A Participant can activate any of five Memo Segregation indicators by providing DTC with a standing Memo Segregation instruction. When the Participant activates a Memo Segregation indicator, the Participant’s free position and Memo Segregation position are automatically updated according to the indicators that the Participant has elected.

Activate Indicator

To

1 Automatically increase the Participant’s Memo Segregation counter upon the receipt of:
  • Free and valued DOs with reason codes 40, 99, 330, & 340
  • DRS-related Deliveries with reason codes 390 and 391
  • WT reversals
  • Positions resulting from voluntary and mandatory reorganizations.
2 Automatically increase the Participant’s Memo Segregation counter upon receipt of transactions with reason codes 41-48, 331-338, and 341-348.
3 Automatically increase the Participant’s Memo Segregation counter upon the receipt of CNS receives from the Fully-Paid-For Securities or "E" account.
4 Turnaround securities positions, regardless of Memo Segregation constraints, for positions received from DOs with reason codes 10 ,30, and 600, except those with reason codes 10, 20, 260, 270, 280, or 290.
5 Turnaround securities positions, regardless of Memo Segregation constraints, for positions received from:

All DOs, except those with reason codes 20-29, 40 - 48, 99, 261-268, 270-278, 290, 291, 330-338, 340-348, 390, 610-619, 705-707 and CNS receives from the “C” and “E” accounts except if the turnaround is a reason code 10, 20, 260, 270, 280, or 290.

 6  A Participant may elect to increase automatically its Memo Segregation counter by the units of securities credited to the Participant’s account in any ACATS transfer to that account.

 

Memo Segregation indicators 4 and 5 control the capability that allows certain positions to be used for turnarounds up to the amount of the received position, regardless of Memo Segregation constraints.

Even if the Participant has no pending deliveries at the time a position is received from a DO with reason code 10 or 30, DTC retains, throughout that day's processing cycle, a notation of the number of shares received from such deliveries. DTC also processes any deliveries regardless of when they are submitted that day, up to that number, regardless of the Participant’s Memo Segregation position.



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