Notice2025-13736
Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the DTC Settlement Service Guide Relating to Wire Instructions
Primary source
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Published
July 22, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 138 (Tuesday, July 22, 2025)</title>
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[Federal Register Volume 90, Number 138 (Tuesday, July 22, 2025)]
[Notices]
[Pages 34550-34552]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13736]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103495; File No. SR-DTC-2025-011]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the DTC Settlement Service Guide Relating to Wire Instructions
July 17, 2025.
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 July 11, 2025, 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 would amend the DTC Settlement Service
Guide (``Settlement Guide'') \5\ to update the messaging format
instructions that are used for DTC settlement payments, Participants
Fund contributions and Settlement Progress Payments (``SPPs'').\6\ The
current instructions are specific to the Fedwire Application Interface
Manual (``FAIM'') format \7\ used by the Federal Reserve. However, on
July 14, 2025, the Federal Reserve will retire FAIM and switch to the
ISO 20022 \8\ message format.\9\ As such, DTC must also switch and, in
turn, update such instructions in the Settlement Guide.\10\
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\5\ Available at <a href="http://www.dtcc.com/-/media/Files/Downloads/legal/service-guides/Settlement.pdf">www.dtcc.com/-/media/Files/Downloads/legal/service-guides/Settlement.pdf</a>. The Settlement Guide is a Procedure
of DTC. Pursuant to the Rules, the term ``Procedures'' means the
Procedures, service guides, and regulations of DTC adopted pursuant
to Rule 27 (Procedures), as amended from time to time. Rule 1
(Definitions; Governing Law), Section 1, infra note 10. Procedures
are binding on DTC and each Participant in the same manner that they
are bound by the Rules. Rule 27, infra note 10.
\6\ SPPs are funds that may be wired to DTC to increase a
Participant's Collateral Value for its Collateral Monitor and reduce
a Participant's Net Debit Balance.
\7\ The FAIM format is the proprietary message format
historically used by the Federal Reserve Banks for Fedwire.
\8\ ISO refers to the International Organization for
Standardization which is a network of national standards bodies that
develop international standards. ISO publishes standards for a broad
range of industries.
\9\ Fedwire[supreg] Funds Service ISO[supreg] 20022
Implementation Center, available at <a href="http://www.frbservices.org/resources/financial-services/wires/iso-20022-implementation-center?utm_source=home-051425&utm_medium=banner&utm_campaign=iso">www.frbservices.org/resources/financial-services/wires/iso-20022-implementation-center?utm_source=home-051425&utm_medium=banner&utm_campaign=iso</a>.
\10\ Terms not defined herein are defined in 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 would amend the Settlement Guide to update
the messaging format instructions that are used for DTC settlement
payments, Participants Fund contributions and SPPs. The current
instructions are specific to the FAIM format used by the Federal
Reserve. However, on July 14, 2025, the Federal Reserve will retire
FAIM and switch to the ISO 20022 message format. As such, DTC must also
switch and, in turn, update such instructions in the Settlement Guide.
Background
DTC requires Settling Banks and Participants to make certain
payments via the Fedwire Funds Service (``Fedwire''). These payments
include (i) end-of-day balances of Settling Banks when traditional
methods for end-of-day settlement using the National Settlement Service
(``NSS'') are not
[[Page 34551]]
feasible,\11\ (ii) initial or voluntary deposits to the DTC
Participants Fund, and (iii) submission of SPPs by Participants.
Currently, the Settlement Guide specifies that these payments should be
made via Fedwire and provides FAIM-based wire instructions for each
case.
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\11\ DTC utilizes NSS, a payment system operated by the Federal
Reserve Banks, to effect end-of-day net money settlement. Settlement
Guide, supra note 5 at 19-20.
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With the migration from FAIM to ISO 20022, the FAIM-based wire
instructions in the Settlement Guide must change. However, to provide
greater flexibility in the event of future changes, DTC proposes to
remove specific formatting details related to wire instructions from
the Settlement Guide and instead publish such details separately.
DTC believes publishing formatting details for wire instructions
separately is appropriate because wire instruction standards are not
controlled by DTC but rather are standards set by the Federal Reserve.
Therefore, maintaining the detailed formatting instructions outside of
the Settlement Guide will allow for real-time updates, either as a
result of regulatory changes (e.g., the current switch by the Federal
Reserve from FAIM to ISO 20022) or technical changes to DTC specific
information (e.g., address, account numbers, etc.).
Proposed Rule Changes
Settlement Payments
If NSS is unavailable, or if a Settling Bank is otherwise unable to
satisfy a settlement debit position via NSS, DTC requires the Settling
Bank to wire the amount due to DTC's account at the Federal Reserve via
Fedwire. The Settlement Guide under the section titled ``Settlement
Payment for Net-Net Debit Balances'' provides FAIM-based guidelines on
how to complete the wire.
Under the proposed rule change, DTC would remove the outdated wire
instruction information and, instead, include a statement that the
Settling Bank should wire funds in accordance with guidance updated and
published by DTC from time to time.
Initial Participants Fund Deposit or a Voluntary Deposit
The text of the Settlement Guide currently contains FAIM-based wire
instructions for new Participants to make an initial deposit to the
Participants Fund or make a voluntary deposit.
Pursuant to the proposed rule change, DTC would remove the outdated
wire instruction information. DTC would maintain an existing statement
that funds should conform to Fedwire standards, and add a statement
that the Participant should prepare and submit a wire instruction in
accordance with guidance updated and published by DTC from time to
time.
SPPs
SPPs are funds wired by a Participant to DTC to increase the amount
of collateral the Participant has available to support the completion
of transactions at DTC. FAIM-based wire instructions on submitting an
SPP are included in a table in the Settlement Guide, under a section
entitled ``Submitting an SPP.''
Pursuant to the proposed rule change, DTC would delete the table,
but would retain an existing statement that SPP instructions should
conform to the Fedwire formatting standards. DTC would add a statement
to the effect that the Participant should prepare and submit a wire
instruction in accordance with guidance updated and published by DTC
from time to time.
Implementation Timeframe
The proposed rule change will be implemented on July 14, 2025.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act, requires, that the Rules be
designed to, among other things, promote the prompt and accurate
clearance and settlement of securities transactions.\12\ DTC believes
that the proposed changes to remove wire instruction information from
the Settlement Guide, as described above, would promote the prompt and
accurate clearance and settlement of securities transactions by DTC.
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
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As described above, wire instruction requirements are not standards
controlled by DTC but rather are controlled by the Federal Reserve.
Maintaining wire instruction guidance outside of the Settlement Guide
would allow for real-time updates to wire instruction guidance either
as a result of regulatory changes or changes to DTC specific
information. This approach would help ensure that DTC may react more
timely to update and publish wire instruction guidance for Participants
relating to payments that support their settlement activity. As such,
DTC believes the proposed rule changes are consistent with Section
17A(b)(3)(F) of the Act.\13\
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\13\ Id.
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(B) Clearing Agency's Statement on Burden on Competition
DTC does not believe the proposed rule changes to remove the wire
instructions from the Settlement Guide would impose a burden on
competition.\14\ As described above, the proposed changes are designed
to enable DTC to respond more timely to changes in wire instruction
formats and guidance, either as a result of regulatory changes or
changes to DTC's information. These proposed changes would not inhibit
access to DTC's services or disadvantage or favor any particular
Participant in relationship to another Participant. Accordingly, DTC
believes that these proposed changes would not impose any burden or
have any impact on competition.
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\14\ 15 U.S.C. 78q-1(b)(3)(I).
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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 will 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 <a href="http://www.sec.gov/rules-regulations/how-submit-comment">www.sec.gov/rules-regulations/how-submit-comment</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#4e3a3c2f2a2720292f202a232f3c252b3a3d0e3d2b2d60292138"><span class="__cf_email__" data-cfemail="d1a5a3b0b5b8bfb6b0bfb5bcb0a3bab4a5a291a2b4b2ffb6bea7">[email protected]</span></a> or 202-551-5777.
DTC reserves the right not to 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) \15\ of the Act and paragraph
[[Page 34552]]
(f) of Rule 19b-4 thereunder.\16\ 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.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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="http://www.sec.gov/rules/sro.shtml">www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5e2c2b323b733d3133333b302a2d1e2d3b3d70393128"><span class="__cf_email__" data-cfemail="2b595e474e06484446464e455f586b584e48054c445d">[email protected]</span></a>. Please include
file number SR-DTC-2025-011 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-2025-011. 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="https://dtcc.com/legal/sec-rule-filings.aspx">https://dtcc.com/legal/sec-rule-filings.aspx</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-2025-011 and should be submitted on
or before August 12, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-13736 Filed 7-21-25; 8:45 am]
BILLING CODE 8011-01-P
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