Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Scope of Risk Management Controls as They Relate to Maturity Presentment Transactions of Pledged Money Market Instruments, 72483-72484 [E5-6825]

Download as PDF Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Notices IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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.20 Jonathan G. Katz, Secretary. [FR Doc. E5–6831 Filed 12–2–05; 8:45 am] BILLING CODE 8010–01–P 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–CBOE–2005–84 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–CBOE–2005–84. 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, as amended, that are filed with the Commission, and all written communications relating to the proposed rule change, as amended, 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–2005–84 and should be submitted on or before December 27, 2005. [Release No. 34–52852; File No. SR–DTC– 2005–18] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Scope of Risk Management Controls as They Relate to Maturity Presentment Transactions of Pledged Money Market Instruments November 29, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on October 28, 2005, The Depository Trust Company (‘‘DTC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) and on November 16, 2005, amended 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 of DTC’s use of risk management controls as they relate to maturity presentment (‘‘MP’’) transactions of pledged Money Market Instruments (‘‘MMIs’’). 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.2 1 15 U.S.C. 78s(b)(1). Commission has modified the text of the summaries prepared by DTC. 2 The 20 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 17:14 Dec 02, 2005 Jkt 208001 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 72483 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The proposed rule change clarifies the scope of DTC’s use of risk management controls as they relate to MP transactions of pledged MMIs.3 Specifically, pledged MP transactions shall be processed in the same manner as non-pledged MP transactions 4 and therefore subject to DTC’s collateral monitor and net debit cap controls.5 As is the case for unpledged MPs, pledged MPs shall only be processed if they will not cause the IPA’s collateral monitor or net debit cap to become negative. Other pledged MPs shall recycle in a ‘‘pend’’ queue until additional collateral or liquidity for the IPA is infused later in the day, which may come from payments sent to DTC by the IPA or from credits resulting from the issuance of new commercial paper. The proposed rule change is consistent with the requirements of Section 17A of the Act 6 and the rules and regulations thereunder applicable to DTC because it assures the safeguarding of securities and funds which are in the custody or control of DTC because pledged MP transactions will be processed in the same manner as nonpledged MP transactions and therefore 3 For background information regarding DTC’s MMI program, see Securities Exchange Act Release Nos. 49618 (April 26, 2004), 69 FR 23840 [File No. SR–DTC–2003–12]; 48145 (July 9, 2003), 68 FR 42442 [File No. SR–DTC–2003–03]; 39422 (December 17, 1997), 62 FR 66158 [File No. SR– DTC–97–20]; 36811 (February 5, 1996), 61 FR 5433 [File No. SR–DTC–95–15]; 35655 (April 28, 1995), 60 FR 22423 [File No. SR–DTC–95–05]; 33958 (April 22, 1994), 59 FR 22878 [File No. SR–DTC– 93–12]; and 28424 (September 11, 1990), 55 FR 38428 [File No. SR–DTC–90–08]. 4 MMI maturity processing is initiated automatically each morning by DTC, which electronically sweeps all maturing positions of MMI CUSIPs from investors’ custodian accounts and generates the appropriate MPs. The MMI is then delivered to the account of the appropriate issuing/ paying agent (‘‘IPA’’). DTC debits the IPA’s account in the amount of the maturity proceeds for settlement that day. DTC credits the same amount of the maturity proceeds to the investor’s custodian account for payment that day to the investor. Processing of a pledged maturing MMI uses a DTC internal account and generates deliver orders from the internal account to the pledgor upon the processing of the release. However, in the event of a market disruption, pledged MMIs will be automatically swept and processed and will not be included in the maturity presentment contingency system (MPCS) processing as are non-pledged MMIs, which can be selectively released for processing in a market disruption using MPCS. 5 Dealers or custodian banks may pledge MMI positions to a pledgee bank. When the applicable MMI matures, MP transactions are staged to DTC’s Account Transaction Processor to deliver the pledged position from an internal DTC account to the IPA in exchange for the total maturity payment of the pledged position. 6 15 U.S.C. 78q–1. E:\FR\FM\05DEN1.SGM 05DEN1 72484 Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Notices Paper Comments subject to collateral monitor and net debit cap controls. (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 7 and Rule 19b– 4(f)(1) 8 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.9 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–2005–18 on the subject line. U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). 9 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on November 16, 2005, the date on which the last amendment to the proposed rule change was filed with the Commission. 15 U.S.C. 78s(b)(3)(C). • 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–2005–18. 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–2005–18 and should be submitted on or before December 27, 2005. For the Commission by the Division of Market Regulation, pursuant to delegated authority.10 Jonathan G. Katz, Secretary. [FR Doc. E5–6825 Filed 12–2–05; 8:45 am] BILLING CODE 8010–01–P 7 15 8 17 VerDate Aug<31>2005 17:14 Dec 02, 2005 Jkt 208001 10 17 PO 00000 CFR 200.30–3(a)(12). Frm 00063 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52850; File No. SR–NYSE– 2004–51] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Order Approving Proposed Rule Change and Amendment No. 1 Thereto Relating to a Proposed Interpretation to Rule 342 (Offices—Approval, Supervision, and Control) November 29, 2005. I. Introduction On September 3, 2004, the New York Stock Exchange, Inc. (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’),1 and Rule 19b–4 thereunder,2 a proposed Interpretation of Exchange Rule 342 (Offices—Approval, Supervision, and Control) to permit the waiver of the qualified resident branch office manager requirement for ‘‘limited purpose offices’’ with more than three registered representatives (‘‘RRs’’). On September 28, 2005, the Exchange filed Amendment No. 1 to the proposed rule change, replacing the original filing in its entirety.3 The proposed rule change was published for comment in the Federal Register on October 25, 2005.4 The Commission received no comments regarding the proposal. This order approves the proposed rule change. II. Description of Proposed Rule Change Currently, except for ‘‘small offices,’’ 5 all member and member organization branch offices are required to have an on-site qualified manager. According to the Exchange, member organizations with branch offices that have a limited scope of activities, but that do not meet the definition of ‘‘small office’’ under the Interpretation, have approached the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 more fully describes the factors to be used in determining whether a location qualifies as a limited purpose office, as well as how those factors will be considered by the Exchange when examining an application for a limited purpose office status. The proposed rule change is described in its entirety in Section II below. 4 See Securities Exchange Act Release No. 52640 (October 19, 2005), 70 FR 61672 (October 25, 2005). 5 The Interpretation of NYSE Rule 342.15 limits a small office to a total of three RRs. Small offices that serve an order-taking function only and have no operational facilities are not required to have a qualified manager on-site if they are under the close supervision of the main office or other designated branch offices. See NYSE Rule Interpretation 342.15/01–02. In addition, supervision and control procedures must be made part of the member’s or member organization’s written plan of supervision. 2 17 E:\FR\FM\05DEN1.SGM 05DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 232 (Monday, December 5, 2005)]
[Notices]
[Pages 72483-72484]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-6825]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52852; File No. SR-DTC-2005-18]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Clarify the Scope of Risk Management Controls as They Relate to 
Maturity Presentment Transactions of Pledged Money Market Instruments

November 29, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 28, 2005, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') and on November 16, 2005, amended 
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 of 
DTC's use of risk management controls as they relate to maturity 
presentment (``MP'') transactions of pledged Money Market Instruments 
(``MMIs'').

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.\2\
---------------------------------------------------------------------------

    \2\ The Commission has modified the text of the summaries 
prepared by DTC.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The proposed rule change clarifies the scope of DTC's use of risk 
management controls as they relate to MP transactions of pledged 
MMIs.\3\ Specifically, pledged MP transactions shall be processed in 
the same manner as non-pledged MP transactions \4\ and therefore 
subject to DTC's collateral monitor and net debit cap controls.\5\ As 
is the case for unpledged MPs, pledged MPs shall only be processed if 
they will not cause the IPA's collateral monitor or net debit cap to 
become negative.
---------------------------------------------------------------------------

    \3\ For background information regarding DTC's MMI program, see 
Securities Exchange Act Release Nos. 49618 (April 26, 2004), 69 FR 
23840 [File No. SR-DTC-2003-12]; 48145 (July 9, 2003), 68 FR 42442 
[File No. SR-DTC-2003-03]; 39422 (December 17, 1997), 62 FR 66158 
[File No. SR-DTC-97-20]; 36811 (February 5, 1996), 61 FR 5433 [File 
No. SR-DTC-95-15]; 35655 (April 28, 1995), 60 FR 22423 [File No. SR-
DTC-95-05]; 33958 (April 22, 1994), 59 FR 22878 [File No. SR-DTC-93-
12]; and 28424 (September 11, 1990), 55 FR 38428 [File No. SR-DTC-
90-08].
    \4\ MMI maturity processing is initiated automatically each 
morning by DTC, which electronically sweeps all maturing positions 
of MMI CUSIPs from investors' custodian accounts and generates the 
appropriate MPs. The MMI is then delivered to the account of the 
appropriate issuing/paying agent (``IPA''). DTC debits the IPA's 
account in the amount of the maturity proceeds for settlement that 
day. DTC credits the same amount of the maturity proceeds to the 
investor's custodian account for payment that day to the investor. 
Processing of a pledged maturing MMI uses a DTC internal account and 
generates deliver orders from the internal account to the pledgor 
upon the processing of the release. However, in the event of a 
market disruption, pledged MMIs will be automatically swept and 
processed and will not be included in the maturity presentment 
contingency system (MPCS) processing as are non-pledged MMIs, which 
can be selectively released for processing in a market disruption 
using MPCS.
    \5\ Dealers or custodian banks may pledge MMI positions to a 
pledgee bank. When the applicable MMI matures, MP transactions are 
staged to DTC's Account Transaction Processor to deliver the pledged 
position from an internal DTC account to the IPA in exchange for the 
total maturity payment of the pledged position.
---------------------------------------------------------------------------

    Other pledged MPs shall recycle in a ``pend'' queue until 
additional collateral or liquidity for the IPA is infused later in the 
day, which may come from payments sent to DTC by the IPA or from 
credits resulting from the issuance of new commercial paper.
    The proposed rule change is consistent with the requirements of 
Section 17A of the Act \6\ and the rules and regulations thereunder 
applicable to DTC because it assures the safeguarding of securities and 
funds which are in the custody or control of DTC because pledged MP 
transactions will be processed in the same manner as non-pledged MP 
transactions and therefore

[[Page 72484]]

subject to collateral monitor and net debit cap controls.
---------------------------------------------------------------------------

    \6\ 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 \7\ and Rule 19b-4(f)(1) \8\ 
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.\9\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(i).
    \8\ 17 CFR 240.19b-4(f)(1).
    \9\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on November 16, 2005, the date on which the last 
amendment to the proposed rule change was filed with the Commission. 
15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-2005-18 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-2005-18. 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-2005-18 and 
should be submitted on or before December 27, 2005.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-6825 Filed 12-2-05; 8:45 am]
BILLING CODE 8010-01-P

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