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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices at CDS on behalf of Participants, receive distributions on behalf of Participants and facilitate Free Deliveries 17 through the link.
Rule 30, Section 2 provides:
The Corporation has entered into various agreements with CDS, and as a participant of CDS has undertaken to abide by the rules, procedures and user guides of CDS the Rules and Procedures of CDS. Such agreements and the Rules and Procedures of CDS, as the same may be amended or supplemented from time to time, are collectively referred to as the CDS
Documents. Notwithstanding anything else contained in this Rule 30 or otherwise in the Rules and Procedures of the Corporation, the Corporation shall offer the Canadian-Link Service only for so long as the Corporation continues to be a participant of CDS and there have been no changes in the CDS
Documents, or actions taken by CDS, which would, in the judgment of the Corporation, prevent or impair the ability of the Corporation to offer the Canadian-Link Service or make it impractical or onerous for the Corporation to do so.

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DTC has determined that it would no longer be able to access CDSs CAD
settlement service without making necessary system changes consistent with CDS PTM. In DTCs judgement, it would be impractical for DTC to incur the costs to undertake such changes, including incurring development costs, due to the lack of demand by its Participants to use the valued aspect of the Canadian Link Service.
In this regard, because there is no Participant demand for valued CAD
Securities transaction and CAD Funds transfer aspect of the Canadian-Link Service, it is DTCs judgement that it would be impractical for DTC to continue to process valued CAD
Securities and CAD Funds transfer transactions and, in accordance with its discretion set forth in Rule 30 as described above, DTC has discontinued processing of CAD Securities and CAD
Funds transactions through the Canadian-Link Service.18 DTC proposes to amend the Rules to clarify its Rules in this regard and reflect the elimination of the function of processing of CAD
Securities and CAD Funds transactions pursuant to the provisions of Rule 30, Section 2.19 However, because the CDS
PTM changes are not expected to materially impact DTCs ability to perform custody and process Free Deliveries at CDS, DTC would continue 17 Pursuant to Rule 1, the term Free Delivery means a Delivery free of any payment by the Receiver through the facilities of the Corporation, as provided in Rule 9B and as specified in the Procedures. See supra note 5.
18 See DTC Important Notice 1363920 July 10, 2020. Available at https www.dtcc.com/-/media/
Files/pdf/2020/7/10/13639-20.pdf.
19 Supra note 5.

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to maintain its membership, including its Securities account, at CDS, to hold Securities on behalf of DTC Participants at CDS and offer the functionality allowing Participants the ability to process Free Deliveries through the Canadian-Link Service. In addition, DTC would continue to pass distributions paid on Securities held in its DTC account to the applicable Participants in CAD or USD.20
In this regard, DTC proposes to update the text of its Rules to reflect the discontinuance of processing valued CAD Securities transactions and CAD
Funds transfers through the CanadianLink Service.
Proposed Rule Changes Proposed Changes to Rulebook Pursuant to the proposed rule change, DTC will delete text in Rule 30 relating to the processing of CAD transactions in the Canadian-Link Service, including as follows.
Defined Terms Defined terms relating to the description of the processing of CAD
transactions in Rule 30 would be deleted, including CAD Funds,21
Canadian-Link CAD Money Settlement,22 Canadian-Link CAD Net Debit Cap,23 Canadian-Link CAD Net Settlement Credit,24 Canadian-Link CAD Settlement Debit,25 Canadian-Link Funds Transactions,26 Canadian-Link Net Debit Cap,27 Canadian-Link Net OA at 2327, supra note 8.
to Section 1h3 of Rule 30, the term CAD Funds are defined as funds denominated in Canadian dollars. See Rule 30, supra note 5.
22 See supra note 14.
23 Pursuant to Section 8a of Rule 30, the term Canadian-Link CAD Net Debit Cap is defined as a limit established by DTC i on the negative CAD
Funds balance that may, from time to time, be incurred by a Canadian-Link Participant in respect of Canadian-Link Transactions processed for such Participant through the Canadian-Link Service in CAD Funds. See Rule 30, supra note 5.
24 Pursuant to Rule 30, Section 12b, the term Canadian-Link CAD Net Settlement Credit is defined as the net amount of CAD Funds, calculated by DTC by a time on a CDS Business Day set forth in the Procedures, payable by DTC to a CanadianLink Participant. Id.
25 Pursuant to Rule 30, Section 12b, the term Canadian-Link CAD Net Settlement Debit is defined as the net amount of CAD Funds, calculated by DTC by a time on a CDS Business Day set forth in the Procedures, payable to DTC by a CanadianLink Participant. Id.
26 Pursuant to Rule 30, Section 1h8, the term Canadian-Link Funds Transactions is defined as Cross-Border CAD Funds Transactions and IntraDTC CAD Funds Transactions, referred to individually or collectively as the context may require. Id.
27 Pursuant to Rule 30, Section 8a, the term Canadian-Link Net Debit Cap is defined as the Canadian-Link CAD Net Debit Cap and CanadianLink USD Net Debit Cap referred to, individually or collectively as the context may require. This
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Settlement Credit,28 Canadian-Link Net Settlement Debit,29 Canadian-Link Participants Fund Cash,30 CanadianLink Required Participants Fund Deposit,31 Canadian-Link USD Net Debit Cap,32 Canadian-Link USD Net Settlement Credit,33 Canadian-Link USD
Net Settlement Debit,34 CDS Payment Exchange,35 Canadian-Link Securities section provides that the Canadian-Link Net Debit Cap of each Canadian-Link Participant shall be determined by a formula taking into account the volume of Canadian-Link Transactions of each Canadian-Link Participant that shall be fixed by DTC and set forth in the Procedures. Id.
28 Pursuant to Rule 30, Section 12b, the term Canadian-Link Net Settlement Credit is defined as the Canadian-Link CAD Net Settlement Credit and Canadian-Link USD Net Settlement Credit referred to, individually or collectively as the context may require. Id.
29 Pursuant to Rule 30, Section 12b, the term Canadian-Link Net Settlement Debit is defined as the Canadian-Link CAD Net Settlement Debit and Canadian-Link USD Net Settlement Debit referred to, individually or collectively as the context may require. Id.
30 Pursuant to Rule 30, Section 6c, the term Canadian-Link Participants Fund Cash is defined as that portion of the cash in the Participants Fund equal to the aggregate amount of the Canadian-Link Required Participants Fund Deposits of all Canadian-Link Participants. Id.
31 Pursuant to Rule 30, Section 6a, the term Canadian-Link Required Participant Fund Deposit is defined as an amount each CanadianLink Participant shall be required to deposit to the Participants Fund as described in Section 1 of Rule 4 an amount of USD Funds in addition to the amount of USD Funds specified in Section 1ai of Rule 4. The Canadian-Link Required Participants Fund Deposit shall be in cash. The Canadian-Link Required Participants Fund Deposit of each Canadian-Link Participant shall be determined by a formula considering the volume of transactions of each Canadian-Link Participant that shall be fixed by the DTC and set forth in the Procedures. DTC
may, from time to time, change the formula for determining the Canadian-Link Required Participants Fund Deposits of Canadian-Link Participants; provided, however, that notice of such change shall be given to each Canadian-Link Participant at least ten Business Days in advance of the effective date thereof. Id.
32 Pursuant to Rule 30, Section 8a, a CanadianLink USD Net Debit Cap is to be established by DTC on the negative USD Funds balance that may, from time to time, be incurred by a Canadian-Link Participant in respect to Canadian-Link Transactions processed for such Participant through the Canadian-Link Service in USD Funds. Id.
33 Pursuant to Rule 30, Section 12b, the term Canadian-Link USD Net Settlement Credit is defined as the net amount of USD Funds calculated by DTC by a time on a CDS Business Day set forth in the Procedures and payable by DTC to a Canadian-Link Participant. Id.
34 Pursuant to Rule 30, Section 12b, the term Canadian-Link USD Net Settlement Debit is defined as the net amount of USD Funds calculated by DTC by a time on a CDS Business Day set forth in the Procedures and payable to DTC by a Canadian-Link Participant. Id.
35 Pursuant to Rule 30, Section 13a, CDS
Payment Exchange is defined as on each CDS
Business Day, during a period of time set forth in the Rules and Procedures of CDS, when CDS is required to pay to DTC the amount of its DTC
Omnibus Account CAD Net Settlement Credit, id, or DTC is required to pay to CDS the amount of its
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