Notice2025-18790
Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Decommission the Initial Public Offering Tracking System
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
September 29, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 186 (Monday, September 29, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 186 (Monday, September 29, 2025)]
[Notices]
[Pages 46679-46682]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18790]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104039; File No. SR-DTC-2025-014]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Decommission the Initial Public Offering Tracking System
September 24, 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 September 19, 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change would (i) amend the DTC Settlement Guide,
[[Page 46680]]
Underwriting Guide, and the OA,\5\ to decommission the Initial Public
Offering Tracking System (``IPO Tracking System''),\6\ an optional
service used to track IPO share movement during the post-offering
stabilization period, and, consequently, (ii) remove from the Guide to
the DTC Fee Schedule \7\ (``Fee Guide'') the related fee (``IPO Tracked
Issue'') associated with the IPO Tracking System.
---------------------------------------------------------------------------
\5\ Each term not otherwise defined herein has its respective
meaning as set forth in the Rules, By-Laws and Organization
Certificate of DTC (``Rules''), the Settlement Service Guide
(``Settlement Guide''), the Underwriting Service Guide
(``Underwriting Guide''), and the Operational Arrangements
(Necessary for Securities to Become and Remain Eligible for DTC
Services) (``OA''), available at <a href="http://www.dtcc.com/legal/rules-and-procedures">www.dtcc.com/legal/rules-and-procedures</a>.
\6\ Securities Exchange Act Release No. 57768 (May 2, 2008), 73
FR 26181 (May 8, 2008) (SR-DTC-2007-10).
\7\ <a href="http://www.dtcc.com/-/media/Files/Downloads/legal/fee-guides/DTC-Fee-Schedule.pdf">www.dtcc.com/-/media/Files/Downloads/legal/fee-guides/DTC-Fee-Schedule.pdf</a>.
---------------------------------------------------------------------------
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 (i) amend the DTC Settlement Guide,
Underwriting Guide, and the OA, to decommission the IPO Tracking
System, an optional service used to track IPO share movement during the
post-offering stabilization period, and, consequently, (ii) remove from
the Fee Guide the IPO Tracked Issue associated with the IPO Tracking
System.
Background
DTC continually evaluates the efficiency and effectiveness of the
services it provides. As part of these evaluations, and in furtherance
of ongoing modernization efforts, DTC seeks to streamline and simplify
services and processes, including through the decommissioning of
underutilized services. DTC proposes to decommission the IPO Tracking
System due to (i) changes in the market structure and the availability
of external tracking systems, and (ii) the operational complexity
required to maintain the service, especially given its limited usage.
The IPO Tracking System was established by DTC to support lead
underwriters and syndicate managers in monitoring the book-entry
movement of IPO shares during the post-offering stabilization period.
The service was designed to enhance transparency by generating daily
reports identifying Participant level deliveries and allocations of new
issue securities for a limited tracking window following an offering.
The IPO Tracking System requires the lead underwriter to initiate
tracking eligibility by submitting instructions through DTC's
underwriting portal (``UW SOURCE'') two business days prior to the
scheduled closing date. Once activated, the IPO Tracking System
provides automated reports, including data files made available to lead
underwriters during the post-offering stabilization period.
Over time, usage of the IPO Tracking System has declined
significantly due to changes in market structure, the availability of
external tracking systems, and reduced reliance by underwriters on
DTC's IPO Tracking System data. In turn, the operational effort
required to maintain the IPO Tracking System has become
disproportionate to the limited number of offerings utilizing the
service. As such, DTC has decided to decommission the IPO Tracking
System.
Proposed Changes
To effectuate the decommissioning of the IPO Tracking System, DTC
proposes to make the below described rule changes.
Settlement Guide
The proposed changes would remove from the Settlement Guide all
provisions relating to the IPO Tracking System, including deleting (i)
the term ``IPO'' under the ``memo segregation'' definition in the
``Important Terms'' table, (ii) entry number nine under ``Account
Options,'' and subsequent renumbering, (iii) the entire text of the
section titled ``Initial Public Offering (IPO) Tracking System,'' which
describes the goals of the IPO Tracking System and contact
information,\8\ (iv) a reference to the IPO Tracking System in the
section titled ``Recycle Processing'' relating to the preliminary
processing of delivery transactions prior to the updating of DTC
accounts,\9\ (v) Pend Hold references to IPO deliveries and the removal
of pend queue logic for IPO positions; and (vi) the note under ``How
PTA Processing Works'' stating that IPO transactions are not subject to
PTA procedures.
---------------------------------------------------------------------------
\8\ See Settlement Guide, supra note 5 at 38.
\9\ Id. at 51.
---------------------------------------------------------------------------
Underwriting Guide
Similarly, DTC proposes to amend the Underwriting Guide to remove
all references in the ``IPO Tracking System'' \10\ section of the
Underwriting Guide, which includes ``About the Product,'' ``How the
Product Works,'' ``Associated Participant Terminal System (PTS)
Functions,'' and the ``IPO Tracking Contact Number.'' These subsections
collectively describe the IPO Tracking System, including setup
procedures, control account activity, and report generation during the
stabilization period. In addition, DTC proposes to remove defined terms
related to IPOs in the ``Overview'' section of the Underwriting Guide,
including the definitions of ``initial public offering (IPO)'' and
``flipping.''
---------------------------------------------------------------------------
\10\ See Underwriting Guide, supra note 5 at 9-10.
---------------------------------------------------------------------------
Fee Guide
DTC proposes to eliminate the IPO Tracked Issue fee of $5,000 from
the ``Other Underwriting Services'' section of the Fee Guide.\11\ This
fee currently applies on a per-issue basis to IPO Tracking activity and
will no longer be applicable as of the effective Decommission Date, as
defined below in the Implementation section.
---------------------------------------------------------------------------
\11\ See Fee Guide, supra note 7 at 28.
---------------------------------------------------------------------------
OA
DTC proposes to update the OA to remove the eligibility
requirements for IPO Tracking currently set forth in Exhibit B
(Underwriting Standard Time Frames).\12\ Specifically, DTC would
eliminate the row labeled ``For IPO Tracked issues'' including the
``Time Frame'' requirement that the lead underwriter indicate inclusion
in the IPO Tracking System via UW SOURCE, no later than 3:00 p.m. ET,
two business days prior to the Closing Date.
---------------------------------------------------------------------------
\12\ See OA, supra note 5 at 88.
---------------------------------------------------------------------------
Implementation
The final IPO issue eligible for tracking via the IPO Tracking
System will be for tracking instructions submitted to DTC on or before
October 2, 2025, after which DTC will update its rules, as described
above, to remove references to the IPO Tracking System. Tracking for
issues requested on or before October 2, 2025 will be tracked according
to the period selected by the Participant (i.e., 30, 60, or 90 days),
after which the IPO Tracking System will be
[[Page 46681]]
fully decommissioned, but no later than December 31, 2025,
(``Decommission Date'').
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.\13\ DTC
believes that the proposed rule change is consistent with the Section
17A(b)(3)(F) of the Act, as cited above.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
As described above, the proposed rule change would (i) amend the
Settlement Guide, Underwriting Guide and the OA to decommission the IPO
Tracking system, an optional, underused service used to track IPO share
movement during the post-offering stabilization period and,
consequently, (ii) remove from Fee Guide the related fee for IPO
Tracked Issue. Eliminating the IPO Tracking System will streamline
DTC's service offerings by retiring an underutilized service allowing
DTC to allocate operational resources more efficiently and ensure DTC's
service offerings remain aligned with the current market usage and
Participant needs. By allocating resources more efficiently and keeping
aligned to Participant needs, DTC will be better positioned and able to
focus on its core mission--clearance and settlement. 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.
Rule 17ad-22(e)(21) \14\ promulgated under the Act requires, inter
alia, that DTC, a covered clearing agency, establish, implement,
maintain and enforce written policies and procedures reasonably
designed to, as applicable, be efficient and effective in meeting the
requirements of its Participants and the markets it serves. As
described above, the proposed rule change would support DTC's efforts
to improve operational efficiency by decommissioning a service that is
underutilized and no longer aligned with Participant demand. In this
regard, DTC believes that the proposed rule change would enable DTC to
streamline its services, reduce operational complexity, and more
effectively allocate resources towards core clearance and settlement
functions that deliver greater utility to Participants. Accordingly,
DTC believes that the proposed rule change would help promote
efficiency and effectiveness in a manner consistent with Rule 17ad-
22(e)(21).
---------------------------------------------------------------------------
\14\ 17 CFR 240.17ad-22(e)(21).
---------------------------------------------------------------------------
(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 decommissions an optional service that
has experienced limited subscription and declining usage over time. DTC
has performed direct outreach to Participants that do use the IPO
Tracking System and announced its plans to decommission the service
through Important Notice. There were no objections or concerns raised
by Participants. Moreover, the IPO Tracking System is not essential to
DTC's core clearance and settlement functions, its retirement would not
impair any Participant's access to any other DTC services, and such
tracking is available via external tracking systems. Therefore, DTC
believes that the decommissioning of the IPO Tracking System would not
favor or disadvantage any Participant.
(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 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#6014120104090e07010e040d01120b051413201305034e070f16"><span class="__cf_email__" data-cfemail="62161003060b0c05030c060f031009071611221107014c050d14">[email protected]</span></a> or 202-551-5777.
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) \15\ of the Act and paragraph (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.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
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#bac8cfd6df97d9d5d7d7dfd4cec9fac9dfd994ddd5cc"><span class="__cf_email__" data-cfemail="a5d7d0c9c088c6cac8c8c0cbd1d6e5d6c0c68bc2cad3">[email protected]</span></a>. Please include
file number SR-DTC-2025-014 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-2025-014. 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 filing 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-2025-014 and
[[Page 46682]]
should be submitted on or before October 20, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18790 Filed 9-26-25; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 29, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.