[16760]
November 12, 2003
TO: TAX COMMITTEE No. 73-03
RE: DTCC SERVICE AVAILABLE TO IDENTIFY TRUST-PREFERRED SECURITIES
As discussed at the recent Tax Committee meeting, the Depository Trust & Clearing
Corporation (“DTCC”) offers a service that identifies securities which are generally described as
equities but whose distributions are treated as interest (not dividends) for tax purposes. DTCC
reviews prospectus information in order to identify whether non-resident aliens are subject to
withholding on distributions. This information is reflected both in a “Tax Code” and an “NRA
Tax Indicator” included in the “DIVANN” file for DTCC participants. For non-participants,
DTCC offers this information for a fee through a service known as “Data Delivery Service.”
Generally this information is provided on an ongoing basis, i.e., each day the service
reports the codes associated with distributions announced that day. However, if a fund wanted
to know which securities in its portfolio paid dividends that should be treated as interest in the
past year, DTCC informs us that it would likely be possible to determine that information as
well.
DTCC is also considering whether to report exchange information for foreign securities,
or qualified dividend status for foreign dividends, in the future, but has not determined
whether it is feasible to report such information.
If you would like more information on the Data Delivery Service, please contact Patricia
Reilly of DTCC at 212/855-4028.
David Orlin
Assistant Counsel