Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Enhance Risk Management Controls Associated With the Receiver Authorized Delivery Function, 75570-75572 [2011-30980]
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Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
3001.111(b). Notices of intervention in
this case are to be filed on or before
December 23, 2011. A notice of
intervention shall be filed using the
Internet (Filing Online) at the
Commission’s Web site, https://www.prc.
gov, unless a waiver is obtained for
hardcopy filing. See 39 CFR 3001.9(a)
and 3001.10(a).
Further procedures. By statute, the
Commission is required to issue its
decision within 120 days from the date
it receives the appeal. See 39 U.S.C.
404(d)(5). A procedural schedule has
been developed to accommodate this
statutory deadline. In the interest of
expedition, in light of the 120-day
decision schedule, the Commission may
request the Postal Service or other
participants to submit information or
memoranda of law on any appropriate
issue. As required by Commission rules,
if any motions are filed, responses are
due 7 days after any such motion is
filed. See 39 CFR 3001.21.
It is ordered:
1. The procedural schedule listed
below is hereby adopted.
2. Pursuant to 39 U.S.C. 505, James
Callow is designated officer of the
Commission (Public Representative) to
represent the interests of the general
public.
3. The Secretary shall arrange for
publication of this notice and order and
Procedural Schedule in the Federal
Register.
By the Commission.
Shoshana M. Grove,
Secretary.
PROCEDURAL SCHEDULE
November 7, 2011 ..........................
November 22, 2011 ........................
November 22, 2011 ........................
December 23, 2011 ........................
December 12, 2011 ........................
January 3, 2012 ..............................
January 18, 2012 ............................
January 25, 2012 ............................
February 23, 2012 ..........................
Filing of Appeal.
Deadline for the Postal Service to file the applicable administrative record in this appeal.
Deadline for the Postal Service to file any responsive pleading.
Deadline for notices to intervene (see 39 CFR 3001.111(b)).
Deadline for Petitioners’ Form 61 or initial brief in support of petition (see 39 CFR 3001.115(a) and (b)).
Deadline for answering brief in support of the Postal Service (see 39 CFR 3001.115(c)).
Deadline for reply briefs in response to answering briefs (see 39 CFR 3001.115(d)).
Deadline for motions by any party requesting oral argument; the Commission will schedule oral argument
only when it is a necessary addition to the written filings (see 39 CFR 3001.116).
Expiration of the Commission’s 120-day decisional schedule (see 39 U.S.C. 404(d)(5)).
associated with DTC’s Receiver
Authorized Delivery (‘‘RAD’’) function.
[FR Doc. 2011–31035 Filed 12–1–11; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65831; File No. SR–DTC–
2011–08]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing of Proposed Rule Change To
Enhance Risk Management Controls
Associated With the Receiver
Authorized Delivery Function
November 28, 2011.
jlentini on DSK4TPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 2 thereunder,
notice is hereby given that on November
16, 2011, The Depository Trust
Company (‘‘DTC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared primarily by DTC. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change would
enhance the risk management controls
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
DTC included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. DTC has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
(1) The RAD function enables each
Participant to control and review a
Deliver Order (‘‘DO’’) 3 or a Payment
Order (‘‘PO’’) 4 that is directed to its
account by another Participant before its
account is updated. The RAD function
was built in 1990 to route money market
instrument (‘‘MMI’’) transactions for
3 A Deliver Order is the term used to define an
instruction initiating the book-entry transfer of a
security from one DTC Participant, as delivering
Participant, to another DTC Participant, as receiving
Participant.
4 A Payment Order is the term used to define an
instruction initiating a transaction in which a
Participant charges another Participant for changes
in value for outstanding stock loans or option
contract premiums. Payment orders involve no
securities, only money.
PO 00000
Frm 00053
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Sfmt 4703
receiver approval. In 1996, there was a
conversion for all transactions to settle
in same-day funds subject to the net
debit cap control 5 and collateral
controls.6 Any DO that obligated a
Participant to pay $15 million or more
and any PO that obligated a Participant
to pay $1 million or more became
subject to RAD. In order to minimize
blockage, DTC excluded from RAD any
DO under $15 million and any PO
under $1 million. Transactions in such
lower amounts were directed to the
account of the receiving Participant
without the RAD filter. For such lower
amounts, the receiving Participant has
the ability on the same day as the
original delivery to instruct a matched
5 The net debit cap control is designed so that
DTC may complete settlement even if a Participant
fails to settle. Before completing a transaction in
which a Participant is the receiver, DTC calculates
the effect the transaction would have on such
Participant’s account and determines whether any
resulting net debit balance would exceed the
Participant’s net debit cap. Any transaction that
would cause the net debit balance to exceed the
Participant’s net debit cap is placed on a pending
(recycling) queue until another transaction creates
sufficient credit in such Participant’s account so
that the net debit cap will not be exceeded.
6 An example of a collateral control is the
Collateral Monitor (‘‘CM’’). DTC tracks collateral in
a Participant’s account through the Collateral
Monitor. At all times, the CM reflects the amount
by which the collateral value in the account
exceeds the net debit balance in the account. When
processing a transaction, DTC verifies that the CM
of neither the deliverer nor the receiver will not
become negative when the transaction completes. If
the transaction would cause either party to have a
negative CM, the transaction will recycle until the
deficient account has sufficient collateral to
proceed or until the applicable cutoff occurs.
E:\FR\FM\02DEN1.SGM
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Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
jlentini on DSK4TPTVN1PROD with NOTICES
reclaim 7 transaction not subject to the
original delivering Participant’s
collateral monitor and net debit cap
controls.
With this rule filing, DTC is proposing
the following revisions to RAD:
(i) DTC will expand RAD to include
Omgeo Institutional Delivery (‘‘ID’’)
transactions in excess of $15 million at
the receiving Participant’s election. If no
election is made, these transactions will
be processed for receipt in the same
manner as they currently are processed.
(Currently, ID transactions are not
routed to RAD and are not subject to
matched reclaim.) The change will
reduce the receiving Participant’s risk
relating to ID transactions.
(ii) Participants will be able to elect to
have all free MMI deliveries bypass
RAD on a counterparty by counterparty
basis. Currently, all free money market
instrument (‘‘MMI’’) deliveries are
routed to RAD for receiver approval.8
The change will help facilitate customer
account transfers.
(iii) DTC will be able, in its discretion,
to apply RAD to all DOs and POs
initiated by a ‘‘Wind-Down
Participant’’ 9 regardless of value. A
receiving Participant will have the
option to raise its RAD limit in
accordance with its own transaction
management objectives (but not to
reinstitute matched reclaims in lieu of
RAD). DTC views this improvement as
a means for Participants, bilaterally, and
DTC, multilaterally, to manage liquidity
and credit risk in a Wind-Down scenario
and to eliminate the risk of matched
reclaims to a Wind-Down Participant.
(iv) DTC will exclude from RAD
certain receives or deliveries (e.g., the
OCC Market Loan program 10 account)
because these are effectively matched
and/or approved by other mechanisms.
DTC also seeks to conform the language
of its existing procedures pertaining to
processing of reclaims to its practices:
(v) Receiving Participants may, only
on the same day as the original delivery,
instruct a matched reclaim transaction.
7 A ‘‘reclaim’’ is a separate DO or PO that a
receiving Participant may use to return a DO or PO
(typically received in error).
8 A receiver that authorizes a free MMI
transaction is deemed to have made an agreement
with the deliverer that it will make payment outside
of DTC in accordance with the agreement of the
parties outside DTC. DTC does not monitor or
enforce compliance with such agreements.
Participants must enforce these agreements
themselves.
9 DTC Rule 32 defines a ‘‘Wind-Down
Participant’’ and provides for actions that may be
taken with respect to such a Participant.
10 For more information about the OCC’s Market
Loan Program, see Securities Exchange Release Act
No. 34–59298 (January 26, 2009) 74 FR 5692
(January 30, 2009) [SR–DTC–2008–15].
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17:03 Dec 01, 2011
Jkt 226001
Any such matched reclaim of a DO with
a settlement value of less than $15
million and a PO with a value less than
$1 million may be processed without
reference to the collateral monitor and
net debit cap controls for the original
delivering Participant.11
DTC has discussed these changes with
selected Participants and with its
Settlement Advisory Board which
agreed that these enhancements should
reduce risk.
These changes will be reflected in
revisions to the existing DTC Settlement
Services Guide, set forth in the attached
Exhibit 5.12
(2) The proposed rule change is
consistent with the requirements of the
Act, and the rules and regulations
thereunder applicable to DTC as well as
the CPSS/IOSCO Recommendations for
Securities Settlement Systems
applicable to DTC. The proposed change
is designed to facilitate the prompt and
accurate settlement of securities
transactions by promoting efficiencies
and reducing risk in the system.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
DTC does not believe that the
proposed rule change will have any
impact or impose any burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments relating to the
proposed rule change have not yet been
solicited or received. DTC will notify
the Commission of any written
comments received by DTC.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
shall: (a) By order approve or
disapprove such proposed rule change
or (b) institute proceedings to determine
whether the proposed rule change
should be disapproved.
11 For more information regarding this change, see
Securities Exchange Release Act No. 34–48121 (July
2, 2003) 68 FR 41030 (July 2, 2003) [SR–DTC–2003–
06].
12 The text of the proposed rule change is
available on DTC’s Web site at https://
www.dtcc.com/legal/rule_filings/dtc/2011.php.
PO 00000
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75571
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–DTC–2011–08 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–DTC–2011–08. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at DTC’s principal office and on
DTC’s Web site at https://www.dtc.org.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly.
All submissions should refer to File
Number SR–DTC–2011–08 and should
be submitted on or before December 23,
2011.
E:\FR\FM\02DEN1.SGM
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75572
Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–30980 Filed 12–1–11; 8:45 am]
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65832; File No. SR–Phlx–
2011–159]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Delay
Implementation of a Recently Effective
Modification to the Operation of the
Minimum Quantity Order on the
NASDAQ OMX PSX
November 28, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
23, 2011, NASDAQ OMX PHLX LLC
(‘‘Phlx’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by Phlx. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Phlx is filing this proposed rule
change to delay implementation of a
recently effective modification to the
operation of the Minimum Quantity
Order on the NASDAQ OMX PSX
(‘‘PSX’’) system. Phlx proposes to
implement the rule change prior to
December 31, 2011. The text of the
proposed rule change is available at
https://
nasdaqomxphlx.cchwallstreet.com/
nasdaqomxphlx/phlx, at Phlx’s
principal office, and at the
Commission’s Public Reference Room.
jlentini on DSK4TPTVN1PROD with NOTICES
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Mar<15>2010
19:31 Dec 01, 2011
Jkt 226001
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
Phlx recently submitted a filing to
modify the functionality of its Minimum
Quantity Order.3 In the filing, Phlx
stated that it expected to implement the
modification on or before November 30,
2011. Due to delays in programming the
change for use on PSX, Phlx is delaying
implementation of the change until
December, likely on December 19, 2011.
If Phlx does not implement the
proposed rule change by December 31,
2011, Phlx will submit a further
proposed rule change to reflect such
delay.4
2. Statutory Basis
Phlx believes that the proposed rule
change is consistent with the provisions
of Section 6 of the Act,5 in general, and
with Section 6(b)(5) of the Act,6 in
particular, in that the proposal is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. Specifically, Phlx
believes that the change to the
functioning of the Minimum Quantity
Order will provide market participants
with better control over their trading
patterns, thereby providing them with
greater potential to improve the quality
of their order executions. Phlx further
believes that the delayed
implementation date of the change will
3 Securities Exchange Act Release No. 65537
(October 12, 2011), 76 FR 64401 (October 18, 2011)
(SR–Phlx–2011–132).
4 Similar change to the Minimum Quantity Order
type offered by The NASDAQ Stock Market LLC
and NASDAQ OMX BX, Inc. were implemented on
November 14, 2011. See Securities Exchange Act
Release No. 65536 (October 12, 2011), 76 FR 64411
(October 18, 2011) (SR–NASDAQ–2011–140);
Securities Exchange Act Release No. 65535 (October
12, 2011), 76 FR 64416 (October 18, 2011) (SR–BX–
2011–069).
5 15 U.S.C. 78f.
6 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
have no material impact on market
participants.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Phlx does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 7 and paragraph (f)(1) of Rule
19b–4 thereunder.8
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–Phlx–2011–159 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–Phlx–2011–159. This file
7 15
8 17
E:\FR\FM\02DEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(1).
02DEN1
]]>Agencies
[Federal Register Volume 76, Number 232 (Friday, December 2, 2011)]
[Notices]
[Pages 75570-75572]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30980]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65831; File No. SR-DTC-2011-08]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change To Enhance Risk Management
Controls Associated With the Receiver Authorized Delivery Function
November 28, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on November 16, 2011, The Depository Trust Company (``DTC'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared primarily by DTC. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change would enhance the risk management controls
associated with DTC's Receiver Authorized Delivery (``RAD'') function.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, DTC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. DTC has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
(1) The RAD function enables each Participant to control and review
a Deliver Order (``DO'') \3\ or a Payment Order (``PO'') \4\ that is
directed to its account by another Participant before its account is
updated. The RAD function was built in 1990 to route money market
instrument (``MMI'') transactions for receiver approval. In 1996, there
was a conversion for all transactions to settle in same-day funds
subject to the net debit cap control \5\ and collateral controls.\6\
Any DO that obligated a Participant to pay $15 million or more and any
PO that obligated a Participant to pay $1 million or more became
subject to RAD. In order to minimize blockage, DTC excluded from RAD
any DO under $15 million and any PO under $1 million. Transactions in
such lower amounts were directed to the account of the receiving
Participant without the RAD filter. For such lower amounts, the
receiving Participant has the ability on the same day as the original
delivery to instruct a matched
[[Page 75571]]
reclaim \7\ transaction not subject to the original delivering
Participant's collateral monitor and net debit cap controls.
---------------------------------------------------------------------------
\3\ A Deliver Order is the term used to define an instruction
initiating the book-entry transfer of a security from one DTC
Participant, as delivering Participant, to another DTC Participant,
as receiving Participant.
\4\ A Payment Order is the term used to define an instruction
initiating a transaction in which a Participant charges another
Participant for changes in value for outstanding stock loans or
option contract premiums. Payment orders involve no securities, only
money.
\5\ The net debit cap control is designed so that DTC may
complete settlement even if a Participant fails to settle. Before
completing a transaction in which a Participant is the receiver, DTC
calculates the effect the transaction would have on such
Participant's account and determines whether any resulting net debit
balance would exceed the Participant's net debit cap. Any
transaction that would cause the net debit balance to exceed the
Participant's net debit cap is placed on a pending (recycling) queue
until another transaction creates sufficient credit in such
Participant's account so that the net debit cap will not be
exceeded.
\6\ An example of a collateral control is the Collateral Monitor
(``CM''). DTC tracks collateral in a Participant's account through
the Collateral Monitor. At all times, the CM reflects the amount by
which the collateral value in the account exceeds the net debit
balance in the account. When processing a transaction, DTC verifies
that the CM of neither the deliverer nor the receiver will not
become negative when the transaction completes. If the transaction
would cause either party to have a negative CM, the transaction will
recycle until the deficient account has sufficient collateral to
proceed or until the applicable cutoff occurs.
\7\ A ``reclaim'' is a separate DO or PO that a receiving
Participant may use to return a DO or PO (typically received in
error).
---------------------------------------------------------------------------
With this rule filing, DTC is proposing the following revisions to
RAD:
(i) DTC will expand RAD to include Omgeo Institutional Delivery
(``ID'') transactions in excess of $15 million at the receiving
Participant's election. If no election is made, these transactions will
be processed for receipt in the same manner as they currently are
processed. (Currently, ID transactions are not routed to RAD and are
not subject to matched reclaim.) The change will reduce the receiving
Participant's risk relating to ID transactions.
(ii) Participants will be able to elect to have all free MMI
deliveries bypass RAD on a counterparty by counterparty basis.
Currently, all free money market instrument (``MMI'') deliveries are
routed to RAD for receiver approval.\8\ The change will help facilitate
customer account transfers.
---------------------------------------------------------------------------
\8\ A receiver that authorizes a free MMI transaction is deemed
to have made an agreement with the deliverer that it will make
payment outside of DTC in accordance with the agreement of the
parties outside DTC. DTC does not monitor or enforce compliance with
such agreements. Participants must enforce these agreements
themselves.
---------------------------------------------------------------------------
(iii) DTC will be able, in its discretion, to apply RAD to all DOs
and POs initiated by a ``Wind-Down Participant'' \9\ regardless of
value. A receiving Participant will have the option to raise its RAD
limit in accordance with its own transaction management objectives (but
not to reinstitute matched reclaims in lieu of RAD). DTC views this
improvement as a means for Participants, bilaterally, and DTC,
multilaterally, to manage liquidity and credit risk in a Wind-Down
scenario and to eliminate the risk of matched reclaims to a Wind-Down
Participant.
---------------------------------------------------------------------------
\9\ DTC Rule 32 defines a ``Wind-Down Participant'' and provides
for actions that may be taken with respect to such a Participant.
---------------------------------------------------------------------------
(iv) DTC will exclude from RAD certain receives or deliveries
(e.g., the OCC Market Loan program \10\ account) because these are
effectively matched and/or approved by other mechanisms.
\10\ For more information about the OCC's Market Loan Program,
see Securities Exchange Release Act No. 34-59298 (January 26, 2009)
74 FR 5692 (January 30, 2009) [SR-DTC-2008-15].
---------------------------------------------------------------------------
DTC also seeks to conform the language of its existing procedures
pertaining to processing of reclaims to its practices:
(v) Receiving Participants may, only on the same day as the
original delivery, instruct a matched reclaim transaction. Any such
matched reclaim of a DO with a settlement value of less than $15
million and a PO with a value less than $1 million may be processed
without reference to the collateral monitor and net debit cap controls
for the original delivering Participant.\11\
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\11\ For more information regarding this change, see Securities
Exchange Release Act No. 34-48121 (July 2, 2003) 68 FR 41030 (July
2, 2003) [SR-DTC-2003-06].
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DTC has discussed these changes with selected Participants and with
its Settlement Advisory Board which agreed that these enhancements
should reduce risk.
These changes will be reflected in revisions to the existing DTC
Settlement Services Guide, set forth in the attached Exhibit 5.\12\
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\12\ The text of the proposed rule change is available on DTC's
Web site at https://www.dtcc.com/legal/rule_filings/dtc/2011.php.
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(2) The proposed rule change is consistent with the requirements of
the Act, and the rules and regulations thereunder applicable to DTC as
well as the CPSS/IOSCO Recommendations for Securities Settlement
Systems applicable to DTC. The proposed change is designed to
facilitate the prompt and accurate settlement of securities
transactions by promoting efficiencies and reducing risk in the system.
B. Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will have any
impact or impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments relating to the proposed rule change have not yet
been solicited or received. DTC will notify the Commission of any
written comments received by DTC.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission shall:
(a) By order approve or disapprove such proposed rule change or (b)
institute proceedings to determine whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-DTC-2011-08 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-DTC-2011-08. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at DTC's principal office and on DTC's Web site
at https://www.dtc.org. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly.
All submissions should refer to File Number SR-DTC-2011-08 and
should be submitted on or before December 23, 2011.
[[Page 75572]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30980 Filed 12-1-11; 8:45 am]
BILLING CODE 8011-01-P
