Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices 64401 

28 15 U.S.C. 78s(b)(3)(A). 

29 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

30 17 CFR 240.19b–4(f)(6). 

31 17 CFR 240.19b–4(f)(6)(iii). 

32For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 33 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(2) and (f)(4). 

5Each capitalized term not otherwise defined 

herein has its respective meaning as set forth in the 

Fee Guide and the Rules, By-Laws and Organization 

Certificate of DTC (the ‘‘Rules’’), available at http:// 

www.dtcc.com/legal/rules-and-procedures.aspx. 

Act 28 and Rule 19b–4(f)(6) 

thereunder.29

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 30 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 31

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay to provide Members 

with additional tools and greater 

flexibility for managing their potential 

risk as soon as possible. Accordingly, 

the Commission believes that waiver of 

the 30-day operative delay is consistent 

with the protection of investors and the 

public interest. Therefore, the 

Commission hereby waives the 

operative delay and designates the 

proposal as operative upon filing.32

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2018–086 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CboeBZX–2018–086. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2018–086 and 

should be submitted on or before 

January 4, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27085 Filed 12–13–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84768; File No. SR–DTC– 

2018–011] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

the Guide to the DTC Fee Schedule 

December 10, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

26, 2018, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the clearing agency. DTC filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 3 and 

Rules 19b–4(f)(2) and (f)(4) thereunder.4

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change consists of 

amendments to the Guide to the DTC 

Fee Schedule (‘‘Fee Guide’’) 5 in order to 

(i) simplify the pricing structure, (ii) 

align fees with the costs of services 

provided by DTC, and (iii) encourage 

Participant practices that promote 

efficient market behavior. The proposed 

changes would include: (A) Grouping 

certain fee line items for related or 

similar services under one fee line item, 

(B) deleting fees with little or no 

activity, (C) updating certain fees to 

reflect DTC’s costs in relation to the 

service, (D) decreasing certain fees in 

order to incentivize Participants to 

utilize certain DTC services that 

promote efficiency, both in the servicing 

of physical securities in the Custody 

Service and for the settlement of 

securities transactions at DTC, and (E) 

increasing a surcharge to discourage the 

late submission of certain underwriting 

documentation. In addition, the 

proposed rule change would also make 


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6 DTC’s affiliates, National Securities Clearing 

Corporation (‘‘NSCC’’) and Fixed Income Clearing 

Corporation (‘‘FICC’’) have undertaken similar 

reviews and are proposing changes to their 

respective fees. 

7 DTC examined how often all fees were charged 

over a period of no less than two years. 

8For further information about the Custody 

Service, see the Custody Service Guide, available at 

http://www.dtcc.com/∼/media/Files/Downloads/ 

legal/service-guides/Custody.pdf. 

clarifying changes to the Fee Guide, as 

described in greater detail below. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The proposed rule change would 

amend the Fee Guide in order to (i) 

simplify the pricing structure, (ii) align 

fees with the costs of services provided 

by DTC, and (iii) encourage Participant 

practices that promote efficient market 

behavior. The proposed changes will 

include: (A) Grouping certain fee line 

items for related or similar services 

under one fee line item, (B) deleting fees 

with little or no activity, (C) updating 

certain fees to reflect DTC’s costs in 

relation to the service, (D) decreasing 

certain fees in order to incentivize 

Participants to utilize certain DTC 

services that promote efficiency, both in 

the servicing of physical securities in 

the Custody Service and for the 

settlement of securities transactions at 

DTC, and (E) increasing a surcharge to 

discourage the late submission of 

certain underwriting documentation. In 

addition, the proposed rule change 

would also make clarifying changes to 

the Fee Guide, as described in greater 

detail below. 

(i) Background 

Participants are charged fees in 

accordance with the Fee Guide, based 

upon their activities and the services 

that they utilize. The Fee Guide lists 

approximately 283 individual fees. 

Certain fees need to be updated in order 

to better align with the costs incurred by 

DTC in providing those services. 

In response to feedback from 

Participants that the pricing structure is 

complex, DTC has undertaken a 

strategic review of its pricing and its 

pricing structure. As a result of the 

review, DTC developed an enhanced 

pricing strategy with the goals of 

reducing pricing complexity, aligning 

fees with costs, and encouraging 

Participant practices that promote 

efficient market behavior.6

A. Simplify the Pricing Structure 

(1) Fee Groupings 

As discussed above, Participants have 

indicated that the DTC pricing structure 

is complex. In response to this feedback, 

the proposed rule change would reduce 

the number of individual fee line items 

by creating new fee groupings that 

would consolidate separate fee line 

items for similar services or 

transactions. These fee line items would 

be grouped together into one line item 

with a standard fee, and the related fee 

condition may be modified to conform 

to the fee grouping. The standard fee 

would apply to each of the grouped 

services or transactions. In most cases, 

the proposed rule change would not 

change the amount charged to a 

Participant for each service or 

transaction within the fee grouping. 

However, in a few circumstances, the 

proposed standard fee may reflect an 

increase or decrease relative to the 

amount currently charged in order to 

either (i) align fees with costs or (ii) 

encourage Participant practices that 

promote efficient market behavior. 

(2) Removing Fees With Little or No 

Activity 

The proposed rule change would 

remove fees for certain services that 

have little or no activity.7 Pursuant to 

the proposed rule change, DTC would 

delete these fees in order to further 

simplify the pricing structure by 

reducing the number of line items in the 

Fee Guide. 

B. Fee Realignment 

Pursuant to the proposed rule change, 

DTC would update certain fees in the 

Fee Guide to more closely reflect the 

costs incurred by DTC in providing the 

services. DTC believes that it is 

reasonable and appropriate to charge 

fees that properly align with DTC’s 

costs. Aligning fees with costs adds 

efficiency to the market by allowing a 

Participant to more accurately evaluate 

the value of a service and to make 

business decisions accordingly. The 

primary goal of DTC with respect to the 

proposed realignment of fees is to 

reduce, where appropriate, the fees 

charged to Participants for services. 

Certain of the proposed fees that relate 

to services with declining volumes have 

been reduced because they consume 

fewer DTC resources. Other proposed 

fees have been reduced because certain 

streamlined processes have resulted in 

the reduction of processing costs for 

DTC. In both cases, pursuant to the 

proposed rule change, DTC, through 

these fee reductions, would be passing 

along its cost savings to Participants. 

Finally, a few proposed fees would 

result in fee increases in order to align 

with the costs incurred by DTC in 

providing the relevant services. 

Increasing a fee to align with the costs 

incurred by DTC in providing the 

service would allow DTC to efficiently 

offer the particular service, as well as 

continue to appropriately manage its 

resources for all its services, thereby 

enabling DTC to efficiently provide 

dependable and stable services to its 

Participants. 

C. Promote Efficient Market Behavior 

DTC believes the proposed changes to 

reduce certain fees would encourage 

Participant use of certain DTC services 

that offer efficiencies that are designed 

to promote the prompt and accurate 

clearance and settlement of securities 

transactions (‘‘efficient market 

behavior’’). Pursuant to the proposed 

rule change, DTC would reduce certain 

fees for its Custody Service in order to 

encourage Participants to centralize the 

servicing of their physical securities at 

DTC, which already services the 

securities deposited at DTC by 

Participants for book-entry services. The 

Custody Service allows a Participant to 

outsource to DTC servicing of physical 

securities by depositing, among other 

things, securities not eligible for DTC 

book-entry services, including securities 

such as customer-registered custodial 

assets, restricted shares, and other DTCineligible securities such as certificated 

money market instruments (MMIs), 

private placements, and limited 

partnership interests.8 A Participant that 

does not use the Custody Service would 

otherwise need to secure its own 

physical securities as well as 

independently handle certain 

transactions, such as the transfer of 

physical securities and the handling of 

reorganization events. By utilizing the 

Custody Service, a Participant is able to 

benefit from, among other things, cost 

savings from the economies of scale 

offered by DTC, and the added 

efficiency of the limited depository 

services offered by DTC with respect to 


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9The limited depository services may include 

physical processing for the security on a 

Participant’s behalf, such as facilitating the transfer 

of security certificates, and providing custody 

reorganization services. 

10 In order to make a book-entry only (‘‘BEO’’) 

issue eligible at DTC, the issuer must submit to DTC 

a LOR or BLOR prior to such issue being 

determined to be eligible. For more information on 

LORs and BLORs, see The DTC Operational 

Arrangements (Necessary for Securities to Become 

and Remain Eligible for DTC Services) at 4–6, 

available at http://www.dtcc.com/∼/media/Files/ 

Downloads/legal/issue-eligibility/eligibility/ 

operational-arrangements.pdf. 

11As discussed below, certain other research fees 

with respect to Deposit Automation Management 

and New York Window Services would also be 

consolidated into the proposed ‘‘Researching fee.’’ 

12There is also a $75.00 ‘‘Custody Deposit’’ fee, 

which would not be affected by the proposed rule 

change. 

13To conform with the proposed fee groupings, 

the subheading ‘‘Branch Deposits (Exception 

Processing)’’ would be modified to read ‘‘Branch 

Deposits and Deposit Automation Management 

(DAM) (Exception Processing). 

securities held in its Custody Service.9

In addition, pursuant to the proposed 

rule change, DTC would also reduce or 

eliminate fees for certain settlement 

services in order to encourage 

Participants to submit their transactions 

earlier in day. The earlier submission of 

transactions by Participants results in 

more efficient settlement processing by 

increasing the volume of transactions 

processed in the night-cycle, which, in 

turn, enhances intraday settlement 

processing. 

Finally, pursuant to the proposed rule 

change, DTC would increase an 

underwriting surcharge charged to a 

Participant for the late submission of a 

letter of representations (‘‘LOR’’) or 

blanket letter of representations 

(‘‘BLOR’’) 10 in order to increase the 

incentive for a Participant to submit its 

underwriting documentation in a timely 

manner. Failure of a Participant to 

submit a LOR or BLOR with respect to 

a security on time could delay the 

clearance and settlement of transactions 

in that security. 

D. Clarify the Fee Guide 

Pursuant to the proposed rule change, 

DTC would amend certain headings, fee 

names, and fee conditions to add clarity 

and conformity to the Fee Guide. 

(ii) Proposed Fee Changes 

Pursuant to the proposed rule change, 

DTC would amend the Fee Guide as 

follows: 

A. Simplify the Pricing Structure 

(x) Fee Groupings With No Change to 

Fee Amount 

Custody and Securities Processing/ 

Securities Processing/Maintenance of 

Long Position (Registered Securities) 

(1) Frozen Letter. Currently, there are 

separate identified fees for (i) ‘‘deliver,’’ 

(ii) ‘‘receive,’’ and (iii) ‘‘reject’’ frozen 

letter transactions, each with a fee of 

$10.00. Pursuant to the proposed rule 

change, these fees would be 

consolidated and charged as a ‘‘Frozen 

letter deliver, receive or reject’’ fee. The 

proposed rule change would not change 

the current amount of the fee. DTC 

believes that it would be appropriate to 

consolidate these fees because it would 

simplify the pricing structure by having 

one standard fee for frozen letter 

transactions. 

Custody and Securities Processing/ 

Securities Processing/General Asset 

Services 

(2) Researching of aged and other 

special items; Extraordinary processing/ 

research fee for ICSR; Paying agent 

research. Pursuant to the proposed rule 

change, ‘‘Researching of aged and other 

special items,’’ ‘‘Extraordinary 

processing/research fee for ICSR,’’ and 

‘‘Paying agent research’’ line items 

would be consolidated and charged as a 

‘‘Researching fee.’’ 11 The proposed 

condition would read, ‘‘per hour or per 

CUSIP, depending on the nature of the 

research.’’ The proposed rule change 

would not affect the current fee of 

$100.00 per hour or CUSIP, as 

applicable. DTC believes that it would 

be appropriate to consolidate these fees 

because it would simplify the pricing 

structure by having one standard fee for 

these research activities. 

Custody and Securities Processing/ 

Corporate Actions/Instruction 

Processing Fee 

(3) EDS/DRIP Election; Voluntary 

Corporate Action Base Election; 

Voluntary Corporate Action Election. 

These separate fees all relate to 

voluntary corporate action instructions. 

Pursuant to the proposed rule change, 

these fees would be consolidated and 

charged as a ‘‘Corporate Action 

Instruction Fee.’’ The proposed rule 

change would not affect the amount of 

the fee. Pursuant to the proposed rule 

change, the condition for the fee would 

read: ‘‘Per voluntary and elective EDS/ 

DRP instruction, up to 50 instructions 

per offer’’ in order to reflect the 

consolidation of the fees for each 

instruction type. DTC believes that it 

would be appropriate to consolidate 

these fees because it would simplify the 

pricing structure by having one standard 

fee for transactions relating to 

instruction processing for voluntary 

corporate action events. 

Custody and Securities Processing/ 

Custody Services/Custody (Non-Core 

Services) 

(4) Custody inventory swing 

withdrawal; Custody inventory swing 

deposit. Pursuant to the proposed rule 

change, these fees would be 

consolidated and charged as a ‘‘Custody 

inventory swing deposit or withdrawal’’ 

fee. The condition for the fee would be 

modified to read: ‘‘Per deposit or 

withdrawal.’’ The proposed rule change 

would not affect the current fee. DTC 

believes that it would be appropriate to 

consolidate these fees because it would 

simplify the pricing structure by having 

one standard fee for these related 

activities. 

Custody and Securities Processing/ 

Custody Services/Custody (Exception 

Processing) 

(5) Rejects. There are currently 

separate identified fees of $125.00 for (i) 

‘‘Transfer,’’ (ii) ‘‘Reorg,’’ and (iii) 

‘‘Front-end reorg reject.’’ 12 Pursuant to 

the proposed rule change, these fees 

would be consolidated and charged as a 

‘‘Transfer, Reorg or Front-end reorg 

rejects’’ fee. The proposed rule change 

would not affect the amount of the fee. 

DTC believes that it would be 

appropriate to consolidate the fees 

because it would simplify the pricing 

structure by having one standard fee for 

custody rejects. 

Custody and Securities Processing/ 

Deposit Services/Branch Deposits (Core 

Services) 

(6) Regular deposit received from a 

branch; Deposit of bearer securities 

received from a branch. Pursuant to the 

proposed rule change, these fees would 

be consolidated and charged as a 

‘‘Regular or bearer deposit received from 

a branch’’ fee. The proposed rule change 

would not affect the current fee of 

$18.00 for each activity. DTC believes 

that it would be appropriate to 

consolidate the fees because it would 

simplify the pricing structure by having 

one standard fee for branch deposits. 

Custody and Securities Processing/ 

Deposit Services/Branch Deposits 

(Exception Processing),13 and Custody 

and Securities Processing/Deposit 

Services/Deposit Automation 

Management (DAM) 

(7) BDS TA deposit reject; Rejected 

deposit; Rejected reorg deposit. 

Pursuant to the proposed rule change, 

these fees would be consolidated and 

charged as a ‘‘Rejected BDS TA deposit, 

Rejected DAM or Rejected Reorg 

deposits’’ fee. The proposed rule change 

would not affect the current fee of 

$125.00 for each activity. DTC believes 


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14See supra note 11. 

15To conform with the proposed fee groupings, 

the subheading ‘‘Deliveries’’ that appears under the 

New York Window Services heading would be 

amended to ‘‘Deliveries and Receives.’’ The current 

subheading ‘‘Receives’’ would be deleted. 16See supra note 11. 

17For conformity with other fee names in this 

section, DTC is proposing to change the fee name 

to ‘‘Reclaims.’’ 

that it would be appropriate to 

consolidate the fees because it would 

simplify the pricing structure by having 

one standard fee for branch deposit 

rejections. 

(8) Registered certificate deposit; 

Previous reverse split. Pursuant to the 

proposed rule change, these fees would 

be consolidated and charged as a 

‘‘Registered certificate deposit or 

Previous reverse split’’ fee. The 

proposed rule change would not affect 

the current fee of $12.00 for each 

activity. DTC believes that it would be 

appropriate to consolidate the fees 

because it would simplify the pricing 

structure by having one standard fee for 

these DAM activities. 

(9) Research fee. Pursuant to the 

proposed rule change, this fee would be 

consolidated into the proposed 

‘‘Researching fee,’’ as discussed above.14

For clarity and transparency, the 

‘‘Researching fee’’ line item would also 

appear in this section. Pursuant to the 

proposed rule change, the proposed 

condition would read: ‘‘per hour or per 

CUSIP, depending on the nature of the 

research.’’ 

Custody and Securities Processing/New 

York Window Services/Deliveries, and 

Custody and Securities Processing/New 

York Window Services/Receives 15

(10) ESS or FOSS delivery; ESS or 

FOSS reclaim delivery; ESS or FOSS 

receive; ESS or FOSS reclaim receive. 

Pursuant to the proposed rule change, 

each of these activities would be 

consolidated and charged as an ‘‘ESS or 

FOSS delivery, receive or reclaim’’ fee. 

The condition for the fee would be 

modified to read: ‘‘Per delivery, per 

receive or per item for reclaim.’’ The 

proposed rule change would not affect 

the current fee of $25.00. DTC believes 

that it would be appropriate to 

consolidate the fees because it would 

simplify the pricing structure by having 

one standard fee for these related and 

similar activities. 

(11) Internal cross-delivery; Internal 

cross-receive. Pursuant to the proposed 

rule change, these activities would be 

consolidated and charged as an 

‘‘Internal cross-delivery or receive’’ fee. 

The condition for the proposed fee 

grouping would read: ‘‘Per delivery or 

receive.’’ The proposed rule change 

would not affect the current fee of 

$20.00 for each activity. DTC believes 

that it would be appropriate to 

consolidate the fees because it would 

simplify the pricing structure by having 

one standard fee for the service. 

Custody and Securities Processing/New 

York Window Services/Other Services 

(12) Research. Pursuant to the 

proposed rule change, this fee would be 

consolidated into the proposed 

‘‘Researching fee,’’ as discussed above.16

For clarity and transparency, the 

‘‘Researching fee’’ line item would also 

appear in this section. Pursuant to the 

proposed rule change, the proposed 

condition would read: ‘‘per hour or per 

CUSIP, depending on the nature of the 

research.’’ 

Custody and Securities Processing/ 

Withdrawal Services/Direct Registration 

System (DRS) 

(13) Initiation of DRS Profile 

transaction; Cancellation of DRS Profile 

change. Pursuant to the proposed rule 

change, these fee line items would be 

consolidated and charged as an 

‘‘Initiation or cancellation of DRS 

Profile transaction’’ fee. The condition 

for the fee grouping would read: ‘‘Per 

transaction submitted or transaction 

cancelled before a Limited Participant 

Account action.’’ The proposed rule 

change would not affect the current fee 

of $0.31 for each activity. 

Custody and Securities Processing/ 

Withdrawal Services/Municipal Bearer 

Bond Service, and Custody and 

Securities Processing/Withdrawal 

Services/Urgent Withdrawal, or 

Certificates-on-Demand, and Custody 

and Securities Processing/Withdrawal 

Services/Withdrawals-by-Transfer 

(14) Critical withdrawal request; 

Generation of WT (interface or window 

pickup); Direct mail by transfer agent 

(DMA)—Certificate. Pursuant to the 

proposed rule change, the fees for these 

activities would be consolidated and 

charged as a ‘‘Physical Certificate: 

Critical withdrawal, WT (interface or 

window pick-up) or DMA withdrawal 

request’’ fee. The condition for the fee 

would be modified to read: ‘‘Per request 

or assignment; special costs and TA fees 

additional.’’ The proposed rule change 

would not affect the current fee of 

$500.00 per request or assignment. DTC 

believes that it would be appropriate to 

consolidate the fees because it would 

simplify the pricing structure by having 

one standard fee for the service. In order 

to reflect the proposed consolidation, 

DTC is proposing to (i) modify the 

subheading of ‘‘Urgent Withdrawal, or 

Certificates-on-Demand’’ to ‘‘Urgent 

Withdrawal, Certificates-on-Demand, or 

Withdrawals by Transfer,’’ and (ii) 

delete the current subheading of 

‘‘Withdrawals by Transfer.’’ 

Settlement Services/Book-Entry 

Delivery, Excluding MMIs 

(15) Stock loans and returns. In the 

current Fee Guide, there is a ‘‘Stock 

loans and returns’’ fee of $0.25 per item; 

charged to the deliverer. The receiver of 

a stock loan or return is currently 

charged $0.11 under the fee ‘‘Receive, 

regardless of time.’’ Pursuant to the 

proposed rule change, both the deliverer 

and receiver would be charged a Stock 

loans and returns fee of $0.18, the 

average of the respective current fees. 

The proposed rule change would 

modify the condition of ‘‘Stock loans 

and returns’’ fee to read: ‘‘Per item; 

charged to deliverer and receiver.’’ The 

purpose of the proposed rule change 

would be to simplify the pricing 

structure by having one standard fee for 

both sides of the transaction. 

(16) Receive, regardless of time. 

Pursuant to the proposed rule change, 

the fee name would be amended to 

reflect the proposed exclusion of stock 

loan receives and reclaim receives from 

this fee, in order to align with the 

proposed changes to the ‘‘Stock loans 

and returns’’ and ‘‘Reclaim’’ fees. As 

such, DTC is proposing to amend the fee 

name to ‘‘Receive, regardless of time 

(excluding reclaims and stock loans and 

returns).’’ 

(17) Reclaim. In the current Fee 

Guide, there is a ‘‘Reclaim’’ fee of $0.45 

per item; charged per delivery. 

Currently, the receive of a reclaim is 

charged $0.11 as a ‘‘Receive, regardless 

of time’’ fee. Pursuant to the proposed 

rule change, both a delivery and receive 

of a reclaim would be charged as a 

‘‘Reclaims’’ 17 fee of $0.26, the average 

of the respective current fees. The 

proposed rule change would modify the 

condition of ‘‘Reclaims’’ fee to read: 

‘‘Per delivery or receive.’’ The purpose 

of the proposed rule change would be to 

simplify the pricing structure by having 

one standard fee for both sides of the 

transaction. 

Settlement Services/Money Market 

Instruments (MMI) by Book-Entry Only 

(18) MMI DO; Maturity or 

reorganization presentment; Issuance 

instruction, both directly placed and 

dealer placed; Issuance deposit; MMI 

issuance receiver. Pursuant to the 

proposed rule change, these fees would 

be consolidated and charged as an 

‘‘MMI Transaction’’ fee. The proposed 

rule change would not affect the current 


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18To conform with this change, the entire 

‘‘Forms’’ section of the Fee Guide would be 

removed. 

19COD is an acronym for ‘‘certificate on 

demand.’’ 

20CNS is an acronym for the NSCC ‘‘Continuous 

Net Settlement’’ system. 

fee of $1.00 for each transaction. To 

reflect the consolidation, DTC is 

proposing to modify the condition to 

read: ‘‘Per item delivered, or received, 

issued or maturing.’’ DTC believes that 

it would be appropriate to consolidate 

the fees because it would simplify the 

pricing structure by having one standard 

fee for these MMI transactions. 

(y) Deletion of Fees With Little or No 

Volume 

The following fees have minimal or 

no activity. Pursuant to the proposed 

rule change, these fees would be deleted 

in order to simplify the pricing 

structure. 

Custody and Securities Processing/ 

General Asset Services 

(19) Transmission of image of deposit 

by fax or email, additional recipient. 

(20) Photocopying of statement or 

certificate. 

(21) Recording of certificate numbers. 

Custody and Securities Processing/ 

Municipal Bearer Bond Service 

(22) BEO issue. 

Custody and Securities Processing/ 

Corporate Actions/Instruction 

Processing Fees 

(23) Voluntary Corporate Action Bulk 

Election. 

Custody and Securities Processing/ 

Custody Services/Custody (Core 

Services) 

(24) Certified Mailing. 

(25) Photocopying and sending 

certificate or other document copies. 

Custody and Securities Processing/ 

Custody Services/Custody (Exception 

Processing) 

(26) Box-to-box audit count. 

(27) Customer audit count. 

Custody and Securities Processing/ 

Deposit Services/Branch Deposits 

(Exception Processing), and Custody 

and Securities Processing/Deposit 

Services/Deposit Automation 

Management (DAM) 

(28) Incorrect/no PDF-generated DAM 

deposit ticket attached. 

(29) Depository Facilities: Facility 

usage fee. 

(30) Depository Facilities: Facility 

deposit. 

Custody and Securities Processing/ 

Deposit Services/Restricted Deposits 

(31) Processing of trailing documents. 

Custody and Securities Processing/New 

York Window Services/Other Services 

(32) Pass-through fees. 

(33) Long position. 

Custody and Securities Processing/ 

Reorganization Services/Reorganization 

(34) Photocopy. 

Custody and Securities Processing/ 

Withdrawal Services/Direct Registration 

System (DRS) 

(35) Establishment of DRS account 

and subsequent mailing transaction. 

(36) Initiation of DRS Profile change 

using DRST via PTS or PBS. 

(37) Cancellation of DRS Profile 

change using DRST via PTS or PBS. 

Custody and Securities Processing/ 

Withdrawal Services/Interface 

Department 

(38) Sorting. 

Forms 

(39) Forms provided by DTC.18

B. Simplify the Pricing Structure/ 

Realignment of Fee (Fee Groupings With 

a Fee Realignment) 

Custody and Securities Processing/ 

Securities Processing/Maintenance of 

Long Position (Registered Securities) 

(40) Less active issue. Currently, there 

are separate fees for registered corporate 

issues ($0.70) and registered municipal 

issues ($1.29). Pursuant to the proposed 

rule change, the fee would be $0.70 for 

either type of security. The proposed 

rule change would result in a fee 

decrease of $0.59 for registered 

municipal issues, which would better 

align the fee with declining volumes of 

less active registered municipal 

securities. As discussed above, certain 

fees that relate to services with 

declining volumes would be reduced 

because they consume fewer DTC 

resources. Pursuant to the proposed rule 

change, the new fee condition would 

read: ‘‘For registered corporate issues, 

when a daily average of 15 or fewer 

participants have position or registered 

municipal issues, when a daily average 

of 1 or 2 participants have position.’’ 

The purpose of the proposed rule 

change would be to (i) simplify the 

pricing structure by having one standard 

fee for the service and (ii) more closely 

align to DTC’s decreased cost of 

providing the service for registered 

municipal securities. 

Custody and Securities Processing/ 

Withdrawal Services/Municipal Bearer 

Bond Service, and Custody and 

Securities Processing/Withdrawal 

Services/Urgent Withdrawal, or 

Certificates-on-Demand 

(41) COD 19 (Municipal Bearer Bond 

Service); COD (Urgent Withdrawal, or 

Certificates-on-Demand). Currently, a 

COD under the Municipal Bearer Bond 

Service is charged a fee of $300.00, and 

other CODs are charged a fee of $240.00. 

Pursuant to the proposed rule change, 

the COD (Municipal Bearer Bond 

Service) fee line item would be 

consolidated with the COD (Urgent 

Withdrawal, or Certificates-on-Demand) 

fee line item and charged as a ‘‘COD’’ 

fee, in the amount of $300.00. The 

proposed rule change would result in a 

fee increase of $60.00 for non-Municipal 

Bearer Bond Service CODs. The 

condition for the fee would be amended 

to read: ‘‘Per withdrawal/COD.’’ The 

purpose of the proposed rule change 

with respect to consolidating the fees 

would be to simplify the pricing 

structure by having one standard fee for 

these COD transactions. The purpose of 

the proposed rule change with respect 

to the fee increase would be to align to 

DTC’s cost of providing the COD 

service, whether under the Municipal 

Bearer Bond Service or otherwise. 

Finally, in order to reflect the proposed 

consolidation, DTC is proposing to 

delete the subheading ‘‘Municipal 

Bearer Bond Service.’’ 

Settlement Services/Book-Entry 

Delivery, Excluding MMIs 

(42) Book-entry deliveries through 

CNS: Delivery to CNS; Receive from 

CNS. Currently, a Participant that 

delivers securities to the NSCC CNS 20

account at DTC is charged $0.09 per 

item delivered; charged to both sides. A 

Participant that receives securities from 

the CNS account is charged $0.035 per 

item received, charged to both sides. 

Pursuant to the proposed rule change, 

each of these activities would be 

charged as a ‘‘Delivery to/from CNS’’ fee 

of $0.08, charged to both sides. To 

reflect the consolidation, DTC is 

proposing to delete the verbiage ‘‘Bookentry deliveries through CNS.’’ The 

purpose of the proposed rule change 

with respect to consolidating the fees 

would be to simplify the pricing 

structure by charging a standard fee to 

both a deliverer and receiver in a CNS 

transaction. The purpose of the 

proposed rule change (with respect to 


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21OTW is an acronym for ‘‘over-the-window.’’ 

establishing a new fee for the fee 

grouping) would be to update the fee to 

better reflect the operational 

complexity, increased capacity, and 

system supports that are required to 

process CNS transactions at DTC. 

(43) Deliver order exception 

processing: Hold or release of pending 

DO that is recycling for insufficient 

position; Cancellation of pending DO. 

Currently, a Participant is charged $0.40 

per item for ‘‘Hold or release of a 

pending DO that is recycling for 

insufficient position.’’ A Participant is 

currently charged $0.20 per item for 

‘‘Cancellation of pending DO.’’ Pursuant 

to the proposed rule change, the hold or 

release of a pending DO and the 

cancellation of a pending DO would 

each be charged a fee of $0.24 per item, 

a weighted average that is based on the 

volume of each activity, under the fee 

name ‘‘Hold, cancel or release of 

pending DO that is recycling for 

insufficient position.’’ The purpose of 

the proposed rule change would be to (i) 

simplify the pricing structure by having 

one standard fee for similar activities 

and (ii) more closely align to DTC’s 

costs incurred in relation to providing 

the service for each type of DO 

exception processing. 

C. Simplify the Pricing Structure/ 

Promote Efficient Market Behavior (Fee 

Groupings With a Fee Change To 

Promote Efficient Market Behavior) 

Custody and Securities Processing/ 

Deposit Services/Reorganization 

Deposits 

(44) Mandatory (regular or legal); 

Redemption or call (regular or legal). 

Currently, each of these reorganization 

deposit fees is $90.00 per deposit. 

Pursuant to the proposed rule change, 

these fees would be consolidated and 

charged as a ‘‘Mandatory, Redemption 

or Call Deposits (regular or legal)’’ fee. 

Pursuant to the proposed rule change, 

the fee for ‘‘Mandatory, Redemption or 

Call Deposits (regular or legal)’’ would 

be $60.00, a $30.00 decrease from the 

current fees. The purpose of the 

proposed rule change would be to (i) 

simplify the pricing structure by having 

one standard fee for these related 

activities and (ii) incentivize 

Participants to utilize DTC to centralize, 

and enhance the efficiency of, the 

servicing of their securities. 

Custody and Securities Processing/New 

York Window Services/Deliveries, and 

Custody and Securities Processing/New 

York Window Services/Receives 

(45) OTW 21 delivery (including 

government securities); OTW reclaim 

delivery; OTW receive (including 

government receives); OTW reclaim 

receive. Pursuant to the proposed rule 

change, these fees would be 

consolidated and charged as an ‘‘OTW 

delivery, receive or reclaim (including 

government securities)’’ fee. The 

condition for the proposed fee grouping 

would be modified to read: ‘‘Per 

delivery, per receive or per item for 

reclaim.’’ Pursuant to the proposed rule 

change, the fee for the new fee grouping 

would be reduced to $40.00, a decrease 

of $10.00 from the current fees. The 

purpose of the proposed rule change 

with respect to consolidating the fees 

would be to simplify the pricing 

structure by having one standard fee for 

these related activities. The purpose of 

the proposed rule change with respect 

to the reduction of the fee would be to 

encourage Participants to utilize the 

OTW services, by incentivizing the 

presentation of more physical securities 

to DTC’s central facility, and thereby 

promote processing efficiency. 

Underwriting Services/Late Surcharges 

(46) Late receipt of LOR or BLOR (on 

closing date); Late closing (after 2:00 

p.m. eastern time). Currently, a 

Participant is charged a $300.00 

surcharge for a ‘‘Late receipt of LOR or 

BLOR (on closing date),’’ and is charged 

a $400.00 surcharge for a ‘‘Late closing 

(after 2:00 p.m. eastern time).’’ Pursuant 

to the proposed rule change, these 

surcharges would be consolidated and 

charged as a ‘‘Late receipt of LOR or 

BLOR (on closing date) or Late Closing 

(after 2:00 p.m. eastern time)’’ surcharge 

of $400. These surcharges are intended 

to align with DTC’s cost in relation to 

a late submission or closing, as well as 

to incentivize Participants to move 

through the underwriting process in a 

timely manner. As such, DTC is 

proposing a $400.00 surcharge for this 

fee grouping, which would result in a 

surcharge increase of $100.00 for late 

submissions of LORs and BLORs. DTC 

is proposing the amount of $400 for the 

standard surcharge in order to 

standardize the amount of the 

surcharge, and to further encourage 

Participants to submit underwriting 

documentation in a timely manner. 

D. Fee Realignment 

Custody and Securities Processing/ 

Corporate Actions/Allocation Fees 

(47) Mandatory Corporate Actions. 

Pursuant to the proposed rule change, 

the fee would be reduced from $80.00 

to $75.00. The purpose of the proposed 

rule change would be to align the fee 

with the costs of providing the service. 

The costs incurred by DTC are 

decreasing because of certain 

streamlined processes that have resulted 

in the reduction of processing costs for 

this service. 

Custody and Securities Processing/ 

Corporate Actions/Voluntary Event 

Handling Fee 

(48) Voluntary Corporate Action 

Handling. Pursuant to the proposed rule 

change, the fee would be reduced from 

$95.00 to $90.00. The purpose of the 

proposed rule change would be to align 

the fee with the costs of providing the 

service. The costs incurred by DTC are 

decreasing because of certain 

streamlined processes that have resulted 

in the reduction of processing costs for 

this service. 

Settlement Services/Book-Entry 

Delivery, Excluding MMIs 

(49) Institutional receive or delivery 

(ID). Pursuant to the proposed rule 

change, this fee would be reduced from 

$0.05 per receive or delivery to $0.04 

per receive or delivery. The purpose of 

the proposed reduction would be to 

more closely align the fee with DTC’s 

decreased cost of providing the service, 

which is primarily handled as straightthrough processing. 

(50) ID Net receive or delivery. 

Pursuant to the proposed rule change, 

this fee would be reduced from $0.025 

per receive or delivery to $0.02 per 

receive or delivery. The purpose of the 

proposed reduction would be to more 

closely align the fee with DTC’s 

decreased cost of providing the service, 

which is primarily handled as straightthrough processing. 

(51) Fed DO. Pursuant to the proposed 

rule change, this fee would be reduced 

from $2.25 per item delivered or 

received to $1.50 per item delivered or 

received. The purpose of the proposed 

reduction is to more closely align the fee 

with DTC’s cost of providing the 

service. 

E. Promote Efficient Market Behavior 

Custody and Securities Processing/ 

Custody Services/Custody (Core 

Services) 

(52) Withdrawal and pickup (COD) 

between 8:30 a.m.–2:00 p.m. Pursuant to 

the proposed rule change, the fee would 

be reduced from $60.00 to $50.00. The 

purpose of the proposed rule change 

would be to incentivize Participants to 

utilize DTC to centralize, and enhance 

the efficiency of, the servicing of their 

physical securities. 

(53) Withdrawal and pickup (COD) 

between 2:00 p.m.–4:30 p.m. Pursuant to 

the proposed rule change, the fee would 

be reduced from $100.00 to $75.00. The 

purpose of the proposed rule change 


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would be to incentivize Participants to 

utilize DTC to centralize, and enhance 

the efficiency of, the servicing of their 

physical securities. 

(54) Withdrawal and subsequent 

deposit. Pursuant to the proposed rule 

change, the fee would be reduced from 

$20.00 to $15.00. The purpose of the 

proposed rule change would be to 

incentivize Participants to utilize DTC 

to centralize, and enhance the efficiency 

of, the servicing of their physical 

securities. 

(55) Withdrawal and shipment 

between 8:30 a.m.–2:00 p.m. Pursuant to 

the proposed rule change, the fee would 

be reduced from $70.00 to $55.00. The 

purpose of the proposed rule change 

would be to incentivize Participants to 

utilize DTC to centralize, and enhance 

the efficiency of, the servicing of their 

physical securities. 

(56) Withdrawal and shipment 

between 2:00 p.m.–4:30 p.m. Pursuant to 

the proposed rule change, the fee would 

be reduced from $110.00 to $80.00. The 

purpose of the proposed rule change 

would be to incentivize Participants to 

utilize DTC to centralize, and enhance 

the efficiency of, the servicing of their 

physical securities. 

(57) Custody reorg deposit. Pursuant 

to the proposed rule change, the fee 

would be reduced from $90.00 to 

$60.00. The purpose of the proposed 

rule change would be to incentivize 

Participants to utilize DTC to centralize, 

and enhance the efficiency of, the 

servicing of their physical securities. 

Custody and Securities Processing/ 

Custody Services/Custody (Exception 

Processing) 

(58) Reorg research. Pursuant to the 

proposed rule change, the fee would be 

reduced from $110.00 to $80.00. The 

purpose of the proposed rule change 

would be to incentivize Participants to 

utilize DTC to centralize, and enhance 

the efficiency of, the servicing of their 

physical securities. 

Custody and Securities Processing/ 

Deposit Services/Restricted Deposits 

(59) Restricted Deposit: Before 2:00 

p.m. Pursuant to the proposed rule 

change, the fee would be reduced from 

$90.00 to $60.00. The purpose of the 

proposed rule change would be to 

incentivize Participants to utilize the 

restricted deposit services to centralize, 

and enhance the efficiency of, the 

servicing of their physical securities. 

(60) Restricted Deposit: After 2:00 

p.m. eastern time. Pursuant to the 

proposed rule change, the fee would be 

reduced from $110.00 to $80.00. The 

purpose of the proposed rule change 

would be to incentivize Participants to 

utilize the restricted deposit services to 

centralize, and enhance the efficiency 

of, the servicing of their physical 

securities. 

(61) Reject of restricted deposit. 

Pursuant to the proposed rule change, 

this disincentive fee for rejections of 

restricted deposits would be eliminated. 

The purpose of the proposed rule 

change would be to remove any 

disincentive for Participants to utilize 

the restricted deposit service, and 

instead encourage Participants to utilize 

the restricted deposit service to 

centralize, and enhance the efficiency 

of, the servicing of their physical 

securities. 

Settlement Services/Book-Entry 

Delivery, Excluding MMIs 

(62) Night deliver order. Pursuant to 

the proposed rule change, the fee would 

be reduced from $0.20 to $0.17 per item; 

charged to deliverer; applies to each DO 

submitted. DTC is proposing to reduce 

this fee in order to encourage 

Participants to submit their transactions 

earlier in day. The earlier submission of 

transactions by Participants results in 

more efficient settlement processing by 

increasing the volume of transactions 

processed in the night-cycle, which, in 

turn, enhances intraday settlement 

processing. 

(63) Deliver order exception 

processing: Dropped DO not completed 

because of insufficient deliverer position 

or collateral. Since the fee for ‘‘Dropped 

DO not completed because of 

insufficient deliverer position or 

collateral’’ may cause a Participant to 

delay making a particular delivery, the 

proposed rule change would eliminate 

the fee in order to encourage 

Participants to submit their transactions 

earlier in the day. The earlier 

submission of transactions by 

Participants results in more efficient 

settlement processing by increasing the 

volume of transactions processed in the 

night-cycle, which, in turn, enhances 

intraday settlement processing. 

(64) Deliver order exception 

processing: Insufficient receiver 

collateral or net debit cap. Since the fee 

for ‘‘Insufficient receiver collateral or 

net debit cap’’ may cause a Participant 

to delay making a particular delivery, 

the proposed rule change would 

eliminate the fee in order to encourage 

Participants to submit their transactions 

earlier in the day. The earlier 

submission of transactions by 

Participants results in more efficient 

settlement processing by increasing the 

volume of transactions processed in the 

night-cycle, which, in turn, enhances 

intraday settlement processing. 

F. Clarify the Fee Guide 

DTC is proposing to amend the 

following provisions to clarify the Fee 

Guide: 

Custody and Securities Processing/ 

Securities Processing/Maintenance of 

Long Position (Registered Securities) 

(65) Average daily number of shares, 

rounded up to a multiple of 100 shares. 

For clarity and transparency, the 

proposed rule change would amend the 

fee name to: ‘‘Average daily number of 

shares (stocks, bonds and registered 

muni), rounded up to a multiple of 100 

shares.’’ The purpose of the proposed 

rule change is to clarify the types of 

securities that are included in the 

service. 

(66) BEO issue. For clarity and 

transparency, the proposed rule change 

would amend the fee name to: ‘‘BEO 

issue (stocks, bonds and registered 

muni).’’ The purpose of the proposed 

rule change is to clarify the types of 

securities that are included in the 

service. 

(67) Medium-term note, money 

market instrument, and commercial 

paper. For clarity and transparency, the 

proposed rule change would amend the 

fee name to: ‘‘Medium-term note, money 

market instrument, registered muni and 

commercial paper.’’ The purpose of the 

proposed rule change is to clarify the 

types of securities that are included in 

the service. 

(68) Issue that has been 

nontransferable for up to 6 years 

(surcharge). For clarity and 

transparency, the proposed rule change 

would amend the fee name to: ‘‘Stock, 

bond, registered and bearer muni that 

have been nontransferable for up to 6 

years (surcharge).’’ The purpose of the 

proposed rule change is to clarify the 

types of securities that are included in 

the service. 

(69) Issue that remains 

nontransferable after 6 years 

(surcharge). For clarity and 

transparency, the fee name would be 

amended to: ‘‘Stock, bonds, registered 

and bearer muni that remain 

nontransferable after 6 years 

(surcharge).’’ The purpose of the 

proposed rule change is to clarify the 

types of securities that are included in 

the service. 

(70) Swing of security position 

(receive or deliver). For clarity and 

transparency, the fee name would be 

amended to: ‘‘Swing of security position 

(receive, or deliver (including stock 

dividend deliver)).’’ The purpose of the 

proposed rule change is to clarify the 

types of securities that are included in 

the service. 


amozie on DSK3GDR082PROD with NOTICES1
64408 Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices 

22Securities Exchange Act Release No. 71206 

(December 30, 2013), 79 FR 690 (January 6, 2014) 

(SR–DTC–2013–12). 

23 Id. 

24 15 U.S.C. 78q–1(b)(3)(D). 

25 15 U.S.C. 78q–1(b)(3)(F). 

26 17 CFR 240.17Ad–22(e)(23)(ii). 

27 15 U.S.C. 78q–1(b)(3)(D). 

28 Id. 

29 DTC believes that the consolidation of fee line 

items, in and of itself, would not affect the 

allocation or amount of fees. Therefore, to the 

extent that a proposed rule change described in 

Item II(A)1(ii)B (Simplify the Pricing Structure/Fee 

Realignment) addresses the consolidation of fee line 

items, DTC believes that such proposed rule change 

would continue to provide for the equitable 

allocation of reasonable fees. See supra Item 

II(A)2(i)A. 

30As discussed above in the section titled 

‘‘Expected Participant Impact,’’ the proposed rule 

change may result in fee increases or fee decreases 

for some Participants. A Participant may be 

impacted differently than another Participant due to 

its use of the various services with fees that would 

be affected by the proposed rule change, pursuant 

to its own particular business structure. 

Underwriting Services/Eligibility Fees 

(71) Equity Eligibility—Additional 

CUSIP Fee. For clarity and 

transparency, the first line of the fee 

condition would be modified to read: 

‘‘Per additional CUSIP;’’. The purpose of 

the proposed rule change is to 

accurately reflect the existing 

underwriting fee-per-CUSIP structure, 

which consists of an initial fixed fee for 

the first CUSIP and an incremental fee 

for each additional CUSIP.22

(72) Debt Eligibility—Additional 

CUSIP Fee. For clarity and 

transparency, the first line of the fee 

condition would be modified to read: 

‘‘Per additional CUSIP;’’. The purpose of 

the proposed rule change is to 

accurately reflect the existing 

underwriting fee-per-CUSIP structure, 

which consists of an initial fixed fee for 

the first CUSIP and an incremental fee 

for each additional CUSIP.23

Expected Participant Impact 

In general, DTC anticipates that the 

proposed rule change would (i) have no 

impact on approximately 30% of 

Participants, (ii) result in fee reductions 

for approximately 49% of Participants, 

and (iii) result in fee increases for 

approximately 21% of Participants. 

These estimates were calculated against 

2017 volume figures. In terms of the 

estimated fee increases, approximately 

38% would have an increase of less 

than $1,000 per year, approximately 

22% would have an increase between 

$1,000 and $10,000 per year, 

approximately 38% would have an 

increase between $10,000 and $75,000 

per year, and approximately 2% would 

have an increase between $100,000 and 

$200,000 per year. These estimated 

impacts correlate to a Participant’s 

business model and its use of the 

services affected by the proposed rule 

change. Taken collectively, the 

proposed rule change would reduce 

DTC’s revenue by approximately 1%. 

Participant Outreach 

Beginning in June 2018, DTC has 

conducted outreach to Participants in 

order to provide them with notice of the 

proposed changes to the affected fees. 

As of the date of this filing, no written 

comments relating to the proposed 

changes have been received in response 

to this outreach. The Commission will 

be notified of any written comments 

received. 

Implementation Timeframe 

DTC would implement this proposal 

on January 1, 2019. As proposed, a 

legend would be added to the Fee Guide 

stating there are changes that became 

effective upon filing with the 

Commission but have not yet been 

implemented. The proposed legend also 

would include a date on which such 

changes would be implemented and the 

file number of this proposal, and state 

that, once this proposal is implemented, 

the legend would automatically be 

removed from the Fee Guide. 

2. Statutory Basis 

DTC believes that this proposal is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a registered 

clearing agency. Specifically, DTC 

believes that this proposal is consistent 

with Sections 17A(b)(3)(D) 24 and 

17A(b)(3)(F) 25 of the Act and Rule 

17Ad–22(e)(23)(ii),26 as promulgated 

under the Act, for the reasons described 

below. 

(i) Section 17A(b)(3)(D) of the Act 

requires, inter alia, that the Rules 

provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among participants.27 For the reasons 

set forth below, DTC believes that each 

of the proposed rule changes described 

above in Items II(A)1(ii)A–F would 

provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among participants. 

A. Simplify the Pricing Structure 

DTC believes that each of the 

proposed rule changes described in 

Items II(A)1(ii)A(x) (Simplify the Pricing 

Structure: Fee Groupings) and 

II(A)1(ii)A(y) (Simplify the Pricing 

Structure: Deletion of Fees with Little or 

No Volume) would provide for the 

equitable allocation of reasonable fees. 

Each of the proposed rule changes 

described in Item II(A)1(ii)A(x) would 

consolidate individual fee line items 

into a single fee line item. Each of the 

proposed rule changes described in Item 

II(A)1(ii)A(y) would delete a fee with 

little or no volume. Each fee for a 

service as described in Items 

II(A)1(ii)A(x) and II(A)1(ii)A(y) would 

continue to be charged (or not charged, 

with respect to the proposed fee 

deletions) to a Participant in accordance 

with (i) its utilization of the service, and 

(ii) the fee condition set forth in the Fee 

Guide, and would therefore be equitably 

allocated. In addition, the proposed rule 

changes described in Item II(A)1(ii)A(x) 

would not affect current fees, and would 

therefore continue to provide for 

reasonable fees. Further, the proposed 

rule changes described in Item 

II(A)1(ii)A(y), which would delete fees 

that have little or no volume, would be 

commensurate with DTC’s minimal cost 

of providing the relevant service. 

Therefore, DTC believes that each of the 

proposed rule changes described in 

Items II(A)1(ii)A(x) and II(A)1(ii)A(y) 

would not affect the allocation or 

amount of fees, and would thereby 

continue to provide for the equitable 

allocation of reasonable fees, consistent 

with Section 17A(b)(3)(D) of the Act.28

B. Fee Realignment 

DTC believes that each of the 

proposed rule changes with respect to 

the proposed realignment of fees, as 

described in Items II(A)1(ii)B (Simplify 

the Pricing Structure/Fee 

Realignment) 29 and II(A)1(ii)D (Fee 

Realignment), would provide for the 

equitable allocation of reasonable fees. 

Each proposed fee for a service as 

described in Items II(A)1(ii)B and D 

would continue to be charged to a 

Participant in accordance with (i) its 

utilization of the service, and (ii) the fee 

condition set forth in the Fee Guide. 

DTC believes that, pursuant to the 

proposed rule changes described in 

Items II(A)1(ii)B and D, the proposed 

fees would continue to be equitably 

allocated because all Participants that 

utilize a particular service would be 

treated equally with respect to these fees 

under the proposal.30

DTC believes that each of the 

proposed rule changes described in 

Items II(A)1(ii)B (Simplify the Pricing 

Structure/Fee Realignment) and 

II(A)1(ii)D (Fee Realignment) would 

provide for reasonable fees. First, as 

discussed above, most of the proposed 

fee realignments described in Items 

II(A)1(ii)B and D would result in a fee 

reduction for a service. As described 

above, these fee reductions are being 


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31Per email instruction from DTC’s legal staff on 

December 4, 2018, Commission staff revised this 

reference to correct a typographical error, changing 

‘‘B(43)–(45)’’ to ‘‘B(41)–(43).’’ 32 15 U.S.C. 78q–1(b)(3)(D). 33 DTC believes that the consolidation of fee line 

items, in and of itself, would not affect the 

allocation or amount of fees. Therefore, to the 

extent that a proposed rule change described in 

Item II(A)1(ii)C (Simplify the Pricing Structure/ 

Promote Efficient Market Behavior) addresses the 

consolidation of fee line items, DTC believes that 

such proposed rule change would continue to 

provide for the equitable allocation of reasonable 

fees. See supra Items II(A)2(i)A and B. 

34See supra note 30. 35 15 U.S.C. 78q–1(b)(3)(D). 

36 Id. 

37 Id. 

38 15 U.S.C. 78q–1(b)(3)(F). 

proposed due to (i) declining volumes 

in connection with the service requiring 

fewer DTC resources and/or (ii) certain 

streamlined processes having resulted 

in the reduction of processing costs for 

DTC in connection with the service. In 

both cases, DTC, through the proposed 

fee reductions, would be passing along 

its cost savings to Participants. 

Therefore, DTC believes that such 

proposed fee reductions would continue 

to provide for the allocation of 

reasonable fees among Participants. 

Second, as discussed above, a few 

proposed fee realignments, as described 

in Items II(A)1(ii)B(41)–(43),31 would 

result in an increase to a fee for a 

service. Such proposed fee increases 

would allow those fees to remain 

commensurate with the costs of 

resources allocated by DTC in 

connection with the relevant services. 

The proposed fee increases to align with 

the costs incurred by DTC in providing 

the service would allow DTC to 

efficiently offer the service. Therefore, 

DTC believes that the proposed rule 

changes described in Items II(A)1(ii)B 

and D, would provide for the equitable 

allocation of reasonable fees, consistent 

with Section 17A(b)(3)(D) of the Act.32

C. Promote Efficient Market Behavior 

DTC believes that each of the 

proposed rule changes described in 

Items II(A)1(ii)C (Simplify the Pricing 

Structure/Promote Efficient Market 

Behavior) 33 and II(A)1(ii)E (Promote 

Efficient Market Behavior) would 

provide for the equitable allocation of 

reasonable fees. Each proposed fee for a 

service as described in Items II(A)1(ii)C 

and E would continue to be charged to 

a Participant in accordance with (i) its 

utilization of the service, and (ii) the fee 

condition set forth in the Fee Guide. 

DTC believes that, pursuant to the 

proposed rule changes described in 

Items II(A)1(ii)C and E, the proposed 

fees would continue to be equitably 

allocated because all Participants that 

utilize a particular service (or submit a 

late BLOR or LOR) would be treated 

equally with respect to these fees under 

the proposal.34

DTC believes that the each of the 

proposed rule changes described in 

Items II(A)1(ii)C (Simplify the Pricing 

Structure/Promote Efficient Market 

Behavior) and II(A)1(ii)E (Promote 

Efficient Market Behavior) would 

provide for reasonable fees. First, with 

the exception of the surcharge for the 

late submission of a LOR or BLOR, the 

proposed fee changes described in Items 

II(A)1(ii)C and E would reduce fees to 

encourage Participant use of certain 

DTC services that promote efficiency in 

the handling of physical securities or 

the processing of securities transactions 

for settlement. As such, DTC believes 

that these proposed fee reductions 

would result in reasonable fees because 

the use of these efficiencies offered by 

DTC could result in future decreased 

processing costs for Participants and for 

DTC, which, in turn, could be passed 

along to Participants. Second, DTC is 

proposing to increase the surcharge for 

the late submission of a LOR or BLOR 

from $300 to $400 in order to increase 

the incentive for a Participant to submit 

its underwriting documentation in a 

timely manner. DTC believes that the 

increase of this surcharge would be 

reasonable because Participants are 

already accustomed to the $400.00 

surcharge for late closings, which is 

being consolidated into one line item 

with the late submission of LORs and 

BLORs surcharge. DTC also believes that 

the proposed fee would be reasonable 

because (i) the increase would be a 

modest amount ($100) that would only 

apply when a Participant submits a late 

LOR or BLOR, and (ii) a Participant can 

avoid the surcharge by submitting the 

LOR or BLOR on time. Therefore, DTC 

believes that each of the proposed rule 

changes described in Items II(A)1(ii)C 

and E would provide for the equitable 

allocation of reasonable fees, consistent 

with Section 17A(b)(3)(D) of the Act.35

D. Clarify the Fee Guide 

DTC believes that each of the 

proposed rule changes described in Item 

II(A)1(ii)F (Clarify the Fee Guide) would 

provide for the equitable allocation of 

reasonable fees among participants. 

Each of the proposed rule changes 

described in II(A)1(ii)F would clarify a 

fee line item without affecting the 

amount of the existing fee for such line 

item. Each fee for a service as described 

in Item II(A)1(ii)F would continue to be 

charged to a Participant in accordance 

with (i) its utilization of the service, and 

(ii) the fee condition set forth in the Fee 

Guide. Therefore, DTC believes that 

each of the proposed rule changes 

described in Item II(A)1(ii)F would not 

affect the allocation or amount of fees, 

and would thereby continue to provide 

for the equitable allocation of reasonable 

fees, consistent with Section 

17A(b)(3)(D) of the Act.36

For the foregoing reasons, DTC 

believes that each of the proposed rule 

changes described in Items II(A)1(ii)A– 

F would provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among participants, 

consistent with Section 17A(b)(3)(D) of 

the Act.37

(ii) Section 17A(b)(3)(F) of the Act 

requires, inter alia, that the Rules be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions.38 For the reasons 

set forth below, DTC believes that each 

of the proposed rule changes described 

in Items II(A)1(ii)A–F is designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions. 

A. Simplify the Fee Guide 

DTC believes that each of the 

proposed rule changes with respect to 

the consolidation of individual fee line 

items or deletion of fees, as described in 

Items II(A)1(ii)A(x) (Simplify the Pricing 

Structure: Fee Groupings), II(A)1(ii)A(y) 

(Simplify the Pricing Structure: Deletion 

of Fees with Little or No Volume), 

II(A)1(ii)B (Simplify the Pricing 

Structure/Fee Realignment), and 

II(A)1(ii)C (Simplify the Pricing 

Structure/Promote Efficient Market 

Behavior) is designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions. 

DTC is proposing changes, as described 

in Items II(A)1(ii)A(x), II(A)1(ii)A(y), 

II(A)1(ii)B, and II(A)1(ii)C, that are 

designed to improve the accuracy and 

clarity of the Fee Guide by simplifying 

the Fee Guide through fee groupings or 

through the deletion of fees with little 

or no volume. Improving the accuracy 

and clarity of the Rules and Procedures, 

including the Fee Guide, would help 

Participants to better understand their 

rights and obligations regarding DTC 

services. When Participants better 

understand their rights and obligations 

regarding DTC services, they can act in 

accordance with the Rules and 

Procedures, which DTC believes would 

promote the prompt and accurate 

clearance and settlement of securities 

transactions by DTC. As such, DTC 

believes the proposed rule changes to 

simplify and clarify the Fee Guide are 


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39 Id. 

40 Id. 

41 Id. 

42 17 CFR 240.17Ad–22(e)(23)(ii). 

consistent with Section 17A(b)(3)(F) of 

the Act.39

B. Fee Realignment 

DTC believes that each of the 

proposed rule changes with respect to 

the proposed realignment of fees, as 

described in Items II(A)1(ii)B (Simplify 

the Pricing Structure/Fee Realignment) 

and II(A)1(ii)D (Fee Realignment) is 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions. First, most of the 

proposed fee realignments described in 

Items II(A)1(ii)B and D would result in 

a fee reduction for a service to align 

with DTC’s decreased costs in providing 

the service. Second, DTC would 

increase certain fees to align with the 

higher costs incurred by DTC in 

providing the relevant service. By 

aligning fees with costs, each of the 

proposed rule changes would add 

efficiency to the market by allowing a 

Participant to more accurately evaluate 

the value of a service and to make 

efficient decisions about the allocation 

of its resources within its business. In 

addition, the proposal to increase 

certain fees to align with the higher 

costs incurred by DTC in providing the 

service would allow DTC to more 

efficiently offer the related service and 

to continue to appropriately manage its 

resources for all its services. In this way, 

each of the proposed rule changes with 

respect to the proposed realignment of 

fees, as described in Items II(A)1(ii)B 

and II(A)1(ii)D would enable DTC 

continue to efficiently provide prompt 

and accurate clearance and settlement 

services to its Participants. 

C. Promote Efficient Market Behavior 

DTC believes that each of the 

proposed rule changes described in 

Items II(A)1(ii)C (Simplify the Pricing 

Structure/Promote Efficient Market 

Behavior) and II(A)1(ii)E (Promote 

Efficient Market Behavior) is designed 

to promote the prompt and accurate 

clearance and settlement of securities 

transactions. First, DTC is proposing to 

reduce or eliminate fees for certain 

settlement services in order to 

encourage Participants to submit their 

transactions earlier in the day. By 

encouraging the earlier submission of 

securities transactions by Participants, 

the proposed rule change is designed to 

promote efficient settlement processing 

by increasing the volume of transactions 

processed in the night-cycle, which, in 

turn, enhances intraday settlement 

processing of securities transactions. 

Therefore, by encouraging behavior that 

would promote efficient settlement 

processing of securities transactions, 

DTC believes that the proposed rule 

changes with respect to the reduction or 

elimination of fees for certain settlement 

services are designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions. 

Second, DTC is proposing to reduce 

certain fees for its Custody Service in 

order to encourage Participants to 

centralize the servicing of their physical 

securities at DTC, which already 

services the securities deposited at DTC 

by Participants for book-entry services. 

By utilizing the Custody Service, a 

Participant is able to benefit from, 

among other things, cost savings from 

the economies of scale offered by DTC, 

and the added efficiency of the limited 

depository services offered by DTC with 

respect to securities held in its Custody 

Service. Therefore, by encouraging 

behavior that would promote added 

efficiency to the processing and 

handling of physical securities, DTC 

believes that the proposed rules changes 

to reduce certain fees for its Custody 

Service in order to encourage 

Participants to centralize the servicing 

of their physical securities at DTC are 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions. 

Third, DTC is proposing to increase 

an underwriting surcharge for the late 

submission of a LOR or BLOR in order 

to encourage Participants to submit 

underwriting documentation in a timely 

manner. In this way, the proposed rule 

change is designed to deter behavior 

that could delay the prompt and 

accurate clearance and settlement of 

transactions in that security. Therefore, 

by deterring behavior that could delay 

the prompt and accurate settlement of 

transactions in a security, DTC believes 

that the proposed rule changes are 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions. 

D. Clarify the Fee Guide 

DTC believes that each of the 

proposed rule changes described in Item 

II(A)1(ii)F (Clarify the Fee Guide) is 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions. Each of these 

changes would amend certain headings, 

fee names, and fee conditions to 

improve the accuracy and clarity of the 

Fee Guide. Improving the accuracy and 

clarity of the Rules and Procedures, 

including the Fee Guide, would help 

Participants to better understand their 

rights and obligations regarding DTC 

services. When Participants better 

understand their rights and obligations 

regarding DTC services, they can act in 

accordance with the Rules and 

Procedures, which DTC believes would 

promote the prompt and accurate 

clearance and settlement of securities 

transactions by DTC. As such, DTC 

believes the proposed rule changes to 

clarify the Fee Guide, as described in 

Item II(A)1(ii)F, are consistent with 

Section 17A(b)(3)(F) of the Act.40

For the foregoing reasons, DTC 

believes that each of the proposed rule 

changes described in Items II(A)1(ii)A– 

F are designed to promote the prompt 

and accurate clearance and settlement of 

securities transactions, consistent with 

Section 17A(b)(3)(F) of the Act.41

(iii) Rule 17Ad–22(e)(23)(ii) under the 

Act requires DTC to establish, 

implement, maintain and enforce 

written policies and procedures 

reasonably designed to provide 

sufficient information to enable 

participants to identify and evaluate the 

risks, fees, and other material costs they 

incur by participating in DTC.42

DTC believes that the proposed rule 

changes with respect to (1) simplifying 

the pricing structure of the Fee Guide 

through (x) fee groupings, as described 

in Items II(A)1(ii)A(x) (Simplify the 

Pricing Structure: Fee Groupings), 

II(A)1(ii)B (Simplify the Pricing 

Structure/Fee Realignment), and 

II(A)1(ii)C (Simplify the Pricing 

Structure/Promote Efficient Market 

Behavior), and (y) deleting fees with 

little or no volume, as described in Item 

II(A)1(ii)A(y) (Simplify the Pricing 

Structure: Deletion of Fees with Little or 

No Volume), and (2) clarifying the Fee 

Guide, as described in Item II(A)1(ii)F, 

by amending conditions and headings 

and by making conforming changes, 

would help ensure that the pricing 

structure of the Fee Guide is welldefined and clear to Participants. 

Having a well-defined and clear Fee 

Guide would help Participants to better 

understand the fees and help provide 

Participants with increased 

predictability and certainty regarding 

the fees they incur in participating in 

DTC. In this way, DTC believes the 

proposed rule changes to simplify the 

pricing structure of the Fee Guide and 

to clarify the Fee Guide, as described in 

Items II(A)1(ii)A(x), II(A)1(ii)A(y), 

II(A)1(ii)B, II(A)1(ii)C, and II(A)1(ii)F 

are consistent with Rule 17Ad– 

22(e)(23)(ii) under the Act, cited above. 


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43 15 U.S.C. 78q–1(b)(3)(I). 

44 DTC believes that the consolidation of fee line 

items, in and of itself, would not have an impact 

on competition. See supra Item II(B)(i). 

45 15 U.S.C. 78q–1(b)(3)(I). 

46 Id. 

47Per email instruction from DTC’s legal staff on 

December 4, 2018, Commission staff revised this 

reference to correct a typographical error, changing 

‘‘B(43)’’ to ‘‘B(41).’’ 

48Per email instruction from DTC’s legal staff on 

December 4, 2018, Commission staff revised this 

reference to correct a typographical error, changing 

‘‘B(44)’’ to ‘‘B(42).’’ 

49Per email instruction from DTC’s legal staff on 

December 4, 2018, Commission staff revised this 

reference to correct a typographical error, changing 

‘‘B(45)’’ to ‘‘B(43).’’ 

50 Id. 

51See supra Item II(A)2(i)B. 

52 15 U.S.C. 78q–1(b)(3)(D). 

53See supra Item II(A)2(ii)B. 

54 15 U.S.C. 78q–1(b)(3)(F). 

55 15 U.S.C. 78q–1(b)(3)(I). 

56 DTC believes that the consolidation of fee line 

items, in and of itself, would not have an impact 

on competition. See supra Item II(B)(i). 

57 15 U.S.C. 78q–1(b)(3)(I). 

(B) Clearing Agency’s Statement on 

Burden on Competition 

(i) Simplify the Fee Guide 

No Impact on Competition. DTC 

believes that each of the proposed rule 

changes with respect to the 

consolidation of individual fee line 

items, as described in Item II(A)1(ii)A(x) 

(Simplify the Pricing Structure: Fee 

Groupings), would not have an impact 

on competition.43 These proposed rule 

changes would improve the accuracy 

and clarity of the Fee Guide by 

simplifying the Fee Guide through fee 

groupings. Having an accurate and clear 

Fee Guide would facilitate Participants’ 

understanding of the Fee Guide and 

their obligations thereunder, and so 

would not affect the rights and 

obligations of any Participant or other 

interested party. Therefore, DTC does 

not believe that the proposed changes 

with respect to the consolidation of 

individual fee line items, as described 

in Item II(A)1(ii)A(x), would have an 

impact on competition. 

Impact on Competition. DTC believes 

that each of the proposed rule changes 

with respect to the deletion of fees with 

little or no volume, as described in Item 

II(A)1(ii)A(y) (Simplify the Pricing 

Structure: Deletion of Fees with Little or 

No Volume), may impact competition 

by potentially reducing Participants’ 

operating costs. Therefore, DTC believes 

that the proposed rule changes with 

respect to the deletion of fees with little 

or no volume, as described in Item 

II(A)1(ii)A(y), would not impose a 

burden on competition, but may 

promote competition. 

(ii) Fee Realignment 

Impact on Competition. DTC believes 

that each of the proposed rule changes 

with respect to the proposed adjustment 

of fees to align with DTC’s costs, as 

described in Items II(A)1(ii)B (Simplify 

the Pricing Structure/Fee 

Realignment)44 and II(A)1(ii)D (Fee 

Realignment), may have an impact on 

competition, because these changes 

would result in either a fee decrease or 

fee increase to Participants for the 

relevant service.45

First, the proposed rule changes that 

would result in a fee reduction for a 

service could promote competition by 

potentially reducing Participants’ 

operating costs. Therefore DTC believes 

that the proposed rule changes to reduce 

fees in order to better align with costs 

would not impose a burden on 

competition, but may promote 

competition. Second, the proposed rule 

changes that would result in a fee 

increase for a service may impact 

competition by creating a burden on 

competition by negatively affecting such 

Participants’ operating costs. However, 

DTC believes that any burden on 

competition that may be caused by these 

proposed rule changes would not be 

significant and would be necessary and 

appropriate in furtherance of the 

purposes of the Act, as permitted by 

Section 17A(b)(3)(I) of the Act.46

Burden on Competition Would Not Be 

Significant. DTC believes the burden on 

competition that may be imposed by the 

proposed fee increase for a nonMunicipal Bearer Bond Service COD, as 

described in Item II(A)1(ii)B(41),47

would not be significant because it 

would be a nominal amount ($60.00) 

where Participants are already 

accustomed to paying a $300.00 fee for 

a similar service within the proposed 

fee grouping. In addition, DTC believes 

that the burden on competition that may 

be imposed by the proposed fee increase 

for receives from CNS, as described in 

Item II(A)1(ii)B(42),48 would not be 

significant. Even though the amount of 

the fee increase may appear significant 

relative to the current fee (a proposed 

increase from $0.035 to $0.08), DTC 

believes that the fee increase does not, 

in and of itself, mean that the burden on 

competition is significant. DTC does not 

believe that the fee increase would 

impose a significant burden on 

competition, because the impact of the 

fee increase would correlate to a 

Participant’s particular business model 

and how CNS fits into that model, and 

therefore, Participants with similar 

business models and relationships with 

CNS would be similarly impacted. 

Finally, DTC believes that the burden on 

competition that may be imposed by the 

proposed fee increase for the 

cancellation of pending DO, as 

described in Item II(A)1(ii)B(43),49

would not be significant because the 

increase would be a nominal amount 

($0.04) and the activity that triggers the 

fee occurs infrequently. Therefore, DTC 

believes that any burden on competition 

that may be caused by the proposed rule 

changes addressed immediately above 

would be insignificant. 

Burden on Competition Would Be 

Necessary and Appropriate. DTC 

believes that any insignificant burden 

on competition that may be imposed by 

the proposed rule changes addressed 

immediately above would be necessary 

and appropriate in furtherance of the 

purposes of the Act, as permitted by 

Section 17A(b)(3)(I) of the Act.50 As 

discussed above, DTC believes that the 

proposed rule changes would (1) 

provide for the equitable allocation of 

reasonable fees,51 as required by Section 

17A(b)(3)(D) of the Act,52 and (2) 

promote the prompt and accurate 

clearance and settlement of securities 

transactions,53 consistent with Section 

17A(b)(3)(F) of the Act.54 Therefore, 

DTC believes that any insignificant 

burden on competition that may be 

imposed by the proposed rule changes 

addressed immediately above would be 

necessary and appropriate in 

furtherance of the purposes of the Act, 

specifically Section 17A(b)(3)(D) of the 

Act and Section 17A(b)(3)(F) of the Act, 

respectively, as permitted by Section 

17A(b)(3)(I) of the Act.55

(iii) Promote Efficient Market Behavior 

Impact on Competition. DTC believes 

that each of the proposed adjustments of 

certain fees to encourage efficient 

market behavior, as described in Items 

II(A)1(ii)C (Simplify the Pricing 

Structure/Promote Efficient Market 

Behavior)56 and II(A)1(ii)E (Promote 

Efficient Market Behavior), may have an 

impact on competition, because these 

proposed adjustments would result in 

either a fee decrease or fee increase to 

Participants for the relevant service.57

First, DTC believes that each of the 

proposed fee reductions for a service 

could promote competition by 

potentially reducing Participants’ 

operating costs. Based on the foregoing, 

DTC believes that each of the proposed 

reduction of certain fees in order to 

promote efficient market behavior, as 

described in Items II(A)1(ii)C and 

II(A)1(ii)E, would not impose a burden 

on competition, but may promote 

competition. Second, DTC believes that 

the proposed increase of the surcharge 

for the late submission of a LOR or 

BLOR may impact competition, because 


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58 Id. 59 Id. 60See supra Item II(A)2(i)C. 61 15 U.S.C. 78q–1(b)(3)(D). 62See supra Item II(A)2(ii)C. 63 15 U.S.C. 78q–1(b)(3)(F). 64 15 U.S.C. 78q–1(b)(3)(I). 65 Id. 

66 15 U.S.C. 78s(b)(3)(A). 

67 17 CFR 240.19b–4(f). 

68 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

it could create a burden on competition 

by negatively affecting such 

Participants’ operating costs. However, 

DTC believes that the burden on 

competition would not be significant 

and would be necessary and appropriate 

in furtherance of the purposes of the 

Act, as permitted by Section 17A(b)(3)(I) 

of the Act.58

Burden on Competition Would Not Be 

Significant. DTC believes that any 

burden on competition that may be 

imposed by the proposed increase of the 

surcharge for the late submission of a 

LOR or BLOR would be insignificant 

because (1) the increase would be a 

modest amount ($100) that would only 

apply when a Participant submits a late 

LOR or BLOR, and (2) a Participant can 

avoid the surcharge by submitting the 

LOR or BLOR on time. 

Burden on Competition Would Be 

Necessary and Appropriate. DTC 

believes that any insignificant burden 

on competition that is created by the 

proposed increase of the surcharge for 

the late submission of a LOR or BLOR 

would be necessary and appropriate in 

furtherance of the purposes of the Act, 

as permitted by Section 17A(b)(3)(I) of 

the Act.59 As discussed above, DTC 

believes that the proposed rule changes 

would (1) provide for the equitable 

allocation of reasonable fees,60 as 

required by Section 17A(b)(3)(D) of the 

Act,61 and (2) promote the prompt and 

accurate clearance and settlement of 

securities transactions,62 consistent 

with Section 17A(b)(3)(F) of the Act.63

Therefore, DTC believes that any 

insignificant burden on competition that 

may be imposed by the proposed rule 

changes addressed immediately above 

would be necessary and appropriate in 

furtherance of the purposes of the Act, 

specifically Section 17A(b)(3)(D) of the 

Act and Section 17A(b)(3)(F) of the Act, 

respectively, as permitted by Section 

17A(b)(3)(I) of the Act.64

(iv) Clarify the Fee Guide 

No Impact on Competition. DTC 

believes that each of the proposed 

clarifications to the Fee Guide, as 

described in Item II(A)1(ii)F (Clarify the 

Fee Guide), would not have an impact 

on competition.65 Each of these changes 

would amend certain headings, fee 

names, and fee conditions to improve 

the accuracy and clarity of the Fee 

Guide. Having an accurate and clear Fee 

Guide would facilitate Participants’ 

understanding of the Fee Guide and 

their obligations thereunder, and so 

would not affect the rights and 

obligations of any Participant or other 

interested party. Therefore, DTC 

believes that each of the proposed 

clarifications to the Fee Guide, as 

described in Item II(A)1(ii)F (Clarify the 

Fee Guide), would not have an impact 

on competition. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

Written comments relating to this 

proposed rule change have not been 

solicited or received. DTC will notify 

the Commission of any written 

comments received by DTC. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 66 and paragraph (f) of Rule 

19b–4 thereunder.67 At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

DTC–2018–011 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–DTC–2018–011. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of DTC and on DTCC’s website 

(http://dtcc.com/legal/sec-rulefilings.aspx). All comments received 

will be posted without change. Persons 

submitting comments are cautioned that 

we do not redact or edit personal 

identifying information from comment 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–DTC– 

2018–011 and should be submitted on 

or before January 4, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.68

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27078 Filed 12–13–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84767; File No. SR–NYSE– 

2018–59] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Pilot Period for the Exchange’s Retail 

Liquidity Program Until the Earlier of 

Approval of the Filing To Make the 

Program Permanent or June 30, 2019 

December 10, 2018. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on November 


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