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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices
Section 15Failure To Make Settlement Payments Section 15 provides the process to be followed if a Participant fails to make payment with regards to Canadian-Link activity. As described above, DTC
proposes to eliminate money settlement with respect to Canadian-Link activity.
In this regard, DTC would delete Section 15 in its entirety as it would become obsolete due to the elimination of settlement payments through this service.
Section 16Currency Conversion and Exchange Section 16 provides the process for the conversion of USD Funds to CAD
Funds as necessary for a Participant to complete settlement or satisfy its risk controls relating to the Canadian-Link Service. Since money settlement would no longer occur through this service, such conversions of currency would no longer occur, and this section would become obsolete. Therefore, pursuant to the proposed rule change, DTC would delete Section 16 in its entirety.
Section 17Choice of Law and Submission to Jurisdiction To conform the numbering of sections to reflect the deletion and renumbering of previous sections as described above, Section 17 would be renumbered as Section 9.

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Section 18Canadian Link Charges Section 18 provides that Participants must pay to DTC any fees and charges relating to their use of the CanadianLink Service. These charges include charges relating to the cost to DTC for maintaining liquidity resources to settle Canadian-Link Transactions. As mentioned above, money settlement under this service would be eliminated and therefore it would no longer necessary for DTC to maintain such liquidity resources with respect to activity processed through the Canadian-Link Service. Therefore, text referring to charges relating to the cost of maintaining liquidity resources with respect to the Canadian-Link Service would be obsolete and would be deleted. As a result of these proposed changes, to conform the numbering of the subsections to reflect the deletion of subsection ii, the subsections following would be renumbered, ii, iii, iv and v. Also, to conform the numbering of sections to reflect the deletion and renumbering of previous sections as described above, Section 18
would be renumbered as Section 10.

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Elimination of the Canadian-Link Service Guide DTC proposes to eliminate the full text of the Guide. The Guide relates to Procedures necessary for the DVP
settlement of Canadian-Link Transactions. These Procedures cover all operational aspects of the service as it relates to DVP activity, including DVP
transaction processing, risk controls and tracking established to control for failed DVP transactions in the processing of end-of-day sweeps. Due to the elimination of money settlement through the Canadian-Link Service, this Guide would become obsolete.
Proposed Changes to the OA
The OA sets forth requirements that a Security must meet to become and remain eligible for DTC services and provides for the orderly processing of such Securities and timely payments to Participants.
Proposed Changes to Text of the OA
Relating to Eligibility Requirements/
Non-U.S. Denominated Securities Section I.C.5. of the OA contains provisions relating to the eligibility of Securities denominated in a non-U.S.
currencies and processing of distribution payments in non-U.S.
currencies. This section currently contains references to CAD settlement through the Canadian-Link Service. To reflect the proposed elimination of money settlement in the Canadian-Link Service, DTC proposes to amend this section to remove references to the availability of Canadian dollar settlement. Since, as described above, DTC would continue to process distributions in CAD, this section would continue to provide for such distributions in CAD. The proposed rule change would make a grammatical change that does not affect the substance of the section.
Proposed Changes to Dividend and Income Payment Notification Procedures Section IV of the OA sets forth Dividend and Income Payment Notification Procedures. Subsection B of this section describes currency provisions relating to dividend and income payments, and specifically refers to such payments made in CAD.
The text includes mentions of CAD
settlement performed through the Canadian-Link Service. It also refers to the service generally as Canadian dollar settlement. In order to reflect the proposed elimination of CAD settlement through the Canadian-Link Service, DTC
would i revise this section to delete provisions referring to or describing
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CAD settlement and ii modify a statement relating to Securities eligible to receive payments in CAD from referencing Securities eligible for Canadian dollar settlement to Securities eligible for the Canadian-Link Service.
Also, the proposed rule change in this regard would cause a defined term for CDS to be deleted as it falls within a paragraph that describes CAD
settlement. The proposed rule change moves the defining term for CDS to a sentence that would not be eliminated by the proposal.
Effective Date The proposed rule change would become effective upon filing with the Commission.
2. Statutory Basis Section 17Ab3F of the Act requires, in part, that the Rules be designed to promote the prompt and accurate clearance and settlement of Securities transactions.69 DTC believes that the proposed rule change is consistent with this provision because it would provide enhanced clarity and transparency for participants with respect to services offered by DTC by updating the Rules to remove the ability to access services that Canadian-Link Participants have not recently utilized and are unlikely to utilize in the future.
Therefore, by providing enhanced clarity and transparency in the Rules regarding the services provided by DTC, DTC believes the proposed rule change would promote the prompt and accurate clearance and settlement of Securities transactions, consistent with the requirements of the Act, in particular Section 17Ab3F, cited above.
B Clearing Agencys Statement on Burden on Competition DTC does not believe that the proposed rule change would have any impact on competition. Participants have not used the Canadian-Link Service for DVP Securities and/or CAD
Funds transactions in several years.
Also, based on discussions DTC has had with Participants regarding their use of the Canadian-Link Service, DTC
believes Participants are unlikely to use the service for this purpose in the future. Therefore, DTC believes that the proposed rule change should have no effect on Participants, other than to remove references to the ability for Participants to conduct DVP
transactions through the Canadian-Link Service from the Rules and Procedures, which transactions are unlikely to be conducted by Participants.
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