DTC Alert! Proposed Rule Change โ€“ Amendment to the Reorganizations Service Guide (SR-DTC-2022-007) provide Participants with the option to submit certain instructions via APIs and ISO 20022 real-time messaging for eligible ATOP, ASOP and APUTS

Source: https://www.dtcc.com/-/media/Files/pdf/2022/6/28/17074-22.pdf

So what do they want real time messaging for?

About DTC's Automated Subscription Offer Program (ASOP):

DTC's Automated Subscription Offer Program (ASOP) allows you to accept a rights offer and receive the underlying securities within a fully automated book-entry environment. A right is a privilege granted to holders of an issuer's securities, allowing them to subscribe to shares of new underlying securities (usually common stock). Rights are short-term instruments with a life usually of 15 to 30 days. Rights subscription offers are normally characterized by limited advance notification of the offer, a restricted acceptance period, and specific requirements for the acceptance of an offer. Rights offers can also be characterized by step-up and oversubscription privileges, allowing a holder that fully exercises its rights (the basic subscription) to subscribe to one or more additional shares, over and above the number of shares to which the holder is entitled through the basic subscription, subject to the availability of additional shares.

ASOP allows you to submit subscription instructions, including basic subscriptions and the exercise of step-up and oversubscription privileges, authorizing DTC to surrender the rights and make the subscription payment to the agent.

What is Automated Tender Option Program (ATOP)?:

Automated Tender Option Program (ATOP) service allow consent solicitation events for Book Entry Only (BEO) securities in the depositoryโ€™s FAST program for Corporate Reorganization events.

A consent solicitation is the process by which a securityโ€™s issuer proposes changes to the material terms of the security agreement. These changes are for investors who hold a stake in the security. The consent solicitation is a request for permission to make a change on behalf of the stakeholder.

'The new ATOP functionality eliminates the manual process of collection and reconciliation of hard-copy instructions, which sharply reduces processing errors from lost documents, misallocations to multiple payees and the miscounting of hard-copy consent instructions. With no need to mail physical documents, the risk of missed expirations caused by mailing delays is removed entirely.'

In one example, utilizing the enhanced ATOP service allowed agents to send just one wire payment to The Depository Trust Company (DTC) -- as opposed to at least 179 separate wires that would have been handled outside of DTC previously.

Additional benefits of the ATOP expansion include facilitating the allocation of Consent Consideration by allowing Agents to centralize payment through DTC. This gives agents the ability to handle multiple elections for a single event while eliminating consents that could potentially exceed a participantโ€™s total outstanding position.

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