Document ID: SEC-2021-0958-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Depository Trust Co.
Posted Date: 2021-07-13T04:00Z

[Federal Register Volume 86, Number 131 (Tuesday, July 13, 2021)]
[Notices]
[Pages 36810-36815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14795]

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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.
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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 changes to the Reorganizations 
Service Guide (the ``Guide''),\5\ as described in greater detail below.
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    \5\ Each term not otherwise defined herein has its respective 
meaning as set forth in the Rules, By-Laws and Organization 
Certificate of DTC (the ``Rules'') and the Guide, available at 
http://www.dtcc.com/legal/rules-and-procedures.aspx.
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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 real-time 
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.
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    \6\ ATOP 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.
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(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.
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    \8\ PTS (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.
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    There are certain potential risks and costs associated with manual 
processing, particularly in connection with voluntary reorganizations

[[Page 36811]]

instructions. Nonautomated input may increase the likelihood of errors, 
which can result in rejected instructions or erroneous elections. 
Rejected instructions and erroneous elections can delay the submission 
of the instructions for the ATOP Offer, which typically have to be 
submitted within a short timeframe. Further, because information about 
the ATOP Offer and the compilation and transmission of instructions 
flows across different market segments, the lack of automation and 
standardization can also lead to errors along the chain. Finally, ATOP 
Offers are becoming increasingly complex, thereby requiring a greater 
volume of individual nonautomated input by Participants, which adds to 
the potential risk of errors and increases the overhead cost for 
additional personnel and processes to handle the volume.
    Therefore, DTC is proposing to provide Participants with the 
ability to use Automated Instruction Messaging via ISO 20022 messages 
and API functionality for ATOP-eligible offers. The functionality for 
the submission of instructions through standardized ISO 20022 messaging 
already exists at DTC. For example, Participants have the ability to 
submit ISO 20022 instructions for eligible distributions events.\9\ ISO 
20022 is a standard that provides the financial industry with a common 
language to capture business transactions and associated message flows. 
The benefits offered by ISO 20022 include, but are not limited to: (i) 
Greater straight through processing by utilizing a data model that 
conforms to market practice, and (ii) improved accuracy and less 
processing risk due to enhanced data elements.
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    \9\ Participants can submit ISO 20022 instructions on applicable 
tax relief, foreign currency payments, dividend reinvestment 
including opt out and optional dividend events. See DTC 
Distributions Service Guide, p. 16, available at http://www.dtcc.com/legal/rules-and-procedures.aspx.
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    DTC already offers API functionality for the submission of certain 
instructions to DTC. For example, Participants can currently engage 
with the DTC ClaimConnect service via APIs.\10\ APIs enable the flow of 
information between computer applications and provide Participants the 
ability to easily access and evaluate customer data as well as provide 
Participants with callable endpoints for deleting data resources and 
for reading and updating data resource values. Stated another way, APIs 
provides enhanced flexibility for Participants, making the process of 
accessing from, and transmitting information to, DTC and its downstream 
customers more efficient. The flexibility of APIs and its use of modern 
programming languages provide benefits that include, but are not 
limited to: (i) Less frequent maintenance, (ii) client development and 
implementation can be quicker to market, and (iii) more efficient 
integration channels.
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    \10\ See ClaimConnect Service Guide, p.8, available at http://www.dtcc.com/legal/rules-and-procedures.aspx.
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B. Automated Instruction Messaging
    Pursuant to the proposed rule change, Automated Instruction 
Messaging would be available for the following ATOP actions: (i) 
Accepting an ATOP-Eligible Offer, (ii) Accepting an ATOP-Eligible Offer 
via Notice of Guaranteed Delivery, (iii) Submitting a Cover of Protect, 
and (iv) Puts. However, withdrawal or cancellation instructions in 
connection with the above would still need to be performed via PTS/PBS. 
In addition, Automated Instruction Messaging for the Submitting a Cover 
of Protect on Behalf of a Third Party action would not be 
available.\11\
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    \11\ DTC anticipates implementing Automated Instruction 
Messaging for withdrawal and cancellation instructions, as well as 
for Cover Protect on Behalf of a Third-Party action, by Q1 2022.
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    Automated Instruction Messaging would consist of (i) Automated 
Instruction Messages for the input of instructions, and (ii) Automated 
Response Messages for feedback and status output with respect to 
submitted instructions. The ISO 20022 Corporate Action Instruction 
(CAIN) message and the API POST function are Automated Instruction 
Messages. The ISO 20022 Corporate Action Instruction Status Advice 
(CAIS) message and the API GET function are Automated Response 
Messages.
    As noted above, automating instructions for ATOP Offers would 
streamline the flow of information, reducing the costs, errors and 
risks that are associated with nonautomated processing. Accordingly, 
pursuant to the proposed rule change, DTC would provide Participants 
with the ability to automate and standardize the submission of 
instructions for ATOP Offers through Automated Instruction Messaging.
(ii) Clarification and Adjustment of Certain Cut-off Times for ATOP 
Offer Instructions
    The terms of an ATOP Offer include, among other things, the dates 
and times by which certain instructions (e.g., acceptances, protects) 
must be submitted, as well the date and time that the ATOP Offer 
expires. For ATOP Offers processed through DTC, DTC establishes a DTC 
Cut-Off Time, which is the deadline for Participants to submit ATOP 
Offer instructions to DTC for processing.\12\
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    \12\ Participants are able to submit ATOP Offer instructions 
after the DTC Cut-Off Time directly to the agent until the actual 
expiration time, if provided for under the terms of the ATOP Offer.
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    DTC is proposing to (i) amend outdated language about the DTC Cut-
Off Time for an ATOP Offer with an actual expiration time that is 6:00 
p.m. ET or later on the expiration date, and (ii) remove the reference 
to a 1:00 p.m. ET DTC Cut-Off Time, which, pursuant to the proposed 
rule change, would no longer be the established DTC Cut-Off Time for an 
ATOP Offer with an actual expiration time before 5:00 p.m. ET.
    The current language in the Guide provides that, unless otherwise 
specified in the ATOP Offer announcement (i) ATOP Offers being 
processed by the agent through ATOP (referred to as an ``ATOP I'' 
offer, which have an actual expiration time of 5:00 p.m. ET or later) 
have a DTC Cut-Off Time of 5:00 p.m. ET, and (ii) ATOP Offers being 
processed by the agent without an electronic connection to ATOP 
(referred to as an ``ATOP II'' offer, which typically expires before 
5:00 p.m. ET) have a DTC Cut-Off Time of 1:00 p.m.
    Pursuant to the proposed rule change, DTC would update the language 
in the Guide to reflect that for ATOP Offers with an actual expiration 
time between 6:00 p.m. ET and midnight on expiration date, the DTC Cut-
Off Time typically will be 6:00 p.m. ET, instead of 5:00 p.m. ET.\13\ 
DTC extended this processing window by an additional hour to provide 
Participants additional time to submit instructions to be processed by 
DTC and to avoid Participants submitting instructions directly to the 
agent outside of DTC.
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    \13\ See Important Notice B#11772-19 (July 15, 2019), available 
at https://www.dtcc.com/~/media/Files/pdf/2019/7/15/11772-19.pdf.
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    DTC is further proposing to amend the Guide to provide that, with 
respect to an ATOP Offer with an actual expiration time earlier than 
5:00 p.m. ET on expiration date,\14\ the DTC Cut-Off Time would vary 
depending on the particular facts and circumstances of the ATOP Offer 
and would be announced in the notice of the ATOP Offer.\15\
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    \14\ Although infrequent, there are some circumstances where an 
ATOP Offer may have an actual expiration time earlier than 5:00 p.m. 
ET. For example, the expiration time of an ATOP Offer from a 
jurisdiction in a later time zone could translate in an atypical 
early expiration time in the eastern time zone.
    \15\ Pursuant to the proposed rule change, DTC would also remove 
the references to ATOP I and ATOP II, which are no longer relevant 
to DTC Cut-Off Time for the submission of instructions for ATOP 
Offers.

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[[Page 36812]]

    DTC is also proposing to amend the Guide to remind Participants 
that expiration and cutoff times may vary per the terms of the offer 
and that Participants are independently responsible for confirming both 
the actual offer expiration date and time and the DTC Cut-off Time and 
date.
(iii) Proposed Rule Changes
    Pursuant to the proposed rule change, DTC is proposing to:
    1. Add references to ``Automated Instruction Messaging'' or 
``Automated Instruction Message,'' as context requires, where other 
types of instruction input for ATOP-eligible offers (e.g., PTS PTOP and 
PBS Voluntary Tenders and Exchanges) are referenced.
    2. Add references to ``Automated Response Message'' where other 
types of response and/or status reports relating to instructions on 
ATOP-eligible offers (e.g., PTS/PBS, CA Web or Participant Daily 
Activity Statement) are referenced.
    3. In the ``Overview'' subsection of the ``About Reorganization 
Services''/``Introduction'' section, insert (i) references to ISO 20022 
and API as additional methods of inputting voluntary reorganization 
instructions, and (ii) a footnote directing Participants to the 
``Automated Instruction Messaging'' section for additional information 
about Automated Instruction Messaging through ISO 20022 messages and 
APIs.
    4. After the ``About the Reorganizations Service'' section, insert 
a new section titled ``Automated Instruction Messaging.'' The section 
would list: (i) The ATOP actions for ATOP-eligible offers for which 
Automated Instruction Messaging is available, which would be: Accepting 
an ATOP-Eligible Offer, Accepting an ATOP-Eligible Offer via Notice of 
Guaranteed Delivery, Submitting a Cover of Protect, and Puts, (ii) the 
Automated Instruction Message Types, which are ISO 20002 Corporate 
Action Instruction (CAIN) and API POST, and (iii) the Automated 
Response Message Types, which are ISO 20022 Corporate Action 
Instruction Status Advice (CAIS) and API GET. The section would also 
include a note stating that all withdrawal and cancellation 
instructions for ATOP-eligible offers must be performed via PTS/PBS and 
cannot be instructed via Automated Instruction Message.
    5. In the ``Instructions/Expirations'' section, above the 
``Important Considerations'' subsection, insert the following warning 
as a reminder to Participants of their responsibility to monitor the 
status of their instructions and to take any actions necessary to 
complete an incomplete transaction:

Warning!

    Regarding incomplete instructions: An instruction that was 
submitted via PTS (PTOP, PSOP, PUTS, WARR, RCNV, CERR), PBS (Voluntary 
Tenders and Exchanges, Rights Subscriptions, Put Option Bonds, Reorg 
Conversions, CD Early Redemptions, Warrants Subscriptions) or via 
Automated Instruction Messaging but was not fully processed by-DTC is 
an incomplete transaction. A Participant has the sole responsibility to 
monitor its messages and confirm that its instruction was processed and 
that the quantity of securities that are the subject of its instruction 
are shown under the contra-CUSIP/RRG specified in the instruction. A 
Participant that submits an incomplete instruction via Automated 
Instruction Messaging will receive an Automated Response Message 
indicating a rejection. Neither DTC nor the agent will take action on 
an incomplete transaction. The Participant is solely responsible for 
taking the additional processing steps to complete the transactions 
before expiration cut-off date and time. DTC shall have no 
responsibility in respect of a Participant's failure to recognize its 
instruction as incomplete or to take the steps necessary to complete 
its transaction. Participants can use the inquiry feature of the 
aforementioned PTS and PBS functions, as applicable, to identify an 
incomplete transaction. For instructions submitted via Automated 
Instruction Messaging, the Automated Response Message will indicate the 
reason for rejection.

    In addition, DTC is proposing to delete other warnings relating to 
incomplete instructions in connection with ATOP-eligible offers, as 
they would be redundant with the insertion of the above warning.
    6. In the ``Instructions/Expirations'' section, under the new 
warning referenced above, insert a note that states that all withdrawal 
and cancellation instructions must be performed via PTS/PBS.
    7. In the ``About DTC's Automated Tender Offer Program (ATOP)'' 
subsection of the ``Instructions/Expirations'' section, remove the 
phrases ``using the PTS PTOP and PBS Voluntary Tenders and Exchanges or 
via CCF,'' and ``by book-entry through PTS PTOP or PBS Voluntary 
Tenders and Exchanges, or via CCF,'' as it is unnecessary and limiting.
    8. In the ``Proration of an Offer'' section, for accuracy, insert a 
reference to CA Web as a source to review the position movements 
representing the unaccepted position.
    9. Add a reference to ``Automated Instruction Messaging'' to the 
following section headings: ``Voluntary Offers by Issuer or Third Party 
(Processed via PTOP),'' ``Submitting a Cover of Protect via PTS PTOP or 
PBS Voluntary Tenders and Exchanges for an ATOP-Eligible Offer,'' 
``Checklist for Submitting a Cover of Protect via PTS PTOP or PBS 
Voluntary Tenders and Exchanges.''
    10. Amend the Guide to reflect that when a Participant uses an 
Automated Instruction Message, it must check its Automated Response 
Message, in order to ensure that its transactions were properly 
processed and recorded, and to note that a Participant could 
additionally check its Participant Daily Activity Statement and the CA 
Web.
    11. Replace the following paragraph, which appears in the 
checklists for submitting instructions for ATOP-eligible offers, 
``Participants that subscribe to the ISO 20022 Instructions Statement 
Report (CAST) will be able to verify instruction status on the 
message'' with ``Participants that submit an Automated Instruction 
Message must monitor the status of their instruction using the 
Automated Response Message. Additionally, the CAST message is available 
to monitor instructed and uninstructed balances.''
    12. In the ``Accepting an ATOP-Eligible Offer'' section, in order 
to reflect that for an ATOP Offer with (i) an actual expiration time 
between 6:00 p.m. ET and midnight, the DTC Cut-Off Time would typically 
be 6:00 p.m. ET, and (ii) an actual expiration time before 5:00 p.m. ET 
on expiration date, the DTC Cut-Off Time would vary depending on the 
facts and circumstances of the offer, DTC is proposing to replace the 
existing paragraph that begins ``The dates on which you can accept an 
offer via PTOP . . .'' with the following paragraphs:
    ``The dates on which you can accept an offer via PTS PTOP, PBS 
Voluntary Tenders and Exchanges, and Automated Instruction Messaging 
are specified in the notice about the offer, which you can view via CA 
Web Announcements, ISO 20022 messaging and PTS RIPS or PBS 
Reorganizations and Redemptions functions. Unless otherwise specified 
in the PTS RIPS, PBS Reorganizations and Redemptions or ISO 20022 
messaging, PTS PTOP, PBS Voluntary Tenders and Exchanges, and Automated 
Instruction

[[Page 36813]]

Messaging are available on those dates for this purpose. DTC processing 
cut-off times on the day of expiration typically will be either 5:00 
p.m. ET (where the notice of the offer specifies an expiration time of 
5:00 p.m. ET on expiration date) or 6:00 p.m. ET (where the notice of 
the offer specifies an expiration time between 6:00 p.m. ET and 
midnight on expiration date). Please note that the DTC processing cut-
off times for offers that specify an offer expiration time before 5:00 
p.m. ET on expiration date will vary depending on the facts and 
circumstances of the offer.
    Note: Participants are reminded that expiration and cutoff time may 
vary per the terms of the offer. Participants are independently 
responsible to confirm, per the terms of the offer and announcement, 
the offer expiration date and time, as well as the applicable DTC 
processing cut-off time, per the terms of the offer and the 
announcement.''
    13. In the ``Checklist for Submitting an Acceptance'' section, 
insert the following language to address how a Participant needs to 
acknowledge the Letter of Transmittal when it transmits an acceptance 
via Automated Instruction Messaging:
    ``Likewise, when you transmit an acceptance via Automated 
Instruction Messaging, you will be required to acknowledge the Letter 
of Transmittal required by the offer identified by the contra-CUSIP you 
specify in your acceptance. The message must contain your 
acknowledgement. If your message does not contain your acknowledgement, 
your acceptance will be rejected. By acknowledging the Letter of 
Transmittal via Automated Instruction Messaging, you agree that (i) you 
have received, and will be bound by the terms of, the Letter of 
Transmittal required by the offer identified in the acceptance and (ii) 
the agreement set forth in the preceding clause (i) may be enforced 
against you by the Offeror in such offer''.
    14. In the ``Submitting a Protect for an ATOP-Eligible Offer'' 
section, in order to reflect that for an ATOP Offer with (i) an actual 
expiration time between 6:00 p.m. ET and midnight, the DTC Cut-Off Time 
would typically be 6:00 p.m. ET, and (ii) an actual expiration time 
before 5:00 p.m. ET on expiration date, the DTC Cut-Off Time would vary 
depending on the facts and circumstances of the offer, DTC is proposing 
to replace the existing paragraph that begins ``The dates on which you 
can accept an offer by submitting a Notice . . .'' with the following 
paragraphs:
    ``The dates on which you can accept an offer by submitting a Notice 
of Guaranteed Delivery via PTS PTOP, PBS Voluntary Tenders and 
Exchanges, and Automated Instruction Messaging are specified in the 
notice about the offer, which you can view via CA Web Announcements, 
ISO 20022 messaging and PTS RIPS or PBS Reorganizations and Redemptions 
functions. Unless otherwise specified in the PTS RIPS, PBS 
Reorganizations and Redemptions or ISO 20022 messaging, PTS PTOP, PBS 
Voluntary Tenders and Exchanges, and Automated Instruction Messaging 
are available on those dates for this purpose. DTC processing cut-off 
times on the day of expiration typically will be either 5:00 p.m. ET 
(where the notice of the offer specifies an expiration time of 5:00 
p.m. ET on expiration date) or 6:00 p.m. ET (where the notice of the 
offer specifies an expiration time between 6:00 p.m. ET and midnight on 
expiration date). Please note that the DTC processing cut-off times for 
offers that specify an offer expiration time before 5:00 p.m. ET on 
expiration date will vary depending on the facts and circumstances of 
the offer.
    Note: Participants are reminded that expiration and cutoff time may 
vary per the terms of the offer. Participants are independently 
responsible to confirm, per the terms of the offer and announcement, 
the offer expiration date and time, as well as the applicable DTC 
processing cut-off time, per the terms of the offer and the 
announcement.''
    15. In the ``Checklist for Submitting a Protect'' section, insert 
the following language to address how a Participant needs to 
acknowledge the Notice of Guaranteed Delivery when it transmits an 
acceptance by Notice of Guaranteed Delivery via Automated Instruction 
Messaging:
    ``Likewise, when you transmit an acceptance via Automated 
Instruction Messaging, you will be required to acknowledge the Notice 
of Guaranteed Delivery required by the offer identified by the contra-
CUSIP you specify in your acceptance. The message must contain your 
acknowledgement. If your message does not contain your acknowledgement, 
your acceptance will be rejected. By acknowledging the Notice of 
Guaranteed Delivery via Automated Instruction Messaging, you agree that 
(i) you have received, and will be bound by the terms of, the Notice of 
Guaranteed Delivery required by the offer identified in the acceptance 
and (ii) the agreement set forth in the preceding clause (i) may be 
enforced against you by the Offeror in such offer.''
    16. In the ``Submitting a Cover of Protect via PTS PTOP or PBS 
Voluntary Tenders and Exchanges for an ATOP-Eligible Offer,'' section, 
in order to reflect that for an ATOP Offer with (i) an actual 
expiration time between 6:00 p.m. ET and midnight, the DTC Cut-Off Time 
would typically be 6:00 p.m. ET, and (ii) an actual expiration time 
before 5:00 p.m. ET on expiration date, the DTC Cut-Off Time would vary 
depending on the facts and circumstances of the offer, DTC is proposing 
to replace the existing paragraph that begins ``The dates on which you 
can submit a cover of protect via PTOP . . .'' with the following 
paragraphs:
    ``The dates on which you can submit a cover of protect via PTS 
PTOP, PBS Voluntary Tenders and Exchanges, and Automated Instruction 
Messaging are specified in the notice about the offer, which you can 
view via CA Web Announcements, ISO 20022 messaging and PTS RIPS or PBS 
Reorganizations and Redemptions functions. Unless otherwise specified 
in the notice, PTS PTOP, PBS Voluntary Tenders and Exchanges, and 
Automated Instruction Messaging are available on those dates for this 
purpose. DTC processing cut-off times on the day of expiration 
typically will be either 5:00 p.m. ET (where the notice of the offer 
specifies an expiration time of 5:00 p.m. ET on expiration date) or 
6:00 p.m. ET (where the notice of the offer specifies an expiration 
time between 6:00 p.m. ET and midnight on expiration date). Please note 
that the DTC processing cut-off times for offers that specify an offer 
expiration time before 5:00 p.m. ET on expiration date will vary 
depending on the facts and circumstances of the offer.
    Note: Participants are reminded that expiration and cutoff time may 
vary per the terms of the offer. Participants are independently 
responsible to confirm, per the terms of the offer and announcement, 
the offer expiration date and time, as well as the applicable DTC 
processing cut-off time, per the terms of the offer and the 
announcement.''
    17. In the ``Checklist for Submitting a Cover of Protect via PTS 
PTOP or PBS Voluntary Tenders and Exchanges'' section:
    a. At the end of the first bulleted paragraph under number 6 of the 
checklist, in order to reflect that the ``made'' status of an Automated 
Instruction Message would be confirmed in the Automated Response 
Message, add the sentence ``The Automated Response Message will confirm 
the ``made'' status.''
    b. Insert the following language to address how a Participant needs 
to acknowledge the Letter of Transmittal when it transmits a cover of 
protect via Automated Instruction Messaging:

[[Page 36814]]

    ``Likewise, when you transmit an instruction to cover a protect via 
Automated Instruction Messaging, you will be required to acknowledge 
the Letter of Transmittal required by the offer identified by the 
contra-CUSIP you specify in your instruction. The message must contain 
your acknowledgement. If your message does not contain your 
acknowledgement, your instruction will be rejected. By submitting the 
acknowledgment via Automated Instruction Messaging, you agree that (i) 
you have received, and will be bound by the terms of, the Letter of 
Transmittal required by the offer identified in the acceptance and (ii) 
the agreement set forth in the preceding clause (i) may be enforced 
against you by the Offeror in such offer.''
    18. In the ``Submitting a Cover of Protect via PTS PTOP or PBS 
Voluntary Tenders and Exchanges on Behalf of Another Participant'' 
section, in order to reflect that for an ATOP Offer with (i) an actual 
expiration time between 6:00 p.m. ET and midnight, the DTC Cut-Off Time 
would typically be 6:00 p.m. ET, and (ii) an actual expiration time 
before 5:00 p.m. ET on expiration date, the DTC Cut-Off Time would vary 
depending on the facts and circumstances of the offer, DTC is proposing 
to replace the existing paragraph that begins ``The dates on which you 
can submit a cover of protect are specified in the notice about the 
offer . . .'' with the following paragraphs:
    ``The dates on which you can submit a cover of protect via PTS PTOP 
and PBS Voluntary Tenders and Exchanges are specified in the notice 
about the offer, which you can view via CA Web Announcements, ISO 20022 
messaging and PTS RIPS or PBS Reorganizations and Redemptions 
functions. Unless otherwise specified in the PTS RIPS, PBS 
Reorganizations and Redemptions or ISO 20022 messaging, PTS PTOP and 
PBS Voluntary Tenders and Exchanges are available on those dates for 
this purpose. DTC processing cut-off times on the day of expiration 
typically will be either 5:00 p.m. ET (where the notice of the offer 
specifies an expiration time of 5:00 p.m. ET on expiration date) or 
6:00 p.m. ET (where the notice of the offer specifies an expiration 
time between 6:00 p.m. ET and midnight on expiration date). Please note 
that the DTC processing cut-off times for offers that specify an offer 
expiration time before 5:00 p.m. ET on expiration date will vary 
depending on the facts and circumstances of the offer.
    Note: Participants are reminded that expiration and cutoff time may 
vary per the terms of the offer. Participants are independently 
responsible to confirm, per the terms of the offer and announcement, 
the offer expiration date and time, as well as the applicable DTC 
processing cut-off time, per the terms of the offer and the 
announcement.''
    19. In the ``Withdrawing an Acceptance of an ATOP-Eligible Offer'' 
section, in order to reflect that for an ATOP Offer with (i) an actual 
expiration time between 6:00 p.m. ET and midnight, the DTC Cut-Off Time 
would typically be 6:00 p.m. ET, and (ii) an actual expiration time 
before 5:00 p.m. ET on expiration date, the DTC Cut-Off Time would vary 
depending on the facts and circumstances of the offer, DTC is proposing 
to replace the existing paragraph that begins ``The dates on which you 
can submit a withdrawal of acceptance are specified in the notice about 
the offer . . .'' with the following paragraphs:
    ``The dates on which you can submit a withdrawal of acceptance via 
PTS PTOP and PBS Voluntary Tenders and Exchanges are specified in the 
notice about the offer, which you can view via CA Web Announcements, 
ISO 20022 messaging and PTS RIPS or PBS Reorganizations and Redemptions 
functions. Unless otherwise specified in the PTS RIPS, PBS 
Reorganizations and Redemptions or ISO 20022 messaging, PTS PTOP and 
PBS Voluntary Tenders and Exchanges are available on those dates for 
this purpose. DTC processing cut-off times on the day of expiration 
typically will be either 5:00 p.m. ET (where the notice of the offer 
specifies an expiration time of 5:00 p.m. ET on expiration date) or 
6:00 p.m. ET (where the notice of the offer specifies an expiration 
time between 6:00 p.m. ET and midnight on expiration date). Please note 
that the DTC processing cut-off times for offers that specify an offer 
expiration time before 5:00 p.m. ET on expiration date will vary 
depending on the facts and circumstances of the offer.
    Note: Participants are reminded that expiration and cutoff time may 
vary per the terms of the offer. Participants are independently 
responsible to confirm, per the terms of the offer and announcement, 
the offer expiration date and time, as well as the applicable DTC 
processing cut-off time, per the terms of the offer and the 
announcement.''
    20. Make ministerial changes to correct typos and omissions and to 
enhance conformity and readability, including, but not limited to:
    a. In the copyright line of the ``Important Legal Information'' 
section, replacing ``2020'' with ``2021.''
    b. Adding the name of the corresponding PBS function where the 
equivalent PTS function is referenced.
    c. Augmenting mentions of PBS and PTS functions with their full 
technical names.
    d. Removing internal references to other sections within the Guide 
that are incorrect, no longer relevant, or that no longer exist.
    e. Inserting references to the CA Web to correctly reflect that a 
Participant can check the CA Web, in addition to its Participant Daily 
Activity Statement and Automated Response Messages, to ensure that its 
transactions were properly processed and recorded.
    f. Inserting references to ISO 20022 messaging and the CA Web to 
correctly reflect them as sources of ATOP-eligible Offer details.
    g. Correcting certain typographical errors.
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules 
be designed to promote the prompt and accurate clearance and settlement 
of securities transactions.\16\
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    \16\ 15 U.S.C. 78q-1(b)(3)(F).
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    The proposed rule change would amend the Guide to provide 
Participants with the option to use Automated Instruction Messaging for 
ATOP Offers. As discussed above, the use of Automated Instruction 
Messaging for ATOP Offers would provide greater straight-through 
processing, improved accuracy, more efficient integration channels and 
less processing risk than nonautomated processing.
    The proposed rule change would also amend the Guide to adjust and 
clarify the DTC Cut-Off Times for the submission of instructions in 
connection with ATOP Offers. Specifically, the proposed rule change 
would clarify that for ATOP Offers with an actual expiration time 
between 6:00 p.m. ET and midnight on expiration date, the DTC Cut-Off 
Time typically is 6:00 p.m. ET, instead of 5:00 p.m. ET. DTC believes 
that providing Participants with clear directions about the deadlines 
for the submission of instructions would facilitate the timely 
submission of instructions and help avoid the submission of 
instructions outside of DTC. In addition, the proposed rule change 
would amend the Guide to provide that, with respect to an ATOP Offer 
with an actual expiration time earlier than 5:00 p.m. ET on expiration 
date, the DTC Cut-Off Time would vary depending on the particular facts 
and circumstances of the ATOP Offer. By eliminating the established 
1:00 p.m. ET DTC Cut-Off Time for these offers, DTC would have the 
flexibility to provide Participants with a

[[Page 36815]]

DTC Cut-off Time that would be most appropriate to the circumstances, 
thereby facilitating the timely and orderly submission of instructions.
    Finally, DTC believes that the proposed rule change to amend the 
Guide to make technical and clarifying changes would enhance the 
clarity and transparency of the Guide. By enhancing the clarity and 
transparency of the Guide, the proposed rule change would allow 
Participants to more efficiently and effectively conduct their business 
in connection with processing reorganization events and associated 
securities transactions.
    Based on the foregoing, DTC believes that the proposed rule change 
is designed to promote the prompt and accurate clearance and settlement 
of securities transactions, consistent with Section 17A(b)(3)(F) of the 
Act, cited above.

(B) Clearing Agency's Statement on Burden on Competition

    DTC believes that the proposed rule change to provide Participants 
with the option to use Automated Instruction Messaging for ATOP Offers 
would not have any impact on competition.\17\ Automated Instruction 
Messaging would be an optional service that would be available to all 
Participants in connection with ATOP Offers. In addition, DTC believes 
that the proposed rule change to amend the Guide to adjust and clarify 
DTC Cut-Off Times for the submission of ATOP Offer instructions, and to 
make technical and ministerial changes to the Guide, would not have any 
impact on competition because it would merely provide Participants with 
clear directions about the deadlines for the submission of 
instructions, and would enhance the clarity of the procedures relating 
to ATOP Offers. In light of the foregoing, DTC does not believe that 
the proposed rule change would impose a burden on competition.\18\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78q-1(b)(3)(I).
    \18\ Id.
---------------------------------------------------------------------------

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

    Written comments relating to the proposed rule change have not been 
solicited or received. DTC will notify the Commission of any written 
comments received by DTC.

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) \19\ of the Act and paragraph (f) \20\ 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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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-2021-010 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-2021-010. 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-rule-filings.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-DTC-2021-010 and should be submitted on 
or before August 3, 2021.
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    \21\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-14795 Filed 7-12-21; 8:45 am]
BILLING CODE 8011-01-P