Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Clarify Procedures Relating to the Destruction of Certain Non-Transferable Securities Certificates That Are Held in DTC's Internal Removal Account Known as PREM, 58761-58762 [E5-5524]
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Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52524; No. SR–DTC–2005–
10]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change to Clarify
Procedures Relating to the Destruction
of Certain Non-Transferable Securities
Certificates That Are Held in DTC’s
Internal Removal Account Known as
PREM
September 28, 2005.
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 August
18, 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. DTC has filed the
proposal pursuant to Section
19(b)(3)(A)(i) of the Act 3 and Rule 19b–
4(f)(1) thereunder,4 which renders the
proposal effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the rule change from
interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The purpose of this rule filing is to
clarify certain procedures with respect
to an earlier filing submitted by DTC
and approved by the Commission that
allowed DTC to destroy certain nontransferable securities certificates.
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.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(i).
4 17 CFR 240.19b–4(f)(1).
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The purpose of this rule filing is to
clarify certain procedures pertaining to
the previously approved File No. SR–
DTC–2003–09.5 In File No. SR–DTC–
2003–09, DTC proposed a new service
designed to allow DTC to destroy
certain certificates representing
positions in securities for which transfer
agent services are no longer available
(‘‘non-transferable certificates’’). At the
time of the original filing, DTC held 1.2
million such certificates, representing
nearly 22% of DTC’s entire certificate
inventory. DTC instituted the
Destruction of Non-Transferable
Securities Certificates Program
(‘‘Program’’) in order to eliminate the
significant risks and costs associated
with the ongoing maintenance of
custody, control, and audit of these nontransferable certificates.
Prior to instituting the Program, many
participants used DTC’s Position
Removal (‘‘PREM’’) function to have
positions in issues of non-transferable
certificates moved from their participant
accounts to a DTC internal PREM
account. However, the certificates
representing those positions were still
held in DTC’s vaults with all the risks
and costs associated with storing such
certificates, maintaining the related
accounts, and monitoring the status of
such issues. Under the Program, DTC
extended the PREM process by
indicating that using PREM to move a
position constituted an
acknowledgement by the participant
that DTC could cease crediting the
security to the participant’s securities
account and that DTC could at its
optionand based upon its own criteria
include the certificates underlying the
position in a certificate destruction
program.
In File No. DTC–2003–09, DTC
indicated that it would implement the
Program ‘‘beginning first with issues in
which all participant positions have
been put in PREM.’’ However, the
Commission’s approval order of File No.
DTC–2003–09 stated that ‘‘DTC will
implement this new program with
issues in which all participant positions
have been moved to PREM.’’ DTC’s
intent in the original filing was to start
the Program with fully PREMed issues
but to thereafter continue with those
issues which had not been fully
PREMed. The purpose of the present
filing is to clarify this point and to make
clear that DTC did not in File No. DTC–
2003–09 intend that in the future it
would be a prerequisite for the
destruction of a particular issue of nontransferable certificates that every
participant must have moved their
respective positions in that issue to a
PREM account. DTC wishes to make
clear that it may destroy any nontransferable certificates for which the
positions have been PREMed even if all
participants have not yet moved their
positions into PREM. DTC will maintain
a certificate or certificates representing
those positions that have not yet been
entered into PREM. DTC has no
intention of clarifying or modifying any
other part of File No. DTC–2003–09
with this filing.
DTC believes that the proposed rule
change is consistent with the
requirements of Section 17A of the Act
and the rules and regulations
thereunder applicable to DTC because
the change is designed to facilitate the
prompt and accurate clearance and
settlement of securities transactions,
including the transfer of record
ownership, and the safeguarding of
securities and funds.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
DTC does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, in the public
interest, and for the protection of
investors.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were not and are
not intended to be solicited with respect
to the proposed rule change, and none
have been received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective upon filing
pursuant to Section 19(b)(3)(A)(i) of the
Act 6 and Rule 19b–4(f)(1) 7 thereunder
because it 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
2 17
VerDate Aug<31>2005
18:27 Oct 06, 2005
5 Securities Exchange Act Release No. 49930
(June 28, 2004), 69 FR 41003 (July 7, 2004).
Jkt 208001
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
58761
6 15
7 17
E:\FR\FM\07OCN1.SGM
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
07OCN1
58762
Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Notices
interest, 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:
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.8
Jonathan G. Katz,
Secretary.
[FR Doc. E5–5524 Filed 10–6–05; 8:45 am]
11890. Clearly Erroneous Transactions
BILLING CODE 8010–01–P
(2) Procedures for Reviewing
Transactions
SECURITIES AND EXCHANGE
COMMISSION
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–2005–10 on the
subject line.
[Release No. 34–52549; File No. SR–NASD–
2005–115]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Amend NASD Rule
11890
Paper Comments
October 3, 2005
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303. All submissions should
refer to File Number SR–DTC–2005–10.
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 filings also
will be available for inspection and
copying at the principal office of DTC
and on DTC’s Web site at https://
www.DTCC.com. 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–2005–10 and
should be submitted on or before
October 28, 2005.
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 22, 2005, the National
Association of Securities Dealers, Inc.
(‘‘NASD’’), through its subsidiary, The
Nasdaq Stock Market, Inc. (‘‘Nasdaq’’),
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by Nasdaq. Nasdaq filed
the proposal as a ‘‘non-controversial’’
rule change pursuant to Section
19(b)(3)(A) of the Act,3 and Rule 19b–
4(f)(6) thereunder,4 which renders the
proposal effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
VerDate Aug<31>2005
18:27 Oct 06, 2005
Jkt 208001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to clarify the scope
of a recent amendment to NASD Rule
11890. Nasdaq proposes to implement
the proposed rule change on September
26, 2005. Below is the text of the
proposed rule change. Proposed new
language is in italics; proposed
deletions are in [brackets].5
*
*
*
*
*
8 17
CFR 200.30–3(a)(12).
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)(6).
5 The proposed rule change is marked to show
changes from the rule as it appears in the electronic
NASD Manual available at https://www.nasd.com.
1 15
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
(a) Authority to Review Transactions
Pursuant to Complaint of Market
Participant
(1) No change.
(A)–(B) No change.
(C) Following the expiration of the
period for submission of supporting
material, a Nasdaq officer shall
determine whether the complaint is
eligible for review. A complaint shall
not be eligible for review under
paragraph (a) unless:
(i) the complainant has provided all of
the supporting information required
under paragraph (a)(2)(B), and
(ii) For trades executed between 9:30
a.m. and 4:00 p.m. Eastern Time, [T]the
price of transaction to buy (sell) that is
the subject of the complaint is greater
than (less than) the best offer (best bid)
by an amount that equals or exceeds the
minimum threshold set forth below:
Inside price
$0–0.99 .............
1.00–4.99 ..........
5.00–14.99 ........
15 or more ........
Minimum threshold
$0.02 + (0.10 × Inside
Price)
0.12 + (0.07 × (Inside
Price¥1.00))
0.40 + (0.06 × (Inside
Price—5.00))
1.00
For a transaction to buy (sell) a
Nasdaq listed security, the inside price
shall be the best offer (best bid) in
Nasdaq at the time that the first share of
the order that resulted in the disputed
transaction was executed, and for a
transaction to buy (sell) an exchangelisted security, the inside price shall be
the national best offer (best bid) at the
time that the first share of the order that
resulted in the disputed transaction was
executed.
(D)–(G) No change.
(b) No change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq 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. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
E:\FR\FM\07OCN1.SGM
07OCN1
]]>Agencies
[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Notices]
[Pages 58761-58762]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5524]
[[Page 58761]]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52524; No. SR-DTC-2005-10]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Clarify Procedures Relating to the Destruction of Certain Non-
Transferable Securities Certificates That Are Held in DTC's Internal
Removal Account Known as PREM
September 28, 2005.
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 August 18, 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. DTC has filed the proposal pursuant to
Section 19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the rule change from interested parties.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(i).
\4\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of this rule filing is to clarify certain procedures
with respect to an earlier filing submitted by DTC and approved by the
Commission that allowed DTC to destroy certain non-transferable
securities certificates.
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.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of this rule filing is to clarify certain procedures
pertaining to the previously approved File No. SR-DTC-2003-09.\5\ In
File No. SR-DTC-2003-09, DTC proposed a new service designed to allow
DTC to destroy certain certificates representing positions in
securities for which transfer agent services are no longer available
(``non-transferable certificates''). At the time of the original
filing, DTC held 1.2 million such certificates, representing nearly 22%
of DTC's entire certificate inventory. DTC instituted the Destruction
of Non-Transferable Securities Certificates Program (``Program'') in
order to eliminate the significant risks and costs associated with the
ongoing maintenance of custody, control, and audit of these non-
transferable certificates.
---------------------------------------------------------------------------
\5\ Securities Exchange Act Release No. 49930 (June 28, 2004),
69 FR 41003 (July 7, 2004).
---------------------------------------------------------------------------
Prior to instituting the Program, many participants used DTC's
Position Removal (``PREM'') function to have positions in issues of
non-transferable certificates moved from their participant accounts to
a DTC internal PREM account. However, the certificates representing
those positions were still held in DTC's vaults with all the risks and
costs associated with storing such certificates, maintaining the
related accounts, and monitoring the status of such issues. Under the
Program, DTC extended the PREM process by indicating that using PREM to
move a position constituted an acknowledgement by the participant that
DTC could cease crediting the security to the participant's securities
account and that DTC could at its optionand based upon its own criteria
include the certificates underlying the position in a certificate
destruction program.
In File No. DTC-2003-09, DTC indicated that it would implement the
Program ``beginning first with issues in which all participant
positions have been put in PREM.'' However, the Commission's approval
order of File No. DTC-2003-09 stated that ``DTC will implement this new
program with issues in which all participant positions have been moved
to PREM.'' DTC's intent in the original filing was to start the Program
with fully PREMed issues but to thereafter continue with those issues
which had not been fully PREMed. The purpose of the present filing is
to clarify this point and to make clear that DTC did not in File No.
DTC-2003-09 intend that in the future it would be a prerequisite for
the destruction of a particular issue of non-transferable certificates
that every participant must have moved their respective positions in
that issue to a PREM account. DTC wishes to make clear that it may
destroy any non-transferable certificates for which the positions have
been PREMed even if all participants have not yet moved their positions
into PREM. DTC will maintain a certificate or certificates representing
those positions that have not yet been entered into PREM. DTC has no
intention of clarifying or modifying any other part of File No. DTC-
2003-09 with this filing.
DTC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act and the rules and regulations
thereunder applicable to DTC because the change is designed to
facilitate the prompt and accurate clearance and settlement of
securities transactions, including the transfer of record ownership,
and the safeguarding of securities and funds.
(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, in the public interest, and for
the protection of investors.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments were not and are not intended to be solicited with
respect to the proposed rule change, and none have been received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective upon filing
pursuant to Section 19(b)(3)(A)(i) of the Act \6\ and Rule 19b-4(f)(1)
\7\ thereunder because it 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
[[Page 58762]]
interest, the protection of investors, or otherwise in furtherance of
the purposes of the Act.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(A)(i).
\7\ 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-2005-10 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303. All submissions should refer to File Number
SR-DTC-2005-10. 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 filings also will be available for inspection and copying at the
principal office of DTC and on DTC's Web site at https://www.DTCC.com.
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-2005-10
and should be submitted on or before October 28, 2005.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jonathan G. Katz,
Secretary.
[FR Doc. E5-5524 Filed 10-6-05; 8:45 am]
BILLING CODE 8010-01-P
