Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Scope and Update the Description of the Security Position Reports Service, 54598-54600 [E5-5028]

Download as PDF 54598 Federal Register / Vol. 70, No. 178 / Thursday, September 15, 2005 / Notices investors and the public interest. The two changes to the ‘‘A+’’ Tier that are described in this proposed rule change do not raise any new, unique, or substantive issues from those raised in the filing that initially established the ‘‘A+’’ Tier and the appointment cost for this tier.14 By lowering the ‘‘appointment cost’’ of the ‘‘A+’’ Tier, CBOE is reducing the cost to its members to trade in the products that are in this tier. For the reasons stated above, the Commission therefore designates the proposal to become operative immediately.15 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2005–74 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File Number SR–CBOE–2005–74. This file number should be included on the subject line if e-mail 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 (https://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 14 See supra note 5. purposes only of waiving the operative date of this proposal, the Commission has considered the impact of the proposed rule on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 15 For VerDate Aug<18>2005 15:03 Sep 14, 2005 Jkt 205001 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 inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. 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–CBOE–2005–74 and should be submitted on or before October 6, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Jonathan G. Katz, Secretary. [FR Doc. E5–5027 Filed 9–14–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52393; File No. SR–DTC– 2005–12] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Scope and Update the Description of the Security Position Reports Service September 8, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on August 23, 2005, The Depository Trust Company (‘‘DTC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change 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 parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The purpose of the proposed rule change is to clarify the scope and update the description of DTC’s Security Position Reports (‘‘SPRs’’) 16 17 1 15 PO 00000 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). Frm 00079 Fmt 4703 Sfmt 4703 Service it provides to issuers, trustees, and authorized agents.2 II. Self-Regulatory Organization’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 these statements.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SPRs are reports prepared by DTC that show for each issuer whose securities are eligible for DTC’s book entry services the identity of each DTC participant having that issuer’s securities credited to its participant account as of a selected date and the quantity of securities so credited (i.e., ‘‘security position’’). Prior to the creation of DTC, issuers had direct access to SPR information from their transfer agents. Now, most securities are registered with the transfer agent in the name of DTC’s nominee, Cede & Co., and issuers rely on DTC to provide them with SPR information. DTC also provides SPR information to trustees and authorized third party agents (‘‘TPAs’’). These entities typically need SPR information provided by DTC in order to properly conduct proxy, record date, and voting rights-related functions.4 2 DTC Rule 2 (‘‘Participants and Pledgees’’), Section 1 authorizes DTC to provide to the issuer of any security at any time credited to the account of the participant the name of the participant and the amount of the issuer’s securities so credited. DTC is also authorized to provide similar information to any appropriate governmental authority. 3 The Commission has modified the text of the summaries prepared by DTC. 4 In 1979, the Commission mandated that each clearing agency make SPRs available to issuers whose securities the clearing agency holds in its name or in the name of its nominee. Securities Exchange Act Release No. 16443 (December 28, 1979), 44 FR 76777. In 1989, a DTC rule change authorized DTC to provide SPRs to resolution and indenture trustees for debt obligations on deposit at DTC. Securities Exchange Act Release No. 27426 (November 7, 1989), 54 FR 47624 [File No. SR– DTC–89–20]. TPAs are also provided with such information as a result of their role in carrying out functions on behalf of issuers or trustees. DTC is modifying its SPR process to require all TPAs that receive SPR information to agree on an annual basis to only use such information for the benefit of the E:\FR\FM\15SEN1.SGM 15SEN1 Federal Register / Vol. 70, No. 178 / Thursday, September 15, 2005 / Notices Several types of SPRs are available: (1) Weekly reports showing daily closing positions during that week; (2) monthly reports showing closing positions on the last business day of the month; (3) quarterly dividend record date reports showing closing positions on the dividend record date; and (4) special requests showing closing positions for the date specified. Weekly reports, monthly reports, and quarterly dividend record date reports are available by annual subscription only. SPRs are available via Web browser from DTC’s secure internet site, by spreadsheet, by fax, and by computer-tocomputer facility (‘‘CCF’’) transmission.5 DTC charges a fee for each SPR and offers discounts for high volume SPR users.6 Issuers and trustees control their SPR account and authorize third party agent access to SPRs via DTC’s secure Internet site. After an issuer or trustee registers for the Web-based service, DTC validates the registrant’s status as an issuer or trustee. Once the registration is approved by DTC, an issuer or trustee may use the Web-based application to order SPRs for itself, as well as designate TPAs that may request SPRs.7 Additionally, DTC requires an annual confirmation by issuers and trustees of their SPR account registration information, including reconfirmation of third party authorizations.8 Similarly, subscriptions must be renewed annually. Delivery of SPR information is terminated for those TPAs that are not reconfirmed by the issuer. Upon a TPA’s first use of the Webbased system on behalf of a particular issuer or trustee, DTC verifies the validity of the TPA’s usage and sends an electronic request to the authorizing issuer or trustee asking for verification of the TPA’s approval to receive SPRs. Once such approval is verified, the authorized TPA may directly request SPRs through the Web-based system. In addition to the SPR program outlined above, DTC provides certain SPR type information, known as ‘‘call lottery results,’’ to auction agents for issuer or trustee. Implementation of this modification is targeted for year end 2005. 5 CCF transmission is generally available only to trustees and third parties and not to issuers because issuers typically do not maintain the required CCF application/connection to DTC. 6 DTC bills the issuer or trustee for all SPR requests including those made by their TPAs. 7 DTC is developing a system enhancement to allow issuers and trustees to limit the type of SPR information available to a particular TPA (e.g., weekly subscriptions only). 8 To allow issuers to better monitor what reports were ordered by whom and their cost, DTC is developing an enhancement that will provide issuers with sixty days of historical activity. VerDate Aug<18>2005 15:03 Sep 14, 2005 Jkt 205001 auction rate securities (‘‘ARS’’). ARS are securities whose interest or dividend rate is reset periodically. The reset interest rate is produced in an auction that is governed by a set of auction procedures established by the issuer, trustee, and its auction agent. In a typical auction, the auction agent, among other things: (1) Receives bids from holders indicating at what interest/ dividend rate they are willing to continue to hold the ARS and/or instructions from holders to sell their ARS unless a rate minimum is established; (2) determines which bids are valid and can be used in calculating the new rate; and (3) calculates the new rate (‘‘clearing rate’’) by determining the lowest interest/dividend rate at which there are purchasers willing to buy all ARS offered in the auction. Some ARS also have a ‘‘call lottery’’ feature, allowing the issuer to redeem a portion of the outstanding ARS shortly before the auction. Because of the typically short time period between the call lottery and the auction, a holder may have submitted a bid before learning his position was called in the lottery.9 In order to maintain the integrity of the auction process for the benefit of all parties involved, auction agents need the call lottery results to determine which bids came from valid holders and which bids should be ignored because the position has been called. Absent receiving such call lottery information, an auction agent may erroneously set the clearing rate using bids that are invalid because they represent positions that have been called. As with other SPRs, trustees must authorize DTC to provide call lottery results to the auction agent for that issue. Once authorized, the auction agent is considered a TPA consistent with the SPR program. Currently, the SPR process for call lottery results is manual. DTC is considering enhancements to its SPR system to incorporate ARS call lottery results in its Web-based application. The proposed rule change is consistent with the requirements of Section 17A of the Act 10 and the rules and regulations thereunder applicable to DTC because it is designed to foster cooperation and coordination with persons engaged in the clearance and settlement of securities transactions and to remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance and 9 Similarly, because of timing pressures, the call lottery results are typically provided even prior to settlement of the redemption. 10 15 U.S.C. 78q–1. PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 54599 settlement of securities transactions by clarifying the SPR service which should promote efficiencies in the proxy, record date, and voting rights functions performed by issuers, trustees, and authorized agents. (B) Self-Regulatory Organization’s Statement on Burden on Competition DTC does not believe that the proposed rule change will have any impact on or impose any burden on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments relating to the proposed rule change have 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 The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(i) of the Act 11 and Rule 19b– 4(f)(1) 12 thereunder because the proposed rule change constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate 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. 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 (https://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–DTC–2005–12 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, 11 15 12 17 E:\FR\FM\15SEN1.SGM U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). 15SEN1 54600 Federal Register / Vol. 70, No. 178 / Thursday, September 15, 2005 / Notices Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File Number SR–DTC–2005–12. This file number should be included on the subject line if e-mail 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 (https://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 inspection and copying in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of DTC and on DTC’s Web site at https:// login.dtcc.com/dtcorg/. 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–2005–12 and should be submitted on or before October 6, 2005. notice in the Federal Register notifying the public that the agency has made such a submission. DATES: Submit comments on or before October 17, 2005. If you intend to comment but cannot prepare comments promptly, please advise the OMB Reviewer and the Agency Clearance Officer before the deadline. Copies: Request for clearance (OMB 83–1), supporting statement, and other documents submitted to OMB for review may be obtained from the Agency Clearance Officer. ADDRESSES: Address all comments concerning this notice to: Agency Clearance Officer, Jacqueline White, Small Business Administration, 409 3rd Street, SW., 5th Floor, Washington, DC 20416; and David_Rostker@omb.eop.gov or fax at 202–2395–7285, Office of Management and Budget, Office of Information and Regulatory Affairs. FOR FURTHER INFORMATION CONTACT: Jacqueline White, Agency Clearance Officer, at: Jacqueline.white@sba.gov (202) 205–7044. SUPPLEMENTARY INFORMATION: Title: Entrepreneurial Development Impact Study. Form Number: SBA Form 2214. Frequency: Annually. Description of Respondents: SBA Clients. Responses: 7,378. Annual Burden: 7,378. BILLING CODE 8025–01–P Office of the Secretary Jonathan G. Katz, Secretary. [FR Doc. E5–5028 Filed 9–14–05; 8:45 am] Notice of Meeting of the Advisory Committee on International Law [Public Notice 5165] Reporting and Recordkeeping Requirements Under OMB Review Small Business Administration. Notice of reporting requirements submitted for OMB review. AGENCY: ACTION: SUMMARY: Under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35, agencies are required to submit proposed reporting and recordkeeping requirements to OMB for review and approval, and to publish a 13 17 CFR 200.30–3(a)(12). VerDate Aug<18>2005 15:03 Sep 14, 2005 Jkt 205001 BILLING CODE 4710–08–P DEPARTMENT OF TRANSPORTATION DEPARTMENT OF STATE SMALL BUSINESS ADMINISTRATION Dated: September 9, 2005. Judith L. Osborn, Attorney-Adviser, Office of United Nations Affairs, Office of the Legal Adviser, Executive Director, Advisory Committee on International Law, Department of State. [FR Doc. 05–18354 Filed 9–14–05; 8:45 am] Jacqueline K. White, Chief, Administrative Information Branch. [FR Doc. 05–18326 Filed 9–14–05; 8:45 am] For the Commission by the Division of Market Regulation, pursuant to delegated authority.13 BILLING CODE 8010–01–P prisoners and detainees, and recent developments on treaties. Entry to the building is controlled and will be facilitated by advance arrangements. Members of the public desiring access to the session should, by Tuesday, September 27, 2005, notify the Office of the Assistant Legal Adviser for United Nations Affairs (telephone: 202– 647–2767) of their name, date of birth; citizenship (country); ID number., i.e., U.S. government ID (agency), U.S. military ID (branch), passport (country), or drivers license (state); professional affiliation, address and telephone number in order to arrange admittance. This includes admittance for government employees as well as others. All attendees must use the ‘‘C’’ Street entrance. One of the following valid IDs will be required for admittance: any U.S. driver’s license with photo, a passport, or a U.S. Government agency ID. Because an escort is required at all times, attendees should expect to remain in the meeting for the entire morning or afternoon session. A meeting of the Advisory Committee on International Law will take place on Thursday, September 29, 2005, from 10 a.m. to approximately 4 p.m., as necessary, in Room 1207 of the United States Department of State, 2201 C Street, NW., Washington, DC. The meeting will be chaired by the Legal Adviser of the Department of State, John B. Bellinger, III, and will be open to the public up to the capacity of the meeting room. The meeting will discuss various issues relating to current international legal topics, including Presidential determinations to comply with International Court of Justice decisions: Avena and domestic litigation; the recent session of the International Law Commission; recent developments on PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 Notice of Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits Filed Under Subpart B (Formerly Subpart Q) During the Week Ending August 26, 2005 The following Applications for Certificates of Public Convenience and Necessity and Foreign Air Carrier Permits were filed under subpart B (formerly subpart Q) of the Department of Transportation’s Procedural Regulations (See 14 CFR 301.201 et. seq.). The due date for Answers, Conforming Applications, or Motions to Modify Scope are set forth below for each application. Following the Answer period DOT may process the application by expedited procedures. Such procedures may consist of the adoption of a show-cause order, a tentative order, or in appropriate cases a final order without further proceedings. Docket Number: OST–2005–22261 and OST–2005–22228. Date Filed: August 26, 2005. E:\FR\FM\15SEN1.SGM 15SEN1

Agencies

[Federal Register Volume 70, Number 178 (Thursday, September 15, 2005)]
[Notices]
[Pages 54598-54600]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5028]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52393; File No. SR-DTC-2005-12]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Clarify the Scope and Update the Description of the Security Position 
Reports Service

September 8, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 23, 2005, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change 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 parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the proposed rule change is to clarify the scope and 
update the description of DTC's Security Position Reports (``SPRs'') 
Service it provides to issuers, trustees, and authorized agents.\2\
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    \2\ DTC Rule 2 (``Participants and Pledgees''), Section 1 
authorizes DTC to provide to the issuer of any security at any time 
credited to the account of the participant the name of the 
participant and the amount of the issuer's securities so credited. 
DTC is also authorized to provide similar information to any 
appropriate governmental authority.
---------------------------------------------------------------------------

II. Self-Regulatory Organization'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 these 
statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified the text of the summaries 
prepared by DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    SPRs are reports prepared by DTC that show for each issuer whose 
securities are eligible for DTC's book entry services the identity of 
each DTC participant having that issuer's securities credited to its 
participant account as of a selected date and the quantity of 
securities so credited (i.e., ``security position''). Prior to the 
creation of DTC, issuers had direct access to SPR information from 
their transfer agents. Now, most securities are registered with the 
transfer agent in the name of DTC's nominee, Cede & Co., and issuers 
rely on DTC to provide them with SPR information. DTC also provides SPR 
information to trustees and authorized third party agents (``TPAs''). 
These entities typically need SPR information provided by DTC in order 
to properly conduct proxy, record date, and voting rights-related 
functions.\4\
---------------------------------------------------------------------------

    \4\ In 1979, the Commission mandated that each clearing agency 
make SPRs available to issuers whose securities the clearing agency 
holds in its name or in the name of its nominee. Securities Exchange 
Act Release No. 16443 (December 28, 1979), 44 FR 76777. In 1989, a 
DTC rule change authorized DTC to provide SPRs to resolution and 
indenture trustees for debt obligations on deposit at DTC. 
Securities Exchange Act Release No. 27426 (November 7, 1989), 54 FR 
47624 [File No. SR-DTC-89-20]. TPAs are also provided with such 
information as a result of their role in carrying out functions on 
behalf of issuers or trustees. DTC is modifying its SPR process to 
require all TPAs that receive SPR information to agree on an annual 
basis to only use such information for the benefit of the issuer or 
trustee. Implementation of this modification is targeted for year 
end 2005.

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[[Page 54599]]

    Several types of SPRs are available: (1) Weekly reports showing 
daily closing positions during that week; (2) monthly reports showing 
closing positions on the last business day of the month; (3) quarterly 
dividend record date reports showing closing positions on the dividend 
record date; and (4) special requests showing closing positions for the 
date specified. Weekly reports, monthly reports, and quarterly dividend 
record date reports are available by annual subscription only. SPRs are 
available via Web browser from DTC's secure internet site, by 
spreadsheet, by fax, and by computer-to-computer facility (``CCF'') 
transmission.\5\ DTC charges a fee for each SPR and offers discounts 
for high volume SPR users.\6\
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    \5\ CCF transmission is generally available only to trustees and 
third parties and not to issuers because issuers typically do not 
maintain the required CCF application/connection to DTC.
    \6\ DTC bills the issuer or trustee for all SPR requests 
including those made by their TPAs.
---------------------------------------------------------------------------

    Issuers and trustees control their SPR account and authorize third 
party agent access to SPRs via DTC's secure Internet site. After an 
issuer or trustee registers for the Web-based service, DTC validates 
the registrant's status as an issuer or trustee. Once the registration 
is approved by DTC, an issuer or trustee may use the Web-based 
application to order SPRs for itself, as well as designate TPAs that 
may request SPRs.\7\ Additionally, DTC requires an annual confirmation 
by issuers and trustees of their SPR account registration information, 
including reconfirmation of third party authorizations.\8\ Similarly, 
subscriptions must be renewed annually. Delivery of SPR information is 
terminated for those TPAs that are not reconfirmed by the issuer.
---------------------------------------------------------------------------

    \7\ DTC is developing a system enhancement to allow issuers and 
trustees to limit the type of SPR information available to a 
particular TPA (e.g., weekly subscriptions only).
    \8\ To allow issuers to better monitor what reports were ordered 
by whom and their cost, DTC is developing an enhancement that will 
provide issuers with sixty days of historical activity.
---------------------------------------------------------------------------

    Upon a TPA's first use of the Web-based system on behalf of a 
particular issuer or trustee, DTC verifies the validity of the TPA's 
usage and sends an electronic request to the authorizing issuer or 
trustee asking for verification of the TPA's approval to receive SPRs. 
Once such approval is verified, the authorized TPA may directly request 
SPRs through the Web-based system.
    In addition to the SPR program outlined above, DTC provides certain 
SPR type information, known as ``call lottery results,'' to auction 
agents for auction rate securities (``ARS''). ARS are securities whose 
interest or dividend rate is reset periodically. The reset interest 
rate is produced in an auction that is governed by a set of auction 
procedures established by the issuer, trustee, and its auction agent. 
In a typical auction, the auction agent, among other things: (1) 
Receives bids from holders indicating at what interest/dividend rate 
they are willing to continue to hold the ARS and/or instructions from 
holders to sell their ARS unless a rate minimum is established; (2) 
determines which bids are valid and can be used in calculating the new 
rate; and (3) calculates the new rate (``clearing rate'') by 
determining the lowest interest/dividend rate at which there are 
purchasers willing to buy all ARS offered in the auction.
    Some ARS also have a ``call lottery'' feature, allowing the issuer 
to redeem a portion of the outstanding ARS shortly before the auction. 
Because of the typically short time period between the call lottery and 
the auction, a holder may have submitted a bid before learning his 
position was called in the lottery.\9\ In order to maintain the 
integrity of the auction process for the benefit of all parties 
involved, auction agents need the call lottery results to determine 
which bids came from valid holders and which bids should be ignored 
because the position has been called. Absent receiving such call 
lottery information, an auction agent may erroneously set the clearing 
rate using bids that are invalid because they represent positions that 
have been called.
---------------------------------------------------------------------------

    \9\ Similarly, because of timing pressures, the call lottery 
results are typically provided even prior to settlement of the 
redemption.
---------------------------------------------------------------------------

    As with other SPRs, trustees must authorize DTC to provide call 
lottery results to the auction agent for that issue. Once authorized, 
the auction agent is considered a TPA consistent with the SPR program. 
Currently, the SPR process for call lottery results is manual. DTC is 
considering enhancements to its SPR system to incorporate ARS call 
lottery results in its Web-based application.
    The proposed rule change is consistent with the requirements of 
Section 17A of the Act \10\ and the rules and regulations thereunder 
applicable to DTC because it is designed to foster cooperation and 
coordination with persons engaged in the clearance and settlement of 
securities transactions and to remove impediments to and perfect the 
mechanism of a national system for the prompt and accurate clearance 
and settlement of securities transactions by clarifying the SPR service 
which should promote efficiencies in the proxy, record date, and voting 
rights functions performed by issuers, trustees, and authorized agents.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

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

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    No written comments relating to the proposed rule change have 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

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(i) of the Act \11\ and Rule 19b-4(f)(1) \12\ 
thereunder because the proposed rule change constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule. At any time within 
sixty days of the filing of the proposed rule change, the Commission 
may summarily abrogate 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A)(i).
    \12\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

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 (https://
www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-DTC-2005-12 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary,

[[Page 54600]]

Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-9303.
    All submissions should refer to File Number SR-DTC-2005-12. This 
file number should be included on the subject line if e-mail 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 (https://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 inspection 
and copying in the Commission's Public Reference Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of DTC and on DTC's 
Web site at https://login.dtcc.com/dtcorg/. 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-2005-12 and 
should be submitted on or before October 6, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).

Jonathan G. Katz,
Secretary.
[FR Doc. E5-5028 Filed 9-14-05; 8:45 am]
BILLING CODE 8010-01-P
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