88078 Federal Register / Vol. 89, No. 215 / Wednesday, November 6, 2024 / Notices 

24 15 U.S.C. 78s(b)(3)(A)(iii). 

25 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. 

26 17 CFR 240.19b–4(f)(6). 

27 17 CFR 240.19b–4(f)(6)(iii). 

28See supra note 7. 

29For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 30 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

3Capitalized terms not defined herein are defined 

in the Rules, By-Laws and Organization Certificate 

of DTC (‘‘Rules’’) and the DTC Settlement Service 

Guide (‘‘Settlement Guide’’), available at https://

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

4See Securities Exchange Act Release No. 101132 

(Sept. 23, 2024), 89 FR 79320 (Sept. 27, 2024) (File 

No. SR–DTC–2024–010) (‘‘Notice of Filing’’). 

5See The Depository Trust Company, Disclosure 

Framework for Covered Clearing Agencies and 

Financial Market Infrastructures (Mar. 2023) 

(‘‘Disclosure Framework’’), available at https://

www.dtcc.com/-/media/Files/Downloads/legal/ 

policy-and-compliance/DTC_Disclosure_

Framework.pdf. 

6NSCC also filed a proposed rule change with the 

Commission in connection with decommissioning 

the ID Net Service. See Securities Exchange Act 

Release No. 101131 (Sept. 23, 2024), 89 FR 79324 

(Sept. 27, 2024) (File No. SR–NSCC–2024–008). 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 24 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.25

A proposed rule change filed under 

Rule 19b–4(f)(6) 26 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),27 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has requested 

that the Commission waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. According to the Exchange, the 

proposed rule change is a competitive 

response to a substantively identical 

filing submitted by ISE that was recently 

approved by the Commission.28 The 

Commission believes that the proposed 

rule change presents no novel issues 

and that waiver of the 30-day operative 

delay is consistent with the protection 

of investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposed rule change as 

operative upon filing.29

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 

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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeEDGX–2024–066 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–CboeEDGX–2024–066. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CboeEDGX–2024–066 and should be 

submitted on or before November 27, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–25731 Filed 11–5–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101486; File No. SR–DTC– 

2024–010] 

Self-Regulatory Organizations; The 

Depository Trust Company; Order 

Approving of Proposed Rule Change 

To Decommission the ID Net Service 

October 31, 2024. 

I. Introduction 

On September 12, 2024, The 

Depository Trust Company (‘‘DTC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–DTC–2024–010 

(‘‘Proposed Rule Change’’) pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 to decommission the 

ID Net service (‘‘ID Net Service’’ or ‘‘ID 

Net’’).3 The Proposed Rule Change was 

published for comment in the Federal 

Register on September 27, 2024.4 The 

Commission has received no comments 

on the Proposed Rule Change. For the 

reasons discussed below, the 

Commission is approving the Proposed 

Rule Change. 

II. Background 

DTC serves as a central securities 

depository providing, in part, custodial 

services for equity securities, which 

include the safekeeping, record keeping, 

book-entry transfer, and pledge of 

securities among its Participants.5 The 

ID Net Service is a joint service offering 

of DTC and its affiliate, National 

Securities Clearing Corporation 

(‘‘NSCC’’), available on a voluntary basis 

to broker/dealers that are participants of 

both NSCC and DTC and banks that are 

participants of DTC.6 ID Net allows 

broker/dealer users to net their affirmed 

institutional transactions (‘‘Affirmed 

Transactions’’) with their transactions in 

NSCC’s Continuous Net Settlement 


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7CNS is NSCC’s system for accounting and 

settling CNS-eligible securities. See NSCC Rule 11 

(describing the CNS System) and Procedure VII 

(describing the CNS Accounting Operation), 

available at www.dtcc.com/-/media/Files/ 

Downloads/legal/rules/nscc_rules.pdf. To be CNSeligible, a security must be eligible for book-entry 

transfer on the books of DTC and must be capable 

of being processed in the CNS system. All eligible 

compared and recorded transactions for a particular 

settlement date are netted by issue into one net long 

(buy), net short (sell) or flat position for each 

Member, and those positions are further netted with 

positions of the same issue that remain open after 

their originally scheduled settlement date. As 

central counterparty, NSCC becomes the contraparty for settlement purposes, assuming the 

obligation of its Members that are receiving 

securities to receive and pay for those securities and 

the obligation of Members that are delivering 

securities to make the delivery. CNS netting thus 

reduces the number of securities movements 

required to settle transactions. 

8See DTC Settlement Guide, supra note 3. 

9The Matching Utility must be (i) a clearing 

agency registered with the Commission, (ii) an 

entity that has obtained an exemption from such 

registration from the Commission, or (iii) a 

‘‘qualified vendor’’ for trade confirmation/ 

affirmation services as defined by the rules of a selfregulatory organization. See DTC Settlement Guide, 

supra note 3, at 40. TCC ITP Matching (US) LLC 

(‘‘ITP’’), a DTC and NSCC affiliate, is currently the 

only Matching Utility that submits Affirmed 

Transactions to DTC. See Notice of Filing, supra 

note 4, at 79320 n.8. 

10See Settlement Guide, supra note 3, at 40–41. 

11See Notice of Filing, supra note 4, at 79321. 

12 Id. 

13 DTC states that this complexity includes (i) 

special eligibility checks versus the ID Net 

eligibility criteria and (ii) leveraging of the omnibus 

accounts to simultaneously allow (a) a bank to 

process ID Net-eligible transactions on a trade-fortrade basis and (b) the broker/dealer side of an ID 

Net-eligible transaction to settle via CNS. Notice of 

Filing, supra note 4, at 79321 n.12. 

14See Settlement Guide, supra note 3, at 40–46. 

15 Id. at 38. 

16See Fee Guide, available at www.dtcc.com/∼/ 

media/Files/Downloads/legal/fee-guides/DTC-FeeSchedule.pdf. 

17 Id. 

18 DTC states that ID Net-related transactions 

currently comprise less than 1 percent of all activity 

processed by CNS. DTC believes that ID Net usage 

has been limited since its implementation in 2008 

because, in part, the service needs both parties to 

an ID Net transaction to be subscribers of ID Net, 

which is not always the case. See Notice of Filing, 

supra note 4, at 79321 n.11. 

19See Notice of Filing, supra note 4, at 79321; see 

also DTC Important Notice regarding decommission 

of the ID Net Service, available at https://

www.dtcc.com/-/media/Files/pdf/2023/8/8/18852- 

23.pdf. 

20 15 U.S.C. 78s(b)(2)(C). 

21 15 U.S.C. 78q–1(b)(3)(F). 

(‘‘CNS’’) system.7 An institutional 

transaction is one between a broker/ 

dealer and its institutional customer. 

Such institutional customers are not 

Participants of DTC. Unlike exchange 

trades and most prime broker trades, 

most institutional delivery transactions 

do not currently flow through CNS but 

instead settle at DTC on a trade-for-trade 

basis.8 DTC may accept Affirmed 

Transactions submitted by a utility that 

provides a matching service (‘‘Matching 

Utility’’).9 The counterparties on an 

Affirmed Transaction submitted by a 

Matching Utility to DTC are a (i) DTC 

Participant, acting as clearing broker to 

the Affirmed Transaction and a (ii) DTC 

Participant bank, acting as the custodian 

for an institutional customer. The 

Affirmed Transaction is processed on a 

trade-for-trade basis at DTC, unless it is 

designated for ID Net processing by the 

Matching Utility and meets certain 

eligibility requirements. 

In order for an Affirmed Transaction 

to be eligible for processing in ID Net, 

(i) both counterparties to the Affirmed 

Transaction must be a Member of NSCC 

and a Participant of DTC, or a bank that 

is a Participant of DTC, that has 

subscribed to ID Net; and (ii) the 

transaction must be (a) in a security 

eligible for processing through NSCC’s 

CNS and (b) affirmed within established 

timeframes set forth in the Settlement 

Guide.10

If an Affirmed Transaction is 

designated for ID Net and meets the 

eligibility criteria, then DTC will direct 

the transaction to ID Net, which 

facilitates the netting of a broker/ 

dealer’s side of an Affirmed Transaction 

with that broker/dealer’s CNS activity, 

via omnibus accounts that are 

maintained by NSCC at DTC and 

designated for ID Net activity. If a bank 

is a counterparty to the ID Net-eligible 

Affirmed Transaction, then it will either 

receive or deliver the subject shares 

versus payment, on a trade-for-trade 

basis, via the ID Net omnibus accounts. 

While ID Net allows broker/dealers to 

realize the benefit of netting for 

Affirmed Transactions by allowing the 

broker/dealer to net its ID Net-eligible 

Affirmed Transactions with its 

transactions in CNS, banks using ID Net 

settle ID Net transactions on a trade-fortrade basis as they would for other 

Affirmed Transactions. In this regard, 

DTC states that ID Net’s main benefit is 

to streamline clearance and settlement 

of ID Net-eligible Affirmed Transactions 

for broker/dealers.11

III. Description of the Proposed Rule 

Change 

DTC states that as part of DTC’s and 

NSCC’s continuous evaluations to the 

efficiency and effectiveness of the 

services they provide and in order to 

streamline and simplify their services 

and processes, DTC and NSCC have 

identified ID Net as an underused 

service that may be eliminated as part 

of modernization efforts.12 They each 

propose to decommission the ID Net 

Service due to factors including: (i) 

limited uptake and usage of the service 

since its adoption; and (ii) the 

operational complexity of maintaining 

the service, which also connects with 

and impacts other core clearance and 

settlement processes.13

To implement the proposed change, 

DTC proposes removing all provisions 

relating to ID Net from the Settlement 

Guide, including (i) the entire text of the 

section titled ‘‘ID Net,’’ which contains 

the DTC Procedures for processing of ID 

Net transactions,14 and (ii) a reference to 

ID Net relating to messaging in the 

section titled ‘‘Affirmed 

Transactions.’’ 15

In addition, DTC proposes removing 

the associated ID Net Fee of 2 cents per 

transaction from the Guide to the DTC 

Fee Schedule (‘‘Fee Guide’’) 16 because 

the fee would be obsolete without the ID 

Net Service. Instead, such transactions 

would, by default, be charged the 

standard fee charged for Affirmed 

Transactions of 4 cents per 

transaction.17

DTC believes that the decommission 

of the ID Net Service would have 

minimal impact on its Participants, as 

only 13 broker/dealers and 20 banks are 

subscribed to the ID Net Service and the 

service is not used by all of those 

broker/dealers and banks.18

Furthermore, without ID Net, Affirmed 

Transactions can simply settle trade-fortrade, directly between the 

counterparties like they already do. 

DTC states that it has performed 

direct outreach to Participants that use 

the ID Net Service and has also 

announced its plans to decommission 

the ID Net Service in an Important 

Notice, and that there have been no 

material objections or concerns raised 

by Participants.19

IV. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act 20

directs the Commission to approve a 

proposed rule change of a selfregulatory organization if it finds that 

such proposed rule change is consistent 

with the requirements of the Act and 

rules and regulations thereunder 

applicable to such organization. After 

careful review of the Proposed Rule 

Change, the Commission finds that the 

Proposed Rule Change is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to DTC. In particular, the 

Commission finds that the Proposed 

Rule Change is consistent with Section 

17A(b)(3)(F) of the Act.21

A. Consistency With Section 

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

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

requires that the rules of a clearing 


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22 Id. 

23 Id. 

24 15 U.S.C. 78q–1. 

25 15 U.S.C. 78s(b)(2). 

26 In approving the Proposed Rule Change, the 

Commission considered its impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 99620 

(Feb. 28, 2024), 89 FR 15907 (Mar. 5, 2024) 

(‘‘Notice’’). Comments received can be found on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-cboe-2024-008/srcboe2024008.htm. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 99963 

(Apr. 16, 2024), 89 FR 29389 (Apr. 22, 2024). 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 100256 

(May 31, 2024), 89 FR 48463 (June 6, 2024) (‘‘OIP’’). 

8See Securities Exchange Act Release No. 100880 

(Aug. 30, 2024), 89 FR 72537 (Sept. 5, 2024). 

9 In disapproving the proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). See infra notes 130– 

138 and accompanying text. 

10See Notice, 89 FR 15907 n.5. 

11 Id. 

12 ‘‘OEMSs generally permit users to route orders 

to other market participants that use the same 

OEMS platform or directly to trading venues. OEMS 

platforms generally provide their users with the 

capability to create orders, route them for 

execution, and input parameters to control the size, 

timing, and other variables of their trades.’’ Notice, 

89 FR 15907–08. For additional description of the 

functionalities of an OEMS, see id. 

13 15 U.S.C. 78c(a)(2). Section 3(a)(1) defines an 

‘‘exchange’’ as ‘‘any organization, association, or 

group of persons . . . which constitutes, maintains, 

or provides a market place or facilities for bringing 

together purchasers and sellers of securities or for 

otherwise performing with respect to securities the 

functions commonly performed by a stock 

exchange.’’ The statute then specifically provides 

that an exchange ‘‘includes . . . the market 

facilities maintained by such exchange.’’ 15 U.S.C. 

78c(a)(1). 

14See infra note 19 and accompanying text 

defining the term ‘‘Exchange-affiliated OEMS’’. 

15References to ‘‘Silexx’’ are to the OEMS Silexx 

(the Silexx system) that is provided by the legal 

entity, Cboe Silexx, LLC. 

16See Notice, 89 FR 15907 and n.3. 

agency, such as DTC, be designed to, 

among other things, promote the prompt 

and accurate clearance and settlement of 

securities transactions.22 The 

Commission believes that the Proposed 

Rule Change is consistent with Section 

17A(b)(3)(F) of the Act for the reasons 

stated below. 

The Proposed Rule Change would 

amend the Settlement Guide to reflect 

the decommission of ID Net and remove 

the ID Net Fee from the Fee Guide. As 

discussed in Parts II and III, ID Net is 

an underused service that is 

operationally complex to maintain, and 

its main benefit is to broker/dealers’ 

streamline clearance and settlement of 

ID Net-eligible Affirmed Transactions, 

which may otherwise settle on a tradefor-trade basis. As such, ID Net’s 

decommission would have minimal 

impact on DTC and its Participants 

considering its limited usage. Affirmed 

Transactions that would have otherwise 

been directed to ID Net will settle tradefor-trade directly between 

counterparties, like most other Affirmed 

Transactions currently do. Therefore, 

these transactions will continue to settle 

promptly and accurately, as other 

Affirmed Transactions do, outside of the 

ID Net Service. For these reasons, the 

Commission finds that the Proposed 

Rule Change should continue to support 

DTC’s ability to provide prompt and 

accurate clearance and settlement of 

securities transactions, consistent with 

Section 17A(b)(3)(F) of the Act.23

V. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Act, and in 

particular, with the requirements of 

Section 17A of the Act 24 and the rules 

and regulations promulgated 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 25 that 

proposed rule change SR–DTC–2024– 

010, be, and hereby is, approved.26

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–25726 Filed 11–5–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101491; File No. SR– 

CBOE–2024–008] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Order Disapproving a 

Proposed Rule Change To Adopt a 

New Rule Regarding Order and 

Execution Management Systems 

October 31, 2024. 

I. Introduction 

On February 13, 2024, Cboe 

Exchange, Inc. (‘‘Cboe’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to section 

19(b)(1) of the Securities Exchange Act 

of 1934 (the ‘‘Exchange Act’’ or ‘‘Act’’),1

and Rule 19b–4 thereunder,2 a proposal 

to adopt a new rule regarding order and 

execution management systems 

(‘‘OEMSs’’). The proposed rule change 

was published for comment in the 

Federal Register on March 5, 2024.3

On April 16, 2024, pursuant to section 

19(b)(2) of the Exchange Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to approve or 

disapprove the proposed rule change.5

On May 31, 2024, the Commission 

instituted proceedings under section 

19(b)(2)(B) of the Exchange Act 6 to 

determine whether to approve or 

disapprove the proposed rule change.7

The Commission received comment 

letters in response to the Notice and the 

OIP. On August 30, 2024, the 

Commission issued a notice of 

designation of a longer period of time 

within which to approve or disapprove 

the proposed rule change.8 For the 

reasons discussed below, this order 

disapproves the proposed rule change.9

II. Description of the Proposed Rule 

Change 

Nine years ago, the Exchange’s parent 

company, Cboe Global Markets, Inc, first 

acquired an OEMS, followed by another 

OEMS approximately two years later.10

Since the acquisition of these assets, 

Cboe has submitted filings for each 

OEMS (which can be used to route 

orders to the Exchange).11 Now, as 

described in more detail in the Notice, 

the Exchange seeks Commission 

approval of a rule providing that any 

OEMS 12 that meets the conditions in 

proposed Rule 3.66 will not be deemed 

a facility of the Exchange as that term 

is defined in the Act. Section 3(a)(2) of 

the Act defines ‘‘facility’’ as follows: 

The term ‘‘facility’’ when used with respect 

to an exchange includes its premises, 

tangible or intangible property whether on 

the premises or not, any right to the use of 

such premises or property or any service 

thereof for the purpose of effecting or 

reporting a transaction on an exchange 

(including, among other things, any system of 

communication to or from the exchange, by 

ticker or otherwise, maintained by or with 

the consent of the exchange), and any right 

of the exchange to the use of any property or 

service.13

The Exchange’s proposal would apply 

to, among others, the Exchangeaffiliated OEMS known as Silexx.14

Silexx is developed, offered, and 

maintained by Cboe Silexx, LLC. The 

Exchange and Cboe Silexx, LLC are each 

a wholly-owned subsidiary of Cboe 

Global Markets, Inc.15

The Exchange states that a function of 

OEMSs (such as Silexx) is to allow 

market participants to enter and route 

orders to trade securities for execution 

on any U.S. exchange, including the 

Exchange.16 The Exchange 


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