Needs to set points out (7)

I believe the answer is:

denotes

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'points out' is the definition.
The answer and definition can be both to do with communicating as well as being verbs in their -s form.
Perhaps there's a link between them I don't understand?

'needs to set' is the wordplay.
'set' indicates anagramming the letters (instruction to set the letters).
'needs'+'to'='needsto'
'needsto' with letters rearranged gives 'DENOTES'.

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I've seen this clue in The Guardian and The Globe and Mail.

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