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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices
Participants would continue to be permitted through the Canadian-Link Service, even though the ability to settle a Securities transaction versus payment would be eliminated. Further, IntraDTC CAD Securities Transactions and Intra-DTC CAD Funds Transactions as elements of the definition of Intra-DTC
Transactions would be replaced with a reference Intra-DTC securities transactions, for the same reason as an identical change to current Subsection e of Section 1 proposed to be renumbered as Subsection d, as described above. Also, Cross-Border CAD Securities Transactions and Cross-Border USD Securities Transactions used as elements of the description of Cross-Border Securities would be deleted and replaced with Cross-Border Transactions. Also, IntraDTC CAD Securities Transactions, used as a descriptor relating to Securities underlying an element of the definition of Intra-DTC Securities, would be replaced with Intra-DTC
Transactions, because i even though Intra-DTC CAD Securities Transactions would no longer be provided for under Rule 30, intra-DTC Securities transactions could still occur through the Canadian-Link Service, as described above and ii such transactions would defined as Intra-DTC Transactions, as described above. In addition, Subsection h would be renumbered as Subsection e to conform the numbering of this section with the elimination and renumbering of other subsections as described above. In this regard, the explanations of definitions in subsection h are currently set forth in an itemized list numbered from 1 to 15, with each item followed by a semicolon. As a result of the proposed revisions described above, in addition to changes to the text to reflect the substantive changes described above, item numbers 3, 4, 5, 6 7, 8 and 15 would be deleted and items 9, 10, 11, 12, 13 and 14 would be renumbered respectively as 3, 4, 5, 6, 7 and 8. A semicolon and the word and would be deleted from the end of current 14 to be renumbered as 8 and replaced with a period because the deletion of 15 would make the newly renumbered 8 the last item of this list. The word and would be added to the end of current 13 to be renumbered as 7 directly after an existing semicolon.
Section 2CDS Documents Section 2 of Rule 30 provides, among other things, that Each Canadian-Link Participant shall observe and comply with the CDS Documents applicable to the Canadian-Link Service as if such
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Canadian-Link Participant were a CDS
Participant and a direct party to the CDS
Documents. Each Canadian-Link Participant acknowledges that the CDS
Documents may include grants of security interests in and liens on CrossBorder Securities and CAD Funds in which such Canadian-Link Participant may have an interest. . . .
Pursuant to the proposed rule change, DTC proposes to change CAD Funds in the preceding sentence to funds.
As described herein, the term CAD
Funds would be eliminated pursuant to the proposed rule change. However, CDS may continue to have a security interest in funds owed to DTC for dividends and interest paid on Securities held by DTC at CDS on behalf of Canadian-Link Participants.66
Section 4Participants Eligible for Canadian-Link Service Section 4 of Rule 30 provides, among other things that A Security that is an Eligible Security may or may not be a Canadian-Link Security and may or may not be the subject of Cross-Border CAD
Securities Transactions, Cross-Border USD Securities Transactions and/or Intra-DTC Securities Transactions. A
Security that is not an Eligible Security may be a Limited-Service CanadianLink Security, but it may not be a FullService Canadian-Link Security and may not be the subject of Intra-DTC
CAD Securities Transactions.
Consistent with the proposed changes described above, DTC proposes to amend this section to eliminate references to CAD and USD-related transactions and refer to transactions without reference to Canadian or U.S.
currency. In this regard, a reference to Intra-DTC CAD Securities Transactions would be revised to Intra-DTC Transactions in a sentence describing to the effect, among other things, that a Limited-Service CanadianLink Security cannot be included in an intra-DTC Securities transaction.
Section 5Canadian-Link Interface and DTC Omnibus Account Section 5a of Rule 10 includes a description of ledgers and accounts that CDS maintains for DTC at CDS that relate to Securities and funds. The funds accounts are denominated in Canadian dollars and US dollars. While the DVP
function of the Canadian-Link Service would be discontinued pursuant to the proposed rule change, DTC would continue to receive dividends and interest on Securities held by it at CDS
and DTC may owe fees for services to 66 See Section 5.2.2 of CDSs rules, available at https www.cds.ca/resource/en/311.

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CDS. As a result, DTC would continue to maintain funds accounts for these purposes. While the terms CAD
Funds and USD Funds would be removed from Rule 30 as described herein, DTC proposes to replace these terms as used in Section 5a of Rule 30
with Canadian Dollar funds and US
dollar funds, respectively.
Section 5b provides that DTC will make the DTC Omnibus Account available for the purpose of processing Cross-Border Transactions between Canadian-Link Participants and CDS
Participants. This section states that DTC will act on behalf of Canadian-Link Participants and in accordance with their instructions, but DTC maintains, at all times, control over the Cross-Border Securities and Funds in the DTC
Omnibus Account. As described herein, DTC would remove the defined term for Funds. However, as described above, DTC would continue to receive funds into its account at CDS in the form of dividends and interest. Therefore, DTC
would replace Funds as used in Section 5b with funds.
Section 6Canadian-Link Required Participants Fund Deposit Section 6 of Rule 30 provides that a Participant must make a deposit that is deemed to be included in the Participants Fund with respect to DVP
volume conducted by the Participant through the Canadian-Link Service. The section also provides for the investment of such deposits by DTC and the payment of interest for those investments to the applicable Participants. The Participants Fund provides liquidity for DTC to complete settlement in the event a Participant fails to meet its settlement obligation.
Section 6 would be deleted in its entirety pursuant to the proposed rule change, because Participants would no longer have a settlement obligation in the Canadian-Link Service due to the elimination of money settlement for Securities transactions conducted through the service. In this regard, DTC
would no longer have a settlement obligation with respect to CDS. As a result, there would no longer be a need to maintain such deposits with respect to Canadian-Link activity.
Section 7Security for Canadian-Link Transactions Section 7 of Rule 30 provides DTC
with a security interest in Securities settled DVP through the Canadian-Link Service and allows DTC to use such Securities to secure loans for purposes of completing settlement in the event a Participant fails to satisfy its settlement obligation. This Section would be
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