Notice2025-19069
Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Amend DTC Rule 18 (Waiver or Suspension of Rules and Procedures)
Primary source
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Published
September 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 46953-46955]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19069]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104096; File No. SR-DTC-2025-013]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Amend DTC
Rule 18 (Waiver or Suspension of Rules and Procedures)
September 26, 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 25, 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)(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 proposed rule change would amend Rule 18 (Waiver or Suspension
of Rules and Procedures) of the DTC Rules.\5\ DTC's two affiliate
clearing agencies, Fixed Income Clearing Corporation (``FICC'') and
National Securities Clearing Corporation (``NSCC,'' and together with
DTC and FICC, the ``Clearing Agencies'' or ``Clearing Agency'' when
referring to one of any of the three Clearing Agencies) \6\ will each
file with the Commission substantively similar proposals to amend their
corresponding rules: Rule 42 of the FICC Government Securities Division
(``GSD'') Rulebook (``GSD Rules''), and Rule 22 of the NSCC Rules &
Procedures (``NSCC Rules'') (collectively with DTC Rule 18, the
``Waiver Rules'').\7\ A substantially similar proposal to amend Rule 33
of the FICC Mortgage-Backed Securities Division (``MBSD'') Clearing
Rules (``MBSD Rules'') was already filed with the Commission and
implemented by FICC.\8\
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\5\ Each capitalized term not otherwise defined herein has its
respective meaning as set forth in the Rules, By-Laws and
Organization Certificate of DTC (the ``DTC Rules''), as applicable,
available at <a href="http://www.dtcc.com/legal/rules-and-procedures">http://www.dtcc.com/legal/rules-and-procedures</a>.
\6\ The Clearing Agencies are each a subsidiary of The
Depository Trust & Clearing Corporation (``DTCC''). DTCC operates on
a shared service model with respect to the Clearing Agencies. Most
corporate functions are established and managed on an enterprise-
wide basis pursuant to intercompany agreements under which it is
generally DTCC that provides relevant services to the Clearing
Agencies.
\7\ Each Waiver Rule is publicly available in the respective
rules of the applicable Clearing Agency at <a href="https://www.dtcc.com/legal/rules-and-procedures">https://www.dtcc.com/legal/rules-and-procedures</a>.
\8\ See Securities Exchange Act Release No. 103584 (July 30,
2025), 90 FR 36492 (Aug. 4, 2025) (SR-FICC-2025-016).
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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 Rule 18 (Waiver or Suspension
of Rules and Procedures) of the DTC Rules. The Clearing Agencies will
each file with the Commission substantively similar proposals to amend
their corresponding Waiver Rules. A substantially similar proposal to
amend MBSD Rule 33 was already filed with
[[Page 46954]]
the Commission and implemented by FICC.
Specifically, the proposed amendments to DTC Rule 18 would (i)
establish ``reasonable and appropriate'' as the new standard for when
an extension, waiver or suspension may occur; (ii) require action under
the rule to be in consideration of DTC's obligations as a clearing
agency; (iii) exclude the need for a written report where an extension
under the rule is for less than eight hours; (iv) be more clear and
concise about who may authorize action under the rule; and (v) make
technical, ministerial, and other conforming and clarifying changes.
(i) Background
DTC Rule 18 authorizes DTC, in general, to extend, waive, or
suspend a DTC Rule or Procedure. Under the current rule, any extension,
waiver, or suspension must be (A) necessary or expedient and (B)
requires a written report of such extension, waiver, or suspension
(other than an extension of time of less than one hour), stating the
pertinent facts, the identity of the Person or Persons who authorized
such extension, waiver or suspension and the reason such extension,
waiver or suspension was deemed necessary or expedient. The report must
then be promptly made and filed with DTC's corporate records and
available for inspection by any Participant or Pledgee during regular
business hours on Business Days.
(ii) Proposed Amendments to DTC Rule 18
The proposed changes would harmonize the language, purpose, and
governance of DTC Rule 18 with the equivalent Waiver Rule of MBSD Rule
33,\9\ and the similarly proposed changes to the Waiver Rules of GSD
Rule 42 \10\ and NSCC Rule 22.\11\ Specifically, the proposed
amendments to DTC Rule 18 would (i) establish ``reasonable and
appropriate'' as the new standard for when an extension, waiver or
suspension may occur; (ii) require action under the rule to be in
consideration of DTC's obligations as a clearing agency; (iii) exclude
the need for a written report where an extension under the rule is for
less than eight hours; (iv) be more clear and concise about who may
authorize action under the rule; and (v) make technical, ministerial,
and other conforming and clarifying changes.
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\9\ MBSD Rules, available at https://www.dtcc.com/~/media/Files/
Downloads/legal/rules/ficc_gov_rules.pdf.
\10\ GSD Rules, available at https://www.dtcc.com/~/media/Files/
Downloads/legal/rules/ficc_gov_rules.pdf.
\11\ NSCC Rules, available at https://dtcc.com/~/media/Files/
Downloads/legal/rules/nscc_rules.pdf.
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DTC proposes to eliminate the requirement that an extension,
waiver, or suspension authorized under DTC Rule 18 must be ``necessary
or expedient.'' Instead, the proposed changes establish ``reasonable
and appropriate'' as the applicable standard, which DTC believes is a
clearer and more relevant standard for the actions to be taken under
the rule. Moreover, DTC proposes to provide some general guidance as to
when the rule may need to be invoked: to prevent, correct, mitigate or
otherwise address an event or situation that, if left unaddressed,
could result in a failure to satisfy a requirement of the DTC Rules or
Procedures. Similarly, the proposed rule change clarifies that such
authority may not be used to circumvent DTC's regulatory obligations
provided under DTC Rule 38 (Market Disruption and Force Majeure) in the
event of a Market Disruption.
In determining whether to exercise the authority provided by the
proposed changes to DTC Rule 18, the proposed rule text would require
DTC to consider its obligation to facilitate the prompt and accurate
clearance and settlement of securities transactions; to safeguard
securities and funds which are in its custody or control; and, in
general, to protect investors and the public interest. Examples of the
types of actions that may be considered reasonable and appropriate
include, but are not limited to, temporarily suspending physical
securities processing; waiving applicable charges related to processing
or submission failures that result from operational constraints; or
reversing fees assessed in connection with erroneous activity resulting
from misunderstanding of established procedures. Note, though, any
extension, waiver or suspension under the proposed changes to DTC Rule
18 could not be a permanent action, nor would the rule permit
extension, waiver or suspension of any regulatory obligations of DTC.
DTC also proposes to update the existing written report requirement
so that it applies when an extension under the rule is for less than
eight hours, rather than the current one-hour requirement. The change
from one hour to eight hours not only harmonizes the timing provision
with the waiver requirements of the other Clearing Agencies' Waiver
Rules, noted above, but it also provides a more reasonable and
realistic period for DTC to identify and address an issue that, by its
abbreviated nature, should not necessitate the more formal process of
documentation via a written report.
Currently, DTC Rule 18 states that action under the rule can be
authorized by DTC's Board of Directors, the Chairman of the DTC Board,
the President or any Managing Director. To be clearer and more concise
about who can authorize action, particularly given changing Board and
executive titles, DTC proposes to modify the language to simply state
that action can be authorized by the Board of Directors or by any
Officer of the Corporation having a rank of Managing Director or
higher.
The proposed rule change would make technical, ministerial, and
other conforming and clarifying changes, including updating the title
of DTC Rule 18 to ``Extension, Waiver or Suspension of Rules and
Procedures'' and correcting missing and defined terms.
This proposed harmonization is important to help ensure that DTC,
NSCC and both FICC divisions can reasonably, appropriately, and
consistently manage situations that may apply across multiple
divisions, Clearing Agencies, or common members.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act requires that the rules of the
clearing agency be designed, inter alia, to assure the safeguarding of
securities and funds which are in the custody or control of the
clearing agency or for which it is responsible.\12\ DTC believes that
the proposed rule change is consistent with the Section 17A(b)(3)(F) of
the Act, as cited above.
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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 would (i) establish
``reasonable and appropriate'' as the new standard for when an
extension, waiver or suspension may occur; (ii) require action under
the rule to be in consideration of DTC's obligations as a clearing
agency; (iii) exclude the need for a written report where an extension
under the rule is for less than eight hours; (iv) be more clear and
concise about who may authorize action under the rule; and (v) make
technical, ministerial, and other conforming and clarifying changes.
The proposed rule change would help ensure that DTC is able to
respond reasonably, appropriately, and effectively to situations that
may require an extension, waiver, or suspension, of a DTC Rule or
Procedure. The proposed changes also enable DTC to respond to such
situations in the same way that GSD, NSCC, and MBSD can respond under
their respective Waiver Rules and
[[Page 46955]]
under the same governance structure. Specifically, replacing the
current ``necessary or expedient'' standard with a clearer and more
intuitive ``reasonable and appropriate'' standard would enhance
transparency and consistency of actions taken under the rule.
Increasing the threshold for requiring a written report from one hour
to eight hours would align DTC Rule 18 with the corresponding Waiver
Rules of GSD, NSCC, and MBSD, allowing for a more efficient handling of
short-term issues without undermining oversight. Clarifying who may
authorize action under the rule helps ensure that the individuals with
appropriate authority are clearly and efficiently identified, which
strengthens governance and accountability. Finally, the proposed
technical and confirming changes improve clarity and consistency within
the rule.
Therefore, by improving the function and clarity of DTC Rule 18,
DTC believes the proposed rule change would help to assure the
safeguarding of securities and funds which are in the custody or
control of DTC or for which it is responsible, 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 will have any
impact or impose any burden on competition because, as described above,
the proposed changes would not affect the rights and obligations of DTC
Participants. Rather, the proposed changes are limited to clarifying
the standard and conditions under which DTC may extend, waive, or
suspend the DTC Rules or Procedures, while also making technical and
ministerial edits. These proposed changes would not inhibit access to
DTC's services or disadvantage or favor any particular Participant in
relationship to another Participant. As such, DTC believes the proposed
rule change would not have any impact on competition.
(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, DTC will amend
this filing to publicly file such comments 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="https://www.sec.gov/regulatory-actions/how-to-submit-comments">https://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#24505645404d4a43454a404945564f415057645741470a434b52"><span class="__cf_email__" data-cfemail="4034322124292e27212e242d21322b253433003325236e272f36">[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
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; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) \13\ of the Act and
Rule 19b-4(f)(6) \14\ thereunder.
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\13\ 15 U.S.C 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
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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.
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-regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking</a>);
or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#7103041d145c121e1c1c141f0502310214125f161e07"><span class="__cf_email__" data-cfemail="ed9f988188c08e8280808883999ead9e888ec38a829b">[email protected]</span></a>. Please include
File Number SR-DTC-2025-013 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-2025-013. 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 (<a href="https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking</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-2025-013
and should be submitted on or before October 21, 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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-19069 Filed 9-29-25; 8:45 am]
BILLING CODE 8011-01-P
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