83 FR 44375 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Reflect a Non-Substantive Name Change in the Market's Governing Documents

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 169 (August 30, 2018)

Page Range		44375-44377
FR Document		2018-18826
Federal Register, Volume 83 Issue 169 (Thursday, August 30, 2018)
[Federal Register Volume 83, Number 169 (Thursday, August 30, 2018)]
[Notices]
[Pages 44375-44377]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-18826]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83949; File No. SR-BOX-2018-26]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Reflect a Non-Substantive Name Change in the Market's Governing 
Documents

August 27, 2018.
    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 August 15, 2018, BOX Options Exchange LLC (the ``Exchange'') 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 self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to reflect a non-substantive name change in 
the Market's governing documents. The text of the proposed rule change 
is available from the principal office of the Exchange, at the 
Commission's Public Reference Room and also on the Exchange's internet 
website at http://boxoptions.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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 self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to reflect a non-substantive name 
change in the Market's governing documents. On July 13, 2018, the BOX 
Market LLC Board of Directors approved that the name of BOX Market LLC 
be changed to ``BOX Options Market LLC'' and that each officer of the 
Company be, and hereby is, authorized and directed to undertake any 
actions required or advisable to carry out the name change, including 
with respect to the SEC and any governmental or third parties. The 
Exchange intends for these changes to be effective upon filing.
    As proposed, references to the Market's name will be deleted and 
revised to state the new name, as described more fully below. No other 
substantive changes are being proposed in this filing. The Exchange 
represents that these changes are concerned solely with the 
administration of the Market, a facility of the Exchange, and do not 
affect the meaning, administration, or enforcement of any rules of the 
Exchange or the rights, obligations, or privileges of Exchange members 
or their associated persons is any way. Accordingly, this filing is 
being submitted under Rule 19b-4(f)(3). In lieu of providing a copy of 
the marked name changes for all corporate documents, the Exchange 
represents that it will make the necessary non-substantive revisions 
described below to the applicable corporate governance documents and 
post updated versions of

[[Page 44376]]

each on the Exchange's website pursuant to Rule 19b-4(m)(2).
Market Name Change
    In connection with the name change of the Market, the Exchange is 
proposing to amend the Market's operative documents. Specifically, the 
Exchange proposes to amend the Market's Certificate of Amendment [sic], 
and the BOX Market LLC Agreement.\3\ Within these documents the 
Exchange proposes to delete all references to BOX Market LLC (``BOX 
Market'' or ``BOX'') and replace it with BOX Options Market LLC (``BOX 
Options Market'' or ``BOX Options'').
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    \3\ The Exchange is also proposing to delete obsolete references 
within the Market LLC Agreement. Specifically, the Exchange proposes 
to remove all references to the Boston Options Exchange Group LLC 
(``Old BOX''), which merged into what is now BOX Market LLC on May 
12, 2012. The Exchange believes references to the Old BOX within the 
Market LLC agreement are no longer necessary or appropriate within 
the BOX Options Market LLC Amended and Restated Agreement.
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    Additionally, in connection with the name change of the Market, the 
Exchange is proposing to make non-substantive conforming changes to the 
BOX Holdings LLC Agreement and the BOX Exchange LLC Agreement. 
Specifically, the Exchange proposes to delete all references to BOX 
Market LLC and replace it with ``BOX Options Market LLC'' in these 
documents.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(1) \5\ in that it enables the Exchange to be so organized 
as to have the capacity to be able to carry out the purposes of the 
Exchange Act and to comply, and to enforce compliance by its exchange 
members and persons associate with its exchange members, with the 
provisions of the Exchange Act, the rules and regulations thereunder, 
and the rules of the Exchange.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    In particular, the proposed change is a non-substantive change and 
does not impact the governance, ownership or operations of the 
Exchange. The Exchange believes that by ensuring that the Exchanges 
operative documents accurately reflect the new legal names, the 
proposed rule change would reduce potential investor or market 
participant confusion.
    Further, the Exchange believes that the proposed deletion of 
obsolete references would remove impediments to, and perfect the 
mechanism of a free and open market and a national market system and, 
in general, protect investors and the public interest because the 
change would eliminate an obsolete reference to Old BOX, thereby 
reducing potential confusion. Market participants and investors would 
not be harmed and in fact could benefit from the increased clarity and 
transparency in the Market LLC Agreement, ensuring that market 
participants could more easily understand the Market LLC Agreement.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not intended to address competitive issues but rather is concerned 
solely with updating the Exchange's governance and operative documents 
to reflect the abovementioned name changes.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    This proposed rule change is filed pursuant to paragraph (A) of 
section 19(b)(3) of the Exchange Act \6\ and Rule 19b-4(f)(3) 
thereunder in that the proposed rule changes is concerned solely with 
the administration of the Exchange.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(3).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or 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-BOX-2018-26 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-BOX-2018-26. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (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 website viewing and printing in 
the Commission's Public Reference Room, on official business days 
between the hours of 10 a.m. and 3:00 p.m., located at 100 F Street NE, 
Washington, DC 20549. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BOX-2018-26 and should be 
submitted on or before September 20, 2018.


[[Page 44377]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18826 Filed 8-29-18; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Notices 44375

investment company or series thereof, interest and the protection of investors. Market’s governing documents. The text
their principal underwriters, and any Section 17(b) of the Act authorizes the of the proposed rule change is available
broker or dealer registered under the Commission to grant an order from the principal office of the
1934 Act to sell shares of the permitting a transaction otherwise Exchange, at the Commission’s Public
Underlying Funds to the Fund of Funds prohibited by section 17(a) if it finds Reference Room and also on the
in excess of the limits in section that (a) the terms of the proposed Exchange’s internet website at http://
12(d)(1)(B) of the Act.3 Applicants also transaction are fair and reasonable and boxoptions.com.
request an order of exemption under do not involve overreaching on the part
sections 6(c) and 17(b) of the Act from of any person concerned; (b) the II. Self-Regulatory Organization’s
the prohibition on certain affiliated proposed transaction is consistent with Statement of the Purpose of, and
transactions in section 17(a) of the Act the policies of each registered Statutory Basis for, the Proposed Rule
to the extent necessary to permit the investment company involved; and (c) Change
Underlying Funds to sell their shares to, the proposed transaction is consistent In its filing with the Commission, the
and redeem their shares from, the Funds with the general purposes of the Act. self-regulatory organization included
of Funds.4 Applicants state that such Section 6(c) of the Act permits the statements concerning the purpose of,
transactions will be consistent with the Commission to exempt any persons or and basis for, the proposed rule change
policies of each Fund of Funds and each transactions from any provision of the and discussed any comments it received
Underlying Fund and with the general Act if such exemption is necessary or on the proposed rule change. The text
purposes of the Act and will be based appropriate in the public interest and of these statements may be examined at
on the net asset values of the consistent with the protection of the places specified in Item IV below.
Underlying Funds. investors and the purposes fairly The self-regulatory organization has
2. Applicants agree that any order intended by the policy and provisions of prepared summaries, set forth in
granting the requested relief will be the Act. Sections A, B, and C below, of the most
subject to the terms and conditions For the Commission, by the Division of significant aspects of such statements.
stated in the application. Such terms Investment Management, pursuant to
and conditions are designed to, among A. Self-Regulatory Organization’s
delegated authority.
other things, help prevent any potential Statement of the Purpose of, and
Eduardo A. Aleman,
(i) undue influence over an Underlying Statutory Basis for, the Proposed Rule
Assistant Secretary. Change
Fund that is not in the same ‘‘group of [FR Doc. 2018–18776 Filed 8–29–18; 8:45 am]
investment companies’’ as the Fund of 1. Purpose
BILLING CODE 8011–01–P
Funds through control or voting power,
or in connection with certain services, The purpose of this filing is to reflect
transactions, and underwritings, (ii) a non-substantive name change in the
SECURITIES AND EXCHANGE Market’s governing documents. On July
excessive layering of fees, and (iii) COMMISSION
overly complex fund structures, which 13, 2018, the BOX Market LLC Board of
are the concerns underlying the limits [Release No. 34–83949; File No. SR–BOX– Directors approved that the name of
in sections 12(d)(1)(A), (B), and (C) of 2018–26] BOX Market LLC be changed to ‘‘BOX
the Act. Options Market LLC’’ and that each
Self-Regulatory Organizations; BOX officer of the Company be, and hereby
3. Section 12(d)(1)(J) of the Act
Options Exchange LLC; Notice of is, authorized and directed to undertake
provides that the Commission may
Filing and Immediate Effectiveness of any actions required or advisable to
exempt any person, security, or
a Proposed Rule Change To Reflect a carry out the name change, including
transaction, or any class or classes of
Non-Substantive Name Change in the with respect to the SEC and any
persons, securities, or transactions, from
Market’s Governing Documents governmental or third parties. The
any provision of section 12(d)(1) if the
exemption is consistent with the public August 27, 2018. Exchange intends for these changes to
Pursuant to Section 19(b)(1) of the be effective upon filing.
3 Applicants are not requesting relief for a Fund Securities Exchange Act of 1934 As proposed, references to the
of Funds to invest in BDCs and registered closed- (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Market’s name will be deleted and
end investment companies that are not listed and
notice is hereby given that on August revised to state the new name, as
traded on a national securities exchange. described more fully below. No other
4 A Fund of Funds generally would purchase and 15, 2018, BOX Options Exchange LLC
sell shares of an Underlying Fund that operates as (the ‘‘Exchange’’) filed with the substantive changes are being proposed
an ETF or closed-end fund through secondary Securities and Exchange Commission in this filing. The Exchange represents
market transactions rather than through principal
(‘‘Commission’’) the proposed rule that these changes are concerned solely
transactions with the Underlying Fund. Applicants with the administration of the Market, a
nevertheless request relief from sections 17(a)(1) change as described in Items I, II, and
and (2) to permit each ETF or closed-end fund that III below, which Items have been facility of the Exchange, and do not
is an affiliated person, or an affiliated person of an prepared by the self-regulatory affect the meaning, administration, or
affiliated person, as defined in section 2(a)(3) of the
organization. The Commission is enforcement of any rules of the
Act, of a Fund of Funds, to sell shares to or redeem Exchange or the rights, obligations, or
shares from the Fund of Funds. This includes, in publishing this notice to solicit
the case of sales and redemptions of shares of ETFs, comments on the proposed rule from privileges of Exchange members or their
the in-kind transactions that accompany such sales interested persons. associated persons is any way.
and redemptions. Applicants are not seeking relief Accordingly, this filing is being
from section 17(a) for, and the requested relief will I. Self-Regulatory Organization’s submitted under Rule 19b–4(f)(3). In
amozie on DSK3GDR082PROD with NOTICES1

not apply to, transactions where an ETF, BDC or Statement of the Terms of Substance of
closed-end fund could be deemed an affiliated
lieu of providing a copy of the marked
person, or an affiliated person of an affiliated
the Proposed Rule Change name changes for all corporate
person, of a Fund of Funds because an investment The Exchange proposes to reflect a documents, the Exchange represents
adviser to the ETF, BDC or closed-end fund or an that it will make the necessary non-
entity controlling, controlled by or under common
non-substantive name change in the
control with the investment adviser to the ETF,
substantive revisions described below to
BDC or closed-end fund, is also an investment 1 15 U.S.C. 78s(b)(1). the applicable corporate governance
adviser to the Fund of Funds. 2 17 CFR 240.19b–4. documents and post updated versions of

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44376 Federal Register / Vol. 83, No. 169 / Thursday, August 30, 2018 / Notices

each on the Exchange’s website Further, the Exchange believes that arguments concerning the foregoing,
pursuant to Rule 19b–4(m)(2). the proposed deletion of obsolete including whether the proposed rule
references would remove impediments change is consistent with the Act.
Market Name Change
to, and perfect the mechanism of a free Comments may be submitted by any of
In connection with the name change and open market and a national market the following methods:
of the Market, the Exchange is system and, in general, protect investors
proposing to amend the Market’s and the public interest because the Electronic Comments
operative documents. Specifically, the change would eliminate an obsolete
Exchange proposes to amend the • Use the Commission’s internet
reference to Old BOX, thereby reducing
Market’s Certificate of Amendment [sic], comment form (http://www.sec.gov/
potential confusion. Market participants
and the BOX Market LLC Agreement.3 rules/sro.shtml); or
and investors would not be harmed and
Within these documents the Exchange in fact could benefit from the increased • Send an email to rule-comments@
proposes to delete all references to BOX clarity and transparency in the Market sec.gov. Please include File Number SR–
Market LLC (‘‘BOX Market’’ or ‘‘BOX’’) LLC Agreement, ensuring that market BOX–2018–26 on the subject line.
and replace it with BOX Options Market participants could more easily
LLC (‘‘BOX Options Market’’ or ‘‘BOX Paper Comments
understand the Market LLC Agreement.
Options’’).
Additionally, in connection with the B. Self-Regulatory Organization’s • Send paper comments in triplicate
name change of the Market, the Statement on Burden on Competition to Secretary, Securities and Exchange
Exchange is proposing to make non- Commission, 100 F Street NE,
The Exchange does not believe that
substantive conforming changes to the Washington, DC 20549–1090.
the proposed rule change will impose
BOX Holdings LLC Agreement and the any burden on competition that is not All submissions should refer to File
BOX Exchange LLC Agreement. necessary or appropriate in furtherance Number SR–BOX–2018–26. This file
Specifically, the Exchange proposes to of the purposes of the Act. The number should be included on the
delete all references to BOX Market LLC proposed rule change is not intended to subject line if email is used. To help the
and replace it with ‘‘BOX Options address competitive issues but rather is Commission process and review your
Market LLC’’ in these documents. concerned solely with updating the comments more efficiently, please use
2. Statutory Basis Exchange’s governance and operative only one method. The Commission will
documents to reflect the post all comments on the Commission’s
The Exchange believes the proposed
abovementioned name changes. internet website (http://www.sec.gov/
rule change is consistent with the
Securities Exchange Act of 1934 (the C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the
‘‘Act’’) and the rules and regulations Statement on Comments on the submission, all subsequent
thereunder applicable to the Exchange Proposed Rule Change Received From amendments, all written statements
and, in particular, the requirements of Members, Participants, or Others with respect to the proposed rule
Section 6(b) of the Act.4 Specifically, The Exchange has neither solicited change that are filed with the
the Exchange believes the proposed rule nor received comments on the proposed Commission, and all written
change is consistent with the Section rule change. communications relating to the
6(b)(1) 5 in that it enables the Exchange proposed rule change between the
to be so organized as to have the III. Date of Effectiveness of the Commission and any person, other than
capacity to be able to carry out the Proposed Rule Change and Timing for those that may be withheld from the
purposes of the Exchange Act and to Commission Action
public in accordance with the
comply, and to enforce compliance by This proposed rule change is filed provisions of 5 U.S.C. 552, will be
its exchange members and persons pursuant to paragraph (A) of section available for website viewing and
associate with its exchange members, 19(b)(3) of the Exchange Act 6 and Rule printing in the Commission’s Public
with the provisions of the Exchange Act, 19b–4(f)(3) thereunder in that the Reference Room, on official business
the rules and regulations thereunder, proposed rule changes is concerned days between the hours of 10 a.m. and
and the rules of the Exchange. solely with the administration of the
In particular, the proposed change is 3:00 p.m., located at 100 F Street NE,
Exchange.7 Washington, DC 20549. Copies of such
a non-substantive change and does not At any time within 60 days of the
impact the governance, ownership or filing also will be available for
filing of the proposed rule change, the
operations of the Exchange. The inspection and copying at the principal
Commission summarily may
Exchange believes that by ensuring that temporarily suspend such rule change if office of the Exchange. All comments
the Exchanges operative documents it appears to the Commission that such received will be posted without change.
accurately reflect the new legal names, action is necessary or appropriate in the Persons submitting comments are
the proposed rule change would reduce public interest, for the protection of cautioned that we do not redact or edit
potential investor or market participant investors, or otherwise in furtherance of personal identifying information from
confusion. the purposes of the Act. If the comment submissions. You should
Commission takes such action, the submit only information that you wish
3 The Exchange is also proposing to delete
Commission shall institute proceedings to make available publicly. All
obsolete references within the Market LLC
Agreement. Specifically, the Exchange proposes to to determine whether the proposed rule submissions should refer to File
should be approved or disapproved. Number SR–BOX–2018–26 and should
amozie on DSK3GDR082PROD with NOTICES1

remove all references to the Boston Options
Exchange Group LLC (‘‘Old BOX’’), which merged be submitted on or before September 20,
into what is now BOX Market LLC on May 12, 2012. IV. Solicitation of Comments
2018.
The Exchange believes references to the Old BOX
within the Market LLC agreement are no longer
Interested persons are invited to
necessary or appropriate within the BOX Options submit written data, views and
Market LLC Amended and Restated Agreement.
4 15 U.S.C. 78f(b). 6 15 U.S.C. 78s(b)(3)(A).
5 15 U.S.C. 78f(b)(5). 7 17 CFR 240.19b–4(f)(3).

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For the Commission, by the Division of (‘‘DEGCL’’) 6 to receive from DTC (i) a or (ii) is organized in a country other
Trading and Markets, pursuant to delegated CMS report that provides information than the United States, is regulated by
authority.8 regarding securities credited to the CMS a financial regulatory authority in the
Eduardo A. Aleman, Sub-Account of such Participant at the country in which it is organized, and
Assistant Secretary. time of the report (‘‘CMS Report’’), and demonstrates that it has notified the
[FR Doc. 2018–18826 Filed 8–29–18; 8:45 am] (ii) CMS delivery information that Commission in writing of its intention
BILLING CODE 8011–01–P provides real-time information to operate under Rule 35; 12 and (3) the
regarding any delivery or pledge from, entity establishes a connection to DTC,
or delivery or release to, the CMS Sub- in accordance with the reasonable
SECURITIES AND EXCHANGE Account (‘‘CMS Delivery requirements of DTC, in order to be able
COMMISSION Information’’).7 to receive position and transaction
[Release No. 34–83940; File No. SR–DTC– B. The Proposed Rule Change information and to submit instructions
2018–006] to DTC in accordance with the DTC
DTC proposes five changes to Rule 35: Rules and Procedures.13
Self-Regulatory Organizations; The (1) Adding the term ‘‘CMSP’’ (i.e., a
CMS provider) and its associated As proposed, DTC may decline to
Depository Trust Company; Order
function; (2) adding the term ‘‘CMSP accept an entity as a CMSP if it would
Granting Approval of Proposed Rule
Accounts’’ and its associated function; present material risk to DTC, its
Change To Amend Rule 35 To Provide
(3) adding the term ‘‘CMSP Reports’’ Participants and Pledgees, or impose
for Designated Accounts for Use With
and its associated function; (4) material costs to DTC.14 DTC states that
Designated Collateral Management
Service Providers authorizing a CMSP to submit CMSP some examples of circumstances in
instructions (‘‘CMSP Instructions’’) on which DTC might reject an applicant as
August 24, 2018. behalf of a Participant or a Pledgee of a CMSP include when DTC reasonably
On July 9, 2018, The Depository Trust DTC (‘‘Pledgee’’); and (5) making believes that acceptance of the applicant
Company (‘‘DTC’’) filed with the ministerial changes to conform with the as a CMSP would (i) subject DTC to
Securities and Exchange Commission proposed changes, as well as making additional legal or regulatory regimes, to
(‘‘Commission’’) proposed rule change stylistic edits.8 Each of these proposed which it is not otherwise subject; (ii)
SR–DTC–2018–006 pursuant to Section changes is described below. expose DTC to additional technology
19(b)(1) of the Securities Exchange Act risk; or (iii) cause DTC to be in violation
of 1934 (‘‘Act’’) 1 and Rule 19b–4 1. CMSP of applicable law or regulation.15
thereunder.2 The proposed rule change The proposal would add to Rule 35
was published for comment in the the term and function of a CMSP, which 2. CMSP Account
Federal Register on July 24, 2018.3 The a Participant or Pledgee could then The proposed rule change would add
Commission did not receive any designate to act on its behalf under the the term and function of a ‘‘CMSP
comment letters on the proposed rule rule, pursuant to the proposed changes.9 Account’’ to Rule 35.16 Currently, Rule
change. For the reasons discussed The term CMSP would replace the 35 requires a Participant looking to
below, the Commission approves the existing, singular designation of DEGCL utilize the services offered through Rule
proposed rule change. to act under Rule 35 as a collateral 35 to designate an account for such
I. Description of the Proposed Rule management provider.10 A partnership,
Change corporation, or other organization or 12 DTC states that in order to protect DTC, its
entity could become a CMSP, under the Participants and Pledgees, a CMSP that wishes to
The proposed rule change would proposed changes to Rule 35, if it act under the proposed changes to Rule 35 would
amend the Rules, By-Laws and satisfies three proposed criteria: (1) One need to be subject to regulatory oversight
Organization Certificate of The or more Participants or Pledgees comparable to a Participant, as provided in
Depository Trust Company (‘‘DTC proposed Section 2(b)(i) of Rule 35, or, if the entity
designate the entity as a CMSP for is organized in a country other than the United
Rules’’) 4 to revise DTC’s current Rule purposes of Rule 35; (2) the entity (i) States (a ‘‘non-U.S. entity’’), it would need to be
35—CMS Reporting (‘‘Rule 35’’). satisfies at least one of the qualifications regulated by a financial regulatory authority in the
country in which it is organized, as provided in
A. Background set forth in Section 1(a)–(h) of Rule 3 11 proposed Section 2(b)(ii) of Rule 35. Notice, 83 FR
Currently, Rule 35 provides that a at 35045. Further, the proposed rule change would
6 DEGCL is a joint venture of The Depository
require that, in order to be eligible to become a
Participant of DTC (‘‘Participant’’) may Trust & Clearing Corporation, the corporate parent CMSP, the non-U.S. entity must notify the
establish a collateral management of DTC, and Euroclear S.A./N.V. and was formed for Commission in writing of its intention to operate
service (‘‘CMS’’) 5 sub-account (‘‘CMS the purpose of offering global information, record under Rule 35, as modified by the proposed
Sub-Account’’), which authorizes DTCC keeping, and processing services for derivatives changes. Id. While DTC reserves the right to request
collateral transactions and other types of financing documentation and/or information relating to a
Euroclear Global Collateral Ltd. transactions. DEGCL offers service options for the CMSP’s compliance with the requirements of
selection of collateral to satisfy the collateral proposed Section 2 of Rule 35, it would be the sole
8 17 CFR 200.30–3(a)(12). obligations of its users (‘‘DEGCL CMS’’). See responsibility of the Participant or Pledgee to
1 15 U.S.C. 78s(b)(1). Securities Exchange Act Release No. 80280 (March evaluate and choose an appropriate CMSP that, at
2 17 CFR 240.19b–4. 20, 2017), 82 FR 15081 (March 24, 2017) (SR–DTC– a minimum, satisfies the requirements. Id. Under
3 See Securities Exchange Act Release No.83667 2017–001) (‘‘CMS Order’’) (providing additional proposed Section 2 of Rule 35, the designating
(July 18, 2018), 83 FR 35044 (July 24, 2018) (SR– information on DEGCL and DEGCL CMS). One Participant or Pledgee would remain liable as
DTC–2018–006) (‘‘Notice’’). option relates exclusively to Securities held at DTC, principal for the actions of its designated CMSP(s)
4 Available at http://www.dtcc.com/legal/rules- and is dependent on Rule 35. Id. on its behalf, and would indemnify DTC for any
7 CMS Order, 82 FR at 21838. loss, liability, or expense as a result of any claim
amozie on DSK3GDR082PROD with NOTICES1

and-procedures.aspx. Each capitalized term not
otherwise defined herein has its respective meaning
8 Notice, 83 FR at 35044–45. arising from (i) any act or omission of the CMSP,
as set forth in the DTC Rules. 9 Notice, 83 FR at 35045. (ii) the provision of CMSP Reports to the CMSP by
5 Collateral management generally involves 10 Id. DTC, or (iii) DTC’s compliance with instructions of
the CMSP. Id.
calculating collateral requirements and facilitating 11 Sections 1(a)–(h) of Rule 3 provide the
13 Id.
the transfer of collateral between counterparties. qualifications for a partnership, corporation or other
14 Id.
See Securities Exchange Act Release No. 64796 organization or entity to be eligible to become a
15 Id.
(July 1, 2011), 76 FR 39963, 39964 (July 7, 2011) Participant. See DTC Rules, Rule 3, Sections 1(a)–
(S7–28–11). (h), supra note 4. 16 Id.

VerDate Sep<11>2014 17:25 Aug 29, 2018 Jkt 244001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 E:\FR\FM\30AUN1.SGM 30AUN1
Document Created: 2018-08-30 01:20:56
Document Modified: 2018-08-30 01:20:56
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		83 FR 44375