Notice2024-30684
Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to DTC's New Issue Information Dissemination Service To Unwind a Prior Rule Filing and Provide a More Accurate Description of the Service
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 26, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 247 (Thursday, December 26, 2024)</title>
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[Federal Register Volume 89, Number 247 (Thursday, December 26, 2024)]
[Notices]
[Pages 105138-105140]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-30684]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101964; File No. SR-DTC-2024-015]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
DTC's New Issue Information Dissemination Service To Unwind a Prior
Rule Filing and Provide a More Accurate Description of the Service
December 18, 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 December 12, 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.
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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 proposed rule change will (i) correct DTC's rule filing record
by unwinding a prior rule filing (``2014 Filing'') \5\ regarding DTC's
New Issue Information Dissemination Service (``NIIDS'') and (ii) update
the description of NIIDS in the DTC Operational Arrangements (Necessary
for Securities to Become and Remain Eligible for DTC Service) (``OA'')
\6\ to more clearly describe NIIDS, as described in greater detail
below.\7\
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\5\ Securities Exchange Act Release No. 72763 (Aug. 5, 2014), 79
FR 46886 (Aug. 11, 2014) (SR-DTC-2014-08).
\6\ Available at www.dtcc.com/~/media/Files/Downloads/legal/
issue-eligibility/eligibility/operational-arrangements.pdf.
\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 <a href="http://www.dtcc.com/legal/rules-and-procedures">www.dtcc.com/legal/rules-and-procedures</a>.
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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 proposed rule change will (i) correct DTC's rule filing record
by unwinding the 2014 Filing regarding DTC's NIIDS and (ii) update the
description of NIIDS in the OA to more clearly describe NIIDS.
[[Page 105139]]
Background
NIIDS was established by DTC in 2008.\8\ It was built to improve
the process by which brokers comply with Municipal Securities Rule
Making Board (``MSRB'') standards for making available certain data
information (``NIIDS Data Elements'') pertaining to the reporting,
comparison, confirmation, and settlement of trades in newly issued
municipal securities (``New Muni Issues'').\9\ Through NIIDS,
underwriters or other authorized representatives (``Dissemination
Agents'') are able to distribute NIIDS Data Elements to data vendors or
other users of such information, as required by the MSRB.\10\
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\8\ Securities Exchange Act Release No. 57768 (May 2, 2008), 73
FR 26181 (May 8, 2008) (SR-DTC-2007-10).
\9\ NIIDS Data Elements are needed for trade reporting, trade
matching and to set up trade confirmation for certain municipal
securities.
\10\ MSRB Rule G-34(a)(ii)(C).
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DTC collects NIIDS Data Elements about New Muni Issues from
Dissemination Agents in electronic format through DTC's underwriting
system as part of DTC's New Muni Issue underwriting process. Those
NIIDS Data Elements are then disseminated to market participants that
subscribed to such information (``NIIDS Subscribers'').
2014 Filing
Prior to 2014, DTC was responsible for disseminating NIIDS Data
Elements to NIIDS Subscribers upon approval to do so by the
Dissemination Agent. The 2014 Filing was a rule change by DTC to
transfer the dissemination process from DTC to a non-clearing agency
affiliate (i.e., the ``NIIDS Disseminator'').\11\ The impetus for
moving the dissemination process was in anticipation of further
business opportunities for the NIIDS Disseminator. However, such
opportunities did not materialize, and the dissemination process was
never transferred from DTC to the NIIDS Disseminator. Because the
transfer never occurred, the OA was never updated to reflect the
proposed changes from the 2014 Filing.
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\11\ Securities Exchange Act Release No. 72763 (Aug. 5, 2014),
79 FR 46886 (Aug. 11, 2014) (SR-DTC-2014-08).
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Since the OA was never updated and because DTC will remain the
disseminator of NIIDS Data Elements, DTC is now proposing to correct
the record and unwind the 2014 Filing with this rule filing.
Updated NIIDS Description
In addition to unwinding the 2014 Filing, this proposed rule change
will delete the current NIIDS description in the OA and replace that
language with a more concise, clear, and accurate description of the
NIIDS dissemination process. The proposed language would not change the
way NIIDS works; rather, the new description would simply provide a
more thorough and precise explanation of NIIDS. Specifically, the
proposed rule language would (1) provide an improved introduction and
explanation of the purpose of NIIDS, how NIIDS is integrated into DTC's
underwriting system (i.e., UW SOURCE), and give a clearer overview of
NIIDS's role and its regulatory context; (2) explain the specific
process that the Dissemination Agent must follow to successfully
disseminate NIIDS Data Elements, outline the steps involved, and
emphasize, for clarity, that failure to enter the required data or
select the dissemination function would prevent the information from
being disseminated; (3) clarify the role and importance of NIIDS Data
Elements by defining them and distinguishing them from the DTC
eligibility process; (4) correct grammatical and technical errors
(e.g., the term ``New Issue Identification Dissemination System'' would
be replaced by the correct term ``New Issue Information Dissemination
Service''); and (5) provide an updated legal disclaimer, which
specifies that DTC functions solely as a conduit for NIIDS, disclaims
responsibility for validating the accuracy or completeness of NIIDS
Data Elements and limits liability for any faults, errors or damages
arising from the use of NIIDS. In order to provide a disclaimer that is
more precise, accurate and more aligned to DTC's current disclaimer
language, the updated disclaimer is broader, more detailed, and
explicitly addresses data faults, warranties and limits liability for
various damages, including the adequacy, quality, accuracy,
completeness, or timeliness of information made available through
NIIDS.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act requires that the rules of the
clearing agency be designed, inter alia, to promote the prompt and
accurate clearance and settlement of securities transactions.\12\ DTC
believes that the proposed rule change is consistent with the Section
17A(b)(3)(F) of the Act.
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
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As described above, the proposed rule change will (i) correct DTC's
filing record by unwinding the 2014 Filing, and (ii) remove the current
description of NIIDS in the OA and replace it with an update
description that more clearly and accurately describes the service,
including an updated and clearer liability disclaimer. By unwinding the
2014 Filing and updating and correcting the description of NIIDS in the
OA, the proposed rule change clarifies for Participants, NIIDS
Subscribers, and other interested parties in NIIDS how the service
works, which, in turn, better enables the timely and accurate reporting
of NIIDS Data Elements and their use in associated transactions.
Therefore, DTC believes that the proposed rule change would help
promote the prompt and accurate clearance and settlement of securities
transactions, consistent with the requirements of the Act, in
particular Section 17A(b)(3)(F) of the Act, cited above.
(B) Clearing Agency's Statement on Burden on Competition
DTC does not believe that the proposed rule change would have any
impact or impose any burden on competition because, as described above,
the proposed rule change simply corrects DTC's filing record with
respect to the dissemination of NIIDS Data Elements, and more clearly
describes NIIDS, without making any actual changes to the service.
(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 will be
publicly filed as an Exhibit 2 to this filing, as required by Form 19b-
4 and the General Instructions thereto.
Persons submitting written comments are cautioned that, according
to Section IV (Solicitation of Comments) of the Exhibit 1A in the
General Instructions to Form 19b-4, the Securities and Exchange
Commission (``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 <a href="http://www.sec.gov/regulatory-actions/how-to-submit-comments">www.sec.gov/regulatory-actions/how-to-submit-comments</a>. 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 <a href="/cdn-cgi/l/email-protection#6a1e180b0e03040d0b040e070b18010f1e192a190f09440d051c"><span class="__cf_email__" data-cfemail="dbafa9babfb2b5bcbab5bfb6baa9b0beafa89ba8beb8f5bcb4ad">[email protected]</span></a> or 202-551-5777.
[[Page 105140]]
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) \13\ of the Act and paragraph (f) \14\ 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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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#493b3c252c642a2624242c273d3a093a2c2a672e263f"><span class="__cf_email__" data-cfemail="2153544d440c424e4c4c444f5552615244420f464e57">[email protected]</span></a>. Please include
file number SR-DTC-2024-015 on the subject line.
Paper Comments
<bullet> 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-2024-015. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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
a.m. and 3 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 (<a href="http://www.dtcc.com/legal/sec-rule-filings">www.dtcc.com/legal/sec-rule-filings</a>). 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-2024-015 and should be submitted on or
before January 16, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-30684 Filed 12-23-24; 8:45 am]
BILLING CODE 8011-01-P
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