Document ID: SEC-2014-1055-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2014-06-25T04:00Z

[Federal Register Volume 79, Number 122 (Wednesday, June 25, 2014)]
[Notices]
[Pages 36116-36118]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-14780]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72432; File No. SR-DTC-2014-08]

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of Proposed Rule Change To Transfer the NIIDS Service 
to a Non-Clearing Agency Affiliate

June 19, 2014.
    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 5, 2014, 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 primarily by DTC. 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.
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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 amendments to DTC's 
Operational Arrangements (``Operational Arrangements'') pursuant to 
which DTC will transfer its New Issue Information Dissemination System 
(``NIIDS'') service to a non-clearing agency affiliate of DTC.\3\
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    \3\ As more fully described in this proposed rule change, NIIDS 
is an information service only and does not relate to the 
performance of a clearing or settlement function.

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[[Page 36117]]

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, DTC 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. DTC 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
    In 2008, the Commission approved the establishment of the NIIDS 
service at DTC.\4\ The NIIDS service was designed to improve the 
process by which information pertaining to the reporting, comparison, 
confirmation and settlement of trades (``NIIDS Data Elements'') with 
respect to new issues in municipal securities (``New Municipal 
Issues'') might be provided by underwriters thereof to information 
vendors or other users of such information (``Subscribers'').
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    \4\ Securities Exchange Act Release No. 57768 (May 2, 2008), 73 
FR 26181 (May 8, 2008) (SR-DTC-2007-10).
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    The NIIDS service originates with making a New Municipal Issue DTC 
eligible. The lead underwriter or other authorized representative of 
such New Municipal Issue (``Dissemination Agent'') electronically 
inputs NIIDS Data Elements into DTC's underwriting system, and to the 
extent it chooses to, the Dissemination Agent may authorize DTC to 
disseminate \5\ the NIIDS Data Elements as set forth in DTC's 
Operational Arrangements. At present, when the Dissemination Agent 
gives such authorization, DTC disseminates the applicable NIIDS Data 
Elements directly to Subscribers.\6\
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    \5\ DTC's underwriting system with respect to New Municipal 
Issues offers an authorization indicator where the Dissemination 
Agent provides its request to and consent for DTC to disseminate the 
information.
    \6\ A Dissemination Agent's authorization to disseminate also 
includes authorization to disseminate the name and contact 
information of such Dissemination Agent and the time at which the 
NIIDS Data Elements were input.
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    Under the proposed rule change, Dissemination Agents will continue 
to electronically input NIIDS Data Elements into DTC's underwriting 
system for purposes of processing the underwriting and closing of New 
Municipal Issues through DTC; however, the dissemination activities 
with respect to such information will be transferred by DTC to a non-
clearing agency affiliate thereof (``NIIDS Disseminator''). Following 
the proposed rule change, once DTC has received authorization from the 
Dissemination Agent to disseminate, DTC will make such information 
available to the NIIDS Disseminator only. The NIIDS Disseminator may 
then deal directly with parties wishing to obtain the information, 
including but not limited to current Subscribers.
    Although the NIIDS service originates with data provided to DTC for 
purposes of processing the underwriting and closing of a New Municipal 
Issue through DTC, the NIIDS service is strictly a dissemination 
service (i.e., the dissemination of NIIDS Data Elements (and related 
information) to Subscribers). Dissemination of such information to 
Subscribers is not a clearing agency function, and accordingly, the 
dissemination of the information to appropriate contractual 
counterparties subscribing for that information might be done by an 
entity that is not a registered clearing agency.
    As DTC will continue to be only a conduit of the information and 
does not and will not confirm the validity of any of the NIIDS Data 
Elements, the inputting of NIIDS Data Elements, and the subsequent use 
thereof, by any party will constitute a waiver of any and all claims 
(whether direct or indirect) against DTC and its affiliates and an 
agreement that DTC and its affiliates shall not be liable for any loss 
or damages in relation to the collection and any subsequent 
dissemination of NIIDS Data Elements and related information. In 
addition, any party that inputs NIIDS Data Elements or thereafter uses 
such NIIDS Data Elements and related information agrees to indemnify 
and hold DTC and its affiliates harmless from and against any and all 
losses, damages, liabilities, costs, judgments, charges, and expenses 
incurred by such party arising out of or relating to the collection and 
subsequent dissemination of the NIIDS Data Elements.
    The date on which DTC will transfer the NIIDS service will be set 
forth in a subsequent Important Notice to DTC Participants.
2. Statutory Basis
    DTC believes that the proposed rule change is consistent with the 
requirements of the Act, specifically Section 17A(b)(3)(F),\7\ and the 
rules and regulations thereunder applicable to DTC, because the NIIDS 
Service is not a clearing agency function. The transfer of this service 
will provide for a more efficient allocation of DTC's resources, which 
will promote the prompt and accurate clearance and settlement of 
securities transactions in accordance with the Act.
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    \7\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Clearing Agency's Statement on Burden on Competition

    DTC does not believe that the proposed rule change will have any 
impact, or impose any burden on competition.

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 yet 
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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-DTC-2014-08 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2014-08. This file 
number should be included on the subject line if email is used. To help 
the

[[Page 36118]]

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 the filing also will be available for inspection 
and copying at the principal office of DTC and on DTC's Web site at 
http://dtcc.com/legal/sec-rule-filings.aspx. 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 Number SR-DTC-2014-08 and should be submitted on 
or before July 16, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-14780 Filed 6-24-14; 8:45 am]
BILLING CODE 8011-01-P