[Federal Register Volume 91, Number 91 (Tuesday, May 12, 2026)]
[Notices]
[Pages 26169-26171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-09364]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105414; File No. SR-DTC-2026-006]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Align the Notice Period for Missed Transfer Adjustments in the
Distributions Service Guide
May 7, 2026.
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 May 6, 2026, The Depository Trust Company (``DTC'') \3\ 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 \4\ and Rule 19b-
4(f)(4) thereunder.\5\ 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\ Capitalized terms not defined herein shall have the meaning
assigned to such terms in the Rules, By-Laws and Organization
Certificate of DTC (``DTC Rules''), available at www.dtcc.com/-/media/Files/Downloads/legal/rules/dtc_rules.pdf.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 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 amendments to the
Distributions Service Guide \6\ to (i) align the notice period for
missed transfer adjustments with the notice periods for other
adjustments resulting from changes to rates, record dates or payable
dates, and (ii) relocate the guidance regarding missed transfer
adjustments to a different section in the Distributions Service Guide
so that it appears alongside other adjustment-related provisions.
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\6\ Available at www.dtcc.com/-/media/Files/Downloads/legal/service-guides/Service-Guide-Distributions.pdf. The Distributions
Service Guide is a Procedure of DTC. Pursuant to the DTC Rules, the
term ``Procedures'' means the Procedures, service guides, and
regulations of DTC adopted pursuant to Rule 27 (Procedures), as
amended from time to time. Rule 1 (Definitions; Governing Law),
Section 1, supra note 3. DTC's Procedures are filed with the
Commission. They are binding on DTC and each Participant in the same
manner as they are bound by the DTC Rules. Rule 27, supra note 3.
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[[Page 26170]]
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
DTC proposes to amend the Distributions Service Guide to (i) align
the notice period for missed transfer adjustments with the notice
periods for other adjustments resulting from changes to rates, record
dates or payable dates, and (ii) relocate the guidance regarding missed
transfer adjustments to a different section in the Distributions
Service Guide so that it appears alongside other adjustment-related
provisions.
Background
In order for DTC to clear, settle and, in general, service
securities it holds on behalf of its Participants, ownership of the
securities must be in the name of DTC's nominee, Cede & Co. Therefore,
when DTC receives DTC-eligible securities for deposit at DTC from a
Participant, it forwards them to the issuer's transfer agent to request
ownership be transferred from the current owner to Cede & Co. At times,
these requests are made on or near the record date of a corporate
action event for the issuance, with the expectation that the ownership
transfer is completed by the record date.
In such instances, DTC proactively monitors whether ownership
transfers have been completed. If the transfer is not completed by the
record date (a ``Missed Transfer''), DTC would adjust the Participant's
record date position so that the corporate action event is properly
credited or allocated to the Participant via DTC and not to an account
outside of DTC.\7\
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\7\ See Entitlements/Allocations, Interim Accounting,
Participant Deposits Missing Transfer, supra note 6, at 28-29.
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Missed Transfers
Missed Transfer adjustments are one of two adjustment types
described in the Distributions Service Guide. The other adjustment type
consists of post-allocation adjustments to correct a rate, record date,
or payable date.\8\ While both adjustment types are subject to a notice
periods, the Missed Transfer periods do not align with the periods
applicable to the other adjustment type.
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\8\ See Adjustments, Reasons for Charge-Backs and Adjustments,
Adjustments Resulting from Changes to Rates, Record Dates, or
Payable Dates, supra note 6, at 32.
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Currently, if a Missed Transfer is identified within 30 days of the
original allocation, DTC sends notice of a claim (i.e., a debit from
the Participant's account) to Participants three days before processing
the related charge to the Participant's account.\9\ If a Missed
Transfer is identified more than 30 days after the original allocation,
DTC sends notice of a claim (i.e., a debit from the Participant's
account) to Participants five days before processing the related charge
to the Participant's account.\10\
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\9\ Supra note 7.
\10\ Id.
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The proposed rule change would revise the Missed Transfer notice
periods to align with the other adjustment periods. Specifically, DTC
would change the notice period from three days to one day for Missed
Transfers identified within 30 days of the original allocation, and
from five days to three days for Missed Transfers identified more than
30 days after the original allocation.
As revised, Missed Transfer adjustments would follow the same
notice period as other adjustments in the Distributions Service Guide:
one day for adjustments identified within 30 days of the original
allocation and three days for adjustments identified more than 30 days
after the original allocation.\11\
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\11\ Supra note 8.
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Relocation of Missed Transfer Notice Period Guidance
In addition to aligning the notice periods, the proposed rule
change would relocate the Missed Transfer notice period guidance from
the section regarding Interim Accounting to the section regarding
Adjustments, so that all adjustment periods would appear in one place.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act requires, in part, that the DTC
Rules be designed to promote the prompt and accurate clearance and
settlement of securities transactions and to protect investors and the
public interest.\12\ DTC believes the proposed rule change is
consistent with Section 17A(b)(3)(F) of the Act.
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
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This proposed rule change is intended to provide Participants with
more consistent, standardized guidance regarding adjustment notice
periods for DTC's Distributions Service. By aligning the notice periods
applicable to Missed Transfer adjustments with the notice periods for
other charge-backs, DTC would apply a uniform timetable across
adjustment types. Uniform periods would improve operational efficiency
and predictability for Participants and DTC, help ensure timely
processing of adjustments, and help reduce the risk of processing
errors associated with differing notice periods. Further, by relocating
the notice period guidance for Missed Transfers so that it appears
alongside the other adjustment guidance, Participants will more easily
locate the information because it will be in one place. Therefore, DTC
believes that the proposed rule change would help promote the prompt
and accurate clearance and settlement of securities transactions and
protect investors and the public interest, consistent with Section
17A(b)(3)(F) of the Act, cited above.
(B) Clearing Agency's Statement on Burden on Competition
DTC does not believe that the proposed rule change would impose a
burden or otherwise have a significant impact on competition as it is
only a conforming change to promote uniformity and predictability with
respect to adjustment notice periods in the Distributions Service
Guide. Uniformity ensures that the same requirements would apply for
all related adjustments equally, while predictability, both in the
periods and in location, ensures that all Participants can easily find
and apply the guidance. Finally, the proposal would not introduce a new
or unique cost or change for Participants. For these reasons, DTC
believes the proposed rule change would not impose any burden on
competition.
(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. If any written comments are received, DTC will amend
this filing to publicly file such comments as an Exhibit 2 to this
filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to
Section IV
[[Page 26171]]
(Solicitation of Comments) of the Exhibit 1A in the General
Instructions to Form 19b-4, the Commission does not edit personal
identifying information from comment submissions. Commenters should
submit only information that they wish to make available publicly,
including their name, email address, and any other identifying
information.
All prospective commenters should follow the Commission's
instructions on how to submit comments, available at www.sec.gov/rules-regulations/how-submit-comment. General questions regarding the rule
filing process or logistical questions regarding this filing should be
directed to the Main Office of the SEC's Division of Trading and
Markets at [email protected] or 202-551-5777.
DTC reserves the right to not respond to any comments received.
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) \13\ of the Act and paragraph (f) of Rule 19b-4
thereunder.\14\ 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. If
the Commission takes such action, the Commission will institute
proceedings to determine whether the proposed rule change should be
approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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 (www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-DTC-2026-006 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-2026-006. 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 (www.sec.gov/rules/sro.shtml). Copies
of the filing will be available for inspection and copying at the
principal office of DTC and on DTCC's website (www.dtcc.com/legal/sec-rule-filings). Do not include personal identifiable information in
submissions; you should submit only information that you wish to make
available publicly. We may redact in part or withhold entirely from
publication submitted material that is obscene or subject to copyright
protection. All submissions should refer to File Number SR-DTC-2026-006
and should be submitted on or before June 2, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2026-09364 Filed 5-11-26; 8:45 am]
BILLING CODE 8011-01-P