Document ID: SEC-2017-1522-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2017-09-14T04:00Z

[Federal Register Volume 82, Number 177 (Thursday, September 14, 2017)]
[Notices]
[Pages 43274-43276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19476]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81554; File No. SR-DTC-2017-017]

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Add a Discount to the Pricing Schedule for Special Requests for 
Security Position Reports Relating to Municipal Security Issues

September 8, 2017.
    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 September 1, 2017, 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)(2) 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)(2).

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[[Page 43275]]

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change by DTC would revise the text of the 
pricing schedule (``Pricing Schedule'') for Security Position Reports 
(``SPRs'') \5\ with respect to charges for special request reports 
(``Special Requests'') relating to municipal security issues (``Muni 
Issues''). Specifically, the proposed rule change would add to the 
Pricing Schedule a discount (``Muni Discount'') for Special Requests 
relating to Muni Issues (``Special Muni Requests'').\6\
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    \5\ Available at http://www.dtcc.com/asset-services/issuer-services/spr-pricing.
    \6\ Terms not otherwise defined herein have the meaning set 
forth in the DTC Rules, By-laws and Organization Certificate (``DTC 
Rules''), available at http://www.dtcc.com/legal/rules-and-procedures.aspx, and the DTC Operational Arrangements (``OA''), 
available at http://www.dtcc.com/~/media/Files/Downloads/legal/
issue-eligibility/eligibility/operational-arrangements.pdf.
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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
    SPRs, which are available by subscription on a daily, weekly, or 
monthly basis,\7\ are listings by CUSIP number of Participants' 
holdings of Issuer Securities on a specific date for specific 
Securities, that DTC may provide to Issuers, trustees and authorized 
third-party Agents of Issuers and trustees (collectively, 
``Users'').\8\ A Special Request, which may be ordered by a User as 
needed on any given Business Day, shows the closing position for each 
Participant having the applicable Security credited to its Account on a 
specified date. Users request these reports for various reasons, 
including facilitating their proxy activities and communicating with 
holders with respect to their issues. Because of the cost that DTC 
incurs in producing these, and other related reports, DTC charges Users 
a fee when they request a report, as set forth in the Pricing 
Schedule.\9\
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    \7\ Daily, weekly, and monthly subscriptions are made on an 
annual basis. A monthly subscription shows the closing position for 
each Participant having the applicable Security credited to its 
Account on the last Business Day of the month. A weekly subscription 
shows the daily closing position for each Participant having the 
Security credited to its Account during the week along with the 
weekly percentage and share changes. A daily subscription shows the 
closing position for each Participant having the Security credited 
to its Account on each Business Day.
    \8\ OA, supra note 6, at 53.
    \9\ Supra note 5.
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    The fee for Special Requests is $120 per report, per date 
requested. However, DTC is proposing to provide the Muni Discount for 
Special Muni Requests to reduce the Users' cost burden relating to high 
volume Special Muni Requests. The Muni Discount would be applied to 
Special Requests, using the calculation described further below, when 
the following criteria (``Muni Discount Criteria'') are met:
    (i) The CUSIP numbers entered for Special Muni Requests share the 
same six digit base and the same ``Dated Date''; \10\ and
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    \10\ The Dated Date is the date at which interest begins to 
accrue on fixed income securities, including municipal bonds. A 
footnote would be added to the Pricing Schedule defining Dated Date.
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    (ii) the Special Muni Requests are entered on the same Business Day 
with the same request start date by the same User.
    Under the proposed Muni Discount, a User would be charged the 
standard $120 fee for a Special Muni Request, but the User would 
receive for free up to nine additional Special Muni Requests that have 
the same Muni Discount Criteria as the first Special Muni Request. In 
other words, if a User purchases one Special Muni Request, the User 
would receive nine more for free, where those additional nine have the 
same Muni Discount Criteria. If the User submits an eleventh Special 
Muni Request that meets the same Muni Discount Criteria as the first, 
the User would be charged another fee of $120 for that request, but 
then the next nine Special Muni Requests with the same Muni Discount 
Criteria would be free of charge. In the same way, if the User submits 
a new Special Muni Request with different Muni Discount Criteria than 
the prior submissions, a fee of $120 would be charged and the next nine 
Special Muni Requests conforming to the same criteria would be free of 
charge.
    DTC believes that applying the Muni Discount to Special Muni 
Requests would allow DTC to align the fees charged to Users for Special 
Muni Requests with DTC's costs of providing the related reports, 
because Special Muni Requests by a User for a single base CUSIP often 
involve a high volume of requests made simultaneously, allowing the 
requests to be fulfilled at the same time (rather than, for example, 
individually on separate days) and therefore resulting in a lower cost 
per request to DTC than low volume requests or otherwise related 
requests that may be spread over multiple days.
Proposed Revisions to the Pricing Schedule
    In connection with this proposal, DTC would update the Special 
Requests section of the Pricing Schedule to reflect details of the Muni 
Discount as described above.
Implementation
    The proposed rule change would be effective upon filing.
2. Statutory Basis
    Section 17A(b)(3)(D) of the Act \11\ requires that the rules of the 
clearing agency be designed, inter alia, in general, to provide for the 
equitable allocation of reasonable dues, fees and other charges. DTC 
believes that the proposed rule change is consistent with this 
provision because, by accounting for the reduced costs of processing 
high volume Special Muni Requests, providing the Muni Discount allows 
DTC to align the fees charged to Users for such Special Muni Requests 
with DTC's costs of providing the reports. Thus, by better aligning 
User fees with DTC's costs of providing Special Muni Requests, the 
proposed rule change would provide for a better equitable allocation of 
reasonable dues, fees, and other charges.
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    \11\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Clearing Agency's Statement on Burden on Competition

    DTC does not believe that the proposed rule change would place a 
burden on competition because it would not have an effect on User 
access to SPRs. The proposed rule change may promote competition by 
allowing Users to make Special Requests in higher volumes as needed to 
conduct their shareholder communication and other related activities 
without incurring significantly higher DTC fees.

[[Page 43276]]

(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. 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) of the Act \12\ and paragraph (f) of Rule 19b-4 
thereunder.\13\ 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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
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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-2017-017 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-2017-017. 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 the filing also will be available 
for inspection and copying at the principal office of DTC and on DTCC's 
Web site (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-2017-017 and should be 
submitted on or before October 5, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19476 Filed 9-13-17; 8:45 am]
 BILLING CODE 8011-01-P