Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Reorganizations Service Guide, 26466-26480 [2019-11802]
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Federal Register / Vol. 84, No. 109 / Thursday, June 6, 2019 / Notices
review of the initial Form ATS–N
disclosures and discussions with CODA.
In the conversations between CODA
and Commission staff about the initial
Form ATS–N disclosures and the ATS
operations, Commission staff and CODA
have discussed a potential amendment
to update CODA’s disclosures regarding
the complexities of its operations.
Extending the review period will enable
the NMS Stock ATS to amend its
disclosures, if appropriate, and allow
Commission staff to conduct a thorough
review of amendments to the initial
disclosures provided on the initial Form
ATS–N.
For the reasons given above, the
Commission is extending the review
period of the initial Form ATS–N
submitted by CODA. Accordingly,
pursuant to Rule 304(a)(1)(iv)(B),
October 6, 2019 is the date by which the
Commission may declare the initial
Form ATS–N submitted by CODA
ineffective.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–11836 Filed 6–5–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86014; File No. 013–00108]
Initial Form ATS–N Filing; Notice of
Extension of Commission Review
Period
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June 3, 2019.
On February 8, 2019, Instinet
BlockCross filed an initial Form ATS–N
(‘‘Form ATS–N’’) with the Securities
and Exchange Commission
(‘‘Commission’’). Pursuant to Rule 304
under the Securities and Exchange Act
of 1934 (‘‘Act’’), the Commission may,
after notice and an opportunity for
hearing, declare an initial Form ATS–N
ineffective no later than 120 days from
the date of filing with the Commission,
or, if applicable, the extended review
period. June 8, 2019 is 120 calendar
days from the date of filing. Pursuant to
Rule 304(a)(1)(iv)(B), the Commission
may extend the initial Form ATS–N
review period for up to an additional
120 calendar days if the initial Form
ATS–N is unusually lengthy or raises
novel or complex issues that require
additional time for review.
Instinet BlockCross was operating
pursuant to an initial operation report
on Form ATS on file with the
Commission as of January 7, 2019.1
1 An
NMS Stock ATS (as defined in Rule 300(k)
of Regulation ATS) that was operating pursuant to
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Instinet BlockCross filed an initial Form
ATS–N on February 8, 2019. During the
initial 120 calendar day review period,
the Commission staff has been
reviewing the disclosures on Instinet
BlockCross’s initial Form ATS–N. In
addition, the staff has been engaged in
ongoing discussions with Instinet
BlockCross about its disclosures and
manner of operations, as well as the
requirements of Form ATS–N, to
facilitate complete and comprehensible
disclosures that reflect the complexities
of those operations.
Form ATS–N requires NMS Stock
ATSs to file with the Commission, and
disclose to the public for the first time,
certain information, including
descriptions by the NMS Stock ATSs of
their fees, the trading activities by their
broker-dealer operators and their
affiliates in the NMS Stock ATSs, their
use of market data, their written
standards for granting access to trading
on the NMS Stock ATSs, and their
written safeguards and procedures for
protecting their subscribers’ confidential
trading information required by revised
Rule 301(b)(10) of Regulation ATS. The
initial Form ATS–N disclosures and
discussions with Commission staff have
revealed complexities about the
operations of Legacy NMS Stock ATSs
including, among other things, matching
functionalities, means of order entry,
order interaction and execution
procedures, conditional order processes,
segmentation of orders, and
counterparty selection protocols. The
Commission staff needs additional time
to review novel and complex issues
such as these, which Commission staff
has discussed with Instinet BlockCross.
Extending the initial Form ATS–N
Commission review period for an
additional 120 calendar days will
provide Commission staff an
opportunity to continue its review of the
initial Form ATS–N disclosures and
discussions with Instinet BlockCross.
In the conversations between Instinet
BlockCross and Commission staff about
the initial Form ATS–N disclosures and
the ATS operations, Commission staff
and Instinet BlockCross have discussed
a potential amendment to update
Instinet BlockCross’s disclosures
regarding the complexities of its
operations. Extending the review period
will enable the NMS Stock ATS to
amend its disclosures, if appropriate,
and allow Commission staff to conduct
a thorough review of amendments to the
initial disclosures provided on the
initial Form ATS–N.
an initial operation report on Form ATS on file with
the Commission as of January 7, 2019 is a ‘‘Legacy
NMS Stock ATS.’’ 17 CFR 242.301(b)(2)(viii).
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For the reasons given above, the
Commission is extending the review
period of the initial Form ATS–N
submitted by Instinet BlockCross.
Accordingly, pursuant to Rule
304(a)(1)(iv)(B), October 6, 2019 is the
date by which the Commission may
declare the initial Form ATS–N
submitted by Instinet BlockCross
ineffective.
By the Commission.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11892 Filed 6–5–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85986; File No. SR–DTC–
2019–003]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
the Reorganizations Service Guide
May 31, 2019.
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 May 21,
2019, 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 by the clearing
agency. DTC filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(4)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change by DTC
would revise the Reorganizations
Service Guide (‘‘Guide’’) 5 to: (1) Update
its corporate action service by
transitioning corporate action 6
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(4).
5 Each capitalized term not otherwise defined
herein has its respective meaning as set forth in the
Rules, By-Laws and Organization Certificate of DTC
(‘‘DTC Rules’’) and in the Guide, available at https://
www.dtcc.com/legal/rules-and-procedures.aspx.
6 DTC offers an array of services for processing
corporate action events. The services fall into three
categories: (i) Distributions, such as cash and stock
dividends, principal and interest, and capital gain
distributions (collectively, ‘‘Distributions’’); (ii)
2 17
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functions on its Participant Terminal
System (‘‘PTS’’) and its Participant
Browser Service (‘‘PBS’’) systems 7 for
the processing of Reorganizations to its
Corporate Action Web (‘‘CA Web’’)
system; 8 and (2) restructure, streamline
and clarify the Guide for enhanced
transparency and clarity, as more fully
described below.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency 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. The
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
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The proposed rule change by DTC
would revise the Guide to: (1) Update its
corporate action service by transitioning
corporate action functions on its PTS
and PBS systems for the processing of
Reorganizations to its CA Web system;
and (2) restructure, streamline and
clarify the Guide for enhanced
transparency and clarity, as more fully
described below.
redemptions such as full and partial calls, final
paydowns, and maturities (collectively,
‘‘Redemptions’’); and (iii) reorganizations, which
include both mandatory and voluntary
reorganizations such as exchange offers,
conversions, Dutch auctions, mergers, puts, reverse
stock splits, tender offers, and warrant exercises
(collectively, ‘‘Reorganizations’’).
7 PTS and PBS are user interfaces for DTC’s
Settlement and Asset Services functions. PTS is
mainframe-based and PBS is web-based with a
mainframe back-end. Participants may use either
PTS or PBS, as they are functionally equivalent.
References to a particular PTS function in this rule
filing include the corresponding PBS function.
8 In PTS/PBS, corporate actions are announced
using DTC proprietary codes to signify event types.
CA Web replaces DTC’s proprietary codes with
market standard language. For example, a cash
dividend payment that PTS/PBS identifies as a
‘‘08’’ function code is identified in CA Web as a
‘‘Cash Dividend’’ event. Additionally, CA Web
incorporates the entire lifecycle of an event into one
platform with a unique corporate action identifier
that follows the event through its lifecycle. CA Web
gives Participants the ability to customize screen
displays and offers flexible methods for event
search, neither of which is available in the PTS/PBS
systems.
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(i) Overview of the Proposed Rule
Change
Transition of PTS/PBS Reorganizations
Functions to CA Web
Beginning in 2011, DTC has filed a
series of rule changes to update its
corporate action services by migrating
the corporate action functions for
Distributions from PTS/PBS to CA Web,
a then new browser user interface.9
After a Participant testing phase, PTS/
PBS functions for Distributions were
retired in 2015, and the use of CA Web
for processing Distributions became
mandatory for all Participants.10
In 2016, DTC filed a rule filing to
transition PTS/PBS functions for
Redemptions to CA Web, and to update
the Guide to add the appropriate
references.11 After a Participant testing
phase, PTS/PBS functions for
Redemptions were retired in 2017, and
the use of CA Web for processing
Redemptions became mandatory for all
Participants.
Pursuant to the proposed rule change,
DTC would transition PTS/PBS
functions for Reorganizations to CA
Web, and update the Guide to add the
appropriate references.12 A pilot testing
period began in Q3 of 2018 and will
conclude in Q2 of 2019, at which time
Reorganizations activity within the
following PTS and corresponding PBS
functions would be retired and
transitioned to CA Web: ADJI
(Adjustment Inquiries), RIPS
(Reorganization Inquiry for
Participants), and SDAR Dept. R (Same
Day Allocation Reporting).13 DTC has
been communicating this change to
Participants through CA Web review
sessions, Important Notices, and
industry outreach.14
9 See Securities Exchange Act Release No. 68114
(October 26, 2012), 77 FR 66497 (November 5, 2012)
(SR–DTC–2012–08).
10 See Securities Exchange Act Release No. 73864
(December 17, 2014), 79 FR 77063 (December 23,
2014) (SR–DTC–2014–12).
11 See Securities Exchange Act Release No. 79746
(January 5, 2017), 82 FR 3372 (January 11, 2017)
(SR–DTC–2016–014).
12 As in the previous migrations of corporate
action PTS/PBS functions to CA Web, corporate
action functions relating to the submission of
instructions by Participants will remain on PTS/
PBS until a later date.
13 See PTS/PBS Function Guides, available at
https://www.dtcc.com/settlement-and-asset-services/
edl-ptspbs-function-guides.
14 See Important Notice B10792–19 (March 14,
2019); Important Notice B8760–18 (June 7, 2018),
Important Notice B9072–18 (July 9, 2018) and
Important Notice B9122–18 (July 26, 2018),
available at https://www.dtcc.com/legal/importantnotices; and DTC Corporate Actions Product Update
to SIFMA (October 11, 2018), available at https://
www.sifma.org/wp-content/uploads/2017/05/
SIFMA-CAS_DTCC-Corporate-Actions-Update_
2018.pdf.
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Restructure, Streamline and Clarify the
Guide
DTC proposes to restructure,
streamline and clarify the Guide for
enhanced transparency and clarity as set
forth below.
DTC would restructure the Guide into
three parts. The first part would provide
an introduction and background on
reorganizations. The second part would
address Reorganizations announcements
(‘‘Announcements’’). The third part
would address the processing of
mandatory events and voluntary
offerings, including, but not limited to,
Participant instructions.
DTC would streamline the Guide as
follows:
(1) The Guide currently contains
contact numbers for information about
different services described in the
Guide. As a practical matter, the contact
information for information about each
of these services is the same. Therefore,
the individual references to contact
information for information about a
service would be deleted and would be
replaced by a single reference in the
beginning of the Guide.
(2) Currently, each section of the
Guide that describes a service contains
a list of associated PTS and PBS
functions. DTC is proposing to insert a
table toward the beginning of the Guide
that would contain a consolidated list of
PTS/PBS functions that are associated
with reorganization events generally,
the parallel CA Web functionality, and
the applicability to voluntary events,
mandatory events, or proxy.
(3) Sections relating to procedures for
the hard copy submission of Participant
instructions in connection with
different offerings would be clarified
and consolidated into one proposed
section that outlines the common
procedure and set of requirements for
the submission of instructions outside
of the Automated Tender Offer Program
(‘‘ATOP’’) and the Automated
Subscription Offer Program (‘‘ASOP’’).15
(4) Currently, the Guide contains
several sections titled ‘‘Important
Considerations’’ in connection with
different reorganization services. These
sections contain a substantial amount of
overlapping information. Therefore,
DTC is proposing to consolidate these
15 ATOP allows Participants to accept various
voluntary offers, such as voluntary tender or
exchange offers, in a book-entry environment. See
Securities Exchange Act Release No. 33797 (March
22, 1994), 59 FR 14696 (March 29, 1994) (SR–DTC–
93–11) (approving enhancements to ATOP). ASOP
allows Participants to accept rights offers and
receive the underlying securities within a fully
automated book-entry environment. See Securities
Exchange Act Release No. 35108 (December 16,
1994), 59 FR 67356 (December 29, 1994) (SR–DTC–
94–15) (instituting ASOP).
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sections into a single proposed
‘‘Important Considerations’’ section.
(5) Currently, the Guide contains
several sections titled ‘‘Interest
Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities,’’
in connection with different
reorganization services. These sections
contain a substantial amount of
overlapping information. Therefore,
DTC is proposing to consolidate these
sections into a single proposed ‘‘Interest
Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities’’
section.
Finally, DTC would clarify and
enhance the transparency of certain
services and procedures by:
(1) Clarifying and simplifying
language;
(2) Inserting additional background
information and clarifying information;
(3) Replacing references to DTC’s
proprietary Computer-to-Computer
Facility (‘‘CCF’’) announcement files
with references to International
Organization for Standardization
(‘‘ISO’’) 20022 messaging in order to
reflect the retirement and transition to
ISO 20022 to communicate
Reorganizations Announcements; 16 and
(4) Making the following ministerial
changes to accurately reflect current
terminology or to remove references to
retired systems:
• For simplicity, consolidate each
reference to CCF/CCF II files in a
reference to CCF files, because CCF/CCF
II files are collectively known as CCF
Files.
• Remove references to MDH
(Mainframe Dual Host) message format
files, which are no longer supported.17
• References to ‘‘product’’ or
‘‘program’’ would be replaced by
references to ‘‘service,’’ which is more
appropriate for a service guide.
• References to ‘‘relinquishment’’ as
an available put exercise would be
deleted because they are no longer
included as features of put bonds in the
industry.
• References to ‘‘hard copy’’ reports,
notifications, or instructions would be
changed to refer more generally to any
16 See Securities Exchange Act Release Nos.
79746 (January 5, 2017), 82 FR 3372 (January 11,
2017) (SR–DTC–2016–014); 76811 (December 31,
2015), 81 FR 826 (January 7, 2016) (SR–DTC–2015–
013); 68114 (October 26, 2012), 77 FR 66497
(November 5, 2012) (SR–DTC–2012–08); and 63886
(February 10, 2011), 76 FR 9070 (February 16, 2011)
(SR–DTC–2011–02).
17 As part of enhanced business continuity plans
in the aftermath of the events of September 11,
2001, on or around 2005, MDH, a proprietary
communications protocol, was retired by DTC. See
Important Notice Z#0004 (October 2, 2002),
available at https://www.dtcc.com/∼/media/Files/
Downloads/Investment-Product-Services/Insuranceand-Retirement-Services/SMART_user_guide.pdf.
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medium used by Participants for
transmitting instructions to, or viewing
messages from, DTC.
• Correct spelling, grammatical and
typographical errors throughout.
• Update other text and contact
information, such as addresses, phone
numbers, website information, and
email addresses.
(ii) Proposed Rule Change
DTC proposes to amend the Guide as
follows:
(1) Important Legal Information: The
copyright date would be updated from
2016 to 2019.
(2) About Reorganization: This
heading would be changed to ‘‘About
Reorganization Services.’’
a. Introduction: No change would be
made to this title.
b. Overview: The ‘‘Overview’’ section
would be modified to include references
to CA Web and ISO 20022 messaging,
and to explain how the functionality for
reorganization services can be accessed.
The word ‘‘chapter’’ would be replaced
with the word ‘‘guide’’ to reflect that the
overview addresses the reorganization
services throughout the Guide. The
second paragraph of the section would
also be modified to remove the specific
references to PTS/PBS functions that
would cease to be available on PTS/
PBS, since these functions would be
already covered in the references to PTS
and PBS in the amended first paragraph
of the section. Further, the section
would be modified to clarify a note
about a Participant’s obligation to check
the accuracy of information regarding
reorganization activities.
c. Proposed ‘‘Reorganization/Proxy
Contact Number’’ section: The new
proposed section, ‘‘Reorganization/
Proxy Contact Number,’’ would be
added to provide Participants with the
contact information for information
regarding any aspect of reorganization/
proxy processing or a specific event. In
connection with this proposed change,
DTC is proposing to remove the sections
of contact information that are repeated
throughout the Guide in connection
with each particular service.
d. About Reorganizations: The title
would be changed to ‘‘About the
Reorganizations Service.’’ The section
would be modified to provide
additional context for, and descriptions
of, the Reorganizations service. The
definition of ‘‘agent,’’ as used in the
Guide, would be inserted into this
section. In addition, the section would
be modified to clarify what would occur
if DTC is unable to fully support a
Reorganizations event.
e. Types of Reorganization Products:
The title of the section would be
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changed to ‘‘Types of Reorganization
Event Services.’’ The list of services that
are announced and processed by the
Reorganization Department would be
clarified and narrowed to the main
event types: Voluntary Offerings,
Mandatory Reorganizations, and Proxy.
Pursuant to the restructuring of the
Guide, the event subtypes would be
addressed later in the Guide.
f. Reorganization Envelopes: The
‘‘Reorganization Envelopes’’ section
would be removed because the relevant
information about viewing
Announcements would be included in
the proposed section titled ‘‘How to
View Mandatory and Voluntary
Reorganization Announcements.’’
g. Reorganization (RRG) Account/
Contra-CUSIP Numbers: This section
would be amended and relocated within
the Guide. The title would be changed
to ‘‘Reorganization (RRG) Segregated
Account.’’ The text at the end of the
section, which reads: ‘‘059 = the activity
code of the RIPS envelope (in this case,
rights)’’ and ‘‘01 = The sequence
number of the RIPS envelope’’ would be
modified to remove the references to the
RIPS envelope, to provide more
generally that the information is
viewable on other platforms, in addition
to RIPS.
h. Pledged Securities: This section
would be amended and relocated within
the Guide. For clarity, the section would
be modified to include the following
sentence: ‘‘There are specific processes
for pledging on voluntary reorganization
events detailed below.’’
i. Segregated Securities: This section
would be relocated within the Guide, as
discussed below.
j. Chills on Reorg Activities: This
section would be amended and
relocated within the Guide. For
additional clarity, the section would be
modified to include the following
sentence: ‘‘The timing of the chills will
vary depending upon the event type or
security type such as book-entry only.’’
k. Frozen Letters: This section would
be amended and relocated within the
Guide. The section would be amended
to remove the list of items that are
required for a frozen letter request and
would reflect that a template request
form (that reflects these requirements) is
available. In addition, the section would
be amended to replace the reference to
‘‘the appropriate person at DTC’’ with a
specific email contact at frozenletter@
dtcc.com.18 Further, for accuracy, the
following note would be removed:
‘‘Note—DTC does not provide a specific
18 See Important Notice B3751–16 (June 29,
2016), available at https://www.dtcc.com/∼/media/
Files/pdf/2016/6/29/3751-16.pdf.
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form for an indemnity clause. You must
provide the indemnity clause in
whatever format your own legal
requirements dictate.’’ The template
request form includes an indemnity.19
l. Preparing to Use the Products: The
title would be changed to ‘‘Preparing to
Use the Services.’’ The list of technical
requirements would be amended to (i)
make ministerial corrections to the
references to PTS and PBS, (ii) add
references to CA Web and to ISO 20022
Messages via MQ and file protocols, and
(iii) delete the references to CCF II and
MDH. In addition, the table of PTS/PBS
functions would be modified to insert
parallel CA Web functionality. The table
would be accompanied by a note that
reads: ‘‘Note that in 2019, the following
PTS/PBS functions will no longer be
available for current Reorganization
activity and will be replaced with CA
Web functionality as indicated. PTS/
PBS functions will, however, be
available for historical research
purposes.’’ Further, the section would
be amended to add the following
clarifying text: ‘‘DTC offers a
comprehensive overview of
reorganization activity comprised of
Announcements, Allocations,
Adjustments and applicable alerts via
CA Web’s Reorganization dashboard
which ‘‘pushes’’ data to users.
Understanding the Reorganizations
lifecycle and data model are important
prerequisites for successful use of the
Reorganizations service. DTC offers
robust training resources available at its
Asset Services Learning Center—https://
dtcclearning.com/products-andservices/asset-services.’’ Finally, the last
sentence in the section would be
changed to: ‘‘Note: DTC also provides
various reports, including on SMART/
Search, and Participants have the ability
to export data from CA Web to
spreadsheets, for manipulation and
analysis.’’ The purpose of this
modification to this general statement is
to reflect that various reports are
accessed through SMART/Search and
CA Web data reports. In general,
Participants no longer use, and therefore
DTC no longer provides, hard copy
reports.
m. Reorganization Contact Numbers:
This section would be deleted because
contact information would be provided
in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
19 See Important Notice B3751–16 (June 29,
2016), available at https://www.dtcc.com/∼/media/
Files/pdf/2016/6/29/3751-16.pdf; Important Notice
B7348 (January 5, 2005), available at
www.dtcc.com/∼/media/Files/pdf/2005/1/27/
7348.pdf.
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n. Service Topics: This heading would
be deleted because it is not relevant to
the proposed restructuring of the Guide.
o. Allocations: This entire section
would be amended and relocated within
the Guide.
(i) About the Product: As noted above,
this section would be amended and
relocated within the Guide. The title
‘‘About the Product’’ would be replaced
with ‘‘About Allocations.’’ The section
would be amended to clarify that DTC
will allocate cash and stock to
Participant upon receipt of the
confirmed position and entitlements
from the agent. For enhanced
transparency, the proposed section
would include additional information
on cash allocations, reorganization cash
settlement reporting and stock
allocations.
p. Proposed ‘‘How Reorganizations
Work’’ section: DTC is proposing to
insert a section containing basic
information on the elements of
Reorganizations that are relevant to the
reorganization services. In particular,
the section would discuss the types of
event information that may be relevant
to reorganization events, the types of
entitlement options, the types of
entitlement payouts, and the methods
by which DTC might deliver entitlement
information to Participants.
q. Associated PTS/PBS Functions:
The table of PTS/PBS functions, which
currently reflects PTS/PBS functions
used in association with Allocations,
would be modified to reflect a
consolidated chart of PTS/PBS
functions that are used in association
with Reorganization events more
generally, and to insert parallel CA Web
functionality and applicability of the
functions to voluntary events,
mandatory events, and/or proxy. In
addition, certain function descriptions
would be revised for clarity. The section
heading would be changed to
‘‘Associated PTS/PBS and CA Web
Functions.’’ Further, the paragraphs
beginning with ‘‘PTOP (PTS)’’ and
‘‘PSOP (PTS)’’ would be moved to the
proposed ‘‘Voluntary Reorganizations’’
section later in the Guide.
r. Allocations Contact Number: This
section would be deleted because
contact information would be provided
in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(3) Announcements: There would be
no changes to this heading.
a. About the Product: The title ‘‘About
the Product’’ would be changed to
‘‘About the Service.’’ The section would
be modified to replace a reference to
‘‘product’’ with ‘‘service’’ and to clarify
the types of Reorganizations activities
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for which DTC provides
Announcements. Further, the section
would be updated to remove references
to CCF, CCF II and MDH, and to insert
references to CA Web and ISO 20022.
For clarity, an additional note would be
inserted, which would read: ‘‘Note: For
all the event/activity types listed, if the
event involves a Canadian issue paying
in Canadian dollars, DTC will announce
either two events or one event with
multiple options to include a U.S. dollar
option.’’
b. How the Product Works: The title
‘‘How the Product Works’’ would be
replaced with ‘‘How the Announcement
Service Works.’’ The section would be
modified to remove inaccurate
references to an internal database and
newspapers as sources of reorganization
information. Although DTC may track
anticipated reorganization events in its
internal database, it does not announce
an event until it retrieves information
from one of the listed sources. DTC does
not retrieve reorganization information
from newspapers because, in contrast to
the other listed sources, the information
is not directly issued by the issuer or
agent.
c. About the RIPS Function: This
section would be consolidated into and
replaced by the proposed section titled
‘‘How to View Mandatory and
Voluntary Reorganization
Announcements.’’
d. Proposed ‘‘How to View Mandatory
and Voluntary Reorganization
Announcements’’ section: The proposed
section would replace the
‘‘Reorganization Envelopes’’ and ‘‘About
the RIPS Function’’ sections and would
reflect the Reorganization
Announcements functionality that
would be available through CA Web and
ISO 20022, and would be modified to
reflect enhanced functionality offered
by CA Web and ISO 20002.
e. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section at the beginning of the Guide.
f. Announcements Contact Numbers:
This section would be deleted because
contact information would be provided
in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(4) CD Early Redemptions: This entire
section, with the exception of
‘‘Associated PBS/PTS functions’’ and
‘‘CD Early Redemptions Contact
Numbers,’’ would be amended and
relocated within the Guide.
a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The section
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would be modified to replace references
to ‘‘product’’ with ‘‘service.’’ The
modifications would include changing
the title of the section ‘‘About the
Product’’ to ‘‘About the Service.’’
b. How the Product Works: As noted
above, this section would be amended
and relocated within the Guide. The
title ‘‘How the Product Works’’ would
be changed to ‘‘How the Service
Works.’’
c. Exempt Instructions: As noted
above, this section would be relocated
within the Guide.
d. Non-Exempt Instructions: As noted
above, this section would be amended
and relocated within the Guide. For
transparency, it would be modified to
note that ‘‘[t]he documents must be
received by DTC within five days of the
instruction otherwise the instruction
will drop off the system (i.e., an
incomplete instruction) and will have to
be reentered into the system to reinitiate the process,’’ which is the
current process.
e. Issuer Acceptance: As noted above,
this section would be relocated within
the Guide.
f. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
g. CD Early Redemptions Contact
Numbers: This section would be deleted
because contact information would be
provided in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(5) Change Mode of Payment (CMOP):
This entire section, with the exception
of ‘‘Associated PBS/PTS functions’’ and
‘‘CMOP Contact Numbers,’’ would be
amended and relocated within the
Guide.
a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The title
‘‘About the Product’’ would be changed
to ‘‘About the Service.’’
b. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
c. CMOP Contact Numbers: This
section would be deleted because
contact information would be provided
in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(6) Conversions: This entire section,
with the exception of ‘‘Associated PBS/
PTS functions’’ and ‘‘Conversions
Contact Numbers,’’ would be amended
and relocated within the Guide.
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a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The title
‘‘About the Product’’ would be changed
to ‘‘About the Service.’’ The section
would be modified to clarify that (i) if
entitlements of cash and/or securities is
not yet determined at the time of the
instruction, DTC may move a
Participant’s instructed position into a
contra CUSIP until the entitlements are
determined, and (ii) the entry on the
Participant Daily Activity Statement for
conversions is ‘‘Conversions (Account
#2222/4444).’’
b. About Conversion Features: As
noted above, this section would be
relocated within the Guide. The section
would be modified to add additional
context and to reflect the trend in the
industry to use market triggers as a
conversion feature. In addition, DTC is
proposing to add language that would
explain the circumstances in which an
entitlement amount would not be
determined at the time of the
Participant’s instructions, and would
further advise that, in these
circumstances, Participants would input
their instructions through ATOP, rather
than the RCNV (PTS).20
c. How the Product Works: As noted
above, this section would be relocated
within the Guide. The title ‘‘How the
Product Works’’ would be changed to
‘‘How the Service Works.’’ This section
would be modified to provide further
clarity with respect to circumstances
where the amount of the entitlement is
undetermined at the time of the
Participant’s instruction and to reflect
the increased utilization of market
triggers for convertibility. DTC is further
proposing to delete the sentence ‘‘DTC
credits these shares to your general free
account if an underlying issue is in an
interim period. The additional shares
are allocated on the due bill redemption
date,’’ because the concept is covered
elsewhere in the Guide.
d. Pledge and Transfer of Underlying
Securities by Book Entry: As noted
above, this section would be relocated
within the Guide. The section would be
modified to clarify that the section
relates to conversion instructions
submitted to DTC via the PTS RCNV or
PBS Reorg Conversion functions, as
opposed to through ATOP. In addition,
20 RCNV is used to submit conversion
instructions when the conversion rate(s) and/or
new entitlements (securities) are known and the
new securities are eligible for DTC services.
Participants get immediate use of the securities.
PTOP (ATOP) is used to submit conversion
instructions when the rate(s) and or new
entitlement(s) is cash, cash or securities or cash and
securities, and is unavailable at the time of the
instruction. Participants get credited with the
entitlements upon receipt from the Issuer/Agent.
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the section would be modified to (i)
clarify that the conversion process does
not complete until DTC receives the
securities from the agent, and (ii) alert
Participants that DTC will reverse the
credits to a Participant’s account for
underlying securities if DTC does not
receive the underlying securities from
the agent promptly.
e. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
f. Conversions Contact Numbers: This
section would be deleted because
contact information would be provided
in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(7) Eurobond Conversions: This entire
section would be amended and
relocated within the Guide, amended as
discussed below.
a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The title
‘‘About the Product’’ would be changed
to ‘‘About the Service.’’ In addition,
references to ‘‘product’’ would be
replaced with ‘‘service.’’
b. How the Product Works: As noted
above, this section would be amended
and relocated within the Guide. The
title ‘‘How the Product Works’’ would
be changed to ‘‘How the Service
Works.’’ For accuracy and because the
list does not necessarily remain static,
the section would be modified to
replace the sentence ‘‘A cumulative
listing of the securities that qualify for
the program appears in DTC’s Monthly
Reference Directory’’ with ‘‘To
determine whether a security qualifies
for the program, contact DTC’s
Customer Support Center at 1–888–382–
2721 and follow the menu options.’’
c. Important Considerations: This
section would be consolidated with
other ‘‘Important Considerations’’
sections into the proposed new
‘‘Important Considerations’’ section.
The proposed ‘‘Important
Considerations’’ section would reflect a
modification to replace a reference to
‘‘product’’ with ‘‘service.’’ In addition,
the proposed ‘‘Important
Considerations’’ section would replace
the statement ‘‘DTC will make copy #4
of the Certification of Conversion form
from the conversion agent available for
you to pick up,’’ with ‘‘DTC will make
available via email the agent’s
Certification of Conversion form.’’ This
modification would reflect that
conversion agents no longer supply hard
copy Certification of Conversion forms.
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d. Pledge and Transfer of Eurobond
Underlying Securities by Book-Entry:
This section would be amended and
relocated within the Guide. The section
would be modified to (i) clarify that the
conversion process does not complete
until DTC receives the securities from
the agent, and (ii) alert Participants that
DTC will reverse credits to a
Participant’s account for underlying
securities if DTC does not receive the
underlying securities from the agent
promptly. The section would also be
revised to replace an enumeration of ‘‘a,
b, c, d, and e’’ with ‘‘1, 2, 3, 4, and 5’’
to conform to the referenced list.
(8) Hard Copy Procedure for
Conversions/Submitting a Hard Copy
Conversion Instruction: These ‘‘Hard
Copy Procedure’’ sections would be
deleted and replaced by the proposed
section ‘‘Procedures for Submitting
Instructions Outside of PTS/PBS,’’
which would update and consolidate
separate hard copy procedures for
different event types. In addition, the
proposed section would consolidate the
‘‘Warning!’’ statements that currently
appear in the separate hard copy
procedures sections. Finally, because
the proposed section would apply to
multiple event types, the section would
include a new table that would list the
forms for instructions to DTC outside of
PTS/PBS. The new table would list the
event types, the appropriate instruction
form for each event, and the appropriate
email address to which the form should
be directed.
(9) Hard Copy Procedure for Warrant
Exercises/Exercising a Warrant via Hard
Copy: These ‘‘Hard Copy Procedure’’
sections would be deleted and replaced
by the proposed section ‘‘Procedures for
Submitting Instructions Outside of PTS/
PBS,’’ which, as noted above, would
update and consolidate separate hard
copy procedures for different event
types. In addition, the proposed section
would consolidate the ‘‘Warning!’’
statements that currently appear in the
separate hard copy procedures sections.
Finally, because the proposed section
would apply to multiple event types,
the section would include a new table
of forms for instructions to DTC outside
of PTS/PBS. The new table would list
the event types, the appropriate
instruction form for each event, and the
appropriate email address to which the
form should be directed.
(10) Hard Copy Procedures for
Voluntary Offerings and Put Option
Exercises/Overview, Accepting an Offer
or Put Option Exercise, and Submitting
a Notice of Guaranteed Delivery: These
‘‘Hard Copy Procedure’’ sections would
be deleted and replaced by the proposed
section ‘‘Procedures for Submitting
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Instructions Outside of PTS/PBS,’’
which, as noted above, would update
and consolidate separate hard copy
procedures for different event types. In
addition, the proposed section would
consolidate the ‘‘Warning!’’ statements
that currently appear in the separate
hard copy procedures sections. Finally,
because the proposed section would
apply to multiple event types, the
section would include a new table of
forms for instructions to DTC outside of
PTS/PBS. The new table would list the
event types, the appropriate instruction
form for each event, and the appropriate
email address to which the form should
be directed.
(11) Hard Copy Procedures for
Voluntary Offerings and Put Option
Exercises/Accepting an Offer to Tender
Securities by Sealed Bids, and
Withdrawing an Acceptance: These
‘‘Hard Copy Procedure’’ sections would
be deleted and replaced by the proposed
section ‘‘Procedures for Submitting
Instructions Outside of PTS/PBS,’’
which would consolidate and update
the separate hard copy procedures for
different event types.
(12) Mandatory Reorganizations: This
entire section, with the exception of
‘‘Associated PBS/PTS functions’’ and
‘‘Mandatory Reorganization Contact
Numbers,’’ would be amended and
relocated within the Guide.
a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The title
‘‘About the Product’’ would be changed
to ‘‘About the Service.’’ The section
would be modified for enhanced
readability and to add transparency
about situations when a mandatory
corporate action may be set-up or
processed differently.
b. How the Product Works: As noted
above, this section would be amended
and relocated within the Guide. The
title ‘‘How the Product Works’’ would
be changed to ‘‘How the Service
Works.’’
c. Various Types of Mandatory
Reorganizations: As noted above, this
section would be amended and
relocated within the Guide. This section
would be modified to clarify that the
activities that are listed are examples of
Mandatory Reorganization events. In
addition, the list of event types would
be revised for clarity and consistency,
and additional event types would be
added for enhanced transparency.
d. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
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e. Mandatory Reorganization Contact
Numbers: This section would be deleted
because contact information would be
provided in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(13) Proxy: For clarity, the title of the
section would be changed to ‘‘Proxy
Announcements.’’
a. About the Product: The title ‘‘About
the Product’’ would be changed to
‘‘About the Service.’’ The section would
be modified to change a reference to
‘‘product’’ with ‘‘service,’’ and to update
the name of the service. For enhanced
clarity, the section would be modified to
include general and extraordinary
meetings as issuer communications that
are supported by Proxy
Announcements. In addition, for
accuracy, the bullet points for
Bankruptcies, Legal notices, and
Appraisal or dissenters’ rights would be
deleted. Announcements for those
events are handled by the
Reorganizations Announcements group,
and not by the proxy announcements
group.
b. How the Product Works: The title
‘‘How the Product Works’’ would be
changed to ‘‘How the Service Works.’’
The paragraphs of the section would be
reordered. The section would also be
modified to (i) add references to CA
Web and ISO 20022, (ii) to make
ministerial clarifying changes, (iii) to
remove a reference to bankruptcy
announcement, because bankruptcies
would have its own section in the
revised Guide, and (iv) remove the
sentences ‘‘DTC also offers election
processing for consent solicitation
events via its ATOP (Automated Tender
Offer Program) service. Under this
service, DTC allows participant
instruction on consent solicitation
events to be accepted via ATOP and
transmitted electronically to balloting
agents,’’ because consent solicitations
are not processed as part of the proxy
service, but rather as part of voluntary
reorganization services. In addition, the
section would be revised to reflect that
Omnibus Proxies are available through
DTC’s Securities Position Report
(‘‘SPR’’) service for those issuers that are
registered for the service. Further, the
section would be modified to provide a
reminder to Participants that they
should make sure that their proxy
contact information is up-to-date.
Finally, a note about voting securities
registered to Cede & Co. that have been
withdrawn on or before record date
would be updated from requiring
microfilm copies of the front and back
of the certificate to requiring images
(i.e., scanned copies of the front and
back of the certificate).
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(14) Proposed ‘‘Processing’’ section:
As part of the proposed restructuring of
the Guide, DTC is proposing that the
‘‘Processing’’ section follow the
proposed ‘‘Proxy Announcements’’
section in the Guide.
(15) Proposed ‘‘Mandatory
Reorganizations’’ section: The entire
Mandatory Reorganizations section,
amended as discussed above, would be
moved under the ‘‘Processing’’ heading.
(16) Proposed ‘‘Voluntary Offerings’’
section: The Voluntary Offerings
section, which appears later in the
Guide, would be moved up to follow the
proposed Mandatory Reorganization
section. The Voluntary Offerings section
would be modified, as discussed below.
(17) About Legal Notices: This section
would be modified for clarity and to
remove references to LENP and the PBS
Legal Notice System, because those
platform-based functions were
superseded by the web-based Legal
Notice System (‘‘LENS’’).21 In addition,
the section would be modified to clarify
that the LENS service is available to
both Participants and non-Participants.
(18) Other Shareholder or Bondholder
Services: This section would be
modified to accurately reflect the
services offered. Specifically, DTC has
not offered ‘‘Ratification of Assertion of
appraisal of Dissenter’s Rights,’’ as a
discrete service and therefore this
language would be deleted. DTC is
proposing to add ‘‘Confirmation of a
position,’’ as this is a specific service
provided by DTC as a part of the
shareholder or bondholder service
offerings. The section would also be
revised to add clarifying language and to
provide a website address at which
template instructions and letters may be
found. Finally, contact information
would be deleted, because, as discussed
above, contact information would be
provided at the beginning of the Guide.
(19) Dissenters’ Rights/Appraisal
Rights: This section would be revised to
state that stockholders may be required
to present (and not deposit) share
certificates (or in the case of Direct
Registration Service (DRS) only
securities, a DRS Statement) in
connection with their dissent. The
purpose of this revision would be to
clarify that this is not a DTC
requirement, but, rather, may be a
required action pursuant to the terms of
the merger. The section would also be
modified to remove the requirement of
an ‘‘appraisal rights questionnaire or
dissenters’ rights questionnaire.’’ An
‘‘appraisal rights questionnaire or
21 See Securities Exchange Act Release No. 62686
(August 10, 2010), 75 FR 50032 (August 16, 2010)
(SR–DTC–2010–10).
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dissenters’ rights questionnaire’’ is
substantively similar to the required
instruction letter and is therefore no
longer required. In addition, DTC is
proposing to add a note providing a
website address at which template
instructions and letters may be found.
(20) Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
(21) Proxy Contact Numbers: This
section would be deleted because
contact information would be provided
in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(22) Puts: This entire section, except
for ‘‘Associated PTS/PBS Functions’’
and ‘‘Puts Contact Numbers,’’ would be
amended and relocated within the
Guide.
a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The section
would be modified to change a reference
to ‘‘product’’ with ‘‘service.’’ In
addition, the reference to exercising
relinquishments would be deleted. In
addition, the provision referencing a
relinquishment, ‘‘[n]on-option securities
based on your position in the contra
(relinquishment) security,’’ would be
deleted.
b. About Puts: This section would be
relocated within the Guide, where it
would proceed the proposed ‘‘Puts/
About the Product’’ section.
c. Types of Put Options: This section
would be amended and relocated within
the Guide, and would be amended to
remove the reference to
‘‘Relinquishment’’ and to add a line
item for ‘‘Put (Survivor Option).’’ ‘‘Put
(Survivor Option)’’ would be described
as ‘‘Issue has an early redemption
feature. This feature allows the holder to
elect to sell bonds back to the issuer on
a predetermined basis (excluding
monthly) according to specific
priorities.’’
d. Exercising Put Options: This
section would be relocated within the
Guide. The section would be amended
to clarify that ‘‘[e]xcept with respect to
put options that have an offer to
purchase with no withdrawal privilege,
you can submit exercise instructions via
the PTS PUTS or PBS Put Option Bonds
functions. Instructions relating to put
options that have an offer to purchase
with a withdrawal privilege can be
submitted through the PTS PTOP or
PBS Voluntary Tenders and Exchanges
functions.’’
e. Withdrawing Put Option
Instructions: This section would be
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relocated within the Guide, and would
be amended to include CA Web and to
further clarify that the event details
would be available on PTS RIPS, PBS
Redemptions and Reorganizations or CA
Web.
f. Rejection of Withdrawal of Put
Option Instructions: This section would
be relocated within the Guide, and
would be modified to remove the
specific reference to how DTC would
communicate the rejection, because
there are different ways for a Participant
to access this information.
g. Proration of a Repayment Option:
This section would be relocated within
the Guide. The text of the section would
be deleted and would be replaced by an
instruction to refer to ‘‘the proration
details found in the Proration of an
Offer section of the About DTC’s
Automated Tender Offer Program
(ATOP) topic of this guide.’’
h. Interest Payments, Dividends,
Distributions, and Voting Rights for
Tendered Securities: This section would
be consolidated with ‘‘About ATOP/
Interest Payments, Dividends,
Distributions, and Voting Rights for
Tendered Securities,’’ and ‘‘Warrant
Exercises/Interest Payments, Dividends,
Distributions, and Voting Rights,’’ into a
single proposed section, ‘‘Interest
Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities,’’
which would appear later in the Guide.
The proposed section would reflect the
consolidation, and would enumerate the
different types of tendered securities for
which Cede & Co. may receive property
or rights to distribute to Participants.
References to specific offer options
would be genericized (e.g., the reference
to a specific ‘‘repayment option period’’
would be replaced with a more general
reference to ‘‘corporate action,’’ and
replace a reference to the terms ‘‘of a
repayment option’’ with the terms ‘‘of
an offer’’).
i. Important Considerations: This
section would be consolidated with
other ‘‘Important Considerations’’
sections the proposed ‘‘Important
Considerations’’ section that would be
inserted in the proposed ‘‘Instructions/
Expirations’’ section. The eighth bullet,
‘‘No legal deposits of the subject
security will be accepted from the date
of the PTS RIPS or PBS Reorganizations
and Redemptions announcement for the
duration of the put exercise period’’
would be deleted because it is
inaccurate.22 The ninth bullet would be
removed because it would be covered in
the Chills on Reorg Activities section.
22 DTC cannot prevent submission of legal
deposits during the put exercise period because the
target CUSIP is not chilled for deposits.
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The tenth bullet would be deleted
because the necessary information
would appear in the proposed
‘‘Procedures for Submitting Instructions
Outside of PTS/PBS’’ section. The
proposed section would also eliminate a
reference to ‘‘relinquishment.’’ The
proposed section would reflect the
substance of the consolidated sections,
and would, where appropriate, replace
the references to specific tenders and
designated PTS/PBS functions with
generic references.
j. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
k. Puts Contact Numbers: This section
would be deleted because contact
information would be provided in the
proposed section, ‘‘Reorganization/
Proxy Contact Number.’’
(23) Rejection by DTC or the Agent:
This entire section would be relocated
within the Guide, as noted above.
a. Rejection by DTC: As noted above,
this section would be relocated within
the Guide.
b. Rejection by the Agent: As noted
above, this section would be relocated
within the Guide.
(24) Rights Subscriptions: This entire
section, except for ‘‘Associated PTS/PBS
Functions,’’ ‘‘Rights Subscriptions
Contact Numbers,’’ ‘‘Distribution of
Underlying Securities,’’ ‘‘Distribution of
Sale Proceeds,’’ ‘‘Cancellation of Rights
Offer,’’ and ‘‘About the Rights
Subscription Instructions PTS/PBS
Backup Form,’’ which would be deleted,
would be amended and relocated within
the Guide.
a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The title
‘‘About the Product’’ would be changed
to ‘‘About the Service.’’ The section
would be modified to change a reference
to ‘‘product’’ with ‘‘service,’’ and to
update the name of the service. In
addition, for accuracy and clarity, the
section would be amended to replace a
reference to ‘‘underlying securities’’
with ‘‘entitlements,’’ and note that DTC
would also allocate refunds when
applicable. Further, the final sentence in
the section would be updated to add a
reference to CA Web.
b. About Rights: As noted above, this
section would be amended and
relocated within the Guide. The last
sentence in this section would be
updated to add references to CA Web
and ISO 20022.
c. Relevant Terms: As noted above,
this section would be amended and
relocated within the Guide. For
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enhanced clarity, the term ‘‘Cover of
Protect,’’ which refers to ‘‘The
surrendering of rights for which a
previous protect had been submitted as
a guarantee of delivery’’ would be added
to the table of relevant terms. For
consistency, DTC is proposing to refer to
‘‘agent,’’ rather than a specific type of
agent, and would therefore delete the
definition of ‘‘Subscription Agent (or
Issuer’s Agent).’’
d. About DTC’s Automated
Subscription Offer Program (ASOP): As
noted above, this section would be
amended and relocated within the
Guide.
e. General Information Regarding
ASOP: As noted above, this section
would be amended and relocated within
the Guide. The section would be
modified to include references to CA
Web Announcements and ISO 20022.
f. Subscription Instructions: As noted
above, this section would be amended
and relocated within the Guide. The
following paragraph would be deleted
because DTC would be adding the
proposed ‘‘Procedures for Submitting
Instructions Outside of PTS/PBS’’
section, which would be applicable to
Subscription Instructions: ‘‘No
hardcopy instructions are accepted by
DTC unless specifically authorized in
advance by the appropriate DTC
Reorganization department or
Relationship Manager. In the event of a
PTS or PBS outage, a backup hard copy
form (Rights Subscription Instructions
PTS/PBS Backup Form) is available for
the purpose of instructing DTC to
surrender rights and the required
subscription payment (see About the
Rights Subscription Instructions PTS/
PBS Backup Form). If you experience a
PTS or PBS outage, you can
alternatively execute and submit the
required Notice of Guaranteed Delivery
document and subscription payment
directly to the agent; a DTC backup hard
copy form is not available for this
purpose.’’
g. Subscription Payments: As noted
above, this section would be amended
and relocated within the Guide. The last
sentence in the section would be
amended to include references to CA
Web and ISO 20022 messages.
h. Payments with Notices of
Guaranteed Delivery: As noted above,
this section would be amended and
relocated within the Guide. The last
sentence in the section would be
amended to include references to CA
Web and ISO 20022 messages.
i. Movement of Underlying Securities:
As noted above, this section would be
amended and relocated within the
Guide. The section would be modified
to add references to contra-CUSIPs,
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which may, in certain circumstances be
applicable. For clarity, the sentences in
the first paragraph of the section would
be reordered.
j. Subscription Sub-Accounts: As
noted above, this section would be
amended and relocated within the
Guide. The last sentence of this section
would be modified to include a
reference to CA Web.
k. Schedule for Submitting
Instructions: As noted above, this
section would be amended and
relocated within the Guide. The first
paragraph of the section would be
modified to include references to CA
Web Announcements and ISO 20022
messaging. In addition, the table of
instructions and PSOP times would be
modified to remove the row relating to
‘‘Notices of Guaranteed Delivery on the
last day of the offer, with deferred
subscription payments,’’ because the
information already appears in the note
below.
l. Inquiring About ASOP-Eligible
Offers: As noted above, this section
would be amended and relocated within
the Guide and would be modified to (i)
include references to CA Web and ISO
20022 messaging, and (ii) replace a
reference to a ‘‘hard copy notice’’ with
‘‘email alert,’’ as hard copy notices are
no longer provided. The section would
also be amended to clarify that ‘‘[w]ith
certain rights subscription events you
may be directed to submit your
instructions through PTOP.’’
m. Accepting an ASOP-Eligible Offer:
As noted above, this section would be
amended and relocated within the
Guide. The section would be amended
to clarify that ‘‘[i]nstructions being
submitted to DTC after the DTC cutoff
must be approved by, and delivered to,
the agent handling the event, prior to
submission to DTC.’’ In addition, the
section would be amended to add a
reference to CA Web.
n. Checklist for Submitting an
Acceptance: As noted above, this
section would be amended and
relocated within the Guide. The section
would be amended to clarify, with
respect to special representations, that a
Participant’s ability to input these
representations in specific fields on the
PTS PSOP or PBS Rights Subscriptions
screen, or in the Comments field, would
be based on the terms of the offer. In
addition, in respect to an
acknowledgement message regarding
the acceptance, the section would be
modified to provide that ‘‘Participants
that subscribe to the ISO 20022
Instruction Statement Report (CAST)
will be able to verify instructions status
on the message.’’
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o. Submitting a Protect for an ASOPEligible Offer: As noted above, this
section would be amended and
relocated within the Guide. The section
would be amended to clarify that a
Participant can cover its protect by ‘‘on
or before the end of the period, by either
delivering securities [the Participant
has] on deposit with DTC or having
another participant deliver on [the
Participant’s] behalf to the agent via the
PTS PSOP or PBS Rights Subscriptions
function.’’ In addition, references to
‘‘hard copy instructions’’ would be
replaced with ‘‘instructions,’’ so as to
include emails, faxes, and other
methods of instructions outside of PTS
PSOP or the PBS Rights Subscriptions
function. In addition, the section would
be modified to instruct Participants that
‘‘[i]f you intended to submit a protect
instruction via PSOP but missed the
cutoff for submitting the protect via
PSOP it is your responsibility to contact
the agent and determine if they will
accept an email submission directly. If
accepted, the agent will notify DTC and
the Participant should submit a Protect
Submission Form to DTC via email.
DTC will then input the protect
submission on behalf of the Participant.
The Participant must confirm the
protect submission input by DTC is
accurate. The Participant will be able to
cover the protect opened by DTC.’’
Further, the section would be amended
to include CA Web as a source for
viewing a notice of an offer.
p. Checklist for Submitting a Protect:
As noted above, this section would be
amended and relocated within the
Guide. The section would be amended
to clarify, with respect to special
representations, that a Participant’s
ability to input these representations in
specific fields on the PTS PSOP or PBS
Rights Subscriptions screen, or in the
Comments field, would be based on the
terms of the offer. The section would
also be amended to remove the
statement that ‘‘(The field available for
this message is 150 characters in
length.)’’ because it is not directly
relevant to the process and is subject to
change. In addition, in respect to an
acknowledgement message regarding
the acceptance, the section would be
modified to provide that ‘‘Participants
that subscribe to the ISO 20022
Instruction Statement Report (CAST)
will be able to verify instructions status
on the message.’’
q. Submitting a Cover of Protect via
PTS PSOP or PBS Rights Subscriptions
for an ASOP-Eligible Offer: As noted
above, this section would be amended
and relocated within the Guide. The
section would be amended to clarify
that a Participant ‘‘cannot subsequently
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deliver the securities to the Agent via
the PTS PSOP or PBS Rights
Subscriptions function unless the
instruction was subsequently input by
DTC.’’ In addition, the warning that
states ‘‘Warning! To be able to cover a
protect via PTS PSOP or PBS Rights
Subscriptions you must submit protect
instructions for ASOP-eligible offers via
PTS PSOP or PBS Rights Subscriptions;
except as noted in Subscription
Instructions, hard copy instructions will
not be accepted by DTC on ASOPeligible offers and, if submitted, will be
rejected. DTC may attempt to notify you
of the rejection, but DTC has no liability
for any failure to notify’’ would be
replaced with a warning that states
‘‘Warning! You must accept ASOPeligible offers via PTS PSOP or PBS
Rights Subscriptions; except as noted in
Subscription Instructions, instructions
outside of PTS/PBS will not be accepted
by DTC on ASOP-eligible offers during
the period when instructions can be
input via PTS PSOP or PBS Rights
Subscriptions for ASOP eligible offers
and, if submitted, will be rejected. If
possible, DTC will attempt to notify you
of the rejection, but DTC cannot
guarantee such notification.’’ The
purpose of this change would be to
clarify that, unless otherwise noted, no
instruction would be accepted by DTC
while the instruction window is open in
PSOP. Finally, the section would be
amended to include CA Web as a source
for viewing a notice of an offer.
r. Checklist for Submitting a Cover of
Protect via PTS PSOP or PBS Rights
Subscriptions: As noted above, this
section would be amended and
relocated within the Guide. The section
would be modified to remove the first
step that reads ‘‘submit a Notice of
Guaranteed Delivery and the required
subscription payment to the
subscription agent via PTS PSOP or PBS
Rights Subscriptions before the offer
expires,’’ because this is a prerequisite
to submitting a cover of protect and is
not part of the actual process. DTC is
proposing that the first step for a
Participant would be to ‘‘[v]erify that a
Notice of Guaranteed Delivery and the
required subscription payment to the
agent via PTS PSOP or PBS Rights
Subscriptions was submitted and
accepted,’’ so it confirms that the
prerequisite occurred prior to
submission of the cover. For clarity, the
second step would be simplified to
instruct a Participant to ‘‘[r]etrieve the
specific protect instruction you want to
cover.’’ In step four, the sentence stating
‘‘See Submitting Cover Protect
Instructions Via PTS PSOP or PBS
Rights Subscriptions’’ would be deleted,
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as it is duplicative. Step five would be
modified to clarify that a Participant can
submit more than one instruction to
cover the Notice of Guaranteed Delivery
as long as the quantity of rights
indicated in those instructions does not
exceed the original Notice of
Guaranteed Delivery quantity, with the
total of all cover of protect instructions
equaling the amount of the protect
submission. Step eight would be
amended to replace ‘‘PTS POS or PBS
Security Position functions’’ with
‘‘Settlement Web’’ because the POS
function has been retired and the
functionality is currently available on
the Settlement Web. The ninth step
would be deleted because a Participant
should make its own determination
about its document retention
procedures.
s. Submitting a Cover of Protect on
Behalf of another Participant: As noted
above, this section would be amended
and relocated within the Guide. The
section would be modified to add a
clarifying warning to Participants that
states: ‘‘Warning! To be able to cover a
protect via PTS PSOP or PBS Rights
Subscriptions on behalf of another
participant you must submit protects on
ASOP-eligible offers via PTS PSOP or
PBS Rights Subscriptions or have had a
protect submitted directly to the agent
via email and subsequently
communicated to DTC and input to
PSOP by DTC; cover of protect
instructions outside of PTS/PBS will not
be accepted by DTC on ASOP-eligible
offers and, if submitted, will be rejected.
If possible, DTC will attempt to notify
you of the rejection, but cannot
guarantee such notification.’’ Further,
the section would be amended to
include CA Web as a source for viewing
a notice of an offer.
t. Checklist for Submitting a Cover of
Protect on Behalf of another Participant:
As noted above, this section would be
amended and relocated within the
Guide. The section would be modified
to amend the second step in the
checklist to clarify that a Participant
should enter and transmit an instruction
to surrender rights and cover the protect
via PTS PSOP or PBS Rights
Subscriptions ‘‘during the period when
cover of protect submissions can be
input.’’ The fifth step would be
amended for clarity and readability. The
sixth step would be deleted because a
Participant should make its own
determination about its document
retention procedures. Further, with
respect to an acknowledgement message
regarding the acceptance, the section
would be modified to provide that
‘‘Participants that subscribe to the ISO
20022 Instruction Statement Report
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(CAST) will be able to verify
instructions status on the message.’’
u. Surrendering Rights for Sale via
ASOP: As noted above, this section
would be amended and relocated within
the Guide. The section would be
amended to include CA Web as a source
for viewing a notice of an offer.
v. Checklist for Submitting Sell
Instructions: As noted above, this
section would be amended and
relocated within the Guide. The section
would be amended by modifying the
seventh step in the checklist for clarity
and readability, and to provide that,
with respect to an acknowledgement
message regarding the acceptance,
‘‘Participants that subscribe to the ISO
20022 Instruction Statement Report
(CAST) will be able to verify
instructions status on the message.’’ The
eighth step would be deleted because a
Participant should make its own
determination about its document
retention procedures.
w. Rejection of Acceptances, Covers
of Protects, or Sell Instructions: As
noted above, this section would be
relocated within the Guide.
x. Distribution of Underlying
Securities: This section would be
deleted because it would be addressed
in the proposed Allocations section.
y. Distribution of Sale Proceeds: This
section would be deleted because it
would be addressed in the proposed
Allocations section.
z. Cancellation of Rights Offer: This
section would be deleted because it
would be addressed in the proposed
Allocations section.
aa. About the Rights Subscription
Instructions PTS/PBS Backup Form: As
discussed above, the proposed
‘‘Procedures for Submitting Instructions
Outside of PTS/PBS’’ would replace the
‘‘Hard Copy Procedure for Conversions/
Submitting a Hard Copy Conversion
Instruction,’’ ‘‘Hard Copy Procedure for
Warrant Exercises/Exercising a Warrant
via Hard Copy,’’ ‘‘Hard Copy Procedures
for Voluntary Offerings and Put Option
Exercises,’’ and ‘‘About the Rights
Subscription Instructions PTS/PBS
Backup Form’’ sections.
bb. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
cc. Rights Subscriptions Contact
Numbers: This section would be deleted
because contact information would be
provided in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(25) Voluntary Offerings: This entire
section would be amended and
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relocated within the Guide, as discussed
above.
a. About the Product: As noted above,
this section would be amended and
relocated within the Guide. The title
‘‘About the Product’’ would be replaced
with ‘‘About the Service.’’ The section
would be modified to streamline
language and to reference CA Web as a
source of information on voluntary
offers. Further, the section would be
modified to delete references to specific
types of voluntary reorganizations in the
first paragraph and provide a new table
of various examples of voluntary
reorganizations and descriptions of
each. In addition, the last two
paragraphs of the section would be
deleted because one of the paragraphs is
inaccurate, and the second because it is
always the responsibility of a
Participant to confirm that their
transactions were properly processed
and recorded. Finally, the section would
be modified to insert the following
language for additional context:
‘‘Voluntary offerings are in the form of
either (1) issuer or third party offers
(e.g., tender, exchange, merger with
elections), (2) offers that reflect the
attributes of the security (e.g., Right,
Convertible Security, Put Bond or
Warrant) and (3) certain consent-only
solicitations (which do not require
securities being forwarded to the agent
and may not include collecting and
allocating proceeds to you). In addition,
this service may require certifications as
part of the acceptance of an offer
(instruction process) and could include
provisions such as conditional tenders
and odd-lots.’’
b. Proposed ‘‘Additional Processes
Associated with Reorganization Events’’
heading: For clarity, DTC is proposing
to insert the heading ‘‘Additional
Processes Associated with
Reorganization Events.’’
c. Proposed ‘‘Pledged Securities’’
section: The ‘‘Pledged Securities’’
section, amended as discussed above,
would be moved under the proposed
‘‘Additional Processes Associated with
Reorganization Events’’ heading.
d. Proposed ‘‘Segregated Securities’’
section: The ‘‘Segregated Securities’’
section, amended as discussed above,
would be moved under the proposed
‘‘Pledged Securities’’ section.
e. Proposed ‘‘Reorganization (RRG)
Segregated Account’’ section: The
‘‘Reorganization (RRG) Segregated
Account’’ section, amended as
discussed above, would be moved under
the proposed ‘‘Segregated Securities’’
section.
f. About Contra-CUSIPs: No change.
g. Pledge of Contra-Securities: The
section would be amended to clarify
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that, for the purpose of its pledge, the
contra-securities represent a
Participant’s rights through DTC to
receive from the agent the cash ‘‘and/or
security’’ payments based on the ‘‘rate
or accepted’’ bid and/or the return of
some or all of the surrendered securities
in accordance with the terms of the
offer.
h. Solicitation Fees and Transfer
Taxes: This section would be relocated
within the Guide. The section would be
modified to include references to CA
Web Announcements and ISO 20022
messaging.
i. Proposed ‘‘Chills on Reorg
Activities’’ section: The ‘‘Chills on Reorg
Activities’’ section, amended as
discussed above, would be moved under
the ‘‘Pledge of Contra-Securities’’
section.
j. Proposed ‘‘Frozen Letters’’ section:
The ‘‘Frozen Letters’’ section, amended
as discussed above, would be moved
under the proposed ‘‘Chills on Reorg
Activities’’ section.
k. Proposed ‘‘Interest Payments,
Dividends, Distributions, and Voting
Rights for Tendered Securities’’ section:
The ‘‘Interest Payments, Dividends,
Distributions, and Voting Rights for
Tendered Securities’’ section, amended
as discussed above and below, would be
moved under the proposed ‘‘Frozen
Letters’’ section.
(26) Proposed ‘‘INSTRUCTIONS/
EXPIRATIONS’’ section: As part of the
proposed restructuring of the Guide,
DTC is proposing that a
‘‘INSTRUCTIONS/EXPIRATIONS’’
section follow the ‘‘Voluntary
Offerings’’ section in the Guide.
a. Relevant Terms: As discussed
above, for consistency, DTC is
proposing to refer to ‘‘agent,’’ rather
than a specific type of agent, and would
therefore delete the definitions of
‘‘Tender Agent’’ and ‘‘Information
Agent.’’
b. Proposed ‘‘Important
Considerations’’ section: As discussed
above and below, the other ‘‘Important
Considerations’’ sections, including the
proposed amendments, would be
consolidated into the proposed
‘‘Important Considerations’’ section,
which would be inserted under the
‘‘Relevant Terms’’ section.
c. About DTC’s Automated Tender
Offer Program (ATOP): This section
would be modified to replace a
reference to ‘‘product’’ with ‘‘service,’’
and to delete references to CCF II and
MDH. The section would also be
modified to clarify that ATOP allows a
Participant to submit instructions on
Consent Solicitation events for
transmission to balloting agents.
Further, the section would be amended
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to include CA Web as a source for
viewing information about an offer.
d. Inquiring About ATOP-Eligible
Offers: This section would be modified
to (i) include references to CA Web and
ISO 20022 messaging, (ii) delete a
reference to a ‘‘hard copy notice,’’ as
hard copy notices are no longer
provided, and add ‘‘email alert,’’ and
(iii) delete the bullet ‘‘A PTS RIPS or
PBS Reorganizations and Redemptions
notice through CCF,’’ because CCF
corporate action announcement files
were retired as of December 31, 2018.
The section would also be amended to
remind Participants that they should
take note of (i) any special conditions of
the offer, such as the existence of oddlot preference or the ability to submit a
conditional acceptance, and the price
range and permissible increments on
bid price tenders, as well as ‘‘early
expirations associated with a premium
or consent,’’ and ‘‘If a withdrawal of a
previously submitted instruction is part
of the offer and the timeframes for
requesting the withdrawal.’’
e. Accepting an ATOP-Eligible Offer:
The reference to ‘‘Submitting a VOI’’
would be deleted because that section
does not appear in the Guide. In
addition, the warning in this section
would be modified to clarify that DTC
will not accept any instructions outside
of ATOP during the period when the
instruction window is open on ATOP.
Further, the section would be amended
to include CA Web as a source for
viewing a notice of an offer. Finally, the
reference to ‘‘Hard Copy Procedures for
Voluntary and Put Options’’ would be
replaced with ‘‘Submitting a Protect for
an ATOP-Eligible Offer,’’ in order to
conform to other proposed changes.
f. Checklist for Submitting an
Acceptance: The section would be
amended to clarify, with respect to the
second step regarding special
representations, that a Participant’s
ability to input these representations in
specific fields on the PTS PTOP or PBS
Voluntary Tenders and Exchanges
screen, or in the Comments field, would
be based on the terms of the offer. With
respect to comments, the statement that
‘‘[t]he field available for this message is
67 characters in length’’ would be
deleted because it is not directly
relevant to the process and is subject to
change. The third step would be
modified to clarify that a Participant
should enter and transmit the
acceptance via PTS PTOP or PBS
Voluntary Tenders and Exchanges
‘‘during the period when submissions
can be input via PTS or PBS for ATOP
eligible offers.’’ The reference to
‘‘Submitting a VOI’’ would be deleted
because that section does not appear in
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the Guide. In the fourth step, a reference
to the Viewing VOI Details section
would be deleted because that section
does not appear in the Guide. In the
fifth step, the reference to a ‘‘PTS/PBS’’
message would be replaced by a generic
reference to a ‘‘message’’ because
Participants can access the
acknowledgement message on various
platforms. In addition, in respect to an
acknowledgement message regarding
the acceptance of an instruction, the
section would be modified to provide
that ‘‘Participants that subscribe to the
ISO 20022 Instruction Statement Report
(CAST) will be able to verify
instructions status on the message.’’
Finally, in the sixth step, the reference
to a ‘‘PTS PTOP or PBS Voluntary
Tenders and Exchanges’’ message would
be replaced by a generic reference to a
‘‘message’’ because Participants can
access the acknowledgement message
through various platforms.
g. Submitting a Protect for an ATOPEligible Offer: The section would be
amended to clarify that (i) an offer has
to include a guaranteed delivery option
in order for a Participant to submit a
protect, and (ii) a Participant can cover
its protect ‘‘on or before the end of the
period, by either delivering securities
[the Participant has] on deposit with
DTC or having another participant
deliver on [the Participant’s] behalf to
the subscription agent via the PTS PTOP
or PBS Voluntary Tenders and
Exchanges functions.’’ Further, the
warning would be amended to clarify
the parameters of submitting an email
submission to DTC. The reference to the
‘‘Submitting a Protect’’ section would be
replaced with a reference to the
‘‘Submitting a Cover of Protect.’’ The
warning would state: ‘‘Warning! You
must submit Notices of Guaranteed
Delivery on ATOP-eligible offers via
PTS PTOP or PBS Voluntary Tenders
and Exchanges; hard copy instructions
outside of PTS/PBS will not be accepted
by DTC on ATOP-eligible offers during
the period when protect submissions
can be input via PTOP for ATOP eligible
offers and, if submitted during this
period, will be rejected. If possible, DTC
will attempt to notify you of the
rejection, but cannot guarantee such
notification. If you intended to submit a
protect instruction via PTOP but missed
the cutoff for submitting the protect via
PTOP, it is your responsibility to
contact the agent and determine if they
will accept an email submission
directly. If accepted, the agent will
notify DTC and the Participant should
email a Protect Submission Form to
DTC. DTC will then input the protect
submission on behalf of the Participant.
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The Participant must confirm the
protect submission input by DTC is
accurate.’’ In addition, references to
‘‘hard copy instructions’’ would be
replaced with ‘‘instructions,’’ in order to
include emails, faxes, and other
methods of instructions outside of PTS
PTOP or the PBS Voluntary Tenders and
Exchanges function. In addition, the
section would be amended to include
CA Web as a source for viewing
information about an offer.
h. Checklist for Submitting a Protect:
The section would be amended to
clarify, with respect to special
representations, that a Participant’s
ability to input these representations in
specific fields on the PTS PTOP or PBS
Voluntary Tenders and Exchanges
screen, or in the Comments field, would
be based on the terms of the offer. In
addition, with respect to comments, the
statement that ‘‘[t]he field available for
this message is 67 characters in length’’
would be deleted because it is not
directly relevant to the process and is
subject to change. The section would be
modified to amend the second step to
clarify that a Participant should enter
and transmit an instruction to surrender
rights and cover the protect via PTS
PTOP or PBS Voluntary Tenders and
Exchanges functions ‘‘during the period
when cover of protect submissions can
be input.’’ Further, a reference to the
Viewing VOI Details section would be
deleted because that section does not
appear in the Guide. In addition, the
references to a ‘‘PTS/PBS’’ or ‘‘PTS
PTOP or PBS Voluntary Tenders and
Exchanges’’ message would be replaced
by a generic reference to a ‘‘message’’
because Participants can access the
acknowledgement message on various
platforms. Finally, in respect to an
acknowledgement message regarding
the acceptance, the section would be
modified to provide that ‘‘Participants
that subscribe to the ISO 20022
Instruction Statement Report (CAST)
will be able to verify instructions status
on the message.’’
i. Submitting a Cover of Protect via
PTS PTOP or PBS Voluntary Tenders
and Exchanges for an ATOP-Eligible
Offer: The section would be modified to
replace a reference to ‘‘hard copy
instructions’’ with the generic
‘‘instructions,’’ to conform the language
with the proposed ‘‘Procedures for
Submitting Instructions Outside of PTS/
PBS’’ section. The section would also be
modified to clarify that instructions
outside of PTS PTOP or the PBS
Voluntary Tenders and Exchanges
function would not be accepted while
the instruction window is open. In
addition, the section would be amended
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to include CA Web as a source for
viewing information about an offer.
j. Checklist for Submitting a Cover of
Protect via PTS PTOP or PBS Voluntary
Tenders and Exchanges: The section
would be modified to remove the first
step that reads ‘‘Submit a Notice of
Guaranteed Delivery to the tender agent
via PTOP before the offer expires,’’
because this is a prerequisite to
submitting a cover of protect and is not
part of the actual process. DTC is
proposing that the first step state that a
Participant ‘‘[v]erify that a protect
instruction was submitted and
accepted,’’ so that a Participant confirms
that the prerequisite occurred prior to
submission of the cover. The section
would be amended to add a step that
would remind Participants to ‘‘[v]erify
the existence of sufficient position being
available to cover the protect instruction
position.’’ For clarity, the following step
would be simplified to instruct a
Participant to ‘‘[r]etrieve the specific
protect instruction you want to cover.’’
The next step would be amended to
clarify that a Participant should ‘‘[e]nter
and transmit an instruction to surrender
securities and cover the protect via PTS
PTOP or PBS Voluntary Tenders and
Exchanges during the period when
cover of protect submissions can be
input,’’ and would add a reference to
the Cover of Protect on Behalf of
Another Participant section, if another
participant is covering the protect on
the Participant’s behalf. Further, a
reference to the Viewing VOI Details
section would be deleted because that
section does not appear in the Guide. In
the subsequent steps, the reference to a
‘‘PTS/PBS,’’ ‘‘PBS,’’ or ‘‘PTOP’’ message
would be replaced by a generic
reference to a ‘‘message’’ because
Participants can access the
acknowledgement message on various
platforms. In addition, in respect to an
acknowledgement message regarding
the acceptance, the section would be
modified to provide that ‘‘Participants
that subscribe to the ISO 20022
Instruction Statement Report (CAST)
will be able to verify instructions status
on the message.’’ Finally, in the sixth
step, the reference to a ‘‘PTS PTOP or
PBS Voluntary Tenders and Exchanges’’
message would be replaced by a generic
reference to a ‘‘message’’ because
Participants can access the
acknowledgement message through
various platforms.
k. Submitting a Cover of Protect via
PTS PTOP or PBS Voluntary Tenders
and Exchanges on Behalf of Another
Participant: The section would be
modified to replace a reference to ‘‘hard
copy instructions’’ with the generic
‘‘instructions,’’ to conform the language
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with the proposed ‘‘Procedures for
Submitting Instructions Outside of PTS/
PBS’’ section. In addition, the warning
language would be amended to conform
with existing practice. The proposed
warning would read: ‘‘Warning! To be
able to cover a protect via PTS PTOP or
PBS Voluntary Tenders and Exchanges
on behalf of another participant you
must submit protects on ATOP-eligible
offers via PTS PTOP or PBS Voluntary
Tenders and Exchanges; hard copy or
have had a protect submitted directly to
the agent via email and subsequently
communicated to DTC and input to
PTOP by DTC; cover of protect
instructions outside of PTS/PBS will not
be accepted by DTC on ATOP-eligible
offers and, if submitted, will be rejected.
If possible, DTC will attempt to notify
you of the rejection, but cannot
guarantee such notification.’’ Further,
the section would be amended to
include CA Web as a source for viewing
a notice of an offer.
l. Checklist for Submitting a Cover of
Protect via PTS PTOP or PBS Voluntary
Tenders and Exchanges on Behalf of
Another Participant: The section would
be modified by deleting a reference to
the Viewing VOI Details section because
that section does not appear in the
Guide. In addition, references to a
‘‘PTS/PBS’’ or ‘‘PBS’’ message would be
replaced by a generic reference to a
‘‘message’’ because Participants can
access the acknowledgement message
on various platforms. In addition, in
respect to an acknowledgement message
regarding the acceptance, the section
would be modified to provide that
‘‘Participants that subscribe to the ISO
20022 Instruction Statement Report
(CAST) will be able to verify
instructions status on the message.’’
m. Withdrawing an Acceptance of an
ATOP-Eligible Offer: The section would
be modified to replace a reference to
‘‘hard copy instructions’’ with the
generic ‘‘instructions,’’ to conform the
language with the proposed ‘‘Procedures
for Submitting Instructions Outside of
PTS/PBS’’ section. In addition, the
warning language would be amended
for clarification. The proposed warning
would read: ‘‘Warning! You must
submit withdrawals of acceptances on
ATOP-eligible offers via PTS PTOP or
PBS Voluntary Tenders and Exchanges;
withdrawals outside PTS/PBS will not
be accepted by DTC on ATOP-eligible
offers during the period when
withdrawal of instructions can be input,
and, if submitted, will be rejected. If
possible, DTC will attempt to notify you
of the rejection, but cannot guarantee
such notification.’’
n. Checklist for Withdrawing an
Acceptance: The section would be
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modified by deleting references to the
Viewing VOI Details section because
that section does not appear in the
Guide. In addition, references to a
‘‘PTS/PBS’’ or ‘‘PTS PTOP or PBS
Voluntary Tenders and Exchanges’’
message would be replaced by a generic
reference to a ‘‘message’’ because
Participants can access the
acknowledgement message on various
platforms. Further, in respect to an
acknowledgement message regarding
the acceptance, the section would be
modified to provide that ‘‘Participants
that subscribe to the ISO 20022
Instruction Statement Report (CAST)
will be able to verify instructions status
on the message.’’
o. About Rejections of Acceptances
and Covers of Protects: This section
would be retitled ‘‘About Rejections of
Instructions’’ in order to encompass
acceptances via Notices of Guaranteed
Delivery.
p. Proration of an Offer: This section
would be modified to enhance
transparency of the process and to
clarify what would happen to
unaccepted positions.
q. Interest Payments, Dividends,
Distributions, and Voting Rights for
Tendered Securities: As discussed
above, this section would be
consolidated with ‘‘Puts/Interest
Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities,’’
and ‘‘Warrant Exercises/Interest
Payments, Dividends, Distributions, and
Voting Rights,’’ into a single proposed
section by the same name, ‘‘Interest
Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities,’’
which would appear later in the Guide.
r. Available Reports: This section
would be modified to delete references
to CCF II and MDH, and to include
references to CA Web and ISO 20022
Announcement messages. The sentence
‘‘Allocation information is available
through all of the normal cash and
position inquiries such as the PBS
functions PTS SDAR or PBS Reorg/
Redemptions/Dividend Allocations,
PTS POS or PBS Security Position, PTS
PART or Participant Activity Research
and PTS ART or PBS Activity Research
Tool’’ would be replaced with the
following sentence: ‘‘Allocation
information is available through the
Reorganization Cash/Stock Settlement
Lists and the Participant Daily Activity
Statement.’’ The purpose of this
proposed change is to remove references
to functions (PTS POS or PBS Security
Position and PTS ART or PBS Activity
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Research Tool) that have been migrated
to the Settlement Web.23
s. Important Considerations: This
section would be consolidated with the
other ‘‘Important Considerations’’
sections into the proposed ‘‘Important
Considerations’’ section that would be
inserted in the proposed ‘‘Instructions/
Expirations’’ section, as discussed
above. The proposed section would
reflect the substance of the consolidated
sections, and would, where appropriate,
replace references to specific tenders
and designated PTS/PBS functions with
generic references.
t. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
u. Voluntary Offerings Contact
Numbers: This section would be deleted
because contact information would be
provided in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
v. Proposed ‘‘Voluntary Offers
Representing Attributes of the Security
(processed via various functions)’’
section: This proposed section would be
added in order to provide direction as
to which PTS function to use for
submitting voluntary instructions in
connection with securities with specific
attributes.
(27) Proposed ‘‘Conversions’’ section,
including the proposed ‘‘About the
Service,’’ ‘‘About Conversion Features,’’
‘‘How the Service Works,’’ and ‘‘Pledge
and Transfer of Underlying Securities by
Book-Entry’’ sections: These proposed
sections, as discussed above, would be
inserted after the proposed ‘‘Voluntary
Offers Representing Attributes of the
Security (processed via various
functions)’’ section.
(28) Proposed ‘‘Eurobond
Conversions’’ section, including the
proposed ‘‘About the Service,’’ ‘‘How It
Works,’’ ‘‘Important Considerations,’’
and ‘‘Pledge and Transfer of Eurobond
Underlying Securities by Book-Entry’’
sections: These proposed sections, as
discussed above, would be inserted after
the proposed ‘‘Conversions’’ sections.
(29) Proposed ‘‘Puts’’ section,
including the proposed ‘‘About Puts,’’
‘‘About the Service,’’ ‘‘Types of Put
Options,’’ ‘‘Exercising Put Options,’’
‘‘Withdrawing Put Options,’’ ‘‘Rejection
of Withdrawal of Put Option
Instructions,’’ and ‘‘Proration of
Repayment Option’’ sections: These
proposed sections, as discussed above,
23 See Securities Exchange Act Release No. 63936
(February 22, 2011), 76 FR 10628 (February 25,
2011) (SR–DTC–2011–03).
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would be inserted after the proposed
‘‘Eurobond Conversions’’ sections.
(30) Proposed ‘‘Rejection by DTC or
Agent’’ section, including the proposed
‘‘Rejection by DTC,’’ and ‘‘Rejection by
the Agent’’ sections: These proposed
sections, as discussed above, would be
inserted after the proposed ‘‘Puts’’
sections.
(31) Proposed ‘‘Rights Subscriptions,’’
including the proposed ‘‘About the
Service,’’ ‘‘About Rights,’’ ‘‘Relevant
Terms,’’ ‘‘About DTC’s Automated
Subscription Offer Program (ASOP),’’
‘‘General Information Regarding
ASOP,’’ ‘‘Subscription Instructions,’’
‘‘Subscription Payments,’’ ‘‘Payments
with Notices of Guaranteed Delivery,’’
‘‘Movement of Underlying Securities,’’
‘‘Subscription Sub-Accounts,’’
‘‘Schedule for Submitting Instructions,’’
‘‘Inquiring About ASOP-Eligible Offers,’’
‘‘Accepting an ASOP-Eligible Offer,’’
‘‘Checklist for Submitting an
Acceptance,’’ ‘‘Submitting a Protect for
an ASOP-Eligible Offer,’’ ‘‘Checklist for
Submitting a Protect,’’ ‘‘Submitting a
Cover of Protect via PTS PSOP or PBS
Rights Subscriptions for an ASOPEligible Offer,’’ ‘‘Checklist for
Submitting a Cover of Protect via PTS
PSOP or PBS Rights Subscriptions,’’
‘‘Submitting a Cover of Protect via PTS
PSOP or PBS Rights Subscriptions on
Behalf of Another Participant,’’
‘‘Checklist for Submitting a Cover of
Protect via PTS PSOP or PBS Rights
Subscriptions on Behalf of Another
Participant,’’ ‘‘Surrendering Rights for
Sale via ASOP,’’ ‘‘Checklist for
Submitting Sell Instructions,’’ and
‘‘Rejection of Acceptances, Covers of
Protects, or Sell Instructions’’ sections:
These proposed sections, as discussed
above, would be inserted after the
proposed ‘‘Rejection by DTC or Agent’’
section.
(32) Warrant Exercises: No changes
would be made to this title.
a. About the Product: This section
would be retitled ‘‘About the Service’’
and references to ‘‘product’’ would be
replaced with ‘‘service.’’ The section
would also be modified to (i) clarify that
warrants could be exercised as a cash or
cashless exercise, if part of the relevant
offer, and to make conforming changes,
and (ii) delete the bullets for ‘‘Notify
you of upcoming expirations and record
dates for warrant exercises’’ because it
would be covered by the proposed
bullet ‘‘Announce key terms and dates
related to the warrant as provided by the
issuer and/or agent.’’
b. Interest Payments, Dividends,
Distributions, and Voting Rights: As
discussed above, this section would be
consolidated with the ‘‘Puts/Interest
Payments, Dividends, Distributions, and
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Voting Rights for Tendered Securities’’
section and the ‘‘About ATOP/Interest
Payments, Dividends, Distributions, and
Voting Rights’’ section into a single
proposed section, also named ‘‘Interest
Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities,’’
which would appear later in the Guide.
c. About Warrants: No changes would
be made to this section.
d. How the Product Works: The
section would be retitled ‘‘How the
Service Works.’’ In addition, a reference
to the ‘‘Hard Copy Procedure for
Warrant Exercises’’ section would be
replaced by a reference to the proposed
‘‘Procedures for Submitting Instructions
Outside of PTS/PBS’’ section.
e. Pledge and Transfer of Underlying
Securities by Book-Entry: Ministerial
changes only.
f. Interest Payments, Dividends,
Distributions, and Voting Rights: This
section would be deleted because it is
duplicative of the earlier ‘‘Warrant
Exercises/Interest Payments, Dividends,
Distributions, and Voting Rights’’
section.
g. Associated PTS/PBS Functions:
This section would be deleted because
the information would be updated and
included in the proposed ‘‘Associated
PTS/PBS and CA Web Functions’’
section in the beginning of the Guide.
h. Warrant Exercises Contact
Numbers: This section would be deleted
because contact information would be
provided in the proposed section,
‘‘Reorganization/Proxy Contact
Number.’’
(33) Proposed ‘‘Procedures for
Submitting Instructions Outside of PTS/
PBS’’ section: As discussed above, the
proposed ‘‘Procedures for Submitting
Instructions Outside of PTS/PBS’’
would replace the ‘‘Hard Copy
Procedure for Conversions/Submitting a
Hard Copy Conversion Instruction,’’
‘‘Hard Copy Procedure for Warrant
Exercises/Exercising a Warrant via Hard
Copy,’’ ‘‘Hard Copy Procedures for
Voluntary Offerings and Put Option
Exercises,’’ and ‘‘About the Rights
Subscription Instructions PTS/PBS
Backup Form’’ sections.
(34) Reorganization Presentments for
MMI Issues: Ministerial changes only.
(35) Proposed ‘‘CD Early
Redemptions’’ section, including the
proposed ‘‘About the Service,’’ ‘‘How
the Service Works,’’ ‘‘Exempt
Instructions,’’ ‘‘Non-Exempt
Instructions,’’ and ‘‘Issuer Acceptance’’
sections: These proposed sections, as
discussed above, would be inserted after
under the Reorganization Presentments
for MMI Issues section.
(36) Proposed ‘‘Change Mode of
Payment (CMOP)’’ section, including the
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proposed ‘‘About the Service’’ section:
The Change Mode of Payment (CMOP)/
About the Product sections, amended as
discussed above, would be moved under
the Proposed ‘‘CD Early Redemptions/
Issuer Acceptance’’ section.
(37) Proposed ‘‘Allocations’’ section,
including the proposed ‘‘About
Allocations’’ section: These proposed
sections, as discussed above, would be
inserted under the proposed ‘‘Change
Mode of Payment (CMOP)/About the
Service’’ section.
(38) Proposed ‘‘Solicitation Fees and
Transfer Taxes’’ section: This section, as
discussed above, would be inserted after
under the proposed ‘‘About
Allocations’’ section.
2. Statutory Basis
DTC believes that this proposal is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a registered
clearing agency. Specifically, DTC
believes that this proposal is consistent
with Section 17A(b)(3)(F) 24 of the Act
and Rule 17Ad–22(e)(23)(i),25 as
promulgated under the Act, for the
reasons described below.
Section 17A(b)(3)(F) of the Act
requires, inter alia, that the DTC Rules
be designed to promote the prompt and
accurate clearance and settlement of
securities transactions.26 DTC believes
that the proposed rule change with
respect to the migration of
Reorganizations processing functions
from PTS/PBS to CA Web is consistent
with this provision of the Act because
it would migrate Reorganizations
functions to a more flexible interface
that utilizes market standard language
and incorporates the entire lifecycle of
an event into one platform. By
providing Participants with more
efficient access to reorganization
services and a broader view of a
reorganization event, DTC believes that
the proposed rule change is designed to
promote the prompt and accurate
clearance and settlement of securities
transactions relating to Reorganizations,
consistent with Section 17A(b)(3)(F) of
the Act.27
DTC believes that the proposed rule
change with respect to the restructuring,
streamlining, and clarification of the
Guide is consistent with Section
17A(b)(3)(F) of the Act.28 DTC believes
that the proposed rule change would
enhance the clarity and transparency of
the Guide, which would allow a
U.S.C. 78q–1(b)(3)(F).
CFR 240.17Ad–22(e)(23)(i).
26 15 U.S.C. 78q–1(b)(3)(F).
27 Id.
28 Id.
Participant to more efficiently conduct
its business in connection with
processing reorganization events.
Therefore, DTC believes that the
proposed rule change is designed to
promote the prompt and accurate
clearance and settlement of securities
transactions related to Reorganizations,
consistent with Section 17A(b)(3)(F) of
the Act.29
Rule 17Ad–22(e)(23)(i) under the Act
requires, inter alia, that DTC establish,
implement, maintain and enforce
written policies and procedures
reasonably designed to publicly disclose
all relevant rules and material
procedures.30 DTC believes that the
proposed rule change with respect to
the restructuring, streamlining, and
clarification of the Guide would
enhance the transparency and clarity of
the Guide. Having clear and transparent
provisions about the DTC
Reorganizations services would enable
Participants to better understand the
processes and provide Participants with
increased predictability and certainty
regarding their rights and obligations
with respect to their use of the services.
Therefore, DTC believes that the
proposed rule changes with respect to
the restructuring, streamlining, and
clarification of the Guide are consistent
with Rule 17Ad–22(e)(23)(i) under the
Act, cited above.
(B) Clearing Agency’s Statement on
Burden on Competition
DTC believes that the proposed rule
change with respect to the migration of
Reorganizations processing functions
from PTS/PBS to CA Web may have an
impact on competition, because it
would facilitate a more efficient process
for communicating and processing
Reorganizations information.31 Having a
more efficient process could promote
competition by potentially reducing
Participants’ operating costs. In
addition, CA Web is an existing DTC
platform that all Participants are
required to use to access other types of
services, including Distributions and
Redemptions processing, and so would
not affect the rights and obligations of
any Participant. Therefore, DTC believes
that the proposed rule change with
respect to the migration of functions
from PTS/PBS to CA Web may promote
competition but would not create a
burden on competition.32
DTC believes that the proposed rule
changes with respect to restructuring,
streamlining, and clarifying the Guide
24 15
25 17
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16:11 Jun 05, 2019
would not have an impact on
competition.33 The proposed rule
change would enhance the clarity and
transparency of the Guide to better
reflect DTC’s Reorganizations services
and practices. Improving the clarity and
transparency of the DTC Rules and
Procedures, including the Guide, would
help Participants to better understand
their rights and obligations regarding
DTC services, and so would not affect
the rights and obligations of any
Participant or other interested party.
(C) Clearing Agency’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 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
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 34 and paragraph (f) of Rule
19b–4 thereunder.35 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.
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–2019–003 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to File
Number SR–DTC–2019–003. This file
number should be included on the
29 Id.
30 17
31 15
CFR 240.17Ad–22(e)(23)(i).
U.S.C. 78q–1(b)(3)(I).
32 Id.
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33 Id.
34 15
35 17
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CFR 240.19b–4(f).
06JNN1
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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 website (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 website 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
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of DTC and on DTCC’s website
(https://dtcc.com/legal/sec-rulefilings.aspx). All comments received
will be posted without change. Persons
submitting comments are cautioned that
we do not redact or edit personal
identifying information from comment
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–DTC–
2019–003 and should be submitted on
or before June 27,2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.36
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11802 Filed 6–5–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86003; File No. 013–00112]
Initial Form ATS–N Filing; Notice of
Extension of Commission Review
Period
khammond on DSKBBV9HB2PROD with NOTICES
June 3, 2019.
On February 8, 2019, Luminex ATS
filed an initial Form ATS–N (‘‘Form
ATS–N’’) with the Securities and
Exchange Commission (‘‘Commission’’).
Pursuant to Rule 304 under the
Securities and Exchange Act of 1934
(‘‘Act’’), the Commission may, after
notice and an opportunity for hearing,
declare an initial Form ATS–N
36 17
CFR 200.30–3(a)(12).
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16:11 Jun 05, 2019
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ineffective no later than 120 days from
the date of filing with the Commission,
or, if applicable, the extended review
period. June 8, 2019 is 120 calendar
days from the date of filing. Pursuant to
Rule 304(a)(1)(iv)(B), the Commission
may extend the initial Form ATS–N
review period for up to an additional
120 calendar days if the initial Form
ATS–N is unusually lengthy or raises
novel or complex issues that require
additional time for review.
Luminex ATS was operating pursuant
to an initial operation report on Form
ATS on file with the Commission as of
January 7, 2019.1 Luminex ATS filed an
initial Form ATS–N on February 8,
2019. During the initial 120 calendar
day review period, the Commission staff
has been reviewing the disclosures on
Luminex ATS’s initial Form ATS–N. In
addition, the staff has been engaged in
ongoing discussions with Luminex ATS
about its disclosures and manner of
operations, as well as the requirements
of Form ATS–N, to facilitate complete
and comprehensible disclosures that
reflect the complexities of those
operations.
Form ATS–N requires NMS Stock
ATSs to file with the Commission, and
disclose to the public for the first time,
certain information, including
descriptions by the NMS Stock ATSs of
their fees, the trading activities by their
broker-dealer operators and their
affiliates in the NMS Stock ATSs, their
use of market data, their written
standards for granting access to trading
on the NMS Stock ATSs, and their
written safeguards and procedures for
protecting their subscribers’ confidential
trading information required by revised
Rule 301(b)(10) of Regulation ATS. The
initial Form ATS–N disclosures and
discussions with Commission staff have
revealed complexities about the
operations of Legacy NMS Stock ATSs
including, among other things, matching
functionalities, means of order entry,
order interaction and execution
procedures, conditional order processes,
segmentation of orders, and
counterparty selection protocols. The
Commission staff needs additional time
to review novel and complex issues
such as these, which Commission staff
has discussed with Luminex ATS.
Extending the initial Form ATS–N
Commission review period for an
additional 120 calendar days will
provide Commission staff an
opportunity to continue its review of the
1 An NMS Stock ATS (as defined in Rule 300(k)
of Regulation ATS) that was operating pursuant to
an initial operation report on Form ATS on file with
the Commission as of January 7, 2019 is a ‘‘Legacy
NMS Stock ATS.’’ 17 CFR 242.301(b)(2)(viii).
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initial Form ATS–N disclosures and
discussions with Luminex ATS.
In the conversations between
Luminex ATS and Commission staff
about the initial Form ATS–N
disclosures and the ATS operations,
Commission staff and Luminex ATS
have discussed a potential amendment
to update Luminex ATS’s disclosures
regarding the complexities of its
operations. Extending the review period
will enable the NMS Stock ATS to
amend its disclosures, if appropriate,
and allow Commission staff to conduct
a thorough review of amendments to the
initial disclosures provided on the
initial Form ATS–N.
For the reasons given above, the
Commission is extending the review
period of the initial Form ATS–N
submitted by Luminex ATS.
Accordingly, pursuant to Rule
304(a)(1)(iv)(B), October 6, 2019 is the
date by which the Commission may
declare the initial Form ATS–N
submitted by Luminex ATS ineffective.
By the Commission.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11869 Filed 6–5–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86015; File No. 013–00105]
Initial Form ATS–N Filing; Notice of
Extension of Commission Review
Period
June 3, 2019.
On February 8, 2019, Instinet CBX
filed an initial Form ATS–N (‘‘Form
ATS–N’’) with the Securities and
Exchange Commission (‘‘Commission’’).
Pursuant to Rule 304 under the
Securities and Exchange Act of 1934
(‘‘Act’’), the Commission may, after
notice and an opportunity for hearing,
declare an initial Form ATS–N
ineffective no later than 120 days from
the date of filing with the Commission,
or, if applicable, the extended review
period. June 8, 2019 is 120 calendar
days from the date of filing. Pursuant to
Rule 304(a)(1)(iv)(B), the Commission
may extend the initial Form ATS–N
review period for up to an additional
120 calendar days if the initial Form
ATS–N is unusually lengthy or raises
novel or complex issues that require
additional time for review.
Instinet CBX was operating pursuant
to an initial operation report on Form
ATS on file with the Commission as of
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Agencies
[Federal Register Volume 84, Number 109 (Thursday, June 6, 2019)]
[Notices]
[Pages 26466-26480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11802]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85986; File No. SR-DTC-2019-003]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend the Reorganizations Service Guide
May 31, 2019.
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 May 21, 2019, 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 by the clearing agency. DTC filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(4)
thereunder.\4\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(4).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change by DTC would revise the Reorganizations
Service Guide (``Guide'') \5\ to: (1) Update its corporate action
service by transitioning corporate action \6\
[[Page 26467]]
functions on its Participant Terminal System (``PTS'') and its
Participant Browser Service (``PBS'') systems \7\ for the processing of
Reorganizations to its Corporate Action Web (``CA Web'') system; \8\
and (2) restructure, streamline and clarify the Guide for enhanced
transparency and clarity, as more fully described below.
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\5\ Each capitalized term not otherwise defined herein has its
respective meaning as set forth in the Rules, By-Laws and
Organization Certificate of DTC (``DTC Rules'') and in the Guide,
available at https://www.dtcc.com/legal/rules-and-procedures.aspx.
\6\ DTC offers an array of services for processing corporate
action events. The services fall into three categories: (i)
Distributions, such as cash and stock dividends, principal and
interest, and capital gain distributions (collectively,
``Distributions''); (ii) redemptions such as full and partial calls,
final paydowns, and maturities (collectively, ``Redemptions''); and
(iii) reorganizations, which include both mandatory and voluntary
reorganizations such as exchange offers, conversions, Dutch
auctions, mergers, puts, reverse stock splits, tender offers, and
warrant exercises (collectively, ``Reorganizations'').
\7\ PTS and PBS are user interfaces for DTC's Settlement and
Asset Services functions. PTS is mainframe-based and PBS is web-
based with a mainframe back-end. Participants may use either PTS or
PBS, as they are functionally equivalent. References to a particular
PTS function in this rule filing include the corresponding PBS
function.
\8\ In PTS/PBS, corporate actions are announced using DTC
proprietary codes to signify event types. CA Web replaces DTC's
proprietary codes with market standard language. For example, a cash
dividend payment that PTS/PBS identifies as a ``08'' function code
is identified in CA Web as a ``Cash Dividend'' event. Additionally,
CA Web incorporates the entire lifecycle of an event into one
platform with a unique corporate action identifier that follows the
event through its lifecycle. CA Web gives Participants the ability
to customize screen displays and offers flexible methods for event
search, neither of which is available in the PTS/PBS systems.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, the clearing agency 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. The clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Purpose
The proposed rule change by DTC would revise the Guide to: (1)
Update its corporate action service by transitioning corporate action
functions on its PTS and PBS systems for the processing of
Reorganizations to its CA Web system; and (2) restructure, streamline
and clarify the Guide for enhanced transparency and clarity, as more
fully described below.
(i) Overview of the Proposed Rule Change
Transition of PTS/PBS Reorganizations Functions to CA Web
Beginning in 2011, DTC has filed a series of rule changes to update
its corporate action services by migrating the corporate action
functions for Distributions from PTS/PBS to CA Web, a then new browser
user interface.\9\ After a Participant testing phase, PTS/PBS functions
for Distributions were retired in 2015, and the use of CA Web for
processing Distributions became mandatory for all Participants.\10\
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\9\ See Securities Exchange Act Release No. 68114 (October 26,
2012), 77 FR 66497 (November 5, 2012) (SR-DTC-2012-08).
\10\ See Securities Exchange Act Release No. 73864 (December 17,
2014), 79 FR 77063 (December 23, 2014) (SR-DTC-2014-12).
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In 2016, DTC filed a rule filing to transition PTS/PBS functions
for Redemptions to CA Web, and to update the Guide to add the
appropriate references.\11\ After a Participant testing phase, PTS/PBS
functions for Redemptions were retired in 2017, and the use of CA Web
for processing Redemptions became mandatory for all Participants.
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\11\ See Securities Exchange Act Release No. 79746 (January 5,
2017), 82 FR 3372 (January 11, 2017) (SR-DTC-2016-014).
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Pursuant to the proposed rule change, DTC would transition PTS/PBS
functions for Reorganizations to CA Web, and update the Guide to add
the appropriate references.\12\ A pilot testing period began in Q3 of
2018 and will conclude in Q2 of 2019, at which time Reorganizations
activity within the following PTS and corresponding PBS functions would
be retired and transitioned to CA Web: ADJI (Adjustment Inquiries),
RIPS (Reorganization Inquiry for Participants), and SDAR Dept. R (Same
Day Allocation Reporting).\13\ DTC has been communicating this change
to Participants through CA Web review sessions, Important Notices, and
industry outreach.\14\
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\12\ As in the previous migrations of corporate action PTS/PBS
functions to CA Web, corporate action functions relating to the
submission of instructions by Participants will remain on PTS/PBS
until a later date.
\13\ See PTS/PBS Function Guides, available at https://www.dtcc.com/settlement-and-asset-services/edl-ptspbs-function-guides.
\14\ See Important Notice B10792-19 (March 14, 2019); Important
Notice B8760-18 (June 7, 2018), Important Notice B9072-18 (July 9,
2018) and Important Notice B9122-18 (July 26, 2018), available at
https://www.dtcc.com/legal/important-notices; and DTC Corporate
Actions Product Update to SIFMA (October 11, 2018), available at
https://www.sifma.org/wp-content/uploads/2017/05/SIFMA-CAS_DTCC-Corporate-Actions-Update_2018.pdf.
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Restructure, Streamline and Clarify the Guide
DTC proposes to restructure, streamline and clarify the Guide for
enhanced transparency and clarity as set forth below.
DTC would restructure the Guide into three parts. The first part
would provide an introduction and background on reorganizations. The
second part would address Reorganizations announcements
(``Announcements''). The third part would address the processing of
mandatory events and voluntary offerings, including, but not limited
to, Participant instructions.
DTC would streamline the Guide as follows:
(1) The Guide currently contains contact numbers for information
about different services described in the Guide. As a practical matter,
the contact information for information about each of these services is
the same. Therefore, the individual references to contact information
for information about a service would be deleted and would be replaced
by a single reference in the beginning of the Guide.
(2) Currently, each section of the Guide that describes a service
contains a list of associated PTS and PBS functions. DTC is proposing
to insert a table toward the beginning of the Guide that would contain
a consolidated list of PTS/PBS functions that are associated with
reorganization events generally, the parallel CA Web functionality, and
the applicability to voluntary events, mandatory events, or proxy.
(3) Sections relating to procedures for the hard copy submission of
Participant instructions in connection with different offerings would
be clarified and consolidated into one proposed section that outlines
the common procedure and set of requirements for the submission of
instructions outside of the Automated Tender Offer Program (``ATOP'')
and the Automated Subscription Offer Program (``ASOP'').\15\
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\15\ ATOP allows Participants to accept various voluntary
offers, such as voluntary tender or exchange offers, in a book-entry
environment. See Securities Exchange Act Release No. 33797 (March
22, 1994), 59 FR 14696 (March 29, 1994) (SR-DTC-93-11) (approving
enhancements to ATOP). ASOP allows Participants to accept rights
offers and receive the underlying securities within a fully
automated book-entry environment. See Securities Exchange Act
Release No. 35108 (December 16, 1994), 59 FR 67356 (December 29,
1994) (SR-DTC-94-15) (instituting ASOP).
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(4) Currently, the Guide contains several sections titled
``Important Considerations'' in connection with different
reorganization services. These sections contain a substantial amount of
overlapping information. Therefore, DTC is proposing to consolidate
these
[[Page 26468]]
sections into a single proposed ``Important Considerations'' section.
(5) Currently, the Guide contains several sections titled
``Interest Payments, Dividends, Distributions, and Voting Rights for
Tendered Securities,'' in connection with different reorganization
services. These sections contain a substantial amount of overlapping
information. Therefore, DTC is proposing to consolidate these sections
into a single proposed ``Interest Payments, Dividends, Distributions,
and Voting Rights for Tendered Securities'' section.
Finally, DTC would clarify and enhance the transparency of certain
services and procedures by:
(1) Clarifying and simplifying language;
(2) Inserting additional background information and clarifying
information;
(3) Replacing references to DTC's proprietary Computer-to-Computer
Facility (``CCF'') announcement files with references to International
Organization for Standardization (``ISO'') 20022 messaging in order to
reflect the retirement and transition to ISO 20022 to communicate
Reorganizations Announcements; \16\ and
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\16\ See Securities Exchange Act Release Nos. 79746 (January 5,
2017), 82 FR 3372 (January 11, 2017) (SR-DTC-2016-014); 76811
(December 31, 2015), 81 FR 826 (January 7, 2016) (SR-DTC-2015-013);
68114 (October 26, 2012), 77 FR 66497 (November 5, 2012) (SR-DTC-
2012-08); and 63886 (February 10, 2011), 76 FR 9070 (February 16,
2011) (SR-DTC-2011-02).
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(4) Making the following ministerial changes to accurately reflect
current terminology or to remove references to retired systems:
For simplicity, consolidate each reference to CCF/CCF II
files in a reference to CCF files, because CCF/CCF II files are
collectively known as CCF Files.
Remove references to MDH (Mainframe Dual Host) message
format files, which are no longer supported.\17\
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\17\ As part of enhanced business continuity plans in the
aftermath of the events of September 11, 2001, on or around 2005,
MDH, a proprietary communications protocol, was retired by DTC. See
Important Notice Z#0004 (October 2, 2002), available at https://
www.dtcc.com/~/media/Files/Downloads/Investment-Product-Services/
Insurance-and-Retirement-Services/SMART_user_guide.pdf.
---------------------------------------------------------------------------
References to ``product'' or ``program'' would be replaced
by references to ``service,'' which is more appropriate for a service
guide.
References to ``relinquishment'' as an available put
exercise would be deleted because they are no longer included as
features of put bonds in the industry.
References to ``hard copy'' reports, notifications, or
instructions would be changed to refer more generally to any medium
used by Participants for transmitting instructions to, or viewing
messages from, DTC.
Correct spelling, grammatical and typographical errors
throughout.
Update other text and contact information, such as
addresses, phone numbers, website information, and email addresses.
(ii) Proposed Rule Change
DTC proposes to amend the Guide as follows:
(1) Important Legal Information: The copyright date would be
updated from 2016 to 2019.
(2) About Reorganization: This heading would be changed to ``About
Reorganization Services.''
a. Introduction: No change would be made to this title.
b. Overview: The ``Overview'' section would be modified to include
references to CA Web and ISO 20022 messaging, and to explain how the
functionality for reorganization services can be accessed. The word
``chapter'' would be replaced with the word ``guide'' to reflect that
the overview addresses the reorganization services throughout the
Guide. The second paragraph of the section would also be modified to
remove the specific references to PTS/PBS functions that would cease to
be available on PTS/PBS, since these functions would be already covered
in the references to PTS and PBS in the amended first paragraph of the
section. Further, the section would be modified to clarify a note about
a Participant's obligation to check the accuracy of information
regarding reorganization activities.
c. Proposed ``Reorganization/Proxy Contact Number'' section: The
new proposed section, ``Reorganization/Proxy Contact Number,'' would be
added to provide Participants with the contact information for
information regarding any aspect of reorganization/proxy processing or
a specific event. In connection with this proposed change, DTC is
proposing to remove the sections of contact information that are
repeated throughout the Guide in connection with each particular
service.
d. About Reorganizations: The title would be changed to ``About the
Reorganizations Service.'' The section would be modified to provide
additional context for, and descriptions of, the Reorganizations
service. The definition of ``agent,'' as used in the Guide, would be
inserted into this section. In addition, the section would be modified
to clarify what would occur if DTC is unable to fully support a
Reorganizations event.
e. Types of Reorganization Products: The title of the section would
be changed to ``Types of Reorganization Event Services.'' The list of
services that are announced and processed by the Reorganization
Department would be clarified and narrowed to the main event types:
Voluntary Offerings, Mandatory Reorganizations, and Proxy. Pursuant to
the restructuring of the Guide, the event subtypes would be addressed
later in the Guide.
f. Reorganization Envelopes: The ``Reorganization Envelopes''
section would be removed because the relevant information about viewing
Announcements would be included in the proposed section titled ``How to
View Mandatory and Voluntary Reorganization Announcements.''
g. Reorganization (RRG) Account/Contra-CUSIP Numbers: This section
would be amended and relocated within the Guide. The title would be
changed to ``Reorganization (RRG) Segregated Account.'' The text at the
end of the section, which reads: ``059 = the activity code of the RIPS
envelope (in this case, rights)'' and ``01 = The sequence number of the
RIPS envelope'' would be modified to remove the references to the RIPS
envelope, to provide more generally that the information is viewable on
other platforms, in addition to RIPS.
h. Pledged Securities: This section would be amended and relocated
within the Guide. For clarity, the section would be modified to include
the following sentence: ``There are specific processes for pledging on
voluntary reorganization events detailed below.''
i. Segregated Securities: This section would be relocated within
the Guide, as discussed below.
j. Chills on Reorg Activities: This section would be amended and
relocated within the Guide. For additional clarity, the section would
be modified to include the following sentence: ``The timing of the
chills will vary depending upon the event type or security type such as
book-entry only.''
k. Frozen Letters: This section would be amended and relocated
within the Guide. The section would be amended to remove the list of
items that are required for a frozen letter request and would reflect
that a template request form (that reflects these requirements) is
available. In addition, the section would be amended to replace the
reference to ``the appropriate person at DTC'' with a specific email
contact at [email protected].\18\ Further, for accuracy, the
following note would be removed: ``Note--DTC does not provide a
specific
[[Page 26469]]
form for an indemnity clause. You must provide the indemnity clause in
whatever format your own legal requirements dictate.'' The template
request form includes an indemnity.\19\
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\18\ See Important Notice B3751-16 (June 29, 2016), available at
https://www.dtcc.com/~/media/Files/pdf/2016/6/29/3751-16.pdf.
\19\ See Important Notice B3751-16 (June 29, 2016), available at
https://www.dtcc.com/~/media/Files/pdf/2016/6/29/3751-16.pdf;
Important Notice B7348 (January 5, 2005), available at www.dtcc.com/
~/media/Files/pdf/2005/1/27/7348.pdf.
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l. Preparing to Use the Products: The title would be changed to
``Preparing to Use the Services.'' The list of technical requirements
would be amended to (i) make ministerial corrections to the references
to PTS and PBS, (ii) add references to CA Web and to ISO 20022 Messages
via MQ and file protocols, and (iii) delete the references to CCF II
and MDH. In addition, the table of PTS/PBS functions would be modified
to insert parallel CA Web functionality. The table would be accompanied
by a note that reads: ``Note that in 2019, the following PTS/PBS
functions will no longer be available for current Reorganization
activity and will be replaced with CA Web functionality as indicated.
PTS/PBS functions will, however, be available for historical research
purposes.'' Further, the section would be amended to add the following
clarifying text: ``DTC offers a comprehensive overview of
reorganization activity comprised of Announcements, Allocations,
Adjustments and applicable alerts via CA Web's Reorganization dashboard
which ``pushes'' data to users. Understanding the Reorganizations
lifecycle and data model are important prerequisites for successful use
of the Reorganizations service. DTC offers robust training resources
available at its Asset Services Learning Center--https://
dtcclearning.com/products-and-services/asset-services.'' Finally, the
last sentence in the section would be changed to: ``Note: DTC also
provides various reports, including on SMART/Search, and Participants
have the ability to export data from CA Web to spreadsheets, for
manipulation and analysis.'' The purpose of this modification to this
general statement is to reflect that various reports are accessed
through SMART/Search and CA Web data reports. In general, Participants
no longer use, and therefore DTC no longer provides, hard copy reports.
m. Reorganization Contact Numbers: This section would be deleted
because contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
n. Service Topics: This heading would be deleted because it is not
relevant to the proposed restructuring of the Guide.
o. Allocations: This entire section would be amended and relocated
within the Guide.
(i) About the Product: As noted above, this section would be
amended and relocated within the Guide. The title ``About the Product''
would be replaced with ``About Allocations.'' The section would be
amended to clarify that DTC will allocate cash and stock to Participant
upon receipt of the confirmed position and entitlements from the agent.
For enhanced transparency, the proposed section would include
additional information on cash allocations, reorganization cash
settlement reporting and stock allocations.
p. Proposed ``How Reorganizations Work'' section: DTC is proposing
to insert a section containing basic information on the elements of
Reorganizations that are relevant to the reorganization services. In
particular, the section would discuss the types of event information
that may be relevant to reorganization events, the types of entitlement
options, the types of entitlement payouts, and the methods by which DTC
might deliver entitlement information to Participants.
q. Associated PTS/PBS Functions: The table of PTS/PBS functions,
which currently reflects PTS/PBS functions used in association with
Allocations, would be modified to reflect a consolidated chart of PTS/
PBS functions that are used in association with Reorganization events
more generally, and to insert parallel CA Web functionality and
applicability of the functions to voluntary events, mandatory events,
and/or proxy. In addition, certain function descriptions would be
revised for clarity. The section heading would be changed to
``Associated PTS/PBS and CA Web Functions.'' Further, the paragraphs
beginning with ``PTOP (PTS)'' and ``PSOP (PTS)'' would be moved to the
proposed ``Voluntary Reorganizations'' section later in the Guide.
r. Allocations Contact Number: This section would be deleted
because contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
(3) Announcements: There would be no changes to this heading.
a. About the Product: The title ``About the Product'' would be
changed to ``About the Service.'' The section would be modified to
replace a reference to ``product'' with ``service'' and to clarify the
types of Reorganizations activities for which DTC provides
Announcements. Further, the section would be updated to remove
references to CCF, CCF II and MDH, and to insert references to CA Web
and ISO 20022. For clarity, an additional note would be inserted, which
would read: ``Note: For all the event/activity types listed, if the
event involves a Canadian issue paying in Canadian dollars, DTC will
announce either two events or one event with multiple options to
include a U.S. dollar option.''
b. How the Product Works: The title ``How the Product Works'' would
be replaced with ``How the Announcement Service Works.'' The section
would be modified to remove inaccurate references to an internal
database and newspapers as sources of reorganization information.
Although DTC may track anticipated reorganization events in its
internal database, it does not announce an event until it retrieves
information from one of the listed sources. DTC does not retrieve
reorganization information from newspapers because, in contrast to the
other listed sources, the information is not directly issued by the
issuer or agent.
c. About the RIPS Function: This section would be consolidated into
and replaced by the proposed section titled ``How to View Mandatory and
Voluntary Reorganization Announcements.''
d. Proposed ``How to View Mandatory and Voluntary Reorganization
Announcements'' section: The proposed section would replace the
``Reorganization Envelopes'' and ``About the RIPS Function'' sections
and would reflect the Reorganization Announcements functionality that
would be available through CA Web and ISO 20022, and would be modified
to reflect enhanced functionality offered by CA Web and ISO 20002.
e. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section at the beginning of
the Guide.
f. Announcements Contact Numbers: This section would be deleted
because contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
(4) CD Early Redemptions: This entire section, with the exception
of ``Associated PBS/PTS functions'' and ``CD Early Redemptions Contact
Numbers,'' would be amended and relocated within the Guide.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The section
[[Page 26470]]
would be modified to replace references to ``product'' with
``service.'' The modifications would include changing the title of the
section ``About the Product'' to ``About the Service.''
b. How the Product Works: As noted above, this section would be
amended and relocated within the Guide. The title ``How the Product
Works'' would be changed to ``How the Service Works.''
c. Exempt Instructions: As noted above, this section would be
relocated within the Guide.
d. Non-Exempt Instructions: As noted above, this section would be
amended and relocated within the Guide. For transparency, it would be
modified to note that ``[t]he documents must be received by DTC within
five days of the instruction otherwise the instruction will drop off
the system (i.e., an incomplete instruction) and will have to be
reentered into the system to re-initiate the process,'' which is the
current process.
e. Issuer Acceptance: As noted above, this section would be
relocated within the Guide.
f. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
g. CD Early Redemptions Contact Numbers: This section would be
deleted because contact information would be provided in the proposed
section, ``Reorganization/Proxy Contact Number.''
(5) Change Mode of Payment (CMOP): This entire section, with the
exception of ``Associated PBS/PTS functions'' and ``CMOP Contact
Numbers,'' would be amended and relocated within the Guide.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The title ``About the Product'' would
be changed to ``About the Service.''
b. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
c. CMOP Contact Numbers: This section would be deleted because
contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
(6) Conversions: This entire section, with the exception of
``Associated PBS/PTS functions'' and ``Conversions Contact Numbers,''
would be amended and relocated within the Guide.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The title ``About the Product'' would
be changed to ``About the Service.'' The section would be modified to
clarify that (i) if entitlements of cash and/or securities is not yet
determined at the time of the instruction, DTC may move a Participant's
instructed position into a contra CUSIP until the entitlements are
determined, and (ii) the entry on the Participant Daily Activity
Statement for conversions is ``Conversions (Account #2222/4444).''
b. About Conversion Features: As noted above, this section would be
relocated within the Guide. The section would be modified to add
additional context and to reflect the trend in the industry to use
market triggers as a conversion feature. In addition, DTC is proposing
to add language that would explain the circumstances in which an
entitlement amount would not be determined at the time of the
Participant's instructions, and would further advise that, in these
circumstances, Participants would input their instructions through
ATOP, rather than the RCNV (PTS).\20\
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\20\ RCNV is used to submit conversion instructions when the
conversion rate(s) and/or new entitlements (securities) are known
and the new securities are eligible for DTC services. Participants
get immediate use of the securities. PTOP (ATOP) is used to submit
conversion instructions when the rate(s) and or new entitlement(s)
is cash, cash or securities or cash and securities, and is
unavailable at the time of the instruction. Participants get
credited with the entitlements upon receipt from the Issuer/Agent.
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c. How the Product Works: As noted above, this section would be
relocated within the Guide. The title ``How the Product Works'' would
be changed to ``How the Service Works.'' This section would be modified
to provide further clarity with respect to circumstances where the
amount of the entitlement is undetermined at the time of the
Participant's instruction and to reflect the increased utilization of
market triggers for convertibility. DTC is further proposing to delete
the sentence ``DTC credits these shares to your general free account if
an underlying issue is in an interim period. The additional shares are
allocated on the due bill redemption date,'' because the concept is
covered elsewhere in the Guide.
d. Pledge and Transfer of Underlying Securities by Book Entry: As
noted above, this section would be relocated within the Guide. The
section would be modified to clarify that the section relates to
conversion instructions submitted to DTC via the PTS RCNV or PBS Reorg
Conversion functions, as opposed to through ATOP. In addition, the
section would be modified to (i) clarify that the conversion process
does not complete until DTC receives the securities from the agent, and
(ii) alert Participants that DTC will reverse the credits to a
Participant's account for underlying securities if DTC does not receive
the underlying securities from the agent promptly.
e. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
f. Conversions Contact Numbers: This section would be deleted
because contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
(7) Eurobond Conversions: This entire section would be amended and
relocated within the Guide, amended as discussed below.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The title ``About the Product'' would
be changed to ``About the Service.'' In addition, references to
``product'' would be replaced with ``service.''
b. How the Product Works: As noted above, this section would be
amended and relocated within the Guide. The title ``How the Product
Works'' would be changed to ``How the Service Works.'' For accuracy and
because the list does not necessarily remain static, the section would
be modified to replace the sentence ``A cumulative listing of the
securities that qualify for the program appears in DTC's Monthly
Reference Directory'' with ``To determine whether a security qualifies
for the program, contact DTC's Customer Support Center at 1-888-382-
2721 and follow the menu options.''
c. Important Considerations: This section would be consolidated
with other ``Important Considerations'' sections into the proposed new
``Important Considerations'' section. The proposed ``Important
Considerations'' section would reflect a modification to replace a
reference to ``product'' with ``service.'' In addition, the proposed
``Important Considerations'' section would replace the statement ``DTC
will make copy #4 of the Certification of Conversion form from the
conversion agent available for you to pick up,'' with ``DTC will make
available via email the agent's Certification of Conversion form.''
This modification would reflect that conversion agents no longer supply
hard copy Certification of Conversion forms.
[[Page 26471]]
d. Pledge and Transfer of Eurobond Underlying Securities by Book-
Entry: This section would be amended and relocated within the Guide.
The section would be modified to (i) clarify that the conversion
process does not complete until DTC receives the securities from the
agent, and (ii) alert Participants that DTC will reverse credits to a
Participant's account for underlying securities if DTC does not receive
the underlying securities from the agent promptly. The section would
also be revised to replace an enumeration of ``a, b, c, d, and e'' with
``1, 2, 3, 4, and 5'' to conform to the referenced list.
(8) Hard Copy Procedure for Conversions/Submitting a Hard Copy
Conversion Instruction: These ``Hard Copy Procedure'' sections would be
deleted and replaced by the proposed section ``Procedures for
Submitting Instructions Outside of PTS/PBS,'' which would update and
consolidate separate hard copy procedures for different event types. In
addition, the proposed section would consolidate the ``Warning!''
statements that currently appear in the separate hard copy procedures
sections. Finally, because the proposed section would apply to multiple
event types, the section would include a new table that would list the
forms for instructions to DTC outside of PTS/PBS. The new table would
list the event types, the appropriate instruction form for each event,
and the appropriate email address to which the form should be directed.
(9) Hard Copy Procedure for Warrant Exercises/Exercising a Warrant
via Hard Copy: These ``Hard Copy Procedure'' sections would be deleted
and replaced by the proposed section ``Procedures for Submitting
Instructions Outside of PTS/PBS,'' which, as noted above, would update
and consolidate separate hard copy procedures for different event
types. In addition, the proposed section would consolidate the
``Warning!'' statements that currently appear in the separate hard copy
procedures sections. Finally, because the proposed section would apply
to multiple event types, the section would include a new table of forms
for instructions to DTC outside of PTS/PBS. The new table would list
the event types, the appropriate instruction form for each event, and
the appropriate email address to which the form should be directed.
(10) Hard Copy Procedures for Voluntary Offerings and Put Option
Exercises/Overview, Accepting an Offer or Put Option Exercise, and
Submitting a Notice of Guaranteed Delivery: These ``Hard Copy
Procedure'' sections would be deleted and replaced by the proposed
section ``Procedures for Submitting Instructions Outside of PTS/PBS,''
which, as noted above, would update and consolidate separate hard copy
procedures for different event types. In addition, the proposed section
would consolidate the ``Warning!'' statements that currently appear in
the separate hard copy procedures sections. Finally, because the
proposed section would apply to multiple event types, the section would
include a new table of forms for instructions to DTC outside of PTS/
PBS. The new table would list the event types, the appropriate
instruction form for each event, and the appropriate email address to
which the form should be directed.
(11) Hard Copy Procedures for Voluntary Offerings and Put Option
Exercises/Accepting an Offer to Tender Securities by Sealed Bids, and
Withdrawing an Acceptance: These ``Hard Copy Procedure'' sections would
be deleted and replaced by the proposed section ``Procedures for
Submitting Instructions Outside of PTS/PBS,'' which would consolidate
and update the separate hard copy procedures for different event types.
(12) Mandatory Reorganizations: This entire section, with the
exception of ``Associated PBS/PTS functions'' and ``Mandatory
Reorganization Contact Numbers,'' would be amended and relocated within
the Guide.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The title ``About the Product'' would
be changed to ``About the Service.'' The section would be modified for
enhanced readability and to add transparency about situations when a
mandatory corporate action may be set-up or processed differently.
b. How the Product Works: As noted above, this section would be
amended and relocated within the Guide. The title ``How the Product
Works'' would be changed to ``How the Service Works.''
c. Various Types of Mandatory Reorganizations: As noted above, this
section would be amended and relocated within the Guide. This section
would be modified to clarify that the activities that are listed are
examples of Mandatory Reorganization events. In addition, the list of
event types would be revised for clarity and consistency, and
additional event types would be added for enhanced transparency.
d. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
e. Mandatory Reorganization Contact Numbers: This section would be
deleted because contact information would be provided in the proposed
section, ``Reorganization/Proxy Contact Number.''
(13) Proxy: For clarity, the title of the section would be changed
to ``Proxy Announcements.''
a. About the Product: The title ``About the Product'' would be
changed to ``About the Service.'' The section would be modified to
change a reference to ``product'' with ``service,'' and to update the
name of the service. For enhanced clarity, the section would be
modified to include general and extraordinary meetings as issuer
communications that are supported by Proxy Announcements. In addition,
for accuracy, the bullet points for Bankruptcies, Legal notices, and
Appraisal or dissenters' rights would be deleted. Announcements for
those events are handled by the Reorganizations Announcements group,
and not by the proxy announcements group.
b. How the Product Works: The title ``How the Product Works'' would
be changed to ``How the Service Works.'' The paragraphs of the section
would be reordered. The section would also be modified to (i) add
references to CA Web and ISO 20022, (ii) to make ministerial clarifying
changes, (iii) to remove a reference to bankruptcy announcement,
because bankruptcies would have its own section in the revised Guide,
and (iv) remove the sentences ``DTC also offers election processing for
consent solicitation events via its ATOP (Automated Tender Offer
Program) service. Under this service, DTC allows participant
instruction on consent solicitation events to be accepted via ATOP and
transmitted electronically to balloting agents,'' because consent
solicitations are not processed as part of the proxy service, but
rather as part of voluntary reorganization services. In addition, the
section would be revised to reflect that Omnibus Proxies are available
through DTC's Securities Position Report (``SPR'') service for those
issuers that are registered for the service. Further, the section would
be modified to provide a reminder to Participants that they should make
sure that their proxy contact information is up-to-date. Finally, a
note about voting securities registered to Cede & Co. that have been
withdrawn on or before record date would be updated from requiring
microfilm copies of the front and back of the certificate to requiring
images (i.e., scanned copies of the front and back of the certificate).
[[Page 26472]]
(14) Proposed ``Processing'' section: As part of the proposed
restructuring of the Guide, DTC is proposing that the ``Processing''
section follow the proposed ``Proxy Announcements'' section in the
Guide.
(15) Proposed ``Mandatory Reorganizations'' section: The entire
Mandatory Reorganizations section, amended as discussed above, would be
moved under the ``Processing'' heading.
(16) Proposed ``Voluntary Offerings'' section: The Voluntary
Offerings section, which appears later in the Guide, would be moved up
to follow the proposed Mandatory Reorganization section. The Voluntary
Offerings section would be modified, as discussed below.
(17) About Legal Notices: This section would be modified for
clarity and to remove references to LENP and the PBS Legal Notice
System, because those platform-based functions were superseded by the
web-based Legal Notice System (``LENS'').\21\ In addition, the section
would be modified to clarify that the LENS service is available to both
Participants and non-Participants.
---------------------------------------------------------------------------
\21\ See Securities Exchange Act Release No. 62686 (August 10,
2010), 75 FR 50032 (August 16, 2010) (SR-DTC-2010-10).
---------------------------------------------------------------------------
(18) Other Shareholder or Bondholder Services: This section would
be modified to accurately reflect the services offered. Specifically,
DTC has not offered ``Ratification of Assertion of appraisal of
Dissenter's Rights,'' as a discrete service and therefore this language
would be deleted. DTC is proposing to add ``Confirmation of a
position,'' as this is a specific service provided by DTC as a part of
the shareholder or bondholder service offerings. The section would also
be revised to add clarifying language and to provide a website address
at which template instructions and letters may be found. Finally,
contact information would be deleted, because, as discussed above,
contact information would be provided at the beginning of the Guide.
(19) Dissenters' Rights/Appraisal Rights: This section would be
revised to state that stockholders may be required to present (and not
deposit) share certificates (or in the case of Direct Registration
Service (DRS) only securities, a DRS Statement) in connection with
their dissent. The purpose of this revision would be to clarify that
this is not a DTC requirement, but, rather, may be a required action
pursuant to the terms of the merger. The section would also be modified
to remove the requirement of an ``appraisal rights questionnaire or
dissenters' rights questionnaire.'' An ``appraisal rights questionnaire
or dissenters' rights questionnaire'' is substantively similar to the
required instruction letter and is therefore no longer required. In
addition, DTC is proposing to add a note providing a website address at
which template instructions and letters may be found.
(20) Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
(21) Proxy Contact Numbers: This section would be deleted because
contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
(22) Puts: This entire section, except for ``Associated PTS/PBS
Functions'' and ``Puts Contact Numbers,'' would be amended and
relocated within the Guide.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The section would be modified to change
a reference to ``product'' with ``service.'' In addition, the reference
to exercising relinquishments would be deleted. In addition, the
provision referencing a relinquishment, ``[n]on-option securities based
on your position in the contra (relinquishment) security,'' would be
deleted.
b. About Puts: This section would be relocated within the Guide,
where it would proceed the proposed ``Puts/About the Product'' section.
c. Types of Put Options: This section would be amended and
relocated within the Guide, and would be amended to remove the
reference to ``Relinquishment'' and to add a line item for ``Put
(Survivor Option).'' ``Put (Survivor Option)'' would be described as
``Issue has an early redemption feature. This feature allows the holder
to elect to sell bonds back to the issuer on a predetermined basis
(excluding monthly) according to specific priorities.''
d. Exercising Put Options: This section would be relocated within
the Guide. The section would be amended to clarify that ``[e]xcept with
respect to put options that have an offer to purchase with no
withdrawal privilege, you can submit exercise instructions via the PTS
PUTS or PBS Put Option Bonds functions. Instructions relating to put
options that have an offer to purchase with a withdrawal privilege can
be submitted through the PTS PTOP or PBS Voluntary Tenders and
Exchanges functions.''
e. Withdrawing Put Option Instructions: This section would be
relocated within the Guide, and would be amended to include CA Web and
to further clarify that the event details would be available on PTS
RIPS, PBS Redemptions and Reorganizations or CA Web.
f. Rejection of Withdrawal of Put Option Instructions: This section
would be relocated within the Guide, and would be modified to remove
the specific reference to how DTC would communicate the rejection,
because there are different ways for a Participant to access this
information.
g. Proration of a Repayment Option: This section would be relocated
within the Guide. The text of the section would be deleted and would be
replaced by an instruction to refer to ``the proration details found in
the Proration of an Offer section of the About DTC's Automated Tender
Offer Program (ATOP) topic of this guide.''
h. Interest Payments, Dividends, Distributions, and Voting Rights
for Tendered Securities: This section would be consolidated with
``About ATOP/Interest Payments, Dividends, Distributions, and Voting
Rights for Tendered Securities,'' and ``Warrant Exercises/Interest
Payments, Dividends, Distributions, and Voting Rights,'' into a single
proposed section, ``Interest Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities,'' which would appear later in
the Guide. The proposed section would reflect the consolidation, and
would enumerate the different types of tendered securities for which
Cede & Co. may receive property or rights to distribute to
Participants. References to specific offer options would be genericized
(e.g., the reference to a specific ``repayment option period'' would be
replaced with a more general reference to ``corporate action,'' and
replace a reference to the terms ``of a repayment option'' with the
terms ``of an offer'').
i. Important Considerations: This section would be consolidated
with other ``Important Considerations'' sections the proposed
``Important Considerations'' section that would be inserted in the
proposed ``Instructions/Expirations'' section. The eighth bullet, ``No
legal deposits of the subject security will be accepted from the date
of the PTS RIPS or PBS Reorganizations and Redemptions announcement for
the duration of the put exercise period'' would be deleted because it
is inaccurate.\22\ The ninth bullet would be removed because it would
be covered in the Chills on Reorg Activities section.
[[Page 26473]]
The tenth bullet would be deleted because the necessary information
would appear in the proposed ``Procedures for Submitting Instructions
Outside of PTS/PBS'' section. The proposed section would also eliminate
a reference to ``relinquishment.'' The proposed section would reflect
the substance of the consolidated sections, and would, where
appropriate, replace the references to specific tenders and designated
PTS/PBS functions with generic references.
---------------------------------------------------------------------------
\22\ DTC cannot prevent submission of legal deposits during the
put exercise period because the target CUSIP is not chilled for
deposits.
---------------------------------------------------------------------------
j. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
k. Puts Contact Numbers: This section would be deleted because
contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
(23) Rejection by DTC or the Agent: This entire section would be
relocated within the Guide, as noted above.
a. Rejection by DTC: As noted above, this section would be
relocated within the Guide.
b. Rejection by the Agent: As noted above, this section would be
relocated within the Guide.
(24) Rights Subscriptions: This entire section, except for
``Associated PTS/PBS Functions,'' ``Rights Subscriptions Contact
Numbers,'' ``Distribution of Underlying Securities,'' ``Distribution of
Sale Proceeds,'' ``Cancellation of Rights Offer,'' and ``About the
Rights Subscription Instructions PTS/PBS Backup Form,'' which would be
deleted, would be amended and relocated within the Guide.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The title ``About the Product'' would
be changed to ``About the Service.'' The section would be modified to
change a reference to ``product'' with ``service,'' and to update the
name of the service. In addition, for accuracy and clarity, the section
would be amended to replace a reference to ``underlying securities''
with ``entitlements,'' and note that DTC would also allocate refunds
when applicable. Further, the final sentence in the section would be
updated to add a reference to CA Web.
b. About Rights: As noted above, this section would be amended and
relocated within the Guide. The last sentence in this section would be
updated to add references to CA Web and ISO 20022.
c. Relevant Terms: As noted above, this section would be amended
and relocated within the Guide. For enhanced clarity, the term ``Cover
of Protect,'' which refers to ``The surrendering of rights for which a
previous protect had been submitted as a guarantee of delivery'' would
be added to the table of relevant terms. For consistency, DTC is
proposing to refer to ``agent,'' rather than a specific type of agent,
and would therefore delete the definition of ``Subscription Agent (or
Issuer's Agent).''
d. About DTC's Automated Subscription Offer Program (ASOP): As
noted above, this section would be amended and relocated within the
Guide.
e. General Information Regarding ASOP: As noted above, this section
would be amended and relocated within the Guide. The section would be
modified to include references to CA Web Announcements and ISO 20022.
f. Subscription Instructions: As noted above, this section would be
amended and relocated within the Guide. The following paragraph would
be deleted because DTC would be adding the proposed ``Procedures for
Submitting Instructions Outside of PTS/PBS'' section, which would be
applicable to Subscription Instructions: ``No hardcopy instructions are
accepted by DTC unless specifically authorized in advance by the
appropriate DTC Reorganization department or Relationship Manager. In
the event of a PTS or PBS outage, a backup hard copy form (Rights
Subscription Instructions PTS/PBS Backup Form) is available for the
purpose of instructing DTC to surrender rights and the required
subscription payment (see About the Rights Subscription Instructions
PTS/PBS Backup Form). If you experience a PTS or PBS outage, you can
alternatively execute and submit the required Notice of Guaranteed
Delivery document and subscription payment directly to the agent; a DTC
backup hard copy form is not available for this purpose.''
g. Subscription Payments: As noted above, this section would be
amended and relocated within the Guide. The last sentence in the
section would be amended to include references to CA Web and ISO 20022
messages.
h. Payments with Notices of Guaranteed Delivery: As noted above,
this section would be amended and relocated within the Guide. The last
sentence in the section would be amended to include references to CA
Web and ISO 20022 messages.
i. Movement of Underlying Securities: As noted above, this section
would be amended and relocated within the Guide. The section would be
modified to add references to contra-CUSIPs, which may, in certain
circumstances be applicable. For clarity, the sentences in the first
paragraph of the section would be reordered.
j. Subscription Sub-Accounts: As noted above, this section would be
amended and relocated within the Guide. The last sentence of this
section would be modified to include a reference to CA Web.
k. Schedule for Submitting Instructions: As noted above, this
section would be amended and relocated within the Guide. The first
paragraph of the section would be modified to include references to CA
Web Announcements and ISO 20022 messaging. In addition, the table of
instructions and PSOP times would be modified to remove the row
relating to ``Notices of Guaranteed Delivery on the last day of the
offer, with deferred subscription payments,'' because the information
already appears in the note below.
l. Inquiring About ASOP-Eligible Offers: As noted above, this
section would be amended and relocated within the Guide and would be
modified to (i) include references to CA Web and ISO 20022 messaging,
and (ii) replace a reference to a ``hard copy notice'' with ``email
alert,'' as hard copy notices are no longer provided. The section would
also be amended to clarify that ``[w]ith certain rights subscription
events you may be directed to submit your instructions through PTOP.''
m. Accepting an ASOP-Eligible Offer: As noted above, this section
would be amended and relocated within the Guide. The section would be
amended to clarify that ``[i]nstructions being submitted to DTC after
the DTC cutoff must be approved by, and delivered to, the agent
handling the event, prior to submission to DTC.'' In addition, the
section would be amended to add a reference to CA Web.
n. Checklist for Submitting an Acceptance: As noted above, this
section would be amended and relocated within the Guide. The section
would be amended to clarify, with respect to special representations,
that a Participant's ability to input these representations in specific
fields on the PTS PSOP or PBS Rights Subscriptions screen, or in the
Comments field, would be based on the terms of the offer. In addition,
in respect to an acknowledgement message regarding the acceptance, the
section would be modified to provide that ``Participants that subscribe
to the ISO 20022 Instruction Statement Report (CAST) will be able to
verify instructions status on the message.''
[[Page 26474]]
o. Submitting a Protect for an ASOP-Eligible Offer: As noted above,
this section would be amended and relocated within the Guide. The
section would be amended to clarify that a Participant can cover its
protect by ``on or before the end of the period, by either delivering
securities [the Participant has] on deposit with DTC or having another
participant deliver on [the Participant's] behalf to the agent via the
PTS PSOP or PBS Rights Subscriptions function.'' In addition,
references to ``hard copy instructions'' would be replaced with
``instructions,'' so as to include emails, faxes, and other methods of
instructions outside of PTS PSOP or the PBS Rights Subscriptions
function. In addition, the section would be modified to instruct
Participants that ``[i]f you intended to submit a protect instruction
via PSOP but missed the cutoff for submitting the protect via PSOP it
is your responsibility to contact the agent and determine if they will
accept an email submission directly. If accepted, the agent will notify
DTC and the Participant should submit a Protect Submission Form to DTC
via email. DTC will then input the protect submission on behalf of the
Participant. The Participant must confirm the protect submission input
by DTC is accurate. The Participant will be able to cover the protect
opened by DTC.'' Further, the section would be amended to include CA
Web as a source for viewing a notice of an offer.
p. Checklist for Submitting a Protect: As noted above, this section
would be amended and relocated within the Guide. The section would be
amended to clarify, with respect to special representations, that a
Participant's ability to input these representations in specific fields
on the PTS PSOP or PBS Rights Subscriptions screen, or in the Comments
field, would be based on the terms of the offer. The section would also
be amended to remove the statement that ``(The field available for this
message is 150 characters in length.)'' because it is not directly
relevant to the process and is subject to change. In addition, in
respect to an acknowledgement message regarding the acceptance, the
section would be modified to provide that ``Participants that subscribe
to the ISO 20022 Instruction Statement Report (CAST) will be able to
verify instructions status on the message.''
q. Submitting a Cover of Protect via PTS PSOP or PBS Rights
Subscriptions for an ASOP-Eligible Offer: As noted above, this section
would be amended and relocated within the Guide. The section would be
amended to clarify that a Participant ``cannot subsequently deliver the
securities to the Agent via the PTS PSOP or PBS Rights Subscriptions
function unless the instruction was subsequently input by DTC.'' In
addition, the warning that states ``Warning! To be able to cover a
protect via PTS PSOP or PBS Rights Subscriptions you must submit
protect instructions for ASOP-eligible offers via PTS PSOP or PBS
Rights Subscriptions; except as noted in Subscription Instructions,
hard copy instructions will not be accepted by DTC on ASOP-eligible
offers and, if submitted, will be rejected. DTC may attempt to notify
you of the rejection, but DTC has no liability for any failure to
notify'' would be replaced with a warning that states ``Warning! You
must accept ASOP-eligible offers via PTS PSOP or PBS Rights
Subscriptions; except as noted in Subscription Instructions,
instructions outside of PTS/PBS will not be accepted by DTC on ASOP-
eligible offers during the period when instructions can be input via
PTS PSOP or PBS Rights Subscriptions for ASOP eligible offers and, if
submitted, will be rejected. If possible, DTC will attempt to notify
you of the rejection, but DTC cannot guarantee such notification.'' The
purpose of this change would be to clarify that, unless otherwise
noted, no instruction would be accepted by DTC while the instruction
window is open in PSOP. Finally, the section would be amended to
include CA Web as a source for viewing a notice of an offer.
r. Checklist for Submitting a Cover of Protect via PTS PSOP or PBS
Rights Subscriptions: As noted above, this section would be amended and
relocated within the Guide. The section would be modified to remove the
first step that reads ``submit a Notice of Guaranteed Delivery and the
required subscription payment to the subscription agent via PTS PSOP or
PBS Rights Subscriptions before the offer expires,'' because this is a
prerequisite to submitting a cover of protect and is not part of the
actual process. DTC is proposing that the first step for a Participant
would be to ``[v]erify that a Notice of Guaranteed Delivery and the
required subscription payment to the agent via PTS PSOP or PBS Rights
Subscriptions was submitted and accepted,'' so it confirms that the
prerequisite occurred prior to submission of the cover. For clarity,
the second step would be simplified to instruct a Participant to
``[r]etrieve the specific protect instruction you want to cover.'' In
step four, the sentence stating ``See Submitting Cover Protect
Instructions Via PTS PSOP or PBS Rights Subscriptions'' would be
deleted, as it is duplicative. Step five would be modified to clarify
that a Participant can submit more than one instruction to cover the
Notice of Guaranteed Delivery as long as the quantity of rights
indicated in those instructions does not exceed the original Notice of
Guaranteed Delivery quantity, with the total of all cover of protect
instructions equaling the amount of the protect submission. Step eight
would be amended to replace ``PTS POS or PBS Security Position
functions'' with ``Settlement Web'' because the POS function has been
retired and the functionality is currently available on the Settlement
Web. The ninth step would be deleted because a Participant should make
its own determination about its document retention procedures.
s. Submitting a Cover of Protect on Behalf of another Participant:
As noted above, this section would be amended and relocated within the
Guide. The section would be modified to add a clarifying warning to
Participants that states: ``Warning! To be able to cover a protect via
PTS PSOP or PBS Rights Subscriptions on behalf of another participant
you must submit protects on ASOP-eligible offers via PTS PSOP or PBS
Rights Subscriptions or have had a protect submitted directly to the
agent via email and subsequently communicated to DTC and input to PSOP
by DTC; cover of protect instructions outside of PTS/PBS will not be
accepted by DTC on ASOP-eligible offers and, if submitted, will be
rejected. If possible, DTC will attempt to notify you of the rejection,
but cannot guarantee such notification.'' Further, the section would be
amended to include CA Web as a source for viewing a notice of an offer.
t. Checklist for Submitting a Cover of Protect on Behalf of another
Participant: As noted above, this section would be amended and
relocated within the Guide. The section would be modified to amend the
second step in the checklist to clarify that a Participant should enter
and transmit an instruction to surrender rights and cover the protect
via PTS PSOP or PBS Rights Subscriptions ``during the period when cover
of protect submissions can be input.'' The fifth step would be amended
for clarity and readability. The sixth step would be deleted because a
Participant should make its own determination about its document
retention procedures. Further, with respect to an acknowledgement
message regarding the acceptance, the section would be modified to
provide that ``Participants that subscribe to the ISO 20022 Instruction
Statement Report
[[Page 26475]]
(CAST) will be able to verify instructions status on the message.''
u. Surrendering Rights for Sale via ASOP: As noted above, this
section would be amended and relocated within the Guide. The section
would be amended to include CA Web as a source for viewing a notice of
an offer.
v. Checklist for Submitting Sell Instructions: As noted above, this
section would be amended and relocated within the Guide. The section
would be amended by modifying the seventh step in the checklist for
clarity and readability, and to provide that, with respect to an
acknowledgement message regarding the acceptance, ``Participants that
subscribe to the ISO 20022 Instruction Statement Report (CAST) will be
able to verify instructions status on the message.'' The eighth step
would be deleted because a Participant should make its own
determination about its document retention procedures.
w. Rejection of Acceptances, Covers of Protects, or Sell
Instructions: As noted above, this section would be relocated within
the Guide.
x. Distribution of Underlying Securities: This section would be
deleted because it would be addressed in the proposed Allocations
section.
y. Distribution of Sale Proceeds: This section would be deleted
because it would be addressed in the proposed Allocations section.
z. Cancellation of Rights Offer: This section would be deleted
because it would be addressed in the proposed Allocations section.
aa. About the Rights Subscription Instructions PTS/PBS Backup Form:
As discussed above, the proposed ``Procedures for Submitting
Instructions Outside of PTS/PBS'' would replace the ``Hard Copy
Procedure for Conversions/Submitting a Hard Copy Conversion
Instruction,'' ``Hard Copy Procedure for Warrant Exercises/Exercising a
Warrant via Hard Copy,'' ``Hard Copy Procedures for Voluntary Offerings
and Put Option Exercises,'' and ``About the Rights Subscription
Instructions PTS/PBS Backup Form'' sections.
bb. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
cc. Rights Subscriptions Contact Numbers: This section would be
deleted because contact information would be provided in the proposed
section, ``Reorganization/Proxy Contact Number.''
(25) Voluntary Offerings: This entire section would be amended and
relocated within the Guide, as discussed above.
a. About the Product: As noted above, this section would be amended
and relocated within the Guide. The title ``About the Product'' would
be replaced with ``About the Service.'' The section would be modified
to streamline language and to reference CA Web as a source of
information on voluntary offers. Further, the section would be modified
to delete references to specific types of voluntary reorganizations in
the first paragraph and provide a new table of various examples of
voluntary reorganizations and descriptions of each. In addition, the
last two paragraphs of the section would be deleted because one of the
paragraphs is inaccurate, and the second because it is always the
responsibility of a Participant to confirm that their transactions were
properly processed and recorded. Finally, the section would be modified
to insert the following language for additional context: ``Voluntary
offerings are in the form of either (1) issuer or third party offers
(e.g., tender, exchange, merger with elections), (2) offers that
reflect the attributes of the security (e.g., Right, Convertible
Security, Put Bond or Warrant) and (3) certain consent-only
solicitations (which do not require securities being forwarded to the
agent and may not include collecting and allocating proceeds to you).
In addition, this service may require certifications as part of the
acceptance of an offer (instruction process) and could include
provisions such as conditional tenders and odd-lots.''
b. Proposed ``Additional Processes Associated with Reorganization
Events'' heading: For clarity, DTC is proposing to insert the heading
``Additional Processes Associated with Reorganization Events.''
c. Proposed ``Pledged Securities'' section: The ``Pledged
Securities'' section, amended as discussed above, would be moved under
the proposed ``Additional Processes Associated with Reorganization
Events'' heading.
d. Proposed ``Segregated Securities'' section: The ``Segregated
Securities'' section, amended as discussed above, would be moved under
the proposed ``Pledged Securities'' section.
e. Proposed ``Reorganization (RRG) Segregated Account'' section:
The ``Reorganization (RRG) Segregated Account'' section, amended as
discussed above, would be moved under the proposed ``Segregated
Securities'' section.
f. About Contra-CUSIPs: No change.
g. Pledge of Contra-Securities: The section would be amended to
clarify that, for the purpose of its pledge, the contra-securities
represent a Participant's rights through DTC to receive from the agent
the cash ``and/or security'' payments based on the ``rate or accepted''
bid and/or the return of some or all of the surrendered securities in
accordance with the terms of the offer.
h. Solicitation Fees and Transfer Taxes: This section would be
relocated within the Guide. The section would be modified to include
references to CA Web Announcements and ISO 20022 messaging.
i. Proposed ``Chills on Reorg Activities'' section: The ``Chills on
Reorg Activities'' section, amended as discussed above, would be moved
under the ``Pledge of Contra-Securities'' section.
j. Proposed ``Frozen Letters'' section: The ``Frozen Letters''
section, amended as discussed above, would be moved under the proposed
``Chills on Reorg Activities'' section.
k. Proposed ``Interest Payments, Dividends, Distributions, and
Voting Rights for Tendered Securities'' section: The ``Interest
Payments, Dividends, Distributions, and Voting Rights for Tendered
Securities'' section, amended as discussed above and below, would be
moved under the proposed ``Frozen Letters'' section.
(26) Proposed ``INSTRUCTIONS/EXPIRATIONS'' section: As part of the
proposed restructuring of the Guide, DTC is proposing that a
``INSTRUCTIONS/EXPIRATIONS'' section follow the ``Voluntary Offerings''
section in the Guide.
a. Relevant Terms: As discussed above, for consistency, DTC is
proposing to refer to ``agent,'' rather than a specific type of agent,
and would therefore delete the definitions of ``Tender Agent'' and
``Information Agent.''
b. Proposed ``Important Considerations'' section: As discussed
above and below, the other ``Important Considerations'' sections,
including the proposed amendments, would be consolidated into the
proposed ``Important Considerations'' section, which would be inserted
under the ``Relevant Terms'' section.
c. About DTC's Automated Tender Offer Program (ATOP): This section
would be modified to replace a reference to ``product'' with
``service,'' and to delete references to CCF II and MDH. The section
would also be modified to clarify that ATOP allows a Participant to
submit instructions on Consent Solicitation events for transmission to
balloting agents. Further, the section would be amended
[[Page 26476]]
to include CA Web as a source for viewing information about an offer.
d. Inquiring About ATOP-Eligible Offers: This section would be
modified to (i) include references to CA Web and ISO 20022 messaging,
(ii) delete a reference to a ``hard copy notice,'' as hard copy notices
are no longer provided, and add ``email alert,'' and (iii) delete the
bullet ``A PTS RIPS or PBS Reorganizations and Redemptions notice
through CCF,'' because CCF corporate action announcement files were
retired as of December 31, 2018. The section would also be amended to
remind Participants that they should take note of (i) any special
conditions of the offer, such as the existence of odd-lot preference or
the ability to submit a conditional acceptance, and the price range and
permissible increments on bid price tenders, as well as ``early
expirations associated with a premium or consent,'' and ``If a
withdrawal of a previously submitted instruction is part of the offer
and the timeframes for requesting the withdrawal.''
e. Accepting an ATOP-Eligible Offer: The reference to ``Submitting
a VOI'' would be deleted because that section does not appear in the
Guide. In addition, the warning in this section would be modified to
clarify that DTC will not accept any instructions outside of ATOP
during the period when the instruction window is open on ATOP. Further,
the section would be amended to include CA Web as a source for viewing
a notice of an offer. Finally, the reference to ``Hard Copy Procedures
for Voluntary and Put Options'' would be replaced with ``Submitting a
Protect for an ATOP-Eligible Offer,'' in order to conform to other
proposed changes.
f. Checklist for Submitting an Acceptance: The section would be
amended to clarify, with respect to the second step regarding special
representations, that a Participant's ability to input these
representations in specific fields on the PTS PTOP or PBS Voluntary
Tenders and Exchanges screen, or in the Comments field, would be based
on the terms of the offer. With respect to comments, the statement that
``[t]he field available for this message is 67 characters in length''
would be deleted because it is not directly relevant to the process and
is subject to change. The third step would be modified to clarify that
a Participant should enter and transmit the acceptance via PTS PTOP or
PBS Voluntary Tenders and Exchanges ``during the period when
submissions can be input via PTS or PBS for ATOP eligible offers.'' The
reference to ``Submitting a VOI'' would be deleted because that section
does not appear in the Guide. In the fourth step, a reference to the
Viewing VOI Details section would be deleted because that section does
not appear in the Guide. In the fifth step, the reference to a ``PTS/
PBS'' message would be replaced by a generic reference to a ``message''
because Participants can access the acknowledgement message on various
platforms. In addition, in respect to an acknowledgement message
regarding the acceptance of an instruction, the section would be
modified to provide that ``Participants that subscribe to the ISO 20022
Instruction Statement Report (CAST) will be able to verify instructions
status on the message.'' Finally, in the sixth step, the reference to a
``PTS PTOP or PBS Voluntary Tenders and Exchanges'' message would be
replaced by a generic reference to a ``message'' because Participants
can access the acknowledgement message through various platforms.
g. Submitting a Protect for an ATOP-Eligible Offer: The section
would be amended to clarify that (i) an offer has to include a
guaranteed delivery option in order for a Participant to submit a
protect, and (ii) a Participant can cover its protect ``on or before
the end of the period, by either delivering securities [the Participant
has] on deposit with DTC or having another participant deliver on [the
Participant's] behalf to the subscription agent via the PTS PTOP or PBS
Voluntary Tenders and Exchanges functions.'' Further, the warning would
be amended to clarify the parameters of submitting an email submission
to DTC. The reference to the ``Submitting a Protect'' section would be
replaced with a reference to the ``Submitting a Cover of Protect.'' The
warning would state: ``Warning! You must submit Notices of Guaranteed
Delivery on ATOP-eligible offers via PTS PTOP or PBS Voluntary Tenders
and Exchanges; hard copy instructions outside of PTS/PBS will not be
accepted by DTC on ATOP-eligible offers during the period when protect
submissions can be input via PTOP for ATOP eligible offers and, if
submitted during this period, will be rejected. If possible, DTC will
attempt to notify you of the rejection, but cannot guarantee such
notification. If you intended to submit a protect instruction via PTOP
but missed the cutoff for submitting the protect via PTOP, it is your
responsibility to contact the agent and determine if they will accept
an email submission directly. If accepted, the agent will notify DTC
and the Participant should email a Protect Submission Form to DTC. DTC
will then input the protect submission on behalf of the Participant.
The Participant must confirm the protect submission input by DTC is
accurate.'' In addition, references to ``hard copy instructions'' would
be replaced with ``instructions,'' in order to include emails, faxes,
and other methods of instructions outside of PTS PTOP or the PBS
Voluntary Tenders and Exchanges function. In addition, the section
would be amended to include CA Web as a source for viewing information
about an offer.
h. Checklist for Submitting a Protect: The section would be amended
to clarify, with respect to special representations, that a
Participant's ability to input these representations in specific fields
on the PTS PTOP or PBS Voluntary Tenders and Exchanges screen, or in
the Comments field, would be based on the terms of the offer. In
addition, with respect to comments, the statement that ``[t]he field
available for this message is 67 characters in length'' would be
deleted because it is not directly relevant to the process and is
subject to change. The section would be modified to amend the second
step to clarify that a Participant should enter and transmit an
instruction to surrender rights and cover the protect via PTS PTOP or
PBS Voluntary Tenders and Exchanges functions ``during the period when
cover of protect submissions can be input.'' Further, a reference to
the Viewing VOI Details section would be deleted because that section
does not appear in the Guide. In addition, the references to a ``PTS/
PBS'' or ``PTS PTOP or PBS Voluntary Tenders and Exchanges'' message
would be replaced by a generic reference to a ``message'' because
Participants can access the acknowledgement message on various
platforms. Finally, in respect to an acknowledgement message regarding
the acceptance, the section would be modified to provide that
``Participants that subscribe to the ISO 20022 Instruction Statement
Report (CAST) will be able to verify instructions status on the
message.''
i. Submitting a Cover of Protect via PTS PTOP or PBS Voluntary
Tenders and Exchanges for an ATOP-Eligible Offer: The section would be
modified to replace a reference to ``hard copy instructions'' with the
generic ``instructions,'' to conform the language with the proposed
``Procedures for Submitting Instructions Outside of PTS/PBS'' section.
The section would also be modified to clarify that instructions outside
of PTS PTOP or the PBS Voluntary Tenders and Exchanges function would
not be accepted while the instruction window is open. In addition, the
section would be amended
[[Page 26477]]
to include CA Web as a source for viewing information about an offer.
j. Checklist for Submitting a Cover of Protect via PTS PTOP or PBS
Voluntary Tenders and Exchanges: The section would be modified to
remove the first step that reads ``Submit a Notice of Guaranteed
Delivery to the tender agent via PTOP before the offer expires,''
because this is a prerequisite to submitting a cover of protect and is
not part of the actual process. DTC is proposing that the first step
state that a Participant ``[v]erify that a protect instruction was
submitted and accepted,'' so that a Participant confirms that the
prerequisite occurred prior to submission of the cover. The section
would be amended to add a step that would remind Participants to
``[v]erify the existence of sufficient position being available to
cover the protect instruction position.'' For clarity, the following
step would be simplified to instruct a Participant to ``[r]etrieve the
specific protect instruction you want to cover.'' The next step would
be amended to clarify that a Participant should ``[e]nter and transmit
an instruction to surrender securities and cover the protect via PTS
PTOP or PBS Voluntary Tenders and Exchanges during the period when
cover of protect submissions can be input,'' and would add a reference
to the Cover of Protect on Behalf of Another Participant section, if
another participant is covering the protect on the Participant's
behalf. Further, a reference to the Viewing VOI Details section would
be deleted because that section does not appear in the Guide. In the
subsequent steps, the reference to a ``PTS/PBS,'' ``PBS,'' or ``PTOP''
message would be replaced by a generic reference to a ``message''
because Participants can access the acknowledgement message on various
platforms. In addition, in respect to an acknowledgement message
regarding the acceptance, the section would be modified to provide that
``Participants that subscribe to the ISO 20022 Instruction Statement
Report (CAST) will be able to verify instructions status on the
message.'' Finally, in the sixth step, the reference to a ``PTS PTOP or
PBS Voluntary Tenders and Exchanges'' message would be replaced by a
generic reference to a ``message'' because Participants can access the
acknowledgement message through various platforms.
k. Submitting a Cover of Protect via PTS PTOP or PBS Voluntary
Tenders and Exchanges on Behalf of Another Participant: The section
would be modified to replace a reference to ``hard copy instructions''
with the generic ``instructions,'' to conform the language with the
proposed ``Procedures for Submitting Instructions Outside of PTS/PBS''
section. In addition, the warning language would be amended to conform
with existing practice. The proposed warning would read: ``Warning! To
be able to cover a protect via PTS PTOP or PBS Voluntary Tenders and
Exchanges on behalf of another participant you must submit protects on
ATOP-eligible offers via PTS PTOP or PBS Voluntary Tenders and
Exchanges; hard copy or have had a protect submitted directly to the
agent via email and subsequently communicated to DTC and input to PTOP
by DTC; cover of protect instructions outside of PTS/PBS will not be
accepted by DTC on ATOP-eligible offers and, if submitted, will be
rejected. If possible, DTC will attempt to notify you of the rejection,
but cannot guarantee such notification.'' Further, the section would be
amended to include CA Web as a source for viewing a notice of an offer.
l. Checklist for Submitting a Cover of Protect via PTS PTOP or PBS
Voluntary Tenders and Exchanges on Behalf of Another Participant: The
section would be modified by deleting a reference to the Viewing VOI
Details section because that section does not appear in the Guide. In
addition, references to a ``PTS/PBS'' or ``PBS'' message would be
replaced by a generic reference to a ``message'' because Participants
can access the acknowledgement message on various platforms. In
addition, in respect to an acknowledgement message regarding the
acceptance, the section would be modified to provide that
``Participants that subscribe to the ISO 20022 Instruction Statement
Report (CAST) will be able to verify instructions status on the
message.''
m. Withdrawing an Acceptance of an ATOP-Eligible Offer: The section
would be modified to replace a reference to ``hard copy instructions''
with the generic ``instructions,'' to conform the language with the
proposed ``Procedures for Submitting Instructions Outside of PTS/PBS''
section. In addition, the warning language would be amended for
clarification. The proposed warning would read: ``Warning! You must
submit withdrawals of acceptances on ATOP-eligible offers via PTS PTOP
or PBS Voluntary Tenders and Exchanges; withdrawals outside PTS/PBS
will not be accepted by DTC on ATOP-eligible offers during the period
when withdrawal of instructions can be input, and, if submitted, will
be rejected. If possible, DTC will attempt to notify you of the
rejection, but cannot guarantee such notification.''
n. Checklist for Withdrawing an Acceptance: The section would be
modified by deleting references to the Viewing VOI Details section
because that section does not appear in the Guide. In addition,
references to a ``PTS/PBS'' or ``PTS PTOP or PBS Voluntary Tenders and
Exchanges'' message would be replaced by a generic reference to a
``message'' because Participants can access the acknowledgement message
on various platforms. Further, in respect to an acknowledgement message
regarding the acceptance, the section would be modified to provide that
``Participants that subscribe to the ISO 20022 Instruction Statement
Report (CAST) will be able to verify instructions status on the
message.''
o. About Rejections of Acceptances and Covers of Protects: This
section would be retitled ``About Rejections of Instructions'' in order
to encompass acceptances via Notices of Guaranteed Delivery.
p. Proration of an Offer: This section would be modified to enhance
transparency of the process and to clarify what would happen to
unaccepted positions.
q. Interest Payments, Dividends, Distributions, and Voting Rights
for Tendered Securities: As discussed above, this section would be
consolidated with ``Puts/Interest Payments, Dividends, Distributions,
and Voting Rights for Tendered Securities,'' and ``Warrant Exercises/
Interest Payments, Dividends, Distributions, and Voting Rights,'' into
a single proposed section by the same name, ``Interest Payments,
Dividends, Distributions, and Voting Rights for Tendered Securities,''
which would appear later in the Guide.
r. Available Reports: This section would be modified to delete
references to CCF II and MDH, and to include references to CA Web and
ISO 20022 Announcement messages. The sentence ``Allocation information
is available through all of the normal cash and position inquiries such
as the PBS functions PTS SDAR or PBS Reorg/Redemptions/Dividend
Allocations, PTS POS or PBS Security Position, PTS PART or Participant
Activity Research and PTS ART or PBS Activity Research Tool'' would be
replaced with the following sentence: ``Allocation information is
available through the Reorganization Cash/Stock Settlement Lists and
the Participant Daily Activity Statement.'' The purpose of this
proposed change is to remove references to functions (PTS POS or PBS
Security Position and PTS ART or PBS Activity
[[Page 26478]]
Research Tool) that have been migrated to the Settlement Web.\23\
---------------------------------------------------------------------------
\23\ See Securities Exchange Act Release No. 63936 (February 22,
2011), 76 FR 10628 (February 25, 2011) (SR-DTC-2011-03).
---------------------------------------------------------------------------
s. Important Considerations: This section would be consolidated
with the other ``Important Considerations'' sections into the proposed
``Important Considerations'' section that would be inserted in the
proposed ``Instructions/Expirations'' section, as discussed above. The
proposed section would reflect the substance of the consolidated
sections, and would, where appropriate, replace references to specific
tenders and designated PTS/PBS functions with generic references.
t. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
u. Voluntary Offerings Contact Numbers: This section would be
deleted because contact information would be provided in the proposed
section, ``Reorganization/Proxy Contact Number.''
v. Proposed ``Voluntary Offers Representing Attributes of the
Security (processed via various functions)'' section: This proposed
section would be added in order to provide direction as to which PTS
function to use for submitting voluntary instructions in connection
with securities with specific attributes.
(27) Proposed ``Conversions'' section, including the proposed
``About the Service,'' ``About Conversion Features,'' ``How the Service
Works,'' and ``Pledge and Transfer of Underlying Securities by Book-
Entry'' sections: These proposed sections, as discussed above, would be
inserted after the proposed ``Voluntary Offers Representing Attributes
of the Security (processed via various functions)'' section.
(28) Proposed ``Eurobond Conversions'' section, including the
proposed ``About the Service,'' ``How It Works,'' ``Important
Considerations,'' and ``Pledge and Transfer of Eurobond Underlying
Securities by Book-Entry'' sections: These proposed sections, as
discussed above, would be inserted after the proposed ``Conversions''
sections.
(29) Proposed ``Puts'' section, including the proposed ``About
Puts,'' ``About the Service,'' ``Types of Put Options,'' ``Exercising
Put Options,'' ``Withdrawing Put Options,'' ``Rejection of Withdrawal
of Put Option Instructions,'' and ``Proration of Repayment Option''
sections: These proposed sections, as discussed above, would be
inserted after the proposed ``Eurobond Conversions'' sections.
(30) Proposed ``Rejection by DTC or Agent'' section, including the
proposed ``Rejection by DTC,'' and ``Rejection by the Agent'' sections:
These proposed sections, as discussed above, would be inserted after
the proposed ``Puts'' sections.
(31) Proposed ``Rights Subscriptions,'' including the proposed
``About the Service,'' ``About Rights,'' ``Relevant Terms,'' ``About
DTC's Automated Subscription Offer Program (ASOP),'' ``General
Information Regarding ASOP,'' ``Subscription Instructions,''
``Subscription Payments,'' ``Payments with Notices of Guaranteed
Delivery,'' ``Movement of Underlying Securities,'' ``Subscription Sub-
Accounts,'' ``Schedule for Submitting Instructions,'' ``Inquiring About
ASOP-Eligible Offers,'' ``Accepting an ASOP-Eligible Offer,''
``Checklist for Submitting an Acceptance,'' ``Submitting a Protect for
an ASOP-Eligible Offer,'' ``Checklist for Submitting a Protect,''
``Submitting a Cover of Protect via PTS PSOP or PBS Rights
Subscriptions for an ASOP-Eligible Offer,'' ``Checklist for Submitting
a Cover of Protect via PTS PSOP or PBS Rights Subscriptions,''
``Submitting a Cover of Protect via PTS PSOP or PBS Rights
Subscriptions on Behalf of Another Participant,'' ``Checklist for
Submitting a Cover of Protect via PTS PSOP or PBS Rights Subscriptions
on Behalf of Another Participant,'' ``Surrendering Rights for Sale via
ASOP,'' ``Checklist for Submitting Sell Instructions,'' and ``Rejection
of Acceptances, Covers of Protects, or Sell Instructions'' sections:
These proposed sections, as discussed above, would be inserted after
the proposed ``Rejection by DTC or Agent'' section.
(32) Warrant Exercises: No changes would be made to this title.
a. About the Product: This section would be retitled ``About the
Service'' and references to ``product'' would be replaced with
``service.'' The section would also be modified to (i) clarify that
warrants could be exercised as a cash or cashless exercise, if part of
the relevant offer, and to make conforming changes, and (ii) delete the
bullets for ``Notify you of upcoming expirations and record dates for
warrant exercises'' because it would be covered by the proposed bullet
``Announce key terms and dates related to the warrant as provided by
the issuer and/or agent.''
b. Interest Payments, Dividends, Distributions, and Voting Rights:
As discussed above, this section would be consolidated with the ``Puts/
Interest Payments, Dividends, Distributions, and Voting Rights for
Tendered Securities'' section and the ``About ATOP/Interest Payments,
Dividends, Distributions, and Voting Rights'' section into a single
proposed section, also named ``Interest Payments, Dividends,
Distributions, and Voting Rights for Tendered Securities,'' which would
appear later in the Guide.
c. About Warrants: No changes would be made to this section.
d. How the Product Works: The section would be retitled ``How the
Service Works.'' In addition, a reference to the ``Hard Copy Procedure
for Warrant Exercises'' section would be replaced by a reference to the
proposed ``Procedures for Submitting Instructions Outside of PTS/PBS''
section.
e. Pledge and Transfer of Underlying Securities by Book-Entry:
Ministerial changes only.
f. Interest Payments, Dividends, Distributions, and Voting Rights:
This section would be deleted because it is duplicative of the earlier
``Warrant Exercises/Interest Payments, Dividends, Distributions, and
Voting Rights'' section.
g. Associated PTS/PBS Functions: This section would be deleted
because the information would be updated and included in the proposed
``Associated PTS/PBS and CA Web Functions'' section in the beginning of
the Guide.
h. Warrant Exercises Contact Numbers: This section would be deleted
because contact information would be provided in the proposed section,
``Reorganization/Proxy Contact Number.''
(33) Proposed ``Procedures for Submitting Instructions Outside of
PTS/PBS'' section: As discussed above, the proposed ``Procedures for
Submitting Instructions Outside of PTS/PBS'' would replace the ``Hard
Copy Procedure for Conversions/Submitting a Hard Copy Conversion
Instruction,'' ``Hard Copy Procedure for Warrant Exercises/Exercising a
Warrant via Hard Copy,'' ``Hard Copy Procedures for Voluntary Offerings
and Put Option Exercises,'' and ``About the Rights Subscription
Instructions PTS/PBS Backup Form'' sections.
(34) Reorganization Presentments for MMI Issues: Ministerial
changes only.
(35) Proposed ``CD Early Redemptions'' section, including the
proposed ``About the Service,'' ``How the Service Works,'' ``Exempt
Instructions,'' ``Non-Exempt Instructions,'' and ``Issuer Acceptance''
sections: These proposed sections, as discussed above, would be
inserted after under the Reorganization Presentments for MMI Issues
section.
(36) Proposed ``Change Mode of Payment (CMOP)'' section, including
the
[[Page 26479]]
proposed ``About the Service'' section: The Change Mode of Payment
(CMOP)/About the Product sections, amended as discussed above, would be
moved under the Proposed ``CD Early Redemptions/Issuer Acceptance''
section.
(37) Proposed ``Allocations'' section, including the proposed
``About Allocations'' section: These proposed sections, as discussed
above, would be inserted under the proposed ``Change Mode of Payment
(CMOP)/About the Service'' section.
(38) Proposed ``Solicitation Fees and Transfer Taxes'' section:
This section, as discussed above, would be inserted after under the
proposed ``About Allocations'' section.
2. Statutory Basis
DTC believes that this proposal is consistent with the requirements
of the Act and the rules and regulations thereunder applicable to a
registered clearing agency. Specifically, DTC believes that this
proposal is consistent with Section 17A(b)(3)(F) \24\ of the Act and
Rule 17Ad-22(e)(23)(i),\25\ as promulgated under the Act, for the
reasons described below.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78q-1(b)(3)(F).
\25\ 17 CFR 240.17Ad-22(e)(23)(i).
---------------------------------------------------------------------------
Section 17A(b)(3)(F) of the Act requires, inter alia, that the DTC
Rules be designed to promote the prompt and accurate clearance and
settlement of securities transactions.\26\ DTC believes that the
proposed rule change with respect to the migration of Reorganizations
processing functions from PTS/PBS to CA Web is consistent with this
provision of the Act because it would migrate Reorganizations functions
to a more flexible interface that utilizes market standard language and
incorporates the entire lifecycle of an event into one platform. By
providing Participants with more efficient access to reorganization
services and a broader view of a reorganization event, DTC believes
that the proposed rule change is designed to promote the prompt and
accurate clearance and settlement of securities transactions relating
to Reorganizations, consistent with Section 17A(b)(3)(F) of the
Act.\27\
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78q-1(b)(3)(F).
\27\ Id.
---------------------------------------------------------------------------
DTC believes that the proposed rule change with respect to the
restructuring, streamlining, and clarification of the Guide is
consistent with Section 17A(b)(3)(F) of the Act.\28\ DTC believes that
the proposed rule change would enhance the clarity and transparency of
the Guide, which would allow a Participant to more efficiently conduct
its business in connection with processing reorganization events.
Therefore, DTC believes that the proposed rule change is designed to
promote the prompt and accurate clearance and settlement of securities
transactions related to Reorganizations, consistent with Section
17A(b)(3)(F) of the Act.\29\
---------------------------------------------------------------------------
\28\ Id.
\29\ Id.
---------------------------------------------------------------------------
Rule 17Ad-22(e)(23)(i) under the Act requires, inter alia, that DTC
establish, implement, maintain and enforce written policies and
procedures reasonably designed to publicly disclose all relevant rules
and material procedures.\30\ DTC believes that the proposed rule change
with respect to the restructuring, streamlining, and clarification of
the Guide would enhance the transparency and clarity of the Guide.
Having clear and transparent provisions about the DTC Reorganizations
services would enable Participants to better understand the processes
and provide Participants with increased predictability and certainty
regarding their rights and obligations with respect to their use of the
services. Therefore, DTC believes that the proposed rule changes with
respect to the restructuring, streamlining, and clarification of the
Guide are consistent with Rule 17Ad-22(e)(23)(i) under the Act, cited
above.
---------------------------------------------------------------------------
\30\ 17 CFR 240.17Ad-22(e)(23)(i).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
DTC believes that the proposed rule change with respect to the
migration of Reorganizations processing functions from PTS/PBS to CA
Web may have an impact on competition, because it would facilitate a
more efficient process for communicating and processing Reorganizations
information.\31\ Having a more efficient process could promote
competition by potentially reducing Participants' operating costs. In
addition, CA Web is an existing DTC platform that all Participants are
required to use to access other types of services, including
Distributions and Redemptions processing, and so would not affect the
rights and obligations of any Participant. Therefore, DTC believes that
the proposed rule change with respect to the migration of functions
from PTS/PBS to CA Web may promote competition but would not create a
burden on competition.\32\
---------------------------------------------------------------------------
\31\ 15 U.S.C. 78q-1(b)(3)(I).
\32\ Id.
---------------------------------------------------------------------------
DTC believes that the proposed rule changes with respect to
restructuring, streamlining, and clarifying the Guide would not have an
impact on competition.\33\ The proposed rule change would enhance the
clarity and transparency of the Guide to better reflect DTC's
Reorganizations services and practices. Improving the clarity and
transparency of the DTC Rules and Procedures, including the Guide,
would help Participants to better understand their rights and
obligations regarding DTC services, and so would not affect the rights
and obligations of any Participant or other interested party.
---------------------------------------------------------------------------
\33\ Id.
---------------------------------------------------------------------------
(C) Clearing Agency'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 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \34\ and paragraph (f) of Rule 19b-4
thereunder.\35\ 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.
---------------------------------------------------------------------------
\34\ 15 U.S.C. 78s(b)(3)(A).
\35\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
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 [email protected]. Please include
File Number SR-DTC-2019-003 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-DTC-2019-003. This file
number should be included on the
[[Page 26480]]
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 website
(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 website 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 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of DTC and on DTCC's website (https://dtcc.com/legal/sec-rule-filings.aspx). All comments received will be posted without
change. Persons submitting comments are cautioned that we do not redact
or edit personal identifying information from comment submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-DTC-2019-003
and should be submitted on or before June 27,2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
---------------------------------------------------------------------------
\36\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11802 Filed 6-5-19; 8:45 am]
BILLING CODE 8011-01-P