Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Clarifications to the DTC Rules Concerning the Admission of Participants to DTC's Premises and DTC's Authority To Impose Fines, 58425-58426 [2022-20729]

Download as PDF Federal Register / Vol. 87, No. 185 / Monday, September 26, 2022 / Notices 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 such filing also will be available for inspection and copying at the principal office of OCC and on OCC’s website at https://www.theocc.com/CompanyInformation/Documents-and-Archives/ By-Laws-and-Rules. 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–OCC–2022–010 and should be submitted on or before October 17, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.74 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–20728 Filed 9–23–22; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–95837; File No. SR–DTC– 2022–009] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Clarifications to the DTC Rules Concerning the Admission of Participants to DTC’s Premises and DTC’s Authority To Impose Fines Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 74 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:43 Sep 23, 2022 Jkt 256001 I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change consists of amendments to DTC Rules, By-Laws and Organization Certificate (‘‘Rules’’) concerning the admission of Participants to DTC’s premises and DTC’s authority to impose fines. DTC filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 5 and Rule 19b–4(f)(4) 6 thereunder so that the proposal was effective upon filing with the Commission, as described in greater detail below.7 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 BILLING CODE 8011–01–P September 20, 2022. (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 14, 2022, 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. Purpose DTC proposes to revise its Rules to clarify requirements related to the admission of Participants to DTC’s premises and DTC’s authority to impose fines. The proposed changes are described in detail below. DTC Rule 17 provides, among other things, that necessary credentials for 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 15 U.S.C. 78s(b)(3)(A). 6 17 CFR 240.19b–4(f)(4). 7 Terms not defined herein are defined in the Rules, available at https://dtcc.com/∼/media/Files/ Downloads/legal/rules/dtc_rules.pdf. 2 17 PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 58425 entering DTC’s premises shall be provided as specified in the Procedures.8 The rule further provides that, unless revoked by DTC, all credentials, authorizations and powers of attorney issued pursuant to Rule 17 or in connection with the work of DTC shall remain in full force and effect until DTC shall have received notice of the revocation thereof or of the termination of the holder’s employment.9 DTC proposes to revise Rule 17 to delete the requirement that necessary credentials for entering DTC’s premises be provided as specified in the Procedures. DTC does not currently maintain in its Procedures any specifications for providing such credentials. The proposed rule change would therefore remove outdated rule language that may cause confusion for DTC’s Participants and readers of its Rules. DTC also proposes to revise Rule 17 to clarify that Participants must provide ‘‘written’’ notice of the revocation of any credentials, authorizations and powers of attorney or the termination of the holder’s employment in order for such revocation or termination to become effective pursuant to Rule 17. The proposed rule change would clarify the appropriate method for notifying DTC of a revocation or termination of credentials and conform the notification requirement in Rule 17 to the requirements of DTC’s affiliate clearing agencies, providing clear and consistent requirements across the clearing agencies’ rules.10 DTC Rule 21 discusses DTC’s authority to discipline Participants or Pledgees for, among other things, violations of DTC’s Rules or Procedures.11 DTC’s disciplinary authority includes imposing any of the following sanctions: expulsion; suspension; limitation of activities, functions and operations; fine; censure; and any other fitting sanction. DTC proposes to revise Rule 21 to state that fines shall be payable in the manner and at such time as determined by DTC from time to time. The proposed 8 The contents of all DTC Service Guides constitute ‘‘Procedures’’ of DTC. The Procedures may be found on DTCC’s public website, available at https://www.dtcc.com/legal/rules-andprocedures. 9 See Rule 17, supra note 7. 10 See National Securities Clearing Corporation (‘‘NSCC’’) Rule 27, Fixed Income Clearing Corporation (‘‘FICC’’) Government Securities Division (‘‘GSD’’) Rule 27, and FICC Mortgage Back Securities Division (‘‘MBSD’’) Rule 20. The NSCC Rules & Procedures, FICC GSD Rulebook, and FICC MBSD Clearing Rules are available on DTCC’s public website, available at https://www.dtcc.com/ legal/rules-and-procedures. 11 See Rule 21, supra note 7. E:\FR\FM\26SEN1.SGM 26SEN1 58426 Federal Register / Vol. 87, No. 185 / Monday, September 26, 2022 / Notices rule change would clarify an implicitly understood aspect of DTC’s Rules and more closely align Rule 21 to the requirements of DTC’s affiliate clearing agencies to provide greater consistency across the DTCC clearing agency rules.12 2. Statutory Basis DTC believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered clearing agency. Section 17A(b)(3)(F) of Act 13 requires, in part, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions. DTC believes the proposed rule change would promote the prompt and accurate clearance and settlement of securities transactions for the reasons set forth below. The proposed rule change would clarify the appropriate method for notifying DTC of a revocation or termination of credentials (i.e., in writing) and remove outdated rule language that may cause confusion for DTC’s Participants and readers of its Rules. The proposed rule change would also clarify that fines imposed by DTC shall be payable in the manner and at such time as determined by DTC from time to time. The proposed rule change would provide additional accuracy, clarity and transparency around implicitly understood aspects of DTC’s Rules and current practices thereunder. When participants better understand their rights and obligations regarding the Rules, such participants are more likely to act in accordance with the Rules, which DTC believes would promote the prompt and accurate clearance and settlement of securities transactions consistent with the requirements of Section 17A(b)(3)(F) of Act.14 (B) Clearing Agency’s Statement on Burden on Competition DTC does not believe that the proposed rule change would have any impact on competition. The proposed changes concerning the issuance and revocation of credentials and the payment of fines are intended to clarify existing processes and would not impose any new material obligations or requirements on users of DTC’s services. The proposed rule changes would apply equally to all participants and would not inhibit access to DTC’s services or disadvantage or favor any particular 12 See NSCC Rule 17 and FICC GSD Rule 23, supra note 10. 13 15 U.S.C. 78q–1(b)(3)(F). 14 Id. VerDate Sep<11>2014 16:43 Sep 23, 2022 Jkt 256001 user in relationship to another. DTC therefore does not believe that the proposed rule change would have any impact 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. If any written comments are received by DTC, they will be publicly filed as an Exhibit 2 to this filing, as required by Form 19b–4 and the General Instructions thereto. Persons submitting comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b–4, the Commission does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information. All prospective commenters should follow the Commission’s instructions on how to submit comments, available at https://www.sec.gov/regulatory-actions/ how-to-submit-comments. General questions regarding the rule filing process or logistical questions regarding this filing should be directed to the Main Office of the Commission’s Division of Trading and Markets at tradingandmarkets@sec.gov or 202– 551–5777. DTC reserves the right not to respond to any comments received. III. Date of Effectiveness of the Proposed Rule Change, and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) 15 of the Act and paragraph (f) 16 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 formm (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– DTC–2022–009 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549. All submissions should refer to File Number SR–DTC–2022–009. 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– 2022–009 and should be submitted on or before October 17, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–20729 Filed 9–23–22; 8:45 am] BILLING CODE 8011–01–P 15 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b–4(f). PO 00000 Frm 00119 Fmt 4703 17 17 Sfmt 4703 E:\FR\FM\26SEN1.SGM CFR 200.30–3(a)(12). 26SEN1

Agencies

[Federal Register Volume 87, Number 185 (Monday, September 26, 2022)]
[Notices]
[Pages 58425-58426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20729]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95837; File No. SR-DTC-2022-009]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Make Clarifications to the DTC Rules Concerning the Admission of 
Participants to DTC's Premises and DTC's Authority To Impose Fines

September 20, 2022.
    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 September 14, 2022, 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 consists of amendments to DTC Rules, By-
Laws and Organization Certificate (``Rules'') concerning the admission 
of Participants to DTC's premises and DTC's authority to impose fines. 
DTC filed the proposed rule change pursuant to Section 19(b)(3)(A) of 
the Act \5\ and Rule 19b-4(f)(4) \6\ thereunder so that the proposal 
was effective upon filing with the Commission, as described in greater 
detail below.\7\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(4).
    \7\ Terms not defined herein are defined in the Rules, available 
at https://dtcc.com/~/media/Files/Downloads/legal/rules/
dtc_rules.pdf.
---------------------------------------------------------------------------

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
    DTC proposes to revise its Rules to clarify requirements related to 
the admission of Participants to DTC's premises and DTC's authority to 
impose fines. The proposed changes are described in detail below.
    DTC Rule 17 provides, among other things, that necessary 
credentials for entering DTC's premises shall be provided as specified 
in the Procedures.\8\ The rule further provides that, unless revoked by 
DTC, all credentials, authorizations and powers of attorney issued 
pursuant to Rule 17 or in connection with the work of DTC shall remain 
in full force and effect until DTC shall have received notice of the 
revocation thereof or of the termination of the holder's employment.\9\
---------------------------------------------------------------------------

    \8\ The contents of all DTC Service Guides constitute 
``Procedures'' of DTC. The Procedures may be found on DTCC's public 
website, available at https://www.dtcc.com/legal/rules-and-procedures.
    \9\ See Rule 17, supra note 7.
---------------------------------------------------------------------------

    DTC proposes to revise Rule 17 to delete the requirement that 
necessary credentials for entering DTC's premises be provided as 
specified in the Procedures. DTC does not currently maintain in its 
Procedures any specifications for providing such credentials. The 
proposed rule change would therefore remove outdated rule language that 
may cause confusion for DTC's Participants and readers of its Rules. 
DTC also proposes to revise Rule 17 to clarify that Participants must 
provide ``written'' notice of the revocation of any credentials, 
authorizations and powers of attorney or the termination of the 
holder's employment in order for such revocation or termination to 
become effective pursuant to Rule 17. The proposed rule change would 
clarify the appropriate method for notifying DTC of a revocation or 
termination of credentials and conform the notification requirement in 
Rule 17 to the requirements of DTC's affiliate clearing agencies, 
providing clear and consistent requirements across the clearing 
agencies' rules.\10\
---------------------------------------------------------------------------

    \10\ See National Securities Clearing Corporation (``NSCC'') 
Rule 27, Fixed Income Clearing Corporation (``FICC'') Government 
Securities Division (``GSD'') Rule 27, and FICC Mortgage Back 
Securities Division (``MBSD'') Rule 20. The NSCC Rules & Procedures, 
FICC GSD Rulebook, and FICC MBSD Clearing Rules are available on 
DTCC's public website, available at https://www.dtcc.com/legal/rules-and-procedures.
---------------------------------------------------------------------------

    DTC Rule 21 discusses DTC's authority to discipline Participants or 
Pledgees for, among other things, violations of DTC's Rules or 
Procedures.\11\ DTC's disciplinary authority includes imposing any of 
the following sanctions: expulsion; suspension; limitation of 
activities, functions and operations; fine; censure; and any other 
fitting sanction.
---------------------------------------------------------------------------

    \11\ See Rule 21, supra note 7.
---------------------------------------------------------------------------

    DTC proposes to revise Rule 21 to state that fines shall be payable 
in the manner and at such time as determined by DTC from time to time. 
The proposed

[[Page 58426]]

rule change would clarify an implicitly understood aspect of DTC's 
Rules and more closely align Rule 21 to the requirements of DTC's 
affiliate clearing agencies to provide greater consistency across the 
DTCC clearing agency rules.\12\
---------------------------------------------------------------------------

    \12\ See NSCC Rule 17 and FICC GSD Rule 23, supra note 10.
---------------------------------------------------------------------------

2. Statutory Basis
    DTC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a registered clearing agency. Section 17A(b)(3)(F) of Act 
\13\ requires, in part, that the rules of a clearing agency be designed 
to promote the prompt and accurate clearance and settlement of 
securities transactions. DTC believes the proposed rule change would 
promote the prompt and accurate clearance and settlement of securities 
transactions for the reasons set forth below.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The proposed rule change would clarify the appropriate method for 
notifying DTC of a revocation or termination of credentials (i.e., in 
writing) and remove outdated rule language that may cause confusion for 
DTC's Participants and readers of its Rules. The proposed rule change 
would also clarify that fines imposed by DTC shall be payable in the 
manner and at such time as determined by DTC from time to time. The 
proposed rule change would provide additional accuracy, clarity and 
transparency around implicitly understood aspects of DTC's Rules and 
current practices thereunder. When participants better understand their 
rights and obligations regarding the Rules, such participants are more 
likely to act in accordance with the Rules, which DTC believes would 
promote the prompt and accurate clearance and settlement of securities 
transactions consistent with the requirements of Section 17A(b)(3)(F) 
of Act.\14\
---------------------------------------------------------------------------

    \14\ Id.
---------------------------------------------------------------------------

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

    DTC does not believe that the proposed rule change would have any 
impact on competition. The proposed changes concerning the issuance and 
revocation of credentials and the payment of fines are intended to 
clarify existing processes and would not impose any new material 
obligations or requirements on users of DTC's services. The proposed 
rule changes would apply equally to all participants and would not 
inhibit access to DTC's services or disadvantage or favor any 
particular user in relationship to another. DTC therefore does not 
believe that the proposed rule change would have any impact 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. If any written comments are received by DTC, they will 
be publicly filed as an Exhibit 2 to this filing, as required by Form 
19b-4 and the General Instructions thereto.
    Persons submitting comments are cautioned that, according to 
Section IV (Solicitation of Comments) of the Exhibit 1A in the General 
Instructions to Form 19b-4, the Commission does not edit personal 
identifying information from comment submissions. Commenters should 
submit only information that they wish to make available publicly, 
including their name, email address, and any other identifying 
information.
    All prospective commenters should follow the Commission's 
instructions on how to submit comments, available at https://www.sec.gov/regulatory-actions/how-to-submit-comments. General 
questions regarding the rule filing process or logistical questions 
regarding this filing should be directed to the Main Office of the 
Commission's Division of Trading and Markets at 
[email protected] or 202-551-5777.
    DTC reserves the right not to respond to any comments received.

III. Date of Effectiveness of the Proposed Rule Change, and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) \15\ of the Act and paragraph (f) \16\ 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.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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 formm (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-DTC-2022-009 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-DTC-2022-009. 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-2022-009 and should be submitted on 
or before October 17, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-20729 Filed 9-23-22; 8:45 am]
BILLING CODE 8011-01-P
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