74796 Federal Register / Vol. 79, No. 241 / Tuesday, December 16, 2014 / Notices 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 73443 (Oct. 

28, 2014), 79 FR 65268 (Nov. 3, 2014). 

4Terms not defined herein have the meaning set 

forth in DTC’s Rules, By-Laws, and Organization 

Certificate (‘‘Rules’’), available at http://dtcc.com/∼/ 

media/Files/Downloads/legal/rules/dtc_rules.ashx. 

5Securities Exchange Act Release No. 72576 (Jul. 

9, 2014); 79 FR 41335 (Jul. 15, 2014) (SR–DTC– 

2014–06). 

6A Deliver Order is a book-entry movement of a 

particular security between two Participants. A 

Payment Order is a method for settling funds 

related to transactions and payments not associated 

with a Deliver Order. 

7Omgeo is a leading provider of post-trade, presettlement institutional trade management 

solutions, processing over one million trades per 

day, and servicing approximately 6,500 investment 

managers, broker/dealers, and custodians in over 50 

countries. See About DTCC: Omgeo LLC, http://

dtcc.com/about/businesses-and-subsidiaries/

omgeo.aspx. 

8Receivers may optionally set their DTC profile 

to route ID Transactions to RAD. 

9For processing efficiency, the proposed change 

to the Guide will offer Participants the option to set 

their system profile to allow affirmed ID 

Transactions to be automatically accepted in RAD. 

However, Participants will no longer have an option 

to allow ID Transactions to bypass RAD. 

10 DTC risk management controls, including 

Collateral Monitor and Net Debit Cap (as defined in 

DTC Rule 1), are designed so that DTC may 

complete system-wide settlement notwithstanding 

the failure to settle of its largest Participant or 

affiliated family of Participants. The Collateral 

Monitor tests that a Receiver has adequate collateral 

to secure the amount of its net debit balance and 

the Net Debit Cap limits the net debit balance of a 

Participant so that it cannot exceed DTC liquidity 

resources for settlement. See DTC Rules, http://

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

dtc_rules.ashx. 

All submissions should refer to File No. 

SR–BATS–2014–064. 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 Web site (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 Web site 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 such 

filing will also be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File No. SR–BATS– 

2014–064 and should be submitted on 

or before January 6, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29364 Filed 12–15–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73804; File No. SR–DTC– 

2014–10)] 

Self-Regulatory Organizations; The 

Depository Trust Company; Order 

Approving Proposed Rule Change in 

Connection With the Modifications To 

Require Receiver Authorized Delivery 

Approval for DTC Processing of 

Institutional Delivery Transactions 

December 10, 2014. 

I. Introduction 

On October 16, 2014, The Depository 

Trust Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) proposed rule change 

SR–DTC–2014–10 (‘‘Proposed Rule 

Change’’) pursuant to Section 19(b)(1) of 

the Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder.2

The Proposed Rule Change was 

published for comment in the Federal 

Register on November 3, 2014.3 The 

Commission did not receive any 

comments on the Proposed Rule 

Change. This order approves the 

Proposed Rule Change. 

II. Description 

DTC filed the Proposed Rule Change 

to modify the DTC Settlement Service 

Guide (‘‘Guide’’) to require DTC 

Participants 4 to use the Receiver 

Authorized Delivery (‘‘RAD’’) function 

to accept any affirmed institutional 

delivery transaction (‘‘ID Transaction’’) 

prior to DTC processing of the delivery. 

With the Proposed Rule Change, DTC 

seeks to reduce uncertainty in the 

settlement of ID Transactions. 

Pursuant to a recent rule change,5

DTC requires all non-institutional 

Deliver Orders and Payment Orders 6 to 

be approved through RAD. RAD enables 

a receiver of valued deliveries of 

securities (‘‘Receiver’’) to manage which 

deliveries to accept, or to reject, prior to 

further processing by DTC. With this 

process, DTC seeks to establish a 

consistent internal ‘‘matching’’ system 

for book-entry deliveries at DTC. 

ID Transactions generally have not 

required RAD approval because the 

transactions are externally pre-matched 

through Omgeo, LLC,7 although 

Participants were permitted to apply 

RAD voluntarily.8 Because RAD was not 

required, a Receiver could use the sameday reclaim process to return securities 

to the original Participant delivering 

securities (‘‘Deliverer’’) without the 

acceptance of the Deliverer. DTC states 

that this process creates uncertainty for 

Participants and DTC as to whether 

securities will be delivered or reclaimed 

on the same day without the prior 

acceptance of the Receiver or original 

Deliverer. 

Pursuant to the Proposed Rule 

Change, DTC will amend the Guide to 

eliminate this uncertainty by requiring 

the intended Receiver to approve the ID 

Transaction in RAD before DTC 

processes the transaction.9 Same-day 

reclaims will also be subject to RAD 

approval by the original Deliverer, as 

though the reclaim was its own, 

separate transaction. As with any 

securities delivery, these transactions 

will be subject to DTC’s risk 

management controls.10

Additionally, with the Proposed Rule 

Change DTC will make technical 

updates to the Guide: (i) update the text 

for consistency to reflect that all valued 

Deliver Orders, Payment Orders, ID 

Transactions, MMI transactions, 

reclaims, pledges, and releases of 

pledged securities will be subject to 

RAD; (ii) update the text for consistency 

to reflect that all reclaims will be subject 

to risk management controls and remove 

references to system functions related to 

reclaims that have become obsolete; (iii) 

add an email address to which Settling 

Banks seeking to adjust Net Debit Caps 

may send their requests, in addition to 

via mail or overnight delivery to the 

existing mailing address; (iv) indicate 

where Participants may access certain 

system functions via Settlement Web 

either in addition to, or in lieu of, PBS/ 

PTS; (v) eliminate references to fees 

relating to the ID Net service, which are 

redundant since those fees are also 

listed in DTC’s fee schedule; and (vi) 

delete reference to the population of a 

‘‘third party’’ field on DTC’s system 

screens for the ID Net service, which is 

no longer applicable. 

The effective date of the Proposed 

Rule Change, including the dates of the 

implementation phases described above, 

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Federal Register / Vol. 79, No. 241 / Tuesday, December 16, 2014 / Notices 74797 

11 15 U.S.C. 78s(b)(2)(C). 

12 15 U.S.C. 78q–1(b)(3)(F). 

13 17 CFR 240.17Ad–22(d)(12). 

14 15 U.S.C. 78q–1(b)(3)(F). 

15 17 CFR 240.17Ad–22(d)(12). 

16 15 U.S.C. 78q–1(b)(3)(F). 

17 15 U.S.C. 78q–1. 

18 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

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

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The PIM is a process by which an Electronic 

Access Member can provide price improvement 

opportunities for a transaction wherein the 

Electronic Access Member seeks to facilitate an 

order it represents as agent, and/or a transaction 

wherein the Electronic Access Member solicited 

interest to execute against an order it represents as 

agent (a ‘‘Crossing Transaction’’). See Rule 723(a). 

4See Securities Exchange Act Release No. 52364 

(August 31, 2005), 70 FR 53403 (September 8, 2005) 

(SR–ISE–2005–41). The term ‘‘Public Customer’’ 

means a person or entity that is not a broker or 

dealer in securities. See ISE Rule 100(a)(38). 

5A Crossing Transaction is comprised of the 

order the Electronic Access Member represents as 

agent (the ‘‘Agency Order’’) and a counter-side 

order for the full size of the Agency Order (the 

‘‘Counter-Side Order’’). The Counter-Side Order 

may represent interest for the Member’s own 

account, or interest the Member has solicited from 

one or more other parties, or a combination of both. 

See Rule 723(b). 

6See ISE Rule 723(c)(1). 

will be announced via a DTC Important 

Notice. 

III. Discussion 

Section 19(b)(2)(C) of the Act 11

directs the Commission to approve a 

proposed rule change of a selfregulatory organization if it finds that 

such proposed rule change is consistent 

with the requirements of the Act and 

rules and regulations thereunder 

applicable to such organization. Section 

17A(b)(3)(F) of the Act requires, among 

other things, that the rules of a clearing 

agency be designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions.12

In addition, Rule 17Ad–22(d)(12) of the 

Act requires that a clearing agency 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to ensure that final 

settlement occurs no later than the end 

of the settlement day and require that 

intraday or real-time finality be 

provided where necessary to reduce 

risks.13

The Commission finds the Proposed 

Rule Change consistent with the Act. 

More specifically, as the Proposed Rule 

Change pertains to requiring acceptance 

through RAD of any affirmed ID 

Transaction, the Commission finds that 

the Proposed Rule Change is consistent 

with Section 17A(b)(3)(F) of the Act 14

because the change will increase the 

number of deliveries that will require 

Receiver approval prior to DTC 

processing. This requirement will 

reduce the intraday uncertainty and 

associated risks that may currently arise 

from same-day reclaims, thus 

facilitating the prompt and accurate 

clearance and settlement of securities 

transactions. The Commission also finds 

these aspects of the Proposed Rule 

Change consistent with Rule 17Ad– 

22(d)(12) under the Act 15 because more 

transactions will be subject to DTC’s 

risk management controls, which helps 

ensure that final settlement occurs no 

later than the end of the settlement day. 

As the Proposed Rule Change pertains 

to the proposed technical changes, the 

Commission finds that the Proposed 

Rule Change is also consistent with 

Section 17A(b)(3)(F) of the Act 16

because updates to the Guide to make it 

more clear, consistent, and current 

supports the prompt and accurate 

clearance and settlement of securities 

transactions. 

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 17 and the rules 

and regulations thereunder. 

It is therefore ordered, pursuant to 

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

proposed rule change SR–DTC–2014–10 

be, and hereby is, approved.18

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29360 Filed 12–15–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73808; File No. SR–ISE– 

2014–54] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Make Technical 

Corrections to ISE Rules 

December 10, 2014. 

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 

3, 2014, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change, as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 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 the Substance 

of the Proposed Rule Change 

The ISE proposes to make certain 

technical corrections to ISE rules as 

described in more detail below. The text 

of the proposed rule change is available 

on the Exchange’s Web site (http://

www.ise.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 

self-regulatory organization 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 self-regulatory organization has 

prepared summaries, set forth in 

sections A, B and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’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 eliminate investor 

confusion by making certain technical 

corrections to ISE rules that are either 

obsolete or outdated, as described in 

more detail below. 

1. Order Type Cleanup 

The Exchange adopted Customer 

Participation Orders in August 2005 in 

order to facilitate members providing 

access to the Price Improvement 

Mechanism (‘‘PIM’’) 3 to Public 

Customers.4 Upon the entry of a 

Crossing Transaction into the PIM,5 a 

broadcast message is sent to all 

members, who then have 500 

milliseconds to enter orders that 

indicate the size and price at which they 

want to participate in the execution 

(‘‘Improvement Orders’’).6 The 

Customer Participation Order is an 

instruction to the member to enter an 

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