1046 Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Notices 

1United States Postal Service FY 2017 Annual 

Report to Congress, Library Reference USPS–FY17– 

17, December 29, 2017 (FY 2017 Annual Report). 

2See Docket No. ACR2013, Postal Regulatory 

Commission, Review of Postal Service FY 2013 

Performance Report and FY 2014 Performance Plan, 

July 7, 2014; Docket No. ACR2014, Postal 

Regulatory Commission, Analysis of the Postal 

Service’s FY 2014 Program Performance Report and 

FY 2015 Performance Plan, July 7, 2015; Docket No. 

ACR2015, Postal Regulatory Commission, Analysis 

of the Postal Service’s FY 2015 Annual Performance 

Report and FY 2016 Performance Plan, May 4, 2016; 

Docket No. ACR2016, Postal Regulatory 

Commission, Analysis of the Postal Service’s FY 

2016 Annual Performance Report and FY 2017 

Performance Plan, April 27, 2017. 3See FY 2017 Annual Report at 27–28. 

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

2 17 CFR 240.19b–4. 

3Each capitalized term not otherwise defined 

herein has its respective meaning as set forth in the 

Rules, By-Laws and Organization Certificate of The 

Depository Trust Company (‘‘Rules’’), available at 

http://www.dtcc.com/legal/rules-andprocedures.aspx and the DTC Settlement Service 

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

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

service-guides/Settlement.pdf. 

4The Required Participants Fund Deposit of a 

Participant is the amount the Participant is required 

to Deposit to the Participants Fund pursuant to 

Section 1 of Rule 4. Rule 4, Section 1, supra note 

3. The Participants Fund, described more fully 

below, is provided for in Rule 4. Rule 4, supra note 

3. Deposit, in this context, pursuant to Section 1 of 

Rule 1, means causing the appropriate amount in 

cash to be paid to DTC for credit to the Participants 

Fund pursuant to Section 1 of Rule 4. Rule 1, 

Section 1, supra note 3. The Settlement Guide, 

3652(g). On December 29, 2017, the 

Postal Service filed its FY 2017 Annual 

Report to Congress in Docket No. 

ACR2017.1 The FY 2017 Annual Report 

includes the Postal Service’s FY 2018 

annual performance plan (FY 2018 Plan) 

and FY 2017 annual performance report 

(FY 2017 Report). FY 2017 Annual 

Report at 13–28. 

The FY 2018 Plan reviews the Postal 

Service’s plans for FY 2018. The FY 

2017 Report discusses the Postal 

Service’s progress during FY 2017 

toward its four performance goals: 

• High-Quality Service 

• Excellent Customer Experiences 

• Safe Workplace and Engaged 

Workforce 

• Financial Health 

Each year, the Commission must 

evaluate whether the Postal Service met 

the performance goals established in the 

annual performance plan and annual 

performance report. 39 U.S.C. 3653(d). 

The Commission may also ‘‘provide 

recommendations to the Postal Service 

related to the protection or promotion of 

public policy objectives set out in’’ title 

39. Id. 

Since Docket No. ACR2013, the 

Commission has evaluated whether the 

Postal Service met its performance goals 

in reports separate from the Annual 

Compliance Determination.2 The 

Commission continues this current 

practice to provide a more in-depth 

analysis of the Postal Service’s progress 

toward meetings its performance goals 

and plans to improve performance in 

future years. To facilitate this review, 

the Commission invites public comment 

on the following issues: 

• Did the Postal Service meet its 

performance goals in FY 2017? 

• Do the FY 2017 Report and the FY 

2018 Plan meet applicable statutory 

requirements, including 39 U.S.C. 2803 

and 2804? 

• What recommendations should the 

Commission provide to the Postal 

Service that relate to protecting or 

promoting public policy objectives in 

title 39? 

• What recommendations or 

observations should the Commission 

make concerning the Postal Service’s 

strategic initiatives? 3

• What other matters are relevant to 

the Commission’s analysis of the FY 

2017 Report and the FY 2018 Plan 

under 39 U.S.C. 3653(d)? 

II. Request for Comments 

Comments by interested persons are 

due no later than February 8, 2018. 

Reply comments are due no later than 

February 22, 2018. Pursuant to 39 U.S.C. 

505, Katalin K. Clendenin is appointed 

to serve as Public Representative to 

represent the interests of the general 

public in this proceeding with respect to 

issues related to the Commission’s 

analysis of the FY 2017 Report and the 

FY 2018 Plan. 

III. Ordering Paragraphs 

It is ordered: 

1. The Commission invites public 

comment on the Postal Service’s FY 

2017 Report and FY 2018 Plan. 

2. Pursuant to 39 U.S.C. 505, the 

Commission appoints Katalin K. 

Clendenin to serve as Public 

Representative to represent the interests 

of the general public in this proceeding 

with respect to issues related to the 

Commission’s analysis of the FY 2017 

Report and the FY 2018 Plan. 

3. Comments are due no later than 

February 8, 2018. 

4. Reply comments are due no later 

than February 22, 2018. 

5. The Secretary shall arrange for 

publication of this order in the Federal 

Register. 

By the Commission. 

Stacy L. Ruble, 

Secretary. 

[FR Doc. 2018–00165 Filed 1–8–18; 8:45 am] 

BILLING CODE 7710–FW–P 

RAILROAD RETIREMENT BOARD 

Sunshine Act; Notice of Public Meeting 

Notice is hereby given that the 

Railroad Retirement Board will hold a 

meeting on January 24, 2018, 10:00 a.m. 

at the Board’s meeting room on the 8th 

floor of its headquarters building, 844 

North Rush Street, Chicago, Illinois, 

60611. The agenda for this meeting 

follows: 

Portion open to the public: 

(1) Executive Committee Reports 

The person to contact for more 

information is Martha P. Rico, Secretary 

to the Board, Phone No. 312–751–4920. 

For the Board. 

Dated: January 5, 2018. 

Martha P. Rico, 

Secretary to the Board. 

[FR Doc. 2018–00254 Filed 1–5–18; 4:15 pm] 

BILLING CODE 7905–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82434; File No. SR–DTC– 

2017–024] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of Proposed Rule Change To 

Amend Procedures in the DTC 

Settlement Service Guide Relating to 

the Intra-Month Collection of Required 

Participants Fund Deposits 

January 3, 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 December 

22, 2017, 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. 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 of DTC is 

annexed hereto as Exhibit 5.3 The 

proposed rule change would amend the 

Procedures, set forth in the Settlement 

Guide, relating to the amount a 

Participant is required to Deposit to the 

Participants Fund to satisfy a deficiency 

in its Required Participants Fund 

Deposit (‘‘Deficiency’’),4 as a result of an 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Notices 1047 

which is proposed to be amended hereby, sets forth 

Procedures for the calculation and payment of the 

Required Participants Fund Deposit. See Settlement 

Guide, supra note 3 at 47–50. Procedures, in this 

context, pursuant to Section 1 of Rule 1, means ‘‘the 

Procedures, service guides, and regulations of DTC 

adopted pursuant to Rule 27, as amended from time 

to time.’’ Rule 1, Section 1, supra note 3. The 

Settlement Guide constitutes Procedures of DTC, as 

defined in the Rules. See Settlement Guide, supra 

note 3 at 1. 

5The term ‘‘Business Day’’ means any day on 

which DTC is open for business. Rule 1, Section 1, 

supra note 3. 

6See Settlement Guide, supra note 3 at 50–51 

(describing this methodology). 

7The term ‘‘Watch List’’ means, at any time and 

from time to time, the list of Participants whose 

credit ratings derived from the Credit Risk Rating 

Matrix are 5, 6 or 7, as well as Participants that, 

based on the Corporation’s consideration of relevant 

factors, including those set forth in Section 10 of 

Rule 2, are deemed by the Corporation to pose a 

heightened risk to the Corporation and its 

Participants. Rule 1, Section 1, supra note 3. Rule 

1 states: ‘‘The term ‘‘Credit Risk Rating Matrix’’ 

means a matrix of credit ratings of Participants 

specified in Section 10(a) of Rule 2. The matrix is 

developed by the Corporation to evaluate the credit 

risk such Participants pose to the Corporation and 

its Participants and is based on factors determined 

to be relevant by the Corporation from time to time, 

which factors are designed to collectively reflect the 

financial and operational condition of a Participant. 

These factors include (i) quantitative factors, such 

as capital, assets, earnings, and liquidity, and (ii) 

qualitative factors, such as management quality, 

market position/environment, and capital and 

liquidity risk management.’’ Id. 

8Pursuant to the Settlement Guide, if there is a 

significant increase to the Participant’s Required 

Participants Fund Deposit as calculated on an intramonth Business Day, such that the increase meets 

a certain threshold amount (‘‘Standard Threshold’’), 

the Participant is required to Deposit the difference 

between its Actual Participants Fund Deposit and 

its Required Participants Fund Deposit. See 

Settlement Guide, supra note 3 at 50–51. 

9 Deposit, in this context, pursuant to Section 1 

of Rule 1, means causing the appropriate amount 

in cash to be paid to DTC for credit to the 

Participants Fund pursuant to Section 1 of Rule 4. 

Rule 1, Section 1, supra note 3. 

10See Id. 

11The DTC net settlement system and the Rules 

are structured so that the net settlement obligation 

of a Participant (its Net Debit Balance) is limited by 

its Net Debit Cap. See Settlement Guide, supra note 

3 at 65. The maximum Net Debit Cap of any 

Participant is $1.8 BN and the maximum Net Debit 

Cap for an Affiliated Family of Participants is $2.85 

BN. See Settlement Guide, supra note 3 at 65–66. 

These limits are determined based on liquidity 

resources available to DTC in the cash Participants 

Fund or under a committed line of credit from a 

syndicate of commercial lenders for $1.9 BN (‘‘Line 

of Credit’’). Id. 

12Settlement Guide, supra note 3 at 47–50. 

13Rule 4, Section 3, supra note 3. The term 

‘‘Voluntary Participants Fund Deposit’’ of a 

Participant means, any amount the Participant has 

Deposited to the Participants Fund in excess of its 

Required Participants Fund Deposit. Rule 1, Section 

1, supra note 3. 

14Settlement Guide, supra note 3 at 47–50. 

15 Id. 

16 Id. 

17See Rule 4, supra note 3. See also Settlement 

Guide, supra note 3 at 47–50. 

18Rule 4, Section 1, supra note 3. 

19See Settlement Guide, supra note 3 at 50–51. 

increase in its Required Participants 

Fund Deposit calculated on an intramonth basis, i.e., on a Business Day 5

other than the last Business Day of a 

month, as described below. Specifically, 

the proposed rule change would codify 

in the Settlement Guide the practice 

currently followed by DTC, to determine 

the ‘‘Reference Amount’’ (as defined 

below) used by DTC, in conjunction 

with the existing methodology that 

determines whether a Participant must 

Deposit an additional amount to the 

Participants Fund to satisfy a Deficiency 

that occurs intra-month.6 In addition, 

the proposed rule change would codify 

a practice used by DTC relating to 

calculating a threshold amount, for any 

intra-month increase in the Required 

Participants Fund Deposit for a 

Participant that has been placed on the 

Watch List 7 (‘‘Watch List Threshold’’), 

to determine whether the Participant 

must Deposit an additional amount to 

the Participants Fund to satisfy a 

Deficiency that occurs intra-month. The 

proposed rule change would provide 

that the Watch List Threshold would be 

lower than the Standard Threshold (as 

defined below).8 The proposed rule 

change would also include technical 

and clarifying changes to the text of the 

Settlement Guide (a) for enhanced 

readability, (b) to make grammatical 

corrections, and (c) to add new section 

headings, as discussed 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 Procedures set forth in the 

Settlement Guide relating to the amount 

a Participant is required to Deposit 9 to 

the Participants Fund to satisfy a 

Deficiency, due to an increase to its 

Required Participants Fund Deposit, as 

calculated on an intra-month basis, as 

described below.10 Specifically, the 

proposed rule change would codify the 

practices currently followed by DTC 

with respect to (i) determining the 

Reference Amount for a Participant (as 

described below) and (ii) the application 

of the Watch List Threshold, as 

described below. The proposed rule 

change would also include technical 

and clarifying changes to the text of the 

Settlement Guide (a) for enhanced 

readability, (b) to make grammatical 

corrections, and (c) to add new section 

headings, as discussed below. 

Background 

DTC maintains a cash Participants 

Fund in an aggregate amount based on 

maintaining liquidity resources 

sufficient to complete net settlement 

among non-defaulting Participants if a 

Participant, or Affiliated Family of 

Participants, with the largest net 

settlement obligation failed to settle.11

The Settlement Guide describes the 

methodology for the calculation and 

procedures for payment of Required 

Participants Fund Deposits.12 The 

aggregate Required Participants Fund 

Deposits must equal $1.15 billion (BN); 

however, Participants may make 

Voluntary Participants Fund Deposits to 

support their activity.13 The minimum 

Required Participants Fund Deposit for 

each Participant is $7,500.14 The 

Required Participants Fund Deposit for 

each Participant is calculated based on 

a 60 business-day rolling average (‘‘60- 

day Rolling Average’’) of the 

Participant’s highest intra-day Net Debit 

Balance peaks, to allocate ratably the 

first $450 million (‘‘MM’’) of the 

aggregate Participants Fund.15 An 

additional algorithm proportionally 

allocates an additional $700 MM among 

Participants whose Affiliated Family’s 

Net Debit Caps exceed $2.15 BN.16 If a 

Participant defaults, its Actual 

Participants Fund Deposit (the Required 

Participants Fund Deposit plus its 

Voluntary Participants Fund Deposit) 

may be applied to satisfy any liability or 

loss due to its default, including 

liquidity to complete settlement.17

The Required Participants Fund 

Deposit of each Participant is calculated 

on a daily basis.18 As the calculation of 

the Required Participants Fund Deposit 

of a Participant takes into account the 

60-day Rolling Average, however, the 

Required Participants Fund Deposit 

remains stable and does not undergo 

material change from day-to-day. 

Therefore, the Settlement Guide only 

requires collection of the full amount of 

any Deficiency on a monthly basis 

unless an increase to its Required 

Participants Fund Deposit as calculated 

intra-month exceeds the Standard 

Threshold.19 In this regard, a Participant 


sradovich on DSK3GMQ082PROD with NOTICES
1048 Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Notices 

20See Id. 

21See Id. 

22See Id. 

23Rule 9(A), Section 2, supra note 3. See also 

Settlement Guide, supra note 1 at 50 (describing 

adjustments that may be made pursuant to Rule 

9(A). 

24Rule 9(A), Section 2, supra note 3. 

25 Infra note 30. 

26 Infra note 29. 

27See Securities Exchange Act Release No. 80734 

(May 19, 2017), 82 FR 24177 (May 25, 2017) (SR– 

DTC–2017–002) 

28See Id. 

29Rule 2, Section 10, supra note 3. Section 10 of 

Rule 2 states: ‘‘A Participant being subject to 

enhanced surveillance or being placed on the 

Watch List shall result in more thorough monitoring 

of the Participant’s financial condition and/or 

operational capability, which could include, for 

example, on-site visits or additional due diligence 

information requests from the Corporation. In 

addition, the Corporation may require a Participant 

placed on the Watch List and/or subject to 

enhanced surveillance to make more frequent 

financial disclosures, including, without limitation, 

interim and/or pro forma reports. Participants that 

are subject to enhanced surveillance are also 

reported to the Corporation’s management 

committees and regularly reviewed by a crossfunctional team comprised of senior management of 

the Corporation. The Corporation may also take 

such additional actions with regard to any 

Participant (including a Participant placed on the 

Watch List and/or subject to enhanced surveillance) 

as are permitted by the Rules and Procedures.’’ Id. 

30Rule 9(A), Section 2, supra note 3. 

31Any such additional amount shall be part of the 

Required Participants Fund Deposit of the 

Participant. See Rule 4, Section 1(a), supra note 3. 

32See Settlement Guide, supra note 3 at 50. 

must satisfy any Deficiency as 

calculated on the last Business Day of a 

month. 

Pursuant to the Settlement Guide, if 

there is a significant increase to the 

Participant’s Required Participants 

Fund Deposit as calculated on an intramonth Business Day, such that the 

increase meets the Standard Threshold, 

the Participant is required to Deposit the 

difference between its Actual 

Participants Fund Deposit and its 

Required Participants Fund Deposit.20

The Standard Threshold is met when 

the difference between the Participant’s 

Required Participants Fund Deposit and 

the Reference Amount (a) equals or 

exceeds $500,000 and (b) represents a 

percentage increase of 25 percent or 

more over the Reference Amount.21

Proposed Rule Changes 

As mentioned above, the proposed 

rule change would amend the 

Procedures set forth in the Settlement 

Guide relating to the amount a 

Participant is required to Deposit to the 

Participants Fund to satisfy a 

Deficiency, due to an increase to its 

Required Participants Fund Deposit, as 

calculated on an intra-month basis.22

Specifically, as mentioned above, the 

proposed rule change would codify the 

practices currently followed by DTC 

with respect to (i) determining the 

Reference Amount for a Participant (as 

described below) and (ii) the application 

of the Watch List Threshold, as 

described below. The proposed rule 

change would also include technical 

and clarifying changes to the text of the 

Settlement Guide (a) for enhanced 

readability, (b) to make grammatical 

corrections, and (c) to add new section 

headings, as discussed below. 

Proposed Clarification of Reference 

Amount 

The Settlement Guide does not 

specify the Reference Amount used for 

the purpose of determining the Standard 

Threshold. In practice, DTC designates 

the Reference Amount for a Participant 

to be the Participant’s Required 

Participants Fund Deposit relating to the 

most recent event that required the 

Participant to Deposit an additional 

amount to the Participants Fund. This 

would be the most recent occurrence, as 

it relates to the Participant, of (a) a 

month-end calculation, (b) an intramonth calculation that meets the 

Standard Threshold resulting in a 

collection of a Deficiency, or (c) an 

adjustment to the Participant’s Required 

Participants Fund Deposit pursuant to 

Rule 9(A),23 as described below. 

Pursuant to the proposed rule change, 

DTC would codify this practice, and 

would update it to take into account 

increases that a Participant would be 

required to Deposit because of an 

increase in its Required Participants 

Fund Deposit that meets the Watch List 

Threshold, as described below. In this 

regard, the proposed rule change would 

amend the Settlement Guide to state 

that the Reference Amount for the 

determination of the Standard 

Threshold and the Watch List Threshold 

for a Participant, on a given intra-month 

Business Day, would equal the 

Participant’s Required Participants 

Fund Deposit as previously calculated 

on the latter of: 

(a) The last Business Day of the prior 

month; 

(b) the most recent intra-month 

Business Day (prior to the then current 

Business Day), when the amount 

resulting from daily calculation of the 

Participant’s Required Participants 

Fund Deposit met or exceeded either the 

Standard Threshold or the Watch List 

Threshold and a deficit collection was 

effectuated pursuant to the intra-month 

collection procedures specified in the 

Settlement Guide; or 

(c) the most recent intra-month 

Business Day (prior to the then current 

Business Day) when DTC effected an 

adjustment to the Participant’s Required 

Participants Fund Deposit pursuant to 

Rule 9(A).24

Proposed Watch List Threshold 

Pursuant to the Rules and Settlement 

Guide, DTC maintains the ability to seek 

additional assurances 25 and tools 

allowing it to conduct enhanced 

surveillance 26 of Participants that 

present heighted risk to DTC. 

In this regard, DTC uses the Credit 

Risk Rating Matrix, the Watch List and 

the enhanced surveillance to manage 

and monitor default risks of Participants 

on an ongoing basis.27 The level and 

frequency of such monitoring for a 

Participant is determined by the 

Participant’s risk of default as assessed 

by DTC.28 Participants that are deemed 

by DTC to pose a heightened risk to DTC 

and its Participants are subject to, 

among other things, closer and more 

frequent monitoring and enhanced 

reporting requirements.29

In addition to the above, pursuant to 

Rule 9(A), if DTC becomes concerned 

with a Participant’s operational or 

financial soundness, DTC may require 

adequate assurances of financial or 

operational capacity from the 

Participant, as a risk mitigant,30

including requiring the Participant to 

Deposit an additional amount to the 

Participants Fund.31 Any additional 

requirements are designed to provide 

appropriate incentives to affected 

Participant(s) to address the underlying 

condition or activity. 

In determining whether it is 

appropriate to require a Participant to 

Deposit an additional amount to the 

Participants Fund for a Participant, DTC 

takes into account credit, market, 

operational or other concerns regarding 

the Participant. Typically, the following 

factors may be considered, including: (i) 

The Participant’s liquidity 

arrangements; (ii) the Participant’s 

overall financial condition; (iii) 

published news or reports and/or 

regulatory observations relating to the 

Participant; and (iv) the Participant’s 

internal credit rating, if any.32

As a further mitigant of risks 

presented by Participants that present 

heightened risk to DTC, and in light of 

the fact that a Participant’s internal 

credit rating is a contributing factor to 

both DTC’s determination to add a 

Participant to the Watch List and/or 

make an adjustment with respect to the 

Participant’s Required Participants 

Required Participants Fund Deposit, the 

proposed rule change would amend the 

Settlement Guide to add the Watch List 

Threshold. 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Notices 1049 

33 15 U.S.C. 78q–1(b)(3)(F). 

34 17 CFR 240.17Ad–22(e)(23)(ii). 35 DTC is a ‘‘covered clearing agency’’ as defined 

by new Rule 17Ad–22(a)(5) and must comply with 

subsection (e) of Rule 17Ad–22. See Securities 

Exchange Act Release No. 78961 (September 28, 

2016), 81 FR 70786 (October 13, 2016) (S7–03–14). 

36 15 U.S.C. 78q–1(b)(3)(I). 

37See Settlement Guide at 50 (stating that a 

Participant’s internal credit rating is a factor DTC 

may take into consideration in determining whether 

to increase the Participant’s Required Participants 

Fund Deposit, pursuant to Rule 9(A), cited above). 

38Supra note 36. 

As mentioned above, the proposed 

rule change relating to the Watch List 

Threshold would reflect criteria DTC 

currently uses in practice for 

Participants that have been placed on 

the Watch List, to determine whether a 

Participant that has been placed on the 

Watch List must Deposit additional 

amount to the Participants Fund to 

satisfy a Deficiency. The Watch List 

Threshold is lower than the Standard 

Threshold and, when met, would 

require the Participant to Deposit the 

full amount of any Deficiency. The 

proposed rule change would add text to 

the Settlement Guide stating that the 

Watch List Threshold would apply to a 

Participant if its Required Participants 

Fund Deposit increases and the 

difference between the Required 

Participants Fund Deposit and the 

Reference Amount equals or is greater 

than 10 percent of the Reference 

Amount. 

Technical and Clarifying Changes 

The proposed rule change would also 

include technical and clarifying changes 

to the text of the ‘‘Settlement of 

Participants Fund Deposits’’ section of 

the Settlement Guide: 

(a) To revise and re-order existing text 

for enhanced readability and flow of 

content; 

(b) to add subheadings with respect to 

provisions relating to (i) settlement of 

Required Participants Fund Deposits 

calculated at the end of a month, (ii) 

collection of Required Participants Fund 

Deposits calculated on an intra-month 

basis, (iii) return of any amount by 

which a Participant’s Actual 

Participants Fund Deposit exceeds its 

Required Participants Fund Deposit; 

(c) to revise informal references to 

terms already defined in the Rules to 

use the actual defined terms, as 

applicable, including changing 

references from (i) ‘‘requirement’’ to 

‘‘Required Participants Fund Deposit, 

(ii) referring informally to a Participant’s 

‘‘deposit’’ to ‘‘Actual Participants Fund 

Deposit’’ and (iii) ‘‘business day’’ to 

‘‘Business Day’’; and 

(d) to make grammatical corrections. 

Implementation Timeframe 

The proposed rule change would be 

effective upon approval of the proposed 

rule change by the Commission. 

2. Statutory Basis 

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

Exchange Act of 1934, as amended 

(‘‘Act’’) 33 requires, inter alia, that the 

Rules promote the prompt and accurate 

clearance and settlement of securities 

transactions. DTC believes that the 

proposed rule changes are consistent 

with this provision because they would 

(i) add provisions in the Settlement 

Guide that provide for, among other 

things, the criteria currently used by 

DTC to determine whether a Participant 

must increase the amount of its Actual 

Participants Fund Deposit on an intramonth basis, and (ii) include technical 

and clarifying changes to the text of the 

Settlement Guide (a) for enhanced 

readability, (b) to make grammatical 

corrections and (c) to add new section 

headings, as discussed above. In this 

regard, the proposed changes would 

enhance the transparency and clarity of 

the applicable provisions of the 

Settlement Guide, which would 

facilitate stakeholders’ ability to 

understand DTC’s criteria the 

determination of whether a Participant 

would be required to make an 

additional Deposit to the Participants 

Fund based on the intra-month 

calculation of its Required Participants 

Fund Deposit. As mentioned above, the 

Participants Fund provides DTC with 

the liquidity to complete end-of-day 

settlement notwithstanding the failure 

to settle of the Participant or Affiliated 

Family of Participants with the largest 

settlement obligation. Therefore, by 

providing stakeholders with enhanced 

transparency with regard to the criteria 

and related Procedures related to 

whether a Participant must Deposit 

additional amounts to satisfy a 

Deficiency, 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. 

The proposed rule change is also 

designed to be consistent with Rule 

17Ad–22(e)(23)(ii) of the Act.34 Rule 

17Ad–22(e)(ii) requires DTC, inter alia, 

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 and material costs they incur by 

participating in the covered clearing 

agency.35 As discussed above, the 

proposed rule change would (i) provide 

greater transparency in the Settlement 

Guide with respect to, the methodology 

used by DTC to determine whether a 

Participant must Deposit an additional 

amount to the Participants Fund based 

on an intra-month calculation of its 

Required Participants Fund Deposit and 

(ii) make other clarifying changes for 

readability and grammatical changes to 

the text of the Settlement Guide in this 

regard. By providing for greater 

transparency and clarity in this regard, 

DTC believes that the proposed rule 

change is consistent with Rule 17Ad– 

22(e)(23)(ii), cited above. 

(B) Clearing Agency’s Statement on 

Burden on Competition 

DTC does not believe that the 

proposed rule change to add provisions 

to the Settlement Guide relating to the 

Watch List Threshold, as discussed 

above, would impact competition.36 The 

proposed rule change codifies a 

procedure that is consistent with the 

existing core concept relating to DTC’s 

authority to impose an adjustment on a 

Required Participants Fund Deposit on 

a Participant because of its internal 

credit rating,37 i.e., relating to Credit 

Risk Rating Matrix, which determines a 

Participant’s placement on the Watch 

List, as described above. Based on the 

foregoing, DTC believes that the 

proposed rule change relating to 

addition of provisions to the Settlement 

Guide relating to the Watch List 

Threshold would not have any impact 

on competition. 

DTC does not believe that the 

proposed rule change to codify in the 

Settlement Guide the criteria DTC 

currently uses to determine the 

Reference Amount would impact 

competition.38 The proposed rule 

change consists of changes to the 

Settlement Guide that do not alter the 

methodology by which Required 

Participants Fund Deposits are 

calculated and collected. Based on the 

foregoing, DTC believes that the 

proposed rule change clarifying the 

criteria for determining the Reference 

Amount would not have any 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. 


sradovich on DSK3GMQ082PROD with NOTICES
1050 Federal Register / Vol. 83, No. 6 / Tuesday, January 9, 2018 / Notices 

39 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)(6)(iii). 

5See Securities Exchange Act Release No. 79585 

(December 16, 2016), 81 FR 93988 (December 22, 

2016) (SR–BatsBZX–2016–68; SR–BatsBYX–2016– 

29; SR–BatsEDGA–2016–24; SR–BatsEDGX–2016– 

60). The Exchange notes that BYX and EDGA are 

also affiliated exchanges but do not operate options 

platforms and thus the integration described in this 

proposal is inapplicable to such exchanges. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self- regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

The proposal shall not take effect 

until all regulatory actions required 

with respect to the proposal are 

completed. 

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–2017–024 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–2017–024. 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– 

2017–024 and should be submitted on 

or before January 30, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.39

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00159 Filed 1–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82436; File No. SR– 

CboeBZX–2017–022] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Adopt Risk 

Controls and Modify Rules 21.1, 21.10, 

and 21.17 in Connection With 

Technology Migration of Cboe 

Exchanges 

January 3, 2018. 

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, 2017, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. 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 filed a proposal to 

update Rule 21.1, Rule 21.10, and Rule 

21.17 to make modifications to the 

Exchange’s rules and functionality 

applicable to the Exchange’s options 

platform (‘‘BZX Options’’) in 

preparation for the technology migration 

of the Exchange’s affiliated options 

exchanges onto the same technology as 

the Exchange. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, 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 parts of such 

statements. 

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In 2016, the Exchange and its 

affiliates Cboe BYX Exchange, Inc. 

(‘‘BYX’’), Cboe EDGA Exchange, Inc. 

(‘‘EDGA’’), and Cboe EDGX Exchange, 

Inc. (‘‘EDGX’’) received approval to 

affect a merger (the ‘‘Merger’’) of the 

Exchange’s then-current indirect parent 

company, Bats Global Markets, Inc., 

with Cboe Global Markets f/k/a CBOE 

Holdings, Inc. (‘‘Cboe’’), the direct 

parent of Cboe Exchange, Inc. (‘‘Cboe 

Options’’) and Cboe C2 Exchange, Inc. 

(‘‘C2 Options’’, and together with the 

Exchange, EDGX, and Cboe Options the 

‘‘Cboe Affiliated Exchanges’’).5 The 

Cboe Affiliated Exchanges are working 

to align certain system functionality, 

retaining only intended differences 

between the Cboe Affiliated Exchanges, 


sradovich on DSK3GMQ082PROD with NOTICES