81 FR 37232 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change Pursuant to Which It Would Impose Deposit Chills and Global Locks and Provide Fair Procedures to Issuers
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 111 (June 9, 2016)
Federal Register Volume 81, Issue 111 (June 9, 2016)
| Page Range | 37232-37236 | |
| FR Document | 2016-13614 |
[Federal Register Volume 81, Number 111 (Thursday, June 9, 2016)] [Notices] [Pages 37232-37236] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-13614] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77991; File No. SR-DTC-2016-003] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change Pursuant to Which It Would Impose Deposit Chills and Global Locks and Provide Fair Procedures to Issuers June 3, 2016. 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 May 27, 2016, 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 DTC. DTC filed the proposed rule change pursuant to Section 19(b)(2) \3\ of the Act thereunder. 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)(2). --------------------------------------------------------------------------- I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change consists of amendments to the Rules, By- Laws and Organization Certificate of DTC (the ``Rules'') in order to add a Rule which establishes: (i) The circumstances under which DTC would impose and release a restriction on Deposits of an Eligible Security (a ``Deposit Chill'') or on book-entry services for an Eligible Security (a ``Global Lock''); and (ii) the fair procedures for notice and an opportunity for the issuer of the Eligible Security (the ``Issuer'') to challenge the Deposit Chill or Global Lock (each, a ``Restriction''), as described below.\4\ --------------------------------------------------------------------------- \4\ Each capitalized term not otherwise defined herein has its respective meaning as set forth in the Rules, available at http://www.dtcc.com/legal/rules-and-procedures.aspx. --------------------------------------------------------------------------- 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 proposal would add new Rule 33 (Deposit Chills and Global Locks) to establish: (i) The circumstances under which DTC would impose and release a Deposit Chill or a Global Lock; and (ii) the fair procedures for notice and an opportunity for the Issuer to challenge the Restriction, as described below. (i) Background A. DTC DTC is the nation's central securities depository, registered as a clearing agency under Section 17A of the Act.\5\ DTC's deposit and book-entry transfer services help facilitate the operation of the nation's securities markets. By serving as registered holder of trillions of dollars of Securities, DTC, on a daily basis, processes enormous volumes of securities transactions facilitated by book-entry movement of interests, without the need to transfer physical certificates. --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release No. 20221 (September 23, 1983), 48 FR 45167 (October 3, 1983) (File No. 600-1). --------------------------------------------------------------------------- DTC performs services and maintains Securities Accounts for its Participants, primarily banks and broker dealers, pursuant to its Rules and Procedures. Participants agree to be bound by the Rules and Procedures of DTC as a condition of their DTC membership.\6\ DTC allows a Participant to present Securities to be made eligible for DTC's depository and book-entry services. If a Security is accepted by DTC as meeting DTC's eligibility requirements for services \7\ and is deposited with DTC for credit to the Securities Account of a [[Page 37233]] Participant, it becomes an Eligible Security. Thereafter, Participants may deposit shares of that Eligible Security into their respective DTC accounts. To facilitate book-entry transfers and other services that DTC provides for its Participants with respect to Deposited Securities, the Deposited Securities are generally registered on the books of the Issuer (typically, in a register maintained by a transfer agent) in DTC's nominee name, Cede & Co. Deposited Securities that are eligible for book-entry services are maintained in ``fungible bulk,'' i.e., each Participant whose Securities of an issue have been credited to its Securities Account has a pro rata (proportionate) interest in DTC's entire inventory of that issue, but none of the Securities on deposit are identifiable to or ``owned'' by any particular Participant.\8\ --------------------------------------------------------------------------- \6\ See supra note 5. \7\ See Rule 5, supra note 4; DTC Operational Arrangements (Necessary for Securities to Become and Remain Eligible for DTC Services), January 2012 (the ``Operational Arrangements''), Section 1, available at http://www.dtcc.com/~/media/Files/Downloads/legal/ issue-eligibility/eligibility/operational-arrangements.pdf. \8\ See Securities Exchange Act Release No. 19678 (April 15, 1983), 48 FR 17603, 17605, n.5 (April 25, 1983) (describing fungible bulk); see also N.Y. Uniform Commercial Code, Sec. 8-503, Off. Cmt 1 (``. . . all entitlement holders have a pro rata interest in whatever positions in that financial asset the [financial] intermediary holds''). --------------------------------------------------------------------------- The Commission has recognized that DTC plays a ``critical function'' in the National Clearance and Settlement system.\9\ More recently, the federal Financial Stability Oversight Council, which was established pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act,\10\ designated DTC as a Systemically Important Financial Market Utility (as defined therein).\11\ --------------------------------------------------------------------------- \9\ See Securities Exchange Act Release No. 47978 (June 4, 2003), 68 FR 35037, 35041 (June 11, 2003) (File No. SR-DTC-2003-02). \10\ Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010). \11\ See Financial Stability Oversight Council, 2012 Annual Report, Appendix A, available at https://www.treasury.gov/initiatives/fsoc/Documents/2012%20Appendix%20A%20Designation%20of%20Systemically%20Important%20Market%20Utilities.pdf. --------------------------------------------------------------------------- B. Deposit Chills and Global Locks: Prior Procedures Previously, upon detecting suspiciously large deposits of a thinly traded Eligible Security, DTC imposed or proposed to impose a Deposit Chill as a measure to maintain the status quo while, pursuant to its Operational Arrangements,\12\ DTC required the Issuer to confirm by legal opinion of independent counsel that the Eligible Security fulfilled the requirements for eligibility. The Deposit Chill would be maintained until the Issuer provided a satisfactory legal opinion. The Deposit Chill could remain in place for years, due to an Issuer's non- responsiveness, refusal, or inability to submit the required legal opinion. --------------------------------------------------------------------------- \12\ See Operational Arrangements, Section I.A, supra note 7. --------------------------------------------------------------------------- With respect to Global Locks, DTC previously imposed a Global Lock on an Eligible Security when a governmental or regulatory authority commenced a proceeding or action alleging violations of Section 5 of the Securities Act of 1933, as amended, with respect to such Eligible Security. A Global Lock could be released when the underlying enforcement action was withdrawn, dismissed on the merits with prejudice, or otherwise resolved in a final, non-appealable judgment in favor of the defendants allegedly responsible for the violations of federal securities laws. However, many enforcement actions are only resolved after several years \13\ and commonly without any definitive determination of wrongdoing.\14\ --------------------------------------------------------------------------- \13\ See, e.g., SEC v. Kahlon, 12-CV-517 (E.D. Tex., filed August 14, 2012); SEC v. Bronson, 12-cv-06421-KMK (S.D.N.Y., filed August 22, 2012). As of the date of this filing, neither case has been resolved. \14\ See, e.g., SEC v. Reiss, 13-cv-01537, dkt no. 10 (S.D.N.Y. 2014) (issuing a final judgment against the defendant in an enforcement action, without the defendant admitting or denying the allegations). --------------------------------------------------------------------------- The above describes, in part, the proposed procedures filed by DTC on December 5, 2013,\15\ in response to the Commission's opinion and order in In re International Power Group, Ltd. (``IPWG'') directing DTC to ``adopt procedures that accord with the fairness requirements of Section 17A(b)(3)(H).'' \16\ DTC withdrew the proposed rule change on August 18, 2014.\17\ --------------------------------------------------------------------------- \15\ See Securities Exchange Act Release No. 71132 (December 18, 2013); 78 FR 77755 (December 24, 2013) (File No. SR-DTC-2013-11). \16\ See Securities Exchange Act Release No. 66611 (March 15, 2012), 2012 SEC LEXIS 844 at *32 (March 15, 2012) (Admin. Proc. File No. 3-13687). \17\ See Securities Exchange Act Release No. 72860 (August 18, 2014), 79 FR 49825 (August 22, 2014) (File No. SR-DTC-2013-11). --------------------------------------------------------------------------- As a result of DTC's experiences following the IPWG decision and in connection with the previous proposed rule change, DTC has determined that its proposed procedures for imposing Deposit Chills and Global Locks are more appropriately directed to current trading halts or suspensions imposed by the Commission, the Financial Industry Regulatory Authority, Inc. (``FINRA''), or a court of competent jurisdiction, and therefore are more effective in targeting suspected securities fraud that is ongoing at the time the Restriction is imposed. In particular, with respect to Deposit Chills imposed pursuant to DTC's previous procedures, DTC believes that wrongdoers have seemingly taken into account DTC's Restriction process, and have been avoiding it by shortening the timeframe in which they complete their scheme, dump their shares into the market, and move on to another issue. Additionally, Global Locks were typically being imposed on the basis of a Commission enforcement action alleging securities law violations that had occurred in the past, and so could not affect the violative behavior (unless the alleged securities law violations were ongoing). In fact, it is DTC's understanding that, by the time of an enforcement action, the wrongdoers had long since transferred the subject securities. In addition, although a Global Lock bars book-entry settlements within DTC, it does not affect the trading of the issue, which occurs outside of DTC. (ii) Proposal A. Proposed Basis for the Imposition of Deposit Chills and Global Locks With this proposal, DTC would establish the basis for the imposition of Deposit Chills and Global Locks, premised on direct current judicial or regulatory intervention or the threat of imminent adverse consequences to DTC or its Participants. DTC believes that the proposed rule change would provide a basis for imposing and releasing Restrictions that is consistent with its obligations under applicable law. Under subsections (a) and (b) of Section 1 of the proposed rule, if FINRA or the Commission halts or suspends trading of an Eligible Security, DTC would impose a Global Lock. Similarly, under subsection (c) of Section 1 of the proposed rule, DTC would impose a Restriction if ordered to do so by a court of competent jurisdiction. Consistent with its mandate ``to promote the prompt and accurate clearance and settlement of securities transactions,'' \18\ DTC's facilities should not be available to settle transactions otherwise prohibited by the Commission, FINRA, or a court of competent jurisdiction. The imposition of a Global Lock on an Eligible Security for which trading is halted or suspended would prevent settlement of trades that continue despite the halt or suspension, and prevent a bad actor from liquidating a position through DTC in order to obtain the proceeds of fraudulent activities. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Notwithstanding subsections (a) and (b) of Section 1 of the proposed Rule, DTC recognizes that FINRA and the Commission issue trading halts and suspensions for numerous reasons, and so there may be certain limited circumstances where a Global Lock [[Page 37234]] would not further the regulatory purpose of such trading halt or suspension. Therefore, if DTC reasonably determines that such is the case, DTC may decline to impose a Global Lock. Some examples of when DTC may decline to impose a Global Lock include, but are not limited to, if FINRA issues a trading halt in all OTC equity securities due to a technical glitch; or if FINRA issues a trading halt clearly based on financial uncertainty in a foreign jurisdiction that doesn't affect DTC's ability to settle transactions. Finally, under subsection (d) of Section 1 of the proposed rule, DTC would impose a Restriction when it becomes aware of a need for immediate action to avert an imminent harm, injury, or other such material adverse consequence to DTC or its Participants that could arise from further Deposits of, or continued book-entry services with respect to, an Eligible Security. While it is impossible to anticipate all possible scenarios that may give rise to the need for action by DTC under this subsection (d) to avoid imminent harm, DTC does not anticipate that it would impose Restrictions pursuant to this formulation frequently. Some examples where this provision may be invoked include, but are not limited to, if DTC becomes aware that marketplace actors were about to deposit Securities at DTC in connection with an ongoing corporate hijacking, market manipulation, or in violation of other applicable laws; if an Issuer or its agent provides DTC with plausible information that Security certificates were stolen and were about to be deposited; or if an Issuer notifies DTC that shares of a Security had just been issued erroneously upon a conversion of previously satisfied notes. The concept of taking immediate action to avoid imminent harm to DTC or its Participants was recognized in the Commission's opinion in IPWG. The Commission ruled that, when faced with justifiable circumstances, DTC may design fair procedures ``in accordance with its own internal needs and circumstances,'' \19\ recognizing that: --------------------------------------------------------------------------- \19\ IPWG, 2012 SEC LEXIS at *30, n.36. If DTC believes that circumstances exist that justify imposing a suspension of services with respect to an issuer's securities in advance of being able to provide the issuer with notice and an opportunity to be heard on the suspension, it may do so. However, in such circumstances, these processes should balance the identifiable need for emergency action with the issuer's right to fair procedures under the Exchange Act. Under such procedures, DTC would be authorized to act to avert an imminent harm, but it could not maintain such a suspension indefinitely without providing expedited fair process to the affected issuer.\20\ --------------------------------------------------------------------------- \20\ Id. at *29. See also In re Atlantis Internet Group (``Atlantis''), Securities Exchange Act Release. No. 75168 at 7-8, 2015 SEC LEXIS 2394 at *18 (June 12, 2015) (Admin. Proc. File No. 3- 15432) (``DTC's imposition of the Global Lock without advance notice was an appropriate exercise of its authority to act to prevent imminent harm . . .''). --------------------------------------------------------------------------- B. Proposed Basis for the Release of Deposit Chills and Global Locks As part of DTC's process for imposing Restrictions premised on direct court or regulatory agency intervention or the prospect of imminent adverse consequences to DTC or its Participants, the proposed rule change provides corresponding criteria for releasing such Restrictions. As an initial matter, pursuant to the proposed rule change, DTC would release a Restriction when DTC reasonably determines that its imposition of the Restriction was based on a clerical mistake. In the case of a Global Lock imposed pursuant to subsections (a) or (b) of Section 1 of the proposed rule (FINRA trading halt or Commission trading suspension), under the proposed rule change, DTC would release the Global Lock when the halt or suspension of trading of the Eligible Security has been lifted. In the case of a Restriction imposed pursuant to subsection (c) of Section 1 of the proposed rule (order from a court of competent jurisdiction), under the proposed rule change, DTC would release the Restriction when a court of competent jurisdiction orders DTC to release the Restriction. Since trading would no longer be prohibited by FINRA, the Commission, or court order, respectively, there should not be any settlement restrictions, other than those otherwise provided in the Rules. Finally, in the case of a Restriction imposed pursuant to subsection (d) of Section 1 of the proposed rule (imminent adverse consequences to DTC or its Participants), pursuant to the proposed rule change, DTC would release the Restriction when it reasonably determines that the release of the Restriction would not pose a threat of imminent adverse consequences to DTC or its Participants, obviating the original basis for the Restriction. It is impossible to anticipate all possible scenarios that may give rise to a release of a Restriction under this basis. However, DTC anticipates that it would release such Restriction in a number of circumstances, including without limitation:When DTC determines that the perceived harm has passed or is significantly remote; when the basis for the Restriction no longer exists. For example, where DTC imposed a Deposit Chill on the basis of plausible information that certificates were stolen and about to be deposited, and DTC subsequently receives plausible information that the certificates have been recovered and will not be deposited, or where DTC imposed a Deposit Chill based on erroneously issued shares, and subsequently receives copies of a ``Stop transfer'' \21\ directive and cancellation of such shares before they have been deposited; or --------------------------------------------------------------------------- \21\ A ``stop transfer'' is an order made to prevent the transfer of ownership of a security. --------------------------------------------------------------------------- when an Eligible Security had been previously Globally Locked based on a Commission enforcement action but there is no indication that illegally distributed Securities are about to be deposited. C. Proposed Fair Procedures DTC has developed the procedures in the proposed rule change to give the Issuer a timely notice of the Restriction, provide the Issuer an opportunity to submit a written challenge to the Restriction, provide a review and written determination by an independent officer, and maintain a complete record of the proceeding, consistent with Section 17A(b)(3)(H) of the Act \22\ and the Commission's opinion and order in IPWG. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78q-1(b)(3)(H). --------------------------------------------------------------------------- Pursuant to the proposed rule change, DTC would send written notice (``Restriction Notice'') to the Issuer's last known business address and to the last known business address of the Issuer's transfer agent, if any, on record with DTC. The Restriction Notice would be sent within three Business Days of imposition of a Restriction and would set forth: (i) The basis for the Restriction; (ii) the date the Restriction was imposed; (iii) that the Issuer may submit a written response to DTC detailing the basis for release of the Restriction under proposed Rule 33 (``the Restriction Response''); and (iv) that the Restriction Response must be received by DTC within twenty Business Days of delivery of the Restriction Notice. Once the Restriction Response is received by DTC, the proposed rule change provides that it would be reviewed by a DTC officer who did not have responsibility for the imposition of the Restriction. DTC may request additional information from the Issuer. After the officer's review is completed, DTC would provide a written decision (a ``Restriction Decision'') to the Issuer. [[Page 37235]] Within ten Business Days of delivery of the Restriction Decision, the Issuer may submit a supplement (a ``Supplement'') for the sole purpose of establishing that DTC made a clerical mistake or mistake arising from an oversight or omission in reviewing the Restriction Response. If the Issuer submits a Supplement, the officer would provide a supplement decision (a ``Supplement Decision'') within ten Business Days after the Supplement was delivered. The Restriction Notice, the Restriction Response, the Restriction Decision, the Supplement, the Supplement Decision, and any other documents submitted in connection with these procedures would constitute the record for purposes of any appeal to the Commission. The proposed rule change would not affect DTC's ability (A) to lift or modify a Restriction; (B) to operationally restrict book-entry services, Deposits or other services in the ordinary course of business, as such restrictions do not constitute Deposit Chills or Global Locks for purposes of proposed Rule 33; (C) to communicate with the Issuer or its transfer agent or representative, if any, provided that substantive communications are memorialized in writing to be included in the record for purposes of any appeal to the Commission; or (D) to send out a Restriction Notice prior to the imposition of a Restriction. DTC believes that these procedures comport with Section 17A(b)(3)(H) of the Act, which requires that a registered clearing agency that denies or limits access to the agency's services to a ``person,'' it must ``provide a fair procedure.'' \23\ Such procedures require the clearing agency to give the person notice and an opportunity to address the specific grounds for denial or prohibition or limitation and to keep a record.\24\ In its decision in IPWG, the Commission ruled, inter alia, that issuers are ``persons'' for the purposes of Section 17A(b)(3).\25\ --------------------------------------------------------------------------- \23\ See id. \24\ See 15 U.S.C. 78q-1(b)(5)(B). \25\ IPWG, 2012 SEC LEXIS at *24. --------------------------------------------------------------------------- Section 17A of the Act does not specify the nature of the fair procedures DTC must provide to ``persons,'' including issuers. In IPWG, the Commission observed that: Exchange Act Section 17A(b)(5)(B) states that, when a registered clearing agency determines that ``a person shall be . . . prohibited or limited with respect to access to services offered by the clearing agency, the clearing agency shall notify such person of, and give him an opportunity to be heard upon, the specific grounds for . . . prohibition or limitation under consideration and keep a record.'' \26\ --------------------------------------------------------------------------- \26\ Id. As stated in IPWG, ``DTC may design such [Section 17A procedures] in accordance with its own internal needs and circumstances.'' \27\ The Commission further ruled in IPWG that DTC ``should adopt procedures that accord with the fairness requirements of Section 17A(b)(3)(H), which may be applied uniformly'' in the cases where DTC denies or limits services with respect to an Issuer's Securities. --------------------------------------------------------------------------- \27\ Id. at *30 n.36. --------------------------------------------------------------------------- In the Commission's more recent opinion in Atlantis, the Commission upheld the notice, opportunity to be heard, and recordkeeping that DTC provided to a Globally Locked issuer. Significantly, the Commission held that Section 17A of the Act does not require DTC to hold a formal hearing in order to satisfy its obligations under Section 17A to provide Issuers with an opportunity to be heard.\28\ --------------------------------------------------------------------------- \28\ Id. at *19. --------------------------------------------------------------------------- DTC believes that the procedures in proposed Rule 33 for giving notice of the Restriction to the Issuer with an opportunity to be heard are consistent with the fair procedures upheld by the Commission in Atlantis. In addition, consistent with the Commission's broad directive in IPWG, DTC believes that the proposed rule would establish uniform standards for the imposition of Restrictions, as well as the fair procedures for Issuers whose Securities are subject to a Restriction. Implementation Timeframe DTC will announce the effective date via Important Notice upon the Commission's approval of the proposed rule change. 2. Statutory Basis DTC believes that the proposed rule change is consistent with the requirements of the Act, and the rules and regulations thereunder applicable to DTC, in particular Section 17A(b)(3)(F) of the Act \29\ and Section 17A(b)(3)(H) of the Act.\30\ --------------------------------------------------------------------------- \29\ 15 U.S.C. 78q-1(b)(3)(F). \30\ 15 U.S.C. 78q-1(b)(3)(H). --------------------------------------------------------------------------- Section 17A(b)(3)(F) of the Act \31\ requires, inter alia, that the rules of the clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions, and 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. By establishing a framework for DTC to impose and release Restrictions, the proposed rule change would provide a mechanism for DTC to act quickly and efficiently to screen out, prior to deposit, or restrict, after deposit, Securities for which trading has been prohibited by the Commission, FINRA, or a court of competent jurisdiction, or which pose a threat of imminent adverse consequences to DTC or its Participants, to assure the safeguarding of Securities deposited to and held by DTC, consistent with the requirements of the Act, in particular Section 17A(b)(3)(F) of the Act, cited above. --------------------------------------------------------------------------- \31\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Section 17A(b)(3)(H) of the Act, requires, inter alia, that the rules of a clearing agency are in accordance with the provisions of Section 17A(b)(5)(B) of the Act,\32\ and in general provide a fair procedure with respect to the prohibition or limitation by the clearing agency of any person with respect to access to services offered by the clearing agency. By establishing a procedure that would provide for: (A) Criteria for notice to an Issuer that a Deposit Chill or Global Lock has been imposed; (B) an explanation of the specific grounds upon which any Restriction has been imposed; (C) the actions that the Issuer may take to object to the Restriction; (D) the process DTC would undertake to review written submissions of the Issuer and to render a final decision concerning the Restriction; (E) the grounds upon which DTC may release the Restriction; and (F) the maintenance of a complete record for submission to the Commission in the event an Issuer appeals, the proposed rule change would provide Issuers with fair procedures with respect to Deposit Chills and Global Locks, consistent with the requirements of the Act, in particular Section 17A(b)(3)(H) of the Act, cited above.\33\ --------------------------------------------------------------------------- \32\ Section 17A(b)(5)(B) of the Act, 15 U.S.C. 78q-1(b)(5)(B) provides: ``In any proceeding by a registered clearing agency to determine whether a person shall be denied participation or prohibited or limited with respect to access to services offered by the clearing agency, the clearing agency shall notify such person of, and give him an opportunity to be heard upon, the specific grounds for denial or prohibition or limitation under consideration and keep a record. A determination by the clearing agency to deny participation or prohibit or limit a person with respect to access to services offered by the clearing agency shall be supported by a statement setting forth the specific grounds on which the denial or prohibition or limitation is based.'' \33\ 15 U.S.C. 78q-1(b)(3)(H). --------------------------------------------------------------------------- (B) Clearing Agency's Statement on Burden on Competition DTC does not believe that the proposed rule change would have any impact on, or impose any burden on competition that is not necessary or [[Page 37236]] appropriate in furtherance of the purposes of the Act, because the proposed procedures as described above would apply to all Eligible Securities that may be subject to a Deposit Chill or Global Lock. (C) Clearing Agency's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not been solicited or received with respect to this filing. To the extent DTC receives written comments on the proposed rule change DTC will forward such comments to the Commission. III. Date of Effectiveness of the Proposed Rule Change, and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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 Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-DTC-2016-003 on the subject line. Paper Comments 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-2016-003. 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 Web site (http://www.sec.gov/rules/sro.shtml). 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 Web site 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 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of DTC and on DTCC's Web site (http://dtcc.com/legal/sec-rule-filings.aspx). All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-DTC-2016-003 and should be submitted on or before June 30, 2016. --------------------------------------------------------------------------- \34\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\34\ Brent J. Fields, Secretary. [FR Doc. 2016-13614 Filed 6-8-16; 8:45 am] BILLING CODE 8011-01-P
![37232 Federal Register / Vol. 81, No. 111 / Thursday, June 9, 2016 / Notices
Notice is hereby given that, pursuant Information Officer, Securities and II. Clearing Agency’s Statement of the
to the Paperwork Reduction Act of 1995 Exchange Commission, c/o Remi Pavlik- Purpose of, and Statutory Basis for, the
(44 U.S.C. 3501 et seq.), the Securities Simon, 100 F Street NE., Washington, Proposed Rule Change
and Exchange Commission DC 20549 or send an email to: PRA_ In its filing with the Commission, the
(‘‘Commission’’) is soliciting comments Mailbox@sec.gov. clearing agency included statements
on the collection of information Dated: June 3, 2016. concerning the purpose of and basis for
summarized below. The Commission the proposed rule change and discussed
Brent J. Fields,
plans to submit this existing collection any comments it received on the
Secretary.
of information to the Office of proposed rule change. The text of these
Management and Budget for extension [FR Doc. 2016–13618 Filed 6–8–16; 8:45 am]
statements may be examined at the
and approval. BILLING CODE 8011–01–P
places specified in Item IV below. The
Rule 155 (17 CFR 230.155) under the clearing agency has prepared
Securities Act of 1933 (15 U.S.C. 77a et summaries, set forth in sections A, B,
seq.) provides safe harbors for a SECURITIES AND EXCHANGE
COMMISSION and C below, of the most significant
registered offering of securities aspects of such statements.
following an abandoned private
offering, or a private offering following [Release No. 34–77991; File No. SR–DTC– (A) Clearing Agency’s Statement of the
an abandoned registered offering, 2016–003] Purpose of, and Statutory Basis for, the
without integrating the registered and Proposed Rule Change
private offerings in either case. In Self-Regulatory Organizations; The
Depository Trust Company; Notice of 1. Purpose
connection with a registered offering
following an abandoned private Filing of Proposed Rule Change The proposal would add new Rule 33
offering, Rule 155 requires an issuer to Pursuant to Which It Would Impose (Deposit Chills and Global Locks) to
include in any prospectus filed as a part Deposit Chills and Global Locks and establish: (i) The circumstances under
of a registration statement disclosure Provide Fair Procedures to Issuers which DTC would impose and release a
regarding the abandoned the private Deposit Chill or a Global Lock; and (ii)
June 3, 2016. the fair procedures for notice and an
offering. Similarly, the rule requires an Pursuant to Section 19(b)(1) of the
issuer to provide each offeree in a opportunity for the Issuer to challenge
Securities Exchange Act of 1934 the Restriction, as described below.
private offering following an abandoned (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
registered offering with: (1) Information (i) Background
notice is hereby given that on May 27,
concerning the withdrawal of the
2016, The Depository Trust Company A. DTC
registration statement; (2) the fact that
(‘‘DTC’’) filed with the Securities and
the private offering is unregistered; and DTC is the nation’s central securities
Exchange Commission (‘‘Commission’’) depository, registered as a clearing
(3) the legal implications of the
the proposed rule change as described agency under Section 17A of the Act.5
offering’s unregistered status. We
in Items I, II and III below, which Items DTC’s deposit and book-entry transfer
estimate Rule 155 takes approximately 4
have been prepared by DTC. DTC filed services help facilitate the operation of
hours per response to prepare and is
the proposed rule change pursuant to the nation’s securities markets. By
filed by 600 respondents annually.
We estimate that 50% of the 4 hours Section 19(b)(2) 3 of the Act thereunder. serving as registered holder of trillions
per response (2 hours per response) is The Commission is publishing this of dollars of Securities, DTC, on a daily
prepared by the filer for a total annual notice to solicit comments on the basis, processes enormous volumes of
reporting burden of 1,200 hours (2 hours proposed rule change from interested securities transactions facilitated by
per response × 600 responses). persons. book-entry movement of interests,
Written comments are invited on: (a) I. Clearing Agency’s Statement of the without the need to transfer physical
Whether this proposed collection of Terms of Substance of the Proposed certificates.
information is necessary for the proper Rule Change DTC performs services and maintains
performance of the functions of the Securities Accounts for its Participants,
agency, including whether the The proposed rule change consists of primarily banks and broker dealers,
information will have practical utility; amendments to the Rules, By-Laws and pursuant to its Rules and Procedures.
(b) the accuracy of the agency’s estimate Organization Certificate of DTC (the Participants agree to be bound by the
of the burden imposed by the collection ‘‘Rules’’) in order to add a Rule which Rules and Procedures of DTC as a
of information; (c) ways to enhance the establishes: (i) The circumstances under condition of their DTC membership.6
quality, utility, and clarity of the which DTC would impose and release a DTC allows a Participant to present
information collected; and (d) ways to restriction on Deposits of an Eligible Securities to be made eligible for DTC’s
minimize the burden of the collection of Security (a ‘‘Deposit Chill’’) or on book- depository and book-entry services. If a
information on respondents, including entry services for an Eligible Security (a Security is accepted by DTC as meeting
through the use of automated collection ‘‘Global Lock’’); and (ii) the fair DTC’s eligibility requirements for
techniques or other forms of information procedures for notice and an services 7 and is deposited with DTC for
technology. Consideration will be given opportunity for the issuer of the Eligible credit to the Securities Account of a
to comments and suggestions submitted Security (the ‘‘Issuer’’) to challenge the
in writing within 60 days of this Deposit Chill or Global Lock (each, a 5 See Securities Exchange Act Release No. 20221
‘‘Restriction’’), as described below.4 (September 23, 1983), 48 FR 45167 (October 3,
sradovich on DSK3TPTVN1PROD with NOTICES
publication. 1983) (File No. 600–1).
An agency may not conduct or 6 See supra note 5.
1 15 U.S.C. 78s(b)(1).
sponsor, and a person is not required to 7 See Rule 5, supra note 4; DTC Operational
2 17 CFR 240.19b–4.
respond to, a collection of information 3 15 U.S.C. 78s(b)(2).
Arrangements (Necessary for Securities to Become
unless it displays a currently valid and Remain Eligible for DTC Services), January
4 Each capitalized term not otherwise defined 2012 (the ‘‘Operational Arrangements’’), Section 1,
control number. herein has its respective meaning as set forth in the available at http://www.dtcc.com/∼/media/Files/
Please direct your written comments Rules, available at http://www.dtcc.com/legal/rules- Downloads/legal/issue-eligibility/eligibility/
to Pamela Dyson, Director/Chief and-procedures.aspx. operational-arrangements.pdf.
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![Federal Register / Vol. 81, No. 111 / Thursday, June 9, 2016 / Notices 37233
Participant, it becomes an Eligible due to an Issuer’s non-responsiveness, avoiding it by shortening the timeframe
Security. Thereafter, Participants may refusal, or inability to submit the in which they complete their scheme,
deposit shares of that Eligible Security required legal opinion. dump their shares into the market, and
into their respective DTC accounts. To With respect to Global Locks, DTC move on to another issue.
facilitate book-entry transfers and other previously imposed a Global Lock on an Additionally, Global Locks were
services that DTC provides for its Eligible Security when a governmental typically being imposed on the basis of
Participants with respect to Deposited or regulatory authority commenced a a Commission enforcement action
Securities, the Deposited Securities are proceeding or action alleging violations alleging securities law violations that
generally registered on the books of the of Section 5 of the Securities Act of had occurred in the past, and so could
Issuer (typically, in a register 1933, as amended, with respect to such not affect the violative behavior (unless
maintained by a transfer agent) in DTC’s Eligible Security. A Global Lock could the alleged securities law violations
nominee name, Cede & Co. Deposited be released when the underlying were ongoing). In fact, it is DTC’s
Securities that are eligible for book- enforcement action was withdrawn, understanding that, by the time of an
entry services are maintained in dismissed on the merits with prejudice, enforcement action, the wrongdoers had
‘‘fungible bulk,’’ i.e., each Participant or otherwise resolved in a final, non- long since transferred the subject
whose Securities of an issue have been appealable judgment in favor of the securities. In addition, although a
credited to its Securities Account has a defendants allegedly responsible for the Global Lock bars book-entry settlements
pro rata (proportionate) interest in violations of federal securities laws. within DTC, it does not affect the
DTC’s entire inventory of that issue, but However, many enforcement actions are trading of the issue, which occurs
none of the Securities on deposit are only resolved after several years 13 and outside of DTC.
identifiable to or ‘‘owned’’ by any commonly without any definitive
determination of wrongdoing.14 (ii) Proposal
particular Participant.8
The Commission has recognized that The above describes, in part, the A. Proposed Basis for the Imposition of
DTC plays a ‘‘critical function’’ in the proposed procedures filed by DTC on Deposit Chills and Global Locks
National Clearance and Settlement December 5, 2013,15 in response to the
Commission’s opinion and order in In re With this proposal, DTC would
system.9 More recently, the federal establish the basis for the imposition of
Financial Stability Oversight Council, International Power Group, Ltd.
(‘‘IPWG’’) directing DTC to ‘‘adopt Deposit Chills and Global Locks,
which was established pursuant to the premised on direct current judicial or
Dodd-Frank Wall Street Reform and procedures that accord with the fairness
requirements of Section regulatory intervention or the threat of
Consumer Protection Act,10 designated imminent adverse consequences to DTC
DTC as a Systemically Important 17A(b)(3)(H).’’ 16 DTC withdrew the
proposed rule change on August 18, or its Participants. DTC believes that the
Financial Market Utility (as defined proposed rule change would provide a
2014.17
therein).11 basis for imposing and releasing
As a result of DTC’s experiences
B. Deposit Chills and Global Locks: following the IPWG decision and in Restrictions that is consistent with its
Prior Procedures connection with the previous proposed obligations under applicable law.
rule change, DTC has determined that Under subsections (a) and (b) of
Previously, upon detecting Section 1 of the proposed rule, if FINRA
its proposed procedures for imposing
suspiciously large deposits of a thinly or the Commission halts or suspends
Deposit Chills and Global Locks are
traded Eligible Security, DTC imposed trading of an Eligible Security, DTC
more appropriately directed to current
or proposed to impose a Deposit Chill would impose a Global Lock. Similarly,
trading halts or suspensions imposed by
as a measure to maintain the status quo under subsection (c) of Section 1 of the
the Commission, the Financial Industry
while, pursuant to its Operational proposed rule, DTC would impose a
Regulatory Authority, Inc. (‘‘FINRA’’),
Arrangements,12 DTC required the Restriction if ordered to do so by a court
or a court of competent jurisdiction, and
Issuer to confirm by legal opinion of therefore are more effective in targeting of competent jurisdiction. Consistent
independent counsel that the Eligible suspected securities fraud that is with its mandate ‘‘to promote the
Security fulfilled the requirements for ongoing at the time the Restriction is prompt and accurate clearance and
eligibility. The Deposit Chill would be imposed. In particular, with respect to settlement of securities transactions,’’ 18
maintained until the Issuer provided a Deposit Chills imposed pursuant to DTC’s facilities should not be available
satisfactory legal opinion. The Deposit DTC’s previous procedures, DTC to settle transactions otherwise
Chill could remain in place for years, believes that wrongdoers have prohibited by the Commission, FINRA,
8 See Securities Exchange Act Release No. 19678
seemingly taken into account DTC’s or a court of competent jurisdiction. The
(April 15, 1983), 48 FR 17603, 17605, n.5 (April 25, Restriction process, and have been imposition of a Global Lock on an
1983) (describing fungible bulk); see also N.Y. Eligible Security for which trading is
Uniform Commercial Code, § 8–503, Off. Cmt 1 13 See, e.g., SEC v. Kahlon, 12–CV–517 (E.D. Tex.,
halted or suspended would prevent
(‘‘. . . all entitlement holders have a pro rata filed August 14, 2012); SEC v. Bronson, 12–cv– settlement of trades that continue
interest in whatever positions in that financial asset 06421–KMK (S.D.N.Y., filed August 22, 2012). As
the [financial] intermediary holds’’). of the date of this filing, neither case has been despite the halt or suspension, and
9 See Securities Exchange Act Release No. 47978 resolved. prevent a bad actor from liquidating a
(June 4, 2003), 68 FR 35037, 35041 (June 11, 2003) 14 See, e.g., SEC v. Reiss, 13–cv–01537, dkt no. 10 position through DTC in order to obtain
(File No. SR–DTC–2003–02). (S.D.N.Y. 2014) (issuing a final judgment against the the proceeds of fraudulent activities.
10 Dodd-Frank Wall Street Reform and Consumer defendant in an enforcement action, without the
defendant admitting or denying the allegations).
Notwithstanding subsections (a) and
Protection Act, Pub. L. 111–203, 124 Stat. 1376
(b) of Section 1 of the proposed Rule,
sradovich on DSK3TPTVN1PROD with NOTICES
(2010). 15 See Securities Exchange Act Release No. 71132
11 See Financial Stability Oversight Council, 2012 (December 18, 2013); 78 FR 77755 (December 24, DTC recognizes that FINRA and the
Annual Report, Appendix A, available at https:// 2013) (File No. SR–DTC–2013–11). Commission issue trading halts and
www.treasury.gov/initiatives/fsoc/Documents/ 16 See Securities Exchange Act Release No. 66611
suspensions for numerous reasons, and
2012%20Appendix%20A%20Designation%20of% (March 15, 2012), 2012 SEC LEXIS 844 at *32
20Systemically%20Important (March 15, 2012) (Admin. Proc. File No. 3–13687).
so there may be certain limited
%20Market%20Utilities.pdf. 17 See Securities Exchange Act Release No. 72860 circumstances where a Global Lock
12 See Operational Arrangements, Section I.A, (August 18, 2014), 79 FR 49825 (August 22, 2014)
supra note 7. (File No. SR–DTC–2013–11). 18 15 U.S.C. 78q–1(b)(3)(F).
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![Federal Register / Vol. 81, No. 111 / Thursday, June 9, 2016 / Notices 37235
Within ten Business Days of delivery of prohibition or limitation under consideration impose and release Restrictions, the
the Restriction Decision, the Issuer may and keep a record.’’ 26 proposed rule change would provide a
submit a supplement (a ‘‘Supplement’’) As stated in IPWG, ‘‘DTC may design mechanism for DTC to act quickly and
for the sole purpose of establishing that such [Section 17A procedures] in efficiently to screen out, prior to
DTC made a clerical mistake or mistake accordance with its own internal needs deposit, or restrict, after deposit,
arising from an oversight or omission in and circumstances.’’ 27 The Commission Securities for which trading has been
reviewing the Restriction Response. further ruled in IPWG that DTC ‘‘should prohibited by the Commission, FINRA,
If the Issuer submits a Supplement, adopt procedures that accord with the or a court of competent jurisdiction, or
the officer would provide a supplement fairness requirements of Section which pose a threat of imminent
decision (a ‘‘Supplement Decision’’) 17A(b)(3)(H), which may be applied adverse consequences to DTC or its
within ten Business Days after the uniformly’’ in the cases where DTC Participants, to assure the safeguarding
Supplement was delivered. The denies or limits services with respect to of Securities deposited to and held by
Restriction Notice, the Restriction an Issuer’s Securities. DTC, consistent with the requirements
Response, the Restriction Decision, the In the Commission’s more recent of the Act, in particular Section
Supplement, the Supplement Decision, opinion in Atlantis, the Commission 17A(b)(3)(F) of the Act, cited above.
and any other documents submitted in upheld the notice, opportunity to be Section 17A(b)(3)(H) of the Act,
connection with these procedures heard, and recordkeeping that DTC requires, inter alia, that the rules of a
would constitute the record for provided to a Globally Locked issuer. clearing agency are in accordance with
purposes of any appeal to the Significantly, the Commission held that the provisions of Section 17A(b)(5)(B) of
Commission. Section 17A of the Act does not require the Act,32 and in general provide a fair
The proposed rule change would not DTC to hold a formal hearing in order procedure with respect to the
affect DTC’s ability (A) to lift or modify to satisfy its obligations under Section prohibition or limitation by the clearing
a Restriction; (B) to operationally 17A to provide Issuers with an agency of any person with respect to
restrict book-entry services, Deposits or opportunity to be heard.28 access to services offered by the clearing
other services in the ordinary course of DTC believes that the procedures in agency. By establishing a procedure that
business, as such restrictions do not proposed Rule 33 for giving notice of would provide for: (A) Criteria for
constitute Deposit Chills or Global the Restriction to the Issuer with an notice to an Issuer that a Deposit Chill
Locks for purposes of proposed Rule 33; opportunity to be heard are consistent or Global Lock has been imposed; (B) an
(C) to communicate with the Issuer or with the fair procedures upheld by the explanation of the specific grounds
its transfer agent or representative, if Commission in Atlantis. In addition, upon which any Restriction has been
any, provided that substantive consistent with the Commission’s broad imposed; (C) the actions that the Issuer
communications are memorialized in directive in IPWG, DTC believes that the may take to object to the Restriction; (D)
writing to be included in the record for the process DTC would undertake to
proposed rule would establish uniform
purposes of any appeal to the review written submissions of the Issuer
standards for the imposition of
Commission; or (D) to send out a and to render a final decision
Restrictions, as well as the fair
Restriction Notice prior to the concerning the Restriction; (E) the
procedures for Issuers whose Securities
imposition of a Restriction. grounds upon which DTC may release
are subject to a Restriction.
DTC believes that these procedures the Restriction; and (F) the maintenance
comport with Section 17A(b)(3)(H) of Implementation Timeframe of a complete record for submission to
the Act, which requires that a registered DTC will announce the effective date the Commission in the event an Issuer
clearing agency that denies or limits via Important Notice upon the appeals, the proposed rule change
access to the agency’s services to a Commission’s approval of the proposed would provide Issuers with fair
‘‘person,’’ it must ‘‘provide a fair rule change. procedures with respect to Deposit
procedure.’’ 23 Such procedures require Chills and Global Locks, consistent with
2. Statutory Basis the requirements of the Act, in
the clearing agency to give the person
notice and an opportunity to address the DTC believes that the proposed rule particular Section 17A(b)(3)(H) of the
specific grounds for denial or change is consistent with the Act, cited above.33
prohibition or limitation and to keep a requirements of the Act, and the rules (B) Clearing Agency’s Statement on
record.24 In its decision in IPWG, the and regulations thereunder applicable to Burden on Competition
Commission ruled, inter alia, that DTC, in particular Section 17A(b)(3)(F)
of the Act 29 and Section 17A(b)(3)(H) of DTC does not believe that the
issuers are ‘‘persons’’ for the purposes of
the Act.30 proposed rule change would have any
Section 17A(b)(3).25
Section 17A(b)(3)(F) of the Act 31 impact on, or impose any burden on
Section 17A of the Act does not
requires, inter alia, that the rules of the competition that is not necessary or
specify the nature of the fair procedures
DTC must provide to ‘‘persons,’’ clearing agency be designed to promote 32 Section 17A(b)(5)(B) of the Act, 15 U.S.C. 78q–
including issuers. In IPWG, the the prompt and accurate clearance and 1(b)(5)(B) provides: ‘‘In any proceeding by a
Commission observed that: settlement of securities transactions, registered clearing agency to determine whether a
Exchange Act Section 17A(b)(5)(B) states
and to assure the safeguarding of person shall be denied participation or prohibited
securities and funds which are in the or limited with respect to access to services offered
that, when a registered clearing agency by the clearing agency, the clearing agency shall
determines that ‘‘a person shall be . . . custody or control of the clearing agency notify such person of, and give him an opportunity
prohibited or limited with respect to access or for which it is responsible. By to be heard upon, the specific grounds for denial
sradovich on DSK3TPTVN1PROD with NOTICES
to services offered by the clearing agency, the establishing a framework for DTC to or prohibition or limitation under consideration
clearing agency shall notify such person of, and keep a record. A determination by the clearing
and give him an opportunity to be heard 26 Id. agency to deny participation or prohibit or limit a
person with respect to access to services offered by
upon, the specific grounds for . . . 27 Id.at *30 n.36. the clearing agency shall be supported by a
28 Id.at *19. statement setting forth the specific grounds on
23 Seeid. 29 15 U.S.C. 78q–1(b)(3)(F).
which the denial or prohibition or limitation is
24 See15 U.S.C. 78q–1(b)(5)(B). 30 15 U.S.C. 78q–1(b)(3)(H). based.’’
25 IPWG, 2012 SEC LEXIS at *24. 31 15 U.S.C. 78q–1(b)(3)(F). 33 15 U.S.C. 78q–1(b)(3)(H).
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![37236 Federal Register / Vol. 81, No. 111 / Thursday, June 9, 2016 / Notices
appropriate in furtherance of the submission, all subsequent arms control, disarmament,
purposes of the Act, because the amendments, all written statements nonproliferation, political-military
proposed procedures as described above with respect to the proposed rule affairs, international security, and
would apply to all Eligible Securities change that are filed with the related aspects of public diplomacy. The
that may be subject to a Deposit Chill or Commission, and all written agenda for this meeting will include
Global Lock. communications relating to the classified discussions related to the
proposed rule change between the Board’s studies on current U.S. policy
(C) Clearing Agency’s Statement on
Commission and any person, other than and issues regarding arms control,
Comments on the Proposed Rule
those that may be withheld from the international security, nuclear
Change Received From Members,
public in accordance with the proliferation, and diplomacy.
Participants, or Others For more information, contact
provisions of 5 U.S.C. 552, will be
Written comments relating to the available for Web site viewing and Christopher Herrick, Acting Executive
proposed rule change have not been printing in the Commission’s Public Director of the International Security
solicited or received with respect to this Reference Room, 100 F Street NE., Advisory Board, U. S. Department of
filing. To the extent DTC receives Washington, DC 20549 on official State, Washington, DC 20520,
written comments on the proposed rule business days between the hours of telephone: (202) 647–9683.
change DTC will forward such 10:00 a.m. and 3:00 p.m. Copies of the Dated: May 20, 2016.
comments to the Commission. filing also will be available for Christopher Herrick,
III. Date of Effectiveness of the inspection and copying at the principal Acting Executive Director, International
Proposed Rule Change, and Timing for office of DTC and on DTCC’s Web site Security Advisory Board, U.S. Department of
Commission Action (http://dtcc.com/legal/sec-rule- State.
filings.aspx). All comments received [FR Doc. 2016–13677 Filed 6–8–16; 8:45 am]
Within 45 days of the date of will be posted without change; the
publication of this notice in the Federal Commission does not edit personal
BILLING CODE 4710–24–P
Register or within such longer period identifying information from
up to 90 days (i) as the Commission may submissions. You should submit only
designate if it finds such longer period SURFACE TRANSPORTATION BOARD
information that you wish to make
to be appropriate and publishes its available publicly. All submissions [Docket No. AB 55 (Sub-No. 760X)]
reasons for so finding or (ii) as to which should refer to File Number SR–DTC–
the self-regulatory organization 2016–003 and should besubmitted on or CSX Transportation, Inc.—
consents, the Commission will: before June 30, 2016. Discontinuance of Service
(A) By order approve or disapprove Exemption—in Boone County, W.Va.
such proposed rule change, or For the Commission, by the Division of
(B) institute proceedings to determine Trading and Markets, pursuant to delegated CSX Transportation, Inc. (CSXT) has
authority.34 filed a verified notice of exemption
whether the proposed rule change
should be disapproved. Brent J. Fields, under 49 CFR pt. 1152 subpart F—
Secretary. Exempt Abandonments and
IV. Solicitation of Comments [FR Doc. 2016–13614 Filed 6–8–16; 8:45 am] Discontinuances of Service to
Interested persons are invited to BILLING CODE 8011–01–P discontinue service over an
submit written data, views and approximately 2.9-mile rail line on
arguments concerning the foregoing, CSXT’s Southern Region, Huntington
including whether the proposed rule DEPARTMENT OF STATE Division, Pond Fork Subdivision, the
change is consistent with the Act. Robinson Creek Industrial Track, from
Comments may be submitted by any of [Public Notice: 9600] the connection with CSXT’s mainline at
the following methods: milepost CLK 0.0 to the end of the line
International Security Advisory Board
at milepost CLK 2.9+ in Boone County,
Electronic Comments (ISAB) Meeting Notice Closed Meeting
W.Va. (the Line). The Line traverses
• Use the Commission’s Internet In accordance with section 10(a)(2) of United States Postal Service Zip Code
comment form (http://www.sec.gov/ the Federal Advisory Committee Act, 5 26325 and includes the Holbrook station
rules/sro.shtml); or U.S.C. App 10(a)(2), the Department of at milepost CLK 2.0 (FSAC 82034/OPSL
• Send an email to rule-comments@ State announces a meeting of the 65220).1
sec.gov. Please include File Number SR– International Security Advisory Board CSXT has certified that: (1) No local
DTC–2016–003 on the subject line. (ISAB) to take place on July 12, 2016, at traffic has moved over the Line for at
Paper Comments the Department of State, Washington, least two years; (2) because the Line is
DC. not a through route, no overhead traffic
• Send paper comments in triplicate Pursuant to section 10(d) of the has operated, and, therefore, none needs
to Secretary, Securities and Exchange Federal Advisory Committee Act, 5 to be rerouted over other lines; (3) no
Commission, 100 F Street NE., U.S.C. App 10(d), and 5 U.S.C. formal complaint filed by a user of rail
Washington, DC 20549. 552b(c)(1), it has been determined that service on the Line (or by a state or local
All submissions should refer to File this Board meeting will be closed to the government entity acting on behalf of
Number SR–DTC–2016–003. This file public because the Board will be such user) regarding cessation of service
number should be included on the reviewing and discussing matters over the Line is pending either with the
sradovich on DSK3TPTVN1PROD with NOTICES
subject line if email is used. To help the properly classified in accordance with Surface Transportation Board (Board) or
Commission process and review your Executive Order 13526. The purpose of with any U.S. District Court or has been
comments more efficiently, please use the ISAB is to provide the Department decided in favor of complainant within
only one method. The Commission will with a continuing source of the two-year period; and (4) the
post all comments on the Commission’s independent advice on all aspects of requirements at 49 CFR 1105.12
Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the 34 17 CFR 200.30–3(a)(12). 1 CSXT states that this station can be closed.
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Document Created: 2018-02-08 07:34:07
Document Modified: 2018-02-08 07:34:07
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