Guides
  1. DDM
  2. DDM Program Fundamentals
  3. Operating Models

Indirect-Source Model

In an Indirect-Source operating model, the Source Institution (e.g. a state-chartered trust company) is the institution that acts as the Customer's agent to facilitate its Customer Funds being sent into the DDM Program through the Participating Institution (e.g. a bank).

Roles and Responsibilities

Source Institution

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 Funds into the DDM Program.

R&T has internal requirements relating to Participating 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.

For ease, in this document, with respect to the Indirect-Source model of the DDM Program, references to Sending Institution may mean the Source Institution or Sending Institution, as applicable.

Sending Institution

Under an Indirect-Source model of the DDM Program, the Sending Institution is the Participating Institution that receives funds sent into the DDM Program from a Source Institution (as agent on behalf of its Customers) and then sends those funds into the DDM Program.

Administrator

→ See: Administrator.

Settlement Bank, Custodian, and Sub-Custodian Bank

→ See: Settlement Bank, Custodian, and Sub-Custodian.

Customer Cash Balances

Customers hold deposits directly with the Source Institution.

Transmission to DDM

Information is transmitted directly into the DDM Program through the Source Institution's established connectivity and operational workflow.

Receiving Institution

→ See: Receiving Institutions.

Processing Variations

In an Indirect-Source operating model, the flow of funds in the DDM Program can follow different operational paths depending on how custodial responsibilities, reciprocal participation, and distribution mechanics are configured. The sections below outline the primary Indirect-Source variations referenced in the DDM Program architecture. Each variation reflects a distinct operational arrangement and may be subject to specific eligibility, processing, and reporting considerations.

Broker-Dealer - Sweep

Broker-Dealer - Sweep is an Indirect-Source, reciprocal processing variation in which a broker-dealer, through an affiliated bank, automatically sweeps client deposits into the DDM Program. The affiliated bank serves as the participating Sending Institution, enabling funds to flow into the DDM Program and return from it as part of a structural reciprocal arrangement.

This structure supports ongoing balance management rather than transaction-by-transaction placement.

Indirect-Source through Reciprocal Institution

In the Indirect-Source through Reciprocal Institution variation of the Indirect-Source model, a state-chartered trust company, acting as a Source Institution, is paired with a single participating bank. The bank acts as the Sending Institution, transmitting Customer Funds into the DDM Program on behalf of the trust company.

Under this structure, the trust company acts as the Source Institution and the bank acts as a Reciprocal Institution, receiving allocated balances back from the DDM Program. The trust company and the bank negotiate program rates and economic terms governing both the placement and return of funds.

This model variation enables the trust company to participate in the DDM Program while ensuring that all money movements with the program are executed by a federally regulated institution.

Indirect-Source through Custodian Bank

The Indirect-Source through Custodian Bank model facilitates deposit placement and movement through a centralized intermediary structure. This variation is utilized when a Source Institution (e.g. state-chartered trust company) leverages the Custodian Bank to interface with the DDM Program.

In this model, the Custodian Bank acts as a sending institution of the DDM Program. The Administrator manages the operational flow and facilitates instructions for money movement between the Source Institution’s settlement accounts and the Custodian Bank's program-specific accounts to ensure daily reconciliation and expanded deposit insurance optimization.

Multi-Bank Distribution (MBD)

Multi-Bank Distribution (MBD) is an Indirect-Source variation in which a state-chartered trust company, acting as the Source Institution, distributes customer funds across multiple participating banks rather than relying on a single bank (those banks then act as reciprocal institutions following the Indirect-Source through the Reciprocal Institution model).

Under an MBD structure, one participating bank is designated to handle daily transactional activity and balance volatility, while additional banks receive fixed or capped allocations based on negotiated agreements. Each bank operates under with its own terms agreed to with the trust company.

This model variation allows the trust company to optimize income by negotiating rates across banks while maintaining operational stability and regulatory compliance.

What's Next

Updated 9 days ago

Did this page help you?

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.

© 2026 R&T Deposit Networks, LLC

Privacy Policy Privacy Policy – CA Terms of Use Legal Disclosures Receiving Institution Lists DDM Program Limit Do Not Share My Personal Information Cookies