# Understanding DWAC: Electronic Securities Transfers Explained

## What Is Deposit/Withdrawal at Custodian?

Deposit/Withdrawal at Custodian (DWAC) is a service offered by the Depository Trust Company (DTC) designed for the electronic transfer of securities. Utilizing the Fast Automated Securities Transfer Program (FAST), this process allows for efficient movement of shares between brokers and transfer agents, eliminating the need for physical [share certificates](https://www.investopedia.com/terms/s/share-certificate.asp) and speeding up settlement times.

DWAC is one of two ways of transferring securities between broker/dealers and the DTC. The second is the Direct Registry System (DRS). Both systems enable investors to hold securities in registered form on the books of the transfer agent, rather than as paper certificates in their homes. When transfers are requested, they happen electronically; no certificates are physically moved.

DRS is different from DWAC in that shares have already been issued, registered to owners, and are held electronically on the books of a transfer agent.

### Key Takeaways

*   Deposit/Withdrawal at Custodian (DWAC) is an electronic service by the [Depository Trust Company](https://www.investopedia.com/terms/d/dtc.asp) allowing quick transfer of securities without physical certificates.
*   DWAC utilizes the Fast Automated Securities Transfer Program (FAST) to enhance the efficiency and security of share transfers.
*   Brokers and custodial banks who are DTC participants can request the transfer of shares using DWAC.
*   Unlike DWAC, the Direct Registry System (DRS) handles already issued shares registered in electronic form.  
    The DTC processes approximately 1.4 million settlement transactions every day, worth around $600 billion.  
    

## How DWAC Works: An Investor's Guide

DWAC is an electronic process of transferring securities between a broker and a transfer agent. It offers a number of benefits to investors, including time savings, cost savings, and low risk.

As an electronic system, DWAC allows the for immediate transfer of securities to a [brokerage account](https://www.investopedia.com/terms/b/brokerageaccount.asp). No time is involved or required for the [physical delivery](https://www.investopedia.com/terms/p/physicaldelivery.asp) of share certificates, so the settlement process is more efficient and faster. It also saves on costs associated with printing a physical certificate and mailing it.

Because no physical certificates are transferred, there is no risk of loss or damage that might occur when transporting and handling such certificates.

While not typically a concern of investors, there are several requirements for the DWAC. Shares must be free trading or eligible for restriction removal. The [broker](https://www.investopedia.com/terms/b/broker.asp) must be a DTC participant, and the issuer must be DWAC-eligible.

> **Fast Fact**
>
> The DTC, which offers DWAC, handles around 1.4 million settlement-related transactions every day. These transactions are valued at approximately $600 billion.

## Understanding the FAST Program in DWAC Transfers

FAST is a contract between DTC and [transfer agents](https://www.investopedia.com/terms/t/transferagent.asp) whereby FAST agents act as custodians for the DTC. It eliminates the movement of physical securities. It was established in 1975.

According to the DTC, the FAST program "facilitates the industry’s dematerialization efforts and plays a significant role in reducing the costs associated with shipping certificates to and from agents as well as those related to printing and processing certificates." [Money market](https://www.investopedia.com/terms/m/moneymarket.asp) securities can't participate in the FAST program.

## Requesting and Receiving Physical Stock Certificates

While this process is electronic, shareholders can still withdraw their stock from their [brokerage accounts](https://www.investopedia.com/terms/b/brokerageaccount.asp) and request a physical [stock certificate](https://www.investopedia.com/terms/s/stockcertificate.asp). They must ask the broker initiate the request through the DTC or have the broker send the shares electronically to the transfer agent through the DWAC system.

There may be fees for this service. The withdrawal of shares as physical certificates generally requires a [Medallion Signature Guarantee](https://www.investopedia.com/terms/m/medallionsignatureguarantee.asp)—a certification stamp that guarantees the signature on a share certificate is authentic.

[Shareholders](https://www.investopedia.com/terms/s/shareholder.asp) can deposit their stock into a brokerage account by either sending their actual stock certificate(s) to their broker or by having the transfer agent send the shares directly to the broker using the DWAC system.

To deposit your shares to your broker via DWAC, shareholders must provide original stock certificate(s), the DWAC deposit form, and applicable fees.

## Is DWAC Provided by DTC Only?

Yes, DWAC is a service offered by the Depository Trust Company. DWAC is a method of requesting the deposit or withdrawal of securities to or from a transfer agent.

## What Does the DTC Do?

The DTC, which is a subsidiary of the Depository Trust & Clearing Corporation (DTCC), provides transfers and trade settlement services for U.S. equity, corporate, municipal debt, and money market transactions. It also provides for the safekeeping and asset servicing of securities of 131 countries and territories valued at approximately $37 trillion.

## Does My Broker Use DWAC?

It may. For example, if you want to transfer securities to your broker, the broker would provide you with an authorization form to allow for the use of either a Deposit/Withdrawal at Custodian or the Direct Registry System. DWAC handles the electronic transfer of new or certified paper shares. The DRS handles the electronic transfer of shares that have been already issued and are registered to you.

## The Bottom Line

Deposit/Withdrawal at Custodian, or DWAC, is a service provided by the Depository Trust Company. It allows DTC participants—brokers and custodial banks—to request the transfer of securities using the FAST system between a transfer agent and a broker.

> **Article Sources**
>
> 1.  DTCC. "[Deposit/Withdrawal at Custodian](https://www.dtcc.com/settlement-and-asset-services/securities-processing/deposit-withdrawal-at-custodian)."
>     
> 2.  DTCC. "[FAQs: How Issuers Work With DTC](https://www.dtcc.com/settlement-and-asset-services/issuer-services/how-issuers-work-with-dtc#:~:text=In%20this%20regard%2C%20DTC%20holds,payment%20or%20delivery%20versus%20payment.)."
>     
> 3.  DTCC. "[The FAST Program](https://www.dtcc.com/settlement-and-asset-services/agent-services/fast)."
>     
> 4.  Merrill. "[Incoming Direct Registration System/Deposit and Withdrawal at Custodian Authorization Letter](https://olui2.fs.ml.com/publish/content/application/pdf/GWMOL/TransferSecurityFromATransferAgency.pdf)."