WHAT IS DTC ELIGIBILITY?DTC Eligibility means that a public company’s securities are able to be deposited through DTC. DTC is the largest securities depository in the world and holds over thirty-five trillion dollars worth of securities on deposit. DTC accepts deposits of securities from its participants only, who are usually clearing firms. Most brokers clear stock in-house or hire a clearing firm to do so on their behalf. All movements of securities are made to the participant’s account electronically with book-entry adjustments.
If an issuer is not DTC eligible, then its shares cannot be transferred between brokerage accounts electronically, which basically means its shares cannot be traded easily. Major Exchanges such as NYSE and NASDAQ require DTC eligibility.