34726 Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices 

53% of the voting securities of NSP. Applicant 

further represents that, to ensure that the value of 

Investment Securities owned by Applicant is less 

than 40% of its total assets, Applicant will own at 

least 50% of the voting securities of any 

subsidiaries that it may form that are not 

themselves investment companies and are not 

relying on the exclusion from the definition of 

investment company set forth in Section 3(c)(1) or 

Section 3(c)(7) of the Act. 

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). 

5Capitalized terms not defined herein are defined 

in the Rules, By-Laws and Organization Certificate 

of DTC (the ‘‘Rules’’), available at www.dtcc.com/ 

∼/media/Files/Downloads/legal/rules/dtc_rules.pdf. 

6Available at http://www.dtcc.com/∼/media/ 

Files/Downloads/legal/fee-guides/ 

dtcfeeguide.pdf?la=en. 

7See Policy Statement, supra note 5. 

8See Rule 2, Section 1, supra note 5. 

9See Rule 2, Section 3, supra note 5. 

10See Fee Guide, supra note 6, at 16. 

11 Id. 

12See Rule 3 (setting forth qualifications for 

eligibility for Participants) and Section 3 of Rule 2 

(setting forth Persons/entity types that may become 

Pledgees), supra note 5. 

13See Rule 2, supra note 5. 

14See Rule 2 and the Policy Statement, supra 

note 5 (setting forth Required Documentation and 

other requirements that an Applicant must satisfy 

prior to DTC’s approval of the Applicant’s 

Application). 

15See Fee Guide, supra note 6, at 16. 

16See Securities Exchange Act Release No. 83544 

(June 28, 2018), 83 FR 31223 (July 3, 2018) (SR– 

DTC–2018–002). 

17The Portal is a closed website that allows 

Applicants to retrieve the Application forms and 

templates for the Required Documentation, and to 

submit their completed Application materials, 

including Required Documentation, to DTC. 

18See Fee Guide, supra note 6, at 16. 

19See Policy Statement, supra note 5. 

7. Applicant states that it is thus 

qualified for an order of the Commission 

pursuant to Section 8(f) of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12165 Filed 6–6–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95017; File No. SR–DTC– 

2022–005] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Eliminate 

Certain Fees Charged to Applicants 

June 1, 2022. 

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 May 24, 

2022, 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 5 consists of 

modifications to the (i) DTC Fee Guide 

(‘‘Fee Guide’’) 6 and (ii) Policy 

Statement on the Admission of 

Participants and Pledgees (‘‘Policy 

Statement’’),7 to eliminate certain fees 

charged to legal entities that formally 

make an application (‘‘Application’’) to 

DTC to become either a Participant 8

(each, a ‘‘Participant Applicant’’) or a 

Pledgee 9 (each, a ‘‘Pledgee Applicant’’) 

of DTC (Participant Applicants and 

Pledgee Applicants, referred to 

collectively as ‘‘Applicants’’). 

More specifically, the Fee Guide will 

be amended to remove a charge to (A) 

each Participant Applicant of $5,000 in 

connection with its Application to 

become a Participant 10 (‘‘Participant 

Application Fee’’), and (B) each Pledgee 

Applicant of $2,500 in connection with 

its Application to become a Pledgee 11

(‘‘Pledgee Application Fee’’) (Participant 

Application Fee and Pledgee 

Application Fee, collectively referred to 

as ‘‘Application Fees’’). The Policy 

Statement will be amended to remove 

text relating to the Application Fees. 

These proposed changes are 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 proposed rule change consists of 

modifications to the Fee Guide and 

Policy Statement to eliminate certain 

fees charged to Applicants. More 

specifically, the Fee Guide will be 

amended to remove the Application 

Fees. The Policy Statement will be 

amended to remove text relating to the 

Application Fees. These proposed 

changes are described in greater detail 

below. 

Background 

DTC may approve an Applicant that 

is eligible for admission as a Participant 

or Pledgee 12 only upon a determination 

by DTC that the Applicant meets 

reasonable standards of financial 

condition, operational capability and 

character at the time of its Application 

and on an ongoing basis thereafter.13 To 

facilitate DTC’s review of an 

Application so that DTC may determine 

whether the Applicant satisfies these 

standards, the Applicant must satisfy 

DTC’s Application requirements in form 

and substance satisfactory to DTC, 

including, but not limited to, required 

documentation (‘‘Required 

Documentation’’), in accordance with 

the Rules.14

DTC charges each Applicant the 

applicable Application Fee as 

established by the Fee Guide.15 The 

Application Fees were implemented to 

help offset expenses associated with the 

review of Applications.16 Payment of 

the full amount of the Application Fee 

is due as of the date DTC provides the 

Applicant with access to DTC’s online 

Application portal (‘‘Portal’’) 17 and 

related payment instructions.18 An 

Application Fee is non-refundable 19

regardless of the outcome of the 

respective Application (i.e., approval, 

disapproval or expiration). 

DTC’s clearing agency affiliates, 

National Securities Clearing Corporation 

(‘‘NSCC’’) and Fixed Income Clearing 

Corporation (‘‘FICC’’), follow similar 

membership application processes and 

require similar documentation from 

their respective applicants as described 

above for DTC. However, despite 

following similar membership 

application processes, DTC charges 

Application Fees, while NSCC and FICC 

do not. DTC believes harmonizing its 

practice with its affiliates’ practices 

would reduce inconsistency between 

the respective application processes and 

provide enhanced consistency relating 

to requirements for applicants, in 

particular where an entity applies to 


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Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices 34727 

20 In 2020, six Participant Applications were 

opened, with a total amount $30,000 in Application 

Fees billed. In 2021, eight Participant Applications 

were opened with a total amount of $40,000 in 

Application Fees billed. 

21 15 U.S.C. 78q–1(b)(3)(D). 

22See DTC Financial Statements as of and for the 

Years Ended December 31, 2021 and 2020, and 

Report of Independent Registered Accounting Firm, 

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

Downloads/legal/financials/2021/DTC-AnnualFinancial-Statements-2021-and-2020.pdf, at 3 

(providing DTC’s statement of income, which 

includes revenue and expenses for 2021 and 2020). 

23See DTC Disclosure Framework, available at 

https://www.dtcc.com/-/media/Files/Downloads/ 

legal/policy-and-compliance/DTC_Disclosure_

Framework.pdf, at 123 (providing a description of 

DTC’s formal budgeting process). 

24 15 U.S.C. 78q–1(b)(3)(D). 

25 15 U.S.C. 78s(b)(3)(A). 

26 17 CFR 240.19b–4(f). 

become a Participant of DTC and a 

member of NSCC and/or FICC. 

Additionally, DTC believes that the 

Application Fees are not necessary 

because the amount collected from them 

is immaterial.20 Therefore, the 

elimination of the Application Fees will 

not have a material effect on DTC’s 

overall recovery of costs and expenses 

associated with the application process, 

but it will help reduce costs for 

Applicants. 

Proposed Rule Change 

To effectuate this proposed rule 

change, DTC will discontinue charging 

Application Fees and remove the 

Application Fees from the Fee Guide. 

Further, DTC will delete a reference to 

Application Fees and the following 

paragraph from the beginning of Section 

3 of the Policy Statement: 

All applicants to become Participants 

or Pledgees must pay a non-refundable 

application fee as specified in the 

Procedures for each application made 

by the applicant to DTC to become a 

Participant or Pledgee. 

2. Statutory Basis 

Section 17A(b)(3)(D) of the Act 21

requires that the Rules provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

participants. DTC believes the proposed 

elimination of the fees is consistent with 

this requirement. As stated above, the 

amount of revenue collected on an 

annual basis by DTC through 

Application Fees is not material to its 

recovery of costs and expenses 

associated with the application process 

or to DTC’s annual revenue and 

expenses.22 Instead of charging the 

Application Fees to offset the costs to 

review Applications, DTC believes it 

would be more appropriate to absorb the 

costs as an operating expense through 

DTC’s internal budget process.23 This 

approach also would be more consistent 

with that of its affiliates NSCC and 

FICC, which follow similar membership 

application review processes but do not 

charge membership application fees, as 

noted above. 

For these reasons, DTC believes that 

the proposed rule change is consistent 

with Section 17A(b)(3)(D) because it 

will help provide for the equitable 

allocation of reasonable fees among its 

participants.24

(B) Clearing Agency’s Statement on 

Burden on Competition 

DTC believes that the proposed rule 

change could impact competition by 

promoting it. That is, by eliminating the 

Applications Fees, Applicants could 

redirect those financial resources to 

other purposes that could benefit their 

competitive position. 

(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, they would 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 

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 not to 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) 25 of the Act and paragraph 

(f) 26 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

DTC–2022–005 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–2022–005. 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 


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34728 Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Exchange Act Release No. 93215 (September 30, 

2021), 86 FR 55641 (October 6, 2021) (File No. SR– 

FINRA–2021–024) (‘‘Notice’’). 

4 Id. 

5See letter from Sarah Kwak, Associate General 

Counsel, Office of General Counsel, FINRA, to 

Daniel Fisher, Branch Chief, Office of Chief 

Counsel, Division of Trading and Markets, 

Commission, dated November 9, 2021. 

6See letter from Sarah Kwak, Associate General 

Counsel, Office of General Counsel, FINRA, to 

Vanessa Countryman, Secretary, Commission, dated 

January 4, 2022 (‘‘FINRA Response Letter’’); see 

also Exchange Act Release No. 93897, 87 FR 1201 

(January 10, 2022) (‘‘OIP and Amendment No. 1’’). 

7 15 U.S.C. 78s(b)(2)(B). 

8See OIP and Amendment No. 1. 

9FINRA Rule 2231(d)(2) defines a ‘‘general 

securities member’’ as any FINRA member ‘‘that 

conducts a general securities business and is 

required to calculate its net capital pursuant to the 

provisions of [Exchange Act] Rule 15c3–1(a)’’ 

except members that do not carry customer 

accounts or hold customer funds or securities. 

10See Notice, 86 FR at 55649. 

11As part of the process of completing a 

consolidated FINRA rulebook, FINRA adopted, 

without substantive changes, the remaining legacy 

NASD rules as FINRA rules in the consolidated 

FINRA rulebook and the NYSE Rules and NYSE 

Rule Interpretations in the consolidated FINRA 

rulebook as a separate Temporary Dual FINRA– 

NYSE Member Rules Series. These NYSE rules and 

their corresponding interpretations now bear a ‘‘T’’ 

modifier after the rule and interpretation number to 

denote their placement in the Temporary Dual 

FINRA–NYSE Member Rules Series. The 

Temporary Dual FINRA–NYSE Member Rules 

Series apply only to FINRA members that are also 

members of the NYSE. The FINRA rules apply to 

all FINRA members, unless such rules have a more 

limited application by their terms. Among the 

remaining NASD rules was NASD Rule 2340 

(Customer Account Statements), which was 

adopted, without substantive changes, as FINRA 

Rule 2231. NYSE Rule 409 (Statements of Accounts 

to Customers) and Incorporated NYSE Rule 

Interpretation 409 (Statements of Accounts to 

Customers) were adopted, without substantive 

changes, under the Temporary Dual FINRA–NYSE 

Rules Series as Rule 409T and Interpretation 409T, 

respectively. See Exchange Act Release No. 85589 

(April 10, 2019), 84 FR 15646 (April 16, 2019) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2019–009). For convenience, 

the rules and interpretations under the Temporary 

Dual FINRA–NYSE Member Rules Series are 

referred to as ‘‘NYSE Rule’’ and ‘‘NYSE Rule 

Interpretation,’’ as appropriate. See Notice, 86 FR at 

note 3. 

12See Notice, 86 FR at 55646. 

13See Notice, 86 FR at 55643. 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–DTC– 

2022–005 and should be submitted on 

or before June 28, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–12168 Filed 6–6–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95018; File No. SR–FINRA– 

2021–02] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Amend 

FINRA Rule 2231 (Customer Account 

Statements), as Modified by 

Amendment No. 1 

June 1, 2022. 

I. Introduction 

On September 29, 2021, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change SR–FINRA– 

2021–024 pursuant to Section 19(b)(1) 

of the Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 2

thereunder to amend FINRA Rule 2231 

(Customer Account Statements) to add 

new supplementary materials, 

incorporate specified provisions from 

dual FINRA–NYSE temporary rules, and 

delete those temporary rules.3 The 

proposed rule change was published for 

public comment in the Federal Register 

on September 30, 2021.4 On November 

9, 2021, FINRA consented to an 

extension of the time period to January 

4, 2022, in which the Commission must 

approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change.5 On January 4, 

2022, FINRA responded to the comment 

letters received in response to the 

Notice and filed an amendment to 

modify the proposed rule change 

(‘‘Amendment No. 1’’).6 On January 4, 

2022, the Commission published notice 

of Amendment No. 1 and instituted 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 7 to determine 

whether to approve or disapprove the 

proposed rule change.8 This order 

approves the proposed rule change, as 

modified by Amendment No. 1. 

II. Description of the Proposed Rule 

Change 

A. Background 

As discussed in the Notice, Rule 2231 

and NYSE Rule 409T govern the 

obligation of FINRA members and 

member organizations to deliver 

customer account statements to 

customers. Specifically, Rule 2231 and 

NYSE Rule 409T generally require a 

general securities member 9 to, at least 

once each calendar quarter, send 

account statements to customers 

containing a description of any 

securities positions, money balances or 

account activity in the accounts since 

the prior account statements were sent, 

except if carried on a Delivery Versus 

Payment/Receive Versus Payment 

basis.10 Rule 2231 does not currently 

contain any supplementary materials. 

FINRA stated that at the time it 

adopted Rule 2231, along with NYSE 

Rule 409T and NYSE Rule 

Interpretation 409T (together, ‘‘NYSE 

Provisions’’), into the consolidated 

FINRA rulebook, it would continue to 

review the substance of such rules and 

expected to propose substantive changes 

to some or all of the rules as part of 

future rulemakings.11 As a result of that 

review, FINRA proposed amending Rule 

2231 to incorporate several existing 

provisions from the NYSE Provisions 

into the FINRA rulebook and proposed 

deleting the NYSE Provisions in their 

entirety.12

Specifically, FINRA’s proposed rule 

change would: (1) amend Rule 2231 to 

(a) add new Supplementary Materials 

.01 (Compliance with Rule 4311 

(Carrying Agreements)), .02 

(Transmission of Customer Account 

Statements to Other Persons or Entities), 

.03 (Use of Electronic Media to Satisfy 

Delivery Obligations), and .04 

(Compliance with Rule 3150 (Holding of 

Customer Mail)) and (b) incorporate 

provisions derived from NYSE Rule 

Interpretation 409T, without substantive 

changes, as Supplementary Materials 

.05 (Information to be Disclosed on 

Statement), .06 (Assets Externally Held), 

.07 (Use of Logos, Trademarks, etc.), and 

.08 (Use of Summary Statements); (2) 

delete Temporary Dual FINRA–NYSE 

Rule 409T (Statements of Accounts to 

Customers) and Temporary Dual 

FINRA–NYSE Rule Interpretation 409T; 

and (3) make other non-substantive and 

technical changes in Rule 2231 and to 

other FINRA rules due to this proposed 

rule change. As a result of these 

changes, FINRA members that are not 

NYSE members would be required to 

comply with provisions that previously 

only applied to NYSE members. In 

addition to the specific points below, as 

a general matter, FINRA stated that 

harmonizing the NYSE provisions into 

Rule 2231 would provide greater clarity 

and regulatory efficiency to all FINRA 

member firms.13 Further, FINRA stated 

that with respect to proposed 

Supplementary Materials .01 and .03 

through .08, the proposed rule change 

would not impose additional material 

burdens on firms as it is substantially 


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