Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide Enhanced Clarity for Deadlines and Processing Times, 32987-32989 [2021-13103]
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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices
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.
[FR Doc. 2021–13101 Filed 6–22–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92198; File No. SR–DTC–
2021–009]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Provide
Enhanced Clarity for Deadlines and
Processing Times
June 16, 2021.
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 8,
2021, 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 of DTC is
attached hereto as Exhibit 5,5 as
described in greater detail 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
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
(the ‘‘Rules’’), the Canadian Link Service Guide,
ClaimConnect Service Guide, Custody Service
Guide, Deposits Service Guide, Distributions
Service Guide, Redemptions Service Guide,
Reorganizations Service Guide, Settlement Service
Guide, and Underwriting Service Guide
(collectively, the ‘‘Service Guides’’) and the DTC
Operational Arrangements (Necessary for Securities
to Become and Remain Eligible for DTC Services)
(‘‘Operational Arrangements’’ or ‘‘OA’’), available at
https://www.dtcc.com/legal/rules-andprocedures.aspx.
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(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
The proposed rule change would
amend the Service Guides and the OA
to provide enhanced clarity around (i)
deadlines, timeframes, and cutoffs
established by DTC in connection with
DTC services (‘‘DTC-established
Stakeholder Deadlines’’), and (ii) the
times and timeframes for DTC actions
and processes relating to DTC services
(‘‘DTC Processing Times’’). In particular,
the proposed rule change would
enhance the transparency around the
ability of DTC to extend DTCestablished Stakeholder Deadlines, and
around DTC Processing Times, which
are standards, rather than deadlines, as
further described below.
(i) DTC-established Stakeholder
Deadlines
The Service Guides provide
Participants with procedures and
information pertaining to DTC
settlement and asset services. The
procedures and information include,
among other things, descriptions of
DTC-established Stakeholder Deadlines
for Participant and stakeholder 6 action
relating to DTC services. The OA is
designed to provide Participants and
other stakeholders with information and
procedures related to DTC eligibility for
securities, and to provide the
requirements for, among other things,
the orderly processing of securities,
corporate actions, and distributions. The
OA includes descriptions of DTCestablished Stakeholder Deadlines in
connection with the requirements and
services.7
The purpose of DTC-established
Stakeholder Deadlines is to help DTC
efficiently and effectively manage its
services and systems, in order to timely
process instructions and securities
transactions at DTC. However, there are
times when, due to the facts and
circumstances of a particular situation,
6 Stakeholders include issuers, agents (as defined
in the OA), underwriters (as defined in the OA),
and other parties, as context requires.
7 For example, the OA requires that, in order for
DTC to make a same day allocation of funds, the
agent must provide DTC with CUSIP-specific
details for the payment before 2:50 p.m. on payable
date, and that the details must match the amount
of funds that are received by DTC no later than 3:00
p.m. See OA, supra note 5, at 27.
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Sfmt 4703
32987
DTC determines to extend a DTCestablished Stakeholder Deadline. The
situations can include, but are not
limited to, a Participant operational
issue or a change to a different deadline
(whether DTC or external) that could
affect the ability of one or more
Participants to meet the DTCestablished Stakeholder Deadline.
(ii) DTC Processing Times
The Service Guides and the OA also
describe DTC Processing Times in
connection with certain services.8 The
purpose of describing these DTC
Processing Times is to provide
Participants and other stakeholders with
information about the typical timing or
timeframe of a DTC action or process, in
order to help Participants and other
stakeholders to more efficiently and
effectively use and understand DTC’s
services and processes. For example, if
a Service Guide states that the
processing time for a particular service
is typically two business days, the
Participant will understand that it is
unlikely that it would get same-day
turnaround from DTC and can plan
accordingly, for instance, by ensuring
that it submits its transaction with
adequate lead-time.
(iii) Overview of Proposed Rule Change
DTC believes that Participants and
other stakeholders benefit from clear
information about their rights and
obligations relating to DTC-established
Stakeholder Deadlines and DTC
Processing Times so that they are able
to plan and conduct their business and
securities transactions more effectively.
Recent events, such as the COVID–19
pandemic and market volatility, have
emphasized the need for flexibility in
times of stress and the importance of
transparency with respect to deadlines
and timeframes. Accordingly, after
reviewing the Service Guides and the
OA, DTC is proposing to enhance the
transparency around the DTCestablished Stakeholder Deadlines and
DTC Processing Times that are
described in the Service Guides and the
OA.
Therefore, DTC is proposing to amend
the Service Guides and the OA to clarify
that (i) DTC may extend any DTCestablished Stakeholder Deadline,
including, without limitation, to (x)
address operational or other delays that
could reasonably affect the ability of
DTC, a Participant, or other stakeholder
from meeting the DTC-established
8 For example, the Settlement Service Guide
indicates that at 1:30 p.m. on a settlement day, DTC
releases all pending delivery account positions and
reverts to default recycle processing. See Settlement
Service Guide, supra note 5, at 26.
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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices
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Stakeholder Deadline or (y) allow DTC
time operationally to exercise its
existing rights under the Rules and
Procedures; and (ii) the DTC Processing
Times are standards and not deadlines;
actual processing times may vary, based
upon the circumstances. For additional
transparency, DTC is proposing to
clarify that any decision to extend a
DTC-established Stakeholder Deadline
in one instance does not establish any
precedent for future situations that may
arise.
In addition, although the Important
Legal Information page of the Service
Guides and the OA already contain
general disclaimers of liability, DTC is
proposing to expressly state that DTC
disclaims all liability for any losses and/
or expenses incurred by a Participant,
stakeholder, or any third-party resulting
from, relating to, or arising from (i) any
action taken by DTC with respect to an
extension of a DTC-established
Stakeholder Timeframe, (ii) the
determination of DTC to decline to take
action with respect to a DTC-established
Stakeholder Timeframe, and/or (iii) the
failure of a Participant, stakeholder or
other third-party to meet any deadline,
timeframe, cutoff or requirement
established by a party other than DTC.
DTC believes that this express
disclaimer would enhance the
understanding of Participants and other
stakeholders of their responsibilities in
connection with DTC-established
Stakeholder Deadlines and possible
extensions, which would help them to
more effectively assess the risks relating
to an inability to meet a DTCestablished Stakeholder Deadline and
conduct their business accordingly.
(iv) Proposed Rule Change
To effectuate the proposed changes
described above, DTC would add the
following paragraph near the beginning
of each of the Service Guides and the
OA:
Note: DTC, as it deems appropriate,
may extend any deadline, timeframe, or
cutoff established by DTC, including,
without limitation, to (i) address
operational or other delays that could
reasonably affect the ability of DTC, a
Participant or other stakeholder from
meeting the deadline, timeframe, or
cutoff; or (ii) allow DTC time
operationally to exercise its existing
rights under the Rules and Procedures.
In addition, times applicable to DTC are
standards and not deadlines; actual
processing times may vary, based upon
the circumstances. Any action taken by
DTC in connection with this paragraph
shall not establish a precedent for any
situation that may occur in the future
(or otherwise bind DTC in any manner).
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DTC disclaims all liability for any losses
and/or expenses incurred by a
Participant, stakeholder or any thirdparty resulting from, relating to, or
arising from (i) any action taken by DTC
in connection with this paragraph, (ii)
the determination of DTC to decline to
take action pursuant to this paragraph,
and/or (iii) the failure of a Participant,
stakeholder or any third-party to meet
any deadline, timeframe, cutoff or
requirement established by a party other
than DTC.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act
requires, in part, that the rules of a
clearing agency be designed to promote
the prompt and accurate clearance and
settlement of securities transactions.9
The proposed rule change would
amend the Service Guides and the OA
to clarify that DTC may extend any
DTC-established Stakeholder Deadline,
including, without limitation, to (i)
address operational or other delays that
could reasonably affect the ability of
DTC, a Participant or other stakeholder
from meeting the DTC-established
Stakeholder Deadline; or (ii) allow DTC
time operationally to exercise its
existing rights under the Rules and
Procedures. The proposed rule change
would also clarify that the DTC
Processing Times set forth in the Service
Guides and the OA are standards and
not deadlines, and that they may vary
based upon the particular
circumstances. The proposed rule
change would also (i) clarify that any
decision by DTC to extend a DTCestablished Stakeholder Deadline in one
case does not establish any precedent
for future situations that may arise, and
(ii) emphasize that DTC disclaims all
liability for any losses or expenses
incurred by a Participant, stakeholder or
any third party relating to, or arising
from, the above.
Taken together, the proposed
amendments to the Service Guides and
the OA would enhance Participants’ and
stakeholders’ understanding of their
rights and obligations relating to DTCestablished Stakeholder Deadlines and
DTC Processing Times. By providing
this enhanced clarity and transparency,
the proposed rule change would help
Participants and other stakeholders to
appropriately plan and to conduct their
business and securities transactions
through DTC more effectively, thereby
promoting the prompt and accurate
clearance and settlement of securities
transactions, consistent with Section
17A(b)(3)(F) of the Act.10
(B) Clearing Agency’s Statement on
Burden on Competition
DTC does not believe the proposed
rule changes described above would
impact competition. Rather, DTC
believes that the proposed rule changes
would simply provide enhanced clarity
around the rights and obligations of
Participants and other stakeholders with
respect to DTC-established Stakeholder
Deadlines and DTC Processing Times,
and would help them to appropriately
plan and to conduct their business and
securities transactions through DTC
more effectively. As such, DTC believes
the proposed rule changes would not
have any impact on competition.11
(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) 12 of the Act and paragraph
(f) 13 of Rule 19b–4 thereunder. 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–2021–009 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
11 15
9 15
U.S.C. 78q–1(b)(3)(F).
10 Id.
PO 00000
Frm 00107
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U.S.C. 78q–1(b)(3)(I).
U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f).
12 15
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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices
Commission, 100 F Street NE,
Washington, DC 20549.
SECURITIES AND EXCHANGE
COMMISSION
All submissions should refer to File
Number SR–DTC–2021–009. 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 (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–
2021–009 and should be submitted on
or before July 14, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–13103 Filed 6–22–21; 8:45 am]
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BILLING CODE 8011–01–P
[Release No. 34–92192; File No. SR–BOX–
2021–07]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Designation
of a Longer Period for Commission
Action on a Proposed Rule Change To
Adopt BOX Rule 7670 To Establish a
Virtual Trading Floor on BOX
On April 16, 2021, BOX Exchange
LLC (‘‘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
establish a virtual trading floor on the
Exchange. The proposed rule change
was published for comment in the
Federal Register on May 5, 2021.3
Section 19(b)(2) of the Act 4 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding, or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is June 19, 2021.
The Commission is extending the 45day time period for Commission action
on the proposed rule change. The
Commission finds it appropriate to
designate a longer period within which
to take action on the proposed rule
change so that it has sufficient time to
consider the proposed rule change.
Accordingly, pursuant to Section
19(b)(2) of the Act,5 the Commission
designates August 3, 2021, as the date
by which the Commission shall either
approve or disapprove, or institute
proceedings to determine whether to
disapprove, the proposed rule change
(File No. SR–BOX–2021–07).
U.S.C.78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 91714
(April 29, 2021), 86 FR 24119.
4 15 U.S.C. 78s(b)(2).
5 Id.
2 17
CFR 200.30–3(a)(12).
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17:13 Jun 22, 2021
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–13099 Filed 6–22–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92200; File No. SR–Phlx–
2021–36]
June 16, 2021.
1 15
14 17
32989
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Self-Regulatory Organizations; Nasdaq
PHLX LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the
Exchange’s Pricing Schedule at
Options 7, Section 5
June 16, 2021.
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 11,
2021, Nasdaq PHLX LLC (‘‘Phlx’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s Pricing Schedule at Options
7, Section 5 to adopt an incentive
program for Lead Market Makers
(‘‘LMMs’’) and Market Makers in
Nasdaq 100 Micro Index (‘‘XND’’)
options.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/phlx/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
6 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 86, Number 118 (Wednesday, June 23, 2021)]
[Notices]
[Pages 32987-32989]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13103]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92198; File No. SR-DTC-2021-009]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Provide Enhanced Clarity for Deadlines and Processing Times
June 16, 2021.
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 8, 2021, 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 is attached hereto as Exhibit 5,\5\
as described in greater detail below.
---------------------------------------------------------------------------
\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 (the ``Rules''), the Canadian Link
Service Guide, ClaimConnect Service Guide, Custody Service Guide,
Deposits Service Guide, Distributions Service Guide, Redemptions
Service Guide, Reorganizations Service Guide, Settlement Service
Guide, and Underwriting Service Guide (collectively, the ``Service
Guides'') and the DTC Operational Arrangements (Necessary for
Securities to Become and Remain Eligible for DTC Services)
(``Operational Arrangements'' or ``OA''), available at https://www.dtcc.com/legal/rules-and-procedures.aspx.
---------------------------------------------------------------------------
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 would amend the Service Guides and the OA
to provide enhanced clarity around (i) deadlines, timeframes, and
cutoffs established by DTC in connection with DTC services (``DTC-
established Stakeholder Deadlines''), and (ii) the times and timeframes
for DTC actions and processes relating to DTC services (``DTC
Processing Times''). In particular, the proposed rule change would
enhance the transparency around the ability of DTC to extend DTC-
established Stakeholder Deadlines, and around DTC Processing Times,
which are standards, rather than deadlines, as further described below.
(i) DTC-established Stakeholder Deadlines
The Service Guides provide Participants with procedures and
information pertaining to DTC settlement and asset services. The
procedures and information include, among other things, descriptions of
DTC-established Stakeholder Deadlines for Participant and stakeholder
\6\ action relating to DTC services. The OA is designed to provide
Participants and other stakeholders with information and procedures
related to DTC eligibility for securities, and to provide the
requirements for, among other things, the orderly processing of
securities, corporate actions, and distributions. The OA includes
descriptions of DTC-established Stakeholder Deadlines in connection
with the requirements and services.\7\
---------------------------------------------------------------------------
\6\ Stakeholders include issuers, agents (as defined in the OA),
underwriters (as defined in the OA), and other parties, as context
requires.
\7\ For example, the OA requires that, in order for DTC to make
a same day allocation of funds, the agent must provide DTC with
CUSIP-specific details for the payment before 2:50 p.m. on payable
date, and that the details must match the amount of funds that are
received by DTC no later than 3:00 p.m. See OA, supra note 5, at 27.
---------------------------------------------------------------------------
The purpose of DTC-established Stakeholder Deadlines is to help DTC
efficiently and effectively manage its services and systems, in order
to timely process instructions and securities transactions at DTC.
However, there are times when, due to the facts and circumstances of a
particular situation, DTC determines to extend a DTC-established
Stakeholder Deadline. The situations can include, but are not limited
to, a Participant operational issue or a change to a different deadline
(whether DTC or external) that could affect the ability of one or more
Participants to meet the DTC-established Stakeholder Deadline.
(ii) DTC Processing Times
The Service Guides and the OA also describe DTC Processing Times in
connection with certain services.\8\ The purpose of describing these
DTC Processing Times is to provide Participants and other stakeholders
with information about the typical timing or timeframe of a DTC action
or process, in order to help Participants and other stakeholders to
more efficiently and effectively use and understand DTC's services and
processes. For example, if a Service Guide states that the processing
time for a particular service is typically two business days, the
Participant will understand that it is unlikely that it would get same-
day turnaround from DTC and can plan accordingly, for instance, by
ensuring that it submits its transaction with adequate lead-time.
---------------------------------------------------------------------------
\8\ For example, the Settlement Service Guide indicates that at
1:30 p.m. on a settlement day, DTC releases all pending delivery
account positions and reverts to default recycle processing. See
Settlement Service Guide, supra note 5, at 26.
---------------------------------------------------------------------------
(iii) Overview of Proposed Rule Change
DTC believes that Participants and other stakeholders benefit from
clear information about their rights and obligations relating to DTC-
established Stakeholder Deadlines and DTC Processing Times so that they
are able to plan and conduct their business and securities transactions
more effectively. Recent events, such as the COVID-19 pandemic and
market volatility, have emphasized the need for flexibility in times of
stress and the importance of transparency with respect to deadlines and
timeframes. Accordingly, after reviewing the Service Guides and the OA,
DTC is proposing to enhance the transparency around the DTC-established
Stakeholder Deadlines and DTC Processing Times that are described in
the Service Guides and the OA.
Therefore, DTC is proposing to amend the Service Guides and the OA
to clarify that (i) DTC may extend any DTC-established Stakeholder
Deadline, including, without limitation, to (x) address operational or
other delays that could reasonably affect the ability of DTC, a
Participant, or other stakeholder from meeting the DTC-established
[[Page 32988]]
Stakeholder Deadline or (y) allow DTC time operationally to exercise
its existing rights under the Rules and Procedures; and (ii) the DTC
Processing Times are standards and not deadlines; actual processing
times may vary, based upon the circumstances. For additional
transparency, DTC is proposing to clarify that any decision to extend a
DTC-established Stakeholder Deadline in one instance does not establish
any precedent for future situations that may arise.
In addition, although the Important Legal Information page of the
Service Guides and the OA already contain general disclaimers of
liability, DTC is proposing to expressly state that DTC disclaims all
liability for any losses and/or expenses incurred by a Participant,
stakeholder, or any third-party resulting from, relating to, or arising
from (i) any action taken by DTC with respect to an extension of a DTC-
established Stakeholder Timeframe, (ii) the determination of DTC to
decline to take action with respect to a DTC-established Stakeholder
Timeframe, and/or (iii) the failure of a Participant, stakeholder or
other third-party to meet any deadline, timeframe, cutoff or
requirement established by a party other than DTC. DTC believes that
this express disclaimer would enhance the understanding of Participants
and other stakeholders of their responsibilities in connection with
DTC-established Stakeholder Deadlines and possible extensions, which
would help them to more effectively assess the risks relating to an
inability to meet a DTC-established Stakeholder Deadline and conduct
their business accordingly.
(iv) Proposed Rule Change
To effectuate the proposed changes described above, DTC would add
the following paragraph near the beginning of each of the Service
Guides and the OA:
Note: DTC, as it deems appropriate, may extend any deadline,
timeframe, or cutoff established by DTC, including, without limitation,
to (i) address operational or other delays that could reasonably affect
the ability of DTC, a Participant or other stakeholder from meeting the
deadline, timeframe, or cutoff; or (ii) allow DTC time operationally to
exercise its existing rights under the Rules and Procedures. In
addition, times applicable to DTC are standards and not deadlines;
actual processing times may vary, based upon the circumstances. Any
action taken by DTC in connection with this paragraph shall not
establish a precedent for any situation that may occur in the future
(or otherwise bind DTC in any manner). DTC disclaims all liability for
any losses and/or expenses incurred by a Participant, stakeholder or
any third-party resulting from, relating to, or arising from (i) any
action taken by DTC in connection with this paragraph, (ii) the
determination of DTC to decline to take action pursuant to this
paragraph, and/or (iii) the failure of a Participant, stakeholder or
any third-party to meet any deadline, timeframe, cutoff or requirement
established by a party other than DTC.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of a clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions.\9\
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\9\ 15 U.S.C. 78q-1(b)(3)(F).
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The proposed rule change would amend the Service Guides and the OA
to clarify that DTC may extend any DTC-established Stakeholder
Deadline, including, without limitation, to (i) address operational or
other delays that could reasonably affect the ability of DTC, a
Participant or other stakeholder from meeting the DTC-established
Stakeholder Deadline; or (ii) allow DTC time operationally to exercise
its existing rights under the Rules and Procedures. The proposed rule
change would also clarify that the DTC Processing Times set forth in
the Service Guides and the OA are standards and not deadlines, and that
they may vary based upon the particular circumstances. The proposed
rule change would also (i) clarify that any decision by DTC to extend a
DTC-established Stakeholder Deadline in one case does not establish any
precedent for future situations that may arise, and (ii) emphasize that
DTC disclaims all liability for any losses or expenses incurred by a
Participant, stakeholder or any third party relating to, or arising
from, the above.
Taken together, the proposed amendments to the Service Guides and
the OA would enhance Participants' and stakeholders' understanding of
their rights and obligations relating to DTC-established Stakeholder
Deadlines and DTC Processing Times. By providing this enhanced clarity
and transparency, the proposed rule change would help Participants and
other stakeholders to appropriately plan and to conduct their business
and securities transactions through DTC more effectively, thereby
promoting the prompt and accurate clearance and settlement of
securities transactions, consistent with Section 17A(b)(3)(F) of the
Act.\10\
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\10\ Id.
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(B) Clearing Agency's Statement on Burden on Competition
DTC does not believe the proposed rule changes described above
would impact competition. Rather, DTC believes that the proposed rule
changes would simply provide enhanced clarity around the rights and
obligations of Participants and other stakeholders with respect to DTC-
established Stakeholder Deadlines and DTC Processing Times, and would
help them to appropriately plan and to conduct their business and
securities transactions through DTC more effectively. As such, DTC
believes the proposed rule changes would not have any impact on
competition.\11\
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\11\ 15 U.S.C. 78q-1(b)(3)(I).
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(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) \12\ of the Act and paragraph (f) \13\ of Rule 19b-4
thereunder. 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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f).
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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-2021-009 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 32989]]
Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-DTC-2021-009. 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 (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-2021-009 and should be submitted on
or before July 14, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-13103 Filed 6-22-21; 8:45 am]
BILLING CODE 8011-01-P
