81_FR_54327 81 FR 54170 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change Regarding the Implementation of Functionality To Submit a Cover of Protect on Behalf of Another Participant and the Removal of the Option To Cover of Protect Directly With Agent

81 FR 54170 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change Regarding the Implementation of Functionality To Submit a Cover of Protect on Behalf of Another Participant and the Removal of the Option To Cover of Protect Directly With Agent

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 157 (August 15, 2016)

Page Range54170-54173
FR Document2016-19322

Federal Register, Volume 81 Issue 157 (Monday, August 15, 2016)
[Federal Register Volume 81, Number 157 (Monday, August 15, 2016)]
[Notices]
[Pages 54170-54173]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-19322]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78520; File No. SR-DTC-2016-005]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of Proposed Rule Change Regarding the Implementation 
of Functionality To Submit a Cover of Protect on Behalf of Another 
Participant and the Removal of the Option To Cover of Protect Directly 
With Agent

August 9, 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 July 29, 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) of the Act.\3\ 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)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change by DTC would update its Procedures\4\ set 
forth in the Guide to make changes to certain options within its 
Participant Subscription Offer Program (``PSOP'')\5\ and Participant 
Tender Offer Program (``PTOP'') functions.\6\ Specifically, DTC 
proposes to add an option called ``Cover of Protect on Behalf of 
Another Participant'' (``CPAP'') to both PSOP and PTOP (``PSOP/PTOP'') 
that would allow a Participant to tender subscription rights 
(``Rights'') or Securities through DTC to an agent (``Offer 
Agent''),\7\ on behalf of another Participant that needs to tender such 
Rights or Securities in order to receive the shares and/or 
consideration from (i) a subscription rights offering (a ``Rights 
Offer''); or (ii) a cash tender offer or exchange offer (collectively, 
a ``Tender/Exchange Offer'') (together with Rights Offer, ``Offer''). 
DTC would also eliminate an option called ``Cover of Protect Submitted 
Directly to Agent'' (``CPDA'') from PSOP/PTOP that has allowed a 
Participant to tender Rights or Securities through DTC to be eligible 
to receive the shares and/or consideration from an Offer, when such 
Participant submitted its initial acceptance directly to the Offer 
Agent outside of DTC. In addition, DTC proposes to make ministerial 
changes to the text of the Guide, as more fully described below.
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    \4\ Capitalized terms not otherwise defined herein have the 
meaning set forth in the Rules, By-Laws and Organization Certificate 
of DTC (the ``Rules''), available at http://www.dtcc.com/legal/rules-and-procedures.aspx and the Reorganizations Service Guide (the 
``Guide''), available at http://www.dtcc.com/~/media/Files/
Downloads/legal/service-guides/Reorganizations.pdf.
    \5\ References in this rule filing to ``PSOP'' refer to both the 
PSOP function within the DTC Participant Terminal System (``PTS'') 
interface and the equivalent ``Rights Subscription'' function within 
the Participant Browser System (``PBS'') interface. PSOP is a 
function that is used by Participants to submit instructions 
including oversubscriptions, submit protects, submit cover of 
protects, submit cover of protects on behalf of another Participant, 
and submit Rights sell instructions on Rights Subscription events. 
PTS and PBS are user interfaces for DTC's Settlement and Asset 
Services functions. PTS is mainframe-based and PBS is web-based with 
a mainframe back-end. Participants may use either PTS or PBS, as 
they are functionally equivalent.
    \6\ References in this rule filing to ``PTOP'' refer to both the 
PTOP function within the PTS interface and the equivalent 
``Voluntary Tenders and Exchanges'' function within the PBS 
interface. PTOP is a function that is used by Participants to submit 
instructions, submit protects, submit cover of protects, submit 
cover of protects on behalf of another Participant, and submit 
withdrawals on various Voluntary Reorganization events.
    \7\ The Offer Agent is the fiscal agent of the offeror, 
typically a bank or trust company that is designated to coordinate 
the process of the Offer.
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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, DTC 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. DTC 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 by DTC would update its Procedures set 
forth in the Guide to make changes to certain options within its PSOP 
and PTOP functions. Specifically, DTC proposes to add an option called 
CPAP to PSOP/PTOP that would allow a Participant to tender Rights or 
Securities through DTC to an Offer Agent, on behalf of another 
Participant that needs to tender such Rights or Securities in order to 
receive the shares and/or consideration from (i) a Rights Offer; or 
(ii) a Tender/Exchange Offer. DTC would also eliminate an option called 
CPDA from PSOP/PTOP that has allowed a Participant to tender Rights or 
Securities through DTC to be eligible to receive the shares and/or 
consideration from an Offer, when such Participant submitted its 
initial acceptance directly to the Offer Agent outside of DTC. In 
addition, DTC proposes to make ministerial changes to the text of the 
Guide, as more fully described below.
(i) Protects and Covers
(a) Protects and Covers Outside of DTC
Subscription Rights Offering
    A Rights Offer is the issuance of Rights to each shareholder as of 
a record date set by the issuer. Rights are issued to each shareholder 
in proportion to the number of shares it holds, and entitles the 
shareholder to purchase additional

[[Page 54171]]

shares at a discount. Rights may be either non-transferable or 
transferable. Holders are able to trade transferable Rights in the 
secondary market.
    In order to subscribe to a Rights Offer, an investor or its broker 
(``Investor'') must, prior to the expiration of the Rights Offer, 
deliver to the Offer Agent: (i) The Rights, (ii) an executed 
subscription form for such Rights Offer (``Subscription Form'') in 
which it subscribes to the new shares of the Rights Offer, and (iii) 
the payment due for the purchase of the shares.
Tender Offers and Exchange Offers
    A tender offer is a solicitation by an issuer or a third party to 
purchase a substantial percentage of the issuer's shares for a 
specified period of time. The tender offer is at a fixed price, usually 
higher than the current market price, and is usually conditioned on a 
sufficient number of the issuer's shareholders tendering a fixed number 
of their shares. An exchange offer is an offer by an issuer to exchange 
its Securities for other Securities (of that issuer or another).
    If an Investor wants to accept a Tender/Exchange Offer, it submits 
to the Offer Agent: (i) The letter of transmittal for such Tender/
Exchange Offer (``Letter of Transmittal'') setting forth the terms of 
the tender or exchange, including information about the quantity of 
Securities being tendered as well as where and to whom the payment 
should be made, and (ii) the Securities it is tendering.
Cover of Protect
    An Investor may want to accept an Offer but will not have the 
necessary Rights or Securities, as the case may be, before the 
expiration date of the Offer. If permitted by the terms of the Offer, 
the Investor may submit to the Offer Agent the notice of guaranteed 
delivery for such Offer (``Notice of Guaranteed Delivery'') which 
serves as (i) protection of the Investor's acceptance of the Offer (the 
``Protect''), and sets forth the number of shares being subscribed to 
or the amount of Securities being tendered, and (ii) a guarantee that 
the Rights or Securities (the ``Cover'') will be delivered to the Offer 
Agent within the period prescribed by the Offer (the ``Protect 
Period'').\8\
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    \8\ A Protect Period is usually three business days after the 
expiration of the Offer.
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Covering Another Investor's Protect
    In some cases, an Investor may find that it will not have the 
necessary Rights or Securities, as the case may be, in time to tender 
to the Offer Agent before the expiration of the Protect Period. This 
may occur due to a failed trade or late delivery of such Rights or 
Securities. If the Investor is unable to deliver the Rights or 
Securities within the Protect Period, it will have failed to validly 
tender and will not be eligible to purchase shares under the Rights 
Offer or to receive the consideration of the Tender/Exchange Offer, 
respectively. However, another Investor who does hold the Rights or 
Securities, and typically owes such Rights or Securities to the 
Investor who submitted the Protect because of a failed trade or late 
delivery, may submit the Cover to the Offer Agent on behalf of such 
Investor.
(b) Protects and Covers Through DTC
PSOP and PTOP
    DTC distributes information to Participants regarding the 
reorganization activity that it handles. Generally, this information is 
distributed through PSOP/PTOP, or the Reorganization Inquiry for 
Participants (``RIPS'') function of PTS/PBS. Upon receiving notice of 
such reorganization activity, Participants may use the PSOP (for Rights 
Offers) or PTOP (for Tender/Exchange Offers) functions to elect 
participation in the reorganization event and to place related 
instructions for DTC to process.
DTC's Automated Subscription Offer Program
    As part of its corporate action \9\ services, DTC offers the 
Automated Subscription Offer Program (``ASOP''),\10\ through which DTC, 
as a conduit between Participants and the Offer Agents, processes 
Rights Offers for Eligible Securities. Each Offer Agent for a Rights 
Offer that is eligible for processing through ASOP enters into an 
agreement with DTC specifying, among other things, that the relay of 
electronic messages by DTC will qualify as the execution and delivery 
of Subscription Forms or Notices of Guaranteed Delivery by 
Participants.
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    \9\ Corporate actions processed by DTC include, but are not 
limited to, the reorganization of Eligible Securities resulting from 
mergers, acquisitions, and reverse splits. DTC performs corporate 
actions processing through its Mandatory and Voluntary 
Reorganization Services. See DTC Operational Arrangements, available 
at http://www.dtcc.com/~/media/Files/Downloads/legal/issue-
eligibility/eligibility/operational-arrangements.pdf.
    \10\ See Securities Exchange Act Release No. 35108 (December 16, 
1994), 59 FR 67356 (December 29, 1994) (SR-DTC-94-15) (instituting 
ASOP).
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    ASOP enables Participants to submit subscription instructions using 
PSOP. Through PSOP, a Participant that wants to subscribe to a Rights 
Offer transmits its acceptance and acknowledgment of the terms of the 
Subscription Form, and instructs and authorizes DTC to surrender the 
Rights and process the corresponding payment to the Offer Agent. In 
accordance with these electronic instructions, DTC effects book-entry 
deliveries of the Rights by transferring the Rights from the 
Participant's Account to a DTC operational account maintained by DTC on 
behalf of the Offer Agent (``Agent Account'') and sending an electronic 
confirmation to the Offer Agent. DTC debits the Participant's 
Settlement Account for the amount of the subscription payments and 
wires the payment to the Offer Agent. When the additional shares are 
distributed by the Offer Agent, DTC credits the Securities to the 
Account of the Participant.
    If permitted by the terms of the Rights Offer, if a Participant 
will not have the Rights before the expiration date of the Rights 
Offer, it may submit a Protect to the Offer Agent by transmitting 
through PSOP its acceptance and acknowledgment of the terms of the 
Notice of Guaranteed Delivery. If the Participant receives the Rights 
before the day designated by DTC as the Cover end date (the ``DTC Cover 
Protect Expiration Date''),\11\ the Participant may submit a Cover of 
Protect by transmitting its acceptance of the terms in the Letter of 
Transmittal via a Cover of Protect option in PSOP, and instructing DTC 
to deliver the Rights and process the payment to the Offer Agent.
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    \11\ The DTC Cover Protect Expiration Date is usually one 
business day earlier than the Protect Period expiration date 
established by the terms of the Offer.
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DTC's Automated Tender Offer Program
    DTC offers the Automated Tender Offer Program (``ATOP''),\12\ 
through which DTC processes Tender/Exchange Offers for Eligible 
Securities. Offer Agents for Tender/Exchange Offers eligible for 
processing through ATOP must enter into a master agreement with DTC.
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    \12\ For a description of ATOP, refer to Securities Exchange Act 
Release No. 33797 (March 22, 1994), 59 FR 14696 (March 29, 1994) 
(SR-DTC-93-11) (approving enhancements to ATOP).
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    A Participant uses PTOP to transmit its acceptance and 
acknowledgement of the Letter of Transmittal of the applicable Tender/
Exchange Offer and to instruct DTC to deliver the Securities to the 
Offer Agent. In accordance with permitted instructions, DTC effects 
book-entry delivery of Securities from the Participant's Account to the 
Agent Account. When the payment (for a tender offer) and/or Securities 
(for an exchange offer) are distributed by the Offer Agent, DTC credits 
the amount of

[[Page 54172]]

the payment and/or Securities to the Settlement Account or Account of 
the Participant, respectively.
    A Participant's Securities may not be available to tender to the 
Offer Agent prior to the expiration of the Tender/Exchange Offer. If 
the Participant anticipates receiving the Securities and wants to 
participate in the Tender/Exchange Offer, it may, if permitted by the 
terms of the Tender/Exchange Offer, submit a Protect by transmitting 
through PTOP its acknowledgement and acceptance of the terms of the 
Notice of Guaranteed Delivery. Before the DTC Cover Protect Expiration 
Date, the Participant must acknowledge and agree to the terms of the 
Letter of Transmittal through PTOP and instruct DTC to deliver the 
Securities to the Offer Agent to Cover such Participant's Protect. If 
the Participant is unable to deliver the Securities before the DTC 
Cover Protect Expiration Date, it will have failed to validly tender 
and will not be eligible for the consideration of the Tender/Exchange 
Offer.
(c) Proposal
    As explained above, there are times when a Participant that 
submitted a Protect (the ``Protecting Participant'') may need to have 
another Participant (the ``Covering Participant'') Cover the Protect. 
Currently, neither PSOP nor PTOP has the specific functionality for a 
Covering Participant to submit a Cover on behalf of a Protecting 
Participant.
    However, DTC is aware that Covering Participants frequently utilize 
the PSOP/PTOP CPDA option in order to submit a Cover on behalf of 
another Participant, which is not the intended purpose of the CPDA 
function. The intended purpose of the CPDA function is to enable a 
Participant that submitted a Protect directly to an Offer Agent outside 
of DTC to later submit the corresponding Cover through DTC.
    In order to address directly a Participant's need to submit a Cover 
of another Participant's Protect, DTC proposes to add the CPAP option 
to PSOP/PTOP. With this enhancement, the Protecting Participant would 
submit a Protect through PSOP/PTOP, and the Covering Participant would 
be able to submit a Cover through PSOP/PTOP by providing the Protecting 
Participant's Protect ID, Protect Sequence Number, and Protect 
Participant ID. This enhanced functionality would automate the matching 
of Covers to corresponding Protects, as well as automatically allocate 
the applicable credits for Securities and/or payments directly to the 
Protecting Participant, rather than to the Covering Participant. The 
CPAP option would eliminate the need for Participants to utilize CPDA 
for the unintended purpose of Covering another Participant's Protect.
    In addition, to further reduce the risks, burden, and costs to DTC 
associated with the manual processing of the CPDA option in PSOP/PTOP, 
DTC is proposing to eliminate that option. When a Participant uses CPDA 
to submit a Cover for another Participant's Protect, DTC must manually 
process the Cover and use manual exception processing to match the 
Cover to the corresponding Protect. In addition, DTC must allocate the 
credits for Securities and/or payment from the Offer to the Covering 
Participant. Even when a Participant uses CPDA for its intended 
purpose, which is infrequent, it is a labor intensive process for DTC, 
as it must manually process the Cover and return the allocation to the 
Offer Agent within a narrow timeframe. Therefore, DTC proposes that 
when a Participant submits a Protect directly to the Offer Agent, such 
Participant would need to submit the Cover directly to the Offer Agent, 
and not through PSOP/PTOP.
(ii) Technical Changes
    The proposed rule change would revise the Guide to make ministerial 
updates to reflect current terminology and practices, as set forth 
below. The Guide would be updated to:
     Correct the text of the Guide to accurately reflect names 
of functions accessible through PTS, and to accurately reflect the 
names of the corresponding functions that are accessible through PBS. 
Presently, the Guide assigns PTS functions to PBS, and does not provide 
the names of the corresponding PBS functions.
     Correct the timeframes within which a Participant can 
submit a Notice of Guaranteed Delivery on the expiration date of a 
Rights Offer. Generally, a Participant may submit a Notice of 
Guaranteed Delivery through PSOP/PTOP from 8:00 a.m. to 2:15 p.m., at 
which time the window closes to allow for settlement of cash 
activities. However, DTC will re-open the window from 3:30 p.m. to 5:00 
p.m. on the expiration date of the Offer to allow Participants extra 
time to submit a Notice of Guaranteed Delivery before the Offer 
expires, provided that the Offer Agent agrees to accept deferred 
subscription payments. The text of the Guide incorrectly reflects an 
open window from 8:00 a.m. to 5:00 p.m., which is not the practice. 
With this rule filing, the text would be corrected to reflect the 
correct 8:00 a.m. to 2:15 p.m. and 3:30 p.m. to 5:00 p.m. windows.
     Pursuant to Participant requests, expand the availability 
of PTOP for a Participant to submit a Cover of Protect, on the dates 
specified in the notice of an Offer. The current availability is until 
4:15 p.m. or 12:00 p.m., depending on the type of Offer, and the 
proposed rule change would revise the text to reflect availability 
until 5:00 p.m. or 1:00 p.m., as applicable.
     Remove references to the UNIT Swingovers service. Several 
years ago, the UNIT Swingovers service was discontinued, and instead, 
voluntary unit separations and recombinations \13\ began to be 
processed under the FAST program.\14\
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    \13\ A unit is a Security comprised of more than one class of 
Securities, e.g., common stock and warrants (the components). In a 
voluntary unit separation, the separation and recombination between 
the security component and the security is done by the Participant 
and transfer agent using DTC's Deposit and Withdrawal at Custodian 
system.
    \14\ Securities Exchange Act Release No. 59199 (January 6, 
2009), 74 FR 1266 (January 12, 2009) (SR-DTC-2008-14).
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     Clarify information regarding available reports and 
methods of submission and receipt.
     Replace reference to `NASDAQ' with `FINRA'.
     Replace reference to `AMEX' with `NASDAQ'.
     Add the title of the Guide, delete `Copyright,' and update 
the `Important Legal Information' to align with other DTC service 
guides.
     Correct spelling, grammatical, capitalization, numbering, 
and typographical errors throughout.
     Update other text, including address, phone numbers, Web 
site information, and methods of communication.
Implementation Date
    DTC will announce the effective date via Important Notice upon the 
Commission's approval of the proposed rule change.
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act \15\ requires that the rules of the 
clearing agency be designed, inter alia, to promote the prompt and 
accurate clearance and settlement of securities transactions. DTC 
believes that the proposed rule change is consistent with this 
provision because (i) by adding the CPAP option by which a Participant 
can submit a Cover through PSOP/PTOP on behalf of another Participant 
instead of improperly using the CPDA option that then requires DTC to 
resort to manual processing and allocate the consideration to the 
Covering

[[Page 54173]]

Participant rather than the Protecting Participant, and (ii) by 
removing the CPDA option and requiring that Participants that Protect 
outside of DTC to also Cover outside DTC, the proposed rule change 
would establish a process that would streamline Cover of Protect 
transactions, allocations and recordkeeping for Participants, and 
reduce manual processing and the risks, burdens, and costs associated 
with such processing for DTC, thereby promoting the prompt and accurate 
clearance and settlement of securities, consistent with the 
requirements of the Act, in particular Section 17A(b)(3)(F), cited 
above.
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    \15\ 15 U.S.C. 78q-1(b)(3)(F).
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    Additionally, the proposed ministerial changes to the Procedures, 
which update the Guide as set forth above, would provide additional 
clarity to Participants and would ensure the accuracy of the Procedures 
by reflecting the present state of DTC's reorganization services and 
practices, thereby promoting the prompt and accurate clearance and 
settlement of securities, consistent with the requirements of the Act, 
in particular Section 17A(b)(3)(F), cited above.

(B) Clearing Agency's Statement on Burden on Competition

    DTC does not believe that the proposed rule change would have any 
impact, or impose any burden, on competition because it would remove a 
function that is infrequently used for its intended purpose, and would 
establish a new function, available to all Participants, without the 
addition of a new fee.

(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. DTC will notify the Commission of any written 
comments received by DTC.

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-2016-005 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2016-005. 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-2016-005 and should be 
submitted on or before September 6, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Robert W. Errett,
Deputy Secretary.
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    \16\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-19322 Filed 8-12-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                54170                          Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices

                                                number should be included on the                        notice is hereby given that on July 29,                   Offer, ‘‘Offer’’). DTC would also
                                                subject line if email is used. To help the              2016, The Depository Trust Company                        eliminate an option called ‘‘Cover of
                                                Commission process and review your                      (‘‘DTC’’) filed with the Securities and                   Protect Submitted Directly to Agent’’
                                                comments more efficiently, please use                   Exchange Commission (‘‘Commission’’)                      (‘‘CPDA’’) from PSOP/PTOP that has
                                                only one method. The Commission will                    the proposed rule change as described                     allowed a Participant to tender Rights or
                                                post all comments on the Commission’s                   in Items I, II and III below, which Items                 Securities through DTC to be eligible to
                                                Internet Web site (http://www.sec.gov/                  have been prepared by DTC. DTC filed                      receive the shares and/or consideration
                                                rules/sro.shtml). Copies of the                         the proposed rule change pursuant to                      from an Offer, when such Participant
                                                submission, all subsequent                              Section 19(b)(2) of the Act.3 The                         submitted its initial acceptance directly
                                                amendments, all written statements                      Commission is publishing this notice to                   to the Offer Agent outside of DTC. In
                                                with respect to the proposed rule                       solicit comments on the proposed rule                     addition, DTC proposes to make
                                                change that are filed with the                          change from interested persons.                           ministerial changes to the text of the
                                                Commission, and all written                                                                                       Guide, as more fully described below.
                                                                                                        I. Clearing Agency’s Statement of the
                                                communications relating to the
                                                                                                        Terms of Substance of the Proposed                        II. Clearing Agency’s Statement of the
                                                proposed rule change between the
                                                                                                        Rule Change                                               Purpose of, and Statutory Basis for, the
                                                Commission and any person, other than
                                                                                                           The proposed rule change by DTC                        Proposed Rule Change
                                                those that may be withheld from the
                                                public in accordance with the                           would update its Procedures4 set forth                       In its filing with the Commission,
                                                provisions of 5 U.S.C. 552, will be                     in the Guide to make changes to certain                   DTC included statements concerning
                                                available for Web site viewing and                      options within its Participant                            the purpose of and basis for the
                                                printing in the Commission’s Public                     Subscription Offer Program (‘‘PSOP’’)5                    proposed rule change and discussed any
                                                Reference Room, 100 F Street NE.,                       and Participant Tender Offer Program                      comments it received on the proposed
                                                Washington, DC 20549, on official                       (‘‘PTOP’’) functions.6 Specifically, DTC                  rule change. The text of these statements
                                                business days between the hours of                      proposes to add an option called ‘‘Cover                  may be examined at the places specified
                                                10:00 a.m. and 3:00 p.m. Copies of the                  of Protect on Behalf of Another                           in Item IV below. DTC has prepared
                                                filing also will be available for                       Participant’’ (‘‘CPAP’’) to both PSOP                     summaries, set forth in sections A, B,
                                                inspection and copying at the principal                 and PTOP (‘‘PSOP/PTOP’’) that would                       and C below, of the most significant
                                                office of the Exchange. All comments                    allow a Participant to tender                             aspects of such statements.
                                                received will be posted without change;                 subscription rights (‘‘Rights’’) or
                                                                                                                                                                  (A) Clearing Agency’s Statement of the
                                                the Commission does not edit personal                   Securities through DTC to an agent
                                                                                                                                                                  Purpose of, and Statutory Basis for, the
                                                identifying information from                            (‘‘Offer Agent’’),7 on behalf of another
                                                                                                                                                                  Proposed Rule Change
                                                submissions. You should submit only                     Participant that needs to tender such
                                                information that you wish to make                       Rights or Securities in order to receive                  1. Purpose
                                                available publicly. All submissions                     the shares and/or consideration from (i)                     The proposed rule change by DTC
                                                should refer to File Number SR–IEX–                     a subscription rights offering (a ‘‘Rights                would update its Procedures set forth in
                                                2016–11 and should be submitted on or                   Offer’’); or (ii) a cash tender offer or                  the Guide to make changes to certain
                                                before September 6, 2016.                               exchange offer (collectively, a ‘‘Tender/                 options within its PSOP and PTOP
                                                                                                        Exchange Offer’’) (together with Rights                   functions. Specifically, DTC proposes to
                                                  For the Commission, by the Division of
                                                Trading and Markets, pursuant to delegated
                                                                                                          3 15
                                                                                                                                                                  add an option called CPAP to PSOP/
                                                authority.19                                                   U.S.C. 78s(b)(2).
                                                                                                          4 Capitalized
                                                                                                                                                                  PTOP that would allow a Participant to
                                                                                                                        terms not otherwise defined herein
                                                Robert W. Errett,                                       have the meaning set forth in the Rules, By-Laws          tender Rights or Securities through DTC
                                                Deputy Secretary.                                       and Organization Certificate of DTC (the ‘‘Rules’’),      to an Offer Agent, on behalf of another
                                                [FR Doc. 2016–19315 Filed 8–12–16; 8:45 am]             available at http://www.dtcc.com/legal/rules-and-         Participant that needs to tender such
                                                                                                        procedures.aspx and the Reorganizations Service           Rights or Securities in order to receive
                                                BILLING CODE 8011–01–P                                  Guide (the ‘‘Guide’’), available at http://
                                                                                                        www.dtcc.com/∼/media/Files/Downloads/legal/               the shares and/or consideration from (i)
                                                                                                        service-guides/Reorganizations.pdf.                       a Rights Offer; or (ii) a Tender/Exchange
                                                SECURITIES AND EXCHANGE                                   5 References in this rule filing to ‘‘PSOP’’ refer to   Offer. DTC would also eliminate an
                                                                                                        both the PSOP function within the DTC Participant         option called CPDA from PSOP/PTOP
                                                COMMISSION                                              Terminal System (‘‘PTS’’) interface and the
                                                                                                        equivalent ‘‘Rights Subscription’’ function within
                                                                                                                                                                  that has allowed a Participant to tender
                                                [Release No. 34–78520; File No. SR–DTC–                                                                           Rights or Securities through DTC to be
                                                2016–005]                                               the Participant Browser System (‘‘PBS’’) interface.
                                                                                                        PSOP is a function that is used by Participants to        eligible to receive the shares and/or
                                                                                                        submit instructions including oversubscriptions,          consideration from an Offer, when such
                                                Self-Regulatory Organizations; The                      submit protects, submit cover of protects, submit
                                                Depository Trust Company; Notice of                     cover of protects on behalf of another Participant,       Participant submitted its initial
                                                Filing of Proposed Rule Change                          and submit Rights sell instructions on Rights             acceptance directly to the Offer Agent
                                                Regarding the Implementation of                         Subscription events. PTS and PBS are user                 outside of DTC. In addition, DTC
                                                                                                        interfaces for DTC’s Settlement and Asset Services        proposes to make ministerial changes to
                                                Functionality To Submit a Cover of                      functions. PTS is mainframe-based and PBS is web-
                                                Protect on Behalf of Another                            based with a mainframe back-end. Participants may         the text of the Guide, as more fully
                                                Participant and the Removal of the                      use either PTS or PBS, as they are functionally           described below.
                                                Option To Cover of Protect Directly                     equivalent.
                                                                                                          6 References in this rule filing to ‘‘PTOP’’ refer to   (i) Protects and Covers
                                                With Agent                                              both the PTOP function within the PTS interface           (a) Protects and Covers Outside of DTC
                                                                                                        and the equivalent ‘‘Voluntary Tenders and
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                                                August 9, 2016.                                         Exchanges’’ function within the PBS interface.            Subscription Rights Offering
                                                   Pursuant to Section 19(b)(1) of the                  PTOP is a function that is used by Participants to
                                                Securities Exchange Act of 1934                         submit instructions, submit protects, submit cover          A Rights Offer is the issuance of
                                                (‘‘Act’’)1 and Rule 19b–4 thereunder,2                  of protects, submit cover of protects on behalf of        Rights to each shareholder as of a record
                                                                                                        another Participant, and submit withdrawals on            date set by the issuer. Rights are issued
                                                                                                        various Voluntary Reorganization events.
                                                  19 17 CFR 200.30–3(a)(12).                              7 The Offer Agent is the fiscal agent of the offeror,
                                                                                                                                                                  to each shareholder in proportion to the
                                                  1 15 U.S.C. 78s(b)(1).                                typically a bank or trust company that is designated      number of shares it holds, and entitles
                                                  2 17 CFR 240.19b–4.                                   to coordinate the process of the Offer.                   the shareholder to purchase additional


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                                                                              Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices                                                       54171

                                                shares at a discount. Rights may be                     expiration of the Protect Period. This                   instructs and authorizes DTC to
                                                either non-transferable or transferable.                may occur due to a failed trade or late                  surrender the Rights and process the
                                                Holders are able to trade transferable                  delivery of such Rights or Securities. If                corresponding payment to the Offer
                                                Rights in the secondary market.                         the Investor is unable to deliver the                    Agent. In accordance with these
                                                   In order to subscribe to a Rights Offer,             Rights or Securities within the Protect                  electronic instructions, DTC effects
                                                an investor or its broker (‘‘Investor’’)                Period, it will have failed to validly                   book-entry deliveries of the Rights by
                                                must, prior to the expiration of the                    tender and will not be eligible to                       transferring the Rights from the
                                                Rights Offer, deliver to the Offer Agent:               purchase shares under the Rights Offer                   Participant’s Account to a DTC
                                                (i) The Rights, (ii) an executed                        or to receive the consideration of the                   operational account maintained by DTC
                                                subscription form for such Rights Offer                 Tender/Exchange Offer, respectively.                     on behalf of the Offer Agent (‘‘Agent
                                                (‘‘Subscription Form’’) in which it                     However, another Investor who does                       Account’’) and sending an electronic
                                                subscribes to the new shares of the                     hold the Rights or Securities, and                       confirmation to the Offer Agent. DTC
                                                Rights Offer, and (iii) the payment due                 typically owes such Rights or Securities                 debits the Participant’s Settlement
                                                for the purchase of the shares.                         to the Investor who submitted the                        Account for the amount of the
                                                                                                        Protect because of a failed trade or late                subscription payments and wires the
                                                Tender Offers and Exchange Offers                       delivery, may submit the Cover to the                    payment to the Offer Agent. When the
                                                   A tender offer is a solicitation by an               Offer Agent on behalf of such Investor.                  additional shares are distributed by the
                                                issuer or a third party to purchase a                                                                            Offer Agent, DTC credits the Securities
                                                                                                        (b) Protects and Covers Through DTC
                                                substantial percentage of the issuer’s                                                                           to the Account of the Participant.
                                                shares for a specified period of time.                  PSOP and PTOP                                               If permitted by the terms of the Rights
                                                The tender offer is at a fixed price,                      DTC distributes information to                        Offer, if a Participant will not have the
                                                usually higher than the current market                  Participants regarding the                               Rights before the expiration date of the
                                                price, and is usually conditioned on a                  reorganization activity that it handles.                 Rights Offer, it may submit a Protect to
                                                sufficient number of the issuer’s                       Generally, this information is                           the Offer Agent by transmitting through
                                                shareholders tendering a fixed number                   distributed through PSOP/PTOP, or the                    PSOP its acceptance and
                                                of their shares. An exchange offer is an                Reorganization Inquiry for Participants                  acknowledgment of the terms of the
                                                offer by an issuer to exchange its                      (‘‘RIPS’’) function of PTS/PBS. Upon                     Notice of Guaranteed Delivery. If the
                                                Securities for other Securities (of that                receiving notice of such reorganization                  Participant receives the Rights before
                                                issuer or another).                                     activity, Participants may use the PSOP                  the day designated by DTC as the Cover
                                                   If an Investor wants to accept a                     (for Rights Offers) or PTOP (for Tender/                 end date (the ‘‘DTC Cover Protect
                                                Tender/Exchange Offer, it submits to the                Exchange Offers) functions to elect                      Expiration Date’’),11 the Participant may
                                                Offer Agent: (i) The letter of transmittal              participation in the reorganization event                submit a Cover of Protect by
                                                for such Tender/Exchange Offer (‘‘Letter                and to place related instructions for                    transmitting its acceptance of the terms
                                                of Transmittal’’) setting forth the terms               DTC to process.                                          in the Letter of Transmittal via a Cover
                                                of the tender or exchange, including                                                                             of Protect option in PSOP, and
                                                information about the quantity of                       DTC’s Automated Subscription Offer
                                                                                                                                                                 instructing DTC to deliver the Rights
                                                Securities being tendered as well as                    Program
                                                                                                                                                                 and process the payment to the Offer
                                                where and to whom the payment should                       As part of its corporate action 9                     Agent.
                                                be made, and (ii) the Securities it is                  services, DTC offers the Automated
                                                tendering.                                              Subscription Offer Program (‘‘ASOP’’),10                 DTC’s Automated Tender Offer Program
                                                                                                        through which DTC, as a conduit                             DTC offers the Automated Tender
                                                Cover of Protect                                        between Participants and the Offer                       Offer Program (‘‘ATOP’’),12 through
                                                   An Investor may want to accept an                    Agents, processes Rights Offers for                      which DTC processes Tender/Exchange
                                                Offer but will not have the necessary                   Eligible Securities. Each Offer Agent for                Offers for Eligible Securities. Offer
                                                Rights or Securities, as the case may be,               a Rights Offer that is eligible for                      Agents for Tender/Exchange Offers
                                                before the expiration date of the Offer.                processing through ASOP enters into an                   eligible for processing through ATOP
                                                If permitted by the terms of the Offer,                 agreement with DTC specifying, among                     must enter into a master agreement with
                                                the Investor may submit to the Offer                    other things, that the relay of electronic               DTC.
                                                Agent the notice of guaranteed delivery                 messages by DTC will qualify as the                         A Participant uses PTOP to transmit
                                                for such Offer (‘‘Notice of Guaranteed                  execution and delivery of Subscription                   its acceptance and acknowledgement of
                                                Delivery’’) which serves as (i) protection              Forms or Notices of Guaranteed                           the Letter of Transmittal of the
                                                of the Investor’s acceptance of the Offer               Delivery by Participants.                                applicable Tender/Exchange Offer and
                                                (the ‘‘Protect’’), and sets forth the                      ASOP enables Participants to submit                   to instruct DTC to deliver the Securities
                                                number of shares being subscribed to or                 subscription instructions using PSOP.                    to the Offer Agent. In accordance with
                                                the amount of Securities being tendered,                Through PSOP, a Participant that wants                   permitted instructions, DTC effects
                                                and (ii) a guarantee that the Rights or                 to subscribe to a Rights Offer transmits                 book-entry delivery of Securities from
                                                Securities (the ‘‘Cover’’) will be                      its acceptance and acknowledgment of                     the Participant’s Account to the Agent
                                                delivered to the Offer Agent within the                 the terms of the Subscription Form, and                  Account. When the payment (for a
                                                period prescribed by the Offer (the                                                                              tender offer) and/or Securities (for an
                                                                                                           9 Corporate actions processed by DTC include,
                                                ‘‘Protect Period’’).8                                                                                            exchange offer) are distributed by the
                                                                                                        but are not limited to, the reorganization of Eligible
                                                                                                        Securities resulting from mergers, acquisitions, and
                                                                                                                                                                 Offer Agent, DTC credits the amount of
                                                Covering Another Investor’s Protect
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                                                                                                        reverse splits. DTC performs corporate actions
                                                  In some cases, an Investor may find                   processing through its Mandatory and Voluntary             11 The DTC Cover Protect Expiration Date is

                                                that it will not have the necessary Rights              Reorganization Services. See DTC Operational             usually one business day earlier than the Protect
                                                                                                        Arrangements, available at http://www.dtcc.com/∼/        Period expiration date established by the terms of
                                                or Securities, as the case may be, in time              media/Files/Downloads/legal/issue-eligibility/           the Offer.
                                                to tender to the Offer Agent before the                 eligibility/operational-arrangements.pdf.                  12 For a description of ATOP, refer to Securities
                                                                                                           10 See Securities Exchange Act Release No. 35108      Exchange Act Release No. 33797 (March 22, 1994),
                                                   8 A Protect Period is usually three business days    (December 16, 1994), 59 FR 67356 (December 29,           59 FR 14696 (March 29, 1994) (SR–DTC–93–11)
                                                after the expiration of the Offer.                      1994) (SR–DTC–94–15) (instituting ASOP).                 (approving enhancements to ATOP).



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                                                54172                        Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices

                                                the payment and/or Securities to the                    Participants to utilize CPDA for the                    • Pursuant to Participant requests,
                                                Settlement Account or Account of the                    unintended purpose of Covering another                expand the availability of PTOP for a
                                                Participant, respectively.                              Participant’s Protect.                                Participant to submit a Cover of Protect,
                                                  A Participant’s Securities may not be                    In addition, to further reduce the                 on the dates specified in the notice of
                                                available to tender to the Offer Agent                  risks, burden, and costs to DTC                       an Offer. The current availability is until
                                                prior to the expiration of the Tender/                  associated with the manual processing                 4:15 p.m. or 12:00 p.m., depending on
                                                Exchange Offer. If the Participant                      of the CPDA option in PSOP/PTOP,                      the type of Offer, and the proposed rule
                                                anticipates receiving the Securities and                DTC is proposing to eliminate that                    change would revise the text to reflect
                                                wants to participate in the Tender/                     option. When a Participant uses CPDA                  availability until 5:00 p.m. or 1:00 p.m.,
                                                Exchange Offer, it may, if permitted by                 to submit a Cover for another                         as applicable.
                                                the terms of the Tender/Exchange Offer,                 Participant’s Protect, DTC must                         • Remove references to the UNIT
                                                submit a Protect by transmitting through                manually process the Cover and use                    Swingovers service. Several years ago,
                                                PTOP its acknowledgement and                            manual exception processing to match                  the UNIT Swingovers service was
                                                acceptance of the terms of the Notice of                the Cover to the corresponding Protect.               discontinued, and instead, voluntary
                                                Guaranteed Delivery. Before the DTC                     In addition, DTC must allocate the                    unit separations and recombinations 13
                                                Cover Protect Expiration Date, the                      credits for Securities and/or payment                 began to be processed under the FAST
                                                Participant must acknowledge and agree                  from the Offer to the Covering                        program.14
                                                to the terms of the Letter of Transmittal               Participant. Even when a Participant                    • Clarify information regarding
                                                through PTOP and instruct DTC to                        uses CPDA for its intended purpose,                   available reports and methods of
                                                deliver the Securities to the Offer Agent               which is infrequent, it is a labor                    submission and receipt.
                                                to Cover such Participant’s Protect. If                 intensive process for DTC, as it must                   • Replace reference to ‘NASDAQ’
                                                the Participant is unable to deliver the                manually process the Cover and return                 with ‘FINRA’.
                                                Securities before the DTC Cover Protect                 the allocation to the Offer Agent within                • Replace reference to ‘AMEX’ with
                                                Expiration Date, it will have failed to                 a narrow timeframe. Therefore, DTC                    ‘NASDAQ’.
                                                validly tender and will not be eligible                 proposes that when a Participant                        • Add the title of the Guide, delete
                                                for the consideration of the Tender/                    submits a Protect directly to the Offer               ‘Copyright,’ and update the ‘Important
                                                Exchange Offer.                                         Agent, such Participant would need to                 Legal Information’ to align with other
                                                                                                        submit the Cover directly to the Offer                DTC service guides.
                                                (c) Proposal
                                                                                                        Agent, and not through PSOP/PTOP.                       • Correct spelling, grammatical,
                                                   As explained above, there are times                                                                        capitalization, numbering, and
                                                when a Participant that submitted a                     (ii) Technical Changes                                typographical errors throughout.
                                                Protect (the ‘‘Protecting Participant’’)                                                                        • Update other text, including
                                                may need to have another Participant                       The proposed rule change would
                                                                                                                                                              address, phone numbers, Web site
                                                (the ‘‘Covering Participant’’) Cover the                revise the Guide to make ministerial
                                                                                                                                                              information, and methods of
                                                Protect. Currently, neither PSOP nor                    updates to reflect current terminology
                                                                                                                                                              communication.
                                                PTOP has the specific functionality for                 and practices, as set forth below. The
                                                a Covering Participant to submit a Cover                Guide would be updated to:                            Implementation Date
                                                on behalf of a Protecting Participant.                     • Correct the text of the Guide to                   DTC will announce the effective date
                                                   However, DTC is aware that Covering                  accurately reflect names of functions                 via Important Notice upon the
                                                Participants frequently utilize the                     accessible through PTS, and to                        Commission’s approval of the proposed
                                                PSOP/PTOP CPDA option in order to                       accurately reflect the names of the                   rule change.
                                                submit a Cover on behalf of another                     corresponding functions that are
                                                Participant, which is not the intended                  accessible through PBS. Presently, the                2. Statutory Basis
                                                purpose of the CPDA function. The                       Guide assigns PTS functions to PBS,                      Section 17A(b)(3)(F) of the Act 15
                                                intended purpose of the CPDA function                   and does not provide the names of the                 requires that the rules of the clearing
                                                is to enable a Participant that submitted               corresponding PBS functions.                          agency be designed, inter alia, to
                                                a Protect directly to an Offer Agent                       • Correct the timeframes within                    promote the prompt and accurate
                                                outside of DTC to later submit the                      which a Participant can submit a Notice               clearance and settlement of securities
                                                corresponding Cover through DTC.                        of Guaranteed Delivery on the                         transactions. DTC believes that the
                                                   In order to address directly a                       expiration date of a Rights Offer.                    proposed rule change is consistent with
                                                Participant’s need to submit a Cover of                 Generally, a Participant may submit a                 this provision because (i) by adding the
                                                another Participant’s Protect, DTC                      Notice of Guaranteed Delivery through                 CPAP option by which a Participant can
                                                proposes to add the CPAP option to                      PSOP/PTOP from 8:00 a.m. to 2:15 p.m.,                submit a Cover through PSOP/PTOP on
                                                PSOP/PTOP. With this enhancement,                       at which time the window closes to                    behalf of another Participant instead of
                                                the Protecting Participant would submit                 allow for settlement of cash activities.              improperly using the CPDA option that
                                                a Protect through PSOP/PTOP, and the                    However, DTC will re-open the window                  then requires DTC to resort to manual
                                                Covering Participant would be able to                   from 3:30 p.m. to 5:00 p.m. on the                    processing and allocate the
                                                submit a Cover through PSOP/PTOP by                     expiration date of the Offer to allow                 consideration to the Covering
                                                providing the Protecting Participant’s                  Participants extra time to submit a
                                                Protect ID, Protect Sequence Number,                    Notice of Guaranteed Delivery before                     13 A unit is a Security comprised of more than

                                                and Protect Participant ID. This                        the Offer expires, provided that the                  one class of Securities, e.g., common stock and
                                                                                                                                                              warrants (the components). In a voluntary unit
                                                enhanced functionality would automate                   Offer Agent agrees to accept deferred
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                                                                                                                                                              separation, the separation and recombination
                                                the matching of Covers to corresponding                 subscription payments. The text of the                between the security component and the security is
                                                Protects, as well as automatically                      Guide incorrectly reflects an open                    done by the Participant and transfer agent using
                                                allocate the applicable credits for                     window from 8:00 a.m. to 5:00 p.m.,                   DTC’s Deposit and Withdrawal at Custodian
                                                                                                                                                              system.
                                                Securities and/or payments directly to                  which is not the practice. With this rule                14 Securities Exchange Act Release No. 59199
                                                the Protecting Participant, rather than to              filing, the text would be corrected to                (January 6, 2009), 74 FR 1266 (January 12, 2009)
                                                the Covering Participant. The CPAP                      reflect the correct 8:00 a.m. to 2:15 p.m.            (SR–DTC–2008–14).
                                                option would eliminate the need for                     and 3:30 p.m. to 5:00 p.m. windows.                      15 15 U.S.C. 78q–1(b)(3)(F).




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                                                                             Federal Register / Vol. 81, No. 157 / Monday, August 15, 2016 / Notices                                                    54173

                                                Participant rather than the Protecting                    (B) Institute proceedings to determine                For the Commission, by the Division of
                                                Participant, and (ii) by removing the                   whether the proposed rule change                      Trading and Markets, pursuant to delegated
                                                CPDA option and requiring that                          should be disapproved.                                authority.16
                                                Participants that Protect outside of DTC                                                                      Robert W. Errett,
                                                                                                        IV. Solicitation of Comments                          Deputy Secretary.
                                                to also Cover outside DTC, the proposed
                                                rule change would establish a process                     Interested persons are invited to                   [FR Doc. 2016–19322 Filed 8–12–16; 8:45 am]
                                                that would streamline Cover of Protect                  submit written data, views and                        BILLING CODE 8011–01–P
                                                transactions, allocations and                           arguments concerning the foregoing,
                                                recordkeeping for Participants, and                     including whether the proposed rule
                                                reduce manual processing and the risks,                 change is consistent with the Act.                    SECURITIES AND EXCHANGE
                                                burdens, and costs associated with such                 Comments may be submitted by any of                   COMMISSION
                                                processing for DTC, thereby promoting                   the following methods:                                [Release No. 34–78511; File No. SR–CBOE–
                                                the prompt and accurate clearance and                                                                         2016–049]
                                                settlement of securities, consistent with               Electronic Comments
                                                the requirements of the Act, in                           • Use the Commission’s Internet                     Self-Regulatory Organizations;
                                                particular Section 17A(b)(3)(F), cited                  comment form (http://www.sec.gov/                     Chicago Board Options Exchange,
                                                above.                                                  rules/sro.shtml); or                                  Incorporated; Notice of Designation of
                                                   Additionally, the proposed                             • Send an email to rule-comments@                   Longer Period for Commission Action
                                                ministerial changes to the Procedures,                  sec.gov. Please include File Number SR–               on Proposed Rule Change To List
                                                which update the Guide as set forth                     DTC–2016–005 on the subject line.                     Options That Overlie the FTSE
                                                above, would provide additional clarity                                                                       Developed Europe Index and the FTSE
                                                to Participants and would ensure the                    Paper Comments                                        Emerging Index, To Raise the
                                                accuracy of the Procedures by reflecting                  • Send paper comments in triplicate                 Comprehensive Surveillance
                                                the present state of DTC’s reorganization               to Secretary, Securities and Exchange                 Agreement Percentage Applicable to
                                                services and practices, thereby                         Commission, 100 F Street NE.,                         Certain Index Options, and To Amend
                                                promoting the prompt and accurate                       Washington, DC 20549–1090.                            the Maintenance Listing Criteria
                                                clearance and settlement of securities,                                                                       Applicable to Certain Index Options
                                                consistent with the requirements of the                 All submissions should refer to File
                                                                                                        Number SR–DTC–2016–005. This file                     August 9, 2016.
                                                Act, in particular Section 17A(b)(3)(F),
                                                cited above.                                            number should be included on the                         On June 15, 2016, Chicago Board
                                                                                                        subject line if email is used. To help the            Options Exchange, Incorporated
                                                (B) Clearing Agency’s Statement on                      Commission process and review your                    (‘‘Exchange’’) filed with the Securities
                                                Burden on Competition                                   comments more efficiently, please use                 and Exchange Commission
                                                                                                        only one method. The Commission will                  (‘‘Commission’’), pursuant to Section
                                                  DTC does not believe that the                                                                               19(b)(1) of the Securities Exchange Act
                                                                                                        post all comments on the Commission’s
                                                proposed rule change would have any                                                                           of 1934 (‘‘Act’’) 1 and Rule 19b–4
                                                                                                        Internet Web site (http://www.sec.gov/
                                                impact, or impose any burden, on                                                                              thereunder,2 a proposed rule change to
                                                                                                        rules/sro.shtml). Copies of the
                                                competition because it would remove a                                                                         list and trade options that overlie the
                                                                                                        submission, all subsequent
                                                function that is infrequently used for its                                                                    FTSE Developed Europe Index and the
                                                                                                        amendments, all written statements
                                                intended purpose, and would establish                                                                         FTSE Emerging Index, raise the
                                                                                                        with respect to the proposed rule
                                                a new function, available to all                                                                              comprehensive surveillance agreement
                                                                                                        change that are filed with the
                                                Participants, without the addition of a                                                                       percentage applicable to options that
                                                                                                        Commission, and all written
                                                new fee.                                                                                                      overlie the MSCI EAFE Index and the
                                                                                                        communications relating to the
                                                (C) Clearing Agency’s Statement on                      proposed rule change between the                      MSCI Emerging Markets Index (‘‘EAFE
                                                Comments on the Proposed Rule                           Commission and any person, other than                 options’’ and ‘‘EM options’’), and amend
                                                Change Received From Members,                           those that may be withheld from the                   the maintenance listing criteria
                                                Participants, or Others                                 public in accordance with the                         applicable to EAFE options, EM options,
                                                                                                        provisions of 5 U.S.C. 552, will be                   FTSE 100 Index options, and FTSE
                                                  Written comments relating to the                      available for Web site viewing and                    China 50 Index options. The proposed
                                                proposed rule change have not been                      printing in the Commission’s Public                   rule change was published for comment
                                                solicited or received. DTC will notify                  Reference Room, 100 F Street NE.,                     in the Federal Register on July 1, 2016.3
                                                the Commission of any written                           Washington, DC 20549 on official                      The Commission has received no
                                                comments received by DTC.                               business days between the hours of                    comment letters on the proposal.
                                                III. Date of Effectiveness of the                       10:00 a.m. and 3:00 p.m. Copies of the                   Section 19(b)(2) of the Act 4 provides
                                                Proposed Rule Change and Timing for                     filing also will be available for                     that within 45 days of the publication of
                                                Commission Action                                       inspection and copying at the principal               notice of the filing of a proposed rule
                                                                                                        office of DTC and on DTCC’s Web site                  change, or within such longer period up
                                                  Within 45 days of the date of                         (http://dtcc.com/legal/sec-rule-                      to 90 days as the Commission may
                                                publication of this notice in the Federal               filings.aspx). All comments received                  designate if it finds such longer period
                                                Register or within such longer period                   will be posted without change; the                    to be appropriate and publishes its
                                                up to 90 days (i) as the Commission may                 Commission does not edit personal                     reasons for so finding or as to which the
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                                                designate if it finds such longer period                identifying information from                          self-regulatory organization consents,
                                                to be appropriate and publishes its                     submissions. You should submit only
                                                reasons for so finding or (ii) as to which              information that you wish to make                       16 17  CFR 200.30–3(a)(12).
                                                                                                                                                                1 15  U.S.C. 78s(b)(1).
                                                the self-regulatory organization                        available publicly. All submissions                      2 17 CFR 240.19b–4.
                                                consents, the Commission will:                          should refer to File Number SR–DTC–                      3 See Securities Exchange Act Release No. 78177
                                                  (A) By order approve or disapprove                    2016–005 and should be submitted on                   (June 28, 2016), 81 FR 43308.
                                                such proposed rule change, or                           or before September 6, 2016.                             4 15 U.S.C. 78s(b)(2).




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Document Created: 2016-08-13 02:22:09
Document Modified: 2016-08-13 02:22:09
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 54170 

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