[Federal Register Volume 83, Number 58 (Monday, March 26, 2018)]
[Notices]
[Pages 12970-12974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06021]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82915; File No. SR-DTC-2018-001]


Self-Regulatory Organizations; The Depository Trust Company; 
Order Approving Proposed Rule Change To Amend the By-Laws

March 20, 2018.
    On February 2, 2018, The Depository Trust Company (``DTC'') filed 
with the Securities and Exchange Commission (``Commission'') proposed 
rule change SR-DTC-2018-001, pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ The proposed rule change was published for comment in 
the Federal Register on February 14, 2018.\3\ The Commission did not 
receive any comment letters on the proposed rule change. For the 
reasons discussed below, the Commission approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 82671 (February 8, 
2018), 83 FR 6639 (February 14, 2018) (SR-DTC-2018-001) 
(``Notice'').
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I. Description of the Proposed Rule Change

    The proposed rule change would amend the DTC By-Laws (``By-Laws'') 
\4\ to (1) revise DTC's governance procedures, (2) change certain DTC 
Board of Directors (``Board'') titles, officer titles, and offices (and 
their respective powers and duties), (3) update the compensation 
section for officers, and (4) make technical changes and corrections, 
each discussed more fully below.
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    \4\ The By-Laws are included in the Rules, By-Laws and 
Organization Certificate of DTC (``Rules''), available at http://www.dtcc.com/legal/rules-and-procedures.
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A. Changes to DTC's Governance Procedures

    Under the proposed rule change, DTC would revise certain governance 
procedures of the By-Laws. Specifically, DTC proposes to (1) change the 
required frequency of the Board's and the Executive Committee's 
meetings, (2) remove the word ``monthly'' from the phrase ``regular 
monthly meetings'' when describing Board meetings, and (3) permit the 
Board to act by unanimous written consent.\5\
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    \5\ Notice, 83 FR at 6640.
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    DTC proposes to reduce the required frequency of its Board meetings 
and Executive Committee meetings, as provided for in Section 2.6 
(Meetings) of the By-Laws,\6\ to better align the frequency of the 
Board meetings with those of the Fixed Income Clearing Corporation 
(``FICC'') and the National Securities Clearing Corporation 
(``NSCC'').\7\ Specifically, the proposal would reduce the minimum 
required number of Board meetings from ten meetings per year (with at 
least two

[[Page 12971]]

meetings during any three-month period) to six meetings per year (with 
at least one meeting during any three-month period).\8\ The proposal 
would also delete the provision in current Section 2.6 (Meetings) 
requiring the Executive Committee to meet during each 30-day period in 
which the Board does not meet.\9\
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    \6\ Hereinafter, section references will always be to the By-
Laws unless otherwise stated.
    \7\ Notice, 83 FR at 6640. DTC, FICC, and NSCC are subsidiaries 
of the Depository Trust and Clearing Corporation (``DTCC''), each 
having the same Board of Directors as DTCC. See Securities Exchange 
Act Release No. 74142 (January 27, 2015), 80 FR 5188 (January 30, 
2015) (SR-FICC-2014-810, SR-NSCC-2014-811, SR-DTC-2014-812).
    \8\ Notice, 83 FR at 6640.
    \9\ Id.
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    Due to the proposed changes to the frequency of Board meetings and 
Executive Committee meetings, DTC proposes to remove the word 
``monthly'' from Section 2.6 (Meetings).\10\ The proposal would also 
permit the Board to fix times and places for its regular meetings and 
not require the Board to provide notice of such regular meetings.\11\
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    \10\ Id.
    \11\ Id. Although the proposal would not require the Board to 
provide notice of its regular meetings, the proposal would not 
affect other existing notice requirements in the By-Laws, such as 
the requirement in Section 1.4 (Notice of Meetings) to provide 
notice of meetings in which stockholders are required or permitted 
to take action and Section 2.6 (Meetings) regarding special meetings 
of the Board. Rules, supra note 4.
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    Finally, DTC proposes to add proposed Section 2.9 (Action by 
Unanimous Written Consent).\12\ This section would permit the Board to 
take all actions that may be taken at a Board meeting by unanimous 
written consent, in lieu of an actual meeting.\13\ The provision would 
require that any written consent (1) identify the action to be taken, 
(2) be signed by all directors, and (3) be filed with the minutes of 
the proceedings of the Board.\14\
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    \12\ Id.
    \13\ Id.
    \14\ Id.
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B. Changes to Certain Titles, Offices, and Related Powers and Duties

    DTC also proposes changes to the titles, offices, and related 
powers and duties of certain Board and officer personnel, as further 
described below.
1. Non-Executive Chairman of the Board
    DTC proposes to replace the title of ``Chairman of the Board'' with 
the title of ``Non-Executive Chairman of the Board.'' \15\ DTC proposes 
to change its By-Laws to reflect that this position is held by a non-
executive.\16\ Therefore, DTC would change relevant references in the 
By-Laws from ``Chairman'' and ``Chairman of the Board'' to ``Non-
Executive Chairman of the Board.'' \17\ DTC also would delete certain 
references in the By-Laws to the Non-Executive Chairman of the Board as 
a member of DTC management because the position is no longer in 
management.\18\
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    \15\ Notice, 83 FR at 6641.
    \16\ Id.
    \17\ Id.
    \18\ Id.
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    In the proposed Section 2.8 (Non-Executive Chairman of the Board), 
DTC would identify the powers and duties of the Non-Executive Chairman 
of the Board, including (1) general responsibility for carrying out the 
policies of the Board, (2) general supervision of the Board and its 
activities and general leadership of the Board, (3) presiding over 
stockholders' meetings (when present), and (4) such other powers and 
duties as the Board may designate.\19\ Proposed Section 2.8 (Non-
Executive Chairman of the Board) also would include a provision stating 
that a presiding director (as elected by the Board) shall preside at 
all stockholders and Board meetings when the Non-Executive Chairman of 
the Board is absent.\20\ Additionally, Proposed Section 2.8 (Non-
Executive Chairman of the Board) would provide that the Non-Executive 
Chairman of the Board's performance of any enumerated duty shall be 
conclusive evidence of his power to act.\21\
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    \19\ Id.
    \20\ Id. This provision is designed to correct an inaccuracy in 
current By-Laws Section 3.3 (Powers and Duties of the President), 
which gives presiding authority over stockholder meetings to the 
President when the Chairman of the Board is absent. Proposed Section 
2.8 (Non-Executive Chairman of the Board) would be consistent with 
the Mission Statement and Charter of DTC, FICC, NSCC, and DTCC, 
which gives presiding authority over stockholder meetings to a 
presiding director when the Non-Executive Chairman of the Board is 
absent.
    \21\ Id.
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    The proposal also identifies the individuals to whom the Non-
Executive Chairman may assign duties. In proposed Section 3.2 (Powers 
and Duties of the President and Chief Executive Officer), the Non-
Executive Chairman of the Board would have the authority to designate 
powers and duties to the President and Chief Executive Officer 
(``CEO'').\22\ In proposed Section 3.2 (Powers and Duties of Managing 
Directors), DTC also would add the Non-Executive Chairman of the Board 
to the list of individuals who have the ability to assign powers and 
duties to Managing Directors.\23\ Finally, in proposed Section 3.4 
(Powers and Duties of the Secretary), the Non-Executive Chairman of the 
Board (i.e., not the President and CEO) would have the authority to 
assign additional powers and duties to the Secretary.\24\
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    \22\ Id.
    \23\ Id.
    \24\ Id.
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2. Office of the CEO
    DTC proposes to revise the By-Laws to reflect that one individual 
holds the office of the President and CEO. As such, the proposal would 
change the By-Laws to add the office of the CEO and combine the office 
of the President and the office of the CEO into one office (President 
and CEO).\25\ While current Section 3.3 (Powers and Duties of the 
President) provides that the President shall be the CEO, current 
Section 3.1 (General Provisions) does not include CEO in the list of 
designated officer positions, though President is currently included in 
this list.\26\ Therefore, DTC proposes to revise the relevant 
references in the By-Laws from President to President and CEO.\27\
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    \25\ Id.
    \26\ Id.
    \27\ Notice, 83 FR at 6642.
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    Additionally, DTC proposes to make several By-Laws revisions to 
reflect the responsibilities for the consolidated role of President and 
CEO.\28\ First, DTC would delete and replace current Section 3.3 
(Powers and Duties of the President) with proposed Section 3.2 (Powers 
and Duties of the President and CEO).\29\ Proposed Section 3.2 (Powers 
and Duties of the President and CEO) would clarify the powers and 
duties associated with the role of President and CEO.\30\ For example, 
in proposed Section 3.2 (Powers and Duties of the President and CEO) 
the President and CEO would have general supervision over the overall 
business strategy, business operations, systems, customer outreach, as 
well as risk management, control, and staff functions, subject to the 
direction of the Board and the Non-Executive Chairman of the Board.\31\ 
In addition, because the office of the Chief Operating Officer 
(``COO'') would be eliminated (as described further below), the current 
COO responsibility of general supervision over DTC's operations in 
current Section 3.4 (Powers and Duties of the Chief Operating Officer) 
would be assigned to the President and CEO.\32\ Proposed Section 3.2 
(Powers and Duties of the President and CEO) would also delineate the 
authority that the Non-Executive Chairman of the Board has over the 
President and CEO by stating that the latter would have such other 
powers and perform such other duties

[[Page 12972]]

as the Board or the Non-Executive Chairman of the Board may 
designate.\33\
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    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ Id.
    \32\ Id.
    \33\ Id.
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    DTC also proposes to reassign or reclassify several 
responsibilities currently assigned to the President.\34\ Specifically, 
the responsibility for executing the Board's policies would be assigned 
to the Non-Executive Chairman of the Board rather than to the President 
and CEO.\35\ Additionally, DTC would remove the statement ``performance 
of any such duty by the President shall be conclusive evidence of his 
power to act'' in current Section 3.3 (Powers and Duties of the 
President).\36\
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    \34\ Id.
    \35\ Id.
    \36\ Id.
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    As mentioned above, DTC would delete language from the By-Laws 
stating that, in the absence of the Chairman of the Board, the 
President shall preside at all meetings of shareholders and all Board 
meetings (when present).\37\ Similarly, DTC would delete language from 
the By-Laws stating that the President and Board currently have the 
authority to assign powers and duties to the Comptroller in current 
Section 3.8 (Powers and Duties of the Comptroller), as discussed 
below.\38\ In proposed Section 3.5 (Powers and Duties of the Chief 
Financial Officer) the President and CEO and Board would have the 
authority to assign duties to the Chief Financial Officer 
(``CFO'').\39\
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    \37\ Id. As stated above, that power resides with the presiding 
director who is elected annually by the Board. See supra note 20.
    \38\ Notice, 83 FR at 6642.
    \39\ Id.
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    The proposal also removes certain responsibilities from the 
President. In proposed Section 3.4 (Powers and Duties of the 
Secretary), the power to assign additional powers and duties to the 
Secretary would be removed from the President and granted to the Non-
Executive Chairman of the Board.\40\
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    \40\ Id.
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3. Office of the CFO; Office of the Comptroller
    The proposal would add the office of the CFO and assign to the CFO 
general supervision of the financial operations of DTC.\41\ References 
in the By-Laws to the Comptroller would be deleted because DTC states 
that it neither has a Comptroller nor plans to appoint one.\42\ In 
proposed Section 3.5 (Powers and Duties of the Chief Financial Officer) 
the CFO would be granted overall supervision authority over the 
financial operations of DTC, and upon request, the CFO would counsel 
and advise other officers of DTC and perform other duties as agreed 
with the President and CEO (or as determined by the Board).\43\ The 
proposal also provides that the CFO would report directly to the 
President and CEO.\44\ Furthermore, because the Treasurer would 
directly report to the CFO, proposed Section 3.6 (Powers and Duties of 
the Treasurer) would provide that the Treasurer would have all such 
powers and duties as generally are incident to the position of 
Treasurer or as the CFO (in addition to the President and CEO and the 
Board) may assign.\45\
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    \41\ Id.
    \42\ Id.
    \43\ Id.
    \44\ Id.
    \45\ Id.
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4. Office of the COO
    In this proposal, DTC would delete references in the By-Laws to the 
COO because DTC states that it no longer has a COO and has no plans to 
appoint one.\46\
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    \46\ Notice, 83 FR at 6643.
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5. Executive Director; Vice President
    In this proposal, DTC would change the title of Vice President to 
Executive Director, and update the Executive Director position's 
related powers and duties to reflect the position's seniority 
level.\47\ In DTC's organizational structure, Executive Directors 
report to Managing Directors.\48\ Due to this level of seniority, DTC 
proposes to remove provisions in the By-Laws that previously allowed 
Vice Presidents (now, Executive Directors) to call special meetings of 
shareholders, or to preside over shareholder meetings unless 
specifically designated to do so by the Board.\49\
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    \47\ Id.
    \48\ Id.
    \49\ Id.
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6. Other Changes to the Powers and Duties of the Board and Certain 
Other Designated Officers
    In proposed Section 3.1 (General Provisions), DTC proposes to add a 
parenthetical phrase to clarify that the Board's power to appoint other 
officers includes, but is not limited to, the power to appoint a Vice 
Chairman of the Corporation and one or more Executive Directors.\50\ 
Additionally, in current Section 3.1 (General Provisions), DTC proposes 
to clarify that neither the Secretary nor any Assistant Secretary can 
hold the following offices (1) Vice Chairman of the Corporation or (2) 
President and CEO.\51\
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    \50\ Id.
    \51\ Id.
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    The proposal also enumerates the responsibilities of DTC's Managing 
Directors.\52\ In proposed Section 1.2 (Special Meetings), Managing 
Directors would be added to the list of officers authorized to call 
special meetings of the stockholders.\53\ Similarly, in proposed 
Section 2.6 (Meetings), Managing Directors would be added to the list 
of officers authorized to call special meetings of the Board.\54\ 
Further, in current Section 6.1 (Certificates for Shares), Managing 
Directors would be removed from the list of officers authorized to sign 
certificates for shares, enabling DTC to limit the authorized 
signatories of certificates for shares of DTC to a smaller number of 
individuals within senior management.\55\
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    \52\ Id.
    \53\ Id.
    \54\ Id.
    \55\ Id.
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    DTC also proposes to amend the By-Laws to remove specific powers 
from the Treasurer and Assistant Treasurer.\56\ In current Section 6.1 
(Certificates of Shares), DTC proposes to delete the reference to 
Treasurer and Assistant Treasurer from the list of authorized 
signatories because DTC expects the Secretary or Assistant Secretary 
(who are each currently listed as authorized signatories) to sign any 
share certificates.\57\
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    \56\ Id.
    \57\ Id.
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C. Compensation of the President and CEO

    Proposed Section 3.10 (Compensation of the President and CEO) would 
reflect DTC's current compensation-setting practices. Current Section 
3.12 (Compensation of Officers) states that (1) the compensation, if 
any, of the Chairman of the Board, and the President shall be fixed by 
a majority (which shall not include the Chairman of the Board or the 
President) of the entire Board of Directors, and (2) salaries of all 
other officers shall be fixed by the President with the approval of the 
Board and no officer shall be precluded from receiving a salary because 
he is also a director.\58\ DTC proposes to state that the Compensation 
Committee of the Corporation will recommend the compensation for the 
President and CEO to the Board of Directors for approval.\59\ In 
addition, DTC also proposes to delete the language stating that (1) 
salaries of all other officers shall be fixed by the President with 
approval of the Board, and (2) no officer shall be precluded

[[Page 12973]]

from receiving a salary because he is also a director.\60\ DTC proposes 
to delete compensation-related references to the Chairman of the Board 
because the Non-Executive Chairman of the Board does not receive 
compensation.\61\ Finally, DTC proposes to change the title of proposed 
Section 3.10 from ``Compensation of Officers'' to ``Compensation of the 
President and Chief Executive Officer'' because this section would no 
longer address the compensation of officers other than the President 
and CEO.\62\
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    \58\ Id.
    \59\ Notice, 83 FR at 6643-44. DTC states that it proposes this 
change for consistency with the DTCC/DTC/FICC/NSCC Compensation and 
Human Resources Committee Charter. Id.
    \60\ Id.
    \61\ Id.
    \62\ Notice, 83 FR at 6644.
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D. Technical Changes and Corrections

    DTC proposes technical changes and/or corrections to the By-Laws 
for clarity and readability, as described below.\63\
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    \63\ Id.
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1. Statutory References and Requirements
    DTC would delete direct statutory references from the By-Laws.\64\ 
DTC states that it would make this change to have the By-Laws remain 
consistent and accurate despite any changes to a specifically cited 
statute.\65\
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    \64\ Id.
    \65\ Id.
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2. Audit Committee
    DTC proposes to revise proposed Section 2.11 (Audit Committee) to 
have the description of its Audit Committee conform to the description 
of the Audit Committee in the by-laws of FICC.\66\
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    \66\ Id.
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3. Other Technical Changes and Corrections
    DTC proposes to make additional technical and grammatical changes 
to address (1) typographical errors, (2) section numbering, (3) 
grammatical errors, (4) heading consistency, and (5) gender 
references.\67\
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    \67\ Notice, 83 FR at 6644-45.
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II. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and rules and regulations thereunder applicable to such 
organization.\68\ The Commission believes the proposal is consistent 
with Act, specifically Section 17A(b)(3)(F) of the Act and Rules 17Ad-
22(e)(1) and, in part, (2) under the Act.\69\
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    \68\ 15 U.S.C. 78s(b)(2)(C).
    \69\ 15 U.S.C. 78q-1(b)(3)(F); 17 CFR 240.17Ad-22(e)(1) and (2).
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A. Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) of the Act requires, in part, that the rules 
of a clearing agency, such as DTC, be designed to protect the public 
interest.\70\ As discussed above, the proposed rule change would make a 
number of updates to the By-Laws.
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    \70\ 15 U.S.C. 78q-1(b)(3)(F).
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    First, the proposed changes to the By-Laws would provide specific 
requirements for, and remove ambiguous language around, the Board's 
required meeting frequency. Specifically, the proposal would align the 
frequency of Board meetings with the frequency of the related FICC and 
NSCC meetings, reducing the number of Board meetings to six annually. 
The proposal also would state that the Board may act through unanimous 
written consent, clarifying that the Board can make important decisions 
without having to conduct a formal Board meeting. Further, the proposal 
would eliminate the word ``monthly'' from the By-Laws' description of 
the Board's meeting frequency, removing ambiguity around whether the 
Board must meet monthly (given the required number of meetings is six). 
Altogether, these proposed governance changes would help enable DTC and 
its stakeholders to better understand when, and specifically, how 
often, the Board must conduct meetings.
    Second, DTC proposes to revise DTC's description of the titles and 
responsibilities of its Board and senior management to match DTC's 
current corporate structure. These changes would help the Board, as 
well as DTC's management, employees, and participants, understand which 
officer or office is responsible for each of DTC's executive-level 
functions.
    Third, the proposal would update the compensation-setting section 
of the By-Laws to reflect the Compensation Committee Charter practice, 
as well as to reflect that the Non-Executive Chairman of the Board 
would not receive compensation. The proposal's increased clarity around 
compensation-setting would better inform DTC stakeholders and the 
general public about how DTC sets the level of compensation for its 
highest-level executive (the President and CEO) and that the Non-
Executive Chairman does not draw a salary.
    Finally, DTC's proposed technical changes and corrections to its 
By-Laws would enhance the clarity, transparency, and readability of 
DTC's organizational documents. In this way, the proposal would better 
enable the Board, as well as DTC's management, employees, and 
participants, to understand their respective authorities, rights, and 
obligations regarding DTC's clearance and settlement of securities 
transactions.
    Governance arrangements are critical to the sound operation of 
clearing agencies.\71\ Specifically, clear and transparent governance 
documents promote accountability and reliability in the decisions, 
rules, and procedures of a clearing agency.\72\ Clear and transparent 
governance documents also provide interested parties, including owners, 
participants, and general members of the public, with information about 
how a clearing agency's decisions are made and what the rules and 
procedures are designed to accomplish.\73\ Further, the decisions, 
rules, and procedures of a clearing agency are important, as they can 
have widespread impact, affecting multiple market participants, 
financial institutions, markets, and jurisdictions.\74\
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    \71\ Securities Exchange Act Release No. 71699 (May 21, 2014), 
79 FR 29508 (May 22, 2014) (``Covered Clearing Agency Standards 
Proposing Release'') at 29521.
    \72\ Securities Exchange Act Release No. 64017 (March 3, 2011), 
76 FR 14472 (March 16, 2011) at 14488.
    \73\ Id.
    \74\ Covered Clearing Agency Standards Proposing Release, 79 FR 
at 29521.
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    As stated above, the proposed rule change would provide DTC 
stakeholders with a better understanding of how DTC makes decisions 
that could ultimately affect the financial system. Such transparency 
helps ensure that DTC reliably makes decisions and follows clearly 
articulated policies and procedures. Accordingly, the Commission finds 
that the proposed rule change is designed to enhance the clarity and 
transparency of DTC's organizational documents, which would help 
protect the public interest, consistent with Section 17A(b)(3)(F) of 
the Act.\75\
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    \75\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Rule 17Ad-22(e)(1) Under the Act

    Rule 17Ad-22(e)(1) under the Act requires a covered clearing agency 
\76\ to

[[Page 12974]]

establish, implement, maintain, and enforce written policies and 
procedures reasonably designed to provide for a well-founded, 
transparent, and enforceable legal basis for each aspect of its 
activities in all relevant jurisdictions.\77\
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    \76\ A ``covered clearing agency'' means, among other things, a 
clearing agency registered with the Commission under Section 17A of 
the Exchange Act (15 U.S.C. 78q-1 et seq.) that is designated 
systemically important by the Financial Stability Oversight Counsel 
(``FSOC'') pursuant to the Payment, Clearing, and Settlement 
Supervision Act of 2010 (12 U.S.C. 5461 et seq.). See 17 CFR 
240.17Ad-22(a)(5)-(6). On July 18, 2012, FSOC designated DTC as 
systemically important. U.S. Department of the Treasury, ``FSOC 
Makes First Designations in Effort to Protect Against Future 
Financial Crises,'' available at https://www.treasury.gov/press-center/press-releases/Pages/tg1645.asp. Therefore, DTC is a covered 
clearing agency.
    \77\ 17 CFR 240.17Ad-22(e)(1).
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    As discussed above, the proposed rule change would update the By-
Laws by (1) providing specific requirements for, and removing ambiguous 
language around, the Board's required meeting frequency, (2) updating 
DTC's description of the titles and responsibilities of its Board and 
senior management to match DTC's current corporate structure, (3) 
documenting DTC's current compensation-setting process, and (4) 
enacting technical corrections to increase readability.
    Each of the proposed changes is designed to help ensure that the 
By-Laws better reflect DTC's governance practices in a clear, 
transparent, and consistent manner. This increased transparency would 
help convey to DTC's stakeholders, and the public generally, a key 
legal basis for the activities of the highest levels of DTC's 
leadership described in the By-Laws. Therefore, the Commission finds 
that the proposed rule change is designed to help ensure that DTC's 
organizational documents remain well-founded, transparent, and legally 
enforceable in all relevant jurisdictions, consistent with Rule 17Ad-
22(e)(1) under the Act.\78\
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    \78\ Id.
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C. Rule 17Ad-22(e)(2)(i) and (v) Under the Act

    Rule 17Ad-22(e)(2)(i) and (v) under the Act requires that DTC 
establish, implement, maintain and enforce written policies and 
procedures reasonably designed to provide for governance arrangements 
that, among other things, (1) are clear and transparent and (2) specify 
clear and direct lines of responsibility.\79\
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    \79\ 17 CFR 240.17Ad-22(e)(2)(i) and (v).
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    As described above, DTC proposes a number of changes to its By-Laws 
that would provide clarity and transparency by setting specific 
standards for DTC (in the case of Board meeting frequency), and 
revising By-Laws provisions that were outdated or incorrect (in the 
case of responsibilities and titles of its Board members and senior 
management, compensation-setting practices, and technical edits). 
Specifically, the new Board meeting requirements would set clear 
numerical parameters around the specific frequency of such meetings, 
while also providing consistency with similar meetings at FICC and 
NSCC. The proposal also would provide clarity that the Board does not 
have to meet monthly (as is currently stated) by removing the qualifier 
``monthly.'' The proposed change allowing the Board to act by unanimous 
written consent, in lieu of a meeting, also would help provide 
transparency by clearly indicating how the Board may act without 
conducting a formal meeting. Similarly, the proposed changes to the 
titles and offices (and their related powers and duties) would provide 
clarity and transparency because they would clearly set forth DTC's 
current organizational structure, including the lines of responsibility 
of various officers and the Board. The proposed changes relating to 
compensation-setting would also give clarity and transparency by (1) 
accurately reflecting the process that is followed pursuant to the 
Compensation Committee Charter, and (2) clarifying that the Non-
Executive Chairman of the Board does not receive compensation. Finally, 
the proposed technical changes and corrections would raise the clarity 
and transparency of the By-Laws by removing grammatical and 
typographical errors.
    For these reasons, the Commission finds that the proposed rule 
change is designed to enhance clarity and transparency in DTC's 
governance arrangements, as well as to specify clear and direct lines 
of responsibility for various officer positions and the Board within 
DTC's organizational structure, consistent with Rule 17Ad-22(e)(2)(i) 
and (v) under the Act.\80\
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    \80\ Id.
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act, in particular 
the requirements of Section 17A of the Act \81\ and the rules and 
regulations thereunder.
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    \81\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that proposed rule change SR-DTC-2018-001 be, and hereby is, 
APPROVED.\82\
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    \82\ In approving the proposed rule change, the Commission 
considered the proposals' impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\83\
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    \83\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-06021 Filed 3-23-18; 8:45 am]
BILLING CODE 8011-01-P


