[Federal Register Volume 79, Number 154 (Monday, August 11, 2014)]
[Notices]
[Pages 46886-46887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18879]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72763; File No. SR-DTC-2014-08]
Self-Regulatory Organizations; The Depository Trust Company;
Order Approving Proposed Rule Change To Transfer NIIDS to a Non-
Clearing Agency Affiliate
August 5, 2014.
I. Introduction
On June 5, 2014, The Depository Trust Company (``DTC'') filed with
the Securities and Exchange Commission (``Commission'') proposed rule
change SR-DTC-2014-08 (``Proposed Rule Change'') pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 \1\ (``Act'') and Rule
19b-4 thereunder.\2\ The Proposed Rule Change was published for comment
in the Federal Register on June 25, 2014.\3\ The Commission did not
receive any comments on the Proposed Rule Change. This order approves
the Proposed Rule Change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 72432 (June 19, 2014);
79 FR 36116 (June 25, 2014) (SR-DTC-2014-08).
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II. Description
DTC filed the Proposed Rule Change to amend its Operational
Arrangements \4\ to transfer its New Issue Information Dissemination
Service (``NIIDS'') to a non-clearing agency affiliate (``NIIDS
Disseminator'').
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\4\ DTC Operational Arrangements, available at http://
www.dtcc.com/~/media/Files/Downloads/Settlement-Asset-Services/
Underwriting/operational-arrangements.pdf.
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The Commission approved DTC's establishment of NIIDS in 2008.\5\
NIIDS collects information (``NIIDS Data Elements'') regarding the
reporting, comparison, confirmation, and settlement of new issues in
municipal securities (``New Issue'') from the lead underwriter or other
authorized representative of a New Issue (``Dissemination Agent'') and
then makes that information available to information vendors and other
users (``Subscribers'') upon authorization by the Dissemination Agent.
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\5\ Securities Exchange Act Release No. 57768 (May 2, 2008); 73
FR 26181 (May 8, 2008) (SR-DTC-2007-10).
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Currently, when a Dissemination Agent provides authorization, DTC
disseminates the applicable NIIDS Data Elements directly to
Subscribers. Under the Proposed Rule Change, the Dissemination Agents
will continue to electronically input NIIDS Data Elements into DTC's
underwriting system for New Issue Processing but DTC will make NIIDS
Data Elements available to the NIIDS Disseminator, which will then deal
directly with Subscribers.
Additionally, because DTC will be a conduit of the NIIDS Data
Elements and related information, and because DTC does not confirm the
validity 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 data 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 NIIDS to the NIIDS Disseminator
will be set forth in a subsequent Important Notice to DTC Participants.
III. Discussion
Section 19(b)(2)(C) of the Act \6\ directs the Commission to
approve a proposed rule change of a self-regulatory 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 \7\ 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.
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\6\ 15 U.S.C. 78s(b)(2)(C).
\7\ 15 U.S.C. 78q-1(b)(3)(F).
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The Commission finds that the Proposed Rule Change is consistent
with the requirements of the Act because transferring NIIDS from DTC to
the NIIDS Disseminator will promote the prompt and accurate clearance
and
[[Page 46887]]
settlement of securities transactions by providing for a more efficient
allocation of DTC's resources.
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 \8\ and
the rules and regulations thereunder.
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\8\ 15 U.S.C. 78q-1.
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It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that proposed rule change SR-DTC-2014-08 be, and hereby is,
approved.\9\
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\9\ 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).
For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-18879 Filed 8-8-14; 8:45 am]
BILLING CODE 8011-01-P