81 FR 81830 - Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the DTC Settlement Service Guide With Respect to Settlement Instructions Provided to DTC by Matching Utilities
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 223 (November 18, 2016)
Federal Register Volume 81, Issue 223 (November 18, 2016)
| Page Range | 81830-81832 | |
| FR Document | 2016-27740 |
[Federal Register Volume 81, Number 223 (Friday, November 18, 2016)] [Notices] [Pages 81830-81832] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-27740] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79297; File No. SR-DTC-2016-012] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the DTC Settlement Service Guide With Respect to Settlement Instructions Provided to DTC by Matching Utilities November 14, 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 November 3, 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 the clearing agency. DTC filed the proposed rule change pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b- 4(f)(4) \4\ thereunder. The proposed rule change was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ 17 CFR 240.19b-4(f)(4). --------------------------------------------------------------------------- I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change by DTC would make technical and clarifying changes to text in the DTC Settlement Service Guide (``Guide'') \5\ with respect to settlement instructions provided to DTC by Matching Utilities (as defined below) on behalf of Participants.\6\ --------------------------------------------------------------------------- \5\ Available at http://www.dtcc.com/~/media/Files/Downloads/ legal/service-guides/Settlement.pdf. \6\ Capitalized Terms not otherwise defined herein have the meaning set forth in the DTC Rules, By-laws and Organization Certificate (``DTC Rules''), available at http://www.dtcc.com/legal/rules-and-procedures.aspx, and the Guide, supra note 5. --------------------------------------------------------------------------- II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. (A) Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose DTC may accept eligible affirmed institutional transactions (``Institutional Transactions'') \7\ from an entity providing a matching service \8\ (``Matching Utility'') that is (i) a clearing agency registered pursuant to Section 17A of the Act, (ii) an entity that has obtained an exemption from such registration from the Commission, or (iii) a ``qualified vendor'' for trade confirmation/ affirmation services as defined by the rules of a self-regulatory organization.\9\ In addition, a Matching Utility must establish a connection to DTC in accordance with DTC's reasonable requirements in order to be able to submit Affirmed Transactions. --------------------------------------------------------------------------- \7\ An Institutional Transaction is a securities transaction between a broker-dealer and its institutional customer (e.g., sell- side firms, buy-side institutions, and custodians). \8\ A matching service is an electronic service by which an intermediary matches (i.e., reconciles) trade information from the counterparties to an Institutional Transaction, to generate an affirmed transaction (``Affirmed Transaction'') which is then used to provide settlement instructions for the Affirmed Transactions to the central securities depository, such as DTC, at which the Affirmed Transaction settles. \9\ See Securities Exchange Act Release No. 39829 (April 6, 1998), 63 FR 17943 (April 13, 1998) at 17946 (providing interpretive guidance on types of entities that may provide a matching service). --------------------------------------------------------------------------- Currently, Omgeo Global Joint Venture Matching Services--US, LLC (hereinafter ``Omgeo'') \10\ is the only Matching Utility that has established a connection with DTC. This is reflected in the text of the Guide which contains specific references to Omgeo with respect to DTC functions that are accessible to any Matching Utility that satisfies the connection requirements. --------------------------------------------------------------------------- \10\ See [sic] Securities Exchange Act Release No. 44188 (April 17, 2001), 66 FR 20494 (April 23, 2001) (600-31) for the order of the Commission granting Omgeo an exemption from registration as a clearing agency. Omgeo is a global provider of post-trade, pre- settlement processing services for the institutional market. --------------------------------------------------------------------------- The Commission recently approved two applications by two separate entities, for exemption from registration as a Clearing Agency to provide post-trade matching services for fixed income and equity trades (``Approved Exemptions'').\11\ According to the Commission's notice of the Approved Exemptions, these entities each indicated an intention to offer matching services that connect to DTC for settlement.\12\ --------------------------------------------------------------------------- \11\ Securities Exchange Act Release No. 76514 (November 24, 2015), 80 FR 75387 (December 1, 2015) (600-33, 600-34) (Bloomberg STP LLC; SS&C Technologies, Inc.; Order of the Commission Approving Applications for an Exemption from Registration as a Clearing Agency; Notice). \12\ Id. --------------------------------------------------------------------------- DTC proposes to revise the Guide to generalize references to Matching Utilities and make other changes, as set forth below. First, DTC would replace specific references to Omgeo in sections describing procedures for the ID Net Service (``ID Net'') and Shareholder Tracking Service to refer to a ``Matching Utility'' and delete provisions referencing to Omgeo by name.\13\ --------------------------------------------------------------------------- \13\ In this regard, the term Matching Utility would be defined in the Guide reflecting the definition provided above in this Form 19b-4. The Commission notes that Form 19b-4 is attached to the filing, not to this Notice. The definition of Affirming Agency which appears in the ID Net section of the Guide and is the functional equivalent of the definition of Matching Utility as it relates to ID Net would be removed. Consistent with this change, references in the Guide to the term Affirming Agency would be replaced to use the term Matching Utility. --------------------------------------------------------------------------- Second, text in the ID Net section of the Guide regarding DTC's acceptance of affirmed institutional transactions from Matching Utilities would be moved to a new section describing Affirmed Transactions more generally. The proposed new section would incorporate the definition of Affirmed Transactions, and expressly state DTC's current requirement that in order for a Matching Utility to establish and maintain a connection with DTC the Matching Utility must be able to balance with DTC in an automated way \14\ and [[Page 81831]] communicate transactions to and from DTC with the necessary mandated fields, i.e., transaction control number, DTC receiver and deliverer account number, CUSIP, message type, share quantity, market type, buy- sell indicator, broker ID, ID agent internal account number, broker internal account number, agent bank ID, settlement amount, origination entity, recipient of message, institution, and settlement date.\15\ --------------------------------------------------------------------------- \14\ For each Matching Utility interfacing with DTC, DTC would require the Matching Utility to deliver a daily message on each business day shortly after noon from the Matching Utility with their accepted item counts of institutional delivery and ID Net (defined below) transaction totals for Settlement Date minus one transactions. DTC's system would compare the totals from the Matching Utility to its accepted item counts. If the totals match, an ``acknowledged balance'' balance file would be sent to the Matching Utility. If the totals do not match, DTC would respond with the list of Settlement Date minus one control numbers received from the Matching Utility, along with their respective transaction types for the originating Matching Utility to compare. \15\ A Matching Utility that intends to establish a new connection with DTC must promptly contact DTC in order to establish a plan to establish a connection and allow adequate time to develop and adequately test the interface prior to the date it expects to implement its connection to DTC. --------------------------------------------------------------------------- Third, the Guide would clarify that (i) a Participant that is a counterparty to an Affirmed Transaction, as submitted to DTC by a Matching Utility, is deemed to have authorized the Matching Utility to provide an instruction to DTC, on the Participant's behalf, to process the Affirmed Transaction in accordance with DTC's Rules and Procedures \16\ and (ii) the submission of an Affirmed Transaction to DTC by the Matching Utility, on behalf of the Participant, constitutes the duly authorized instruction of the Participant to DTC to process the Affirmed Transaction in accordance with the Rules and Procedures.\17\ --------------------------------------------------------------------------- \16\ Pursuant to the Rules, the term ``Procedures'' means the Procedures, service guides, and regulations of the Corporation adopted pursuant to Rule 27, as amended from time to time. Rule 1, Section 1, supra [sic] note 6, at 13. \17\ DTC will attempt to process an eligible transaction in accordance with a duly authorized instruction of the Delivering Participant provided to DTC in this regard. See Rule 6, supra note 6. Processing by DTC of the Delivery of the Securities subject of the transaction is subject to satisfaction of risk controls by the Participants to the transaction. Rule 9(B), Section 1, supra note 6. A Delivery is also subject to approval by the Receiver in the Receiver Authorized Delivery system before DTC will process the Delivery. Guide, supra note 5, at 57. --------------------------------------------------------------------------- Fourth, the Guide would state that a Matching Utility that elects to enter into an arrangement to interoperate with another Matching Utility (``Interoperability Arrangement'') maintains the sole responsibility to ensure that its customers, including but not limited to DTC Participants that are customers of the Matching Utility, are operationally prepared to process Affirmed Transactions relating to the Interoperability Arrangement prior to the submission of such Affirmed Transactions to DTC. Finally, the proposed rule change would make technical and clarifying changes to the Guide to: (1) Clarify and streamline the text to improve readability; (2) Add background information regarding the Affirmed Transactions accepted by DTC; (3) Correct spelling, grammatical and typographical errors throughout and update tenses from future to present with respect to functions of ID Net and the Shareholder Tracking Service; and (4) Add a title page to the Guide. Implementation Date The proposed rule change would become effective as of November 3, 2016. 2. Statutory Basis Section 17A(b)(3)(F) \18\ of the Act 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 it would (i) clarify the text of the Guide with respect to fair access to DTC for those Matching Utilities that satisfy DTC's reasonable requirements so that DTC may accept Affirmed Transactions from them, (ii) clarify the responsibilities of Matching Utilities that intend to interoperate and submit related Affirmed Transactions to DTC, and (iii) clarify the terms pursuant to which a Participant's duly authorized instructions to process Affirmed Transactions are provided to DTC by a Matching Utility. Thus, by facilitating transparency in the Guide with respect to DTC's requirements for acceptance of Affirmed Transactions from Matching Utilities and clarifying the responsibilities of interoperating Matching Utilities in this regard, as well as by clarifying the terms pursuant to which a Participant's duly authorized instructions to process Affirmed Transactions are provided to DTC by a Matching Utility, the proposed rule change would promote the prompt and accurate clearance and settlement of securities transactions. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- (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 merely update the Guide to make technical and clarifying changes and updates with respect to DTC's acceptance of Affirmed Transactions from Matching Utilities. (C) Clearing Agency's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others DTC has not solicited and does not intend to solicit comments regarding the proposed rule change. DTC has not received any unsolicited written comments from interested parties. To the extent DTC receives written comments on the proposed rule change, DTC will forward such comments to the Commission. DTC has discussed the proposed rule change with Matching Utilities that have contacted DTC specifically with respect to establishing a connection with DTC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) \19\ of the Act and paragraph (f) of Rule 19b-4 \20\ thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78s(b)(3)(A). \20\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- 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 CommentsUse 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-2016-012 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR-DTC-2016-012. 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/ [[Page 81832]] 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-2016-012 and should be submitted on or before December 9, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-27740 Filed 11-17-16; 8:45 am] BILLING CODE 8011-01-P
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For the Commission, by the Division of II. Clearing Agency’s Statement of the accessible to any Matching Utility that
Trading and Markets, pursuant to delegated Purpose of, and Statutory Basis for, the satisfies the connection requirements.
authority.13 Proposed Rule Change The Commission recently approved
Brent J. Fields, two applications by two separate
In its filing with the Commission, the entities, for exemption from registration
Secretary.
clearing agency included statements as a Clearing Agency to provide post-
[FR Doc. 2016–27744 Filed 11–17–16; 8:45 am]
concerning the purpose of and basis for trade matching services for fixed income
BILLING CODE 8011–01–P
the proposed rule change and discussed and equity trades (‘‘Approved
any comments it received on the Exemptions’’).11 According to the
proposed rule change. The text of these Commission’s notice of the Approved
SECURITIES AND EXCHANGE
statements may be examined at the Exemptions, these entities each
COMMISSION
places specified in Item IV below. The indicated an intention to offer matching
clearing agency has prepared services that connect to DTC for
[Release No. 34–79297; File No. SR–DTC– summaries, set forth in sections A, B, settlement.12
2016–012] and C below, of the most significant DTC proposes to revise the Guide to
aspects of such statements. generalize references to Matching
Self-Regulatory Organizations; The Utilities and make other changes, as set
Depository Trust Company; Notice of (A) Clearing Agency’s Statement of the forth below.
Filing and Immediate Effectiveness of Purpose of, and Statutory Basis for, the First, DTC would replace specific
a Proposed Rule Change To Modify the Proposed Rule Change references to Omgeo in sections
DTC Settlement Service Guide With describing procedures for the ID Net
1. Purpose
Respect to Settlement Instructions Service (‘‘ID Net’’) and Shareholder
Provided to DTC by Matching Utilities DTC may accept eligible affirmed Tracking Service to refer to a ‘‘Matching
institutional transactions (‘‘Institutional Utility’’ and delete provisions
November 14, 2016.
Transactions’’) 7 from an entity referencing to Omgeo by name.13
Pursuant to Section 19(b)(1) of the providing a matching service 8 Second, text in the ID Net section of
Securities Exchange Act of 1934 (‘‘Matching Utility’’) that is (i) a clearing the Guide regarding DTC’s acceptance of
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 agency registered pursuant to Section affirmed institutional transactions from
notice is hereby given that on November 17A of the Act, (ii) an entity that has Matching Utilities would be moved to a
3, 2016, The Depository Trust Company obtained an exemption from such new section describing Affirmed
(‘‘DTC’’) filed with the Securities and registration from the Commission, or Transactions more generally. The
Exchange Commission (‘‘Commission’’) (iii) a ‘‘qualified vendor’’ for trade proposed new section would
the proposed rule change as described confirmation/affirmation services as incorporate the definition of Affirmed
in Items I, II and III below, which Items defined by the rules of a self-regulatory Transactions, and expressly state DTC’s
have been prepared by the clearing organization.9 In addition, a Matching current requirement that in order for a
agency. DTC filed the proposed rule Utility must establish a connection to Matching Utility to establish and
change pursuant to Section 19(b)(3)(A) 3 DTC in accordance with DTC’s maintain a connection with DTC the
of the Act and Rule 19b–4(f)(4) 4 reasonable requirements in order to be Matching Utility must be able to balance
able to submit Affirmed Transactions. with DTC in an automated way 14 and
thereunder. The proposed rule change
was effective upon filing with the Currently, Omgeo Global Joint 11 Securities Exchange Act Release No. 76514
Commission. The Commission is Venture Matching Services—US, LLC (November 24, 2015), 80 FR 75387 (December 1,
publishing this notice to solicit (hereinafter ‘‘Omgeo’’) 10 is the only 2015) (600–33, 600–34) (Bloomberg STP LLC; SS&C
comments on the proposed rule change Matching Utility that has established a Technologies, Inc.; Order of the Commission
Approving Applications for an Exemption from
from interested persons. connection with DTC. This is reflected Registration as a Clearing Agency; Notice).
in the text of the Guide which contains 12 Id.
I. Clearing Agency’s Statement of the
specific references to Omgeo with 13 In this regard, the term Matching Utility would
Terms of Substance of the Proposed respect to DTC functions that are be defined in the Guide reflecting the definition
Rule Change provided above in this Form 19b–4. The
Commission notes that Form 19b–4 is attached to
7 An Institutional Transaction is a securities
The proposed rule change by DTC the filing, not to this Notice. The definition of
transaction between a broker-dealer and its Affirming Agency which appears in the ID Net
would make technical and clarifying institutional customer (e.g., sell-side firms, buy-side section of the Guide and is the functional
changes to text in the DTC Settlement institutions, and custodians). equivalent of the definition of Matching Utility as
Service Guide (‘‘Guide’’) 5 with respect 8 A matching service is an electronic service by
it relates to ID Net would be removed. Consistent
to settlement instructions provided to which an intermediary matches (i.e., reconciles) with this change, references in the Guide to the
trade information from the counterparties to an term Affirming Agency would be replaced to use
DTC by Matching Utilities (as defined Institutional Transaction, to generate an affirmed the term Matching Utility.
below) on behalf of Participants.6 transaction (‘‘Affirmed Transaction’’) which is then 14 For each Matching Utility interfacing with
used to provide settlement instructions for the DTC, DTC would require the Matching Utility to
13 17 Affirmed Transactions to the central securities deliver a daily message on each business day
CFR 200.30–3(a)(12).
1 15
depository, such as DTC, at which the Affirmed shortly after noon from the Matching Utility with
U.S.C. 78s(b)(1). Transaction settles.
2 17 CFR 240.19b–4. their accepted item counts of institutional delivery
9 See Securities Exchange Act Release No. 39829
3 15 U.S.C. 78s(b)(3)(A).
and ID Net (defined below) transaction totals for
(April 6, 1998), 63 FR 17943 (April 13, 1998) at Settlement Date minus one transactions. DTC’s
mstockstill on DSK3G9T082PROD with NOTICES
4 17 CFR 240.19b–4(f)(4).
17946 (providing interpretive guidance on types of system would compare the totals from the Matching
5 Available at http://www.dtcc.com/∼/media/ entities that may provide a matching service). Utility to its accepted item counts. If the totals
Files/Downloads/legal/service-guides/ 10 See [sic] Securities Exchange Act Release No. match, an ‘‘acknowledged balance’’ balance file
Settlement.pdf. 44188 (April 17, 2001), 66 FR 20494 (April 23, would be sent to the Matching Utility. If the totals
6 Capitalized Terms not otherwise defined herein 2001) (600–31) for the order of the Commission do not match, DTC would respond with the list of
have the meaning set forth in the DTC Rules, By- granting Omgeo an exemption from registration as Settlement Date minus one control numbers
laws and Organization Certificate (‘‘DTC Rules’’), a clearing agency. Omgeo is a global provider of received from the Matching Utility, along with their
available at http://www.dtcc.com/legal/rules-and- post-trade, pre-settlement processing services for respective transaction types for the originating
procedures.aspx, and the Guide, supra note 5. the institutional market. Matching Utility to compare.
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communicate transactions to and from (2) Add background information (C) Clearing Agency’s Statement on
DTC with the necessary mandated regarding the Affirmed Transactions Comments on the Proposed Rule
fields, i.e., transaction control number, accepted by DTC; Change Received From Members,
DTC receiver and deliverer account (3) Correct spelling, grammatical and Participants, or Others
number, CUSIP, message type, share typographical errors throughout and DTC has not solicited and does not
quantity, market type, buy-sell intend to solicit comments regarding the
update tenses from future to present
indicator, broker ID, ID agent internal proposed rule change. DTC has not
with respect to functions of ID Net and
account number, broker internal received any unsolicited written
account number, agent bank ID, the Shareholder Tracking Service; and
comments from interested parties. To
settlement amount, origination entity, (4) Add a title page to the Guide. the extent DTC receives written
recipient of message, institution, and comments on the proposed rule change,
Implementation Date
settlement date.15 DTC will forward such comments to the
Third, the Guide would clarify that (i) The proposed rule change would Commission. DTC has discussed the
a Participant that is a counterparty to an become effective as of November 3, proposed rule change with Matching
Affirmed Transaction, as submitted to 2016. Utilities that have contacted DTC
DTC by a Matching Utility, is deemed to specifically with respect to establishing
have authorized the Matching Utility to 2. Statutory Basis a connection with DTC.
provide an instruction to DTC, on the
Section 17A(b)(3)(F) 18 of the Act III. Date of Effectiveness of the
Participant’s behalf, to process the
requires that the rules of the clearing Proposed Rule Change and Timing for
Affirmed Transaction in accordance
with DTC’s Rules and Procedures 16 and agency be designed, inter alia, to Commission Action
(ii) the submission of an Affirmed promote the prompt and accurate The foregoing rule change has become
Transaction to DTC by the Matching clearance and settlement of securities effective pursuant to Section
Utility, on behalf of the Participant, transactions. DTC believes that the 19(b)(3)(A) 19 of the Act and paragraph
constitutes the duly authorized proposed rule change is consistent with (f) of Rule 19b–4 20 thereunder. At any
instruction of the Participant to DTC to this provision because it would (i) time within 60 days of the filing of the
process the Affirmed Transaction in clarify the text of the Guide with respect proposed rule change, the Commission
accordance with the Rules and to fair access to DTC for those Matching summarily may temporarily suspend
Procedures.17 Utilities that satisfy DTC’s reasonable such rule change if it appears to the
Fourth, the Guide would state that a requirements so that DTC may accept Commission that such action is
Matching Utility that elects to enter into Affirmed Transactions from them, (ii) necessary or appropriate in the public
an arrangement to interoperate with clarify the responsibilities of Matching interest, for the protection of investors,
another Matching Utility Utilities that intend to interoperate and or otherwise in furtherance of the
(‘‘Interoperability Arrangement’’) submit related Affirmed Transactions to purposes of the Act.
maintains the sole responsibility to DTC, and (iii) clarify the terms pursuant IV. Solicitation of Comments
ensure that its customers, including but to which a Participant’s duly authorized
Interested persons are invited to
not limited to DTC Participants that are instructions to process Affirmed submit written data, views, and
customers of the Matching Utility, are Transactions are provided to DTC by a arguments concerning the foregoing,
operationally prepared to process Matching Utility. Thus, by facilitating including whether the proposed rule
Affirmed Transactions relating to the transparency in the Guide with respect change is consistent with the Act.
Interoperability Arrangement prior to to DTC’s requirements for acceptance of Comments may be submitted by any of
the submission of such Affirmed Affirmed Transactions from Matching the following methods:
Transactions to DTC. Utilities and clarifying the
Finally, the proposed rule change responsibilities of interoperating Electronic Comments
would make technical and clarifying Matching Utilities in this regard, as well • Use the Commission’s Internet
changes to the Guide to: as by clarifying the terms pursuant to comment form (http://www.sec.gov/
(1) Clarify and streamline the text to which a Participant’s duly authorized rules/sro.shtml); or
improve readability; instructions to process Affirmed • Send an email to rule-comments@
Transactions are provided to DTC by a sec.gov. Please include File Number SR–
15 A Matching Utility that intends to establish a
Matching Utility, the proposed rule DTC–2016–012 on the subject line.
new connection with DTC must promptly contact
DTC in order to establish a plan to establish a change would promote the prompt and Paper Comments
connection and allow adequate time to develop and accurate clearance and settlement of • Send paper comments in triplicate
adequately test the interface prior to the date it securities transactions.
expects to implement its connection to DTC. to Secretary, Securities and Exchange
16 Pursuant to the Rules, the term ‘‘Procedures’’
(B) Clearing Agency’s Statement on Commission, 100 F Street NE.,
means the Procedures, service guides, and
Burden on Competition Washington, DC 20549.
regulations of the Corporation adopted pursuant to
Rule 27, as amended from time to time. Rule 1, All submissions should refer to File
Section 1, supra [sic] note 6, at 13. DTC does not believe that the Number SR–DTC–2016–012. This file
17 DTC will attempt to process an eligible proposed rule change would have any number should be included on the
transaction in accordance with a duly authorized impact or impose any burden on subject line if email is used. To help the
instruction of the Delivering Participant provided to
mstockstill on DSK3G9T082PROD with NOTICES
DTC in this regard. See Rule 6, supra note 6.
competition because it would merely Commission process and review your
Processing by DTC of the Delivery of the Securities update the Guide to make technical and comments more efficiently, please use
subject of the transaction is subject to satisfaction clarifying changes and updates with only one method. The Commission will
of risk controls by the Participants to the respect to DTC’s acceptance of Affirmed post all comments on the Commission’s
transaction. Rule 9(B), Section 1, supra note 6. A
Delivery is also subject to approval by the Receiver Transactions from Matching Utilities. Internet Web site (http://www.sec.gov/
in the Receiver Authorized Delivery system before
19 15 U.S.C. 78s(b)(3)(A).
DTC will process the Delivery. Guide, supra note
5, at 57. 18 15 U.S.C. 78q–1(b)(3)(F). 20 17 CFR 240.19b–4(f).
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rules/sro.shtml). Copies of the one establishing or changing a member priced at or above $1.00 that yield fee
submission, all subsequent due, fee, or other charge imposed by the codes RT, RX, or Z.
amendments, all written statements Exchange under Section 19(b)(3)(A)(ii)
Deletion of References to the ROOC
with respect to the proposed rule of the Act 3 and Rule 19b–4(f)(2)
Routing Strategy
change that are filed with the thereunder,4 which renders the
Commission, and all written proposed rule change effective upon The Exchange previously submitted a
communications relating to the filing with the Commission. The proposed rule change for immediate
proposed rule change between the Commission is publishing this notice to effectiveness to discontinue the ROOC
Commission and any person, other than solicit comments on the proposed rule routing strategy and to remove
those that may be withheld from the change from interested persons. references to the ROOC routing strategy
public in accordance with the from its rulebook.7 The Exchange now
provisions of 5 U.S.C. 552, will be I. Self-Regulatory Organization’s proposes to delete three references to
available for Web site viewing and Statement of the Terms of Substance of the ROOC routing strategy from its Fee
printing in the Commission’s Public the Proposed Rule Change Schedule, as those associated rates and
Reference Room, 100 F Street NE., The Exchange filed a proposal to references have not been applicable
Washington, DC 20549 on official amend the fee schedule applicable to since the Exchange discontinued the
business days between the hours of Members 5 and non-members of the ROOC routing strategy. These changes
10:00 a.m. and 3:00 p.m. Copies of the Exchange pursuant to EDGA Rules are to delete:
filing also will be available for 15.1(a) and (c). • Fee code RN and its associate rates,
inspection and copying at the principal which is appended to orders routed to
The text of the proposed rule change
office of DTC and on DTCC’s Web site the Nasdaq Stock Market LLC using the
is available at the Exchange’s Web site
(http://dtcc.com/legal/sec-rule- ROOC routing strategy and add
at www.batstrading.com, at the
filings.aspx). All comments received liquidity.
principal office of the Exchange, and at • a reference to ROOC in fee code RT,
will be posted without change; the the Commission’s Public Reference
Commission does not edit personal which is appended to orders routed
Room. using the ROUT or ROOC routing
identifying information from
submissions. You should submit only II. Self-Regulatory Organization’s strategy; and
information that you wish to make Statement of the Purpose of, and • a reference to the ROOC routing
available publicly. All submissions Statutory Basis for, the Proposed Rule strategy in footnote 12, which lists the
should refer to File Number SR–DTC– Change routing strategies eligible for fee code
2016–012 and should be submitted on CR.
In its filing with the Commission, the
or before December 9, 2016. Exchange included statements Fee Codes RT, RX, and Z
For the Commission, by the Division of concerning the purpose of and basis for The Exchange also proposes to
Trading and Markets, pursuant to delegated the proposed rule change and discussed increase the fees associated with orders
authority.21 any comments it received on the in securities priced at or above $1.00
Brent J. Fields, proposed rule change. The text of these that yield fee codes RT, RX, or Z.8 First
Secretary. statements may be examined at the the Exchange proposes to increase the
[FR Doc. 2016–27740 Filed 11–17–16; 8:45 am] places specified in Item IV below. The fee for orders yielding fee code RT,
BILLING CODE 8011–01–P Exchange has prepared summaries, set which are routed using a ROUT 9 or
forth in Sections A, B, and C below, of ROOC 10 routing strategy, from $0.00250
the most significant parts of such to $0.00260 per share. Second, the
SECURITIES AND EXCHANGE statements. Exchange proposes to increase the fee
COMMISSION for orders yielding fee code RX, which
A. Self-Regulatory Organization’s
[Release No. 34–79305; File No. SR– Statement of the Purpose of, and the are routed using a ROUX 11 routing
BatsEDGA–2016–26]
Statutory Basis for, the Proposed Rule strategy, from $0.00270 to $0.00280 per
Change share. Lastly, the Exchange proposes to
Self-Regulatory Organizations; Bats increase the fee for orders yielding fee
EDGA Exchange, Inc.; Notice of Filing 1. Purpose code Z, which are routed to a non-
and Immediate Effectiveness of a exchange destination using ROCO 12 or
Proposed Rule Change Related to Fees The Exchange proposes to amend its
Fee Schedule to: (i) Delete references to ROUZ 13 routing strategy, from $0.00100
for Use of Bats EDGA Exchange, Inc. to $0.00120 per share.
the ROOC routing strategy, which was
November 14, 2016. previously, removed from the Implementation Date
Pursuant to Section 19(b)(1) of the Exchange’s rulebook; 6 and (ii) increase
The Exchange proposes to implement
Securities Exchange Act of 1934 (the the fees associate for orders in securities these amendments to its Fee Schedule
‘‘Act’’),1 and Rule 19b–4 thereunder,2
November 1, 2016.
notice is hereby given that on November 3 15 U.S.C. 78s(b)(3)(A)(ii).
1, 2016, Bats EDGA Exchange, Inc. (the 4 17 CFR 240.19b–4(f)(2). 7 Id. See also Securities Exchange Act Release No.
‘‘Exchange’’ or ‘‘EDGA’’) filed with the 5 The term ‘‘Member’’ is defined as ‘‘any
75550 (July 29, 2015), 80 FR 4636 (August 4, 2015)
Securities and Exchange Commission registered broker or dealer that has been admitted (SR–EDGA–2015–28).
to membership in the Exchange.’’ See Exchange
(‘‘Commission’’) the proposed rule Rule 1.5(n).
8 The Exchange does not propose to amend the
mstockstill on DSK3G9T082PROD with NOTICES
change as described in Items I, II and III 6 See Securities Exchange Act Release N. 75550
fees for orders yielding fee codes RT, RX, or Z in
securities priced below $1.00.
below, which Items have been prepared (July 29, 2015), 80 FR 46363 (August 4, 2015) (SR– 9 See Exchange Rule 11.11(g)(3).
by the Exchange. The Exchange has EDGA–2015–28). See also BATS EDGA Exchange 10 The Exchange notes that it is deleting reference
designated the proposed rule change as and BYX Exchange Decommissioning ROOC
Effective August 10, 2015, available at http:// to the ROOC routing strategy in this filing. See also
cdn.batstrading.com/resources/release_notes/2015/ supra note 6.
21 17 CFR 200.30–3(a)(12). 11 See Exchange Rule 11.11(g)(3).
BATS-EDGA-Exchange-and-BYX-Exchange-
1 15 U.S.C. 78s(b)(1). 12 Id.
Decommissioning-ROOC-Effective-August-10-
2 17 CFR 240.19b–4. 2015.pdf. 13 Id.
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Document Created: 2018-02-14 08:31:57
Document Modified: 2018-02-14 08:31:57
| 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 81830 |
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