Guides
  1. DDM
  2. DDM Program Fundamentals

Overview

What is DDM?

The Demand Deposit Marketplace® (DDM®) Program (DDM Program) is a configurable cash management solution that R&T1 makes available to participating financial institutions (Participating Institution), giving a Participating Institution the ability to offer its customers access to an expanded level of Deposit Insurance coverage on their funds by spreading their funds across a network of other Participating Institutions, while also providing a powerful tool to help manage their balance-sheet liquidity and deposit funding needs. An institution can participate in the DDM Program through Send-Only Institution, Receive-Only Institution, and Reciprocal Institution participation options.

DDM Program Roles and Responsibilities

The DDM Program involves a number of key participants, each with its own roles and responsibilities.

Customer

The Customer is the deposit or other customer that sweeps or places its Client's Customer Funds into the DDM Program for the purpose of accessing expanded Deposit Insurance coverage on those funds. Customers may include individuals, corporations, businesses, municipalities and non-profit organizations.

  • Under the Indirect-Source model of the DDM Program, the Customer is a depositor of the Source Institution.

  • Under the Direct-Source model of the DDM Program, the Customer is a depositor of the Sending Institution.

Sending Institution

A Sending Institution is the Participating Institution that transmits Customer Funds into the DDM Program. Its functional designation is determined by the selected operating model.

Depending on the operating model that a Sending Institution uses to participate in the DDM Program, whether Direct-Source or Indirect-Source, such institution could operate as a Source Institution or a Sending Institution, each with its own roles and responsibilities.

→ See: Operating Models

Source Institution

R&T has internal requirements relating to institutions that can act as a Source Institution under the DDM Program. For example, a Source Institution may be a state chartered trust company or other entity approved by R&T.

Under an Indirect-Source model of the DDM Program, the Source Institution is the Participating Institution with whom a Customer has its primary relationship and which acts as its Customer’s agent to send its Customer’s funds into the DDM Program.

With respect to the Indirect-Source model, references to Sending Institution may mean the Source Institution or Sending Institution, as applicable.

Under a Direct-Source model of the DDM Program, there is no separate Source Institution – only a Sending Institution on the send-side.

Receiving Institution

A Receiving Institution is a Participating Institution that receives funds sent into the DDM Program by other Sending Institutions. The Receiving Institution maintains those funds in one or more Program Accounts established at that Receiving Institution as part of the DDM Program.

A Receiving Institution does not own the Customer relationship and does not originate Customer Funds. Instead, it participates in the DDM Program by receiving and holding, in Program Accounts, allocated Customer Deposits that have been sent into the DDM Program by a Sending Institution which maintains the Customer relationship.

A Receiving Institution may participate in the DDM Program in one of two capacities. As a:

  • Receive-Only Institution: where the institution receives funds sent into the DDM Program by other Sending Institutions, but does not send funds into the DDM Program; or

  • Reciprocal Institution: where the institution both sends funds into the DDM Program and receives funds from the DDM Program.

Administrator

R&T (through the RTDM entity) acts as the administrator of the DDM Program and provides administrative services to Participating Institutions with respect to the DDM Program, such as managing operational workflows, reporting, reconciliation, and allocations.

Settlement Bank, Custodian, and Sub-Custodian

The DDM Program utilizes a Settlement Bank, Custodian, and Sub-Custodian structure:

  • The Settlement Bank maintains certain Settlement Accounts for the DDM Program and facilitates the movement of funds to and from the DDM Program (i.e., for deposits to, and withdrawals from, the DDM Program) based on files received from R&T (which, in turn, are based on instructions R&T receives from the Participating Institutions and their Servicers).

  • The Custodian holds all funds maintained in the Settlement Accounts at the Settlement Bank and Program Accounts at the Receiving Institutions in custody.

  • The Sub-Custodian acts as sub-custodian of the Custodian to hold funds maintained in certain Settlement Accounts and Program Accounts in custody. Currently, an affiliate of R&T, Stable Custody Group II LLC acts as Sub-Custodian for the DDM Program.

Agent of Sending Institutions

Under the DDM Program, in addition to acting as the Sub-Custodian for the DDM Program, Stable Custody Group II LLC also acts as the relevant Sending Institution’s agent for the limited purpose of holding the Sending Institution’s Customers’ funds in certain Settlement Accounts and Program Accounts under the DDM Program.

What's Next

1 “R&T” is used, generally, to refer to R&T Deposit Solutions. Specifically, (i) with respect to the DDM Program and CDMX Program, R&T means the administrator of those programs, being R&T Deposit Marketplace, LLC (d/b/a R&T Deposit Solutions) and (ii) respect to the RTID Program, R&T means the administrator of that program, being R&T Deposit Solutions, LLC (d/b/a R&T Deposit Solutions).

Updated about 1 month ago

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R&T Deposit Networks, LLC, R&T Deposit Marketplace, LLC, R&T Deposit Solutions, LLC and R&T Deposit Programs, LLC (each d/b/a R&T Deposit Solutions), each a Delaware limited liability company, (together, “R&T”) provide administrative, recordkeeping, and/or other services to banks, credit unions, trust companies, wealth management firms, broker-dealers and other institutions with respect to deposit placement and sweep programs, including the Demand Deposit Marketplace® (DDM®), Certificate of Deposit Marketplace Exchange℠ (CDMX℠) and R&T Insured Deposits℠ (RTID®) programs, as well as other services. An affiliate of R&T, Stable Custody Group II LLC (“Stable”), acts as agent of participating sending institutions under the DDM and CDMX programs. R&T and Stable, together, “we”, “us” or “our”. All of our services are provided subject to the terms and conditions of the written agreements and/or agency appointments between us and our clients with respect to those services, and we provide no representations or warranties, express or implied, except as expressly set forth in those written agreements and/or appointments. Click here for our legal and other disclosures. We are not an FDIC or NCUA-insured institution. FDIC insurance only covers the failure of an FDIC-insured institution. NCUA insurance only covers the failure of an NCUA-insured institution. Certain conditions must be satisfied for FDIC and NCUA pass-through deposit insurance coverage to apply. Click here for a list of the FDIC and NCUA-insured institutions with which R&T has a direct or indirect business relationship for the placement of deposits under the DDM, CDMX, and RTID programs, and into which a participating institution may place deposits (subject to the terms of those programs and any opt-outs by the participating institution and/or its customers). While the DDM, CDMX, and RTID programs provide access to an expanded level of FDIC or NCUA deposit insurance coverage on funds placed into the programs (subject to program terms and applicable laws, regulations and guidance, including pass-through insurance coverage requirements), the DDM, CDMX and RTID programs, themselves, as well as our other service offerings, are not insured or guaranteed by the FDIC or NCUA, are not deposits, and may lose value. We are not an affiliate of an FDIC or NCUA-insured institution, we are not an office, division, or sub-division of the FDIC or NCUA, and we are not associated with the FDIC or NCUA or office, division, or sub-division thereof. The primary objective of the DDM, CDMX, and RTID programs is to provide customers with convenient access to expanded deposit insurance coverage on their funds (and not for investment enhancements, higher rates of returns or profits). R&T®, Reich & Tang®, Demand Deposit Marketplace®, DDM®, DepositView®, CDMX®, and RTID® are registered marks, and R&T Direct℠ is a pending mark of R&T Deposit Networks, LLC. of R&T Deposit Networks, LLC. IDEA℠, Certificate of Deposit Marketplace Exchange℠, R&T Insured Deposits℠ are unregistered service marks of R&T Deposit Networks, LLC.

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