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 Range		54170-54173
FR Document		2016-19322

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.

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 rule-comments@sec.gov. 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 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

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 54170