42242 Federal Register / Vol. 87, No. 134 / Thursday, July 14, 2022 / Notices 

33 17 CFR 240.17Ad–22(e)(21)(iv). 

34 Id. 

35 15 U.S.C. 78q–1. 

36 15 U.S.C. 78s(b)(2). 

37 In approving the Proposed Rule Change, the 

Commission considered the proposals’ impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

38 17 CFR 200.30–3(a)(12). 

1The Participants joining the motion include 

BOX Exchange LLC; Cboe BYX Exchange, Inc., Cboe 

BZX Exchange, Inc., Cboe EDGA Exchange, Inc., 

Cboe EDGX Exchange, Inc., Cboe C2 Exchange, Inc. 

and Cboe Exchange, Inc.; Investors Exchange LLC; 

MEMX LLC; Miami International Securities 

Exchange LLC, MIAX Emerald, LLC, MIAX PEARL, 

LLC; NASDAQ BX, Inc., Nasdaq GEMX, LLC, 

Nasdaq ISE, LLC, Nasdaq MRX, LLC, NASDAQ 

PHLX LLC, The NASDAQ Stock Market LLC; and 

New York Stock Exchange LLC, NYSE American 

LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and 

NYSE National, Inc. Participants FINRA and LongTerm Stock Exchange, Inc. did not approve the stay 

motions. 

2The following Participants joined in the stay 

motions but did not approve the filing of a petition 

for judicial review: Investors Exchange LLC, MEMX 

LLC, Miami International Securities Exchange LLC, 

MIAX Emerald, LLC, and MIAX PEARL, LLC. 

Participants FINRA and Long-Term Stock 

Exchange, Inc. did not approve the stay motions or 

the filing of a petition for judicial review. 

3See Letter from K. King, Counsel for 

Consolidated Audit Trail, LLC, Covington & Burling 

LLP, to Vanessa Countryman, Secretary, 

Commission (January 12, 2022). 

and enforce written policies and 

procedures reasonably designed to have 

the covered clearing agency’s 

management regularly review the 

efficiency and effectiveness of its use of 

technology and communication 

procedures.33

As mentioned above, DTC maintains 

multiple network and communication 

methods to interact with its 

participants, including certain outdated 

communication technologies necessary 

to support participants that continue to 

use such older technologies. DTC 

believes that continuing to use such 

outdated technologies could render 

communications between DTC and 

some of its participants vulnerable to 

cyber risks. Additionally, participants’ 

use of outdated technology delays DTC’s 

implementation of its own internal 

system upgrades, which by doing so, 

risks losing connectivity between DTC 

and a number of its participants. 

Finally, DTC states that it currently 

expends unnecessary resources to 

maintain outdated communications 

channels. In other words, DTC has 

subjected its network communication 

methods to review for efficiency and 

effectiveness. As a result, to enhance the 

efficiency and effectiveness of its 

technology and communication 

procedures, DTC proposes to require its 

participants to upgrade and maintain 

network technology, communication 

technology, and protocol standards, in 

accordance with applicable technology 

standards that DTC would identify and 

publish via Important Notice on its 

website. Because the Proposed Rule 

Change is an outgrowth of DTC’s review 

of the efficiency and effectiveness of its 

technology and communication 

procedures, the Commission finds the 

Proposed Rule Change is consistent 

with the requirements of Rule 17Ad– 

22(e)(21)(iv) under the Act.34

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Act and in 

particular with the requirements of 

Section 17A of the Act 35 and the rules 

and regulations promulgated 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 36 that 

Proposed Rule Change SR–DTC–2022– 

004, be, and hereby is, approved.37

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15003 Filed 7–13–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Securities Exchange Act of 1934: Release 

No. 34–95235/July 8, 2022] 

In the Matter of the: Order Granting 

Temporary Conditional Exemptive 

Relief Pursuant to Section 36 of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) and Rule 608(e) of 

Regulation NMS Under the Exchange 

Act, Relating to Certain Requirements 

of the National Market System Plan 

Governing the Consolidated Audit 

Trail; In the Matter of the: Order 

Granting Temporary Conditional 

Exemptive Relief Pursuant to Section 

36 of the Exchange Act and Rule 608(e) 

of Regulation NMS Under the 

Exchange Act, From Section 8.1.1 and 

Section 8.1.2 of Appendix D of the 

National Market System Plan 

Governing the Consolidated Audit 

Trail; Order Denying Stay 

On December 16, 2020, the 

Commission issued two orders pursuant 

to Section 36 of the Exchange Act and 

Rule 608(e) of Regulation NMS under 

the Exchange Act: (1) an Order Granting 

Temporary Conditional Exemptive 

Relief Pursuant to Section 36 of the 

Exchange Act and Rule 608(e) of 

Regulation NMS Under the Exchange 

Act Relating to Certain Requirements of 

the National Market System Plan 

Governing the Consolidated Audit Trail, 

Release No. 34–90688 (Dec. 16, 2020) 

(the ‘‘First Order’’); and (2) an Order 

Granting Temporary Conditional 

Exemptive Relief Pursuant to Section 36 

of the Exchange Act and Rule 608(e) of 

Regulation NMS Under the Exchange 

Act From Section 8.1.1 and Section 

8.1.2 of Appendix D of the National 

Market System Plan Governing the 

Consolidated Audit Trail, Release No. 

34–90689 (Dec. 16, 2020) (the ‘‘Second 

Order’’) (together, the ‘‘prior Orders’’). 

On February 14, 2021, Petitioner 

Consolidated Audit Trail, LLC 

(‘‘Petitioner’’ or ‘‘CAT LLC’’), on behalf 

of itself and a majority of the 

Participants in the National Market 

System Plan Governing the 

Consolidated Audit Trail (‘‘CAT NMS 

Plan’’ or ‘‘Plan’’) (together, 

‘‘Petitioners’’) 1 filed with the 

Commission the pending motions for 

partial stays of the prior Orders. That 

same day, Petitioners 2 filed petitions in 

the U.S. Court of Appeals for the District 

of Columbia Circuit seeking review of 

the Orders. See Case Nos. 21–1065, 21– 

1066. Petitioners sought a partial stay of 

the prior Orders until the Commission 

‘‘had an opportunity to consider all the 

Participants’ arguments and supporting 

evidence’’ and ‘‘reevaluate whether the 

Order[s] [are] appropriate in light of that 

information,’’ or, in the alternative, 

pending resolution of the petitions for 

judicial review. Since that time, the 

Participants and Commission staff have 

been engaged in ongoing discussions 

with the goal of resolving or narrowing 

their differences with respect to the 

issues raised in the Participants’ stay 

motions. On January 12, 2022, the 

Participants requested that the 

Commission supplement the record to 

include certain additional materials 

prepared in connection with those 

discussions.3

On July 8, 2022, after careful review 

of the arguments and evidence proffered 

by the Participants, the Commission 

issued an Order Granting Temporary 

Conditional Exemptive Relief, Pursuant 

to Section 36 of the Exchange Act and 

Rule 608(e) of Regulation NMS under 

the Exchange Act, from Certain 

Requirements of the National Market 

System Plan Governing the 

Consolidated Audit Trail (the ‘‘Third 

Order’’), which supersedes the prior 

Orders. The Third Order clarifies certain 

aspects of the prior Orders and modifies 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 134 / Thursday, July 14, 2022 / Notices 42243 

4On February 14, 2021, the Participants also filed 

a motion for a protective order shielding from 

public disclosure certain documents submitted in 

connection with their stay motions as well as 

portions of the motions that refer to those 

documents, pursuant to SEC Rule of Practice 322. 

Finding that the harm resulting from disclosure of 

that material would outweigh the benefits of 

disclosure, we grant the motion for a protective 

order. 

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). 

5Pursuant to the DTC Rules, the term 

‘‘Procedures’’ means the Procedures, service guides, 

and regulations of DTC adopted pursuant to Rule 

27, as amended from time to time. See Rule 1, 

Section 1, infra note 7. DTC’s Procedures are filed 

with the Commission. They are binding on DTC and 

each Participant in the same manner that they are 

bound by the DTC Rules. See Rule 27, infra note 

7. 

6Tax Event Announcements provides 

Participants with information-only announcements 

regarding taxable events that may give rise to 

information and/or withholding obligations which 

occur even in the absence of an actual distribution 

of dividend and interest payments (‘‘Tax Events’’). 

See Distributions Guide, infra note 7, at 14. 

7Each 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 (‘‘DTC Rules’’), 

available at http://www.dtcc.com/legal/rules-andprocedures.aspx, and the DTC Corporate Actions 

Distributions Service Guide (‘‘Distributions 

Guide’’), available at https://www.dtcc.com/∼/ 

media/Files/Downloads/legal/service-guides/ 

Service-Guide-Distributions.pdf. 

8 Distribution Events covered by Announcements 

include cash dividends, interest, principal, capital 

gains, sale of rights on American depositary 

receipts, return of capital, dividend with option, 

stock splits, stock dividends, automatic dividend 

reinvestments, spinoffs, rights distributions, pay in 

kind, and liquidation. See Distributions Guide, 

supra note 7, at 12. 

9See Distributions Guide, supra note 7, at 14–15. 

See also Securities Exchange Act Release No. 81871 

(October 13, 2017), 82 FR 48734 (October 19, 2017) 

(SR–DTC–2017–018) and Securities Exchange Act 

Release No. 87729 (December 12, 2019), 84 FR 

69424 (December 18, 2019) (SR–DTC–2019–011). 

10Pursuant to the DTC Rules, the term 

‘‘Procedures’’ means the Procedures, service guides, 

and regulations of DTC adopted pursuant to Rule 

27, as amended from time to time. See Rule 1, 

Section 1, supra note 7. DTC’s Procedures are filed 

with the Commission. They are binding on DTC and 

each Participant in the same manner that they are 

bound by the DTC Rules. See Rule 27, supra note 

7. 

11Tax Event Announcements provides 

Participants with information-only announcements 

regarding taxable events that may give rise to 

information and/or withholding obligations which 

occur even in the absence of an actual distribution 

of dividend and interest payments (‘‘Tax Events’’). 

See Distributions Guide, supra note 7, at 14. 

other aspects of the prior Orders in light 

of subsequent developments and/or 

additional information provided by the 

Participants. It also gives the 

Participants until July 31, 2024 to either 

come into compliance with the relevant 

provisions of the CAT NMS Plan or to 

develop alternative solutions that 

achieve the regulatory goals of Rule 613 

and the CAT NMS Plan in a more costeffective manner. Because the terms of 

the Third Order now govern, the terms 

of the prior Orders are no longer in 

force, and the pending motions are 

moot.4

Accordingly, it is ordered that the 

motions for a stay of the prior Orders be 

denied as moot. 

By the Commission. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–14983 Filed 7–13–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95231; File No. SR–DTC– 

2022–008] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of Immediate Effectiveness of a 

Proposed Rule Change To Amend the 

DTC Distributions Guide To Enhance 

the Tax Event Announcements Feature 

of the Distributions Service and Make 

Related Clarifying Changes 

July 8, 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 June 30, 

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 would 

amend the Procedures 5 set forth in the 

Distributions Guide to accommodate 

Participants’ tax reporting and 

withholding obligations, by setting forth 

a proposed enhancement to DTC’s 

Procedure for the Tax Events 

Announcements feature (‘‘Tax Event 

Announcements’’) of DTC’s 

Distributions Service,6 as described 

below.7

Announcements 

The Distributions Service includes the 

announcement, collection, allocation 

and reporting by DTC, on behalf of its 

Participants, of dividend, interest and 

principal payments for Eligible 

Securities held by Participants at DTC 

(‘‘Announcements’’). This centralized 

processing provides efficiency for 

Participants for their receipt of (i) 

payment information and (ii) payments 

on distributions covered by 

Announcements (‘‘Distribution Event’’) 8

from multiple issuers and agents. 

DTC also provides a Participant 

holding a Security in its DTC account 

with Tax Events Announcements for 

distributions subject to Sections 305(c) 

and 871(m) of the Internal Revenue 

Code (‘‘Code’’).9 The proposed rule 

change would enhance Tax Event 

Announcements by adding a new type 

of Tax Event to be referred to as a 

‘‘1042–S Classification,’’ as more fully 

described below. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The proposed rule change would 

amend the Procedures 10 set forth in the 

Distributions Guide to accommodate 

Participants’ tax reporting and 

withholding obligations, by setting forth 

a proposed enhancement to DTC’s 

Procedure for the Tax Events 

Announcements feature (‘‘Tax Event 

Announcements’’) of DTC’s 

Distributions Service,11 as described 

below. 

(a) Announcements 

The Distributions Service includes the 

announcement, collection, allocation 

and reporting by DTC, on behalf of its 

Participants, of dividend, interest and 

principal payments for Eligible 

Securities held by Participants at DTC 

(‘‘Announcements’’). This centralized 

processing provides efficiency for 

Participants for their receipt of (i) 

payment information and (ii) payments 

on distributions covered by 

Announcements (‘‘Distribution 


jspears on DSK121TN23PROD with NOTICES1