Deposit/withdrawal at custodian (DWAC) is a method of electronically transferring new shares or paper share certificates to and from the Depository Trust Company (DTC) using a Fast Automated Securities Transfer (FAST) service transfer agent as the distribution point. The DWAC is one of two ways of transferring between broker/dealers and the DTC, the other being the Direct Registry System (DRS) method. The DWAC process begins with an instruction from a customer to their broker/dealer to deposit new shares or certificates into DTC on their behalf. Once received, the broker will initiate a FAST transfer through its service provider which will in turn send instructions electronically to DTCC's FAST system. DTCC then notifies its member banks who act as custodians for these securities that they have received new deposits and should credit them accordingly. In order for withdrawals to take place, customers must provide similar instructions directly to their brokers who will then request release authority from DTCC's FAST system before sending out withdrawal requests through their respective service providers. Again, member banks are notified by DTCC when withdrawals have been authorized and they should debit customer accounts accordingly."The Deposit Withdrawal at Custodian process provides investors with an efficient way of exchanging securities between themselves and DTC utilizing FAST transfers through approved transfer agents. This system allows investors direct communication with their brokers regarding deposits and withdrawals rather than having to go through intermediaries such as DTCC thus providing more control over transactions while maintaining security measures instituted by SROs including FINRA.This system allows investors to move securities between accounts at different brokerages even if they do not have accounts with the same transfer agent. A.G. Edwards & Sons, Inc. and Merrill Lynch, Pierce, Fenner & Smith, Incorporated (now a part of Bank of America) are two such transfer agents that participate in the Deposit Withdrawal at Custodian process.
