Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36807 

92 15 U.S.C. 78q–1(b)(3)(I). 93 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

participants clear guidelines with 

respect to such event to allow 

participants to understand their rights 

and obligations. Such changes have also 

been designed to apply uniformly to all 

Members and EPN Users in the event of 

a Major Event and should not affect 

FICC’s day-to-day operations under 

normal circumstances, or in the 

management of a typical Member or 

EPN User default scenario or nondefault event. 

Therefore, FICC does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act.92

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

FICC has not received or solicited any 

written comments relating to this 

proposal. FICC will notify the 

Commission of any written comments 

received by FICC. 

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. 

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– 

FICC–2021–004 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–FICC–2021–004. 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 FICC 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–FICC– 

2021–004 and should be submitted on 

or before August 3, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.93

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–14796 Filed 7–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92345; File No. SR– 

NASDAQ–2021–055] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

Listing Rule 5910 To Establish Entry 

and All-Inclusive Annual Listing Fees 

for Companies Listing Under IM–5101– 

2 on the Nasdaq Global Market 

July 7, 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 June 28, 

2021, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 to amend 

Listing Rule 5910 to establish Entry and 

All-Inclusive Annual Listing Fees for 

companies listing under IM–5101–2 

(companies whose business plan is to 

complete one or more acquisitions) on 

the Nasdaq Global Market. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, 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 aspects of such 

statements. 


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36808 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 

3Nasdaq Listing Rule 5310(i) provides that an 

Acquisition Company is not eligible to list on the 

Nasdaq Global Select Market. 

4Staff Statement on Accounting and Reporting 

Considerations for Warrants Issued by Special 

Purpose Acquisition Companies (SPACs), by John 

Coates, Acting Director of the Division of 

Corporation Finance, and Paul Munter, Acting 

Chief Accountant (April 12, 2021), available at: 

https://www.sec.gov/news/public-statement/ 

accounting-reporting-warrants-issued-spacs. 

5Nasdaq Rule 5405(b)(3) allows a company to list 

on the Nasdaq Global Market with no equity if it 

has a Market Value of Listed Securities of $75 

million and a Market Value of Unrestricted Publicly 

Held Shares of $20 million, along with satisfying 

price, publicly held shares, round lot holder and 

market maker requirements. See also Section 102.06 

of the NYSE Listed Company Manual. 

6Nasdaq would also add sub-paragraph 

numbering to Rule 5910(a)(1) to improve readability 

and move language about the deferral of the Entry 

Fee applicable to Acquisition Companies to new 

Rule 5910(a)(1)(B). 

7An Acquisition Company is offered certain 

services under IM–5900–8 following the public 

announcement that the company entered into a 

binding agreement for the business combination, 

however these services are available to Acquisition 

Companies listed on either the Nasdaq Global 

Market or the Nasdaq Capital Market. 

8This trading pattern will generally change once 

the Acquisition Company announces its business 

combination target. 9While Nasdaq has experienced few deficiencies 

recently, historically some Acquisition Companies 

became non-compliant with the holder 

requirement. See, e.g., Nasdaq Rule 5550(a)(3) 

(requiring at least 300 Public Holders for continued 

listing on the Nasdaq Capital Market). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Historically, companies whose 

business plan is to complete an initial 

public offering and engage in a merger 

or acquisition with one or more 

unidentified companies within a 

specific period of time, as described in 

IM–5101–2, (‘‘Acquisition Companies’’) 

would choose to list on the Nasdaq 

Capital Market instead of the Nasdaq 

Global Market, primarily because it has 

lower fees. However, nothing in 

Nasdaq’s rules prohibits an Acquisition 

Company from listing on the Global 

Market.3 More recently, certain 

Acquisition Companies have sought to 

list on the Nasdaq Global Market. In 

particular, Nasdaq notes that a recent 

SEC statement about accounting 

treatment by Acquisition Companies 4

has resulted in some Acquisition 

Companies adopting different 

accounting practices and, as a result, 

having insufficient equity to qualify for 

initial listing on the Nasdaq Capital 

Market. However, these companies 

could list on the Nasdaq Global Market 

or on competing marketplaces, which 

permit listing without any minimum 

equity requirement.5 Nasdaq wishes to 

revise the fees for Acquisition 

Companies listing on the Nasdaq Global 

Market so that its fees for these 

companies seeking to list on that market 

tier will be competitive with other 

markets where they can list. 

As described below, Nasdaq believes 

that this fee change is appropriate 

because Acquisition Companies listed 

on the Nasdaq Global Market (‘‘Global 

Market Acquisition Companies’’) 

receive the same services as Acquisition 

Companies listed on the Nasdaq Capital 

Market (‘‘Capital Market Acquisition 

Companies’’). For example, Global 

Market Acquisition Companies are not 

eligible to receive services from Nasdaq 

under IM–5900–7, unlike other 

companies listing on the Nasdaq Global 

Market but like Capital Market 

Acquisition Companies. Moreover, 

Global Market Acquisition Companies 

require fewer regulatory resources than 

other companies listing on the Nasdaq 

Global Market and the same regulatory 

resources as Capital Market Acquisition 

Companies. Therefore, Nasdaq proposes 

to adopt Entry and All-Inclusive Annual 

Listing Fees for Global Market 

Acquisition Companies that are 

identical to the fees currently charged 

Capital Market Acquisition Companies. 

As proposed, Nasdaq would amend 

Rule 5910(a)(1) to include the following 

entry fee schedule applicable to Global 

Market Acquisition Companies, based 

on the number of shares outstanding: 

Up to 15 million shares outstanding, 

$50,000; over 15 million shares 

outstanding, $75,000. These are the 

same fees charged Capital Market 

Acquisition Companies under Rule 

5920(a)(1).6

In addition, Nasdaq would amend 

Rule 5910(b)(2) to include the following 

All-Inclusive Annual Fee schedule 

applicable to Global Market Acquisition 

Companies, based on the number of 

shares outstanding: Up to 10 million 

shares outstanding, $44,000; between 

10,000,001 and 50 million shares 

outstanding, $58,000; over 50 million 

shares outstanding, $79,000. These are 

the same fees charged Capital Market 

Acquisition Companies under Rule 

5920(b)(2)(A). 

The proposed Entry Fee and AllInclusive Annual Fee would be lower 

than the fees applicable to other 

companies listing on the Nasdaq Global 

Market. However, Nasdaq notes that 

Acquisition Companies differ in some 

important respects from traditional 

operating companies and believes that 

these differences make it reasonable to 

adopt separate fee schedules for 

Acquisition Companies. 

An Acquisition Company, when it 

first lists under IM–5101–2, will only be 

listed for a brief period of time while 

looking to complete a business 

combination. Under IM–5101–2, an 

Acquisition Company must complete a 

business combination within three 

years, although the governing 

documents of many Acquisition 

Companies require the business 

combination occur in a shorter time. If 

the Acquisition Company does not 

complete a business combination it 

must return the funds held in trust to 

the company’s shareholders and 

dissolve the company. Accordingly, 

Acquisition Companies must assess the 

economic value of a listing on the basis 

of a potentially very brief period of 

listing. Given the much shorter average 

length of an Acquisition Company’s 

listing, Nasdaq believes it is reasonable 

to charge Acquisition Companies listed 

on the Nasdaq Global Market lower 

Entry Fees than operating companies. 

Further, upon first listing, Acquisition 

Companies are not eligible to receive 

services from Nasdaq under IM–5900–7, 

unlike other companies listing on the 

Nasdaq Global Market, and therefore 

Nasdaq believes that it is reasonable to 

charge Acquisition Companies that list 

on the Nasdaq Global Market lower 

Entry Fees than operating companies.7

While Acquisition Companies are 

searching for a target to complete a 

business combination Nasdaq has 

observed that their shares typically 

trade less frequently than comparable 

operating companies.8 Accordingly, 

they are less reliant on the Exchange’s 

trading platform and need less support 

from the Nasdaq Market Intelligence 

Desk and require fewer regulatory 

resources to monitor trading. In 

addition, in Nasdaq’s experience their 

periodic filings tend to be simpler than 

those of operating companies, they issue 

fewer press releases prior to announcing 

their business combination, and their 

prices generally remain stable resulting 

in very few deficiencies related to their 

price or market value measures, all of 

which also leads to their requiring fewer 

regulatory resources.9 Accordingly, 

Nasdaq believes that it is reasonable to 

charge Acquisition Companies listed on 

the Nasdaq Global Market lower AllInclusive Annual Fees than operating 

companies. 

Nasdaq does not expect the financial 

impact of this proposal to be material in 

terms of the level of listing fees 

collected from issuers. Specifically, 

Nasdaq notes that without the proposed 

fee changes, many of the Acquisition 

Companies that do not qualify for the 

Nasdaq Capital Market would list on a 

market with lower listing fees instead of 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36809 

10Nasdaq notes that its All-Inclusive Annual Fee 

is assessed on January 1 of each year and neither 

the Acquisition Company nor the post-business 

combination entity would pay any additional fees 

in the year of the business combination 

(irrespective of the form or structure of that 

combination). However, the post-business 

combination would begin paying the higher Annual 

Fee as of January 1 of the following year. 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4) and (5). 

13 15 U.S.C. 78f(b)(4). 

14See Section 902.11 of the NYSE Listed 

Company Manual, imposing a flat $85,000 Listing 

Fee for an Acquisition Company and providing a 

limit of $85,000 on annual fees payable by an 

Acquisition Company. Under NYSE Listing Rules, 

a SPAC can list without regard to the amount of its 

stockholders’ equity. 

15 Id. 

16 15 U.S.C. 78s(b)(3)(A)(ii). 

on Nasdaq, in which case Nasdaq would 

not collect any fees. Moreover, once an 

Acquisition Company completes a 

business combination it would be 

subject to the higher fee schedule 

applicable to operating companies.10

Accordingly, the Exchange believes that 

the proposed rule change will not 

impact the Exchange’s resource 

commitment to its regulatory oversight 

of the listing process or its regulatory 

programs. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,11 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,12 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

As a preliminary matter, Nasdaq 

competes for listings with other national 

securities exchanges and companies can 

easily choose to list on, or transfer to, 

those alternative venues. As a result, the 

fees Nasdaq can charge listed companies 

are constrained by the fees charged by 

its competitors and Nasdaq cannot 

charge prices in a manner that would be 

unreasonable, inequitable, or unfairly 

discriminatory. 

The proposed fees are being 

implemented to avoid charging a higher 

fee to an Acquisition Company that is 

unable to list on the Nasdaq Capital 

Market but is able to list on the Nasdaq 

Global Market due to insufficient 

shareholders’ equity and to enable 

Nasdaq to compete with other markets 

that can list such Acquisition 

Companies. Nasdaq believes it is 

equitable under Section 6(b)(4) of the 

Act 13 to charge Global Market 

Acquisition Companies the same fees as 

Capital Market Acquisition Companies 

given that they are treated the same 

regardless of whether they are listed on 

the Global or Capital Market. For 

example, as described below, neither is 

eligible to receive services upon first 

listing, each receive identical services 

from Nasdaq upon announcing a 

business combination and each uses 

similar regulatory resources. 

Moreover, the Exchange believes that 

the proposal is not unfairly 

discriminatory, because Acquisition 

Companies are shell companies with no 

business operations, and, while 

searching for a target, their shares trade 

less frequently on the Exchange than 

operating companies. In Nasdaq’s 

experience, Acquisition Companies are 

less reliant on the Exchange’s trading 

platform and need less support from the 

Nasdaq Market Intelligence Desk and 

require fewer regulatory resources to 

monitor trading. In addition, in 

Nasdaq’s experience, their periodic 

filings tend to be simpler than those of 

operating companies, they issue fewer 

press releases prior to announcing their 

business combination, and their prices 

generally remain stable resulting in very 

few deficiencies related to their price or 

market value measures, all of which also 

leads to their requiring fewer regulatory 

resources. Further, Acquisition 

Companies are not eligible to receive 

services from Nasdaq under IM–5900–7, 

unlike other companies listing on the 

Nasdaq Global Market. While an 

Acquisition Company is offered certain 

services under IM–5900–8 following the 

public announcement that the company 

entered into a binding agreement for the 

business combination, these services are 

available to Acquisition Companies 

listed on either the Nasdaq Global 

Market or the Nasdaq Capital Market. 

Therefore, Nasdaq believes that it is 

appropriate, and not unfairly 

discriminatory, to charge lower fees to 

Global Market Acquisition Companies 

than are charged to operating companies 

listed on the Nasdaq Global Market. 

Finally, Nasdaq competes for listings 

with the New York Stock Exchange, 

which has adopted lower fees for 

Acquisition Companies than for 

operating companies 14 and can list 

certain Acquisition Companies that 

have insufficient shareholders’ equity to 

list on the Nasdaq Capital Market, but 

can list on the Nasdaq Global Market. 

Nasdaq believes that this competition is 

a non-discriminatory reason to reduce 

the fees for Acquisition Companies 

seeking to list on the Nasdaq Global 

Market. 

For the foregoing reasons, the 

Exchange believes that the proposal is 

consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The proposed new fee schedule will 

be available to all similarly situated 

issuers on the same basis. The Exchange 

does not believe that the proposed fees 

will have any meaningful effect on the 

competition among issuers listed on the 

Exchange. 

The Exchange operates in a highly 

competitive market in which issuers can 

readily choose to list new securities on 

other exchanges and transfer listings to 

other exchanges if they deem fee levels 

at those other venues to be more 

favorable. Because competitors are free 

to modify their own fees in response, 

and because issuers may change their 

listing venue, the Exchange does not 

believe its proposed fee change can 

impose any burden on intermarket 

competition. Nasdaq notes that the New 

York Stock Exchange is its primary 

competitor for listing Acquisition 

Companies and that market has already 

adopted a lower fee for Acquisition 

Companies than for operating 

companies.15

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or 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)(ii) of the Act.16

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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 


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36810 Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 

17 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)(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’’) and the Guide, available at http://

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

6ATOP is a DTC program through which 

Participant instructions are transmitted to the agent 

for an ATOP offers and through which a participant 

can tender its securities to the agent’s account at 

DTC. 

7 DTC anticipates implementing Automated 

Instruction Messaging for Automated Subscription 

Offer Program (‘‘ASOP’’)-eligible offers by Q1 2022. 

8PTS (Participant Terminal System) and PBS 

(Participant Browser System) are user interfaces for 

DTC settlement and asset services functions. PTS is 

mainframe-based, and PBS is web-based with a 

mainframe back-end. Participants may use either 

PTS or PBS, as they are functionally equivalent. 

PTOP and Voluntary Tenders and Exchanges are 

functions of PTS and PBS, respectively, that are 

currently used by Participants to submit 

instructions, submit protects, submit cover of 

protects, submit cover of protects on behalf of 

another Participant, and submit withdrawals on 

various voluntary reorganization events. 

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– 

NASDAQ–2021–055 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–NASDAQ–2021–055. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2021–055 and 

should be submitted on or before 

August 3, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–14800 Filed 7–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92339; File No. SR–DTC– 

2021–010] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Reorganizations Service Guide 

July 7, 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 July 1, 

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 Rule 19b–4(f)(4) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change consists of 

changes to the Reorganizations Service 

Guide (the ‘‘Guide’’),5 as described in 

greater detail below. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the Guide to provide 

Participants with the option to submit 

instructions via Application Program 

Interface (‘‘API’’) and ISO 20022 realtime messaging (collectively, 

‘‘Automated Instruction Messaging’’) for 

Automated Tender Offer Program 

(‘‘ATOP’’) 6-eligible voluntary 

reorganizations offers (each, an ‘‘ATOP 

Offer’’).7 DTC is also proposing to 

amend the Guide to adjust and clarify 

DTC processing cut-off times for the 

submission of ATOP Offer instructions 

(‘‘DTC Cut-Off Time’’), and to make 

technical and ministerial changes to the 

Guide, as discussed more fully below. 

(i) Automated Instruction Messaging 

A. Background 

When an issuer or agent announces an 

ATOP Offer, it communicates the details 

of the offer to DTC, which announces 

the ATOP Offer to its Participants in 

accordance with the Guide and 

applicable Rules. Participants then relay 

the information to their clients, which, 

in turn, relay the information to their 

clients, and so forth, down to the 

investor level. For example, the ATOP 

Offer information flows from the issuer/ 

agent to DTC, DTC to Participant, 

Participant to Investor Manager client, 

Investment Manager to its investor 

clients. Each level of the chain solicits 

and compiles instructions from its 

clients and submits the instructions 

back up the chain, until the instructions 

reach the Participant level. Each 

Participant compiles and aggregates all 

instructions received from its clients 

and submits the instructions to DTC 

through the PTS PTOP or PBS 

Voluntary Tenders and Exchanges 

functions via nonautomated key entry.8

The whole process needs to be 

completed before the DTC Cut-Off Time 

for the ATOP Offer. 

There are certain potential risks and 

costs associated with manual 

processing, particularly in connection 

with voluntary reorganizations 


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