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  • On the day before trade date (T-1), participants receive a Portfolio Composition File (PCF), either through a web-based application or in a data file, listing the securities in each ETF.  The data file also identifies the cash amount in each portfolio and other relevant information. Trades eligible for cash creates and redeems show a cash creation amount on the portfolio composition file.
  • On trade date (T), participants can place a create/redeem order through the distributor. The distributor delivers the order to the ETF agent. After receiving, the ETF agent transmits an Instruction file for the creates or redeems to NSCC.
  • On the night of T, NSCC transmits an Instruction Detail file showing the details of the creates and redeems to participants with activity. The information in the file can also be viewed by Members who subscribe to Universal Trade Capture (UTC) through that service’s data output. This report serves as the contract for the create/redeem activity.
  • Both the components underlying the ETF and the ETF itself are processed through DTCC’s normal equity clearance and settlement systems.
  • Create and redeem transaction fees are reflected separately in the participants End of Day settlement. Cash amounts for the transaction fees are sent directly to money settlement and are settled under a unique NSCC settlement codes. For standard portfolios, it is a code 54; for custom portfolio’s it is a code 55.

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