528 Federal Register / Vol. 87, No. 3 / Wednesday, January 5, 2022 / Notices 

78See id. 

79See Susquehanna Int’l Group, LLP v. Securities 

and Exchange Commission, 866 F.3d 442, 446–47 

(D.C. Cir. 2017) (rejecting the Commission’s reliance 

on an SRO’s own determinations without sufficient 

evidence of the basis for such determinations). 

80Section 19(b)(2) of the Exchange Act, as 

amended by the Securities Act Amendments of 

1975, Public Law 94–29 (June 4, 1975), grants the 

Commission flexibility to determine what type of 

proceeding—either oral or notice and opportunity 

for written comments—is appropriate for 

consideration of a particular proposal by a selfregulatory organization. See Securities Act 

Amendments of 1975, Senate Comm. on Banking, 

Housing & Urban Affairs, S. Rep. No. 75, 94th 

Cong., 1st Sess. 30 (1975). 81 15 U.S.C. 78s(b)(3)(C). 

82 17 CFR 200.30–3(a)(57) and (58). 

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 term not otherwise defined herein has its 

respective meaning as set forth in the Rules, ByLaws and Organization Certificate of DTC (the 

‘‘Rules’’), the Guide to the DTC Fee Schedule (‘‘Fee 

Guide’’), and the Reorganizations Service Guide 

(‘‘Reorganizations Guide’’), available at http://

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

6Each of the CCF Entitlements and Allocations 

Files falls into one of two categories (each, a ‘‘File 

Category’’): (i) Pre-allocation (‘‘Pre-Allocation CCF 

Files’’), which includes files containing a 

Participant’s allocation projections and 

entitlements, or (ii) allocation/post-allocation 

(‘‘Allocation/Post-Allocation CCF Files’’), which 

and regulations.78 Moreover, 

‘‘unquestioning reliance’’ on an SRO’s 

representations in a proposed rule 

change would not be sufficient to justify 

Commission approval of a proposed rule 

change.79

The Commission believes it is 

appropriate to institute proceedings to 

allow for additional consideration and 

comment on the issues raised herein, 

including as to whether the proposed 

fees are consistent with the Act, any 

potential comments or supplemental 

information provided by the Exchange, 

and any additional independent 

analysis by the Commission. 

V. Request for Written Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the concerns 

and issues identified above, as well as 

any other relevant concerns. In 

particular, the Commission invites the 

written views of interested persons 

concerning whether the proposal is 

consistent with Sections 6(b)(4), 6(b)(5), 

and 6(b)(8), or any other provision of the 

Act, or the rules and regulations 

thereunder. The Commission asks that 

commenters address the sufficiency and 

merit of the Exchange’s statements in 

support of the proposal, in addition to 

any other comments they may wish to 

submit about the proposed rule change. 

Although there do not appear to be any 

issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.80

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by January 26, 2022. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by February 9, 2022. 

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– 

IEX–2021–14 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–IEX–2021–14. 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 IEX–2021–14 and should be 

submitted on or before January 26, 2022. 

Rebuttal comments should be submitted 

by February 9, 2022. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,81 that File 

No. SR–IEX–2021–14 be, and hereby is, 

temporarily suspended. In addition, the 

Commission is instituting proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.82

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2021–28577 Filed 1–4–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93885; File No. SR–DTC– 

2021–018] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

the Reorganizations Guide and the Fee 

Guide 

December 30, 2021. 

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 December 

29, 2021, 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 5 consists of 

amendments to the Reorganizations 

Guide and the Fee Guide to (i) postpone 

the retirement of DTC’s legacy computer 

to computer facility (‘‘CCF’’) files for 

corporate actions entitlements and 

allocations (‘‘CCF Entitlements and 

Allocations Files’’) 6 to January 1, 2023, 


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includes files containing information on a 

Participant’s allocations and pending allocations. 

See Important Notice 13851–20 (August 27, 2020), 

available at https://www.dtcc.com/legal/importantnotices. 

7There are three types of CCF files representing 

the corporate actions lifecycle: Corporate actions 

announcements (‘‘CCF Announcements Files’’); the 

CCF Entitlements and Allocations Files; and 

corporate actions instructions from Participants 

through CCF files (‘‘CCF Corporate Actions 

Instructions Files’’). All CCF Announcement Files 

were retired as of December 31, 2018. See Securities 

Exchange Act Release No. 79746 (January 5, 2017), 

82 FR 3372 (January 11, 2017) (SR–DTC–2016–014). 

CCF Corporate Actions Instructions Files have not 

yet been retired and are not subject to this proposed 

rule change. 

8See Securities Exchange Act Release No. 90490 

(November 23, 2020), 85 FR 76645 (November 30, 

2020) (SR–DTC–2020–016). 

9There are three event groups for CCF files for 

corporate actions. Participants subscribe to the CCF 

files for each event group separately. The event 

groups are (i) distributions (‘‘Distributions’’), such 

as cash and stock dividends, principal and interest, 

and capital gain distributions; (ii) redemptions 

(‘‘Redemptions’’), such as full and partial calls, final 

paydowns, and maturities; and (iii) reorganizations 

(‘‘Reorganizations’’), which include both mandatory 

and voluntary reorganizations such as exchange 

offers, conversions, Dutch auctions, mergers, puts, 

reverse stock splits, tender offers, and warrant 

exercises. 

10See Securities Exchange Act Release No. 63886 

(February 10, 2011), 76 FR 9070 (February 16, 2011) 

(SR–DTC–2011–02) (indicating that DTC will 

continue to support its legacy proprietary CCF files 

until 2015.) 

11See Important Notice 2538–16 (January 21, 

2016), supra note 6; Important Notice 4381–16 

(November 4, 2016), supra note 6; Important Notice 

5099–17 (February 2017), supra note 6; Important 

Notice 7488–18 (February 28, 2018), supra note 6; 

Important Notice 9861–18 (October 9, 2018), supra 

note 6. 

and (ii) amend the Fee Guide to apply 

the CCF File Fee to Participants that 

consume CCF Entitlements and 

Allocations Files 7 between January 1, 

2022 and December 31, 2022, as more 

fully described 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 Reorganizations Guide and 

the Fee Guide to (i) postpone the 

retirement of CCF Entitlements and 

Allocations Files to January 1, 2023, and 

(ii) amend the Fee Guide to apply the 

CCF File Fee to Participants that 

consume CCF Entitlements and 

Allocations Files between January 1, 

2022 and December 31, 2022, as more 

fully described below. 

(i) Retirement of CCF Entitlements and 

Allocations Files and CCF File Fee 

A. Background 

On November 19, 2020, DTC filed a 

rule change (the ‘‘CCF Retirement 

Filing’’) 8 that amended the 

Reorganizations Guide and the Fee 

Guide to (i) set a retirement date for CCF 

Entitlements and Allocations Files of 

January 1, 2022, and (ii) apply a 

$50,000,000 CCF File Fee, per File 

Category (Pre-Allocation or Allocation/ 

Post-Allocation) of CCF Entitlements 

and Allocations Files, to Participants 

that continued to consume CCF 

Entitlements and Allocations Files 

between January 1, 2021 and December 

31, 2021 (‘‘Original Fee Period’’). 

As discussed in the CCF Retirement 

Filing, DTC has been informing 

Participants that corporate actions CCF 

files 9 will be retired and will be 

replaced by ISO 20022 messaging since 

2011.10 ISO 20022 messaging offers 

enhanced efficiency and transparency in 

the corporate action lifecycle because, 

in contrast to the proprietary function 

and activity codes of CCF Files, ISO 

20022 is a business-model-based 

standard for the development of 

messages for the international financial 

services industry. 

DTC has been working with 

Participants to specifically support their 

orderly transition from CCF 

Entitlements and Allocations Files to 

ISO 20022 messaging since 2013. DTC 

began providing Participants with 

parallel entitlements and allocations 

ISO 20022 messaging in 2013 

(Distributions), 2015 (Redemptions) and 

2017 (Reorganizations). In addition, 

since 2016, DTC had been 

communicating with Participants about 

the deadline for retirement of the CCF 

Entitlements and Allocation Files and 

postponed the projected retirement date 

multiple times.11 Finally, in 2020, DTC 

filed the CCF Retirement Filing and 

continued to work with Participants to 

support their orderly migration away 

from the CCF Entitlements and 

Allocations Files to ISO 20022 

messaging before the January 1, 2022. 

B. Proposed Rule Change 

Most Participants have successfully 

migrated from CCF Entitlements and 

Allocations Files to ISO 20022 

messaging. However, DTC understands 

that a few Participants are still testing 

the ISO 20022 messages and that not all 

will be ready to transition away from 

the CCF Entitlements and Allocations 

Files before January 1, 2022. 

Therefore, pursuant to this proposed 

rule change, DTC would postpone the 

retirement date of the CCF Entitlements 

and Allocation Files to January 1, 2023, 

and would charge Participants the 

$50,000 CCF File Fee for each File 

Category of CCF Entitlements and 

Allocations Files that they consume 

between January 1, 2022 and December 

31, 2022 (the ‘‘New Fee Period’’). The 

CCF File Fee would be charged to the 

Account of the Participant, upon the 

Participant’s first receipt of CCF 

Entitlements and Allocations Files in a 

particular File Category during the New 

Fee Period. The CCF File Fee would 

cover all CCF Entitlements and 

Allocations Files within that File 

Category during the New Fee Period. 

Pursuant to the proposed rule change, 

DTC would amend the description of 

the CCF File Fee in the Fee Guide to 

conform with the proposed rule change. 

DTC would also amend the 

Reorganizations Guide to reflect the 

January 1, 2023 retirement date for CCF 

Entitlements and Allocations Files. 

Specifically, in the ‘‘Preparing to Use 

the Services’’ subsection of the ‘‘How 

Reorganizations Work’’ section of the 

Reorganizations Guide, DTC is 

proposing to replace ‘‘*CCF files 

associated with entitlements and 

allocations will be retired as of January 

1, 2022’’ with ‘‘*CCF files associated 

with entitlements and allocations will 

be retired as of January 1, 2023.’’ 

Implementation Date 

DTC will implement the proposed 

changes on January 1, 2022. DTC will 

announce the implementation date of 

the proposed rule change in an 

Important Notice posted on its website. 

As proposed, a legend would be 

added to the Reorganizations Guide and 

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 that the implementation 

date will be January 1, 2022. In 

addition, the proposed legend would 

state that the legend would 

automatically be removed upon the 

implementation of the proposed 

changes. 

2. Statutory Basis 

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

requires, inter alia, that the Rules be 

designed to promote the prompt and 


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12 15 U.S.C. 78q–1(b)(3)(F). 

13 15 U.S.C. 78q–1(b)(3)(D). 

14As discussed above, DTC has been 

communicating with Participants about the 

migration from CCF files to the ISO 20022 standard 

for corporate actions events since 2011. Since 2013, 

DTC has been communicating with Participants 

about targeted retirement dates for CCF 

Entitlements and Allocations Files and has, at the 

request of Participants, postponed the projected 

dates numerous times. Before October 2018, DTC 

had always told Participants that there would not 

be any charges for the continued consumption of 

CCF Entitlements and Allocations Files. After the 

CCF Retirement Filing most Participants did 

complete development and fully adopted the ISO 

20022 standard for entitlements and allocations 

information, illustrating the effectiveness of the 

CCF File Fee. 

15The CCF File Fee is not designed to cover costs 

incurred by DTC as a result of continuing to service 

CCF files. 

16 DTC also had charged a similar $50,000 CCF 

File Fee to Participants that continued to receive 

the CCF Announcements Files between 2016–2018, 

in order to encourage Participants to migrate from 

CCF Announcements Files to ISO 20022 messaging. 

DTC believes that the CCF File Fee provided a 

strong incentive for Participants to accelerate their 

migration from the CCF format to the ISO 2002 

standard, thereby allowing DTC to retire all of the 

CCF Announcements Files by December 31, 2018. 

See Securities Exchange Act No. 76811 (December 

31, 2015), 81 FR 826 (January 7, 2016) (SR–DTC– 

2015–013) (postponing retirement of CCF 

Announcements Files and implementation of a 

$50,000 CCF File Fee to encourage prompt 

transition to the ISO 20022 standard); and see also 

Securities Exchange Act Release No. 79746 (January 

5, 2017), 82 FR 3372 (January 11, 2017) (SR–DTC– 

2016–014) (establishing the retirement date for CCF 

Announcement Files). 

17 15 U.S.C. 78q–1(b)(3)(I). 

18 Id. 

19 Id. 

20See supra note 16. 

accurate clearance and settlement of 

securities transactions.12

As described above, the proposed rule 

change would (i) postpone the 

retirement of CCF Entitlements and 

Allocations Files to January 1, 2023, and 

(ii) apply the CCF File Fee to 

Participants that continue to consume 

CCF Entitlements and Allocations Files 

during the New Fee Period. By 

postponing the retirement of CCF 

Entitlements and Allocations Files to 

January 1, 2023, the proposed rule 

change would allow Participants to 

minimize potential business 

interruptions by undertaking an orderly 

and organized migration from CCF files 

to the more efficient ISO 20022 

standard. Similarly, by charging a CCF 

File Fee to those Participants that 

continue to receive CCF Entitlements 

and Allocations Files after December 31, 

2021, the proposed rule change would 

encourage Participants to accelerate 

system development and the adoption 

of the ISO 20022 standard. In this 

manner, the proposed rule change 

would encourage and facilitate the 

transition to the ISO 20022 standard, 

which provides efficiencies and 

enhanced transparency in processing 

corporate actions and the settlement 

activities related thereto. Accordingly, 

DTC believes that the proposed rule 

change would promote the prompt and 

accurate clearance and settlement of 

securities transactions, consistent with 

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

of the Act, cited above. 

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

requires that the Rules provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

Participants.13 DTC believes that the 

proposed rule change to apply the CCF 

File Fee to Participants that continue to 

consume CCF Entitlements and 

Allocations Files during the New Fee 

Period would provide for the equitable 

allocation of reasonable fees. 

DTC believes that the proposed 

application of the CCF File Fee would 

be equitably allocated because the CCF 

File Fee (i) would only be charged to 

those Participants that have delayed 

their migration from CCF Entitlements 

and Allocations Files beyond December 

31, 2021 14 and (ii) would be applied in 

accordance with the Participant’s use of 

a particular File Category. 

Further, DTC believes that the 

application of the $50,000 CCF File Fee 

would be reasonable. As discussed 

above, Participants that did not 

complete their migration to ISO 20022 

by January 1, 2021 were charged the 

$50,000 CCF File Fee for each File 

Category of CCF Entitlements and 

Allocations Files that they consumed 

during the Original Fee Period. Most 

Participants completed their migration 

during the Original Fee Period, which 

DTC believes is due, in part, to the 

application of the CCF Fee. Based on 

this prior experience with the CCF File 

Fee, DTC believes that the CCF File Fee 

in the amount of $50,000 provides the 

necessary encouragement for 

Participants to accelerate their system 

development for their adoption of the 

ISO 20022 standard for entitlements and 

allocations information.15 Further, 

during the application of the CCF File 

Fee to CCF Entitlements and Allocations 

Files during the Original Fee Period, 

DTC had not received any negative 

feedback from Participants suggesting 

that the $50,000 fee was overly 

burdensome.16

Therefore, DTC believes that the 

proposed rule change regarding the CCF 

File Fee provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its Participants, 

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

the Act, cited above. 

(B) Clearing Agency’s Statement on 

Burden on Competition 

DTC believes that the proposed rule 

change with respect to postponing the 

retirement of CCF Entitlements and 

Allocations Files to January 1, 2023 

would not have any impact on 

competition. The proposed rule change 

would provide any Participant that has 

not completed its migration from CCF 

Entitlements and Allocation Files with 

additional time to complete its testing 

and development of its systems, and 

finalize the transition to ISO 20022 

messaging. Therefore, DTC believes that 

the proposed rule change with respect 

to postponing the retirement of CCF 

Entitlements and Allocations Files to 

January 1, 2023 would not have a 

burden on competition.17

DTC believes that the proposed rule 

change with respect to amending the 

Fee Guide to apply the CCF File Fee to 

Participants that continue to consume 

CCF Entitlements and Allocations Files 

during the New Fee Period could have 

an impact on competition because it 

could create a burden on competition.18

Although the proposed application of 

the CCF File Fee is designed to 

incentivize Participants to accelerate 

their adoption of the ISO 20022 

standard, DTC recognizes and 

appreciates that charging the fee could 

negatively affect such Participants’ 

operating costs. However, DTC believes 

that any 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.19

DTC believes any burden on 

competition would not be significant 

because (i) the fee would only be 

charged once per File Category, upon 

the Participant’s first receipt of CCF 

Entitlements and Allocations Files for a 

File Category during the New Fee 

Period, and (ii) the application of the 

CCF File Fee for a File Category would 

cover the consumption of all CCF 

Entitlements and Allocations Files 

within that File Category during the 

New Fee Period. In addition, based on 

DTC’s prior use of the CCF File Fee for 

CCF Announcements Files 20 and CCF 

Entitlements and Application Files, 

DTC has no indication that the amount 

of the fee creates a significant burden on 

any Participant. 

DTC believes that any burden on 

competition that may be created by the 

proposed change to amend the Fee 

Guide to apply the CCF File Fee to 

Participants that continue to consume 

CCF Entitlements and Allocations Files 

during the New Fee Period would be 


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21 Id. 

22See supra notes 10 and 11. 

23 15 U.S.C. 78q–1(b)(3)(F). 

24 15 U.S.C. 78q–1(b)(3)(I). 

25 15 U.S.C. 78q–1(b)(3)(I). 

26 15 U.S.C 78s(b)(3)(A). 

27 17 CFR 240.19b–4(f). 

necessary and appropriate in 

furtherance of the purposes of the Act, 

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

the Act.21 DTC believes that this 

proposed change would be necessary 

because some Participants have yet to 

adopt the ISO 20022 standard, despite at 

least seven years of communication and 

prompting on the issue.22 As noted 

above, the ISO 20022 standard provides 

efficiencies and enhanced transparency 

in processing corporate actions and the 

settlement activities related thereto. 

Thus, DTC believes that the proposed 

rule change would promote the prompt 

and accurate clearance and settlement of 

securities transactions, consistent with 

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

DTC believes that the proposed rule 

change to apply the CCF File Fee to 

Participants that continue to consume 

CCF Entitlements and Allocations Files 

during the New Fee Period would be 

appropriate in furtherance of the 

purposes of the Act, as permitted by 

Section 17A(b)(3)(I) of the Act.24 DTC’s 

prior experience with the $50,000 CCF 

File Fee and the successful retirement of 

CCF Announcements Files illustrates 

that a $50,000 CCF File Fee provides the 

necessary encouragement for 

Participants to accelerate their system 

development for the full adoption of the 

ISO 20022 standard. Further, during the 

application of the CCF File Fee to CCF 

Announcements Files, DTC had not 

received any negative feedback from 

Participants that suggested that the 

$50,000 fee was overly burdensome; nor 

did DTC receive any objections during 

the application of the CCF File Fee to 

CCF Entitlements and Allocations Files 

during the Original Fee Period that 

suggested that the $50,000 fee was 

overly burdensome. Accordingly, DTC 

believes that application of the $50,000 

CCF File Fee would be appropriate here 

in order to incentivize Participants to 

accelerate their migration to the ISO 

20022 standard. In addition, as 

discussed above, DTC believes that the 

proposed application of the CCF File 

Fee would be equitably allocated 

because the CCF File Fee (i) would only 

be charged to those Participants that 

have delayed their migration from CCF 

Entitlements and Allocations beyond 

December 31, 2021 and (ii) would be 

applied in accordance with the 

Participant’s use of a particular File 

Category. 

Therefore, for these reasons, DTC 

believes that a perceived competitive 

burden of the proposed rule change to 

apply the CCF File Fee to Participants 

that continue to consume CCF 

Entitlements and Allocations Files 

during the Fee Period would be 

necessary and appropriate in 

furtherance of the purposes of the Act, 

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

the Act.25

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

DTC has not received or solicited any 

written comments relating to this 

proposal. If any written comments are 

received, DTC will amend this filing to 

publicly file such comments as an 

Exhibit 2 to this filing, as required by 

Form 19b–4 and the General 

Instructions thereto. 

Persons submitting written comments 

are cautioned that, according to Section 

IV (Solicitation of Comments) of the 

Exhibit 1A in the General Instructions to 

Form 19b–4, the Commission does not 

edit personal identifying information 

from comment submissions. 

Commenters should submit only 

information that they wish to make 

available publicly, including their 

name, email address, and any other 

identifying information. 

All prospective commenters should 

follow the Commission’s instructions on 

How to Submit Comments, available at 

https://www.sec.gov/regulatory-actions/ 

how-to-submit-comments. General 

questions regarding the rule filing 

process or logistical questions regarding 

this filing should be directed to the 

Main Office of the Commission’s 

Division of Trading and Markets at 

tradingandmarkets@sec.gov or 202– 

551–5777. 

DTC reserves the right to not respond 

to any comments received. 

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) 26 of the Act and paragraph 

(f) 27 of Rule 19b–4 thereunder. 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

DTC–2021–018 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–2021–018. 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 

10:00 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 

(https://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– 

2021–018 and should be submitted on 

or before January 26, 2022. 


TKELLEY on DSK125TN23PROD with NOTICE 
532 Federal Register / Vol. 87, No. 3 / Wednesday, January 5, 2022 / Notices 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3As provided in Rule 11.23(a)(23), an NBBO is a 

Valid NBBO where: (i) There is both a NBB and 

NBO for the security; (ii) the NBBO is not crossed; 

and (iii) the midpoint of the NBBO is less than the 

Maximum Percentage away from both the NBB and 

the NBO. See Exchange Rule 11.23(a)(23). 

4The term ‘‘Indicative Price’’ shall mean the price 

at which the most shares from the Auction Book 

and the Continuous Book would match. In the event 

of a volume based tie at multiple price levels, the 

Indicative Price will be the price which results in 

the minimum total imbalance. In the event of a 

volume based tie and a tie in minimum total 

imbalance at multiple price levels, the Indicative 

Price will be the price closest to the Volume Based 

Tie Breaker. See Exchange Rule 11.23(a)(10). 

5See Exchange Rule 11.23(a)(6). 

6See Exchange Rule 11.23(a)(5). 

7See Exchange Rule 11.23(a)(7). 

8See Exchange Rule 11.23(a)(1). 

9The Volume Based Tie Breaker is the midpoint 

of the NBBO for a particular security where the 

NBBO is a Valid NBBO. Where the NBBO is not a 

Valid NBBO, the price of the FLSET is used as the 

Volume Based Tie Breaker, which for the Opening 

Auction process is the previous BZX Official 

Closing Price. See Exchange Rule 11.23(a)(23). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2021–28569 Filed 1–4–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93888; SR–CboeBZX– 

2021–086] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change To Amend 

the Opening Auction Process Provided 

Under Rule 11.23(b)(2)(B) 

December 30, 2021. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on December 

21, 2021, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes a rule change 

to amend the Opening Auction process 

provided under Rule 11.23(b)(2)(B) to 

better align the Opening Auction 

Process with current market conditions, 

and, where certain market conditions 

are not optimal, to delay the Opening 

Auction from occurring until those 

market conditions have improved. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 11.23(b)(2)(B) to make the Opening 

Auction process more dynamic by, 

under certain circumstances delaying 

the Opening Auction in order to 

incorporate additional information into 

the determination of the Opening 

Auction price. Specifically, as proposed 

the Rule would provide that when there 

is no Valid NBBO 3 in a BZX-listed 

security and there is an Indicative 

Price 4 that is not within the Collar Price 

Range,5 the Opening Auction will be 

delayed until there is a Valid NBBO or 

the delay period has lapsed, as further 

described below. The Exchange believes 

that the proposal will make the Opening 

Auction price in less liquid securities 

more representative of current market 

conditions making the Opening Auction 

process a more meaningful price 

formation event in such BZX-listed 

securities. 

Background 

Rule 11.23(b)(2)(B) sets forth the 

process by which the BZX Official 

Opening Price 6 is determined for BZXlisted securities during the Opening 

Auction Process. Specifically, as 

provided in Rule 11.23(b)(2)(B), the 

Opening Auction price will be the price 

level within the Collar Price Range that 

maximizes the number of shares 

executed between the Continuous 

Book 7 and Auction Book 8 in the 

Opening Auction. In the event of a 

volume based tie at multiple price 

levels, the Opening Auction price will 

be the price which results in the 

minimum total imbalance. In the event 

of a volume based tie and a tie in 

minimum total imbalance at multiple 

price levels, the Opening Auction price 

will be the price closest to the Volume 

Based Tie Breaker.9

The Volume Based Tie Breaker for an 

Opening Auction will be the midpoint 

of the NBBO where there is a Valid 

NBBO. Where there is no Valid NBBO, 

the FLSET will be used as the Volume 

Based Tie Breaker. Because the FLSET 

is typically based on the most recent 

execution in a security during Regular 

Trading Hours, its value may be 

significantly away from the Indicative 

Price at the time of the Opening Auction 

process, especially in more thinly 

traded securities. As a result, the 

Exchange has observed instances where 

auction eligible orders priced in-line 

with the Indicative Price were not 

executed in the Opening Auction 

because they were outside the Collar 

Price Range established using the 

FLSET. Based on analysis by the 

Exchange and feedback from market 

participants, certain of these instances 

resulted in orders not receiving 

executions in the Opening Auction that 

would have otherwise occurred at prices 

that would have been acceptable to both 

parties to the execution. To illustrate 

this point, the Exchange presents the 

following example: Consider a security 

with a prevailing NBBO at 9:30:00 a.m. 

of $27.10 × $29.54 and an Indicative 

Price of $27.90. Because the midpoint of 

the NBBO (i.e., $28.32) is more than the 

Maximum Percentage away from both 

the NBB and NBO, the NBBO is not a 

Valid NBBO. Accordingly, the FLSET 

would be used as the Volume Based Tie 

Breaker, which would by definition be 

the BZX Official Closing Price from the 

previous business day. For purposes of 

this example, that price is $26.52. Using 

the FLSET as the Collar Midpoint, the 

Collar Price Range would be $25.19 × 

$27.85. Because the Indicative Price is 

outside of the Collar Price Range, the 

auction would occur at the upper most 

price that is included in the Collar Price 

Range (i.e., $27.85) even though more 

shares could have executed at $27.90. 

Because the Opening Auction was 

forced into the Collar Price Range and 

occurred at $27.85, a contingent of 

auction eligible orders that would have 

executed at $27.90 that were priced 


TKELLEY on DSK125TN23PROD with NOTICE