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[Federal Register Volume 89, Number 246 (Monday, December 23, 2024)]
[Notices]
[Pages 104579-104581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30528]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101946; File No. SR-DTC-2024-014]

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Modify the Clearing Agency Operational Risk Management Framework

December 17, 2024.
    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 11, 2024, 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

[[Page 104580]]

Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(4) thereunder.\4\ 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \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)(4).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change consists of amendments to the Clearing 
Agency Operational Risk Management Framework (``ORM Framework'' or 
``Framework'') of DTC and its affiliates National Securities Clearing 
Corporation (``NSCC'') and Fixed Income Clearing Corporation (``FICC,'' 
and together with NSCC and DTC, the ``Clearing Agencies'') in order to 
reflect recent changes to group names and make other nonmaterial 
clarifying edits.

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 Clearing Agencies adopted the ORM Framework \5\ to provide an 
outline for how each of the Clearing Agencies manages its operational 
risks. In this way, the Framework supports the Clearing Agencies' 
compliance with Rule 17ad-22(e)(17) under the Act,\6\ as described in 
the Initial Filing. In addition to setting forth the way each of the 
Clearing Agencies addresses these requirements, the ORM Framework also 
contains a section titled ``Framework Ownership and Change Management'' 
that, among other matters, describes the Framework ownership and the 
required governance process for review and approval of changes to the 
Framework.
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    \5\ See Securities Exchange Act Release No. 81745 (Sept. 28, 
2017), 82 FR 46332 (Oct. 4, 2017) (SR-DTC-2017-014; SR-NSCC-2017-
013; SR-FICC-2017-017) (``Initial Filing'').
    \6\ 17 CFR 240.17ad-22(e)(17).
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    In connection with the annual review and approval of the Framework 
by the Board of Directors of each of the Clearing Agencies, the 
Clearing Agencies are proposing to make certain revisions to the 
Framework. Such proposed changes would include updating the ORM 
Framework to reflect recent changes to group names and making other 
nonmaterial clarifying edits. The proposed changes are described in 
greater detail below.
i. Proposed Amendments To Update Organizational Name Changes
    The Framework is owned and managed by an officer within the 
Operational Risk group within the Group Chief Risk Office of DTCC,\7\ 
who works with the Technology Risk Management group within the Group 
Chief Risk Office in administration of the Framework. The Technology 
Risk Management group's name has changed to the Cyber Security & 
Technology Risk Management group. The proposed changes to the Framework 
would reflect the recent organizational name change.
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    \7\ The Depository Trust & Clearing Corporation (``DTCC'') is 
the parent company of the Clearing Agencies.
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ii. Proposed Changes To Make Nonmaterial Clarifying Edits
    The proposed rule change would make additional immaterial edits to 
the Framework that include (a) the removal of a defined term not used 
in the Framework and therefore unnecessary, and (b) adding additional 
context in Section 6 related to data centers. The proposed changes to 
Section 6 add context around data centers, specifically the out-of-
region centers, to allow for greater understanding of configurations, 
parameters, and limitations. This proposed change also provides 
consistency across the Clearing Agencies disclosures. These immaterial 
changes do not alter how the Clearing Agencies comply with the 
applicable requirements of Rule 17ad-22(e)(17) under the Act.\8\
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    \8\ 17 CFR 240.17ad-22(e)(17).
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2. Statutory Basis
    The Clearing Agencies believe that the proposed changes are 
consistent with Section 17A(b)(3)(F) of the Act \9\ for the reasons 
described below.
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    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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    Section 17A(b)(3)(F) of the Act requires, in part, that the rules 
of a registered clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions, and to 
assure the safeguarding of securities and funds which are in the 
custody or control of the clearing agency or for which it is 
responsible.\10\ The proposed changes to update the ORM Framework to 
reflect recent changes to group names and making other nonmaterial 
clarifying edits would update and clarify the Framework and would make 
it more comprehensive in how it describes the methods and tools 
currently used by the Clearing Agencies to manage operational risks and 
therefore comply with Section 17A(b)(3)(F) of the Act.\11\ By creating 
clearer, updated and more comprehensive descriptions, the Clearing 
Agencies believe the proposed changes would make the ORM Framework more 
effective in providing an overview of the important risk management 
activities described therein. Therefore, the Clearing Agencies believe 
that the proposed changes are consistent with the requirements of 
Section 17A(b)(3)(F) of the Act.\12\
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    \10\ Id.
    \11\ Id.
    \12\ Id.
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(B) Clearing Agency's Statement on Burden on Competition

    The Clearing Agencies do not believe that the proposed changes to 
the ORM Framework described above would have any impact, or impose any 
burden, on competition. The proposed changes would enhance the 
Framework by providing additional clarity and accuracy concerning the 
Clearing Agencies' operational risk management processes. The proposed 
changes to the Framework would not advantage or disadvantage any 
participant or user of the Clearing Agencies' services or unfairly 
inhibit access to the Clearing Agencies' services. As such, the 
Clearing Agencies do not believe that the proposed rule changes would 
have any impact on competition.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    The Clearing Agencies have not received or solicited any written 
comments relating to this proposal. If any written comments are 
received, they will be publicly filed as an Exhibit 2 to this filing, 
as required by Form 19b-4 and the General Instructions thereto.
    Persons submitting 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

[[Page 104581]]

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-submitcomments. 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 [email protected] or 202-
551-5777.
    The Clearing Agencies reserve 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) \13\ of the Act and paragraph (f) \14\ 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f).
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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 [email protected]. Please include 
File Number SR-DTC-2024-014 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-2024-014. 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 
(dtcc.com/legal/sec-rule-filings). 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-DTC-2024-014 and should be submitted on or before January 13, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-30528 Filed 12-20-24; 8:45 am]
BILLING CODE 8011-01-P
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