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), 70230-70234 [2024-19396]
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Federal Register / Vol. 89, No. 168 / Thursday, August 29, 2024 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100815]
Notice of Intention To Cancel
Registration of Certain Municipal
Advisors Pursuant to Section 15b(C)(3)
of the Securities Exchange Act of 1934
August 23, 2024.
Notice is given that the Securities and
Exchange Commission (the
‘‘Commission’’) intends to issue an
order or orders, pursuant to Section
15B(c)(3) of the Securities Exchange Act
of 1934 (the ‘‘Act’’), cancelling the
municipal advisor registration of
Development & Public Finance, LLC
(CIK# 1613281) (hereinafter referred to
as the ‘‘Registrant’’).
Section 15B(c)(3) of the Act provides,
in pertinent part, that if the Commission
finds that any municipal advisor
registered under Section 15B is no
longer in existence or has ceased to do
business as a municipal advisor, the
Commission, by order, shall cancel the
registration of such municipal advisor.
The Commission finds that the
Registrant:
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(i) has not filed any municipal advisor
form submissions with the Commission
through the Commission’s Electronic Data
Gathering and Retrieval (‘‘EDGAR’’) system
since May 24, 2021 (including but not
limited to the annual amendments (form
MA–A) required by 17 CFR 240.15Ba1–
5(a)(1)); and/or
(ii) based on information available from the
Municipal Securities Rulemaking Board (the
‘‘MSRB’’), (a) is not registered as a municipal
advisor with the MSRB under MSRB Rule A–
12(a) and/or (b) does not have an associated
person who is qualified as a municipal
advisor representative under MSRB Rule G–
3(d) and for whom there is a Form MA–I
required by 17 CFR 240.15Ba1–2(b) available
on EDGAR, and/or (c) has not, since February
2022, filed with the MSRB any Form A–12
annual affirmation as required by MSRB Rule
A–12(k); and/or withdrew its registration
from the MSRB without first withdrawing its
registration from the Commission.
Accordingly, the Commission finds
that the Registrant is either no longer in
existence or has ceased to do business
as a municipal advisor.
Notice is also given that any
interested person may, by September 23,
2024, at 5:30 p.m. Eastern Time, submit
to the Commission in writing a request
for a hearing on the cancellation of the
registration of the Registrant,
accompanied by a statement as to the
nature of such person’s interest, the
reason for such request, and the issues,
if any, of fact or law proposed to be
controverted, and such person may
request to be notified if the Commission
should order a hearing thereon. Any
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such communication should be
addressed to the Commission’s
Secretary at the address below. All
comments or requests received will be
posted without change; the Commission
does not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly.
At any time after September 23, 2024,
the Commission may issue an order or
orders cancelling the registration of the
Registrant, upon the basis of the
information stated above, unless an
order or orders for a hearing on the
cancellation shall be issued upon
request or upon the Commission’s own
motion. Persons who requested a
hearing, or to be advised as to whether
a hearing is ordered, will receive any
notices and orders issued in this matter,
including the date of the hearing (if
ordered) and any postponements
thereof. Any Registrant whose
registration is cancelled under delegated
authority may appeal that decision
directly to the Commission in
accordance with Rules 430 and 431 of
the Commission’s rules of practice (17
CFR 201.430 and 431).
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549.
FOR FURTHER INFORMATION CONTACT:
Mark Elion, Senior Counsel, Office of
Municipal Securities, 100 F Street NE,
Washington, DC 20549, or at (202) 551–
5680.
notice is hereby given that on August
13, 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)(4) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
For the Commission, by the Office of
Municipal Securities, pursuant to delegated
authority.1
Vanessa A. Countryman,
Secretary.
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,
[FR Doc. 2024–19398 Filed 8–28–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100813; File No. SR–DTC–
2024–008]
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 23, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
1 17
CFR 200.30–3a(a)(1)(ii).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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
modifications to the DTC Operational
Arrangements (Necessary for Securities
to Become and Remain Eligible for DTC
Services) (‘‘OA’’) 5 to provide for a
modernized process for submission of
notices (‘‘LENS Notices’’) by issuers,
transfer agents and trustees to DTC’s
Legal Notice System (‘‘LENS’’) and
DTC’s processing of such LENS
Notices.6 Specifically, the proposal
would revise the OA to replace existing
methods for submitting LENS Notices
with an online portal (‘‘Issuer Agent
Portal’’) that DTC has developed for this
purpose. The proposed rule change
would also make technical and
clarifying changes to the text of the OA
relating to the submission and
processing of LENS Notices, as
described in greater detail below.7
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(4).
5 Available at https://www.dtcc.com/∼/media/
Files/Downloads/legal/issue-eligibility/eligibility/
operational-arrangements.pdf. The OA is a
Procedure of DTC. Pursuant to the Rules, the term
‘‘Procedures’’ means the Procedures, service guides,
and regulations of DTC adopted pursuant to Rule
27, as amended from time to time. See Rule 1,
Section 1, infra note 7. They are binding on DTC
and each Participant in the same manner that the
Rules bind them. See Rule 27, infra note 7.
6 See OA, supra note 5, at 27–29.
7 Each capitalized term not otherwise defined
herein has its respective meaning as set forth the
Rules, By-Laws and Organization Certificate of DTC
(the ‘‘Rules’’), available at https://www.dtcc.com/
legal/rules-and-procedures.aspx.
4 17
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Federal Register / Vol. 89, No. 168 / Thursday, August 29, 2024 / Notices
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
The proposed rule change consists of
modifications to the OA to provide for
a modernized process for submission of
LENS Notices by issuers, transfer agents
and trustees to DTC’s Legal Notice
System (‘‘LENS’’) and DTC’s processing
of such LENS Notices. Specifically, the
proposal would revise the OA to replace
existing methods for submitting LENS
Notices with an online portal (‘‘Issuer
Agent Portal’’) that DTC has developed
for this purpose. The proposed rule
change would also make technical and
clarifying changes to the text of the OA
relating to the submission and
processing of LENS Notices, as
described below.
Background
A LENS Notice is a notice of
information, provided to DTC by an
issuer, transfer agent or trustee of
securities, which is intended to be made
available to holders of securities. Parties
submitting LENS Notices may have a
legal or regulatory obligation or other
interest in distributing the notice
information to holders of the securities.
Such notices are delivered to DTC
because DTC’s nominee, Cede & Co., is
the registered holder of the applicable
securities and/or DTC is the
‘‘appropriate qualified registered
securities depository’’ 8 with respect to
the securities.
A type of LENS Notice DTC receives
is a notice of transfer agent changes
(‘‘17Ad–16 Notice’’) pursuant to Rule
17Ad–16.9 DTC has been designated by
the Commission as the appropriate
qualified registered securities
depository to receive 17Ad–16
Notices.10 Rule 17Ad–16 is designed to
address transfer delays due to
unannounced transfer agent changes,
including the termination or assumption
of the transfer agent services for a
particular issue, and the change of the
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8 Pursuant
to Rule 17Ad–16 (‘‘Rule 17Ad–16’’)
under the Act, an ‘‘appropriate qualified registered
securities depository’’ shall mean the qualified
registered securities depository that the
Commission so designates by order or, in the
absence of such designation, the qualified registered
securities depository that is the largest holder of
record of all qualified registered securities
depositories as of the most recent record date. 17
CFR 240.17Ad–16(f).
9 Id.
10 See Securities Exchange Act Release No. 35378
(Feb. 15, 1995), 60 FR 9875 (Feb. 22, 1995) (File No.
SR–DTC–95–02).
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name or address of a transfer agent.11
Rule 17Ad–16 requires a registered
transfer agent to send a 17Ad–16 Notice
to the appropriate qualified registered
securities depository (a) on or before the
later of ten calendar days prior to the
effective date of such termination or the
day the transfer agent is notified of the
effective date of such termination 12 and
(b) on or before the later of ten calendar
days prior to the effective date of a
change in the registered transfer agent’s
name or address or when that registered
transfer agent assumes transfer agent
services on behalf of an issuer of
securities.13
Any transfer agent for securities held
at DTC, whether or not it is a registered
transfer agent, and any trustee for
securities held at DTC must submit
information relating to transfer agent or
trustee changes to DTC. Today, these
LENS Notices must be provided via (i)
designated email addresses (‘‘Email
Method’’) or (ii) an online link (‘‘Link
Method,’’ and collectively with the
Email Method, the ‘‘Current Submission
Methods’’), as set forth in the OA.14
Issuers, transfer agents and trustees
may deliver other types of LENS Notices
to holders to DTC for posting to LENS.
These include, but are not limited to,
closing memoranda, new issue
memoranda, mutual fund memoranda,
notices for ineligible securities, legal
notices, tax notices and other forms of
public investor communications.15 Such
LENS Notices must be submitted via the
Email Method.
If a LENS Notice is delivered to DTC
using the applicable Current
Submission Method, DTC then posts the
LENS Notice to LENS, where it becomes
available for viewing by Participants.16
DTC makes each 17Ad–16 Notice
available to Participants within 24 hours
of DTC’s receipt of the notice from the
transfer agent, not including weekends
and holidays (i.e., non-Business Days).17
11 See Securities Exchange Act Release No. 35039
(Dec. 1, 1994), 59 FR 63656 (Dec. 8, 1994) (S7–1–
92).
12 17 CFR 240.17Ad–16(a).
13 17 CFR 240.17Ad–16(b).
14 See OA, supra note 5, at 27–29.
15 See OA, supra note 5, at 29.
16 Once a LENS Notice is posted, a Participant
may share it with its customers.
17 For example, if DTC receives a 17Ad–16 Notice
through a Current Submission Method at 6:00 p.m.
Eastern Time (‘‘ET’’) on a Monday (that is not a
holiday), DTC makes the 17Ad–16 Notice available
for viewing by Participants on LENS no later than
5:59 p.m. ET on Tuesday. For weekends, if DTC
receives a notice at or after 6:00 p.m. ET on a
Friday, DTC makes the 17Ad–16 Notice available
for viewing by Participants on LENS no later than
5:59 p.m. ET on Monday.
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70231
Proposed Enhancements
The Current Submission Methods
require manual intervention by DTC to
post the LENS Notices that it receives to
LENS. DTC proposes to automate these
processes through implementation of
the Issuer Agent Portal, which would
provide a more efficient straight-through
posting of LENS Notices, in support of
the regulatory required timeframes. In
this regard, the Issuer Agent Portal
would allow centralized receipt and
dissemination of LENS Notices and
eliminate the manual processing that
DTC currently performs to post LENS
Notices.
More specifically, the proposal will
update the OA to establish the Issuer
Agent Portal for (i) receiving LENS
Notices, and (ii) automated posting of
LENS Notices to LENS. The Current
Submission Methods would be
discontinued. The proposed rule change
will also make technical and clarifying
changes relating to the submission and
posting of LENS Notices, as described
below.
Proposed Rule Change
Pursuant to the proposed rule change,
the OA text will be revised as set forth
below.
Subsection II.B.4.b. (Transfer Agent
Required Notices)
The proposed rule change will revise
this subsection II. B. 4. b. of the OA to
(i) remove the Current Submission
Methods as the accepted methods for
submission of 17Ad–16 Notices to DTC,
(ii) provide that the Issuer Agent Portal
is the only means for transfer agents to
submit 17Ad–16 Notices to DTC and
give a brief description of the Issuer
Agent Portal,18 (iii) provide the link to
the web page 19 where the Issuer Agent
Portal is available, (iv) specify that
agents must use a function within the
Issuer Agent Portal referred to as the
Transfer Agent 17Ad–16 Notices
function (‘‘17Ad–16 Function’’) when
submitting 17Ad–16 Notices, (v) state
that the 17Ad–16 Function requires
completion of certain mandatory fields
18 There is no cost to parties submitting through
the Issuer Agent Portal, and registration to use the
Issuer Agent Portal is not required. Since the
submitting party is submitting public data, it is not
required to have a registration account. Submitters
of LENS Notices would use a public facing site, the
Issuer Agent Portal, and submit details/documents
using an email address to receive a verification
code, and complete a test to ensure the submitter
is a human (i.e., CAPTCHA verification). In this
regard, the proposed new submission method using
the Issuer Agent Portal would provide for enhanced
verification of the identity of submitters in
comparison to the Current Submission Methods.
19 Available at https://
issueragentservices.dtcc.com.
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(a) relating to information required to be
included in a 17Ad–16 Notice pursuant
to Rule 17Ad–16 20 and (b) other
information necessary for DTC to
process a submission,21 (vi) state that
optional fields may also be available,22
(vii) state that hard copy notices
physically mailed to DTC and/or notices
attached to or embedded in an email
sent to DTC will not be posted to LENS
and (viii) provide technical information
on the features of the Issuer Agent
Portal, including that (a) after an agent
makes a successful input of the 17Ad–
16 Notice and required information, the
agent may review the information and
make any changes, if necessary, and
submit the details for posting to LENS,
(b) the Issuer Agent Portal will provide
functionality for the agent to save and
export, a copy of the information for its
own records and (c) state that a
confirmation email will be sent to the
submitting agent.23 The revised OA text
will also provide that if an agent does
not receive a confirmation email, it
should consider submission of the
17Ad–16 Notice as incomplete and not
submitted to LENS, and that the agent
should resubmit the 17Ad–16 Notice.
The subsection will also state that all
information is posted to LENS in a
standardized format reflecting the
information submitted by the agent and
that agents should retain a copy of all
information they submit for their own
records.
An email address will also be
provided for inquiries to DTC relating to
the 17Ad–16 Notice process.
20 Information required to be included in a 17Ad–
16 Notice pursuant to Rule 17Ad–16 includes (i)
contact information of the transfer agent, (ii)
Financial Industry Number Standard (‘‘FINS’’)
number of the submitting transfer agent and (iii)
issuer name, issue or issues handled and, if
applicable, respective CUSIP numbers. A FINS
number is a unique number issued by DTC and
used by the securities industry as a means of
identifying financial institutions in automated data
processing systems. See Notice of Assumption or
Termination of Transfer Agent Services, Securities
Exchange Act Release No. 35039 (Dec. 1, 1994), 59
FR 63656 (Dec. 8, 1994) (S7–1–92) n 12.
21 Such information includes, but may not be
limited to, the transfer agent indicating whether the
relevant issue or issues are held in DTC’s Fast
Automated Securities Transfer (‘‘FAST’’) program.
22 Optional fields may include, but not be limited
to, identifying information for the agent involved in
the change of transfer agent services that is not the
submitter of the notice. For example, if a transfer
agent that is submitting a notice to the Issuer Agent
Portal is assuming services for an issue, the portal
may provide an optional field or fields for that
transfer agent to provide certain identifying
information, if known, relating to the transfer agent
that is terminating its services for the issue.
23 The confirmation email representing a
successful submission is sent to a transfer agent’s
business email in near real-time. The text will state
that transfer agents should check their spam,
clutter, or junk folders if they do not receive the
submission confirmation email.
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19:16 Aug 28, 2024
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Subsections II.B.4.c. and d.
(Termination of Transfer Agent
Services/Assumption of Transfer Agent
Services)
Subsections II.B.4.c. and d. would be
deleted. These sections itemize
information currently required to be
included in a 17Ad–16 Notice relating
to the termination of transfer agent
services or the assumption of transfer
agent services, as applicable. Since
these lists are derived primarily from
Rule 17Ad–16 itself, it is unnecessary to
state them in the OA. In this regard,
DTC would replace these lists with the
general description of required
information, as stated above, with
respect to revised subsection II.B.4.b.
Re-Lettered Subsection II.B.4.e. (To Be
Re-Lettered as II. B. 4. c.) (Transfer
Agent’s Change of Name or Address)
Subsection II.B.4.e. will be re-lettered
as II. B. 4. c. to reflect the changes to the
subsections described above.
This subsection notes the type of
information that a transfer agent must
provide in a notice if it is changing its
name or address. This information
includes (i) certain contact information
of the agent, (ii) FINS Number, (iii)
agent number and (iv) the location
where security certificates shall be
received for transfer and re-registration.
Rule 17Ad–16 requires the transfer
agent’s notice to include all this
information in its notice except for the
agent number. To conform the list of
required items in this subsection to Rule
17Ad–16, DTC proposes to revise this
subsection to eliminate the agent’s
number 24 as a required item.25
This subsection would also note that
hard copy notices physically mailed to
DTC and/or notices attached to or
embedded in an email sent to DTC will
not be posted to LENS.
An email address will also be
provided for inquiries to DTC relating to
the 17Ad–16 Notice process, and certain
technical and clarifying changes will be
made to this subsection’s text.
Re-Lettered Subsection II.B.4.f. (To Be
Re-Lettered as II.B.4.d.) (Posting of
Transfer Agent Notices to LENS)
Subsection II.B.4.f. will be re-lettered
as II.B.4.e. to reflect the lettering change
related to the consolidation of
Subsections II.B.4.c. and II.B.4.d.
The text of this subsection will be
revised to change an existing reference
that a 17Ad–16 Notice is ‘‘sent’’ to DTC
to instead state that a 17Ad–16 Notice
is ‘‘submitted’’ to DTC, in order to
24 The agent number is assigned by DTC on its
‘‘Agent Masterfile.’’
25 See 17 CFR 240.17Ad–16(b).
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reflect the proposed submission change
through the Issuer Agent Portal.
New Subsection II.B.4.e. (Legal and Tax
Notices)
The Issuer Agent Portal will include
a new Legal & Tax function to be used
by transfer agents to submit to LENS
legal, tax and other forms of public
investor communications 26 unrelated to
corporate actions.27 The OA text would
be updated to state that this function
must be used for these types of
communications. Like submissions
using the 17Ad–16 Function, the Issuer
Agent Portal will generate an email
confirmation upon successful receipt of
notice submissions for legal and tax
notices. An email address will also be
provided for inquiries to DTC relating to
the notice process.
Text would be added to clarify that
the Issuer Agent Portal is the only
facility where transfer agents can submit
such forms of public investor
communications that are not related to
corporate actions to DTC. The text
would also state that hard copy notices
physically mailed to DTC and/or notices
embedded in an email sent to DTC will
not be posted to LENS.
Re-Lettered Subsection II.B.4.g. (To Be
Re-Lettered as II.B.4.f.) (Other Notices
Delivered by Transfer Agents for Posting
to LENS)
Subsection II.B.4.g. will be re-lettered
as II.B.4.f. to reflect the lettering change
related to the consolidation of
Subsections II.B.4.c. and II.B.4.d.
This subsection provides
requirements for submission of other
types of notices to LENS including but
not limited to closing memoranda, new
issue memoranda, mutual fund
memoranda and notices for ineligible
securities. The proposed rule change
would revise this section to reflect that
such notices must be submitted to DTC
through the 17Ad–16 Function of the
Issuer Agent Portal, rather than via
email, as they are currently submitted.
A disclaimer stating that DTC does
not screen notices for posting to LENS
would be revised to reflect the new
mechanism through the Issuer Agent
Portal for the submission of notices and
clarify that DTC does not screen such
notices from issuers, agents and
trustees.28
26 See Securities Exchange Act Release No. 43964
(Feb. 14, 2001), 66 FR 11190 (Feb. 22, 2001) (File
No. SR–DTC–00–18) n.6.
27 The process for submitting notices for specific
types of corporate actions notifications is defined in
applicable sections relating to processing of
corporate actions in the OA.
28 The current text only specifies that DTC does
not screen notices received from transfer agents.
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Federal Register / Vol. 89, No. 168 / Thursday, August 29, 2024 / Notices
The proposed rule change would
provide clarifying text that notices
relating to corporate actions (except for
bankruptcy notices) 29 should not be
submitted through the Issuer Agent
Portal. Other sections of the OA provide
instructions on the submission of
corporate actions notices.
Subsection II.B.5. (Trustee Required
Notices)
This subsection provides instructions
for trustees for providing notices with
respect to a change in trustee with
respect to an issue of securities. While
DTC understands that trustees may not
be transfer agents, and thus may not
subject be to Rule 17Ad–16, the
information provided for such notices is
like that required for 17Ad–16 Notices.
Therefore, the proposed rule change
would revise the text of this subsection
to remove references to the Current
Submission Methods as acceptable
means for submitting such notices, and
direct that these notices should be
submitted through the 17Ad–16
Function.30 The Subsection would state
that hard copy notices physically
mailed to DTC and/or notices embedded
in an email sent to DTC will not be
posted to LENS.
An email address will also be
provided for inquiries to DTC relating to
the notice process.
Subsection II.B.6. (LIBOR Replacement
Index Communication Tool)
Subsection II.B.6. provides
instructions for use of the LIBOR
Replacement Index Communication
Tool (‘‘Communication Tool’’), which is
designed to help issuers, trustees and
agents communicate via LENS certain
LIBOR benchmark replacement
information for securities that are
converting from LIBOR (USD) to an
alternative reference rate.31 The OA
currently provides a URL to a web page
where users may access the
Communication Tool. Upon
implementation of the proposed rule
change, the OA will be updated to
instruct transfer agents to use the LIBOR
function of the Issuer Agent Portal 32 to
access the Communication Tool, and the
text of this subsection will be updated
accordingly.
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29 Bankruptcy
notices would be submitted via the
Issuer Agent Portal by selecting Legal and Tax
Notices.
30 If the trustee believes that a field within in the
17Ad–16 Function is not applicable to a trustee (as
opposed to a transfer agent), the trustee should
leave the field blank.
31 See Securities Exchange Act Release No. 97009
(Mar. 1, 2023), 88 FR 14221 (Mar. 7, 2023) (File No.
SR–DTC–2023–002).
32 Supra note 19.
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Effective Date
The proposed changes will be
implemented by no later than August
23, 2024, on a date to be announced by
Important Notice.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act 33
requires that the rules of the clearing
agency be designed, inter alia, to foster
cooperation and coordination with
persons engaged in the clearance and
settlement of securities transactions. As
described above, the proposed rule
change would help facilitate the posting
of LENS Notices containing information
relating to securities held at DTC, by
removing an outdated, manual process
of making LENS Notices available to
Participants that hold the securities
through their DTC Accounts and settle
transactions in them through DTC, in
favor of the newer, more efficient
method of posting LENS Notices using
the Issuer Agent Portal. In this regard,
DTC believes that the proposed rule
change would foster cooperation and
coordination with persons engaged in
the clearance and settlement of
securities transactions by facilitating
posting Notices to LENS through using
a more automated, straight-through
processing method for distribution of
LENS Notices to such Participants.
Therefore, by facilitating a more
automated and efficient method of
transmission of straight-through
processing method for distribution of
notices to Participants that may hold
such securities and settle transaction in
them through DTC, DTC believes that
the proposed rule change is consistent
with the requirements of the Act, in
particular Section 17A(b)(3)(F) of the
Act, cited above.
Rule 17ad–22(e)(21) 34 promulgated
under the Act requires, inter alia, that
DTC, a covered clearing agency,
establish, implement, maintain and
enforce written policies and procedures
reasonably designed to, as applicable, be
efficient and effective in meeting the
requirements of its participants and the
markets it serves. As described above,
the proposed rule change would update
the OA to establish a more centralized
and improved means for DTC to receive
Notices more efficiently and effectively
through the Issuer Agent Portal than via
an email submission and to provide for
the automated posting of Notices to
LENS for Participant consumption. In
this regard, DTC believes that the
proposed rule change would provide a
more streamlined approach for issuers,
trustees and agents to disseminate
33 15
34 17
PO 00000
U.S.C. 78q–1(b)(3)(F).
CFR 240.17ad–22(e)(21).
Frm 00073
Fmt 4703
Sfmt 4703
70233
Notices to Participants, and ultimately
their customers, regarding securities
that they may hold and processed
through DTC. Therefore, DTC believes
that the proposed rule change would
help promote efficiency and
effectiveness by helping DTC better
meet the requirements of its participants
and the markets it serves, consistent
with Rule 17ad–22(e)(21).
(B) Clearing Agency’s Statement on
Burden on Competition
DTC does not believe that the
proposed rule change will have any
impact, or impose any burden, on
competition.
As described above, the proposed rule
change consists of changes to the OA
that will provide for the submission of
LENS Notices for posting to LENS via
the Issuer Agent Portal. The Issuer
Agent Portal will be publicly available
on DTCC’s web page and DTC believes
the portal will be as readily accessible
to submitters of LENS Notices as the
Current Submission Methods.
Consistent with current practice,
issuers, agents and trustees will not be
charged for submission of LENS
Notices.
(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.35
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
35 DTC has conducted outreach to transfer agents
to discuss the proposed Issuer Agent Portal. DTC
also held a webinar to discuss the Issuer Agent
Portal with the transfer agent community. DTC has
provided transfer agents with access to test the
Issuer Agent Portal and has established a dedicated
email box for transfer agents to provide feedback on
the functionality of the Issuer Agent Portal. DTC has
added information and responses to frequently
asked questions to the web page dedicated to the
Issuer Agent Portal, available at https://
www.dtcc.com/settlement-and-asset-services/issuerservices/issuer-agent-portal.
E:\FR\FM\29AUN1.SGM
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70234
Federal Register / Vol. 89, No. 168 / Thursday, August 29, 2024 / Notices
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 to not 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) 36 of the Act and paragraph
(f) 37 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:
lotter on DSK11XQN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
DTC–2024–008 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–2024–008. 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 (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–2024–008 and should
be submitted on or before September 19,
2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.38
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–19396 Filed 8–28–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100810; File No. SR–BX–
2024–019)]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Suspension of and Order
Instituting Proceedings To Determine
Whether To Approve or Disapprove
Proposed Rule Change To Adopt an
OTTO Protocol
August 23, 2024.
I. Introduction
On June 26, 2024, Nasdaq BX, Inc.
(‘‘BX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change
(File Number SR–BX–2024–019) to
adopt an OTTO protocol and associated
fee. The proposed rule change was
immediately effective upon filing with
the Commission pursuant to Section
38 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
36 15
U.S.C. 78s(b)(3)(A).
37 17 CFR 240.19b–4(f).
VerDate Sep<11>2014
19:16 Aug 28, 2024
1 15
Jkt 262001
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
19(b)(3)(A) of the Act.3 The proposed
rule change was published for comment
in the Federal Register on July 15,
2024.4 Pursuant to Section 19(b)(3)(C) of
the Act,5 the Commission is hereby: (1)
temporarily suspending the proposed
rule change; and (2) instituting
proceedings to determine whether to
approve or disapprove the proposed
rule change.
II. Background and Description of the
Proposed Rule Change
The Exchange states that the purpose
of the proposed rule change is to adopt
a new protocol, ‘‘Ouch to Trade
Options’’ or ‘‘OTTO’’ and establish
pricing for this new protocol.
According to the Exchange, today, BX
Participants may enter orders into the
Exchange through the ‘‘Financial
Information eXchange’’ or ‘‘FIX.’’ 6 The
Exchange states that the proposed new
OTTO protocol is identical to the OTTO
protocol offered today on 3 Nasdaq
affiliated exchanges, Nasdaq ISE, LLC
(‘‘ISE’’), Nasdaq GEMX, LLC (‘‘GEMX’’)
and Nasdaq MRX, LLC (‘‘MRX’’).7
The Exchange states that the OTTO
protocol is a proprietary protocol of
Nasdaq, Inc and that the Exchange
continues to innovate and modernize
technology so that it may continue to
compete among options markets.8 The
Exchange states that the ability to
continue to innovate with technology
and offer new products to market
participants allows BX to remain
competitive in the options space which
currently has seventeen options markets
and potential new entrants.9
3 15 U.S.C. 78s(b)(3)(A). A proposed rule change
may take effect upon filing with the Commission if
it is designated by the exchange as ‘‘establishing or
changing a due, fee, or other charge imposed by the
self-regulatory organization on any person, whether
or not the person is a member of the self-regulatory
organization.’’ 15 U.S.C. 78s(b)(3)(A)(ii).
4 See Securities Exchange Act Release No. 99841
(July 9, 2024), 89 FR 57485 (‘‘Notice’’).
5 15 U.S.C. 78s(b)(3)(C).
6 See Notice, 89 FR at 57485. The Exchange states
that FIX is an interface that allows Participants and
their Sponsored Customers to connect, send, and
receive messages related to orders and auction
orders and responses to and from the Exchange. Id.
at n.3. The Exchange states that features include the
following: (1) execution messages; (2) order
messages; and (3) risk protection triggers and cancel
notifications. Id. The Exchange states that, in
addition, a BX Participant may elect to utilize FIX
to send a message and PRISM Order, as defined
within Options 3, Section 13, to all BX Participants
that opt in to receive Requests for PRISM requesting
that it submit the sender’s PRISM Order with
responder’s Initiating Order, as defined within
Options 3, Section 13, into the Price Improvement
Auction (‘‘PRISM’’) mechanism, pursuant to
Options 3, Section 13 (‘‘Request for PRISM’’). Id.
(citing Exchange Rule Options 3, Section
7(e)(1)(A)).
7 See Notice, 89 FR at 57485–86.
8 See Notice, 89 FR at 57486.
9 See Notice, 89 FR at 57486.
E:\FR\FM\29AUN1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 168 (Thursday, August 29, 2024)]
[Notices]
[Pages 70230-70234]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19396]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100813; File No. SR-DTC-2024-008]
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 23, 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 August 13, 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)(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 modifications to the DTC
Operational Arrangements (Necessary for Securities to Become and Remain
Eligible for DTC Services) (``OA'') \5\ to provide for a modernized
process for submission of notices (``LENS Notices'') by issuers,
transfer agents and trustees to DTC's Legal Notice System (``LENS'')
and DTC's processing of such LENS Notices.\6\ Specifically, the
proposal would revise the OA to replace existing methods for submitting
LENS Notices with an online portal (``Issuer Agent Portal'') that DTC
has developed for this purpose. The proposed rule change would also
make technical and clarifying changes to the text of the OA relating to
the submission and processing of LENS Notices, as described in greater
detail below.\7\
---------------------------------------------------------------------------
\5\ Available at https://www.dtcc.com/~/media/Files/Downloads/
legal/issue-eligibility/eligibility/operational-arrangements.pdf.
The OA is a Procedure of DTC. Pursuant to the Rules, the term
``Procedures'' means the Procedures, service guides, and regulations
of DTC adopted pursuant to Rule 27, as amended from time to time.
See Rule 1, Section 1, infra note 7. They are binding on DTC and
each Participant in the same manner that the Rules bind them. See
Rule 27, infra note 7.
\6\ See OA, supra note 5, at 27-29.
\7\ Each capitalized term not otherwise defined herein has its
respective meaning as set forth the Rules, By-Laws and Organization
Certificate of DTC (the ``Rules''), available at https://www.dtcc.com/legal/rules-and-procedures.aspx.
---------------------------------------------------------------------------
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, the clearing agency included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. The clearing agency has prepared summaries,
set forth in sections A, B,
[[Page 70231]]
and C below, of the most significant aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Purpose
The proposed rule change consists of modifications to the OA to
provide for a modernized process for submission of LENS Notices by
issuers, transfer agents and trustees to DTC's Legal Notice System
(``LENS'') and DTC's processing of such LENS Notices. Specifically, the
proposal would revise the OA to replace existing methods for submitting
LENS Notices with an online portal (``Issuer Agent Portal'') that DTC
has developed for this purpose. The proposed rule change would also
make technical and clarifying changes to the text of the OA relating to
the submission and processing of LENS Notices, as described below.
Background
A LENS Notice is a notice of information, provided to DTC by an
issuer, transfer agent or trustee of securities, which is intended to
be made available to holders of securities. Parties submitting LENS
Notices may have a legal or regulatory obligation or other interest in
distributing the notice information to holders of the securities. Such
notices are delivered to DTC because DTC's nominee, Cede & Co., is the
registered holder of the applicable securities and/or DTC is the
``appropriate qualified registered securities depository'' \8\ with
respect to the securities.
---------------------------------------------------------------------------
\8\ Pursuant to Rule 17Ad-16 (``Rule 17Ad-16'') under the Act,
an ``appropriate qualified registered securities depository'' shall
mean the qualified registered securities depository that the
Commission so designates by order or, in the absence of such
designation, the qualified registered securities depository that is
the largest holder of record of all qualified registered securities
depositories as of the most recent record date. 17 CFR 240.17Ad-
16(f).
---------------------------------------------------------------------------
A type of LENS Notice DTC receives is a notice of transfer agent
changes (``17Ad-16 Notice'') pursuant to Rule 17Ad-16.\9\ DTC has been
designated by the Commission as the appropriate qualified registered
securities depository to receive 17Ad-16 Notices.\10\ Rule 17Ad-16 is
designed to address transfer delays due to unannounced transfer agent
changes, including the termination or assumption of the transfer agent
services for a particular issue, and the change of the name or address
of a transfer agent.\11\ Rule 17Ad-16 requires a registered transfer
agent to send a 17Ad-16 Notice to the appropriate qualified registered
securities depository (a) on or before the later of ten calendar days
prior to the effective date of such termination or the day the transfer
agent is notified of the effective date of such termination \12\ and
(b) on or before the later of ten calendar days prior to the effective
date of a change in the registered transfer agent's name or address or
when that registered transfer agent assumes transfer agent services on
behalf of an issuer of securities.\13\
---------------------------------------------------------------------------
\9\ Id.
\10\ See Securities Exchange Act Release No. 35378 (Feb. 15,
1995), 60 FR 9875 (Feb. 22, 1995) (File No. SR-DTC-95-02).
\11\ See Securities Exchange Act Release No. 35039 (Dec. 1,
1994), 59 FR 63656 (Dec. 8, 1994) (S7-1-92).
\12\ 17 CFR 240.17Ad-16(a).
\13\ 17 CFR 240.17Ad-16(b).
---------------------------------------------------------------------------
Any transfer agent for securities held at DTC, whether or not it is
a registered transfer agent, and any trustee for securities held at DTC
must submit information relating to transfer agent or trustee changes
to DTC. Today, these LENS Notices must be provided via (i) designated
email addresses (``Email Method'') or (ii) an online link (``Link
Method,'' and collectively with the Email Method, the ``Current
Submission Methods''), as set forth in the OA.\14\
---------------------------------------------------------------------------
\14\ See OA, supra note 5, at 27-29.
---------------------------------------------------------------------------
Issuers, transfer agents and trustees may deliver other types of
LENS Notices to holders to DTC for posting to LENS. These include, but
are not limited to, closing memoranda, new issue memoranda, mutual fund
memoranda, notices for ineligible securities, legal notices, tax
notices and other forms of public investor communications.\15\ Such
LENS Notices must be submitted via the Email Method.
---------------------------------------------------------------------------
\15\ See OA, supra note 5, at 29.
---------------------------------------------------------------------------
If a LENS Notice is delivered to DTC using the applicable Current
Submission Method, DTC then posts the LENS Notice to LENS, where it
becomes available for viewing by Participants.\16\ DTC makes each 17Ad-
16 Notice available to Participants within 24 hours of DTC's receipt of
the notice from the transfer agent, not including weekends and holidays
(i.e., non-Business Days).\17\
---------------------------------------------------------------------------
\16\ Once a LENS Notice is posted, a Participant may share it
with its customers.
\17\ For example, if DTC receives a 17Ad-16 Notice through a
Current Submission Method at 6:00 p.m. Eastern Time (``ET'') on a
Monday (that is not a holiday), DTC makes the 17Ad-16 Notice
available for viewing by Participants on LENS no later than 5:59
p.m. ET on Tuesday. For weekends, if DTC receives a notice at or
after 6:00 p.m. ET on a Friday, DTC makes the 17Ad-16 Notice
available for viewing by Participants on LENS no later than 5:59
p.m. ET on Monday.
---------------------------------------------------------------------------
Proposed Enhancements
The Current Submission Methods require manual intervention by DTC
to post the LENS Notices that it receives to LENS. DTC proposes to
automate these processes through implementation of the Issuer Agent
Portal, which would provide a more efficient straight-through posting
of LENS Notices, in support of the regulatory required timeframes. In
this regard, the Issuer Agent Portal would allow centralized receipt
and dissemination of LENS Notices and eliminate the manual processing
that DTC currently performs to post LENS Notices.
More specifically, the proposal will update the OA to establish the
Issuer Agent Portal for (i) receiving LENS Notices, and (ii) automated
posting of LENS Notices to LENS. The Current Submission Methods would
be discontinued. The proposed rule change will also make technical and
clarifying changes relating to the submission and posting of LENS
Notices, as described below.
Proposed Rule Change
Pursuant to the proposed rule change, the OA text will be revised
as set forth below.
Subsection II.B.4.b. (Transfer Agent Required Notices)
The proposed rule change will revise this subsection II. B. 4. b.
of the OA to (i) remove the Current Submission Methods as the accepted
methods for submission of 17Ad-16 Notices to DTC, (ii) provide that the
Issuer Agent Portal is the only means for transfer agents to submit
17Ad-16 Notices to DTC and give a brief description of the Issuer Agent
Portal,\18\ (iii) provide the link to the web page \19\ where the
Issuer Agent Portal is available, (iv) specify that agents must use a
function within the Issuer Agent Portal referred to as the Transfer
Agent 17Ad-16 Notices function (``17Ad-16 Function'') when submitting
17Ad-16 Notices, (v) state that the 17Ad-16 Function requires
completion of certain mandatory fields
[[Page 70232]]
(a) relating to information required to be included in a 17Ad-16 Notice
pursuant to Rule 17Ad-16 \20\ and (b) other information necessary for
DTC to process a submission,\21\ (vi) state that optional fields may
also be available,\22\ (vii) state that hard copy notices physically
mailed to DTC and/or notices attached to or embedded in an email sent
to DTC will not be posted to LENS and (viii) provide technical
information on the features of the Issuer Agent Portal, including that
(a) after an agent makes a successful input of the 17Ad-16 Notice and
required information, the agent may review the information and make any
changes, if necessary, and submit the details for posting to LENS, (b)
the Issuer Agent Portal will provide functionality for the agent to
save and export, a copy of the information for its own records and (c)
state that a confirmation email will be sent to the submitting
agent.\23\ The revised OA text will also provide that if an agent does
not receive a confirmation email, it should consider submission of the
17Ad-16 Notice as incomplete and not submitted to LENS, and that the
agent should resubmit the 17Ad-16 Notice.
---------------------------------------------------------------------------
\18\ There is no cost to parties submitting through the Issuer
Agent Portal, and registration to use the Issuer Agent Portal is not
required. Since the submitting party is submitting public data, it
is not required to have a registration account. Submitters of LENS
Notices would use a public facing site, the Issuer Agent Portal, and
submit details/documents using an email address to receive a
verification code, and complete a test to ensure the submitter is a
human (i.e., CAPTCHA verification). In this regard, the proposed new
submission method using the Issuer Agent Portal would provide for
enhanced verification of the identity of submitters in comparison to
the Current Submission Methods.
\19\ Available at https://issueragentservices.dtcc.com.
\20\ Information required to be included in a 17Ad-16 Notice
pursuant to Rule 17Ad-16 includes (i) contact information of the
transfer agent, (ii) Financial Industry Number Standard (``FINS'')
number of the submitting transfer agent and (iii) issuer name, issue
or issues handled and, if applicable, respective CUSIP numbers. A
FINS number is a unique number issued by DTC and used by the
securities industry as a means of identifying financial institutions
in automated data processing systems. See Notice of Assumption or
Termination of Transfer Agent Services, Securities Exchange Act
Release No. 35039 (Dec. 1, 1994), 59 FR 63656 (Dec. 8, 1994) (S7-1-
92) n 12.
\21\ Such information includes, but may not be limited to, the
transfer agent indicating whether the relevant issue or issues are
held in DTC's Fast Automated Securities Transfer (``FAST'') program.
\22\ Optional fields may include, but not be limited to,
identifying information for the agent involved in the change of
transfer agent services that is not the submitter of the notice. For
example, if a transfer agent that is submitting a notice to the
Issuer Agent Portal is assuming services for an issue, the portal
may provide an optional field or fields for that transfer agent to
provide certain identifying information, if known, relating to the
transfer agent that is terminating its services for the issue.
\23\ The confirmation email representing a successful submission
is sent to a transfer agent's business email in near real-time. The
text will state that transfer agents should check their spam,
clutter, or junk folders if they do not receive the submission
confirmation email.
---------------------------------------------------------------------------
The subsection will also state that all information is posted to
LENS in a standardized format reflecting the information submitted by
the agent and that agents should retain a copy of all information they
submit for their own records.
An email address will also be provided for inquiries to DTC
relating to the 17Ad-16 Notice process.
Subsections II.B.4.c. and d. (Termination of Transfer Agent Services/
Assumption of Transfer Agent Services)
Subsections II.B.4.c. and d. would be deleted. These sections
itemize information currently required to be included in a 17Ad-16
Notice relating to the termination of transfer agent services or the
assumption of transfer agent services, as applicable. Since these lists
are derived primarily from Rule 17Ad-16 itself, it is unnecessary to
state them in the OA. In this regard, DTC would replace these lists
with the general description of required information, as stated above,
with respect to revised subsection II.B.4.b.
Re-Lettered Subsection II.B.4.e. (To Be Re-Lettered as II. B. 4. c.)
(Transfer Agent's Change of Name or Address)
Subsection II.B.4.e. will be re-lettered as II. B. 4. c. to reflect
the changes to the subsections described above.
This subsection notes the type of information that a transfer agent
must provide in a notice if it is changing its name or address. This
information includes (i) certain contact information of the agent, (ii)
FINS Number, (iii) agent number and (iv) the location where security
certificates shall be received for transfer and re-registration. Rule
17Ad-16 requires the transfer agent's notice to include all this
information in its notice except for the agent number. To conform the
list of required items in this subsection to Rule 17Ad-16, DTC proposes
to revise this subsection to eliminate the agent's number \24\ as a
required item.\25\
---------------------------------------------------------------------------
\24\ The agent number is assigned by DTC on its ``Agent
Masterfile.''
\25\ See 17 CFR 240.17Ad-16(b).
---------------------------------------------------------------------------
This subsection would also note that hard copy notices physically
mailed to DTC and/or notices attached to or embedded in an email sent
to DTC will not be posted to LENS.
An email address will also be provided for inquiries to DTC
relating to the 17Ad-16 Notice process, and certain technical and
clarifying changes will be made to this subsection's text.
Re-Lettered Subsection II.B.4.f. (To Be Re-Lettered as II.B.4.d.)
(Posting of Transfer Agent Notices to LENS)
Subsection II.B.4.f. will be re-lettered as II.B.4.e. to reflect
the lettering change related to the consolidation of Subsections
II.B.4.c. and II.B.4.d.
The text of this subsection will be revised to change an existing
reference that a 17Ad-16 Notice is ``sent'' to DTC to instead state
that a 17Ad-16 Notice is ``submitted'' to DTC, in order to reflect the
proposed submission change through the Issuer Agent Portal.
New Subsection II.B.4.e. (Legal and Tax Notices)
The Issuer Agent Portal will include a new Legal & Tax function to
be used by transfer agents to submit to LENS legal, tax and other forms
of public investor communications \26\ unrelated to corporate
actions.\27\ The OA text would be updated to state that this function
must be used for these types of communications. Like submissions using
the 17Ad-16 Function, the Issuer Agent Portal will generate an email
confirmation upon successful receipt of notice submissions for legal
and tax notices. An email address will also be provided for inquiries
to DTC relating to the notice process.
---------------------------------------------------------------------------
\26\ See Securities Exchange Act Release No. 43964 (Feb. 14,
2001), 66 FR 11190 (Feb. 22, 2001) (File No. SR-DTC-00-18) n.6.
\27\ The process for submitting notices for specific types of
corporate actions notifications is defined in applicable sections
relating to processing of corporate actions in the OA.
---------------------------------------------------------------------------
Text would be added to clarify that the Issuer Agent Portal is the
only facility where transfer agents can submit such forms of public
investor communications that are not related to corporate actions to
DTC. The text would also state that hard copy notices physically mailed
to DTC and/or notices embedded in an email sent to DTC will not be
posted to LENS.
Re-Lettered Subsection II.B.4.g. (To Be Re-Lettered as II.B.4.f.)
(Other Notices Delivered by Transfer Agents for Posting to LENS)
Subsection II.B.4.g. will be re-lettered as II.B.4.f. to reflect
the lettering change related to the consolidation of Subsections
II.B.4.c. and II.B.4.d.
This subsection provides requirements for submission of other types
of notices to LENS including but not limited to closing memoranda, new
issue memoranda, mutual fund memoranda and notices for ineligible
securities. The proposed rule change would revise this section to
reflect that such notices must be submitted to DTC through the 17Ad-16
Function of the Issuer Agent Portal, rather than via email, as they are
currently submitted.
A disclaimer stating that DTC does not screen notices for posting
to LENS would be revised to reflect the new mechanism through the
Issuer Agent Portal for the submission of notices and clarify that DTC
does not screen such notices from issuers, agents and trustees.\28\
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\28\ The current text only specifies that DTC does not screen
notices received from transfer agents.
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[[Page 70233]]
The proposed rule change would provide clarifying text that notices
relating to corporate actions (except for bankruptcy notices) \29\
should not be submitted through the Issuer Agent Portal. Other sections
of the OA provide instructions on the submission of corporate actions
notices.
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\29\ Bankruptcy notices would be submitted via the Issuer Agent
Portal by selecting Legal and Tax Notices.
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Subsection II.B.5. (Trustee Required Notices)
This subsection provides instructions for trustees for providing
notices with respect to a change in trustee with respect to an issue of
securities. While DTC understands that trustees may not be transfer
agents, and thus may not subject be to Rule 17Ad-16, the information
provided for such notices is like that required for 17Ad-16 Notices.
Therefore, the proposed rule change would revise the text of this
subsection to remove references to the Current Submission Methods as
acceptable means for submitting such notices, and direct that these
notices should be submitted through the 17Ad-16 Function.\30\ The
Subsection would state that hard copy notices physically mailed to DTC
and/or notices embedded in an email sent to DTC will not be posted to
LENS.
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\30\ If the trustee believes that a field within in the 17Ad-16
Function is not applicable to a trustee (as opposed to a transfer
agent), the trustee should leave the field blank.
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An email address will also be provided for inquiries to DTC
relating to the notice process.
Subsection II.B.6. (LIBOR Replacement Index Communication Tool)
Subsection II.B.6. provides instructions for use of the LIBOR
Replacement Index Communication Tool (``Communication Tool''), which is
designed to help issuers, trustees and agents communicate via LENS
certain LIBOR benchmark replacement information for securities that are
converting from LIBOR (USD) to an alternative reference rate.\31\ The
OA currently provides a URL to a web page where users may access the
Communication Tool. Upon implementation of the proposed rule change,
the OA will be updated to instruct transfer agents to use the LIBOR
function of the Issuer Agent Portal \32\ to access the Communication
Tool, and the text of this subsection will be updated accordingly.
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\31\ See Securities Exchange Act Release No. 97009 (Mar. 1,
2023), 88 FR 14221 (Mar. 7, 2023) (File No. SR-DTC-2023-002).
\32\ Supra note 19.
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Effective Date
The proposed changes will be implemented by no later than August
23, 2024, on a date to be announced by Important Notice.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act \33\ requires that the rules of the
clearing agency be designed, inter alia, to foster cooperation and
coordination with persons engaged in the clearance and settlement of
securities transactions. As described above, the proposed rule change
would help facilitate the posting of LENS Notices containing
information relating to securities held at DTC, by removing an
outdated, manual process of making LENS Notices available to
Participants that hold the securities through their DTC Accounts and
settle transactions in them through DTC, in favor of the newer, more
efficient method of posting LENS Notices using the Issuer Agent Portal.
In this regard, DTC believes that the proposed rule change would foster
cooperation and coordination with persons engaged in the clearance and
settlement of securities transactions by facilitating posting Notices
to LENS through using a more automated, straight-through processing
method for distribution of LENS Notices to such Participants.
Therefore, by facilitating a more automated and efficient method of
transmission of straight-through processing method for distribution of
notices to Participants that may hold such securities and settle
transaction in them through DTC, DTC believes that the proposed rule
change is consistent with the requirements of the Act, in particular
Section 17A(b)(3)(F) of the Act, cited above.
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\33\ 15 U.S.C. 78q-1(b)(3)(F).
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Rule 17ad-22(e)(21) \34\ promulgated under the Act requires, inter
alia, that DTC, a covered clearing agency, establish, implement,
maintain and enforce written policies and procedures reasonably
designed to, as applicable, be efficient and effective in meeting the
requirements of its participants and the markets it serves. As
described above, the proposed rule change would update the OA to
establish a more centralized and improved means for DTC to receive
Notices more efficiently and effectively through the Issuer Agent
Portal than via an email submission and to provide for the automated
posting of Notices to LENS for Participant consumption. In this regard,
DTC believes that the proposed rule change would provide a more
streamlined approach for issuers, trustees and agents to disseminate
Notices to Participants, and ultimately their customers, regarding
securities that they may hold and processed through DTC. Therefore, DTC
believes that the proposed rule change would help promote efficiency
and effectiveness by helping DTC better meet the requirements of its
participants and the markets it serves, consistent with Rule 17ad-
22(e)(21).
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\34\ 17 CFR 240.17ad-22(e)(21).
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(B) Clearing Agency's Statement on Burden on Competition
DTC does not believe that the proposed rule change will have any
impact, or impose any burden, on competition.
As described above, the proposed rule change consists of changes to
the OA that will provide for the submission of LENS Notices for posting
to LENS via the Issuer Agent Portal. The Issuer Agent Portal will be
publicly available on DTCC's web page and DTC believes the portal will
be as readily accessible to submitters of LENS Notices as the Current
Submission Methods. Consistent with current practice, issuers, agents
and trustees will not be charged for submission of LENS Notices.
(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.\35\
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\35\ DTC has conducted outreach to transfer agents to discuss
the proposed Issuer Agent Portal. DTC also held a webinar to discuss
the Issuer Agent Portal with the transfer agent community. DTC has
provided transfer agents with access to test the Issuer Agent Portal
and has established a dedicated email box for transfer agents to
provide feedback on the functionality of the Issuer Agent Portal.
DTC has added information and responses to frequently asked
questions to the web page dedicated to the Issuer Agent Portal,
available at https://www.dtcc.com/settlement-and-asset-services/issuer-services/issuer-agent-portal.
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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
[[Page 70234]]
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 to not 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) \36\ of the Act and paragraph (f) \37\ of Rule 19b-4
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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\36\ 15 U.S.C. 78s(b)(3)(A).
\37\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-DTC-2024-008 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-2024-008. 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 (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-2024-008 and should be submitted on or
before September 19, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-19396 Filed 8-28-24; 8:45 am]
BILLING CODE 8011-01-P
