2 ms·

Question: According to this, all the actual share certificates are held in a vault at DTC. Do people have a right to "cash out" and demand physical share certif

Question: According to this, all the actual share certificates are held in a vault at DTC. Do people have a right to "cash out" and demand physical share certificates? If so, it seems like if a large number of people suddenly started demanding share certificates, this could cause problems for DTC and show this problem for what it is. Essentially a "run on the bank".

JumpCrisscross 6y ago
> it seems like if a large number of people suddenly started demanding share certificates, this could cause problems for DTC No it wouldn’t. You would be delivered shares within two days as is required. Lots of institutions don’t hold their shares “in street name,” i.e. they hold them in their own. And some people still demand physical certification. (Not every issuer supports this, largely due to exchange rules.)
- hlandau 6y ago
  If the number of share certificates being requested exceeds the number of share certificates existing, how would they do this?
  - JumpCrisscross 6y ago
    > If the number of share certificates being requested exceeds the number of share certificates existing, how would they do this? When a stock has 140% short interest, there are net 40% of the float of holders who have loaned out their shares. They wouldn’t have the right to certificate until they called back their shares. If literally everyone asked for delivery, you’d wind up with the naked shorts needing to pay up to some of those taking delivery to settle their positions. If everyone refuses to sell, those naked shorts would FTD, and the appropriate processes would take over. Long story short, nothing intrinsic to the DTCC creates net over or under allotment. Companies go private all the time, which is a functional case of all of a company’s shares being taken out of the DTCC.

2 ms·

Question: According to this, all the actual share certificates are held in a vault at DTC. Do people have a right to "cash out" and demand physical share certif

by hlandau 6y ago

JumpCrisscross 6y ago
> it seems like if a large number of people suddenly started demanding share certificates, this could cause problems for DTC No it wouldn’t. You would be delivered shares within two days as is required. Lots of institutions don’t hold their shares “in street name,” i.e. they hold them in their own. And some people still demand physical certification. (Not every issuer supports this, largely due to exchange rules.)
- hlandau 6y ago
  If the number of share certificates being requested exceeds the number of share certificates existing, how would they do this?
  - JumpCrisscross 6y ago
    > If the number of share certificates being requested exceeds the number of share certificates existing, how would they do this? When a stock has 140% short interest, there are net 40% of the float of holders who have loaned out their shares. They wouldn’t have the right to certificate until they called back their shares. If literally everyone asked for delivery, you’d wind up with the naked shorts needing to pay up to some of those taking delivery to settle their positions. If everyone refuses to sell, those naked shorts would FTD, and the appropriate processes would take over. Long story short, nothing intrinsic to the DTCC creates net over or under allotment. Companies go private all the time, which is a functional case of all of a company’s shares being taken out of the DTCC.