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Federal Register / Vol. 86, No. 210 / Wednesday, November 3, 2021 / Notices
Act,7 and a systemically important financial market utility under Title VIII
of Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
Dodd-Frank,8 DTC is required to follow: i A specified process 9
whenever it proposes a new rule or a change or amendment to its Rules and ii a specified process 10 whenever it proposes to make a change to its rules, procedures or operations that could materially affect the nature or level of risks presented by DTC.
These rule change processes provide notice to Participants, Pledgees, and registered clearing agencies, among others, and provide an opportunity for those parties to comment on such changes. Rule 19b4 under the Act requires that DTC post any rule change proposals on its website within two business days after the filing of a proposed rule change,11 post any rule changes that are approved by the Commission within two business days after it has been notified of the Commissions approval 12 and post any rule change within two business days of the Commissions notice of such proposed change for rule changes that are effective upon filing.13 DTC
compliesand will continue to complywith such notice requirements which it believes are adequate.
In terms of technical changes that relate to the notice provisions, DTC is proposing to amend the language in Rule 19 to i more closely align with the SECs interpretation 14 of the requirement for a clearing agency to provide for the fair representation of its members,15 and ii clarify that DTC will notify Participants, Pledgees and registered clearing agencies of any rule change proposals by posting the proposal on the DTC website.16 Further, 7 15

U.S.C. 78s.
U.S.C. 5465e1.
9 This process is set forth in Section 19b of the Exchange Act and Exchange Act Rule 19b4. 15
U.S.C. 78sb and 17 CFR 240.19b4.
10 This process is set forth in Section 806e of Dodd-Frank and Exchange Act Rule 19b4. 12
U.S.C. 5465e and 17 CFR 240.19b4.
11 17 CFR 240.19b4l.
12 17 CFR 240.19b4m2.
13 Id.
14 See Securities Exchange Act Release No. 16900
June 17, 1980, 20 FR 415 July 1, 1980 Clearing agencies, however, should incorporate in their rules a procedure pursuant to which participants and registered clearing agencies will normally receive the text or a brief description of the proposed rule and its purpose and effect in sufficient time, in view of the date by which the Commission may be expected to act upon the filing, to permit the participants and registered clearing agencies to comment to the Commission emphasis added.
15 15 U.S.C. 78q1b3C.
16 Pursuant to the proposed rule change, DTC
would add the defined terms DTC Website and DTCC to Section 1 of Rule 1 Definitions;

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in order to clarify that Pledgees are bound by Procedures in the same manner they are bound to the Rules, DTC is proposing to add Pledgee to the third sentence of Rule 27.17
ii Eliminate Obsolete Rules DTC periodically reviews the Rules for accuracy and applicability. In the most recent review, DTC identified the following two Rules for removal from the Rules.
A. Rule 8 Deliveries of Notifications Among Participants and Pledgees DTC is proposing to remove Rule 8
from the Rules because the subject delivery service is no longer utilized by Participants and Pledgees. Rule 8
provides that DTC will accept deliveries of hard copy confirmations, advices and other records from a Participant or Pledgee that are addressed to another Participant or Pledgee at its offices.
DTC, in turn, will make the hard-copy documents available to the addressee.
Rule 8 has appeared in the Rules, in its current form, since at least 1980.18
Rule 8 relates back to a time when physical securities processing and the associated documentation were only in hardcopy form. It is DTCs understanding that, as technology started to advance, including, but not limited to the automation and availability of data files, Participants and Pledgees began using other means, including electronic or computergenerated messaging, to communicate and exchange documentation relating to a securities transaction.
No Participant or Pledgee has used DTC facilities to deliver hardcopy documents to other Participants and Pledgees in several years. DTC is not aware of any Participant or Pledgee that has expressed interest in doing so.
Therefore, DTC is proposing to remove Rule 8 from the Rules and reflect that the Rule number is reserved for future use.
B. Rule 34 EB Collateral Positioning DTC is proposing to remove Rule 34
from the Rules because, as explained below, the predicate service operated by Euroclear Bank SA/NV EB is no longer being offered. In 2016, DTC filed Governing Law. DTC Website would be defined as any URL Uniform Resource Locator designated by the Corporation from time to time which may include DTCCs website at https www.dtcc.com.
DTCC would be defined as The Depository Trust & Clearing Corporation.
17 As a ministerial correction to Rule 27, DTC is also proposing to replace the term DTC officer with officer of the Corporation.
18 See DTC CA1 Application for Permanent Registration as a Clearing Agency, dated December 15, 1980 File 6001 at page 594.

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a rule filing with the Commission to add Rule 34 to the Rules.19 The purpose of Rule 34 was to establish a free-ofpayment FOP Participant Account for EB at DTC 20 and to provide Participants with a framework for positioning securities they held at DTC
for collateral transfers on the books of EB in connection with EBs collateral management services Collateral Positioning.21 Rule 34 also reflects that EB would only accept deliveries of securities for Collateral Positioning from Participants that were also i participants of EB and ii users of DTCC
Euroclear Global Collateral Ltd.
DEGCL Inventory Management Service DEGCL IMS. DEGCL was a United Kingdom joint venture of The Depository Trust & Clearing Corporation DTCC and Euroclear S.A./N.V.
Euroclear, formed for the purpose of offering global information, record keeping, and processing services for derivatives collateral transactions and other types of financing transactions.
The DEGCL IMS service offered each user an automated mechanism for using the securities it held at DTC as collateral on the books of EB. DEGCL IMS was operated by EB and other entities in the Euroclear group, as the service provider to DEGCL, in accordance with the appropriate agreements among them and in compliance with applicable regulatory requirements. There was no direct relationship between DTC and DEGCL IMS. However, DTC understood that EB was acting as a service provider to DEGCL, and accordingly, that Rule 34
supported the DEGCL IMS service.
On March 10, 2020, the DEGCL joint venture was dissolved.22 As a result, the DEGCL IMS service is no longer offered, rendering Rule 34 obsolete.
Accordingly, DTC is proposing to remove Rule 34 from the Rules and reflect that the Rule number is reserved for future use.
19 Securities Exchange Act Release No. 78358
July 19, 2016, 81 FR 48482 July 25, 2016 SR
DTC2016004.
20 In 2019, EB applied and was approved by DTC
for a delivery versus payment DVP Participant Account at DTC. In 2019, DTC filed a rule filing to make non-substantive changes to the Rule in order to reflect the change to the account structure of EB.
See Securities Exchange Act Release No. 87474
November 6, 2019, 84 FR 61670 November 13, 2019 SRDTC2019010.
21 For a description of Collateral Positioning, see Securities Exchange Act Release No. 78358 July 19, 2016, 81 FR 48482 July 25, 2016 SRDTC2016
004.
22 See Update on DTCC-Euroclear GlobalCollateral Joint Venture, available at https
www.dtcc.com/news/2020/january/14/update-ondtcc-euroclear-globalcollateral-joint-venture.

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