[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Notices]
[Pages 79388-79393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28080]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96543; File No. SR-DTC-2022-013]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Reorganizations Guide and the Fee Guide

December 20, 2022.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 15, 2022, The Depository Trust Company (``DTC'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II and III below, which Items have 
been prepared by the clearing agency. DTC filed the proposed rule 
change pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(4) thereunder.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \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).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The purpose of the proposed rule change is to amend the 
Reorganizations Guide to (i) provide Participants with the option to 
submit instructions for the withdrawal of an earlier acceptance of an 
Automated Tender Offer Program (``ATOP'')-eligible \5\ offer (each, an 
``ATOP Offer'') via Application Program Interface (``API'') and ISO 
20022 real-time messaging (collectively, ``Automated Instruction 
Messaging''), (ii) postpone the retirement of DTC's legacy computer-to-
computer facility (``CCF'') files for corporate actions entitlements 
and allocations (``CCF Entitlements and Allocations Files'') \6\ to 
July 1, 2024, and (iii) make technical and ministerial changes. In 
addition, DTC is proposing to amend the Fee Guide to continue to charge 
Participants that consume CCF Entitlements and Allocations Files after 
December 31, 2022 the CCF File Fee of $50,000, as described in greater 
detail below.\7\
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    \5\ ATOP is a DTC program through which Participant instructions 
are transmitted to the agent for an ATOP offer and through which a 
participant can tender its securities to the agent's account at DTC.
    \6\ There are three types of CCF files representing the 
corporate actions lifecycle: corporate actions announcements (``CCF 
Announcements Files''); the CCF Entitlements and Allocations Files; 
and corporate actions instructions from Participants through CCF 
files (``CCF Corporate Actions Instructions Files''). All CCF 
Announcement Files were retired as of December 31, 2018. See 
Securities Exchange Act Release No. 79746 (January 5, 2017), 82 FR 
3372 (January 11, 2017) (SR-DTC-2016-014).
    \7\ Each term not otherwise defined herein has its respective 
meaning as set forth in the Rules, By-Laws and Organization 
Certificate of DTC (the ``Rules''), the Guide to the DTC Fee 
Schedule (``Fee Guide''), and the Reorganizations Service Guide (the 
``Reorganizations Guide''), available at http://www.dtcc.com/legal/rules-and-procedures.aspx.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency included 
statements concerning the purpose of and basis for the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. The clearing agency has prepared summaries, 
set forth in sections A, B, and C below, of the most significant 
aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend the 
Reorganizations Guide to (i) provide Participants with the option to 
submit instructions for the withdrawal of an earlier acceptance of an 
Automated Tender Offer Program (``ATOP'')-eligible \8\ offer (each, an 
``ATOP Offer'') via Application Program Interface (``API'') and ISO 
20022 real-time messaging (collectively, ``Automated Instruction 
Messaging''), (ii) postpone the retirement of DTC's legacy computer-to-
computer facility (``CCF'') files for corporate actions entitlements 
and allocations (``CCF Entitlements and Allocations Files'') \9\ to 
July 1, 2024, and (iii) make technical and ministerial changes. In 
addition, DTC is proposing to amend the Fee Guide to continue to charge 
Participants that consume CCF Entitlements and Allocations Files after 
December 31, 2022 the CCF File Fee of $50,000, as discussed more fully 
below.
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    \8\ ATOP is a DTC program through which Participant instructions 
are transmitted to the agent for an ATOP offer and through which a 
participant can tender its securities to the agent's account at DTC.
    \9\ There are three types of CCF files representing the 
corporate actions lifecycle: corporate actions announcements (``CCF 
Announcements Files''); the CCF Entitlements and Allocations Files; 
and corporate actions instructions from Participants through CCF 
files (``CCF Corporate Actions Instructions Files''). All CCF 
Announcement Files were retired as of December 31, 2018. See 
Securities Exchange Act Release No. 79746 (January 5, 2017), 82 FR 
3372 (January 11, 2017) (SR-DTC-2016-014).
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(i) Automated Instruction Messaging
A. Background
    On July 7, 2021, DTC filed a rule filing \10\ (the ``ATOP Automated 
Messaging Filing'') that provided Participants with the option to use 
Automated Instruction Messaging to submit acceptance, protect, and 
cover of protect instructions (each, an ``Acceptance Instruction'') for 
ATOP Offers instead of submitting those instructions through the 
Participant Tender Offer Program (``PTOP'') or Voluntary Tenders and 
Exchanges functions through PTS and PBS, respectively.\11\
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    \10\ See Securities Exchange Act Release No. 92339 (July 7, 
2021), 86 FR 36810 (July 13, 2021) (SR-DTC-2021-010). In addition, 
DTC subsequently filed a rule filing that similarly provided 
Participants with the option to use Automated Instruction Messaging 
to submit acceptance, protect, and cover of protect instructions for 
Automated Subscription Offer Program and APUT offers. See Securities 
Exchange Act Release No. 95197 (July 5, 2022), 87 FR 41153 (July 11, 
2022) (SR-DTC-2022-007).
    \11\ PTS (Participant Terminal System) and PBS (Participant 
Browser System) are user interfaces for DTC settlement and asset 
services functions. PTS is mainframe-based, and PBS is web-based 
with a mainframe back-end. Participants may use either PTS or PBS, 
as they are functionally equivalent. PTOP and Voluntary Tenders and 
Exchanges are functions of PTS and PBS, respectively, that are 
currently used by Participants to submit instructions, submit 
protects, submit cover of protects, submit cover of protects on 
behalf of another Participant, and submit withdrawals on various 
voluntary reorganization events.
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    As described in the ATOP Automated Messaging Filing, the submission 
of voluntary reorganizations instructions through PTS and PBS is a 
nonautomated key-entry process, and there are certain potential risks 
and costs associated with manual processing, particularly in connection 
with voluntary reorganizations instructions. Nonautomated input may 
increase the likelihood of errors, which can result in rejected 
instructions or erroneous

[[Page 79389]]

elections. Rejected instructions and erroneous elections can delay the 
submission of the instructions for voluntary offers, which typically 
have to be submitted within a short timeframe. Further, because 
information about a voluntary offer and the compilation and 
transmission of instructions flows across different market segments, 
the lack of automation and standardization can also lead to errors 
along the chain.
    ISO 20022 is a standard that provides the financial industry with a 
common language to capture business transactions and associated message 
flows. The benefits offered by ISO 20022 include, but are not limited 
to (i) greater straight through processing by utilizing a data model 
that conforms to market practice and (ii) improved accuracy and less 
processing risk due to enhanced data elements. APIs provides enhanced 
flexibility for Participants, making the process of accessing from, and 
transmitting information to, DTC and its downstream customers more 
efficient. The flexibility of APIs and its use of modern programming 
languages provide benefits that include but are not limited to (i) less 
frequent maintenance, (ii) client development and implementation can be 
quicker to market, and (iii) more efficient integration channels.
B. Automated Instruction Messaging
    DTC is proposing to enhance Automated Instruction Messaging for 
ATOP Offers by providing Participants with the ability to use Automated 
Instruction Messaging to submit an instruction to withdraw an 
Acceptance Instruction.\12\ Automated Instruction Messaging for 
withdrawal instructions must be for the full quantity of the original 
Acceptance Instruction. Participants that are submitting withdrawal 
instructions for less than the full quantity must continue to submit 
those instructions via PTS/PBS.
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    \12\ DTC notes that withdrawal actions--whether through 
Automated Instruction Messaging or PTS/PBS--are only available when 
provided for under the terms of the applicable ATOP Offer.
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    As with Automated Instruction Messaging for other actions for ATOP, 
ASOP and APUT eligible offers, Automated Instruction Messaging for 
withdrawal instructions for an ATOP Offer would consist of (i) 
Automated Instruction Messages for the input of instructions and (ii) 
Automated Response Messages for feedback and status output with respect 
to submitted instructions. The ISO 20022 Corporate Action Instruction 
(CAIN) message and the API POST function are Automated Instruction 
Messages. The ISO 20022 Corporate Action Instruction Status Advice 
(CAIS) message and the API GET function are Automated Response 
Messages.
    As noted above, automating the submission of withdrawal 
instructions for ATOP Offers would streamline the flow of information 
and reduce the costs, errors and risks that are associated with 
nonautomated processing. Accordingly, pursuant to the proposed rule 
change, DTC would enhance the ability of Participants to automate and 
standardize the submission of withdrawal instructions for ATOP Offers 
through Automated Instruction Messaging.
C. Proposed Rule Changes
    Pursuant to the proposed rule change, DTC is proposing to:
    1. Add references to ``Automated Instruction Messaging'' or 
``Automated Instruction Message,'' as context requires, where other 
types of instruction input for withdrawals of instructions for ATOP 
Offers (e.g., PTS PTOP and PBS Voluntary Tenders and Exchanges) are 
referenced.
    2. In the ``Automated Instruction Messaging'' Section:
    a. Amend the text of footnote 1 to read, ``Automated Instruction 
Messaging for withdrawal instructions for ATOP-eligible offers will be 
available in Q1 of 2023.''
    b. At the bottom of the enumerated list of actions for ATOP Offers 
that can be taken via Automated Instruction Messaging, insert ``5. 
Withdrawal (for full amount of original instruction only).''
    c. Amend the note under the enumerated list of actions for ATOP 
Offers that can be taken via Automated Instruction Messaging to state: 
``Withdrawal instructions submitted via Automated Instruction Messaging 
must be for the full quantity of the original instruction. Partial 
withdrawal instructions for ATOP-eligible offers must be performed via 
PTS/PBS and cannot be instructed via Automated Instruction Message.''
    3. In the ``Instructions/Expirations'' section, amend the note 
``All withdrawal/cancellation instructions must be performed via PTS/
PBS,'' to read, ``Partial withdrawal instructions must be performed via 
PTS/PBS.''
    4. At the end of the first paragraph of the ``Withdrawing an 
Acceptance of an ATOP-Eligible Offer'' section, insert the following 
sentence: ``Note: Only full withdrawals will be accepted via Automated 
Instruction Messaging. Partial withdrawal instructions must be 
performed via PTS/PBS.''
    5. Amend the second paragraph in the ``Checklist for Withdrawing an 
Acceptance'' section to read, ``Enter and transmit an instruction to 
withdraw the acceptance via PTS PTOP, PBS Voluntary Tenders and 
Exchanges, or Automated Instruction Messaging. For instructions 
transmitted via PTS/PBS, the withdrawal request can be for all or any 
part of the acceptance previously submitted, and you can submit more 
than one withdrawal request as long as the quantity of securities 
indicated in the withdrawal instructions does not exceed the original 
quantity of the acceptance. Withdrawal instructions submitted via 
Automated Instruction Messaging must be for the full quantity of the 
original instruction.''
    6. Amend the first bullet under the fourth paragraph in the 
``Checklist for Withdrawing an Acceptance'' section to read, ``You can 
inquire about your withdrawal instructions and the status thereof via 
the PTS PTOP or PBS Voluntary Tenders and Exchanges function's inquiry 
feature, or via Automated Instruction Messaging.''
    7. Make ministerial changes for clarity, to correct typos and 
omissions and to enhance conformity and readability, including, but not 
limited to:
    a. In the ``Important Legal Information'' replace ``Copyright 
(copyright) 2022'' with ``Copyright (copyright) 2023.''
    b. Delete all instances of the following sentences: ``If possible, 
DTC will attempt to notify you of the rejection, but DTC cannot 
guarantee such notification,'' ``If practicable, DTC will attempt to 
notify you of the rejection, but cannot guarantee such notification,'' 
``DTC will attempt to notify your designated coordinator by telephone 
of the rejection, but DTC cannot guarantee that this will be done,'' 
and ``If rejection is for a reason other than that your tender price 
was not accepted or that a pro rata portion of your tender was not 
accepted, DTC will attempt to notify you by telephone, calling first 
the coordinator (s) at the telephone number (s) entered on the 
instructions form, but takes no responsibility therefor.'' DTC is 
proposing to delete these sentences in order to make it clear that 
Participants are solely responsible for monitoring their accounts and 
the response messages to ensure that they properly submitted their 
instructions and that the instructions were accepted.
    c. In ``How to View Mandatory and Voluntary Reorganization 
Announcements'' section, delete the footnote that reads ``The RIPS 
function for mandatory reorganizations announcements will be retired on 
November 16, 2020.'' DTC is proposing to delete this sentence because 
RIPS for

[[Page 79390]]

mandatory reorganizations has been retired.
(ii) CCF Entitlements and Allocations Files and CCF File Fee
A. Background
    On November 19, 2020, DTC filed a rule change (the ``2021 CCF 
Retirement Filing'') \13\ that amended the Reorganizations Guide and 
the Fee Guide to (i) set a retirement date for CCF Entitlements and 
Allocations Files of January 1, 2022, and (ii) apply a $50,000 CCF File 
Fee, per File Category (Pre-Allocation or Allocation/Post-Allocation) 
of CCF Entitlements and Allocations Files,\14\ to Participants that 
continued to consume CCF Entitlements and Allocations Files between 
January 1, 2021 and December 31, 2021. The CCF File Fee was charged to 
the Account of the Participant upon the Participant's first receipt of 
CCF Entitlements and Allocations Files in a particular File Category 
during 2021. The CCF File Fee covered all CCF Entitlements and 
Allocations Files within that File Category during 2021.
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    \13\ See Securities Exchange Act Release No. 90490 (November 23, 
2020), 85 FR 76645 (November 30, 2020) (SR-DTC-2020-016).
    \14\ Each of the CCF Entitlements and Allocations Files falls 
into one of two categories (each, a ``File Category''): (i) pre-
allocation (``Pre-Allocation CCF Files''), which includes files 
containing a Participant's allocation projections and entitlements, 
or (ii) allocation/post-allocation (``Allocation/Post-Allocation CCF 
Files''), which includes files containing information on a 
Participant's allocations and pending allocations. See Important 
Notice 13851-20 (August 27, 2020), available at https://www.dtcc.com/legal/important-notices.
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    Many Participants completed their adoption of ISO 20022 messaging 
for entitlements and allocations information, and their migration from 
the CCF Entitlements and Allocations Files, before the January 1, 2022 
retirement date. However, some Participants had not completed their 
system development for the ISO 20022 messaging requested that DTC 
continue to offer the CCF Entitlements and Allocations Files for 
another year. Accordingly, on December 29, 2021, DTC filed a rule 
change (``2022 CCF Retirement Filing'') \15\ to postpone the retirement 
date of the CCF Entitlements and Allocation Files to January 1, 2023, 
and to charge Participants the $50,000 CCF File Fee for each File 
Category of CCF Entitlements and Allocations Files that they consumed 
between January 1, 2022 and December 31, 2022. The CCF File Fee was 
charged to the Account of the Participant upon the Participant's first 
receipt of CCF Entitlements and Allocations Files in a particular File 
Category during 2022. The CCF File Fee covered all CCF Entitlements and 
Allocations Files within that File Category during 2022.
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    \15\ See Securities Exchange Act Release No. 93885 (December 30, 
2021), 87 FR 528 (January 5, 2022) (SR-DTC-2021-018).
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    As discussed in the 2021 and 2022 CCF Retirement Filings, DTC has 
been informing Participants that corporate actions CCF files \16\ will 
be retired and will be replaced by ISO 20022 messaging since 2011.\17\ 
As noted above, ISO 20022 messaging offers enhanced efficiency and 
transparency in the corporate action lifecycle because, in contrast to 
the proprietary function and activity codes of CCF Files, ISO 20022 is 
a business-model-based standard for the development of messages for the 
international financial services industry.
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    \16\ There are three event groups for CCF files for corporate 
actions. Participants subscribe to the CCF files for each event 
group separately. The event groups are (i) distributions 
(``Distributions''), such as cash and stock dividends, principal and 
interest, and capital gain distributions; (ii) redemptions 
(``Redemptions''), such as full and partial calls, final paydowns, 
and maturities; and (iii) reorganizations (``Reorganizations''), 
which include both mandatory and voluntary reorganizations such as 
exchange offers, conversions, Dutch auctions, mergers, puts, reverse 
stock splits, tender offers, and warrant exercises.
    \17\ See Securities Exchange Act Release No. 63886 (February 10, 
2011), 76 FR 9070 (February 16, 2011) (SR-DTC-2011-02) (indicating 
that DTC would continue to support its legacy proprietary CCF files 
until 2015).
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    DTC has been working with Participants to specifically support 
their orderly transition from CCF Entitlements and Allocations Files to 
ISO 20022 messaging since 2013. DTC began providing Participants with 
parallel entitlements and allocations ISO 20022 messaging in 2013 
(Distributions), 2015 (Redemptions) and 2017 (Reorganizations). In 
addition, since 2016,DTC had been communicating with Participants about 
the deadline for retirement of the CCF Entitlements and Allocation 
Files and postponed the projected retirement date multiple times.\18\ 
Until the 2021 CCF Retirement Filing, DTC had not imposed a fee on 
Participants' continued use of CCF Entitlements and Allocations Files.
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    \18\ See Important Notice 2538-16 (January 21, 2016), supra note 
15; Important Notice 4381-16 (November 4, 2016), supra note 15; 
Important Notice 5099-17 (February 2017), supra note 15; Important 
Notice 7488-18 (February 28, 2018), supra note 15; Important Notice 
9861-18 (October 9, 2018), supra note 15.
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B. Proposed Rule Change
    Almost all Participants have now successfully migrated from CCF 
Entitlements and Allocations Files to ISO 20022 messaging. There are, 
however, a few Participants that have indicated to DTC that, for 
reasons internal to their respective firms, they would not be able to 
complete their migration by the end of 2022.
    Therefore, pursuant to this proposed rule change, DTC would 
postpone the retirement date of the CCF Entitlements and Allocation 
Files to July 1, 2024, and would continue to charge each Participant 
the CCF File Fee of $50,000 for each File Category of CCF Entitlements 
and Allocations Files that it consumes during each of the following fee 
periods (each, a ``Fee Period''): (i) from January 1, 2023 through 
December 31, 2023, and (ii) from January 1, 2024 through June 30, 2024. 
The CCF File Fee would be charged to the Account of the Participant, 
upon the Participant's first receipt of CCF Entitlements and 
Allocations Files in a particular File Category during that specific 
Fee Period. The CCF File Fee would cover all CCF Entitlements and 
Allocations Files within that File Category during that Fee Period.
    Pursuant to the proposed rule change, DTC would amend the 
description of the CCF File Fee in the Fee Guide to conform with the 
proposed rule change. DTC would also amend the Reorganizations Guide to 
reflect the July 1, 2024, retirement date for CCF Entitlements and 
Allocations Files. Specifically, in the ``Preparing to Use the 
Services'' subsection of the ``How Reorganizations Work'' section of 
the Reorganizations Guide, DTC is proposing to replace ``*CCF files 
associated with entitlements and allocations will be retired as of 
January 1, 2023'' with ``*CCF files associated with entitlements and 
allocations will be retired as of July 1, 2024.''
Implementation Date
    DTC will implement the proposed changes on January 1, 2023. DTC 
will announce the implementation date of the proposed rule change in an 
Important Notice posted on its website.
    As proposed, a legend would be added to the Reorganizations Guide 
and the Fee Guide stating there are changes that became effective upon 
filing with the Commission but have not yet been implemented. The 
proposed legend also would include that the implementation date will be 
January 1, 2023. In addition, the proposed legend would state that the 
legend would automatically be removed upon the implementation of the 
proposed changes.
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules 
be designed to promote the prompt and

[[Page 79391]]

accurate clearance and settlement of securities transactions.\19\
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    \19\ 15 U.S.C. 78q-1(b)(3)(F).
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    The proposed rule change would amend the Reorganizations Guide to 
provide Participants with the option to use Automated Instruction 
Messaging for withdrawal instructions for ATOP Offers. As discussed 
above, Automated Instruction Messaging provides greater straight-
through processing, improved accuracy, more efficient integration 
channels and less processing risk than nonautomated processing.
    DTC believes that the proposed rule change to amend the 
Reorganizations Guide to make technical and clarifying changes would 
enhance the clarity and transparency of the Reorganizations Guide. By 
enhancing the clarity and transparency of the Reorganizations Guide, 
the proposed rule change would allow Participants to more efficiently 
and effectively conduct their business in connection with processing 
reorganization events and associated securities transactions. Based on 
the foregoing, DTC believes that the proposed rule change is designed 
to promote the prompt and accurate clearance and settlement of 
securities transactions, consistent with section 17A(b)(3)(F) of the 
Act, cited above.
    In addition, the proposed rule change would (i) postpone the 
retirement of CCF Entitlements and Allocations Files to July 1, 2024, 
and (ii) continue the application of a CCF File Fee of $50,000 to 
Participants that continue to consume CCF Entitlements and Allocations 
Files after December 31, 2022. By postponing the retirement of CCF 
Entitlements and Allocations Files to July 1, 2024, the proposed rule 
change would allow Participants to minimize potential business 
interruptions by undertaking an orderly and organized migration from 
CCF files to the more efficient ISO 20022 standard. Similarly, by 
continuing to charge a CCF File Fee of $50,000 to those Participants 
that continue to receive CCF Entitlements and Allocations Files after 
December 31, 2022, the proposed rule change would encourage the few 
remaining Participants still utilizing CCF Entitlements and Allocations 
Files to accelerate system development and their adoption of the ISO 
20022 standard. In this manner, the proposed rule change would 
encourage and facilitate the transition to the ISO 20022 standard, 
which provides efficiencies and enhanced transparency in processing 
corporate actions and the settlement activities related thereto. 
Accordingly, DTC believes that the proposed rule change would promote 
the prompt and accurate clearance and settlement of securities 
transactions, consistent with the requirements of 17A(b)(3)(F) of the 
Act, cited above.
    Section 17A(b)(3)(D) of the Act requires that the Rules provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among its Participants.\20\ DTC believes that the proposed rule change 
to continue to apply the $50,000 CCF File Fee to Participants that 
continue to consume CCF Entitlements and Allocations Files after 
December 31, 2022 would provide for the equitable allocation of 
reasonable fees.
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    \20\ 15 U.S.C. 78q-1(b)(3)(D).
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    DTC believes that the proposed application of the CCF File Fee 
would be equitably allocated because the CCF File Fee (i) would only be 
charged to those Participants that have delayed their migration from 
CCF Entitlements and Allocations Files beyond December 31, 2022 \21\ 
and (ii) would be applied in accordance with the Participant's use of a 
particular File Category during a specific Fee Period.
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    \21\ As noted above, DTC has been communicating with 
Participants about the migration from CCF files to the ISO 20022 
standard for corporate actions events since 2011. Since 2013, DTC 
has been communicating with Participants about targeted retirement 
dates for CCF Entitlements and Allocations Files and has, at the 
request of Participants, postponed the projected dates numerous 
times.
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    Further, DTC believes that the continued application of the $50,000 
CCF File Fee would be reasonable. As discussed above, Participants that 
did not complete their migration to ISO 20022 by January 1, 2021, or 
January 1, 2022, were charged the $50,000 CCF File Fee for each File 
Category of CCF Entitlements and Allocations Files that they consumed 
during each calendar year. Most Participants have now completed their 
migration, which DTC believes is due, in part, to the application of 
the CCF File Fee. Based on this prior experience with the CCF File Fee, 
DTC believes that the CCF File Fee in the amount of $50,000 provides 
the necessary encouragement for Participants to accelerate their system 
development for their adoption of the ISO 20022 standard for 
entitlements and allocations information.\22\ Further, during the prior 
applications of the CCF File Fee to CCF Entitlements and Allocations 
Files, DTC had not received any negative feedback from Participants 
that suggested that the $50,000 fee was overly burdensome.
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    \22\ The CCF File Fee is not designed to cover costs incurred by 
DTC as a result of continuing to service CCF files.
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    Therefore, DTC believes that the proposed rule change regarding the 
CCF File Fee provides for the equitable allocation of reasonable dues, 
fees, and other charges among its Participants, consistent with 
17A(b)(3)(D) of the Act, cited above.

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

    DTC believes that the proposed rule change to provide Participants 
with the option to use Automated Instruction Messaging for withdrawal 
instructions for ATOP Offers would not have any impact on competition. 
Because Automated Instruction Messaging is an optional service that 
would be available to all Participants in connection with ATOP Offers, 
DTC does not believe that the proposed rule change would impose a 
burden on competition.\23\ In addition, DTC believes that the proposed 
rule change to make technical and ministerial changes to the 
Reorganizations Guide, would not have any impact on competition because 
it would merely enhance the clarity of the procedures relating to ATOP 
Offers. In light of the foregoing, DTC does not believe that the 
proposed rule changes would impose a burden on competition.\24\
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    \23\ 15 U.S.C. 78q-1(b)(3)(I).
    \24\ Id.
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    DTC believes that the proposed rule change with respect to 
postponing the retirement of CCF Entitlements and Allocations Files to 
July 1, 2024 would not have any impact on competition. The proposed 
rule change would provide any Participant that has not completed its 
migration from CCF Entitlements and Allocation Files with additional 
time to complete its testing and development of its systems and 
finalize the transition to ISO 20022 messaging. Therefore, DTC believes 
that the proposed rule change with respect to postponing the retirement 
of CCF Entitlements and Allocations Files to July 1, 2024 would not 
have a burden on competition.\25\
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    \25\ 15 U.S.C. 78q-1(b)(3)(I).
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    DTC believes that the proposed rule change with respect to amending 
the Fee Guide to continue to apply the CCF File Fee to Participants 
that continue to consume CCF Entitlements and Allocations Files after 
December 31, 2022 could have an impact on competition because it could 
create a burden on competition.\26\ Although the proposed application 
of the CCF File Fee is designed to incentivize Participants to 
accelerate and complete their adoption of the ISO 20022 standard, DTC 
recognizes and appreciates that continuing to charge

[[Page 79392]]

the fee could negatively affect such Participants' operating costs. 
However, DTC believes that any burden on competition would not be 
significant and would be necessary and appropriate in furtherance of 
the purposes of the Act, as permitted by 17A(b)(3)(I) of the Act.\27\
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    \26\ Id.
    \27\ Id.
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    DTC believes any burden on competition would not be significant 
because (i) the fee would only be charged once per File Category, upon 
the Participant's first receipt of CCF Entitlements and Allocations 
Files for a File Category during a particular Fee Period, and (ii) the 
application of the CCF File Fee for a File Category would cover the 
consumption of all CCF Entitlements and Allocations Files within that 
File Category during that Fee Period. In addition, based on DTC's prior 
use of the CCF File Fee for CCF Entitlements and Application Files, DTC 
has no indication that the amount of the fee creates a significant 
burden on any Participant.
    DTC believes that any burden on competition that may be created by 
the proposed change to amend the Fee Guide to continue to apply the CCF 
File Fee to Participants that continue to consume CCF Entitlements and 
Allocations Files after December 31, 2022 would be necessary and 
appropriate in furtherance of the purposes of the Act, as permitted by 
17A(b)(3)(I) of the Act.\28\ DTC believes that this proposed change 
would be necessary because some Participants have yet to adopt the ISO 
20022 standard, despite at least nine years of communication and 
prompting on the issue.\29\ As noted above, the ISO 20022 standard 
provides efficiencies and enhanced transparency in processing corporate 
actions and the settlement activities related thereto. Thus, DTC 
believes that the proposed rule change would promote the prompt and 
accurate clearance and settlement of securities transactions, 
consistent with 17A(b)(3)(F) of the Act.\30\
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    \28\ Id.
    \29\ See supra notes 17 and 18.
    \30\ 15 U.S.C. 78q-1(b)(3)(F).
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    DTC believes that the proposed rule change to continue to apply the 
CCF File Fee to Participants that continue to consume CCF Entitlements 
and Allocations Files after December 31, 2022 would be appropriate in 
furtherance of the purposes of the Act, as permitted by 17A(b)(3)(I) of 
the Act.\31\ As discussed above, Participants that did not complete 
their migration to ISO 20022 by January 1, 2021 or by January 1, 2022 
were charged the $50,000 CCF File Fee for each File Category of CCF 
Entitlements and Allocations Files that they consumed during the each 
calendar year. Most Participants have now completed their migration, 
which DTC believes is due, in part, to the application of the $50,000 
CCF File Fee. DTC's prior experience with the $50,000 CCF File Fee 
illustrates that a $50,000 CCF File Fee provides the necessary 
encouragement for Participants to accelerate their system development 
for the full adoption of the ISO 20022 standard. Further, during the 
previous application of the CCF File Fee to CCF Entitlements and 
Allocations Files, DTC had not received any negative feedback from 
Participants that suggested that the $50,000 fee was overly burdensome. 
Accordingly, DTC believes that the continued application of the $50,000 
CCF File Fee would be appropriate here in order to incentivize the 
remaining Participants to accelerate their migration to the ISO 20022 
standard. In addition, as discussed above, DTC believes that the 
proposed continued application of the CCF File Fee would be equitably 
allocated because the CCF File Fee (i) would only be charged to those 
Participants that have delayed their migration from CCF Entitlements 
and Allocations beyond December 31, 2022, and (ii) would be applied in 
accordance with the Participant's use of a particular File Category 
during a specific Fee Period.
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    \31\ 15 U.S.C. 78q-1(b)(3)(I).
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    Therefore, for these reasons, DTC believes that a perceived 
competitive burden of the proposed rule change to continue to apply the 
CCF File Fee to Participants that continue to consume CCF Entitlements 
and Allocations Files after December 31, 2022, would be necessary and 
appropriate in furtherance of the purposes of the Act, as permitted by 
17A(b)(3)(I) of the Act.\32\
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    \32\ Id.
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    DTC has not received or solicited any written comments relating to 
this proposal. If any written comments are received, they would be 
publicly filed as an Exhibit 2 to this filing, as required by Form 19b-
4 and the General Instructions thereto.
    Persons submitting comments are cautioned that, according to 
Section IV (Solicitation of Comments) of the Exhibit 1A in the General 
Instructions to Form 19b-4, the Commission does not edit personal 
identifying information from comment submissions. Commenters should 
submit only information that they wish to make available publicly, 
including their name, email address, and any other identifying 
information.
    All prospective commenters should follow the Commission's 
instructions on how to submit comments, available at 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.

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

    The foregoing rule change has become effective pursuant to 
19(b)(3)(A) \33\ of the Act and paragraph (f) \34\ 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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    \33\ 15 U.S.C. 78s(b)(3)(A).
    \34\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-DTC-2022-013 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-DTC-2022-013. 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 (http://www.sec.gov/rules/sro.shtml). 
Copies of the

[[Page 79393]]

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 
(http://dtcc.com/legal/sec-rule-filings.aspx). All comments received 
will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-DTC-2022-013 and should be submitted on 
or before January 17, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\35\
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    \35\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-28080 Filed 12-23-22; 8:45 am]
BILLING CODE 8011-01-P


