Notice2025-21397
Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the DTC Rules To Align With Exchange Act Rule 17ad-26
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Published
November 28, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 227 (Friday, November 28, 2025)</title>
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[Federal Register Volume 90, Number 227 (Friday, November 28, 2025)]
[Notices]
[Pages 54812-54814]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-21397]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104248; File No. SR-DTC-2025-016]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the DTC Rules To Align With Exchange Act Rule 17ad-26
November 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 November 21, 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 consists of certain changes to Rule 32(A)
(Wind-down of the Corporation) of the Rules of The Depository Trust
Company (``DTC'') \5\ to revise certain defined terms and make related
technical changes to align with Exchange Act Rule 17ad-26 \6\ (``SEC
Rule 17ad-26'' or ``Rule 17ad-26'') promulgated by the Commission.
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\5\ Terms not otherwise defined herein have the meaning set
forth in the DTC Rules, By-Laws and Organization Certificate (the
``Rules''), available at <a href="http://www.dtcc.com/legal/rules-and-procedures">www.dtcc.com/legal/rules-and-procedures</a>.
\6\ Covered Clearing Agency Resilience and Recovery and Orderly
Wind-down Plans, Exchange Act Release No. 101446 (Oct. 25, 2024), 89
FR 91000 (Nov.18, 2024) (S7-10-23).
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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 Commission promulgated Rule 17ad-26,\7\ which requires that
plans for the recovery and orderly wind-down of a covered clearing
agency, such as DTC, include certain specific elements. The Commission
recently approved DTC's proposed rule change to reflect the
requirements of Rule 17ad-26 in the DTC Recovery & Wind-down Plan (the
``Plan'' or ``RWP'').\8\ For purposes of implementing certain aspects
of the RWP, DTC is proposing to revise certain defined terms and make
certain technical changes to DTC Rule 32(A) (Wind-down of the
Corporation),\9\ in order to align with how they are referred to in the
Plan and to conform with the definitions set forth in Rule 17ad-26.\10\
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\7\ Id.
\8\ See Securities Exchange Act Release No.103221 (June 10,
2025), 90 FR 25414 (June 16, 2025) (SR-DTC-2025-007).
\9\ DTC Rule 32(A) (Wind-down of the Corporation), supra note 5.
\10\ Supra note 6.
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A. Proposal To Modify or Add Certain Defined Terms in DTC Rule 32(A)
(Wind-Down of the Corporation)
(i) Proposal To Replace the Term ``Critical Services'' With ``Core
Services''
Consistent with SEC Rule 17ad-26(a)(1),\11\ DTC is proposing to
modify DTC Rule 32(A) to replace all references to ``Critical
Services'' with ``Core Services.'' Use of the descriptive term ``Core''
rather than ``Critical'' would not affect DTC's identification,
classification or description of these services in the RWP. Similarly,
the proposed rule filing would replace all references to ``Non-Critical
Services'' with ``Non-Core Services.''
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\11\ Id. In the Adopting Release covering Rule 17ad-26, it was
noted that ``The Commission is modifying the final rule to refer to
``core payment, clearance, and settlement services'' rather than
``critical payment, clearance, and settlement services''
(hereinafter, referred to as ``core services'') to improve clarity
and consistency with terminology in other rules, such as Rule 17ad-
25(i), 242 which concerns the governance of ``service providers for
core services.'' Furthermore, the use of ``core'' as opposed to
``critical'' helps distinguish a CCA's obligations under Rule 17ad-
26 from those under 17 CFR 242.1000 through 242.1007 (``Regulation
SCI''), which addresses, in the context of clearing agencies subject
to the rule, ``critical systems'' that support clearance and
settlement. The Commission further noted that ``Use of the
descriptive term ``core'' rather than ``critical'' does not affect
the Commission's guidance stated in the RWP Proposing Release on
identifying those services.''
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(ii) Proposal To Modify the Defined Terms ``Recovery Plan'' and ``Wind-
Down Plan''
For purposes of consistency with SEC Rule 17ad-26(b),\12\ DTC is
proposing to capitalize references to the terms ``Recovery'' and
``Orderly Wind-down,'' and add an associated reference to the
definition of these terms as set forth under SEC Rule 17ad-26(b) \13\
within the definitions of ``Recovery Plan'' and ``Wind-down Plan'' in
DTC Rule 32(A).
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\12\ Id.
\13\ Id. Pursuant to SEC Rule 17ad-26(b), ``Recovery'' means the
actions of a covered clearing agency, consistent with its rules,
procedures, and other ex ante contractual arrangements, to address
any uncovered loss, liquidity shortfall, or capital inadequacy,
whether arising from participant default or other causes (such as
business, operational, or other structural weaknesses), including
actions to replenish any depleted prefunded financial resources and
liquidity arrangements, as necessary to maintain the covered
clearing agency's viability as a going concern and to continue its
provision of core services, as identified by the covered clearing
agency pursuant to paragraph (a)(1) of this section. The term
``Orderly wind-down'' means the actions of a covered clearing agency
to effect the permanent cessation, sale, or transfer of one or more
of its core services, as identified by the covered clearing agency
pursuant to paragraph (a)(1) of this section, in a manner that would
not increase the risk of significant liquidity, credit, or
operational problems spreading among financial institutions or
markets and thereby threaten the stability of the U.S. financial
system.''
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B. Implementation of the Proposal
As noted above, the principal purpose of the proposed rule change
is to revise certain defined terms and make related technical changes
to DTC Rule 32(A) (Wind-down of the Corporation) to align with Rule
17ad-26.\14\ This would help to facilitate implementation of certain
aspects of the RWP in a manner consistent with SEC Rule 17ad-26 and the
amended RWP recently approved by the Commission.\15\ Based on the
compliance date of SEC Rule 17ad-26 that was established by the
Commission,
[[Page 54813]]
the proposed rule change would become operative on December 15,
2025.\16\
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\14\ Id.
\15\ Supra note 8.
\16\ Supra note 6. As set forth in the Adopting Release, ``[. .
.] (2) the proposed rule changes and Advance Notices must be
effective by December 15, 2025. These compliance dates provide
sufficient time for CCAs to consider changes to their rules,
policies, and procedures necessary to ensure consistency with the
rules amended and adopted in this release [. . .].''
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2. Statutory Basis
(B) Clearing Agency's Statement on Burden on Competition
DTC believes that the proposal is consistent with the requirements
of the Act and the rules and regulations thereunder applicable to a
registered clearing agency. In particular, DTC believes that the
proposed rule change is consistent with Section 17A(b)(3)(F) of the
Act,\17\ Rule 17ad-22(e)(3)(ii) under the Act,\18\ and Rule 17ad-26
under the Act \19\ for the reasons described below.
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\17\ 15 U.S.C. 78q-1(b)(3)(F).
\18\ See 17 CFR 240.17ad-22(e)(3)(ii). DTC is a ``covered
clearing agency'' as defined in Rule 17ad-22(a)(5) under the Act and
must comply with paragraph (e) of Rule 17ad-22. In 2012, DTC was
designated a Systemically Important Financial Market Utility by the
Financial Stability Oversight Council.
\19\ Supra note 6.
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Section 17A(b)(3)(F) of the Act requires, in part, that the DTC
Rules be designed to promote the prompt and accurate clearance and
settlement of securities transactions.\20\ The proposed rule change
would help to ensure that the Rules are accurate and clear to
participants in the event that the RWP is ever needed to be implemented
by DTC. When participants better understand their rights and
obligations regarding the Rules, such participants are more likely to
act in accordance with the Rules, which DTC believes would promote the
prompt and accurate clearance and settlement of securities
transactions. As such, DTC believes that the proposed changes would be
consistent with Section 17A(b)(3)(F) of the Act.\21\ Further, by
providing clarity on the Rules covering a DTC recovery and orderly
wind-down, the proposed rule change would help ensure the continuity of
DTC's core functions for the markets served by DTC, and thereby promote
the prompt and accurate clearance and settlement of securities
transactions.
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\20\ 15 U.S.C. 78q-1(b)(3)(F).
\21\ Id.
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Rule 17ad-22(e)(3)(ii) under the Act \22\ requires DTC to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to maintain a sound risk management
framework for comprehensively managing legal, credit, liquidity,
operational, general business, investment, custody, and other risks
that arise in or are borne by the covered clearing agency, which
includes plans for the recovery and orderly wind-down of the covered
clearing agency necessitated by credit losses, liquidity shortfalls,
losses from general business risk, or any other losses. By ensuring
that defined terms in the relevant Rules are consistent with how such
terms are defined under Rule 17ad-26 and how they are referred to in
the Plan, DTC believes that the proposed rule change is designed to
support the maintenance of the and, as such, meets the requirements of
Rule 17ad-22(e)(3)(ii) under the Act. Therefore, the proposed changes
would help DTC to maintain the Plan in a way that continues to be
consistent with the requirements of Rule 17ad-22(e)(3)(ii).\23\
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\22\ Supra note 18.
\23\ Id.
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In addition to the requirements covering elements to be included in
the recovery and wind-down plans of covered clearing agencies, SEC Rule
17ad-26 includes certain associated new defined terms.\24\ The proposed
rule change would revise certain defined terms and make related
technical changes to the applicable Rules to align with SEC Rule 17ad-
26. By doing so, DTC believes that the proposed rule change would help
DTC maintain the Plan and the Rules in a way that is consistent with
Rule 17ad-26.\25\
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\24\ Supra note 6.
\25\ Id.
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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#186c6a797c71767f79767c75796a737d6c6b586b7d7b367f776e"><span class="__cf_email__" data-cfemail="e6929487828f88818788828b87948d839295a6958385c8818990">[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) \26\ of the Act and paragraph (f) of Rule 19b-4
thereunder.\27\ 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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\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 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#d8aaadb4bdf5bbb7b5b5bdb6acab98abbdbbf6bfb7ae"><span class="__cf_email__" data-cfemail="186a6d747d357b7775757d766c6b586b7d7b367f776e">[email protected]</span></a>. Please include
file number SR-DTC-2025-016 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-2025-016. 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 (https://
dtcc.com/legal/
[[Page 54814]]
sec-rule-filings.aspx). 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-2025-016 and should be submitted on or before December 19, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-21397 Filed 11-26-25; 8:45 am]
BILLING CODE 8011-01-P
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