shares as a result of an account transfer) were the lenders and Participants
other than the Lead Underwriter were the borrower. The Syndicate Member is reported for
these loans since it is the Syndicate Member that originally delivered the IPO shares to
the lending custodian.
• SL SM Borrows: only reported when a Syndicate Member long in IPO shares nonetheless
•
•
•
•
•
•
•
•
•
•
•
•
borrows shares in the tracked CUSIP (Free or IPO) from another Participant. The quantity
reported is the entire quantity of shares borrowed.
SL SM IPO To Free Realloc: the quantity reported is the Syndicate Member's portion of
IPO shares distributed to a custodian used to replace free secondary market shares
previously loaned out by the bank but which the bank instead needs to satisfy a
customer's delivery transaction. This reported quantity reflects an increase in the number
of the Syndicate Member's IPO shares issued by custodians.
SL SM Free To IPO Realloc: Free shares used to replace IPO shares of a loan because the
IPO shares are needed for a delivery transaction. The quantity reflects the Syndicate
Member's portion of the IPO shares originally reported as a stock loan flip by a custodian
but which have been reallocated to satisfy the Syndicate Member's/custodian's customer's
delivery transaction (a regular flip). Since the customer's flip will be reported under the
Flipped category, this SL SM Free To IPO Realloc quantity should be subtracted from one
of the quantities reported as IPO shares loaned by custodians (SL Custodian To Lead or
SL Custodian To Other categories) in order to avoid double-counting.
SL Flip to IPO Realloc: The quantity reflects the Syndicate Member's portion of IPO
shares originally reported as a stock loan flip transacted by a custodian but which have
been reallocated to satisfy the Syndicate Member's/custodian's delivery transaction (a
regular flip). (See SL SM Realloc below. ) Since the customer's flip will be reported under
the Flipped category, this SL SM Free To IPO Realloc quantity should be subtracted from
one of the quantities reported as IPO shares loaned by custodians (SL Custodian To Lead
or SL Custodian to Other categories) in order to avoid double-counting.
SL SM Realloc: the quantity of the Syndicate Member's IPO shares reallocated to a stock
loan flip at a custodian because another Syndicate Member at the Custodian was
reallocated out of the original loan quantity. This quantity should be added to the SL
Custodian To Lead, SL Custodian To Other, SL Firm To Lead or SL Firm To Other
categories since it represents an increase in this Syndicate Member's IPO Shares loaned
by the custodian.
SL Inst Unmatch Release: the quantity of the Syndicate Member's stock loan releases for
Institutional customers that exceeded the total quantity of shares used for stock loan
deliveries. This quantity should be added to the SL Custodian To Lead or SL Custodian To
Other categories since, had the custodian delivered the shares in a timely fashion, it
would represent an increase in this Syndicate Member's IPO shares loaned by the
Custodian.
SL Retail Unmatch Release: the quantity of the Syndicate Member's stock loan releases
for Retail customers that exceeded the total quantity of shares used for stock loan
deliveries. This quantity should be added to the SL Firm To Lead or SL Firm To Other
categories since, had the custodian delivered the shares in a timely fashion, it would
represent an increase in this Syndicate Member's IPO shares loaned by the Custodian.
Total Retail: Flipped: the total number of shares potentially flipped by the Syndicate
Member's Retail customers.
Total Retail: Withdrawal: the total amount of IPO shares used to satisfy WTs by the
Syndicate Member's Retail customers.
Total Institutional: Flipped: the total number of shares potentially flipped by the
Syndicate Member's Institutional customers.
Total Institutional: Withdrawal: the total amount of IPO shares used to satisfy WTs by
the Syndicate Member's Institutional customers.
Grand Total: Flipped: total of all shares potentially flipped by the Syndicate Member's
customers.
Grand Total: Withdrawal: the total amount of IPO shares used to satisfy the WTs by the
Syndicate Member's customers.
Number of Shares: the total number of shares transferred, potentially flipped, or withdrawn-bytransfer.
Final Reports
When the Lead Manager notifies DTC that the tracking period is over, DTC issues final reports to the
Lead Manager, Co-Managers, Syndicate Members, Clearing Agents, and primary Co-Reporters.
These cumulative versions of the daily reports reflect the full history of the tracked issue, and
indicate that the tracking period has ended.
This is the last report Participants receive for the tracked CUSIP.
Syndicate Member
Receive Shares from Lead Manager
The Lead Manager sets up deliveries of IPO shares to its Co-Managers, Co-Reporters and Syndicate
Members prior to closing using the appropriate Deliver Order Reason Codes.
By 1:15 p.m. closing date, DTC receives a call from the Lead Manager permitting the distribution of
shares to Co-Managers, Co-Reporters and Syndicate Members. DTC then delivers shares from the
Lead Manager's IPO Control Account to each Syndicate Member's IPO Control Account, in
accordance with the Lead Manager's Deliver Order instructions ("Syndicate Takedown").
Note- Shares remain in the IPO Control Account for the duration of the tracking period unless
transferred, released or distributed to Institutional customers at Agent Banks or Prime Brokers.
Initial Distribution
Initial Distribution, the delivery of IPO shares to a Syndicate Member's Institutional customers at
Agent Banks or Prime Brokers, takes place after the Syndicate Takedown.
Although Initial distribution shares can be delivered on or after the closing date, you can set up
their Initial Distribution deliveries prior to receiving shares from the Lead Manager.
An Initial Distribution is performed by using either DTC's ID system or the PTS functions DO or
NDOM. You can indicate an Initial Distribution delivery by entering the appropriate Market Code on
the Institutional Delivery Trade Input Screen for ID trades, or by entering the appropriate Reason
Code in the REAS field of the Initial Public Offering Deliver Orders Screen for Day or Night DOs.
Note- Initial Distribution transactions are not settled through CNS.
Distribute Shares to Agent Banks and Prime Brokers
Distribute Shares via ID
Note- Customer-level detail is required for Initial Distribution transactions.
1 Enter information in the following fields of the Institutional Delivery Trade Input Screen:
•
•
Market Code: enter Market Code 11
Agent Internal Account: enter the Agent Bank or Prime Broker's Internal Account
number for the customer
Note- The Internal Account number must be entered correctly in order to ensure accurate
processing of the transaction. If it is missing, or entered incorrectly, an error code of 91
will appear on the Confirmation and Affirmation tickets. Refer to Resolve Internal Account
Number Discrepancies for information on how to correct the Internal Account number.
•
Broker Internal Account: enter the Executing Broker's Internal Account (BIA) number
for the customer; optional
Note- The Executing Broker Internal Account number (BIA#) is optional. However, there
are several advantages to entering this information: the BIA provides more detailed
reporting of flipping activity; and this information can easily be extracted from CCF,
CCFII and MDH trade files.
The Internal Account number, the BIA number and the associated Syndicate Member are
extracted from ID trades upon authorization. On closing date, the IPO database is populated.
2 Refer to IDTI for additional ID field and processing information.
Distribute Unaffirmed ID Trade Shares via DO or NDOM
When a trade is unaffirmed, excepted or rejected from the ID system, you can settle that trade via
the PTS functions DO (option 4) and NDOM (option 6).
1 Enter the information in the following fields of the Initial Public Offering Deliver Orders Screen:
•
•
•
Recv-Pt: enter the Agent Bank or Prime Broker's Participant number
REAS: enter Reason Code 50
Int-Acct#: enter the Agent Bank or Prime Broker's Internal Account number for the
customer
Note- The Internal Account number must be entered correctly to ensure accurate
processing of the transaction.
•
Bkr-Acct#: enter the Executing Broker's Internal Account (BIA) number for the
customer; optional
Note- The Executing Broker Internal Account number (BIA#) is optional. However, there
are several advantages to entering this information: the BIA provides more detailed
reporting of flipping activity; and this information can easily be extracted from CCF,
CCFII and MDH trade files.
The system captures the Agent Bank/Prime Broker Internal Account number along with the BIA
number and associated Syndicate Member and populates the IPO database.
2 Refer to DO or NDOM for additional Deliver Order field and processing information.
Distribute Shares for Broker Custody Trades
For trades where the Executing Broker and Custodian are the same entity ("Broker Custody") you
"deliver" shares to your own account via DTC's ID system.
1 Follow the Initial Distribution procedures described in Distribute Shares via ID, entering your own
Participant number as both the Executing Broker and the Custodian of the transaction.
2 Because there is no actual movement of shares, the IPO database is populated with customerlevel detail and the associated Syndicate Member upon Confirmation of Broker Custody trades.
Update Customer-Level Information via IPOU
Customer-level detail in the IPO database can be added and/or updated via the PTS function IPOU.
The following sections describe some of the activities you can perform via IPOU.
Warning! If customer-level detail has been added for any of your customers, it must be added for
all your customers or you will not be able to perform subsequent transactions (e. g. WTs, customer
account transfers) for those customers.
Refer to Appendix D for additional information IPOU procedures.
Allocate Shares to Retail Customers (Add Customer-Level Detail)
After delivering Initial Distribution shares to Institutional customers' Prime Brokers/Agent Banks,
you can allocate the shares you retain to your Retail customers.
IPOU, Option 2 allows you to populate the IPO database by adding their Retail clients' customerlevel details and share allocations.
Note- Participants cannot allocate shares to Institutional customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter information in the following required fields of the IPO- Add Customer-Level Detail Screen:
•
•
•
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the whole number quantity, up to 13 positions
Sign: enter (+) to increase shares
3 Refer to Appendix D for additional processing information.
Update Customer-Level Detail
IPOU, Option 5 allows you to correct or update your customer Internal Account numbers and adjust
the share quantities allocated to your customers.
1 On the IPO- Tracking System Main Menu Screen, select Option 5, Customer-Level Adjustment.
2 Enter information in the following required fields of the IPO- Customer-Level Adjustment screen:
•
•
•
•
From Internal Customer: enter the existing AIA number of the customer
From BIA: enter the existing BIA number for the customer (optional)
To Internal Customer: enter the new AIA number of the customer; required if the
Participant wants to change the existing number to a new one
Reallocated Share Quantity: enter the number of whole shares being adjusted, up to
13 positions; required if the Participant is adjusting a share quantity from existing
customers to the new customer
Note- Because the system overlays the share quantity information, you must input exactly the
total number of shares the "To Internal Customer" should have. If you are not sure of the exact
total the customer should have, refer to the following section.
3 Refer to Appendix D for additional field and processing information.
Update Customer-Level Detail Using the Add Customer-Level Detail Function
IPOU Option 2, Add Customer-Level Detail, provides a way for you to adjust share quantities for
their customers without knowing the total number of shares each customer should have.
This method can also be used to eliminate an old Internal Account number from the IPO database
and add a new one.
1 On the IPO Tracking system Main Menu Screen, select Option 2, Add Customer-Level Detail.
2 Enter Information in the following required fields:
•
•
•
Internal Customer: enter the Internal Account number of the customer
Share Quantity: enter the number of whole shares, up to 13 positions, you wish to
increase/decrease the account by
Sign: enter (+) to indicate the shares should be increased or (-) to indicate the shares
should be decreased
The system adds/subtracts the share quantities for the account and updates them accordingly.
If the share quantity for an Account number is reduced to zero, the system deletes that number
from the IPO database.
3 Refer to Appendix D for additional information.
Transfer of Customer's Position Between Participants
You can transfer your customers positions to another Participant without that transfer being
reported as a potential flip. For reporting purposes, the IPO database moves the original Syndicate
Member's Participant number and BIA number with each transfer of a customer's position.
Memo Segregation and Sub Account Segregated positions do not need to be released prior to
attempting any customer account transfers. IPO account transfer transactions can bypass Memo
Segregation.
Customer-level detail is required for account transfers.
Transfer Customer's Position via IPOU
1. For those transfers that originate in NSCC's ACATS system, Participants will be notified that
an issue is tracked and will receive a trade-for-trade (Balance Order) ticket.
2. The transfer of shares in a tracked CUSIP must be accomplished by the IPO Customer
Account Transfer function and must be for the total position the customer has in its IPO
Control and Free Accounts.
1 On the IPO- Tracking System Main Menu Screen, select Option 4, Customer Account Transfer.
2 Enter information in the following fields of the IPO- Customer Account Transfer Screen:
•
•
•
•
•
•
To Participant: enter the receiving Participant's number
From Internal Customer: enter the existing AIA number for the customer
To Internal Customer: enter the receiving Participant's AIA number for the customer
Share Quantity: enter the number of whole shares being transferred, up to 13 positions
Settlement Amount: enter the settlement amount for the account transfer; optional
Reason Code: enter Reason Code by which this account transfer is to be processed
3 Refer to Appendix D for additional field and processing information.
Transfers can also be performed using the PTS functions DO or NDOM. However, since this requires
manual releases to the Free Account, these transfers will be recorded as potential flips on DTC's
tracking reports.
Note- Account transfers of IPO and Free Secondary Market shares from a Broker Participant will
result in two DOs generated.
Share Movement for Customer Account Transfers- Deliveries
When you transfer a customer's position to another Participant, DTC moves the shares in one of the
following ways:
• Transfer position to a Bank: Both IPO Control and Free Account shares move to the
receiving Bank's Free Account in ART. The IPO database marks the shares delivered from
your IPO Control Account as IPO shares and those delivered from your Free Account are
marked as Secondary Market shares in the IPO database.
• Transfer position to a Broker: Shares delivered from your IPO Control Account move to
the receiving Broker's IPO Control Account in ART and are marked as IPO shares in the
IPO database. Shares delivered from your Free Account move to the Receiving Broker's
Free Account in ART. These Free Account shares are not captured in the IPO database.
Share Movement for Customer Account Transfers- Receipts
You will receive a customer's position from another Participant in one of the following ways:
• Receive position from a Bank: Shares marked as IPO shares in the Bank's Free Account
move to the your IPO Control Account in ART and are marked as IPO shares in the IPO
database. Shares marked as Secondary Market shares in the Bank's Free Account move to
your Free Account in ART. These Free Account shares are not captured in the IPO
database.
• Receive position from a Broker: Shares from the delivering Broker's IPO Control Account
move to your IPO Control Account in ART and are marked as IPO shares in the IPO
database. Shares from the Delivering Broker's Free Account move to your Free Account in
ART. These Free Account shares are not captured in the IPO database.
Secondary Market
Release Shares From the IPO Control Account for Secondary Market Sales
All Secondary Market sell transactions settle from the Free Account. In order to deliver shares sold
by your customers in the Secondary Market, those shares must first be released from your IPO
Control Account to your Free Account using the IPOU function. Failure to release shares to the Free
Account could result in a CNS short or DOs for Secondary Market sales dropping in ART.
Releases can be performed on the individual customer level, by including the AIA number of the
customer on the release, or on the Syndicate Member level. Doing releases on the individual
customer level allows DTC to provide a more detailed report of flipping activity by the your
customers.
Releases can be submitted as early as 6:00 a.m. Eastern Standard Time (EST) trade date through
the settlement of the trade.
Note- Releases from the IPO Control Account cannot be reversed and will be recorded as potential
flips regardless of whether or not delivery is made.
1 On the IPO- Tracking System Main Menu Screen, select Option 3, Release IPO Shares To The Free
Account.
2 Enter information in the following required fields of the IPO- Release IPO Shares To The Free
Account Screen:
•
Internal Customer: enter the AIA number of the customer (if already identified in the
IPO database)
The Internal Customer field (AIA number) is required for all customer
transactions if customer-level detail has been added for any of your customers.
2. If an incorrect AIA number is entered, the shares will not be released and the
subsequent Deliver Order may pend.
Trade Date: enter a valid business date in MMDDYY format
1.
•
Note- DTC edits to ensure that the trade date entered is no earlier than four days prior to
the issue's closing in DTC and no later than the current date. Dates entered on a release
instruction that fall outside these parameters result in DTC rejecting the release
instruction.
•
•
Contract Price: enter a price greater than zero in 9999999.99 format
Share Quantity: enter the number of whole shares, up to 13 positions
3 Refer to Appendix D for additional field and processing information.
If you and your customer have position in the IPO database, an immediate release is processed. If
you and your customer do not have position, refer to the following sections.
Pending Releases
You and your customer must have position in the IPO database in order for a release to be
processed. If the customer/Syndicate Member does not have position, the release will pend ("hold")
for up to 3 days after Trade Date or for up to 30 calendar days, depending on the recycle option
selected by the Participant.
If you and your customer do have position, but not enough to satisfy the entire release, DTC will
release the available shares from the customer/Syndicate Member's account and pend the balance
of the release request ("partial hold").
Participants that do not populate the IPO database with customer-level detail can use an omnibus or
dummy account number. This allows for partial releases of their position as shares are sold.
Cancel Pending Releases
You can cancel pending releases via the IPOU function.
1 On the IPO- Tracking System Main Menu Screen, select Option 7, IPO Pending Transaction
Cancel.
2 Enter information in the following fields of the IPO- Pending Transaction Screen:
•
•
CUSIP: enter the issue's CUSIP number
Date: enter a date range (From and To) in YYMMDD format. The default is the current
date.
3 Press the ENTER key.
Result- A list of pending transactions is displayed.
4 Enter S to the left of the selected transaction to view details.
5 Enter C (cancel) to the left of the selected transaction.
Result- The message "PRESS PF1/13 TO CONFIRM CANCEL" appears.
6 Press the PF1/13 key.
Result- The transaction is canceled.
7 Refer to Appendix D for additional information.
Secondary Market Deliveries
Secondary Market deliveries are performed using the same procedures currently used for deliveries
of non-tracked issues.
Note- The ID Agent number must be included for Secondary Market DO deliveries to Prime Brokers
and Banks. When delivering to a Bank, the ID Agent number will default to the receiving Bank's
Participant number.
Resolve Internal Account Number Discrepancies in ID Sell Transactions
When the AIA number on the sale transaction does not match an AIA number in the IPO Tracking
database, the system generates a warning message, Error 91.
Error 91 flags an unmatched Internal Account number three times:
• ID Confirmation
• ID Affirmation
• Authorization and Exception (ANE)
Error 91 also appears on machine-readable output.
If the Internal Account number is still unmatched when validation occurs at Authorization and
Exception (ANE) time, ANE will not reject the transaction, because the system assumes the delivery
will use Secondary Market shares. However, an automated release will not be generated and the
delivery will pend.
Unmatched AIA numbers can be corrected in the IPO database prior to the settlement date cutoffs
of 10:00 a.m. EST for Global processing and 2:30 p.m. for Trade-for-Trade processing. This allows
the ID trade to be authorized and settle that day through the automated settlement feature of the
ID system.
Note- The ANE inquiry function and T+3 hard-copy report will display a code of "F" in the status
field to indicate an Initial Distribution trade that has been rejected from settlement and an "I" to
indicate a Secondary Market trade that has been rejected. The "F" and "I" codes will be displayed in
cases where the Internal Account number on an IPO trade does not match the Internal Account
number as stored on the IPO database. These transactions may be reprocessed for up to 21 days.
You may resolve Internal Account number discrepancies in the following ways:
• Have the Custodian update the Internal Account number in the IPO database to match the
number on the ID transaction by performing an IPO customer-level adjustment. (Refer to
Update Customer-Level Detail)
• Cancel the ID transaction and re-enter it in the ID system as per the Custodian's
instructions. (Refer to Distribute Shares via ID)
• Have the Custodian except the ID transaction from automated settlement and enter a DO
with the AIA number as it appears in the IPO database.
Withdrawals-by-Transfer (WTs)
If certificate denominations are available, Withdrawals-by-Transfers (WTs) of tracked issues are
permitted starting on closing day via the PTS functions NWT1 (Night Withdrawal-by-Transfer) and
RWT1 (Rush Withdrawal-by-Transfer), as well as via CCF and CCFII. WTs are noted as separate line
items on tracking reports.
1. Requests for WTs must include customer-level detail.
2. The IPO database must be populated with the customer-level detail prior to requesting a
WT.
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
•
Int Cust: enter the AIA number of the customer for whom shares are being withdrawn
Agt ID: enter the ID Agent number; optional
2 Refer to NWT1 and RWT1 for additional WT field and processing information.
DTC processes WT requests using shares from your IPO Control Account first. DTC generates
releases from your IPO Control Account to its Free Account.
1. Since the IPO Tracking System records all manual releases as potential flips, you should not
manually release shares for WT processing.
2. DTC generates releases from your IPO Control Account only if the Internal Account number
already exists in the IPO database. If the Internal Account number does not exist, a
release will not be generated and the WT will be assumed to be from Free shares only.
Request a WT Using Free Shares Only
1 Enter information in the following fields of the Night W/T Data Collection Screen or the Rush
Withdrawal Transfer System Add Function Screen:
•
Int Cust: enter a "dummy" AIA number (one that does not exist in the IPO database).
Note- The use of a dummy Internal Account number in the Int Cust field will default the
system to use Free shares for WT processing.
•
Agt ID: enter ID the Agent number; optional
2 Refer to NWT1 and RWT1 of the PTS Manual for additional WT field and processing information.
Stock Loans and Returns
Stock Loan Deliveries
Syndicate Members are able to process stock loans using the appropriate DO/NDOM Reason Codes.
As for all broker Participants, DTC fulfills a Syndicate Member's stock loan delivery quantity with
Free Account shares only. If insufficient shares are available in the Syndicate Member's Free
Account, the Participant must instruct DTC to process a Stock Loan Release to release IPO shares
from its IPO Control account to its Free account for the balance.
DTC distinguishes between stock loan releases and regular releases and reports each type as
separate line items on Lead Underwriter and Syndicate Member Flipping Activity Reports. All stock
loan releases are categorized according to Participant type of lender and borrower.
To dissuade Participants from using the stock loan release facility for regular releases, DTC monitors
the quantity of IPO shares moved to the Participant's Free account via stock loan releases versus
the quantity of shares loaned by the Participant on the same day and reports discrepancies to the
Lead Underwriter and appropriate Syndicate Members.
All stock loans are made on an omnibus basis. No customer account numbers are tagged to stock
loans. An AIA number entered in a stock loan delivery is ignored by DTC; however, the exception to
this is for stock loans to banks, in which case the Participant number of the receiving bank must be
entered as the AIA number in order to allow the receiving bank the ability to deliver borrowed
shares.
Stock Loan Receipts
DTC delivers all Stock Loans to the Borrower's Free Account.
Stock Loan Returns
You can process Stock Loan Returns by using the appropriate Reason Codes via the PTS functions
DO or NDOM. All stock loan returns are delivered from the borrower's Free account.
1 Enter Reason Code 20 in the REAS field of the SDFS Initial Public Offering Deliver Orders Screen.
2 Refer to DO and NDOM of the PTS Manual for additional Deliver Order field and processing
information.
Stock Loan Return Receipts
All Stock Loan Returns are delivered to the lender's Free Account as Free Secondary Market shares
in the IPO database.
Pledges
Pledges of Collateral
You can pledge shares with or without value from either their IPO Control or Free Accounts via the
PTS function COLL.
1 Enter the following information on the Free Pledge Service Screen:
•
IPO: enter Y if the shares are being pledged from the IPO Control Account
OR
Enter N if the shares are being pledged from the Free Account
2 Refer to COLL for additional field and processing information.
Pledged IPO Control and Free Account shares are moved to the Pledge (14) Account. IPO shares are
segregated in the I14 Account.
Pledge Releases
If released during the tracking period, Pledge shares are delivered back to their original accounts. In
cases where both IPO and Secondary Market shares were pledged, released (Free) shares are
returned to the Free Account first, up to the quantity of Free Account shares pledged. The balance
of the shares return to the IPO Control Account.
If released after tracking has ended, all Pledge shares are delivered to the Free Account regardless
of what their account of origin.
Reclaims
Reclaim Deliveries
DTC will automatically process a matched reclamation based on the DO transaction number and
other transaction information provided until one day after settlement.
You can enter Matched Reclaims via the PTS functions ART and DO/NDOM and via CCF, CCFII and
MDH.
When You reclaim a delivery, the reclaimed DO will be matched to the original delivery and the
information in the IPO database will be reversed.
Note- Partial reclaims are not permitted.
Matched Reclaim Deliveries via ART
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter R to the left of the item to be reclaimed on the ATP Activity Summary Screen.
Matched Reclaim Deliveries via DO or NDOM
Matched Reclaims can be made on settlement date and the day after. These reclaims can not be
reclaimed by the original deliverer and are not subject to risk management controls.
1 Enter information in the following fields of the SDFS Automatic Reclaim Deliver Orders Screen:
•
•
•
Trans#: enter the transaction number of the transaction being reclaimed
Reas-Code: enter the appropriate Reason Code (Refer to Codes in this Manual for
Reclaim Reason Codes. )
Orig-Date-Ind: enter T to reclaim a DO entered today or P to reclaim a DO entered on
the previous business day
Note- If made during the Matched Reclaims timeframe, DTC will also match Freeform Reclaims,
provided the appropriate DO Reason Code and correct information is entered.
Unmatched/Freeform Reclaim Deliveries
Reclaims must be entered Freeform via CCF/CCFII, MDH or the PTS functions DO/NDOM if:
• The reclaim transaction number cannot be matched to an original delivery
• The reclaim occurs after the Matched Reclaim deadline has passed
You must input transaction details Freeform, including the appropriate DO Reclaim Reason Code.
DTC treats these Reclaim transactions as original deliveries, which in turn can be reclaimed by the
receiver.
Reclaim Receipts
IPO shares that are reclaimed within the Matched Reclaim deadline (S through S+ 1) will be
returned to the account from which they originated, provided the issue is still being tracked.
Reclaims performed after the Matched Reclaim deadline, or after tracking has ended, will be placed
in the Receiver's Free Account. These deliveries can be reclaimed.
Memo Segregation
Although position may reside in both the IPO Control and Free Accounts, you can enter Memo
Segregation instructions for tracked issues using the same procedures currently used for nontracked issues. Memo Segregation bridges the IPO Control and Free Accounts.
Refer to the Settlement Service Guide for information on Memo Segregation instruction processing.
The share quantity in the Memo Segregation instruction will be subtracted from the combined share
total in the IPO Control and Free Accounts. The resulting share total must be greater than the
quantity of any Deliver Orders entered. If the quantity is less, the Deliver Orders will not be
processed and will pend.
Deposits
Deposits are chilled for tracked issues for the duration of the tracking period.
DWAC (Deposit/Withdrawal at Custodian) activity is permitted on a very limited basis during the
tracking period and only with consent of the Lead Underwriter.
Certificates-On-Demand (CODs)
CODs are chilled for tracked issues for the duration of the tracking period.
Collateralization of IPO Shares
Shares in the IPO Control Account will be considered collateral (NA) only on the day they are
received into the account and only if received for value. Shares received into the IPO control
account without value will follow the normal accounting updating rules, and will be considered NA or
MA depending on the SDFS Account Coding Instructions.
Shares in the IPO Control Account will not be considered collateral after the first day they are
received. MA/NA intra-day moves will not be permitted.
Shares in the Free Account are subject to normal collateralization rules. Refer to the Settlement
Service Guide for additional collateralization information.
Reconcile Customer-Level Detail with Internal Records
You should reconcile the Customer-Level Detail in the IPO database with your internal records daily
using an IPOCLD machine-readable file. This file contains the Agent Bank or Prime Broker's Internal
Account numbers of all your customers on file, as well as the Executing Broker's Internal Account
numbers for those customers.
Contact DTC's Participant Interface Planning Department or your Participant Services representative
for assistance.
Make Inquiries via IPOI
The PTS function IPOI (Initial Public Offering Tracking System Inquiry) allows you to make inquiries
about tracked issues.
The following information is provided via IPOI:
•
•
•
•
A
A
A
A
list of all tracked IPO issues
summary of tracked IPO issues in which the Participant has position
summary of customer-level details by Participant-issue
summary of IPO pending/canceled/released transactions
For additional information on the IPO Tracking System Inquiry function, refer to the Overview and
Appendix E.
Receive Reports from DTC
DTC prepares and distributes daily to you cumulative hard-copy reports of tracked issues. The
following information is provided:
• List of potential flips by own Retail and Institutional customers.
• Potential flips by customers are broken down by trade date and price; for customers using
more than one Syndicate Member, flipped quantities are prorated.
• Separate line for WTs.
• Separate line for stock loans: quantity reported represents the net amount (outstanding
loans less returns).
• Retail account transfers (showing the receiving Participant number).
• Institutional account transfers (showing the receiving Participant number and BIA number).
Refer to Reports for further information.
Syndicate Member Tasks: Required Field Information &DTC Output
TASK:
FIELD INFORMATION
REQUIRED:
DTC
OUTPUT:
Market Code: Market Code 11
Activity
Code: 48
Initial Distribution To:
Agent Banks via ID
Agent Internal Account: Agent
Bank's Internal Account#
Broker Internal Account:
Reason
Code: 49
Executing Broker's Internal
Account#; optional
Agent Banks via DO/NDOM
Recv-Pt: Agent Bank's Part#
REAS: Reason Code 50
Int-Acct#: Agent Bank's Internal
Account#
Activity
Code: 48
Reason
Code: 50
Bkr-Acct#: Executing Broker's
Internal Account#; optional
Prime Brokers via ID
Market Code: Market Code 11
Agent Internal Account: Prime
Broker's Internal Account#
Activity
Code: 47
Reason
Code: 49
Broker Internal Account:
Executing Broker's Internal
Account#; optional
Prime Brokers via
DO/NDOM
Recv-Pt: Prime Broker's Part#
REAS: Reason Code 50
Int-Acct#: Prime Broker's
Internal Account#
Activity
Code: 47
Reason
Code: 50
Bkr-Acct#: Executing Broker's
Internal Account#; optional
Customer-Level
Updates:
Add Customer-Level Detail
via IPOU, Option 2
Internal Customer: Internal
Account#
Share Quantity: Whole number
quantity
Sign: + or- to increase or
decrease shares
Update Customer-Level
Detail via IPOU, Option 5
From Internal Customer: Old
Internal Account#
To Internal Customer: New
Internal Account#; optional
Share Quantity: New whole
number quantity; optional
Secondary Market
Activity:
Sale of Free shares
Same as for non-tracked issues.
Activity
Code: 26
Release of IPO shares to
Free Account via IPOU,
Internal Customer: Internal
Activity
Code: 46
Option 3
Account#
Trade Date: Trade date
Contract Price: Contract price
Withdrawals-by-Transfer
via NWT1/ RWT1
Int Cust: Internal Account#
Agt ID: ID Agent ID#; optional
Stock Loan via DO/NDOM
REAS: Reason Code 10
Activity
Code:
IPO
shares: 48
Free
shares: 26
Reason
Code: 10
Stock Loan Return via
DO/NDOM
REAS: Reason Code 20
Activity
Code:
IPO
shares: 49
Free
shares: 26
Reason
Code: 20
Account Transfer to
Broker- IPO Shares- via
IPOU, Option 4
To Participant: Receiving
Broker's Part#
Activity
Code: 47
From Internal Customer:
Current Internal Account#
Reason
Code: 40
To Internal Customer: New
Internal Account#
Share Quantity: number of
whole shares being transferred
Settlement Amount: Settlement
amount; optional
Account Transfer to
Broker- Free shares- via
IPOU, Option 4
To Participant: Receiving
Broker's Part#
Activity
Code: 26
From Internal Customer:
Current Internal Account#
Reason
Code: 40
To Internal Customer: New
Internal Account#
Share Quantity: number of
whole shares being transferred
Settlement Amount: Settlement
amount; optional
Account Transfer to BankIPO Shares- via IPOU,
Option 4
To Participant: Receiving Bank's
Part#
Activity
Code: 48
From Internal Customer:
Current Internal Account#
Reason
Code: 40
To Internal Customer: New
Internal Account#
Share Quantity: number of
whole shares being transferred
Settlement Amount: Settlement
amount; optional
Account Transfer to BankFree shares- via IPOU,
Option 4
To Participant: Receiving Bank's
Part#
Activity
Code: 26
From Internal Customer:
Current Internal Account#
Reason
Code: 40
To Internal Customer: New
Internal Account#
Share Quantity: number of
whole shares being transferred
Settlement Amount: Settlement
amount; optional
IPO Appendix:
Appendix A
Syndicate Prioritization
Deliveries for an IPO tracked issue are prioritized in the following order:
Co-Managers/Co-Reporters
Delivery to Co-Managers/Co-Reporters via DO/NDOM Reason Code:
•
560
Co-Manager/Co-Reporter
Syndicate Members
Delivery to Syndicate Members via DO/NDOM Reason Code:
•
570
Syndicate Takedown
Affirmed ID Syndicate Trades
Delivery to Agent Banks/Prime Brokers via ID Market Codes:
•
•
•
•
11
Initial Distribution
51
Directed Concessions
52
Oversubscriptions
53
Oversubscriptions/Directed Concessions
Unaffirmed ID Syndicate Trades Performed via DO/NDOM
Delivery to Institutional clients at Prime Broker/Agent Bank via DO/NDOM Reason Codes:
•
•
•
•
50
Initial Distribution
530
Directed Concessions
540
Oversubscriptions
550
Oversubscriptions/Directed Concessions
Secondary Market ID Trades
Secondary Market deliveries with ID Market Codes other than 11, 51, 52, 53
Secondary Market DO/NDOM Trades
Secondary Market deliveries with DO/NDOM Reason Code:
•
30
Delivery Versus Payment
Appendix B
GLOSSARY
Agent Bank
See Custodian Bank.
Agent Bank Number
The number identifying banks in DTC's ID
system. Also referred to as:
•
•
•
•
Agent Bank Identifier
ID Agent Bank Identifier
IPO Agent Bank Identifier
ID Agent Bank Number
Agent Bank Identifier
See Agent Bank Number.
Agent Internal Account
(AIA) Number
The number used by the Custodian Bank or
Prime Broker to identify its customer. Also
referred to as the Internal Account number.
Balance Order Ticket
NSCC output indicating a firm's remaining
long or short positions after a day's
transactions have been netted.
Broker Custody Trade
Trade in which the Executing Broker and the
Custodian are the same entity.
Broker Internal Account
(BIA) Number
Number used by the Executing Broker
(Syndicate Member) to identify its customer.
Clearing Agent
DTC Participant (Bank or Broker) that
processes transactions at DTC on behalf of a
non-DTC Participant.
Closing Date
Date on which an issue "closes": the Issue's
shares are distributed by the Lead Manager
and Syndicate Members to Retail and
Institutional investors.
CNS (Continuous Net
Settlement)
The Net Settlement System employed by the
National Securities Clearing Corporation
(NSCC) to settle IPO Secondary Market
transactions.
Co-Lead
See Co-Manager.
Co-Manager
One of two entities acting in equal capacities
as Lead Manager. Co-Manager relationships
often allow different Participants to handle
domestic and international portions of an
IPO.
Co-Reporter
Underwriter (Lead Manager) uses two
Participant numbers for distribution of an IPO
(e. g. , one for domestic distribution and one
for international distribution).
Correspondent
Non-DTC Participant that uses a DTC
Participant as a Clearing Agent to process
transactions at DTC.
Correspondent Account
Number
The number used by a Clearing BrokerDealer or Clearing Bank to identify its
correspondent.
CUSIP Number
The unique nine-digit identifier of an issue.
Custodian Bank
Bank that holds shares for an Institutional
customer; shares are "in custody" for that
customer.
Customer Account Transfer
The movement of a customer's position from
one Participant to another.
Customer-Level Detail
For transaction processing purposes, the
Internal Account number of a Participant's
customer. In IPOI, Option 3, additional
customer details include: the allocated share
quantity; the available share quantity; the
flipped share quantity; the customer's
Custodian and Executing Broker (Syndicate
Member).
Directed Concession
Delivery of a block of IPO shares from the
Lead Manager directly to a Syndicate
Member's Institutional customer (delivery is
to the customer's Agent Bank or Prime
Broker), at the Institution's request. The
Syndicate Member gets the benefit of the
selling concession. The Lead Manager is set
up as the associated Syndicate Member in
the IPO database.
Executing Broker
Broker-Dealer that executes a buy or sell
order.
Flipping
The sale of Initial Distribution securities in
the Secondary Market during the
stabilization/penalty-bid period.
Free Account
General DTC Participant Account. For
Brokers, all shares of non-tracked issues, as
well as Secondary Market shares of tracked
issues, reside there (unless pledged, loaned,
etc. ). For Banks, all shares, including
tracked IPO shares, reside there.
Green Shoe
The right of the Lead Manger to purchase a
certain amount of additional shares (usually
equal to 15% of Initial Distribution amount)
from the Issuer at an agreed upon price
within a certain time period (usually 30
days).
ID Agent Bank Identifier
See Agent Bank Number.
ID Agent Bank Number
See Agent Bank Number.
ID Affirmation
DTC output indicating the Custodian's
affirmation (agreement) of the details of a
trade.
ID Broker-Dealer Number
The number used to identify a Broker-Dealer
in DTC's ID System.
ID Confirmation
DTC output outlining the details of a trade
entered into the ID system.
Initial Distribution Shares
Shares delivered from the Lead Manager or
Syndicate Members to their customers.
Shares are considered Initial Distribution
shares until they are sold in the Secondary
Market.
Institutional Customer
Large Investors, such as Insurance
Companies, Retirement Funds, etc. Positions
are held by an Agent Bank or Prime Broker.
Internal Account Number
Number used by an Agent Bank, Prime
Broker or Executing Broker to identify its
customer.
Investment Manager
See Institutional Customer.
IPO Agent Bank Identifier
See Agent Bank Number.
IPO Control Account
Account established for Brokers to separate
tracked IPO shares during the tracking
period.
IPOI
PTS inquiry function that provides
information including: list of tracked issues;
list of tracked issues in which the Participant
has position; customer-level details; and the
status of IPO Control Account releases.
IPOU
PTS update function that allows Participants
to perform transactions with their IPO shares
including: releasing shares to their Free
Accounts; canceling pending transactions;
moving shares from the Free Account to the
IPO Control Account for Oversubscriptions;
customer account transfers; adding
customer-level details; adjusting customerlevel details; adjusting Corresp. Positions;
releasing IPO shares for stock lending; and
accessing the Inquiry (IPOI) function.
Lead Manager
The firm that organizes and leads a
syndicate of underwriters in the act of
purchasing and distributing the shares of an
initial public offering to investors.
Matched Reclaim
Return of a delivery, made no later than the
day after settlement date, that DTC matches
to the original delivery.
Memo Segregation
Control mechanism that prevents securities,
residing in either the Participant's IPO
Control Account or its Free Account, that
have been fully paid for by the Participant's
customer from being accessed for normal
activity. Only certain types of activities may
reduce this position.
Oversubscription
Lead Manager commits to selling more
shares than have been issued and must
purchase or borrow shares in the Secondary
Market to fulfill its Syndicate Takedown and
Initial Distribution obligations.
Oversubscription/Directed
Concession
Lead Manager delivers oversubscribed shares
directly to a Syndicate Member's Institutional
customer (delivery is to the customer's
Agent Bank or Prime Broker), at the
customer's request. The Syndicate Member
gets the benefit of the selling concession.
The Lead Manager is set up as the associated
Syndicate Member in the IPO database.
Penalty-Bid Period
Established time period in which the Lead
Manager has the right to penalize Syndicate
Members for their customers' flipping
activity.
Primary Market
The Initial Distribution of shares of an IPO:
the delivery of shares from the Lead
Manager and Syndicate Members to their
customers.
Prime Broker
A broker-dealer acting as a Custodian for an
Institution or a large Retail customer that is
set up like an Institution.
Reclaim
The return of a delivery by the Receiver.
Relative Block Number
(RBN)/Transaction Number
Identification number of a trade processed
via CCF/CCFII, MDH or PTS. This, along with
other CCF transaction information, (including
the Deliverer, the Receiver, the CUSIP
number, the dollar value and the settlement
value) is used by DTC to effect a matched
reclaim of a specific delivery.
Relaxed Editing
Feature of the IPO tracking system that
allows a Secondary Market sell transaction to
be settled by the Custodian Bank without an
Agent Internal Account number match or
sufficient position.
Retail Customer
An individual investor.
Risk Management Controls
Features (Net Debit Caps and Collateral
Monitor) used to provide protection to all
DTC Participants against the inability of one
or more Participants to settle its net
settlement obligation. Net Debit Caps are
meant to assure liquidity while the collateral
monitor assures sufficient collateral to avoid
generalized losses if a failure is due to
insolvency.
Scrubbing
The IPO Tracking System process that
adjusts the Internal Account number in order
to reduce the number of unmatched Internal
Account numbers on sale transactions. The
incoming Internal Account number is leftaligned and stripped of all insignificant
characters, including leading zeros. Only
letters (A- Z) and numbers (0- 9) remain
within the scrubbed Internal Account
number. Any incoming Internal Account
number that, when scrubbed, results in all
spaces is treated as if the Internal Account
number was not entered and is edit rejected.
All internal processing by the IPO Tracking
system occurs against the scrubbed version
of the Internal Account number. The original
Internal Account number is stored in the IPO
Transaction database, and is returned to the
Participant on output copies of Deliver
Orders (DOs), ID Confirms, IPO Customer
Allocations, IPO Account Transfers, IPO
Releases and IPO Customer-Level
Adjustments.
Secondary Market
Where shares of a new issue are bought and
sold after Initial Distribution.
Selling Group
Entity that markets an Initial Public Offering
that is not a part of the Syndicate.
Settlement Date
Date on which a trade settles.
Stabilization Period
Duration of time that the Lead Manager is
responsible for maintaining the price of a
new issue.
Stock Loan
The loaning of shares from one Participant to
another.
Stock Loan Return
The return of loaned shares from the
Borrower back to the Lender.
Syndicate Member
One of a group of Broker-Dealers that agrees
to purchase a New Issue of securities from
the issuer for resale to the investment
public.
Trade Date
Date on which a trade is executed.
Trade-For-Trade Ticket
NSCC output containing deliver or receive
instructions for transactions that are
ineligible for CNS processing.
Turnaround Sell
To buy on Primary Market and sell in
Secondary Market on the same day. Both
trades settle on the same day.
Withdrawal-by-Transfer
(WT)
The withdrawal of physical certificates from
DTC for re-registration. The certificates are
transferred out of DTC's nominee name,
Cede &Co. , to a Participant or customer
name.
Appendix C
CODES
Deliver Order Reason Codes
REASON
CODE
DESCRIPTION
10
Stock Loan
11
Stock Loan Reclaim-DK
Receiver reclaims a Stock Loan delivery: the Receiver "doesn't
know" the trade.
12
Stock Loan Reclaim-Wrong Quantity
Receiver reclaims a Stock Loan delivery: the wrong quantity of
shares was delivered.
13
Stock Loan Reclaim-Wrong Security
Receiver reclaims a Stock Loan delivery: the wrong security was
delivered.
14
Stock Loan Reclaim-Wrong Money
Receiver reclaims a Stock Loan delivery: the money charged is
incorrect.
16
Stock Loan Reclaim-Account Information Missing
Receiver reclaims a Stock Loan delivery: additional account
information is needed to identify the original delivery.
17
Stock Loan Reclaim-Due Bill Missing
Receiver reclaims a Stock Loan delivery: the due bill is missing.
20
Stock Loan Return
21
Stock Loan Return Reclaim-DK
Receiver reclaims a Stock Loan Return delivery: the Receiver
"doesn't know" the trade.
22
Stock Loan Return Reclaim-Wrong Quantity
Receiver reclaims a Stock Loan Return delivery: the wrong
quantity of shares was delivered.
23
Stock Loan Return Reclaim-Wrong Security
Receiver reclaims a Stock Loan Return delivery: the wrong
security was delivered.
24
Stock Loan Return Reclaim-Wrong Money
Receiver reclaims a Stock Loan Return delivery: the money
charged is incorrect.
26
Stock Loan Return Reclaim-Account Information Missing
Receiver reclaims a Stock Loan Return delivery: additional account
information is needed to identify the original delivery.
27
Stock Loan Return Reclaim-Due Bill Missing
Receiver reclaims a Stock Loan Return delivery: the due bill is
missing.
30
Delivery versus Payment
40
Transfer of Customer Account
49
Initial Distribution via ID
50
Initial Distribution:
Lead Manager and Syndicate Members Deliver to Agent Banks or
Prime Brokers for Institutional customers. Shares are moved from
the Lead Manager's or Syndicate Member's IPO Control Account to
a Prime Broker's IPO Control Account, or to an Agent Bank's Free
Account.
51
New Issue Reclaim-DK
Receiver reclaims an Initial Distribution delivery: the Receiver
"doesn't know" the trade.
52
New Issue Reclaim-Wrong Quantity
Receiver reclaims an Initial Distribution delivery: the wrong
quantity of shares was delivered.
53
New Issue Reclaim-Wrong Security
Receiver reclaims an Initial Distribution delivery: the wrong
security was delivered.
54
New Issue Reclaim-Wrong Money
Receiver reclaims an Initial Distribution delivery: the money
charged is incorrect.
56
New Issue Reclaim-Account Information Missing
Receiver reclaims an Initial Distribution delivery: additional
account information is needed to identify the original delivery.
57
New Issue Reclaim-Due Bill Missing
Receiver reclaims an Initial Distribution delivery: the due bill is
missing.
530
Directed Concession Delivery:
Lead Manager delivers a block of IPO shares directly to a
Syndicate Member's Institutional customer (at its Agent Bank or
Prime Broker), at the Institution's request. Shares are moved from
the Lead Manager's IPO Control Account to a Prime Broker's IPO
Control Account, or to an Agent Bank's Free Account (and are
marked as IPO shares in the IPO database).
531
Directed Concession Reclaim-DK
Receiver reclaims a Directed Concession delivery: the Receiver
"doesn't know" the delivery.
532
Directed Concession Reclaim-Wrong Quantity
Receiver reclaims a Directed Concession delivery: the wrong
quantity of shares was delivered.
533
Directed Concession Reclaim-Wrong Security
Receiver reclaims a Directed Concession delivery: the wrong
security was delivered.
534
Directed Concession Reclaim-Wrong Money
Receiver reclaims a Directed Concession delivery: the money
charged is incorrect.
536
Directed Concession Reclaim-Need Account Information
Receiver reclaims a Directed Concession delivery: additional
account information is needed to identify the original delivery.
537
Directed Concession Reclaim-Due Bill Missing
Receiver reclaims a Directed Concession delivery: the due bill is
missing.
539
ID Directed Concession delivery.
540
Oversubscription delivery:
Delivery from the Lead Manager's Free Account to Syndicate
Member's or Prime Broker's IPO Control Account, or to an Agent
Bank's Free Account (and marked as IPO shares in the IPO
database).
541
Oversubscription Reclaim-DK
Receiver reclaims an Oversubscription delivery: the Receiver
"doesn't know" the delivery.
542
Oversubscription Reclaim-Wrong Quantity
Receiver reclaims an Oversubscription delivery: the wrong
quantity of shares was delivered.
543
Oversubscription Reclaim-Wrong Security
Receiver reclaims an Oversubscription delivery: the wrong security
was delivered.
544
Oversubscription Reclaim-Wrong Money
Receiver reclaims an Oversubscription delivery: the money
charged is incorrect.
546
Oversubscription Reclaim-Account Information Missing
Receiver reclaims an Oversubscription delivery: additional account
information is needed to identify the delivery.
547
Oversubscription Reclaim-Due Bill Missing
Receiver reclaims an Oversubscription delivery: the due bill is
missing.
549
ID Oversubscription Delivery
550
Oversubscription/Directed Concession Delivery:
Lead Manager delivers oversubscribed shares directly to a
Syndicate Member's Institutional customer (at its Agent Bank or
Prime Broker), at the Institution's request. Shares are moved from
the Lead Manager's IPO Control Account to a Prime Broker's IPO
Control Account, or to an Agent Bank's Free Account (and are
marked as IPO shares in the IPO database).
551
Oversubscription/Directed Concession Reclaim-DK
Receiver reclaims an Oversubscription/Directed Concession
delivery: the Receiver "doesn't know" the delivery.
552
Oversubscription/Directed Concession Reclaim-Wrong Quantity
Receiver reclaims an Oversubscription/Directed Concession
delivery: the wrong quantity of shares was delivered.
553
Oversubscription/Directed Concession Reclaim-Wrong Security
Receiver reclaims an Oversubscription/Directed Concession
delivery: the wrong security was delivered.
554
Oversubscription/Directed Concession Reclaim-Wrong Money
Receiver reclaims an Oversubscription/Directed Concession
delivery: the money charged is incorrect.
556
Oversubscription/Directed Concession Reclaim-Account
Information Missing
Receiver reclaims an Oversubscription/Directed Concession
delivery: additional account information is needed to identify the
delivery.
557
Oversubscription/Directed Concession Reclaim-Due Bill Missing
Receiver reclaims an Oversubscription/Directed Concession
delivery: the due bill is missing.
559
ID Oversubscription/Directed Concession Delivery
560
Co-Manager/Co-Reporter Delivery (IPO Foreign Distribution):
Lead Manager delivers shares to a second Lead Manager (CoManager) or to its own second Participant number (Co-Reporter).
561
Co-Manager/Co-Reporter Delivery Reclaim-DK
Receiver reclaims a Co-Manager/Co-Reporter delivery: the
Receiver "doesn't know" the delivery.
562
Co-Manager/Co-Reporter Delivery Reclaim-Wrong Quantity
Receiver reclaims a Co-Manager/Co-Reporter delivery: the wrong
quantity of shares was delivered.
563
Co-Manager/Co-Reporter Delivery Reclaim-Wrong Security
Receiver reclaims a Co-Manager/Co-Reporter delivery: the wrong
security was delivered.
564
Co-Manager/Co-Reporter Delivery Reclaim-Wrong Money
Receiver reclaims a Co-Manager/Co-Reporter delivery: the money
charged is incorrect.
566
Co-Manager/Co-Reporter Delivery Reclaim-Account Information
Missing
Receiver reclaims a Co-Manager/Co-Reporter delivery: additional
account information is needed to identify the delivery.
567
Co-Manager/Co-Reporter Delivery Reclaim-Due Bill Missing
Receiver reclaims a Co-Manager/Co-Reporter delivery: the due bill
is missing.
570
Syndicate Takedown
Delivery of shares from Lead Manager's IPO Control Account to
Syndicate Members' IPO Control Accounts.
571
Syndicate Takedown Reclaim-DK
Receiver reclaims a Syndicate Takedown delivery: the Receiver
"doesn't know" the delivery.
572
Syndicate Takedown Reclaim-Wrong Quantity
Receiver reclaims a Syndicate Takedown delivery: the wrong
quantity of shares was delivered.
573
Syndicate Takedown Reclaim-Wrong Security
Receiver reclaims a Syndicate Takedown delivery: the wrong
security was delivered.
574
Syndicate Takedown Reclaim-Wrong Money
Receiver reclaims a Syndicate Takedown delivery: the money
charged is incorrect.
576
Syndicate Takedown Reclaim-Account Information Missing
Receiver reclaims a Syndicate Takedown delivery: additional
account information is needed to identify the delivery.
577
Syndicate Takedown Reclaim-Due Bill Missing
Receiver reclaims a Syndicate Takedown delivery: the due bill is
missing.
ID Trade Input Market Codes and Information Warning Codes
Note- Market Codes are used for trade input. Market Codes should not be confused with Reason or
Activity Codes.
MARKET
CODE
DESCRIPTION
11
Syndicate Takedown
Lead Manager delivers shares to its Co-Managers, Co-Reporters
and Syndicate Members.
51
Directed Concession
Lead Manager delivers shares directly to a Syndicate Member's
Institutional customer (at its Agent Bank or Prime Broker), at the
Institution's request.
52
Oversubscription
Lead manager delivers shares from its Free Account to a
Syndicate Member's or Prime Broker's IPO Control Account or an
Agent Bank's Free Account (shares are marked as IPO shares in
the IPO database).
53
Oversubscription/Directed Concession
Lead Manager delivers oversubscribed shares directly to a
Syndicate Member's Institutional customer (at its Agent Bank or
Prime Broker), at the Institution's request.
WARNING
CODE
DESCRIPTION
91
Unmatched Agent Internal Account number. This warning
code will appear on ID Confirmation and Affirmation output.
DTC Output Activity and Reason Codes
ACTIVITY
CODE
REASON
CODE
26
DESCRIPTION
Stock Loan Returns of IPO shares to a Bank
26
10
Bank Stock Loan of IPO sharesn Stock Loans of
Free shares
26
20
Stock Loan Returns of Free shares
26
40
Broker transfers a customer's Free shares to
Broker
Broker transfers a customer's Free shares to
Bank
Bank transfers a customer's Free shares to
Broker
Bank transfers a customer's Free shares to
Bank
Bank transfers a customer's IPO shares to Bank
26
49
Agent Bank Initial Distribution ID delivery
Prime Broker Initial Distribution ID delivery
26
50
Agent Bank Initial Distribution DO/NDOM
delivery
Prime Broker Initial Distribution DO/NDOM
delivery
46
Release of shares from a Broker's IPO Control
Account to its Free Account via IPOU
47
40
Broker transfers a customer's IPO shares to
another Broker
47
49
Syndicate Member delivers Initial Distribution
shares to a Prime Broker via ID
47
50
Syndicate Member delivers Initial Distribution
shares to a Prime Broker via DO/NDOM
48
10
Broker Stock Loan of IPO shares
48
40
Broker transfers a customer's IPO shares to a
Bank
48
49
Syndicate Member delivers Initial Distribution
shares to an Agent Bank via ID
48
50
Syndicate Member delivers Initial Distribution
shares to an Agent Bank via DO/NDOM
49
20
Stock Loan Return of IPO shares to a Broker
49
40
Bank transfers IPO shares to a Broker
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