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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices deleted in its entirety pursuant to the proposal, because since Participants would no longer be able to incur a settlement obligation with respect to activity within the Canadian-Link Service, it would no longer necessary for DTC to maintain a security interest in Securities that are the subject of Canadian-Link Transactions.

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Section 8Canadian-Link Net Debit Caps of Canadian-Link Participants Section 8 of Rule 30 provides for a limit to be 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 each a Canadian-Link CAD Net Debit Cap and ii 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 each, a Canadian-Link USD Net Debit Cap.
The Canadian-Link CAD Net Debit Cap and Canadian-Link USD Net Debit Cap are referred to, individually or collectively as the context may require, as the Canadian-Link Net Debit Cap.
This Section subjects all transactions processed though the Canadian-Link Service to be subject to the CanadianLink Net Debit Cap. The section further provides that DTC shall not comply with any instruction from a CanadianLink Participant in respect of any Canadian-Link Transaction that would cause DTC to exceed its DTC Omnibus Account Net Debit Cap or cause such Canadian-Link Participant to exceed its Canadian-Link Net Debit Cap but rather shall pend such Canadian-Link Transaction subject to the Rules until such Canadian-Link Transaction may be processed without causing DTC to exceed its DTC Omnibus Account Net Debit Cap or causing such CanadianLink Participant to exceed its CanadianLink Net Debit Cap.
Pursuant to the proposed rule change, DTC would delete Section 8 of Rule 30
in its entirety. The maintenance of a Canadian-Link Net Debit Cap would no longer be necessary as this limit applies to DVP transactions, and DVP
transactions would no longer be processed through the Canadian-Link Service.

Section 9Collateral Monitor of Canadian-Link Participants In addition to the Net Debit Cap,67
another tool DTC uses in managing credit risk is the Collateral Monitor.68
These two controls work together to protect the DTC settlement system in the event of Participant default. The Collateral Monitor requires net debit settlement obligations, as they accrue intraday, to be fully collateralized.
Meanwhile, the Net Debit Cap limits the amount of any Participants net debit settlement obligation to the amount that can be satisfied with DTC liquidity resources. Section 9 of Rule 30 provides for activity conducted by a Participant through the Canadian-Link Service to be included in the Participants Collateral Monitor. For the same reason as described above with respect to the elimination of Section 8, DTC would delete Section 9 in its entirety, because the elimination of DVP activity would eliminate any credit risk associated with transactions conducted through the Canadian-Link Service, and therefore DTC would no longer require the inclusion of Canadian-Link activity in the Collateral Monitor in managing its credit risk.
Section 10Processing Canadian-Link Transactions Section 10 of Rule 30 provides for the process by which Securities and funds are credited and debited to and from Canadian-Link Participants accounts for activity instructed by Participants to be processed through the Canadian-Link Service. As described above, DTC would continue to process transfers of Securities through the Canadian-Link Service, but it would no longer process DVP and/or CAD Funds activity for transactions conducted through the service. Therefore, pursuant to the proposed rule change, DTC would amend Section 10 to reflect the elimination of processing of funds debits and credits as part of the processing of Canadian-Link Transactions. In this regard, DTC would also revise references in the text of this section to a Canadian-Link Securities Transaction to Canadian-Link Transaction, b Intra-DTC CAD
Securities Transaction to Intra-DTC
Transaction, and c Cross-Border Securities Transaction to CrossBorder Transaction, because the currently used terms would be deleted from Rule 30, as described above, and the elimination of the processing of funds debits and credits, as described 67 Id.
68 Id.

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above, would eliminate the need for the use of defined terms relating to transactions processed through the Canadian-Link that distinguish between Securities transactions from funds transactions. Further subsections C
and D of Section 10a1 and Item iii of Sections 10a2A and 10a2B
would be deleted from Rule 30. Finally, this section would also be renumbered as Section 6 due to the deletion of the original Sections 6, 7, 8 and 9, as described above.
Section 11CDS Business Days Pursuant to the proposed rule change, Section 11 would be renumbered as Section 7.
Section 12Settlement Recaps Section 12 provides the process for the issuance of Settlement Recaps by DTC. Because the money settlement aspect of the Canadian-Link Service would be eliminated, there would no longer be a need for DTC to issue Settlement Recaps with respect to CAD
activity. Therefore, DTC would eliminate Section 12 in its entirety because Settlement Recaps would no longer be issued by DTC, and this Section would become obsolete.
Section 13Settlement Payments Section 13 provides for the processing of settlement payments relating to DVP
activity through the Canadian-Link Service. As described above, money settlement would be eliminated pursuant to the proposed rule change.
Therefore, DTC would no longer provide for money settlement relating to transactions processed through the Canadian-Link. In this regard, DTC
proposes to eliminate Section 13 in its entirety as it would become obsolete.
Section 14End of Day Sweep Section 14 provides for the timing of the movement of Securities between accounts used for the Canadian-Link Service. This section provides that such movements occur at the end of each CDS Business Day after the completion of money settlement. DTC would delete the provision requiring for the completion of money settlement prior to the sweeping of Securities in this regard as DTC would no longer be conducting money settlement for the Canadian-Link Service. Also, DTC
would renumber this section as Section 8 to reflect the renumbering and deletion of previous sections as described above.

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