Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the DTC Operational Arrangements (Necessary for Securities To Become and Remain Eligible for DTC Services), 64511-64516 [2024-17389]
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Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–17386 Filed 8–6–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100637; File No. SR–DTC–
2024–007]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify the
DTC Operational Arrangements
(Necessary for Securities To Become
and Remain Eligible for DTC Services)
khammond on DSKJM1Z7X2PROD with NOTICES
August 1, 2024.
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 July 26,
2024, 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)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
18 17
CFR 200.30–3(a)(12).
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)(6).
1 15
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I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to DTC Operational
Arrangements (Necessary for Securities
to Become and Remain Eligible for DTC
Services) (the ‘‘OA’’) 5 to (i) insert,
consolidate and update the procedures
for an Agent processing a
reorganizations event, offer, or
solicitation (each, an ‘‘Offer’’) through
the DTC Automated Tender Offer
Program (‘‘ATOP’’) 6 system or
Automated Subscription Offer Program
(‘‘ASOP’’) 7 system in order to better
align with current processing, and (ii)
make related technical and clarifying
changes relating to Offers processed
through ATOP (an ‘‘ATOP-eligible
Offer’’) or ASOP (an ‘‘ASOP-eligible
Offer’’), 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
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 purpose of the proposed rule
change is to amend the DTC Operational
Arrangements (Necessary for Securities
to Become and Remain Eligible for DTC
Services) (the ‘‘OA’’) to (i) insert,
5 Available at www.dtcc.com/∼/media/Files/
Downloads/legal/issue-eligibility/eligibility/
operational-arrangements.pdf. Each term not
otherwise defined herein has its respective meaning
as set forth in the OA, the Rules, By-Laws and
Organization Certificate of DTC (the ‘‘Rules’’) and
the Reorganizations Service Guide (the
‘‘Reorganizations Guide’’), available at
www.dtcc.com/legal/rules-and-procedures.
6 For the history of ATOP, see Securities
Exchange Act Release Nos. 26538 (Feb. 13,1989), 54
FR 7316 (Feb. 17, 1989) (SR–DTC–88–19); 27139
(Aug. 14, 1989), 54 FR 34841 (Aug. 22, 1989) (SR–
DTC–88–19); 29168 (May 7, 1991), 56 FR 22742
(May 16, 1991) (SR–DTC–91–04); 30678 (May 7,
1992), 57 FR 20541 (May 13, 1992) (SR–DTC–91–
11); and 32645 (July 16, 1993), 58 FR 39585 (SR–
DTC–92–12).
7 For more information about ASOP, see
Securities Exchange Act Release No. 35108 (Dec.
16, 1994), 59 FR 67356 (Dec. 29, 1994) (SR–DTC–
94–15).
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64511
consolidate and update the procedures
for an Agent processing a
reorganizations event, offer, or
solicitation (each, an ‘‘Offer’’) through
the DTC Automated Tender Offer
Program (‘‘ATOP’’) system or
Automated Subscription Offer Program
(‘‘ASOP’’) system in order to better align
with current processing, and (ii) make
related technical and clarifying changes
relating to Offers processed through
ATOP (an ‘‘ATOP-eligible Offer’’) or
ASOP (an ‘‘ASOP-eligible Offer’’), as
described below.
(i) Background
ATOP is an instruction processor
initially developed by DTC in 1988 to
automate the manner in which tender
and exchange offers are processed
through DTC. When an Agent processes
an Offer through ATOP, Participants are
able to (i) submit instructions or
elections for the Offer without needing
to provide a letter of transmittal 8 or a
notice of guaranteed delivery 9 to the
Agent, which will instead receive an
electronic message transmitted by DTC
through the ATOP system with respect
to each instruction and election, and (ii)
tender the subject securities directly
from the Participant’s account into the
Agent’s account maintained by DTC for
purposes of the ATOP-eligible Offer or
ASOP-eligible Offer (‘‘Agent ATOP/
ASOP Account’’). ATOP can be used in
connection with any corporate action
event that DTC deems appropriate,
including, but not limited to, tenders
and exchanges, cash conversions, and
event processing of mergers with
elections.10
ASOP is an instruction processing
system similar to ATOP that was
developed by DTC around 1994 to
automate the manner in which rights
subscription offers are processed
8 The letter of transmittal is the basic instrument
for effecting transfer of tendered securities. It is the
document by which a security holder of the subject
company’s securities, as applicable, accepts the
invitation to tender or offer to purchase; offers to
sell the subject company’s shares to the bidder;
appoints the depositary as the agent to receive and
hold tendered securities; and guarantees to deliver
the subject company’s securities to or actually
deposits the subject company’s securities with the
depositary.
9 A notice of guaranteed delivery, sometimes
called a ‘‘protect,’’ is a document submitted to the
tender agent prior to the expiration of the tender
offer whereby the holder submitting the notice
guarantees delivery of securities (a ‘‘cover’’ of the
protect) after the expiration of the tender offer but
before the expiration of the protection period.
10 See Securities Exchange Act Release Nos.
56538 (Sep. 26, 2007), 72 FR 56409 (Oct. 3, 2007)
(SR–DTC–2007–09); 62119 (May 18, 2010), 75 FR
29374 (May 25, 2010) (SR–DTC–2010–08); 69597
(May 16, 2013), 78 FR 30382 (May 22, 2013) (SR–
DTC–2013–06); and 81096 (July 7, 2017), 82 FR
32406 (July 13, 2017) (SR–DTC–2017–011).
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through DTC. When an Agent processes
an Offer through ASOP, a Participant
can (i) submit subscription instructions
without providing a subscription form,
letter of transmittal, or a notice of
guaranteed delivery to the Agent, which
instead receives an electronic message
transmitted by DTC through the ASOP
system with respect to each instruction
and election from DTC, and (ii) tender
the subject rights directly from the
Participant’s account into the Agent
ATOP/ASOP Account and authorize
DTC to debit the payment from
Participant’s account and credit the
payment to the Agent’s account. When
the underlying securities are distributed
by the Agent, DTC credits the securities
to the account of the Participant.
Currently, in order to make an Offer
eligible for ATOP or ASOP, the agent for
the Offer must have entered into a
corresponding agreement (‘‘Master
Agreement’’) with DTC and been
approved by DTC to process Offers as an
ATOP Agent or an ASOP Agent, as
applicable. The ATOP Agent Master
Agreement and ASOP Agent Master
Agreement provide, in relevant part,
that the Agent agrees that (i) the
delivery by DTC of an electronic
message transmitted through the ATOP
or ASOP system, with respect to each
instruction and election (an ‘‘Agent
Message’’), will satisfy the terms of each
Offer made eligible for ATOP or ASOP
(as applicable) as to the execution and
delivery of a subscription form, letter of
transmittal or a notice of guaranteed
delivery, as the case may be, in the form
of the subscription form, letter of
transmittal or notice of guaranteed
delivery required by the Offer by the
Participant identified in such Agent’s
Message, and (ii) the agreement set forth
above will be enforceable against the
offeror in each Offer made eligible for
ATOP or ASOP (as applicable) by the
Participant identified in such Agent’s
Message. For each ATOP-eligible Offer
or ASOP-eligible Offer, the Agent is
required to electronically agree to a
Letter of Agreement (‘‘LOA’’) that relates
specifically to that Offer and contains
additional terms, conditions, and
requirements with respect to the Offer.
ATOP Agents and ASOP Agents are also
provided with a copy of the ATOP
Agent procedures and ASOP Agent
procedures, respectively. The
procedures, which were originally
drafted around 1989 and revised from
time to time, outline the procedures and
the technical operations of ATOP and
ASOP.11
(ii) Proposed Rule Change
DTC currently provides the ATOP
Agent procedures and the ASOP Agent
procedures to the ATOP Agent and
ASOP Agent, as applicable, upon
onboarding. However, DTC has come to
understand that when the Agent later
makes additional Offers ATOP-eligible
or ASOP-eligible, as the case may be,
the Agent might not have the applicable
procedures readily accessible or might
not be familiar with current processes.
In addition, on the basis of its
interactions with ATOP Agents and
ASOP Agents, DTC has determined that
the clarification and update of certain
elements of the procedures would
enhance Agents’ understanding and
facility with the process. Further, since
there is considerable overlap between
ATOP Agents and ASOP Agents, DTC
determined that it is duplicative to
continue to have two separate
agreements and procedures for ATOP
and ASOP processing.
Therefore, in order to make the
Agent’s procedures for ATOP and ASOP
more streamlined, transparent, and
reflective of current processes, DTC
would discontinue use of standalone
procedures and proposes to amend the
OA to (i) insert consolidated and
updated procedures for Agents that are
processing ATOP-eligible Offers or
ASOP-eligible Offers, and (ii) make
related technical and clarifying changes
relating to ATOP-eligible Offers or
ASOP-eligible Offers.
11 See e.g., Securities Exchange Release Nos.
26757 (Apr. 21, 1989); 54 FR 18619 (May 1, 1989)
(SR–DTC–88–19); 33797 (Mar. 22, 1994); 59 FR
14696 (Mar. 29, 1994) (SR–DTC–93–11).
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A. Deletion of Current Language
Pursuant to the proposed rule change,
DTC would delete the following:
1. Delete the second paragraph in
Section VI.D because cut-off times
would be addressed in the text of the
proposed rule change.
2. Delete Section VI.D.2 because rights
offers would be addressed in the text of
the proposed rule change.
3. Delete Section VI.D.4.a and the text
beginning ‘‘With regard to tender/
exchange offers’’ through ‘‘Agent is
required to approve and adhere to all
requirements represented in the LOA
which includes, but is not limited to,
the following:’’ because processing of
tender/exchange offers would be more
fully described in the text of the
proposed rule change.
B. Heading
Above the paragraph beginning with
‘‘At least one business day prior to
payment and allocation of entitlements
by DTC,’’ DTC is proposing to insert a
new Section VI.D.3 with the title ‘‘DTC’s
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Fmt 4703
Sfmt 4703
Automated Tender Offer Program
(‘‘ATOP’’) and DTC’s Automated
Subscription Offer Program (‘‘ASOP’’).’’
C. Becoming an ATOP/ASOP Agent
DTC is proposing to add a new
subsection VI.D.3.a with the heading
‘‘Becoming an ATOP/ASOP Agent.’’
Currently, the requirements for an Agent
to become an ATOP or ASOP Agent are
reflected in the ATOP Agent procedures
and the ASOP Agent procedures,
respectively. The new subsection would
reflect the new consolidated designation
of an Agent as an ATOP/ASOP Agent,
which would be permitted to make an
Offer ATOP or ASOP eligible.
Specifically, in order to make an Offer
eligible to be processed through ATOP
or ASOP, an Agent must be an agent
approved as an ATOP/ASOP Agent.
To become an ATOP/ASOP Agent, the
Agent must (i) obtain the proper
connectivity to access the ATOP and
ASOP functions as may be required by
DTC, and (ii) execute a DTC OA Agent
Letter, if the Agent does not already
have one on file with DTC; and (iii)
execute an Automated Tender Offer
(ATOP) and Automated Subscription
Offer Program (ASOP) Agent Master
Agreement (‘‘ATOP/ASOP Master
Agreement’’), if the Agent does not
already have one on file at DTC.12
Two footnotes will be inserted to
clarify when an Agent will be required
to sign a new OA Letter and/or a new
ATOP/ASOP Master Agreement. The
footnotes would state as follows: ‘‘All
Agents must have a signed OA Agent
Letter on file at DTC prior to making any
Offer eligible for either ATOP or ASOP.
All Agents must have a signed ATOP/
ASOP Master Agreement on file at DTC
prior to making any Offer eligible for
either ATOP or ASOP. Any Agent that
had previously signed an ATOP Master
Agreement and/or ASOP Master
Agreement prior to August 1, 2024, will
be required to execute a new ATOP/
ASOP Master Agreement. DTC may, in
its sole discretion, decline to make an
Offer eligible for ATOP or ASOP if the
Agent does not have an ATOP/ASOP
Master Agreement on file with DTC.
Pursuant to the proposed rule change,
OA would provide that the DTC Rules,
including, without limitation, the OA,
as may be amended from time to time,
and the LOA for the particular Offer will
govern the rights and obligations of the
Agent in respect of each ATOP-eligible
Offer or ASOP-eligible Offer, as the case
may be. In addition, the OA would
12 As noted above, this would be a change from
the current structure, where an Agent has to be
approved as an ATOP Agent or an ASOP Agent
under separate agreements.
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provide that by executing the ATOP/
ASOP Master Agreement, the Agent
acknowledges and agrees that:
1. The transmission by DTC of an
Agent’s Message shall satisfy the terms
of: 13
a. each ATOP-eligible Offer as to the
execution and delivery of a letter of
transmittal, a notice of guaranteed
delivery, or other form of instruction,
election, or acceptance, as the case may
be, in the form of the letter of
transmittal, notice of guaranteed
delivery, or other form of instruction,
election, or acceptance required by the
Offer by the Participant identified in
such Agent’s Message;
b. each ASOP-eligible Offer as to the
execution and delivery of a subscription
form, a notice of guaranteed delivery,
other form of instruction, election, or
acceptance, as the case may be, in the
form of the subscription form, notice of
guaranteed delivery, or other form of
instruction, election or acceptance
required by the Offer by the Participant
identified in such Agent’s Message.
2. The delivery of securities from the
account of the Participant identified in
the Agent’s Message to the Agent’s
account maintained by DTC for
purposes of the Offer (‘‘Agent ATOP/
ASOP Account’’) shall satisfy the terms
of each Offer as to the surrender of
securities required by the Offer by the
Participant identified in the Agent’s
Message.
3. Notwithstanding anything to the
contrary, for purposes of making a
determination of the timeliness of an
instruction, election, or acceptance and,
if applicable, the tender of securities,
the date and time of a Participant’s
submission of any instruction, election,
or acceptance to DTC through ATOP or
ASOP (as reflected in the Transaction ID
or Subscription ID), and not the date
and time of the transmission of the
Agent’s Message by DTC to the Agent,
shall govern. A footnote would be
inserted to state that ‘‘By way of
example, but without limitation, for
purposes of determining the timeliness
of a Participant’s instruction and/or
tender in connection with an Offer, the
Participant’s instruction is deemed to
have been timely received by, and, if
applicable, the securities timely
tendered to, the Agent when the date
and time of the submission of a
Participant’s instruction to DTC (as
reflected in the Transaction ID or
Subscription ID of the completed
transaction) is prior to the applicable
13 The following footnote reference would be
added: ‘‘The Agent’s Message is the electronic
message that is generated and transmitted to the
Agent through ATOP or ASOP with respect to each
Participant instruction and election.’’
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cutoff/expiration date and time, even if
the transaction does not complete and/
or an Agent’s Message is not transmitted
until after the applicable cutoff/
expiration date and time for the Offer.’’
4. The agreements set forth in the
preceding paragraphs 1–3 are
enforceable against the offeror of an
ATOP-eligible Offer or ASOP-eligible
Offer by the Participant(s) identified in
the applicable Agent’s Message.
5. Prior to making an Offer eligible for
ATOP or ASOP, the Agent shall have
obtained authorization by the offeror of
the Offer to make the
acknowledgements and agreements in
the preceding paragraphs 1–4.
6. The Agent must inspect all Agent’s
Messages promptly upon receipt and to
immediately escalate any questions to
the appropriate DTC contacts identified
in the OA and in the LOA for the
specific Offer.
7. If the Agent believes that the
acceptance of an Offer (including
acceptance by notice of guaranteed
delivery and cover of protect
instructions) and/or the tender of
securities reflected in an Agent’s
Message is deficient for some reason, it
is the sole responsibility of the Agent to
promptly notify the affected Participant
directly to resolve the issue and/or
request that the Participant enter a
withdrawal of its acceptance. The Agent
must also promptly notify DTC about
the deficiency by emailing the DTC
contacts listed in the OA and in the
LOA for the specific Offer.
8. The Agent acknowledges and
agrees that if there are any events or
amendments that occur during the life
of the Offer, the Agent must
immediately notify DTC, and confirm
DTC’s receipt of the notice. DTC may
revoke the eligibility of an Offer,
including, without limitation, in the
event that the terms of the Offer are
amended, or if DTC becomes aware of
a fact, factor, or circumstance and
determines, in its sole discretion, that it
is not practical or feasible for DTC to
provide services in respect of the Offer.
9. The Agent will ensure that DTC
has, at all times, up-to-date contact
information for the Agent, including,
but not limited to, for senior
management and operational personnel.
D. ATOP Eligibility or ASOP Eligibility
of an Offer
DTC is proposing to insert a new
subsection VI.D.3.b. with the heading
‘‘ATOP Eligibility or ASOP Eligibility of
an Offer.’’ Pursuant to the proposed rule
change, this section would reflect the
current procedure on how an Agent can
make an Offer ATOP-eligible or ASOPeligible and would add transparency to
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64513
DTC’s discretion to decline to process
any Offer and to the ATOP and ASOP
cutoff times for instructions, after which
the ATOP/ASOP Agent would need to
process instructions outside of DTC.
The proposed new subsection would
first remind Agents and Issuers that
DTC has discretion to decline to process
any Offer, and DTC’s acceptance of a
particular Offer in one case does not set
a precedent for future Offers. All Agents
and Issuers with a proposed nonstandard Offer that could require special
processing must confirm with DTC
whether the particular Offer can be
processed on the ATOP or ASOP
platform before including references to,
or instructions or directions for, ATOP
or ASOP processing in any
documentation or filings. The new
subsection would then explain that to
make an Offer ATOP-eligible or ASOPeligible, the Agent must send the
offering announcement, including the
source document, and a completed DTC
questionnaire to DTC within the
timeframes and in the manner described
in the OA. DTC may require the Agent
to provide additional documentation if
needed. For an ASOP-eligible Offer, the
Agent will also be required to provide
the ‘‘Agent Wire Instructions Letter’’ for
which DTC is to send the subscription
payments.
Once DTC’s receipt and review of the
documentation and information is
complete, DTC will post the terms of the
Offer on ATOP or ASOP, as the case
may be, viewable by the Agent only.
Within one business day of posting, the
Agent must review and approve the
details of the Offer and to approve the
terms of the LOA for the Offer by
entering an acknowledgement in ATOP
or ASOP, as applicable. Any delays by
the Agent may impact the timeliness of
opening the Offer to participants. If the
Agent reviews the details of the Offer
and the terms of the LOA and disagrees
with one or more terms or details, the
Agent must notify DTC of its
disagreement by entering the LOA
rejection and the reason for the rejection
in ATOP or ASOP, as applicable, and by
email to the DTC contacts listed in the
LOA. DTC, at its option, may work with
the Agent to modify the terms and
details and resolve any differences with
the Agent. DTC will not make an Offer
available to Participants unless all
approvals have been received from the
Agent.
The proposed subsection would also
note that when making an Offer ATOPeligible or ASOP-eligible, DTC will
confirm with the Agent the actual
expiration date/time for the Offer and
the DTC cutoff date/time for the Offer.
For Offers in which the offering
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F. Use of ATOP
The new proposed subsection would
reflect the existing language that with
regard to certain Offers, such as tenders
and exchanges and mergers with
elections, ATOP procedures and
systems must be used for all elections
(e.g., original acceptances, withdrawals
of acceptances, notices of guaranteed
deliveries, conditional acceptances).
Use of ATOP for these purposes is an
eligibility requirement for securities that
are the subject of such Offers unless it
is communicated by the Issuer or Agent
to DTC and determined by DTC that
certain conditions preclude the use of
DTC’s processors for a particular event,
or preclude DTC from allocating
entitlements for an Offer (e.g., restricted
securities that cannot be made DTC
eligible).
The proposed subsection will also
note that the subsequent description of
ATOP processing is for standard
processing of a tender or exchange Offer
on ATOP, but that ATOP may be used
for processing any Offer as DTC may
deem appropriate. Accordingly, certain
processes and requirements may differ
and, when applicable, will be
communicated to the Agent by DTC in
writing and/or in a rider to the ATOP/
ASOP Master Agreement and/or in the
LOA for the specific Offer. For
illustration, a footnote would be added
as follows: ‘‘By way of example, but
without limitation, in order to make a
voting solicitation Offer eligible for
ATOP, the Agent must have a signed
voting addendum to the ATOP/ASOP
Master Agreement on file at DTC.’’
The text of the proposed subsection
would continue to explain that, in
addition, for such Offers, including, but
not limited to, Offers that require
special or manual processing, the Agent
and Issuer may be required to provide
additional written instructions and
indemnifications from the Agent and
Issuer and to pay additional processing
fees. Unless otherwise agreed between
the parties, payment of such fees is due
upon receipt of an invoice from DTC,
prior to DTC’s announcement of the
Offer.
DTC is proposing to insert a new
subsection VI.D.3.c. (i) with the heading
‘‘Use of ATOP.’’ Pursuant to the
proposed rule change, to enhance the
transparency of possible uses of the
ATOP platform, this subsection would
briefly explain that ATOP can be used
for processing any Offer as DTC may
deem appropriate, and that the
procedures and requirements may differ
for ATOP-eligible Offers that are not
standard tender and exchange Offers
and/or require special or manual
processing.
G. Participant Acceptance and
Surrender of Securities Through ATOP
DTC is proposing to insert a new
subsection VI.D.3.c.(ii) titled
‘‘Participant Acceptances and Surrender
of Securities Through ATOP’’ to provide
transparency into how instructions are
inputted and processed through ATOP.
Pursuant to the proposed rule change,
this subsection would briefly
summarize how the ATOP system
processes Participant instructions,
stating that when a Participant submits
an instruction to DTC for an ATOP-
documentation (i) allows for holders to
participate in the Offer (i.e., submit
instructions) on the expiration date
until a time later than the DTC cutoff
time of 6:00 p.m. ET for equities or 5:00
p.m. ET for debt (e.g., Offers with an
actual expiration time of 11:59 p.m. ET
on expiration date), or (ii) reflects an
Offer expiration time on expiration date
that is earlier than 5:00 p.m. ET on
expiration date (e.g., an Offer with an
11:00 a.m. ET expiration time on
expiration date), in which case DTC’s
cutoff date and time for such Offer will
typically be at 6:00 p.m. ET for equities
or 5:00 p.m. ET for debt on the business
day prior to the actual expiration date.
DTC will neither accept nor facilitate
any instructions through ATOP/ASOP
after the stated DTC cutoff date/time,
and DTC has no responsibility or
obligation to do so. After DTC cutoff
date/time, the Agent will be responsible
for administering protects and cover of
protects. The Agent must make itself
available to Participants and have the
capabilities to handle protect
instructions, tenders of securities, and
payments directly with Participants.
Further, if the Agent is not the tendering
security’s transfer agent it is the
responsibility of the Agent to coordinate
with the transfer agent to receive the
tendered securities from Participants
and/or to deliver the security
entitlement (if applicable) to
Participants upon payment.
E. ATOP-Eligible Offers
khammond on DSKJM1Z7X2PROD with NOTICES
DTC is proposing to insert a new
subsection VI.D.3.c. with the heading
‘‘ATOP-eligible Offers.’’ As previously
noted, pursuant to the proposed rule
change, DTC would discontinue its
practice of providing standalone ATOP
Agent procedures and would insert
clarified and updated ATOP procedures
in the OA. This new subsection would
provide such updated procedures in
order to provide enhanced transparency
and to reflect current processes relating
to ATOP-eligible Offers.
VerDate Sep<11>2014
17:07 Aug 06, 2024
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Sfmt 4703
eligible Offer, such as an acceptance and
surrender of securities, acceptance by
submission of a notice of guaranteed
delivery (a ‘‘protect’’), or a surrender of
securities to cover a notice of
guaranteed delivery (a ‘‘cover of a
protect’’) through ATOP, the ATOP
system will typically (x) process the
Participant submission, and, in the case
of an acceptance with surrender of
securities or a cover of a protect, effect
a book-entry delivery of the
Participant’s subject position in the
securities to the Agent ATOP/ASOP
Account, (y) enter information about the
submission (including the time of the
Participant’s submission into DTC) into
ATOP and transmit an Agent’s Message
to the Agent that indicates the
Participant’s acceptance of the ATOPeligible Offer or its instruction to cover
a protect, as the case may be, and, to the
extent applicable, reflects the bookentry delivery of the securities into the
Agent ATOP/ASOP Account.
H. Withdrawal of Acceptances
DTC proposes to insert a new
subsection VI.D.3.c.(iii) titled
‘‘Withdrawal of Acceptances (including
acceptances by notice of guaranteed
delivery or instructions to cover the
protect)’’ to provide transparency into
how withdrawals may be processed
through ATOP. Pursuant to the
proposed rule change, this subsection
would briefly describe the process for a
Participant to withdraw its acceptance
or cover instruction.
The proposed subsection would
provide that if permitted under the
terms of the ATOP-eligible Offer,
Participants can submit an instruction
for a partial or full withdrawal of their
acceptance of an ATOP-eligible Offer.
When a Participant submits a
withdrawal request, the ATOP System
will transmit a message (‘‘Withdrawal
Message’’) to the Agent indicating the
withdrawal instruction submitted by the
Participant. The Agent is required to
inspect all Withdrawal Messages upon
receipt to verify the validity of the
withdrawal request. No later than 30
minutes after the instruction cutoff time
on the day of the withdrawal
instruction, the Agent must take one of
the following actions: (i) if the Agent
determines to accept the withdrawal,
the Agent must transmit an acceptance
(‘‘Withdrawal Acceptance’’) to DTC
through ATOP; or (ii) if the Agent
determines to reject the request, the
Agent must transmit a rejection
(‘‘Withdrawal Rejection’’) to DTC
through ATOP.
The proposed subsection would also
provide that the Agent’s failure to
timely accept or reject a pending
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Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
Withdrawal Message can prevent the
ATOP-eligible Offer from being
balanced with DTC and delay any
payments due to Participants pursuant
to the ATOP-eligible Offer and note that
an Agent cannot partially accept or
reject a withdrawal instruction.
The proposed subsection would also
clarify that if the withdrawal instruction
relates to securities delivered to the
Agent ATOP/ASOP Account in
connection with the acceptance of the
ATOP-eligible Offer, the Withdrawal
Acceptance shall constitute an
authorization from the Agent to DTC to
deliver by book-entry from the Agent
ATOP/ASOP Account to the account of
the Participant submitting the
withdrawal instruction the securities
that are the subject of the Participant’s
withdrawal instruction. Upon receipt of
such a Withdrawal Acceptance, DTC
will affect a book-entry delivery
returning the securities to the
Participant from the Agent ATOP/ASOP
Account. If the withdrawal request
relates to an acceptance of the ATOPeligible Offer by notice of guaranteed
delivery, the Withdrawal Acceptance
constitutes an authorization from the
Agent to DTC to reduce the quantity of
securities to which the Notice of
Guaranteed Delivery relates by the
quantity of securities that are subject to
the withdrawal instruction.
I. After Expiration of an ATOP-Eligible
Offer
DTC is proposing to add a new
subsection VI.D.3.c.(iv) titled ‘‘After
Expiration of an ATOP-eligible Offer,’’
which would include the existing
enumerated list of requirements. DTC
would also make grammatical changes,
correct typos, and add the following
sentence into No. 2 in the list: ‘‘Agent
must reconcile balances with DTC at
least one business day prior to the
allocation of entitlements, and must
receive DTC confirmation prior to
wiring funds to DTC.’’ The purpose of
this requirement is to prevent agents
from overpaying or underpaying DTC,
which would delay the allocation to
Participants.
khammond on DSKJM1Z7X2PROD with NOTICES
J. ASOP-Eligible Offers
DTC is proposing to insert a new
subsection VI.D.3.d. with the heading
‘‘ASOP-eligible Offers.’’ As previously
noted, pursuant to the proposed rule
change, DTC would discontinue its
practice of providing standalone ASOP
Agent procedures and would insert
clarified and updated ASOP procedures
in the OA. This new subsection would
provide such updated procedures in
order to provide enhanced transparency
VerDate Sep<11>2014
17:07 Aug 06, 2024
Jkt 262001
and to reflect current processes relating
to ASOP-eligible Offers.
K. ASOP-Eligible Offer Processing
DTC is proposing to insert subsection
VI.D.3.d.(i). titled ‘‘ASOP-eligible Offer
Processing,’’ to enhance the
transparency of possible uses of the
ASOP platform. This subsection would
generally describe the possible uses for
ASOP, and what may be required from
the Agent and Issuer for Offers that
require special or manual processing.
Pursuant to the proposed rule filing,
this subsection would state that in the
case of rights offerings, DTC’s ASOP
procedures and systems must be used to
process subscription exercise activities,
including the submission of instructions
for basic subscriptions, the exercise of
oversubscriptions, sales of rights, and
notices of guaranteed deliveries, and all
related activities. Use of ASOP for these
purposes is an eligibility requirement
for securities that are the subject of
rights offers. However, ASOP can be
used for processing any corporate action
as DTC may deem appropriate.
Accordingly, certain processes and
requirements may differ and, when
applicable, will be communicated to the
Agent by DTC in writing and/or in a
rider to the ATOP/ASOP Master
Agreement and/or in the LOA. In
addition, for such Offers, including, but
not limited to, Offers that require
special or manual processing, the Agent
and Issuer may be required to provide
additional written instructions and
indemnifications from the Agent and
Issuer and to pay additional processing
fees. Unless otherwise agreed between
the parties, payment of such fees is due
upon receipt of an invoice from DTC,
prior to DTC’s announcement of the
Offer.
L. Participant Acceptances of the ASOPEligible Offer and Surrender of Rights
Through ASOP
DTC is proposing to insert subsection
VI.D.3.d.(ii) under the ‘‘ASOP-eligible
Offers’’ subsection with the heading
‘‘Participant Acceptances of the ASOPeligible Offer and Surrender of Rights
through ASOP,’’ to provide
transparency into how instructions are
inputted and processed through ATOP.
Pursuant to the proposed rule change,
this subsection would briefly
summarize how the ASOP system
processes Participant instructions,
stating that when a Participant submits
an instruction to DTC for an ASOPeligible Offer, such as an acceptance and
surrender of rights, acceptance by
submission of a notice of guaranteed
delivery (protect), or a surrender of
securities to cover a notice of
PO 00000
Frm 00115
Fmt 4703
Sfmt 4703
64515
guaranteed delivery (cover of a protect),
through ASOP, the ASOP system will
typically (x) process the Participant
submission, and in the case of an
acceptance with surrender of rights or
cover of a protect, effect a book-entry
delivery of the Participant’s subject
position in the rights from Participant’s
account to the Agent ATOP/ASOP
Account, (y) debit the required
subscription payment from the
Participant’s account and credit the
payment to the Agent ATOP/ASOP
Account,14 (z) enter information about
the submission (including the time of
the Participant’s submission into DTC)
into ASOP and transmit an Agent’s
Message to the Agent that indicates the
Participant’s acceptance of the ASOPeligible Offer and reflects the crediting
of the required subscription payment to
the Agent ATOP/ASOP Account, and, to
the extent applicable, the book-entry
delivery of the rights into the Agent
ATOP/ASOP Account.
The subscription payment indicated
on the Agent’s Message is typically
credited to the Agent ATOP/ASOP
Account on the same day, except where
the Agent agrees to, or the Terms and
Conditions of the Offer provides for,
different procedures with respect to
payment. Once the funds are credited to
the Agent ATOP/ASOP Account, the
funds are usually wired to the Agent on
the following business day.
M. Instructions To Surrender and Sell
Rights Through ASOP
DTC is proposing to insert subsection
VI.D.3.d. (iii) under the ‘‘ASOP-eligible
Offers’’ subsection with the heading
‘‘Instructions to Surrender and Sell
Rights Through ASOP,’’ which would
briefly describe the process through
which a Participant could submit
instructions to sell rights through ASOP.
Pursuant to the proposed rule change,
the subsection would state that for any
ASOP-eligible Offer on which the Agent
accepts instructions to sell rights, when
a Participant submits instructions to sell
rights through the Agent by means of
ASOP, the ASOP system will typically
(x) process the Participant submission,
(y) effect a book-entry delivery of the
Participant’s position in the subject
rights from the Participant’s account to
the Agent ATOP/ASOP Account, (z)
enter information about the submission
(including the time of the Participant’s
submission into DTC) into ASOP, and
transmit an Agent’s Message to the
Agent that indicates the Participant’s
instruction to sell rights and reflects the
14 Depending on the terms of the Offer, the
subscription payment may be debited at the end of
the Offer.
E:\FR\FM\07AUN1.SGM
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Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices
book-entry delivery of the rights into the
Agent ATOP/ASOP Account.
khammond on DSKJM1Z7X2PROD with NOTICES
2. Statutory Basis
Section 17A(b)(3)(F) of the Act) 15
requires, in part, that the Rules be
designed to promote the prompt and
accurate clearance and settlement of
securities transactions. As described
above, the proposed rule change to
amend the OA would (i) insert
consolidate and updated procedures,
including for an enhanced Master
Agreement, for ATOP/ASOP Agents,
and (ii) make related technical and
clarifying changes relating to ATOPeligible Offers or ASOP-eligible Offers.
DTC believes that these proposed
changes would make the Agent’s
procedures for ATOP and ASOP more
streamlined, transparent, and reflective
of current processes, thereby allowing
Agents to more efficiently and
effectively process corporate action
events and associated securities
transactions. Based on the foregoing,
DTC believes that the proposed rule
change is designed to promote the
prompt and accurate clearance and
settlement of securities transactions,
consistent with Section 17A(b)(3)(F) of
the Act, cited above.
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
www.sec.gov/regulatory-actions/how-tosubmit-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 to not respond
to any comments received.
III. Date of Effectiveness of the
Proposed Rule Change, and Timing for
Commission Action
(B) Clearing Agency’s Statement on
Burden on Competition
DTC believes that the proposed rule
change to amend the OA to (i) insert
consolidated and updated procedures,
including for an enhanced Master
Agreement, for ATOP/ASOP Agents,
and (ii) make related technical and
clarifying changes relating to ATOPeligible Offers or ASOP-eligible Offers
will not have any impact on
competition.16 The proposed rule
change would provide procedures that
are more accessible, transparent, and
reflective of current processes and
would apply to all ATOP/ASOP Agents
equally. Any additional efforts required
on the part of Agents would be merely
administrative, such as entering a new
Master Agreement. In light of the
foregoing, DTC does not believe that the
proposed rule change would impose a
burden on competition.17
Because the foregoing proposed rule
change does not:
(i) significantly affect the protection of
investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act and Rule 19b–4(f)(6) 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.
(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, they would be publicly filed
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:
15 15
16 15
17 Id.
17:07 Aug 06, 2024
Jkt 262001
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–2024–007. 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). Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to File
Number SR–DTC–2024–007 and should
be submitted on or before August 28,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–17389 Filed 8–6–24; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
U.S.C. 78q–1(b)(3)(F).
U.S.C. 78q–1(b)(3)(I).
VerDate Sep<11>2014
IV. Solicitation of Comments
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
DTC–2024–007 on the subject line.
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18 17
E:\FR\FM\07AUN1.SGM
CFR 200.30–3(a)(12).
07AUN1
]]>Agencies
[Federal Register Volume 89, Number 152 (Wednesday, August 7, 2024)]
[Notices]
[Pages 64511-64516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17389]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100637; File No. SR-DTC-2024-007]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify the DTC Operational Arrangements (Necessary for Securities To
Become and Remain Eligible for DTC Services)
August 1, 2024.
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 July 26, 2024, 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)(6)
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)(6).
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change consists of amendments to DTC Operational
Arrangements (Necessary for Securities to Become and Remain Eligible
for DTC Services) (the ``OA'') \5\ to (i) insert, consolidate and
update the procedures for an Agent processing a reorganizations event,
offer, or solicitation (each, an ``Offer'') through the DTC Automated
Tender Offer Program (``ATOP'') \6\ system or Automated Subscription
Offer Program (``ASOP'') \7\ system in order to better align with
current processing, and (ii) make related technical and clarifying
changes relating to Offers processed through ATOP (an ``ATOP-eligible
Offer'') or ASOP (an ``ASOP-eligible Offer''), as described in greater
detail below.
---------------------------------------------------------------------------
\5\ Available at www.dtcc.com/~/media/Files/Downloads/legal/
issue-eligibility/eligibility/operational-arrangements.pdf. Each
term not otherwise defined herein has its respective meaning as set
forth in the OA, the Rules, By-Laws and Organization Certificate of
DTC (the ``Rules'') and the Reorganizations Service Guide (the
``Reorganizations Guide''), available at www.dtcc.com/legal/rules-and-procedures.
\6\ For the history of ATOP, see Securities Exchange Act Release
Nos. 26538 (Feb. 13,1989), 54 FR 7316 (Feb. 17, 1989) (SR-DTC-88-
19); 27139 (Aug. 14, 1989), 54 FR 34841 (Aug. 22, 1989) (SR-DTC-88-
19); 29168 (May 7, 1991), 56 FR 22742 (May 16, 1991) (SR-DTC-91-04);
30678 (May 7, 1992), 57 FR 20541 (May 13, 1992) (SR-DTC-91-11); and
32645 (July 16, 1993), 58 FR 39585 (SR-DTC-92-12).
\7\ For more information about ASOP, see Securities Exchange Act
Release No. 35108 (Dec. 16, 1994), 59 FR 67356 (Dec. 29, 1994) (SR-
DTC-94-15).
---------------------------------------------------------------------------
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 purpose of the proposed rule change is to amend the DTC
Operational Arrangements (Necessary for Securities to Become and Remain
Eligible for DTC Services) (the ``OA'') to (i) insert, consolidate and
update the procedures for an Agent processing a reorganizations event,
offer, or solicitation (each, an ``Offer'') through the DTC Automated
Tender Offer Program (``ATOP'') system or Automated Subscription Offer
Program (``ASOP'') system in order to better align with current
processing, and (ii) make related technical and clarifying changes
relating to Offers processed through ATOP (an ``ATOP-eligible Offer'')
or ASOP (an ``ASOP-eligible Offer''), as described below.
(i) Background
ATOP is an instruction processor initially developed by DTC in 1988
to automate the manner in which tender and exchange offers are
processed through DTC. When an Agent processes an Offer through ATOP,
Participants are able to (i) submit instructions or elections for the
Offer without needing to provide a letter of transmittal \8\ or a
notice of guaranteed delivery \9\ to the Agent, which will instead
receive an electronic message transmitted by DTC through the ATOP
system with respect to each instruction and election, and (ii) tender
the subject securities directly from the Participant's account into the
Agent's account maintained by DTC for purposes of the ATOP-eligible
Offer or ASOP-eligible Offer (``Agent ATOP/ASOP Account''). ATOP can be
used in connection with any corporate action event that DTC deems
appropriate, including, but not limited to, tenders and exchanges, cash
conversions, and event processing of mergers with elections.\10\
---------------------------------------------------------------------------
\8\ The letter of transmittal is the basic instrument for
effecting transfer of tendered securities. It is the document by
which a security holder of the subject company's securities, as
applicable, accepts the invitation to tender or offer to purchase;
offers to sell the subject company's shares to the bidder; appoints
the depositary as the agent to receive and hold tendered securities;
and guarantees to deliver the subject company's securities to or
actually deposits the subject company's securities with the
depositary.
\9\ A notice of guaranteed delivery, sometimes called a
``protect,'' is a document submitted to the tender agent prior to
the expiration of the tender offer whereby the holder submitting the
notice guarantees delivery of securities (a ``cover'' of the
protect) after the expiration of the tender offer but before the
expiration of the protection period.
\10\ See Securities Exchange Act Release Nos. 56538 (Sep. 26,
2007), 72 FR 56409 (Oct. 3, 2007) (SR-DTC-2007-09); 62119 (May 18,
2010), 75 FR 29374 (May 25, 2010) (SR-DTC-2010-08); 69597 (May 16,
2013), 78 FR 30382 (May 22, 2013) (SR-DTC-2013-06); and 81096 (July
7, 2017), 82 FR 32406 (July 13, 2017) (SR-DTC-2017-011).
---------------------------------------------------------------------------
ASOP is an instruction processing system similar to ATOP that was
developed by DTC around 1994 to automate the manner in which rights
subscription offers are processed
[[Page 64512]]
through DTC. When an Agent processes an Offer through ASOP, a
Participant can (i) submit subscription instructions without providing
a subscription form, letter of transmittal, or a notice of guaranteed
delivery to the Agent, which instead receives an electronic message
transmitted by DTC through the ASOP system with respect to each
instruction and election from DTC, and (ii) tender the subject rights
directly from the Participant's account into the Agent ATOP/ASOP
Account and authorize DTC to debit the payment from Participant's
account and credit the payment to the Agent's account. When the
underlying securities are distributed by the Agent, DTC credits the
securities to the account of the Participant.
Currently, in order to make an Offer eligible for ATOP or ASOP, the
agent for the Offer must have entered into a corresponding agreement
(``Master Agreement'') with DTC and been approved by DTC to process
Offers as an ATOP Agent or an ASOP Agent, as applicable. The ATOP Agent
Master Agreement and ASOP Agent Master Agreement provide, in relevant
part, that the Agent agrees that (i) the delivery by DTC of an
electronic message transmitted through the ATOP or ASOP system, with
respect to each instruction and election (an ``Agent Message''), will
satisfy the terms of each Offer made eligible for ATOP or ASOP (as
applicable) as to the execution and delivery of a subscription form,
letter of transmittal or a notice of guaranteed delivery, as the case
may be, in the form of the subscription form, letter of transmittal or
notice of guaranteed delivery required by the Offer by the Participant
identified in such Agent's Message, and (ii) the agreement set forth
above will be enforceable against the offeror in each Offer made
eligible for ATOP or ASOP (as applicable) by the Participant identified
in such Agent's Message. For each ATOP-eligible Offer or ASOP-eligible
Offer, the Agent is required to electronically agree to a Letter of
Agreement (``LOA'') that relates specifically to that Offer and
contains additional terms, conditions, and requirements with respect to
the Offer. ATOP Agents and ASOP Agents are also provided with a copy of
the ATOP Agent procedures and ASOP Agent procedures, respectively. The
procedures, which were originally drafted around 1989 and revised from
time to time, outline the procedures and the technical operations of
ATOP and ASOP.\11\
---------------------------------------------------------------------------
\11\ See e.g., Securities Exchange Release Nos. 26757 (Apr. 21,
1989); 54 FR 18619 (May 1, 1989) (SR-DTC-88-19); 33797 (Mar. 22,
1994); 59 FR 14696 (Mar. 29, 1994) (SR-DTC-93-11).
---------------------------------------------------------------------------
(ii) Proposed Rule Change
DTC currently provides the ATOP Agent procedures and the ASOP Agent
procedures to the ATOP Agent and ASOP Agent, as applicable, upon
onboarding. However, DTC has come to understand that when the Agent
later makes additional Offers ATOP-eligible or ASOP-eligible, as the
case may be, the Agent might not have the applicable procedures readily
accessible or might not be familiar with current processes. In
addition, on the basis of its interactions with ATOP Agents and ASOP
Agents, DTC has determined that the clarification and update of certain
elements of the procedures would enhance Agents' understanding and
facility with the process. Further, since there is considerable overlap
between ATOP Agents and ASOP Agents, DTC determined that it is
duplicative to continue to have two separate agreements and procedures
for ATOP and ASOP processing.
Therefore, in order to make the Agent's procedures for ATOP and
ASOP more streamlined, transparent, and reflective of current
processes, DTC would discontinue use of standalone procedures and
proposes to amend the OA to (i) insert consolidated and updated
procedures for Agents that are processing ATOP-eligible Offers or ASOP-
eligible Offers, and (ii) make related technical and clarifying changes
relating to ATOP-eligible Offers or ASOP-eligible Offers.
A. Deletion of Current Language
Pursuant to the proposed rule change, DTC would delete the
following:
1. Delete the second paragraph in Section VI.D because cut-off
times would be addressed in the text of the proposed rule change.
2. Delete Section VI.D.2 because rights offers would be addressed
in the text of the proposed rule change.
3. Delete Section VI.D.4.a and the text beginning ``With regard to
tender/exchange offers'' through ``Agent is required to approve and
adhere to all requirements represented in the LOA which includes, but
is not limited to, the following:'' because processing of tender/
exchange offers would be more fully described in the text of the
proposed rule change.
B. Heading
Above the paragraph beginning with ``At least one business day
prior to payment and allocation of entitlements by DTC,'' DTC is
proposing to insert a new Section VI.D.3 with the title ``DTC's
Automated Tender Offer Program (``ATOP'') and DTC's Automated
Subscription Offer Program (``ASOP'').''
C. Becoming an ATOP/ASOP Agent
DTC is proposing to add a new subsection VI.D.3.a with the heading
``Becoming an ATOP/ASOP Agent.'' Currently, the requirements for an
Agent to become an ATOP or ASOP Agent are reflected in the ATOP Agent
procedures and the ASOP Agent procedures, respectively. The new
subsection would reflect the new consolidated designation of an Agent
as an ATOP/ASOP Agent, which would be permitted to make an Offer ATOP
or ASOP eligible. Specifically, in order to make an Offer eligible to
be processed through ATOP or ASOP, an Agent must be an agent approved
as an ATOP/ASOP Agent.
To become an ATOP/ASOP Agent, the Agent must (i) obtain the proper
connectivity to access the ATOP and ASOP functions as may be required
by DTC, and (ii) execute a DTC OA Agent Letter, if the Agent does not
already have one on file with DTC; and (iii) execute an Automated
Tender Offer (ATOP) and Automated Subscription Offer Program (ASOP)
Agent Master Agreement (``ATOP/ASOP Master Agreement''), if the Agent
does not already have one on file at DTC.\12\
---------------------------------------------------------------------------
\12\ As noted above, this would be a change from the current
structure, where an Agent has to be approved as an ATOP Agent or an
ASOP Agent under separate agreements.
---------------------------------------------------------------------------
Two footnotes will be inserted to clarify when an Agent will be
required to sign a new OA Letter and/or a new ATOP/ASOP Master
Agreement. The footnotes would state as follows: ``All Agents must have
a signed OA Agent Letter on file at DTC prior to making any Offer
eligible for either ATOP or ASOP. All Agents must have a signed ATOP/
ASOP Master Agreement on file at DTC prior to making any Offer eligible
for either ATOP or ASOP. Any Agent that had previously signed an ATOP
Master Agreement and/or ASOP Master Agreement prior to August 1, 2024,
will be required to execute a new ATOP/ASOP Master Agreement. DTC may,
in its sole discretion, decline to make an Offer eligible for ATOP or
ASOP if the Agent does not have an ATOP/ASOP Master Agreement on file
with DTC.
Pursuant to the proposed rule change, OA would provide that the DTC
Rules, including, without limitation, the OA, as may be amended from
time to time, and the LOA for the particular Offer will govern the
rights and obligations of the Agent in respect of each ATOP-eligible
Offer or ASOP-eligible Offer, as the case may be. In addition, the OA
would
[[Page 64513]]
provide that by executing the ATOP/ASOP Master Agreement, the Agent
acknowledges and agrees that:
1. The transmission by DTC of an Agent's Message shall satisfy the
terms of: \13\
---------------------------------------------------------------------------
\13\ The following footnote reference would be added: ``The
Agent's Message is the electronic message that is generated and
transmitted to the Agent through ATOP or ASOP with respect to each
Participant instruction and election.''
---------------------------------------------------------------------------
a. each ATOP-eligible Offer as to the execution and delivery of a
letter of transmittal, a notice of guaranteed delivery, or other form
of instruction, election, or acceptance, as the case may be, in the
form of the letter of transmittal, notice of guaranteed delivery, or
other form of instruction, election, or acceptance required by the
Offer by the Participant identified in such Agent's Message;
b. each ASOP-eligible Offer as to the execution and delivery of a
subscription form, a notice of guaranteed delivery, other form of
instruction, election, or acceptance, as the case may be, in the form
of the subscription form, notice of guaranteed delivery, or other form
of instruction, election or acceptance required by the Offer by the
Participant identified in such Agent's Message.
2. The delivery of securities from the account of the Participant
identified in the Agent's Message to the Agent's account maintained by
DTC for purposes of the Offer (``Agent ATOP/ASOP Account'') shall
satisfy the terms of each Offer as to the surrender of securities
required by the Offer by the Participant identified in the Agent's
Message.
3. Notwithstanding anything to the contrary, for purposes of making
a determination of the timeliness of an instruction, election, or
acceptance and, if applicable, the tender of securities, the date and
time of a Participant's submission of any instruction, election, or
acceptance to DTC through ATOP or ASOP (as reflected in the Transaction
ID or Subscription ID), and not the date and time of the transmission
of the Agent's Message by DTC to the Agent, shall govern. A footnote
would be inserted to state that ``By way of example, but without
limitation, for purposes of determining the timeliness of a
Participant's instruction and/or tender in connection with an Offer,
the Participant's instruction is deemed to have been timely received
by, and, if applicable, the securities timely tendered to, the Agent
when the date and time of the submission of a Participant's instruction
to DTC (as reflected in the Transaction ID or Subscription ID of the
completed transaction) is prior to the applicable cutoff/expiration
date and time, even if the transaction does not complete and/or an
Agent's Message is not transmitted until after the applicable cutoff/
expiration date and time for the Offer.''
4. The agreements set forth in the preceding paragraphs 1-3 are
enforceable against the offeror of an ATOP-eligible Offer or ASOP-
eligible Offer by the Participant(s) identified in the applicable
Agent's Message.
5. Prior to making an Offer eligible for ATOP or ASOP, the Agent
shall have obtained authorization by the offeror of the Offer to make
the acknowledgements and agreements in the preceding paragraphs 1-4.
6. The Agent must inspect all Agent's Messages promptly upon
receipt and to immediately escalate any questions to the appropriate
DTC contacts identified in the OA and in the LOA for the specific
Offer.
7. If the Agent believes that the acceptance of an Offer (including
acceptance by notice of guaranteed delivery and cover of protect
instructions) and/or the tender of securities reflected in an Agent's
Message is deficient for some reason, it is the sole responsibility of
the Agent to promptly notify the affected Participant directly to
resolve the issue and/or request that the Participant enter a
withdrawal of its acceptance. The Agent must also promptly notify DTC
about the deficiency by emailing the DTC contacts listed in the OA and
in the LOA for the specific Offer.
8. The Agent acknowledges and agrees that if there are any events
or amendments that occur during the life of the Offer, the Agent must
immediately notify DTC, and confirm DTC's receipt of the notice. DTC
may revoke the eligibility of an Offer, including, without limitation,
in the event that the terms of the Offer are amended, or if DTC becomes
aware of a fact, factor, or circumstance and determines, in its sole
discretion, that it is not practical or feasible for DTC to provide
services in respect of the Offer.
9. The Agent will ensure that DTC has, at all times, up-to-date
contact information for the Agent, including, but not limited to, for
senior management and operational personnel.
D. ATOP Eligibility or ASOP Eligibility of an Offer
DTC is proposing to insert a new subsection VI.D.3.b. with the
heading ``ATOP Eligibility or ASOP Eligibility of an Offer.'' Pursuant
to the proposed rule change, this section would reflect the current
procedure on how an Agent can make an Offer ATOP-eligible or ASOP-
eligible and would add transparency to DTC's discretion to decline to
process any Offer and to the ATOP and ASOP cutoff times for
instructions, after which the ATOP/ASOP Agent would need to process
instructions outside of DTC.
The proposed new subsection would first remind Agents and Issuers
that DTC has discretion to decline to process any Offer, and DTC's
acceptance of a particular Offer in one case does not set a precedent
for future Offers. All Agents and Issuers with a proposed non-standard
Offer that could require special processing must confirm with DTC
whether the particular Offer can be processed on the ATOP or ASOP
platform before including references to, or instructions or directions
for, ATOP or ASOP processing in any documentation or filings. The new
subsection would then explain that to make an Offer ATOP-eligible or
ASOP-eligible, the Agent must send the offering announcement, including
the source document, and a completed DTC questionnaire to DTC within
the timeframes and in the manner described in the OA. DTC may require
the Agent to provide additional documentation if needed. For an ASOP-
eligible Offer, the Agent will also be required to provide the ``Agent
Wire Instructions Letter'' for which DTC is to send the subscription
payments.
Once DTC's receipt and review of the documentation and information
is complete, DTC will post the terms of the Offer on ATOP or ASOP, as
the case may be, viewable by the Agent only. Within one business day of
posting, the Agent must review and approve the details of the Offer and
to approve the terms of the LOA for the Offer by entering an
acknowledgement in ATOP or ASOP, as applicable. Any delays by the Agent
may impact the timeliness of opening the Offer to participants. If the
Agent reviews the details of the Offer and the terms of the LOA and
disagrees with one or more terms or details, the Agent must notify DTC
of its disagreement by entering the LOA rejection and the reason for
the rejection in ATOP or ASOP, as applicable, and by email to the DTC
contacts listed in the LOA. DTC, at its option, may work with the Agent
to modify the terms and details and resolve any differences with the
Agent. DTC will not make an Offer available to Participants unless all
approvals have been received from the Agent.
The proposed subsection would also note that when making an Offer
ATOP-eligible or ASOP-eligible, DTC will confirm with the Agent the
actual expiration date/time for the Offer and the DTC cutoff date/time
for the Offer. For Offers in which the offering
[[Page 64514]]
documentation (i) allows for holders to participate in the Offer (i.e.,
submit instructions) on the expiration date until a time later than the
DTC cutoff time of 6:00 p.m. ET for equities or 5:00 p.m. ET for debt
(e.g., Offers with an actual expiration time of 11:59 p.m. ET on
expiration date), or (ii) reflects an Offer expiration time on
expiration date that is earlier than 5:00 p.m. ET on expiration date
(e.g., an Offer with an 11:00 a.m. ET expiration time on expiration
date), in which case DTC's cutoff date and time for such Offer will
typically be at 6:00 p.m. ET for equities or 5:00 p.m. ET for debt on
the business day prior to the actual expiration date. DTC will neither
accept nor facilitate any instructions through ATOP/ASOP after the
stated DTC cutoff date/time, and DTC has no responsibility or
obligation to do so. After DTC cutoff date/time, the Agent will be
responsible for administering protects and cover of protects. The Agent
must make itself available to Participants and have the capabilities to
handle protect instructions, tenders of securities, and payments
directly with Participants. Further, if the Agent is not the tendering
security's transfer agent it is the responsibility of the Agent to
coordinate with the transfer agent to receive the tendered securities
from Participants and/or to deliver the security entitlement (if
applicable) to Participants upon payment.
E. ATOP-Eligible Offers
DTC is proposing to insert a new subsection VI.D.3.c. with the
heading ``ATOP-eligible Offers.'' As previously noted, pursuant to the
proposed rule change, DTC would discontinue its practice of providing
standalone ATOP Agent procedures and would insert clarified and updated
ATOP procedures in the OA. This new subsection would provide such
updated procedures in order to provide enhanced transparency and to
reflect current processes relating to ATOP-eligible Offers.
F. Use of ATOP
DTC is proposing to insert a new subsection VI.D.3.c. (i) with the
heading ``Use of ATOP.'' Pursuant to the proposed rule change, to
enhance the transparency of possible uses of the ATOP platform, this
subsection would briefly explain that ATOP can be used for processing
any Offer as DTC may deem appropriate, and that the procedures and
requirements may differ for ATOP-eligible Offers that are not standard
tender and exchange Offers and/or require special or manual processing.
The new proposed subsection would reflect the existing language
that with regard to certain Offers, such as tenders and exchanges and
mergers with elections, ATOP procedures and systems must be used for
all elections (e.g., original acceptances, withdrawals of acceptances,
notices of guaranteed deliveries, conditional acceptances). Use of ATOP
for these purposes is an eligibility requirement for securities that
are the subject of such Offers unless it is communicated by the Issuer
or Agent to DTC and determined by DTC that certain conditions preclude
the use of DTC's processors for a particular event, or preclude DTC
from allocating entitlements for an Offer (e.g., restricted securities
that cannot be made DTC eligible).
The proposed subsection will also note that the subsequent
description of ATOP processing is for standard processing of a tender
or exchange Offer on ATOP, but that ATOP may be used for processing any
Offer as DTC may deem appropriate. Accordingly, certain processes and
requirements may differ and, when applicable, will be communicated to
the Agent by DTC in writing and/or in a rider to the ATOP/ASOP Master
Agreement and/or in the LOA for the specific Offer. For illustration, a
footnote would be added as follows: ``By way of example, but without
limitation, in order to make a voting solicitation Offer eligible for
ATOP, the Agent must have a signed voting addendum to the ATOP/ASOP
Master Agreement on file at DTC.''
The text of the proposed subsection would continue to explain that,
in addition, for such Offers, including, but not limited to, Offers
that require special or manual processing, the Agent and Issuer may be
required to provide additional written instructions and
indemnifications from the Agent and Issuer and to pay additional
processing fees. Unless otherwise agreed between the parties, payment
of such fees is due upon receipt of an invoice from DTC, prior to DTC's
announcement of the Offer.
G. Participant Acceptance and Surrender of Securities Through ATOP
DTC is proposing to insert a new subsection VI.D.3.c.(ii) titled
``Participant Acceptances and Surrender of Securities Through ATOP'' to
provide transparency into how instructions are inputted and processed
through ATOP.
Pursuant to the proposed rule change, this subsection would briefly
summarize how the ATOP system processes Participant instructions,
stating that when a Participant submits an instruction to DTC for an
ATOP-eligible Offer, such as an acceptance and surrender of securities,
acceptance by submission of a notice of guaranteed delivery (a
``protect''), or a surrender of securities to cover a notice of
guaranteed delivery (a ``cover of a protect'') through ATOP, the ATOP
system will typically (x) process the Participant submission, and, in
the case of an acceptance with surrender of securities or a cover of a
protect, effect a book-entry delivery of the Participant's subject
position in the securities to the Agent ATOP/ASOP Account, (y) enter
information about the submission (including the time of the
Participant's submission into DTC) into ATOP and transmit an Agent's
Message to the Agent that indicates the Participant's acceptance of the
ATOP-eligible Offer or its instruction to cover a protect, as the case
may be, and, to the extent applicable, reflects the book-entry delivery
of the securities into the Agent ATOP/ASOP Account.
H. Withdrawal of Acceptances
DTC proposes to insert a new subsection VI.D.3.c.(iii) titled
``Withdrawal of Acceptances (including acceptances by notice of
guaranteed delivery or instructions to cover the protect)'' to provide
transparency into how withdrawals may be processed through ATOP.
Pursuant to the proposed rule change, this subsection would briefly
describe the process for a Participant to withdraw its acceptance or
cover instruction.
The proposed subsection would provide that if permitted under the
terms of the ATOP-eligible Offer, Participants can submit an
instruction for a partial or full withdrawal of their acceptance of an
ATOP-eligible Offer. When a Participant submits a withdrawal request,
the ATOP System will transmit a message (``Withdrawal Message'') to the
Agent indicating the withdrawal instruction submitted by the
Participant. The Agent is required to inspect all Withdrawal Messages
upon receipt to verify the validity of the withdrawal request. No later
than 30 minutes after the instruction cutoff time on the day of the
withdrawal instruction, the Agent must take one of the following
actions: (i) if the Agent determines to accept the withdrawal, the
Agent must transmit an acceptance (``Withdrawal Acceptance'') to DTC
through ATOP; or (ii) if the Agent determines to reject the request,
the Agent must transmit a rejection (``Withdrawal Rejection'') to DTC
through ATOP.
The proposed subsection would also provide that the Agent's failure
to timely accept or reject a pending
[[Page 64515]]
Withdrawal Message can prevent the ATOP-eligible Offer from being
balanced with DTC and delay any payments due to Participants pursuant
to the ATOP-eligible Offer and note that an Agent cannot partially
accept or reject a withdrawal instruction.
The proposed subsection would also clarify that if the withdrawal
instruction relates to securities delivered to the Agent ATOP/ASOP
Account in connection with the acceptance of the ATOP-eligible Offer,
the Withdrawal Acceptance shall constitute an authorization from the
Agent to DTC to deliver by book-entry from the Agent ATOP/ASOP Account
to the account of the Participant submitting the withdrawal instruction
the securities that are the subject of the Participant's withdrawal
instruction. Upon receipt of such a Withdrawal Acceptance, DTC will
affect a book-entry delivery returning the securities to the
Participant from the Agent ATOP/ASOP Account. If the withdrawal request
relates to an acceptance of the ATOP-eligible Offer by notice of
guaranteed delivery, the Withdrawal Acceptance constitutes an
authorization from the Agent to DTC to reduce the quantity of
securities to which the Notice of Guaranteed Delivery relates by the
quantity of securities that are subject to the withdrawal instruction.
I. After Expiration of an ATOP-Eligible Offer
DTC is proposing to add a new subsection VI.D.3.c.(iv) titled
``After Expiration of an ATOP-eligible Offer,'' which would include the
existing enumerated list of requirements. DTC would also make
grammatical changes, correct typos, and add the following sentence into
No. 2 in the list: ``Agent must reconcile balances with DTC at least
one business day prior to the allocation of entitlements, and must
receive DTC confirmation prior to wiring funds to DTC.'' The purpose of
this requirement is to prevent agents from overpaying or underpaying
DTC, which would delay the allocation to Participants.
J. ASOP-Eligible Offers
DTC is proposing to insert a new subsection VI.D.3.d. with the
heading ``ASOP-eligible Offers.'' As previously noted, pursuant to the
proposed rule change, DTC would discontinue its practice of providing
standalone ASOP Agent procedures and would insert clarified and updated
ASOP procedures in the OA. This new subsection would provide such
updated procedures in order to provide enhanced transparency and to
reflect current processes relating to ASOP-eligible Offers.
K. ASOP-Eligible Offer Processing
DTC is proposing to insert subsection VI.D.3.d.(i). titled ``ASOP-
eligible Offer Processing,'' to enhance the transparency of possible
uses of the ASOP platform. This subsection would generally describe the
possible uses for ASOP, and what may be required from the Agent and
Issuer for Offers that require special or manual processing.
Pursuant to the proposed rule filing, this subsection would state
that in the case of rights offerings, DTC's ASOP procedures and systems
must be used to process subscription exercise activities, including the
submission of instructions for basic subscriptions, the exercise of
oversubscriptions, sales of rights, and notices of guaranteed
deliveries, and all related activities. Use of ASOP for these purposes
is an eligibility requirement for securities that are the subject of
rights offers. However, ASOP can be used for processing any corporate
action as DTC may deem appropriate. Accordingly, certain processes and
requirements may differ and, when applicable, will be communicated to
the Agent by DTC in writing and/or in a rider to the ATOP/ASOP Master
Agreement and/or in the LOA. In addition, for such Offers, including,
but not limited to, Offers that require special or manual processing,
the Agent and Issuer may be required to provide additional written
instructions and indemnifications from the Agent and Issuer and to pay
additional processing fees. Unless otherwise agreed between the
parties, payment of such fees is due upon receipt of an invoice from
DTC, prior to DTC's announcement of the Offer.
L. Participant Acceptances of the ASOP-Eligible Offer and Surrender of
Rights Through ASOP
DTC is proposing to insert subsection VI.D.3.d.(ii) under the
``ASOP-eligible Offers'' subsection with the heading ``Participant
Acceptances of the ASOP-eligible Offer and Surrender of Rights through
ASOP,'' to provide transparency into how instructions are inputted and
processed through ATOP.
Pursuant to the proposed rule change, this subsection would briefly
summarize how the ASOP system processes Participant instructions,
stating that when a Participant submits an instruction to DTC for an
ASOP-eligible Offer, such as an acceptance and surrender of rights,
acceptance by submission of a notice of guaranteed delivery (protect),
or a surrender of securities to cover a notice of guaranteed delivery
(cover of a protect), through ASOP, the ASOP system will typically (x)
process the Participant submission, and in the case of an acceptance
with surrender of rights or cover of a protect, effect a book-entry
delivery of the Participant's subject position in the rights from
Participant's account to the Agent ATOP/ASOP Account, (y) debit the
required subscription payment from the Participant's account and credit
the payment to the Agent ATOP/ASOP Account,\14\ (z) enter information
about the submission (including the time of the Participant's
submission into DTC) into ASOP and transmit an Agent's Message to the
Agent that indicates the Participant's acceptance of the ASOP-eligible
Offer and reflects the crediting of the required subscription payment
to the Agent ATOP/ASOP Account, and, to the extent applicable, the
book-entry delivery of the rights into the Agent ATOP/ASOP Account.
---------------------------------------------------------------------------
\14\ Depending on the terms of the Offer, the subscription
payment may be debited at the end of the Offer.
---------------------------------------------------------------------------
The subscription payment indicated on the Agent's Message is
typically credited to the Agent ATOP/ASOP Account on the same day,
except where the Agent agrees to, or the Terms and Conditions of the
Offer provides for, different procedures with respect to payment. Once
the funds are credited to the Agent ATOP/ASOP Account, the funds are
usually wired to the Agent on the following business day.
M. Instructions To Surrender and Sell Rights Through ASOP
DTC is proposing to insert subsection VI.D.3.d. (iii) under the
``ASOP-eligible Offers'' subsection with the heading ``Instructions to
Surrender and Sell Rights Through ASOP,'' which would briefly describe
the process through which a Participant could submit instructions to
sell rights through ASOP.
Pursuant to the proposed rule change, the subsection would state
that for any ASOP-eligible Offer on which the Agent accepts
instructions to sell rights, when a Participant submits instructions to
sell rights through the Agent by means of ASOP, the ASOP system will
typically (x) process the Participant submission, (y) effect a book-
entry delivery of the Participant's position in the subject rights from
the Participant's account to the Agent ATOP/ASOP Account, (z) enter
information about the submission (including the time of the
Participant's submission into DTC) into ASOP, and transmit an Agent's
Message to the Agent that indicates the Participant's instruction to
sell rights and reflects the
[[Page 64516]]
book-entry delivery of the rights into the Agent ATOP/ASOP Account.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act) \15\ requires, in part, that the
Rules be designed to promote the prompt and accurate clearance and
settlement of securities transactions. As described above, the proposed
rule change to amend the OA would (i) insert consolidate and updated
procedures, including for an enhanced Master Agreement, for ATOP/ASOP
Agents, and (ii) make related technical and clarifying changes relating
to ATOP-eligible Offers or ASOP-eligible Offers. DTC believes that
these proposed changes would make the Agent's procedures for ATOP and
ASOP more streamlined, transparent, and reflective of current
processes, thereby allowing Agents to more efficiently and effectively
process corporate action events and associated securities transactions.
Based on the foregoing, DTC believes that the proposed rule change is
designed to promote the prompt and accurate clearance and settlement of
securities transactions, consistent with Section 17A(b)(3)(F) of the
Act, cited above.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
DTC believes that the proposed rule change to amend the OA to (i)
insert consolidated and updated procedures, including for an enhanced
Master Agreement, for ATOP/ASOP Agents, and (ii) make related technical
and clarifying changes relating to ATOP-eligible Offers or ASOP-
eligible Offers will not have any impact on competition.\16\ The
proposed rule change would provide procedures that are more accessible,
transparent, and reflective of current processes and would apply to all
ATOP/ASOP Agents equally. Any additional efforts required on the part
of Agents would be merely administrative, such as entering a new Master
Agreement. In light of the foregoing, DTC does not believe that the
proposed rule change would impose a burden on competition.\17\
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78q-1(b)(3)(I).
\17\ Id.
---------------------------------------------------------------------------
(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, they would 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 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 to not respond to any comments received.
III. Date of Effectiveness of the Proposed Rule Change, and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule
19b-4(f)(6) 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 [email protected]. Please include
File Number SR-DTC-2024-007 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-2024-007. 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). Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to File Number SR-DTC-2024-007 and should be submitted on
or before August 28, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17389 Filed 8-6-24; 8:45 am]
BILLING CODE 8011-01-P
