Notice2025-01547
Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend and Restate the Second Amended and Restated Netting Contract and Limited Cross-Guaranty Between NSCC and DTC
Primary source
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Published
January 23, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 14 (Thursday, January 23, 2025)</title>
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[Federal Register Volume 90, Number 14 (Thursday, January 23, 2025)]
[Notices]
[Pages 8080-8081]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-01547]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102218; File No. SR-DTC-2025-001]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend and Restate the Second Amended and Restated Netting Contract
and Limited Cross-Guaranty Between NSCC and DTC
January 16, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on January 2, 2025, The Depository Trust Company (``DTC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Item I below, which Item has been
substantially prepared by the clearing agency. DTC filed the proposed
rule change pursuant to Section 19(b)(3)(A) of the Exchange Act \3\ and
Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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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)(6).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The purpose of this proposed rule change \5\ is to amend and
restate the Second Amended and Restated Netting Contract and Limited
Cross-Guaranty, dated as of October 1, 2002, between NSCC and DTC (the
``Cross-Guaranty Agreement'').\6\ As part of the proposed amendment and
restatement of the Cross-Guaranty Agreement, NSCC and DTC (each, a
``Clearing Agency,'' and, together, the ``Clearing Agencies'') propose
to enter into a Third Amended and Restated Netting Contract and Limited
Cross-Guaranty. The proposed changes would amend and restate the Cross-
Guaranty Agreement to (i) revise the description of the Clearing
Agencies' cross-endorsement procedures to better reflect current
practices of the Clearing Agencies, (ii) simplify and consolidate the
liquidity and guaranty obligations of the Clearing Agencies under the
current Cross-Guaranty Agreement into a single guaranty obligation of
each Clearing Agency, (iii) provide for the netting of guaranty
obligations between the Clearing Agencies' in certain instances, (iv)
provide for more up-to-date valuations of securities under the Cross-
Guaranty Agreement, (v) provide for the Clearing Agency receiving
securities in connection with the performance of the other Clearing
Agency's guaranty obligation the ability to select the particular
securities it receives, (vi) enhance the information sharing between
the Clearing Agencies under the Cross-Guaranty Agreement, and (vii)
make appropriate conforming and clarifying changes to the Cross-
Guaranty Agreement.
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\5\ Capitalized terms not defined herein are defined in the
Rules, By-Laws and Organization Certificate of DTC (``DTC Rules'')
or the National Securities Clearing Corporation (``NSCC'') Rules &
Procedures (``NSCC Rules''), available at <a href="https://www.dtcc.com/legal/rules-and-procedures">https://www.dtcc.com/legal/rules-and-procedures</a>, or the Second Amended and Restated
Netting Contract and Limited Cross-Guaranty, dated as of October 1,
2002, between NSCC and DTC, as applicable.
\6\ The Cross-Guaranty Agreement (i) is a Clearing Agency
Agreement as defined in the DTC Rules (DTC Rule 1, Definitions;
Governing Law, supra note 5) and is subject to, inter alia, Rule
9(E) of the DTC Rules (DTC Rule 9(E), Clearing Agency Agreements,
supra note 5), and (ii) is a Clearing Agency Cross-Guaranty
Agreement as defined in the NSCC Rules (NSCC Rule 1, Definitions and
Descriptions, supra note 5) and is subject to, inter alia, Rule 25
of the NSCC Rules (NSCC Rule 25, Cross-Guaranty Obligation, supra
note 5).
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The proposed rule change, including the Clearing Agency's statement
of the purpose of, and statutory basis for, the proposed rule change,
is available on the Clearing Agency's website at <a href="https://www.dtcc.com/legal/sec-rule-filings">https://www.dtcc.com/legal/sec-rule-filings</a> and on the Commission's website at <a href="https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking/dtc?file_number=SR-DTC-2025-001">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking/dtc?file_number=SR-DTC-2025-001</a>.
II. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Clearing Agency has filed the proposed rule change pursuant to
Section 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) \8\ thereunder.
Because the foregoing proposed rule change does not: (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; or (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
[[Page 8081]]
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\ thereunder.
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\7\ 15 U.S.C. 78(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Clearing Agency to give the Commission written notice
of its intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Clearing Agency has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Clearing Agency
has asked the Commission to waive the 30-day operative delay so that
the proposed rule change may become operative immediately upon filing.
The Commission believes that waving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission designates the proposed rule change to be
operative upon filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
III. 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.\14\ Comments may be submitted
electronically by using the Commission's internet comment form (<a href="https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking/national-securities-exchanges?file_number=SR-DTC-2025-001">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking/national-securities-exchanges?file_number=SR-DTC-2025-001</a>) or by
sending an email to <a href="/cdn-cgi/l/email-protection#d1a3a4bdb4fcb2bebcbcb4bfa5a291a2b4b2ffb6bea7"><span class="__cf_email__" data-cfemail="fd8f889198d09e9290909893898ebd8e989ed39a928b">[email protected]</span></a>. Please include file number
SR-DTC-2025-001 on the subject line. Alternatively, paper comments may
be sent to Secretary, Securities and Exchange Commission, 100 F Street
NE, Washington, DC 20549-1090. All submissions should refer to file
number SR-DTC-2025-001. 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-regulations/self-regulatory-organization-rulemaking/national-securities-exchanges?file_number=SR-DTC-2025-001">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking/national-securities-exchanges?file_number=SR-DTC-2025-001</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-2025-001 and should be
submitted on or before February 13, 2025.
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\14\ 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 SRO.
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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-01547 Filed 1-22-25; 8:45 am]
BILLING CODE 8011-01-P
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