Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Operational Arrangements Relating to Transfer Agent and Trustee Notices, 28867-28871 [2019-13074]

Download as PDF Federal Register / Vol. 84, No. 119 / Thursday, June 20, 2019 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86111; File No. SR– NYSEAMER–2018–39] Self-Regulatory Organizations; NYSE American LLC; Notice of Withdrawal of Proposed Rule Change, as Modified by Amendment No. 2, To Allow Flexible Exchange Equity Options To Be Cash Settled Where the Underlying Security Is a Specified Exchange-Traded Fund June 14, 2019. On September 20, 2018, NYSE American LLC (‘‘NYSE American’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to modify the rules related to Flexible Exchange (‘‘FLEX’’) Options to allow cash settlement for certain FLEX Equity Options. The proposal, as modified by Amendment No. 2, would allow FLEX Equity Options to be cash settled where the underlying security is one of 25 specified Exchange-Traded Funds (‘‘ETF’’). The proposed rule change was published for comment in the Federal Register on October 11, 2018.3 On November 19, 2018, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.5 The Commission received one comment in response to the Original Notice.6 On December 19, 2018, the Commission instituted proceedings under Section 19(b)(2)(B) of the Act 7 to determine whether to approve or disapprove the proposed rule change.8 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 84364 (October 4, 2018), 83 FR 51535 (October 11, 2018) (‘‘Original Notice’’). 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 84616 (November 19, 2018), 83 FR 60519 (November 26, 2018). The Commission designated January 9, 2019, as the date by which it should approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change. 6 See Letter to Brent J. Fields, Secretary, Commission, from Samara Cohen, Head of ETF Global Markets, BlackRock, dated November 27, 2018 (‘‘BlackRock Letter’’). 7 15 U.S.C. 78s(b)(2)(B). 8 See Securities Exchange Act Release No. 84870 (December 19, 2018), 83 FR 66779 (December 27, 2018) (‘‘Order Instituting Proceedings’’). The Commission designated April 9, 2019, as the date by which the Commission shall approve or disapprove the proposed rule change. jbell on DSK3GLQ082PROD with NOTICES 2 17 VerDate Sep<11>2014 17:47 Jun 19, 2019 Jkt 247001 On March 11, 2019, the Exchange filed Amendment No. 1 to the proposed rule change. On March 25, 2019, the Exchange withdrew Amendment No. 1 and filed Amendment No. 2 to the proposed rule change, which superseded and replaced the proposed rule change in its entirety.9 On April 5, 2019, the Commission designated a longer period for Commission action on the proceedings to determine whether to approve or disapprove the proposed rule change.10 The Commission published Amendment No. 2 for comment in the Federal Register on April 17, 2019.11 The Commission received no comments in response to this solicitation for comments. On May 31, 2019, the Exchange withdrew the proposed rule change (SR–NYSEAMER– 2018–39). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Vanessa A. Countryman, Acting Secretary. [FR Doc. 2019–13072 Filed 6–19–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86113; File No. SR–DTC– 2019–001] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Operational Arrangements Relating to Transfer Agent and Trustee Notices June 14, 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 June 13, 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) 9 See Notice, infra note 11, at n.10, which describes the changes proposed in Amendment No. 2 from the original proposal. 10 See Securities Exchange Act Release No. 85531 (April 5, 2019), 84 FR 14703 (April 11, 2019). The Commission extended the date by which the Commission shall approve or disapprove the proposed rule change to June 8, 2019. 11 See Securities Exchange Act Release No. 85628 (April 11, 2019), 84 FR 16102 (April 17, 2019) (‘‘Notice’’). 12 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 28867 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 of DTC 5 consists of modifications to the DTC Operational Arrangements (Necessary for Securities to Become and Remain Eligible for DTC Services) (‘‘OA’’) 6 in order to amend DTC’s Procedures 7 regarding (i) the available methods for a transfer agent 8 or trustee 9 to notify DTC of a change relating to ceasing to perform or assumption of transfer agent services on behalf of an Issuer of Securities (‘‘Issuer’’) or when the transfer agent or trustee is changing its name or address, (ii) the deadline by which a transfer agent must provide such a notice, (iii) the required timeframe for DTC to make such notices from transfer agents available to Participants, and (iv) other clarifying and technical changes, as 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. 3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(4). 5 Capitalized terms not defined herein are defined in the Rules, By-Laws and Organization Certificate of DTC (the ‘‘Rules’’), available at http:// www.dtcc.com/∼/media/Files/Downloads/legal/ rules/dtc_rules.pdf. 6 Available at http://www.dtcc.com/∼/media/ Files/Downloads/legal/issue-eligibility/eligibility/ operational-arrangements.pdf. 7 Pursuant to the Rules, the term ‘‘Procedures’’ means the Procedures, service guides, and regulations of DTC adopted pursuant to Rule 27, as amended from time to time. See Rule 1, Section 1, supra note 5. 8 Transfer agents record changes of ownership, maintain the issuer’s security holder records, cancel and issue certificates, and distribute dividends. Because transfer agents stand between issuing companies and security holders, efficient transfer agent operations are critical to the successful completion of secondary trades. See https:// www.sec.gov/divisions/marketreg/mrtransfer.shtml. (describing transfer agents and related information). 9 A trustee is hired by an issuer of debt securities and is responsible for registration, transfer and payment of the securities. 4 17 E:\FR\FM\20JNN1.SGM 20JNN1 28868 Federal Register / Vol. 84, No. 119 / Thursday, June 20, 2019 / Notices (A) Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The proposed rule change consists of modifications to the OA 10 in order to amend DTC’s Procedures regarding (i) the available methods for a transfer agent or trustee to notify DTC of a change relating to ceasing to perform or assumption of transfer agent services on behalf of an Issuer or when the transfer agent or trustee is changing its name or address, (ii) the deadline by which a transfer agent must provide such a notice, (iii) the required timeframe for DTC to make such notices from transfer agents available to Participants, and (iv) other clarifying and technical changes, as described below. Background In 1995, the Securities and Exchange Commission (‘‘Commission’’) approved a DTC rule filing (‘‘1995 Rule Filing’’) 11 for DTC to be designated as the ‘‘appropriate qualified registered securities depository’’ to receive notices of transfer agent changes (‘‘17Ad–16 Notice’’) pursuant to Rule 17Ad–16 12 (‘‘Rule 17Ad–16’’) of the Securities Exchange Act of 1934, as amended (‘‘Act’’).13 Rule 17Ad–16 is designed to address transfer delays due to unannounced transfer agent changes, including the termination of the transfer agent services for a particular issue and the change of the name or address of a transfer agent.14 Rule 17Ad–16 requires a registered transfer agent to send a 17Ad–16 Notice to the ‘‘appropriate qualified registered securities depository’’ (a) on or before the later of ten calendar days prior to the effective date of such termination or the day the transfer agent is notified of the effective date of such termination 15 and (b) on or before the later of ten calendar days prior to the effective date of a change in the transfer agent’s name or address or when that transfer agent assumes jbell on DSK3GLQ082PROD with NOTICES 10 Supra note 6. 11 See Securities Exchange Act Release No. 35378 (February 15, 1995), 60 FR 9875 (February 22, 1995) (File No. SR–DTC–95–02). 12 17 CFR 240.17Ad–16. Pursuant to Rule 17Ad– 16, an ‘‘appropriate qualified registered securities depository’’ shall mean the qualified registered securities depository that the Commission so designates by order or, in the absence of such designation, the qualified registered securities depository that is the largest holder of record of all qualified registered securities depositories as of the most recent record date. 17 CFR 240.17Ad–16(f). 13 15 U.S.C. 78q–1. 14 See Securities Exchange Act Release No. 35039 (December 1, 1994), 59 FR 63656 (December 8, 1994) (File No. S7–1–92). 15 17 CFR 240.17Ad–16(a). VerDate Sep<11>2014 17:47 Jun 19, 2019 Jkt 247001 transfer agent services on behalf of an issuer of securities.16 For purposes of submitting a 17Ad–16 Notice to DTC, the OA provides that a transfer agent should (i) use the template Notice of Assumption or Termination of Transfer Agent Services Form 17Ad–16 (‘‘17Ad–16 Change Form’’) designated for this purpose that is made available by DTC on DTCC’s website,17 and (ii) send the completed form, signed by the transfer agent, in a portable document format to a designated email address,18 by the effective date of the change being reported on the form.19 The OA also provides that in the event of a change in trustee with respect to an issue of Securities, DTC requires that the new and prior trustee update the trustee information previously provided to DTC by the trustee for the issue using the 17Ad–16 Change Form and sending the form, signed by the trustee, in portable document format, to a designated email address.20 Once received, DTC would make the form submitted by the transfer agent or trustee available to its Participants by posting it to DTC’s Legal Notice System (‘‘LENS’’).21 Proposed Rule Change Electronic Submission of 17Ad–16 Change Forms Pursuant to the proposed rule change, to facilitate the reduction of costs and administrative burdens associated with the processing of transfer agent and trustee notices, DTC would modify the OA to allow transfer agents and trustees to provide the applicable notices electronically through a designated link on the DTCC website,22 as described below. In this regard, the proposed 16 17 CFR 240.17Ad–16(b). at http://dtcc.com/matchingsettlement-and-asset-services/agent-services/dtceligible-agent. 18 The address designated for this purpose is TAServices@dtcc.com. See OA, supra note 6, at 17. 19 OA, supra note 6, at 17. 20 OA, supra note 6, at 18. 21 LENS enables Participants to choose from a menu on a secure interface with DTC certain notices received by DTC which they order. The Commission issued an order approving LENS on June 12, 1991. See Securities Exchange Act Release No. 29291 (June 12, 1991), 56 FR 28190 (June 19, 1991) (File No. SR–DTC–91–08). LENS was originally accessible through the DTC Participant Terminal System (‘‘PTS’’). Id. DTC subsequently implemented a web-based LENS interface. See Securities Exchange Act Release No. 43964 (February 14, 2001), 66 FR 11190 (February 22, 2001) (SR–DTC–00–18). The LENS PTS function was retired effective August 27, 2010, and Participants may access LENS via the web-based functionality mentioned above. See Securities Exchange Act Release No. 62686 (August 10, 2010), 75 FR 50032 (August 16, 2010) (SR–DTC–2010–10). 22 Supra note 17. 17 Available PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 method would allow for the submission of a notice that follows the template of the 17Ad–16 Change Form that is electronically signed 23 and submitted by the transfer agent or trustee, as applicable, using the designated link. The OA would still allow for submission of such notices via email, as described above. However, DTC believes that also allowing for a whollyelectronic method for the completion, signing and submission of the 17Ad–16 Change Form would reduce costs and administrative burdens for transfer agents and trustees by eliminating the manual processing otherwise entailed with an email submission.24 Notification Timeframe for Transfer Agents To Provide Notices The OA currently states that a transfer agent should notify DTC of the transfer agent’s termination of services for an Issuer by the effective date and does not provide a deadline for notifications to DTC of other events that are reportable by the transfer agent to DTC pursuant to Rule 17Ad–16. Pursuant to the proposed rule change, in order to harmonize the timeframe stated in the OA in this regard with the requirements of Rule 17Ad–16,25 discussed above, DTC would amend the OA to require that a transfer agent must notify DTC when terminating or assuming transfer agent services on behalf of an Issuer, or when the transfer agent is changing its name or address, before the later of (a) 10 calendar days prior to the effective date or (b) in the case of a termination or assumption, the date the transfer agent is (1) notified of the effective date, or (2) becomes aware of, the termination or assumption date, as applicable. DTC believes that the proposed amendment to the timeframes for transfer agents to provide 17Ad–16 Notices, as set forth above, would promote the prompt and accurate clearance and settlement of securities by facilitating DTC’s ability to distribute to its Participants via LENS, a transfer 23 Pursuant to Rule 26, DTC may, at its option, in lieu of relying on an original signature, rely on a signature as if it were (and the signature shall be considered and have the same effect as) a valid and binding signature in the following circumstances: If such signature is transmitted, recorded or stored by an electronic, optical, or similar means (including but not limited to telecopy, imaging, xeroxing, electronic mail, electronic data interchange, telegram or telex). Rule 26, supra note 5. 24 The manual processing that may be necessary for a transfer agent or trustee to make an email submission of a notice, which would be eliminated by instead using the proposed electronic method to submit the form, includes the transfer agent or trustee printing, completing, manually signing the notice and converting it to the portable document format currently required by the OA. 25 17 CFR 240.17Ad–16(a). E:\FR\FM\20JNN1.SGM 20JNN1 Federal Register / Vol. 84, No. 119 / Thursday, June 20, 2019 / Notices agent’s notification made by it pursuant to Rule 17Ad–16 prior to the effective date, to the extent the notice is timely provided by the transfer agent, thus reducing the potential for transfer delays due to unannounced transfer agent changes. jbell on DSK3GLQ082PROD with NOTICES Posting 17Ad–16 Notices to LENS The 1995 Rule Filing stated that DTC would make 17Ad–16 Notices available to Participants via LENS no later than the Business Day 26 following DTC’s receipt of such notice from the transfer agent.27 Rule 17Ad–16 states that a qualified registered securities depository that receives notice pursuant to the requirements noted above, ‘‘shall deliver a copy of such notices to its own participants within 24 hours.’’ 28 In order to provide enhanced transparency with regard to the timeframe for DTC to post notices consistent with 1995 Rule Filing, and reflecting the underlying requirement of Rule 17Ad–16 in this regard, DTC would add text to the OA to clarify that DTC would make each 17Ad–16 Notice available to Participants within 24 hours of DTC’s receipt of a 17Ad–16 Notice from the transfer agent, not including weekends and holidays (i.e., nonBusiness Days). For example, if DTC receives a 17Ad–16 Notice through the designated email or electronic methods described above at 6:00 p.m. Eastern Time (‘‘ET’’) on a Monday (that is not a holiday), DTC would make the 17Ad– 16 Notice available for viewing by Participants on LENS no later than 5:59 p.m. ET on Tuesday. For weekends, if DTC receives a notice at or after 6:00 p.m. ET on a Friday, DTC would make the 17Ad–16 Notice available for viewing by Participants on LENS no later than 5:59 p.m. ET on Monday. Proposed Changes to the Text of the OA Pursuant to the proposed rule change, DTC would amend Section II (B)(4) of the OA to (i) provide for the electronic submission of applicable notices/forms by transfer agents, as described above, (ii) amend the OA to require that a transfer agent must notify DTC when terminating or assuming transfer agent services on behalf of an Issuer, or when the transfer agent is changing its name or address, before the later of (a) 10 calendar days prior to the effective date or (b) the date the transfer agent is (1) notified of the effective date, or (2), in the case of a termination or assumption, becomes aware of, the termination or 26 Pursuant to Rule 1, the term Business Day means any day on which DTC is open for business. Rule 1, supra note 5. 27 See supra note 11. 28 17 CFR 240.17Ad–16(d)(1). VerDate Sep<11>2014 17:47 Jun 19, 2019 Jkt 247001 assumption date, as applicable, and (iii) add a new subsection (f) that would state that DTC would make each 17Ad– 16 Notice available to Participants within 24 hours of DTC’s receipt of a 17Ad–16 Notice from the transfer agent, not including weekends and holidays (i.e., non-Business Days), as described above. The text would also include an example illustrating the timeline pursuant to which the notices would be made available on LENS that is consistent with the example provided under ‘‘Posting 17Ad–16 Notices to LENS’’ above. The proposed rule change would also amend the text of Section II (B)(4) of the OA to (i) correct a typographical error where the Act is not referred to by its full name, (ii) allow transfer agents to submit the 17Ad–16 Change Form in Word format, (iii) update the information that should be included on transfer agent notices to include the agent name, address, contact name, contact phone, contact email, and agent number, (iv) add a defined term for 17Ad–16 Notices, (v) note that notices sent to DTC, as described above, will be made available to Participants for viewing on LENS, (vi) modify text in two places that refer to the requirements of Rule 17Ad–16 to conform the OA text to the terminology in the rule regarding a transfer agent ‘‘ceasing to perform’’ 29 services on behalf of an issuer rather than referring to the transfer agent ‘‘terminating’’ such services as currently stated in the OA, (vii) conform the title of the 17Ad–16 Change Form as set forth in the OA to the title which appears on DTCC’s website which is ‘‘Notice of Assumption or Termination of Transfer Agent Services Form 17Ad– 16’’ followed by ‘‘also known as 17Ad– 16 Change Form’’ (viii) clarify the location and name of the link where a template of the 17Ad–16 Change Form is available,30 and (ix) make technical and clarifying changes to the text for enhanced flow and readability. The proposed rule change would amend Section II (B)(5) to (i) conform the title of the 17Ad–16 Change Form as set forth in the OA to the title which appears on DTCC’s website which is ‘‘Notice of Assumption or Termination of Transfer Agent Services Form 17Ad– 16’’ followed by ‘‘also known as 17Ad– 16 Change Form’’ (ii) clarify the location 29 17 CFR 240.17Ad–16(a). revised OA text would state that a template of the Notice of Assumption or Termination of Transfer Agent Services Form 17Ad–16 can be obtained from DTCC’s website at: http://dtcc.com/ matching-settlement-and-asset-services/agentservices/dtc-eligible-agent and by clicking on the link titled ‘‘Notice of Assumption or Termination of Transfer Agent Services Form 17Ad–16.’’ 30 The PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 28869 and name of the link where a template of the 17Ad–16 Change Form is available,31 (iii) add a clarifying statement that DTC would make notices from trustees received pursuant to this section available for viewing by Participants on LENS, and (iv) make technical and clarifying changes to the text for enhanced flow and readability. The proposed rule change would also add a note to the sections relating to posting of 17Ad–16 Notices and trustee notices (the new Section II (B)(4)(f) and Section II (B)(5), respectively) to state that (1) DTC does not screen the 17Ad– 16 Notices for confidential information, and (2) it is the full and sole responsibility of the transfer agent or trustee, as applicable, submitting a 17Ad–16 Notice to ensure that the information contained in the 17Ad–16 Notice is correct and does not include any information that would otherwise be deemed as confidential or material non-public information. The proposed rule change would revise text that indicates to the effect that a transfer agent or trustee, as applicable, ‘‘should’’ use or is required to use the template of the 17Ad–16 Change Form made available by DTC to notify DTC of a change relating to a transfer agent or trustee, as applicable, to instead state that the transfer agent or trustee, as applicable, ‘‘may’’ use the DTC template 17Ad–16 Change Form for this purpose. This change to the text reflects that Rule 17Ad–16 states the information that a transfer agent should include on a notice, but it does not mandate the use of a template of a qualified registered securities depository.32 In addition, DTC would make a technical change to Sections VI (E)(1)(a) and (b) to change the email address for Issuers and agents to submit notices submitted to DTC in accordance with those sections from lensnotices@ dtcc.com to LegalandTaxNotices@ dtcc.com.33 Effective Date The proposed rule change would become effective upon filing with the Commission. 31 Id. 32 See 17 CFR 240.17Ad–16(a) and (b). sections relate to the submission of consent notices and certain legal notices respectively. Consent notices are submitted by an issuer or agent via email to provide notices of record dates for the purpose of facilitating the solicitation of consents from or voting by beneficial owners of Securities. See OA, supra note 6, at 52. The legal notices to be submitted to DTC via email in accordance with Section VI (E)(1)(b) include notices to security holders of bankruptcies, litigation/class actions and defaults. Id. 33 These E:\FR\FM\20JNN1.SGM 20JNN1 jbell on DSK3GLQ082PROD with NOTICES 28870 Federal Register / Vol. 84, No. 119 / Thursday, June 20, 2019 / Notices 2. Statutory Basis Section 17A(b)(3)(F) 34 of the Act requires that the rules of the clearing agency be designed, inter alia, to promote the prompt and accurate clearance and settlement of securities transactions. DTC believes that the proposed rule change is consistent with this provision of the Act because, by amending DTC’s Procedures regarding (i) the available methods for a transfer agent or trustee to notify DTC of a change relating to ceasing to perform or assumption of transfer agent services on behalf of an Issuer or when the transfer agent or trustee is changing its name or address, (ii) the deadline by which a transfer agent must provide such a notice, and (iii) the required timeframe for DTC to make such notices from transfer agents available to Participants, it would facilitate the prompt and accurate clearance and settlement of securities transactions by facilitating timely and efficient distribution of changes to information for transfer agents and trustees to DTC and Participants, as described above, and therefore promote the ability of DTC and Participants to interface with transfer agents and trustees with respect to functions performed by them, including the registration, transfer and payment of the securities. DTC also believes that the proposed rule changes are consistent with Section 17A(b)(3)(F), cited above, because by making technical and clarifying changes to the text within the Procedures set forth in the OA regarding the (i) amendment to Section II (B) of the OA to (a) correct a typographical error where the Act is not referred to by its full name, (b) allow transfer agents and trustees to submit the 17Ad–16 Change Form in Word format, (c) update information that should be included on transfer agent notices to include the agent name, address, contact name, contact phone, contact email, and agent number, (d) add a defined term for 17Ad–16 Notices, (e) add a note that transfer agent notices and trustee notices provided by transfer agents and trustees, respectively, to DTC, as described above, are made available for viewing by Participants on LENS, and (f) add a note to the sections relating to responsibilities of transfer agents and trustees with respect to accuracy and confidentiality considerations relating to 17Ad–16 Notices and trustee notices (Sections II (B)(4)(f) and II (B)(5), respectively), as described above, and by (ii) providing a change in email address for issuers and agents to submit 34 15 U.S.C. 78q–1(b)(3)(F). VerDate Sep<11>2014 17:47 Jun 19, 2019 Jkt 247001 notices submitted to DTC in accordance with Sections VI (E)(1)(a) and (b) of the OA, as described above, the proposed rule change would provide enhanced transparency for transfer agents, trustees and Issuers with respect to the Procedures relating to submission and processing of notices that may be submitted by them, as applicable, in accordance with the sections of the OA mentioned above. Therefore, by providing transfer agents, trustees and Issuers with enhanced transparency with regard to the Procedures relating to the submission and processing of notices, and therefore facilitating the prompt posting of notices and distribution of information on LENS to Participants related to Securities held by the Participants, and that may be the subject of transactions processed through the DTC system, DTC believes that the proposed rule change would promote the prompt and accurate clearance and settlement of securities transactions consistent with the Act. Rule 17Ad–16(d)(1) 35 requires that, inter alia, the appropriate qualified registered securities depository that receives 17Ad–16 Notices shall deliver a copy of such notices to its own participants within 24 hours. Rule 17Ad–16(d)(2) 36 provides that a qualified registered securities depository may comply with its notice requirements under Rule 17Ad– 16(d)(1) 37 by making available the notice of all material information from the notice within 24 hours in a manner set forth in the rules of the qualified registered securities depository. DTC believes that the proposed rule change is consistent with Rule 17Ad–16(d)(1) because it would amend the text of the OA, as described above, to provide that DTC would make 17Ad–16 Notices that it receives available to Participants via LENS within 24 hours of receipt, not including weekends and holidays (i.e., non-Business Days).38 DTC believes the proposed rule change is consistent with Rule 17Ad–16(d)(2) because, as described above, the proposed rule change would add the text described in the sentence immediately above to the OA, which are Procedures filed as rules with the Commission. (B) Clearing Agency’s Statement on Burden on Competition DTC does not believe that the proposed rule change would have any impact, or impose any burden, on competition. The proposed rule change 35 17 CFR 240.17Ad–16(d)(1). CFR 240.17Ad–16(d)(2). 37 17 CFR 240.17Ad–16(d)(1). 38 Supra note 26. would, (i) with respect to the proposed rule changes to amend the OA regarding notification timeframes relating to transfer agent notifications to DTC and the distribution of those notifications by DTC to its Participants, merely align and clarify the text of the OA in accordance with the applicable requirements relating to such notifications set forth in Rule 17Ad–16 and the provisions of the 1995 Rule Filing as described above, and (ii) with respect to the addition of an electronic method for the submission of notices by transfer agents and trustees, merely allow for an additional means for such notices to be submitted and not impact the existing email option, as described above. Therefore, the proposed rule change would not impact, or impose any burden on, competition. (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others DTC has not received or solicited any written comments relating to this proposal. 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 39 and paragraph (f) of Rule 19b–4 thereunder.40 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– DTC–2019–001 on the subject line. 36 17 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 39 15 40 17 E:\FR\FM\20JNN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 20JNN1 Federal Register / Vol. 84, No. 119 / Thursday, June 20, 2019 / Notices 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–2019–001. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (http://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 (http://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– 2019–001 and should be submitted on or before July 11, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.41 Vanessa A. Countryman, Acting Secretary. [FR Doc. 2019–13074 Filed 6–19–19; 8:45 am] jbell on DSK3GLQ082PROD with NOTICES BILLING CODE 8011–01–P 41 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:47 Jun 19, 2019 Jkt 247001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86112; File No. SR– NYSEArca–2019–28] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 3, To List and Trade Shares of the Virtus WMC RiskManaged Alternative Equity ETF Under NYSE Arca Rule 8.600–E June 14, 2019. I. Introduction On April 15, 2019, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares (‘‘Shares’’) of the Virtus WMC RiskManaged Alternative Equity ETF (‘‘Fund’’) under NYSE Arca Rule 8.600– E. The proposed rule change was published for comment in the Federal Register on May 3, 2019.3 On May 14, 2019, the Exchange filed Amendment No. 1 to the proposed rule change. On May 16, 2019, the Exchange filed Amendment No. 2 to the proposed rule change, which amended and replaced the proposed rule change as modified by Amendment No. 1. On June 10, 2019, the Exchange filed Amendment No. 3 to the proposed rule change, which amended and replaced the proposed rule change as modified by Amendment No. 2.4 The Commission has received no comments on the proposed rule change. This order approves the proposed rule change, as modified by Amendment No. 3. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 85751 (April 30, 2019), 84 FR 19141. 4 In Amendment No. 3, the Exchange: (a) Clarified the permitted investments of the Fund; (b) clarified that the only OTC derivatives that the Fund may invest in are forward foreign currency contracts and OTC options on U.S. and foreign exchange-listed equity securities, U.S. and foreign exchange-listed equity securities indices, and interest rates; (c) stated that price information relating to currency forwards will be available from major market data vendors; and (d) made other clarifying, technical, and conforming changes. Amendment No. 3 is not subject to notice and comment because it does not materially alter the substance of the proposed rule change or raise unique or novel regulatory issues. Amendment No. 3 is available at: https:// www.sec.gov/comments/sr-nysearca-2019-28/ srnysearca201928-5656834-185771.pdf. 2 17 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 28871 II. Description of the Proposal, as Modified by Amendment No. 3 5 The Exchange proposes to list and trade Shares of the Fund under NYSE Arca Rule 8.600–E, which governs the listing and trading of Managed Fund Shares on the Exchange. The Fund is a series of ETFis Series I (‘‘Trust’’).6 Virtus ETF Advisors LLC (‘‘Adviser’’) is the investment adviser for the Fund. Wellington Management Company LLP is the sub-adviser to the Fund (‘‘SubAdviser’’).7 ETF Distributors LLC, a registered broker-dealer, will act as the distributor for the Fund’s Shares and the Bank of New York Mellon will serve as the custodian, administrator, and transfer agent for the Fund. A. Principal Investments of the Fund According to the Exchange, the investment objective of the Fund is to seek to provide superior risk-adjusted total returns over the long term. The Fund will seek to achieve its investment objective, under normal market conditions,8 by (i) investing in a broadly diversified portfolio of global equity securities in both developed and emerging markets, and (ii) implementing a beta management strategy by shorting futures contracts and purchasing and selling options, as further described below. Under normal market conditions, the Fund will invest at least 80% of its net assets (plus any 5 For a complete description of the Exchange’s proposal, see Amendment No. 3, supra note 4. 6 According to the Exchange, on February 28, 2019, the Trust filed with the Commission a PostEffective Amendment to the Trust’s registration statement on Form N–1A under the Securities Act of 1933 and the 1940 Act relating to the Fund (File Nos. 333–187668 and 811–22819) (‘‘Registration Statement’’). The Exchange represents that the Trust will file an amendment to the Registration Statement as necessary to conform to the representations in this filing. In addition, the Exchange states that the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 30607 (July 23, 2013) (File No. 812– 14080). 7 The Exchange states that the Adviser and the Sub-Adviser are not registered as broker-dealers but that each is affiliated with one or more brokerdealers and has implemented and will maintain a ‘‘fire wall’’ with respect to each such broker-dealer affiliate regarding access to information concerning the composition of and/or changes to the Fund’s portfolio. In addition, in the event (a) the Adviser or the Sub-Adviser becomes registered as a brokerdealer or newly affiliated with a broker-dealer, or (b) any new adviser or sub-adviser is a registered broker-dealer or becomes affiliated with a brokerdealer, such entity will implement and maintain a ‘‘fire wall’’ with respect to its relevant personnel or broker-dealer affiliate regarding access to information concerning the composition of and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding such portfolio. 8 The term ‘‘normal market conditions’’ is defined in NYSE Arca Rule 8.600–E(c)(5). E:\FR\FM\20JNN1.SGM 20JNN1

Agencies

[Federal Register Volume 84, Number 119 (Thursday, June 20, 2019)]
[Notices]
[Pages 28867-28871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13074]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86113; File No. SR-DTC-2019-001]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend the Operational Arrangements Relating to Transfer Agent and 
Trustee Notices

June 14, 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 June 13, 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change of DTC \5\ consists of modifications to 
the DTC Operational Arrangements (Necessary for Securities to Become 
and Remain Eligible for DTC Services) (``OA'') \6\ in order to amend 
DTC's Procedures \7\ regarding (i) the available methods for a transfer 
agent \8\ or trustee \9\ to notify DTC of a change relating to ceasing 
to perform or assumption of transfer agent services on behalf of an 
Issuer of Securities (``Issuer'') or when the transfer agent or trustee 
is changing its name or address, (ii) the deadline by which a transfer 
agent must provide such a notice, (iii) the required timeframe for DTC 
to make such notices from transfer agents available to Participants, 
and (iv) other clarifying and technical changes, as described below.
---------------------------------------------------------------------------

    \5\ Capitalized terms not defined herein are defined in the 
Rules, By-Laws and Organization Certificate of DTC (the ``Rules''), 
available at http://www.dtcc.com/~/media/Files/Downloads/legal/
rules/dtc_rules.pdf.
    \6\ Available at http://www.dtcc.com/~/media/Files/Downloads/
legal/issue-eligibility/eligibility/operational-arrangements.pdf.
    \7\ Pursuant to the Rules, the term ``Procedures'' means the 
Procedures, service guides, and regulations of DTC adopted pursuant 
to Rule 27, as amended from time to time. See Rule 1, Section 1, 
supra note 5.
    \8\ Transfer agents record changes of ownership, maintain the 
issuer's security holder records, cancel and issue certificates, and 
distribute dividends. Because transfer agents stand between issuing 
companies and security holders, efficient transfer agent operations 
are critical to the successful completion of secondary trades. See 
https://www.sec.gov/divisions/marketreg/mrtransfer.shtml. 
(describing transfer agents and related information).
    \9\ A trustee is hired by an issuer of debt securities and is 
responsible for registration, transfer and payment of the 
securities.
---------------------------------------------------------------------------

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.

[[Page 28868]]

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    The proposed rule change consists of modifications to the OA \10\ 
in order to amend DTC's Procedures regarding (i) the available methods 
for a transfer agent or trustee to notify DTC of a change relating to 
ceasing to perform or assumption of transfer agent services on behalf 
of an Issuer or when the transfer agent or trustee is changing its name 
or address, (ii) the deadline by which a transfer agent must provide 
such a notice, (iii) the required timeframe for DTC to make such 
notices from transfer agents available to Participants, and (iv) other 
clarifying and technical changes, as described below.
---------------------------------------------------------------------------

    \10\ Supra note 6.
---------------------------------------------------------------------------

Background
    In 1995, the Securities and Exchange Commission (``Commission'') 
approved a DTC rule filing (``1995 Rule Filing'') \11\ for DTC to be 
designated as the ``appropriate qualified registered securities 
depository'' to receive notices of transfer agent changes (``17Ad-16 
Notice'') pursuant to Rule 17Ad-16 \12\ (``Rule 17Ad-16'') of the 
Securities Exchange Act of 1934, as amended (``Act'').\13\ Rule 17Ad-16 
is designed to address transfer delays due to unannounced transfer 
agent changes, including the termination of the transfer agent services 
for a particular issue and the change of the name or address of a 
transfer agent.\14\ Rule 17Ad-16 requires a registered transfer agent 
to send a 17Ad-16 Notice to the ``appropriate qualified registered 
securities depository'' (a) on or before the later of ten calendar days 
prior to the effective date of such termination or the day the transfer 
agent is notified of the effective date of such termination \15\ and 
(b) on or before the later of ten calendar days prior to the effective 
date of a change in the transfer agent's name or address or when that 
transfer agent assumes transfer agent services on behalf of an issuer 
of securities.\16\
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 35378 (February 15, 
1995), 60 FR 9875 (February 22, 1995) (File No. SR-DTC-95-02).
    \12\ 17 CFR 240.17Ad-16. Pursuant to Rule 17Ad-16, an 
``appropriate qualified registered securities depository'' shall 
mean the qualified registered securities depository that the 
Commission so designates by order or, in the absence of such 
designation, the qualified registered securities depository that is 
the largest holder of record of all qualified registered securities 
depositories as of the most recent record date. 17 CFR 240.17Ad-
16(f).
    \13\ 15 U.S.C. 78q-1.
    \14\ See Securities Exchange Act Release No. 35039 (December 1, 
1994), 59 FR 63656 (December 8, 1994) (File No. S7-1-92).
    \15\ 17 CFR 240.17Ad-16(a).
    \16\ 17 CFR 240.17Ad-16(b).
---------------------------------------------------------------------------

    For purposes of submitting a 17Ad-16 Notice to DTC, the OA provides 
that a transfer agent should (i) use the template Notice of Assumption 
or Termination of Transfer Agent Services Form 17Ad-16 (``17Ad-16 
Change Form'') designated for this purpose that is made available by 
DTC on DTCC's website,\17\ and (ii) send the completed form, signed by 
the transfer agent, in a portable document format to a designated email 
address,\18\ by the effective date of the change being reported on the 
form.\19\
---------------------------------------------------------------------------

    \17\ Available at http://dtcc.com/matching-settlement-and-asset-services/agent-services/dtc-eligible-agent.
    \18\ The address designated for this purpose is 
[email protected]. See OA, supra note 6, at 17.
    \19\ OA, supra note 6, at 17.
---------------------------------------------------------------------------

    The OA also provides that in the event of a change in trustee with 
respect to an issue of Securities, DTC requires that the new and prior 
trustee update the trustee information previously provided to DTC by 
the trustee for the issue using the 17Ad-16 Change Form and sending the 
form, signed by the trustee, in portable document format, to a 
designated email address.\20\
---------------------------------------------------------------------------

    \20\ OA, supra note 6, at 18.
---------------------------------------------------------------------------

    Once received, DTC would make the form submitted by the transfer 
agent or trustee available to its Participants by posting it to DTC's 
Legal Notice System (``LENS'').\21\
---------------------------------------------------------------------------

    \21\ LENS enables Participants to choose from a menu on a secure 
interface with DTC certain notices received by DTC which they order. 
The Commission issued an order approving LENS on June 12, 1991. See 
Securities Exchange Act Release No. 29291 (June 12, 1991), 56 FR 
28190 (June 19, 1991) (File No. SR-DTC-91-08). LENS was originally 
accessible through the DTC Participant Terminal System (``PTS''). 
Id. DTC subsequently implemented a web-based LENS interface. See 
Securities Exchange Act Release No. 43964 (February 14, 2001), 66 FR 
11190 (February 22, 2001) (SR-DTC-00-18). The LENS PTS function was 
retired effective August 27, 2010, and Participants may access LENS 
via the web-based functionality mentioned above. See Securities 
Exchange Act Release No. 62686 (August 10, 2010), 75 FR 50032 
(August 16, 2010) (SR-DTC-2010-10).
---------------------------------------------------------------------------

Proposed Rule Change
Electronic Submission of 17Ad-16 Change Forms
    Pursuant to the proposed rule change, to facilitate the reduction 
of costs and administrative burdens associated with the processing of 
transfer agent and trustee notices, DTC would modify the OA to allow 
transfer agents and trustees to provide the applicable notices 
electronically through a designated link on the DTCC website,\22\ as 
described below. In this regard, the proposed method would allow for 
the submission of a notice that follows the template of the 17Ad-16 
Change Form that is electronically signed \23\ and submitted by the 
transfer agent or trustee, as applicable, using the designated link. 
The OA would still allow for submission of such notices via email, as 
described above. However, DTC believes that also allowing for a wholly-
electronic method for the completion, signing and submission of the 
17Ad-16 Change Form would reduce costs and administrative burdens for 
transfer agents and trustees by eliminating the manual processing 
otherwise entailed with an email submission.\24\
---------------------------------------------------------------------------

    \22\ Supra note 17.
    \23\ Pursuant to Rule 26, DTC may, at its option, in lieu of 
relying on an original signature, rely on a signature as if it were 
(and the signature shall be considered and have the same effect as) 
a valid and binding signature in the following circumstances: If 
such signature is transmitted, recorded or stored by an electronic, 
optical, or similar means (including but not limited to telecopy, 
imaging, xeroxing, electronic mail, electronic data interchange, 
telegram or telex). Rule 26, supra note 5.
    \24\ The manual processing that may be necessary for a transfer 
agent or trustee to make an email submission of a notice, which 
would be eliminated by instead using the proposed electronic method 
to submit the form, includes the transfer agent or trustee printing, 
completing, manually signing the notice and converting it to the 
portable document format currently required by the OA.
---------------------------------------------------------------------------

Notification Timeframe for Transfer Agents To Provide Notices
    The OA currently states that a transfer agent should notify DTC of 
the transfer agent's termination of services for an Issuer by the 
effective date and does not provide a deadline for notifications to DTC 
of other events that are reportable by the transfer agent to DTC 
pursuant to Rule 17Ad-16. Pursuant to the proposed rule change, in 
order to harmonize the timeframe stated in the OA in this regard with 
the requirements of Rule 17Ad-16,\25\ discussed above, DTC would amend 
the OA to require that a transfer agent must notify DTC when 
terminating or assuming transfer agent services on behalf of an Issuer, 
or when the transfer agent is changing its name or address, before the 
later of (a) 10 calendar days prior to the effective date or (b) in the 
case of a termination or assumption, the date the transfer agent is (1) 
notified of the effective date, or (2) becomes aware of, the 
termination or assumption date, as applicable.
---------------------------------------------------------------------------

    \25\ 17 CFR 240.17Ad-16(a).
---------------------------------------------------------------------------

    DTC believes that the proposed amendment to the timeframes for 
transfer agents to provide 17Ad-16 Notices, as set forth above, would 
promote the prompt and accurate clearance and settlement of securities 
by facilitating DTC's ability to distribute to its Participants via 
LENS, a transfer

[[Page 28869]]

agent's notification made by it pursuant to Rule 17Ad-16 prior to the 
effective date, to the extent the notice is timely provided by the 
transfer agent, thus reducing the potential for transfer delays due to 
unannounced transfer agent changes.
Posting 17Ad-16 Notices to LENS
    The 1995 Rule Filing stated that DTC would make 17Ad-16 Notices 
available to Participants via LENS no later than the Business Day \26\ 
following DTC's receipt of such notice from the transfer agent.\27\ 
Rule 17Ad-16 states that a qualified registered securities depository 
that receives notice pursuant to the requirements noted above, ``shall 
deliver a copy of such notices to its own participants within 24 
hours.'' \28\
---------------------------------------------------------------------------

    \26\ Pursuant to Rule 1, the term Business Day means any day on 
which DTC is open for business. Rule 1, supra note 5.
    \27\ See supra note 11.
    \28\ 17 CFR 240.17Ad-16(d)(1).
---------------------------------------------------------------------------

    In order to provide enhanced transparency with regard to the 
timeframe for DTC to post notices consistent with 1995 Rule Filing, and 
reflecting the underlying requirement of Rule 17Ad-16 in this regard, 
DTC would add text to the OA to clarify that DTC would make each 17Ad-
16 Notice available to Participants within 24 hours of DTC's receipt of 
a 17Ad-16 Notice from the transfer agent, not including weekends and 
holidays (i.e., non-Business Days). For example, if DTC receives a 
17Ad-16 Notice through the designated email or electronic methods 
described above at 6:00 p.m. Eastern Time (``ET'') on a Monday (that is 
not a holiday), DTC would make the 17Ad-16 Notice available for viewing 
by Participants on LENS no later than 5:59 p.m. ET on Tuesday. For 
weekends, if DTC receives a notice at or after 6:00 p.m. ET on a 
Friday, DTC would make the 17Ad-16 Notice available for viewing by 
Participants on LENS no later than 5:59 p.m. ET on Monday.
Proposed Changes to the Text of the OA
    Pursuant to the proposed rule change, DTC would amend Section II 
(B)(4) of the OA to (i) provide for the electronic submission of 
applicable notices/forms by transfer agents, as described above, (ii) 
amend the OA to require that a transfer agent must notify DTC when 
terminating or assuming transfer agent services on behalf of an Issuer, 
or when the transfer agent is changing its name or address, before the 
later of (a) 10 calendar days prior to the effective date or (b) the 
date the transfer agent is (1) notified of the effective date, or (2), 
in the case of a termination or assumption, becomes aware of, the 
termination or assumption date, as applicable, and (iii) add a new 
subsection (f) that would state that DTC would make each 17Ad-16 Notice 
available to Participants within 24 hours of DTC's receipt of a 17Ad-16 
Notice from the transfer agent, not including weekends and holidays 
(i.e., non-Business Days), as described above. The text would also 
include an example illustrating the timeline pursuant to which the 
notices would be made available on LENS that is consistent with the 
example provided under ``Posting 17Ad-16 Notices to LENS'' above.
    The proposed rule change would also amend the text of Section II 
(B)(4) of the OA to (i) correct a typographical error where the Act is 
not referred to by its full name, (ii) allow transfer agents to submit 
the 17Ad-16 Change Form in Word format, (iii) update the information 
that should be included on transfer agent notices to include the agent 
name, address, contact name, contact phone, contact email, and agent 
number, (iv) add a defined term for 17Ad-16 Notices, (v) note that 
notices sent to DTC, as described above, will be made available to 
Participants for viewing on LENS, (vi) modify text in two places that 
refer to the requirements of Rule 17Ad-16 to conform the OA text to the 
terminology in the rule regarding a transfer agent ``ceasing to 
perform'' \29\ services on behalf of an issuer rather than referring to 
the transfer agent ``terminating'' such services as currently stated in 
the OA, (vii) conform the title of the 17Ad-16 Change Form as set forth 
in the OA to the title which appears on DTCC's website which is 
``Notice of Assumption or Termination of Transfer Agent Services Form 
17Ad-16'' followed by ``also known as 17Ad-16 Change Form'' (viii) 
clarify the location and name of the link where a template of the 17Ad-
16 Change Form is available,\30\ and (ix) make technical and clarifying 
changes to the text for enhanced flow and readability.
---------------------------------------------------------------------------

    \29\ 17 CFR 240.17Ad-16(a).
    \30\ The revised OA text would state that a template of the 
Notice of Assumption or Termination of Transfer Agent Services Form 
17Ad-16 can be obtained from DTCC's website at: http://dtcc.com/matching-settlement-and-asset-services/agent-services/dtc-eligible-agent and by clicking on the link titled ``Notice of Assumption or 
Termination of Transfer Agent Services Form 17Ad-16.''
---------------------------------------------------------------------------

    The proposed rule change would amend Section II (B)(5) to (i) 
conform the title of the 17Ad-16 Change Form as set forth in the OA to 
the title which appears on DTCC's website which is ``Notice of 
Assumption or Termination of Transfer Agent Services Form 17Ad-16'' 
followed by ``also known as 17Ad-16 Change Form'' (ii) clarify the 
location and name of the link where a template of the 17Ad-16 Change 
Form is available,\31\ (iii) add a clarifying statement that DTC would 
make notices from trustees received pursuant to this section available 
for viewing by Participants on LENS, and (iv) make technical and 
clarifying changes to the text for enhanced flow and readability.
---------------------------------------------------------------------------

    \31\ Id.
---------------------------------------------------------------------------

    The proposed rule change would also add a note to the sections 
relating to posting of 17Ad-16 Notices and trustee notices (the new 
Section II (B)(4)(f) and Section II (B)(5), respectively) to state that 
(1) DTC does not screen the 17Ad-16 Notices for confidential 
information, and (2) it is the full and sole responsibility of the 
transfer agent or trustee, as applicable, submitting a 17Ad-16 Notice 
to ensure that the information contained in the 17Ad-16 Notice is 
correct and does not include any information that would otherwise be 
deemed as confidential or material non-public information.
    The proposed rule change would revise text that indicates to the 
effect that a transfer agent or trustee, as applicable, ``should'' use 
or is required to use the template of the 17Ad-16 Change Form made 
available by DTC to notify DTC of a change relating to a transfer agent 
or trustee, as applicable, to instead state that the transfer agent or 
trustee, as applicable, ``may'' use the DTC template 17Ad-16 Change 
Form for this purpose. This change to the text reflects that Rule 17Ad-
16 states the information that a transfer agent should include on a 
notice, but it does not mandate the use of a template of a qualified 
registered securities depository.\32\
---------------------------------------------------------------------------

    \32\ See 17 CFR 240.17Ad-16(a) and (b).
---------------------------------------------------------------------------

    In addition, DTC would make a technical change to Sections VI 
(E)(1)(a) and (b) to change the email address for Issuers and agents to 
submit notices submitted to DTC in accordance with those sections from 
[email protected] to [email protected].\33\
---------------------------------------------------------------------------

    \33\ These sections relate to the submission of consent notices 
and certain legal notices respectively. Consent notices are 
submitted by an issuer or agent via email to provide notices of 
record dates for the purpose of facilitating the solicitation of 
consents from or voting by beneficial owners of Securities. See OA, 
supra note 6, at 52. The legal notices to be submitted to DTC via 
email in accordance with Section VI (E)(1)(b) include notices to 
security holders of bankruptcies, litigation/class actions and 
defaults. Id.
---------------------------------------------------------------------------

Effective Date
    The proposed rule change would become effective upon filing with 
the Commission.

[[Page 28870]]

2. Statutory Basis
    Section 17A(b)(3)(F) \34\ of the Act requires that the rules of the 
clearing agency be designed, inter alia, to promote the prompt and 
accurate clearance and settlement of securities transactions. DTC 
believes that the proposed rule change is consistent with this 
provision of the Act because, by amending DTC's Procedures regarding 
(i) the available methods for a transfer agent or trustee to notify DTC 
of a change relating to ceasing to perform or assumption of transfer 
agent services on behalf of an Issuer or when the transfer agent or 
trustee is changing its name or address, (ii) the deadline by which a 
transfer agent must provide such a notice, and (iii) the required 
timeframe for DTC to make such notices from transfer agents available 
to Participants, it would facilitate the prompt and accurate clearance 
and settlement of securities transactions by facilitating timely and 
efficient distribution of changes to information for transfer agents 
and trustees to DTC and Participants, as described above, and therefore 
promote the ability of DTC and Participants to interface with transfer 
agents and trustees with respect to functions performed by them, 
including the registration, transfer and payment of the securities.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    DTC also believes that the proposed rule changes are consistent 
with Section 17A(b)(3)(F), cited above, because by making technical and 
clarifying changes to the text within the Procedures set forth in the 
OA regarding the (i) amendment to Section II (B) of the OA to (a) 
correct a typographical error where the Act is not referred to by its 
full name, (b) allow transfer agents and trustees to submit the 17Ad-16 
Change Form in Word format, (c) update information that should be 
included on transfer agent notices to include the agent name, address, 
contact name, contact phone, contact email, and agent number, (d) add a 
defined term for 17Ad-16 Notices, (e) add a note that transfer agent 
notices and trustee notices provided by transfer agents and trustees, 
respectively, to DTC, as described above, are made available for 
viewing by Participants on LENS, and (f) add a note to the sections 
relating to responsibilities of transfer agents and trustees with 
respect to accuracy and confidentiality considerations relating to 
17Ad-16 Notices and trustee notices (Sections II (B)(4)(f) and II 
(B)(5), respectively), as described above, and by (ii) providing a 
change in email address for issuers and agents to submit notices 
submitted to DTC in accordance with Sections VI (E)(1)(a) and (b) of 
the OA, as described above, the proposed rule change would provide 
enhanced transparency for transfer agents, trustees and Issuers with 
respect to the Procedures relating to submission and processing of 
notices that may be submitted by them, as applicable, in accordance 
with the sections of the OA mentioned above. Therefore, by providing 
transfer agents, trustees and Issuers with enhanced transparency with 
regard to the Procedures relating to the submission and processing of 
notices, and therefore facilitating the prompt posting of notices and 
distribution of information on LENS to Participants related to 
Securities held by the Participants, and that may be the subject of 
transactions processed through the DTC system, DTC believes that the 
proposed rule change would promote the prompt and accurate clearance 
and settlement of securities transactions consistent with the Act.
    Rule 17Ad-16(d)(1) \35\ requires that, inter alia, the appropriate 
qualified registered securities depository that receives 17Ad-16 
Notices shall deliver a copy of such notices to its own participants 
within 24 hours. Rule 17Ad-16(d)(2) \36\ provides that a qualified 
registered securities depository may comply with its notice 
requirements under Rule 17Ad-16(d)(1) \37\ by making available the 
notice of all material information from the notice within 24 hours in a 
manner set forth in the rules of the qualified registered securities 
depository. DTC believes that the proposed rule change is consistent 
with Rule 17Ad-16(d)(1) because it would amend the text of the OA, as 
described above, to provide that DTC would make 17Ad-16 Notices that it 
receives available to Participants via LENS within 24 hours of receipt, 
not including weekends and holidays (i.e., non-Business Days).\38\ DTC 
believes the proposed rule change is consistent with Rule 17Ad-16(d)(2) 
because, as described above, the proposed rule change would add the 
text described in the sentence immediately above to the OA, which are 
Procedures filed as rules with the Commission.
---------------------------------------------------------------------------

    \35\ 17 CFR 240.17Ad-16(d)(1).
    \36\ 17 CFR 240.17Ad-16(d)(2).
    \37\ 17 CFR 240.17Ad-16(d)(1).
    \38\ Supra note 26.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    DTC does not believe that the proposed rule change would have any 
impact, or impose any burden, on competition. The proposed rule change 
would, (i) with respect to the proposed rule changes to amend the OA 
regarding notification timeframes relating to transfer agent 
notifications to DTC and the distribution of those notifications by DTC 
to its Participants, merely align and clarify the text of the OA in 
accordance with the applicable requirements relating to such 
notifications set forth in Rule 17Ad-16 and the provisions of the 1995 
Rule Filing as described above, and (ii) with respect to the addition 
of an electronic method for the submission of notices by transfer 
agents and trustees, merely allow for an additional means for such 
notices to be submitted and not impact the existing email option, as 
described above. Therefore, the proposed rule change would not impact, 
or impose any burden on, competition.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    DTC has not received or solicited any written comments relating to 
this proposal. 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 \39\ and paragraph (f) of Rule 19b-4 
thereunder.\40\ 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.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78s(b)(3)(A).
    \40\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-DTC-2019-001 on the subject line.

[[Page 28871]]

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-2019-001. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://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 
(http://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-2019-001 and should be submitted on 
or before July 11, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\41\
---------------------------------------------------------------------------

    \41\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Vanessa A. Countryman,
Acting Secretary.
[FR Doc. 2019-13074 Filed 6-19-19; 8:45 am]
 BILLING CODE 8011-01-P