Self-Regulatory Organizations; The Depository Trust Company, Fixed Income Clearing Corporation, and National Securities Clearing Corporation; Order Approving Proposed Rule Changes to Require Members to Purchase Shares of the Common Stock of The Depository Trust & Clearing Corporation, 74070-74071 [E5-7305]
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<![CDATA[
74070
Federal Register / Vol. 70, No. 239 / Wednesday, December 14, 2005 / Notices
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
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–2005–97 and should
be submitted on or before January 4,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7338 Filed 12–13–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52922; File Nos. SR–DTC–
2005–16, SR–FICC–2005–19, and SR–
NSCC–2005–14]
Self-Regulatory Organizations; The
Depository Trust Company, Fixed
Income Clearing Corporation, and
National Securities Clearing
Corporation; Order Approving
Proposed Rule Changes to Require
Members to Purchase Shares of the
Common Stock of The Depository
Trust & Clearing Corporation
On October 4, 2005, The Depository
Trust Company (‘‘DTC’’), the Fixed
Income Clearing Corporation (‘‘FICC’’),
and the National Securities Clearing
Corporation filed with the Securities
and Exchange Commission
(‘‘Commission’’) proposed rule changes
SR–DTC–2005–16, SR–FICC–2005–19,
and SR–NSCC–2005–14 pursuant to
section 19(b)(1) of the Securities
VerDate Aug<31>2005
15:29 Dec 13, 2005
Jkt 208001
U.S.C. 78s(b)(1).
Exchange Act Release Nos. 52665
(October 25, 2005), 70 FR 62357 [SR–DTC–2005–
16]; 52663 (October 25, 2005), 70 FR 62359 [SR–
FICC–2005–19]; and 52664 (October 25, 2005), 70
FR 62364 [SR–NSCC–2005–14].
3 Letter from Stewart A. Levin, Ph.D., Geophysics
Research Fellow, Landmark Graphics Corp. (Oct.
29, 2005).
4 Letter from Kelly S. McEntire, Retired State of
Utah Administrator, (Dec. 6, 2005).
5 Pursuant to the amendments to the Shareholders
Agreement, a Mandatory Purchaser Participant that
is a Participant in more than one clearing agency
will be required to purchase DTCC common shares
based upon its relative use of the services of all
clearing agencies of which it is a Participant. For
DTC, a Mandatory Purchaser Participant includes
all participants of DTC other than Limited
Participants. For FICC, this term includes Netting
Members of FICC’s Government Securities Division.
For NSCC, this term includes all Members other
than Mutual Fund/Insurance Services Members.
2 Securities
I. Introduction
CFR 200.30–3(a)(12).
II. Description
The Depository Trust & Clearing
Corporation (‘‘DTCC’’) is a holding
company parent of DTC, FICC, and
NSCC. Pursuant to DTCC’s current
Shareholders Agreement (‘‘Shareholders
Agreement’’), substantially all members
and participants of DTC, FICC, and
NSCC (collectively ‘‘Participants’’) are
entitled but are not required to purchase
DTCC common shares. Participants are
allocated an entitlement to purchase
DTCC common shares on the basis of
their relative use of the services of DTC,
FICC, and NSCC. As of the last periodic
allocation of share entitlements in 2003,
approximately 1,100 Participants had a
right to purchase DTCC common shares;
however, only 190 Participants
currently own any DTCC common
shares and of these only 86 own DTCC
common shares up to the full amounts
of their share entitlements.
DTCC has obtained the consent of its
common shareholders to amend the
Shareholders Agreement pursuant to
which Participants of DTC, FICC, and
NSCC that make full use of the services
of one or more of these clearing agency
subsidiaries of DTCC would be required
to purchase DTCC common shares
(‘‘Mandatory Purchaser Participants’’) 5
in accordance with the terms of the
amended Shareholders Agreement
while preserving the right but not the
obligation of other Participants that
make only limited use of the services of
one or more of the clearing agencies to
1 15
December 7, 2005.
11 17
Exchange Act of 1934 (‘‘Act’’).1 Notices
of the proposals were published in the
Federal Register on October 31, 2005.2
The Commission received one comment
letter in response to the proposed rule
change filed by DTC 3 and one comment
letter in response to the proposed rule
change filed by FICC.4 For the reasons
discussed below, the Commission is
approving the proposed rule change.
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
purchase DTCC common shares
(‘‘Voluntary Purchaser Participants’’).6
Holders of DTCC common shares are
entitled to elect all of the directors of
DTCC other than two directors that
DTCC preferred shareholders are
entitled to elect.7 DTCC common
shareholders are entitled to vote on all
other matters submitted to a vote of
DTCC shareholders, and each DTCC
common shareholder is entitled to one
vote per DTCC common share. DTCC
common shareholders are entitled to
cumulative voting in the election of
directors. In addition, DTCC common
shareholders are entitled to receive out
of the assets of DTCC, when and if
declared by the Board of Directors of
DTCC, dividends payable in cash or
stock or otherwise. However, since DTC,
FICC, and NSCC provide their services
to their Participants on a cost-basis with
revenues in excess of expenses and
necessary reserves rebated or provide
their services on a discounted basis, as
a matter of policy and practice DTCC
does not pay any dividends on DTCC
common shares. The amendments to the
Shareholders Agreement will have no
effect on these rights of DTCC common
shareholders and preferred
shareholders.
Pursuant to certain covenants in the
Shareholders Agreement, a person
elected as a director of DTCC also serves
as a director of DTC, FICC, and NSCC.
The amendments to the Shareholders
Agreement will have no effect on these
covenants.
The system for allocating entitlements
to purchase shares in the Shareholders
Agreement was first implemented by
DTC with respect to DTC common
shares in 1973. At that time, the bank
users of DTC’s services purchased their
DTC common shares, but for logistical
and other reasons the NYSE, the NASD,
and the American Stock Exchange
(‘‘AMEX’’) (collectively ‘‘Self-Regulatory
6 The DTCC Shareholders Agreement marked to
show the proposed amendments is attached to the
proposed rule change as Exhibit 3 and is available
on DTC’s Web site at https://www.dtc.org/impNtc/
mor/, FICC’s Web site at https://
www.ficc.com/gov/gov.docs.jsp?NS-query=, and
NSCC’s Web site at www.nscc.com/legal.
7 In connection with the 1999 integration of DTC
and NSCC and formation of DTCC, the New York
Stock Exchange (‘‘NYSE’’) and the National
Association of Securities Dealers (‘‘NASD’’), the
then coowners of NSCC, each received 10,000
DTCC preferred shares in exchange for their NSCC
common stock. DTCC preferred shareholders have
no right to vote on any matters submitted to a vote
of DTCC shareholders except that each of the two
DTCC preferred shareholders are entitled to elect
one director. DTCC preferred shareholders have no
right to receive any dividends. In the event of any
liquidation, dissolution or winding up of the affairs
of DTCC, DTCC preferred shareholders are entitled
to a liquidation preference of $300 per share of
DTCC preferred stock.
E:\FR\FM\14DEN1.SGM
14DEN1
Federal Register / Vol. 70, No. 239 / Wednesday, December 14, 2005 / Notices
Organizations’’) purchased the DTC
common shares allocated to the brokerdealer users of DTC services that were
their members. It was anticipated that
over time as broker-dealers exercised
their right to purchase DTC common
shares, the number of DTC common
shares held by broker-dealers directly
would increase, and the number of DTC
common shares held by the SelfRegulatory Organizations would
correspondingly decrease, potentially to
zero, since the share entitlements of the
Self-Regulatory Organizations were a
function of the unexercised share
entitlements of their members.
Notwithstanding the passage of time
and the opportunity afforded brokerdealer Participants to purchase DTCC
common shares, the Self-Regulatory
Organizations continue to hold a
significant block of DTCC common
shares. NYSE holds approximately 29%
of the outstanding DTCC common
shares, and the NASD and the AMEX
each holds approximately 3.7%. It is
also the case that a significant number
of Participants other than broker-dealers
have not purchased any DTCC common
shares or have not purchased DTCC
common shares commensurate with
their share entitlements. Accordingly, a
total of approximately 36.4% of the
outstanding DTCC common shares are
not held by Participants but rather are
held by the Self-Regulatory
Organizations. Ownership of DTCC
common shares (and previously
ownership of DTC common shares) is
not a financial investment but instead is
a vehicle for supporting each registered
clearing agency and influencing its
policies and operations through the
election of directors.
By providing that all DTCC common
shares are owned by Participants, DTC,
FICC, and NSCC believe that the
proposed rule changes 8 and the
proposed amendments to the
Shareholders Agreement will guarantee
that Participants continue to govern and
to control the activities of DTC, FICC,
and NSCC, including the services
provided and the service fees charged.
In particular, Participants will be in a
position to assure that DTC, FICC, and
NSCC continue the practices of
establishing fees that are cost-based and
use-based and of returning to
Participants in the form of cash rebates
8 The proposals add a new provision to each of
DTC, FICC, and NSCC’s rules that requires
Mandatory Purchaser Participants to purchase and
own DTCC common shares in accordance with the
terms of the Shareholders Agreement. The new
provisions are DTC Rule 31, NSCC Rule 64, FICC’s
Government Securities Division Rule 49, and FICC’s
Mortgage-Backed Securities Division Article V, Rule
18.
VerDate Aug<31>2005
15:29 Dec 13, 2005
Jkt 208001
or discounts revenues in excess of
expenses and necessary reserves.
Finally, because they introduce the
greatest risks to the clearing agencies
and obtain the greatest benefits from
clearing agency services, it is
appropriate to require those Participants
making full use of the services of DTC,
FICC, and NSCC to contribute to DTCC’s
capital through the purchase of its
common shares.
III. Comment Letters
The Commission received two
comment letters.9 Both commenters
opposed the proposed rule change. One
commenter stated that if DTC needed to
raise capital it should offer the shares to
the general public or participants in
DTC’s Direct Registration System. The
commenter also suggested that share
ownership by DTC participants provides
a financial disincentive for such
participants to share information with
the Commission and other regulators
regarding criminal or unethical
practices. The other commentator
suggested that requiring participants to
purchase common shares in DTCC
could be used as a means to separate
small investors from large investors
based on their net assets and subject
smaller investors to potential abuse.
IV. Discussion
Section 17A(b)(3)(C) of the Act
requires that the rules of a clearing
agency be designed to assure fair
representation in the selection of its
directors and the administration of its
affairs.10 The Commission finds that
DTC, FICC, and NSCC’s proposed rule
changes are consistent with this
requirement because the proposed
changes serve to increase the number of
Participants that have input in the
selection of DTCC’s board of directors
and thus the boards of directors of DTC,
FICC, and NSCC. This increased
participation of Participants should help
DTC, FICC, and NSCC assure that their
Participants have fair representation in
the selection of its directors and the
administration of their affairs.
The purpose of the proposed rule
changes are not to raise capital for DTC,
FICC, and NSCC as suggested by one of
the commenters, but rather to
redistribute common share ownership
from having a significant portion held
by the Self-Regulatory Organizations to
having all shares held by the
Participants in order to increase
Participants’ role in the selection of
directors and the administration of DTC,
FICC, and NSCC’s affairs. With respect
9 Supra
10 15
PO 00000
notes 3 and 4.
U.S.C. 78q–1(b)(3)(C).
Frm 00084
Fmt 4703
Sfmt 4703
74071
to the other commenter’s fear that some
‘‘investors’’ would not be able to
purchase DTCC common shares, neither
DTC, FICC, nor NSCC have been
informed by any of their Participants
that they would have difficulty or be
unable to pay for the allocation of
shares.
V. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule changes are consistent with the
requirements of the Act and in
particular section 17A of the Act and
the rules and regulations thereunder.
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,11 that the
proposed rule changes (File Nos. SR–
DTC–2005–16, SR–FICC–2005–19, and
SR–NSCC–2005–14) be and hereby is
approved.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.12
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7305 Filed 12–13–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52910; File No. SR–ISE–
2005–052]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change Relating to the Requirements
for Continued Approval of Securities
that Underlie Options Traded on the
Exchange
December 7, 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 November
21, 2005, the International Securities
Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’)
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 the ISE.3 The ISE filed
11 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 In one part of the proposal, ISE Rule 504(d)(6)
is erroneously referenced, instead of current ISE
Rule 503(b)(6). The staff corrected this reference, as
per telephone conversation between Samir Patel,
Assistant General Counsel, ISE, and Christopher
Chow, Attorney, Division of Market Regulation,
Commission, December 5, 2005.
12 17
E:\FR\FM\14DEN1.SGM
14DEN1
]]>Agencies
[Federal Register Volume 70, Number 239 (Wednesday, December 14, 2005)]
[Notices]
[Pages 74070-74071]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-7305]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52922; File Nos. SR-DTC-2005-16, SR-FICC-2005-19, and
SR-NSCC-2005-14]
Self-Regulatory Organizations; The Depository Trust Company,
Fixed Income Clearing Corporation, and National Securities Clearing
Corporation; Order Approving Proposed Rule Changes to Require Members
to Purchase Shares of the Common Stock of The Depository Trust &
Clearing Corporation
December 7, 2005.
I. Introduction
On October 4, 2005, The Depository Trust Company (``DTC''), the
Fixed Income Clearing Corporation (``FICC''), and the National
Securities Clearing Corporation filed with the Securities and Exchange
Commission (``Commission'') proposed rule changes SR-DTC-2005-16, SR-
FICC-2005-19, and SR-NSCC-2005-14 pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'').\1\ Notices of the proposals
were published in the Federal Register on October 31, 2005.\2\ The
Commission received one comment letter in response to the proposed rule
change filed by DTC \3\ and one comment letter in response to the
proposed rule change filed by FICC.\4\ For the reasons discussed below,
the Commission is approving the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ Securities Exchange Act Release Nos. 52665 (October 25,
2005), 70 FR 62357 [SR-DTC-2005-16]; 52663 (October 25, 2005), 70 FR
62359 [SR-FICC-2005-19]; and 52664 (October 25, 2005), 70 FR 62364
[SR-NSCC-2005-14].
\3\ Letter from Stewart A. Levin, Ph.D., Geophysics Research
Fellow, Landmark Graphics Corp. (Oct. 29, 2005).
\4\ Letter from Kelly S. McEntire, Retired State of Utah
Administrator, (Dec. 6, 2005).
---------------------------------------------------------------------------
II. Description
The Depository Trust & Clearing Corporation (``DTCC'') is a holding
company parent of DTC, FICC, and NSCC. Pursuant to DTCC's current
Shareholders Agreement (``Shareholders Agreement''), substantially all
members and participants of DTC, FICC, and NSCC (collectively
``Participants'') are entitled but are not required to purchase DTCC
common shares. Participants are allocated an entitlement to purchase
DTCC common shares on the basis of their relative use of the services
of DTC, FICC, and NSCC. As of the last periodic allocation of share
entitlements in 2003, approximately 1,100 Participants had a right to
purchase DTCC common shares; however, only 190 Participants currently
own any DTCC common shares and of these only 86 own DTCC common shares
up to the full amounts of their share entitlements.
DTCC has obtained the consent of its common shareholders to amend
the Shareholders Agreement pursuant to which Participants of DTC, FICC,
and NSCC that make full use of the services of one or more of these
clearing agency subsidiaries of DTCC would be required to purchase DTCC
common shares (``Mandatory Purchaser Participants'') \5\ in accordance
with the terms of the amended Shareholders Agreement while preserving
the right but not the obligation of other Participants that make only
limited use of the services of one or more of the clearing agencies to
purchase DTCC common shares (``Voluntary Purchaser Participants'').\6\
---------------------------------------------------------------------------
\5\ Pursuant to the amendments to the Shareholders Agreement, a
Mandatory Purchaser Participant that is a Participant in more than
one clearing agency will be required to purchase DTCC common shares
based upon its relative use of the services of all clearing agencies
of which it is a Participant. For DTC, a Mandatory Purchaser
Participant includes all participants of DTC other than Limited
Participants. For FICC, this term includes Netting Members of FICC's
Government Securities Division. For NSCC, this term includes all
Members other than Mutual Fund/Insurance Services Members.
\6\ The DTCC Shareholders Agreement marked to show the proposed
amendments is attached to the proposed rule change as Exhibit 3 and
is available on DTC's Web site at https://www.dtc.org/impNtc/mor/
index.html, FICC's Web site at https://www.ficc.com/gov/
gov.docs.jsp?NS-query=, and NSCC's Web site at www.nscc.com/legal.
---------------------------------------------------------------------------
Holders of DTCC common shares are entitled to elect all of the
directors of DTCC other than two directors that DTCC preferred
shareholders are entitled to elect.\7\ DTCC common shareholders are
entitled to vote on all other matters submitted to a vote of DTCC
shareholders, and each DTCC common shareholder is entitled to one vote
per DTCC common share. DTCC common shareholders are entitled to
cumulative voting in the election of directors. In addition, DTCC
common shareholders are entitled to receive out of the assets of DTCC,
when and if declared by the Board of Directors of DTCC, dividends
payable in cash or stock or otherwise. However, since DTC, FICC, and
NSCC provide their services to their Participants on a cost-basis with
revenues in excess of expenses and necessary reserves rebated or
provide their services on a discounted basis, as a matter of policy and
practice DTCC does not pay any dividends on DTCC common shares. The
amendments to the Shareholders Agreement will have no effect on these
rights of DTCC common shareholders and preferred shareholders.
---------------------------------------------------------------------------
\7\ In connection with the 1999 integration of DTC and NSCC and
formation of DTCC, the New York Stock Exchange (``NYSE'') and the
National Association of Securities Dealers (``NASD''), the then
coowners of NSCC, each received 10,000 DTCC preferred shares in
exchange for their NSCC common stock. DTCC preferred shareholders
have no right to vote on any matters submitted to a vote of DTCC
shareholders except that each of the two DTCC preferred shareholders
are entitled to elect one director. DTCC preferred shareholders have
no right to receive any dividends. In the event of any liquidation,
dissolution or winding up of the affairs of DTCC, DTCC preferred
shareholders are entitled to a liquidation preference of $300 per
share of DTCC preferred stock.
---------------------------------------------------------------------------
Pursuant to certain covenants in the Shareholders Agreement, a
person elected as a director of DTCC also serves as a director of DTC,
FICC, and NSCC. The amendments to the Shareholders Agreement will have
no effect on these covenants.
The system for allocating entitlements to purchase shares in the
Shareholders Agreement was first implemented by DTC with respect to DTC
common shares in 1973. At that time, the bank users of DTC's services
purchased their DTC common shares, but for logistical and other reasons
the NYSE, the NASD, and the American Stock Exchange (``AMEX'')
(collectively ``Self-Regulatory
[[Page 74071]]
Organizations'') purchased the DTC common shares allocated to the
broker-dealer users of DTC services that were their members. It was
anticipated that over time as broker-dealers exercised their right to
purchase DTC common shares, the number of DTC common shares held by
broker-dealers directly would increase, and the number of DTC common
shares held by the Self-Regulatory Organizations would correspondingly
decrease, potentially to zero, since the share entitlements of the
Self-Regulatory Organizations were a function of the unexercised share
entitlements of their members.
Notwithstanding the passage of time and the opportunity afforded
broker-dealer Participants to purchase DTCC common shares, the Self-
Regulatory Organizations continue to hold a significant block of DTCC
common shares. NYSE holds approximately 29% of the outstanding DTCC
common shares, and the NASD and the AMEX each holds approximately 3.7%.
It is also the case that a significant number of Participants other
than broker-dealers have not purchased any DTCC common shares or have
not purchased DTCC common shares commensurate with their share
entitlements. Accordingly, a total of approximately 36.4% of the
outstanding DTCC common shares are not held by Participants but rather
are held by the Self-Regulatory Organizations. Ownership of DTCC common
shares (and previously ownership of DTC common shares) is not a
financial investment but instead is a vehicle for supporting each
registered clearing agency and influencing its policies and operations
through the election of directors.
By providing that all DTCC common shares are owned by Participants,
DTC, FICC, and NSCC believe that the proposed rule changes \8\ and the
proposed amendments to the Shareholders Agreement will guarantee that
Participants continue to govern and to control the activities of DTC,
FICC, and NSCC, including the services provided and the service fees
charged. In particular, Participants will be in a position to assure
that DTC, FICC, and NSCC continue the practices of establishing fees
that are cost-based and use-based and of returning to Participants in
the form of cash rebates or discounts revenues in excess of expenses
and necessary reserves. Finally, because they introduce the greatest
risks to the clearing agencies and obtain the greatest benefits from
clearing agency services, it is appropriate to require those
Participants making full use of the services of DTC, FICC, and NSCC to
contribute to DTCC's capital through the purchase of its common shares.
---------------------------------------------------------------------------
\8\ The proposals add a new provision to each of DTC, FICC, and
NSCC's rules that requires Mandatory Purchaser Participants to
purchase and own DTCC common shares in accordance with the terms of
the Shareholders Agreement. The new provisions are DTC Rule 31, NSCC
Rule 64, FICC's Government Securities Division Rule 49, and FICC's
Mortgage-Backed Securities Division Article V, Rule 18.
---------------------------------------------------------------------------
III. Comment Letters
The Commission received two comment letters.\9\ Both commenters
opposed the proposed rule change. One commenter stated that if DTC
needed to raise capital it should offer the shares to the general
public or participants in DTC's Direct Registration System. The
commenter also suggested that share ownership by DTC participants
provides a financial disincentive for such participants to share
information with the Commission and other regulators regarding criminal
or unethical practices. The other commentator suggested that requiring
participants to purchase common shares in DTCC could be used as a means
to separate small investors from large investors based on their net
assets and subject smaller investors to potential abuse.
---------------------------------------------------------------------------
\9\ Supra notes 3 and 4.
---------------------------------------------------------------------------
IV. Discussion
Section 17A(b)(3)(C) of the Act requires that the rules of a
clearing agency be designed to assure fair representation in the
selection of its directors and the administration of its affairs.\10\
The Commission finds that DTC, FICC, and NSCC's proposed rule changes
are consistent with this requirement because the proposed changes serve
to increase the number of Participants that have input in the selection
of DTCC's board of directors and thus the boards of directors of DTC,
FICC, and NSCC. This increased participation of Participants should
help DTC, FICC, and NSCC assure that their Participants have fair
representation in the selection of its directors and the administration
of their affairs.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78q-1(b)(3)(C).
---------------------------------------------------------------------------
The purpose of the proposed rule changes are not to raise capital
for DTC, FICC, and NSCC as suggested by one of the commenters, but
rather to redistribute common share ownership from having a significant
portion held by the Self-Regulatory Organizations to having all shares
held by the Participants in order to increase Participants' role in the
selection of directors and the administration of DTC, FICC, and NSCC's
affairs. With respect to the other commenter's fear that some
``investors'' would not be able to purchase DTCC common shares, neither
DTC, FICC, nor NSCC have been informed by any of their Participants
that they would have difficulty or be unable to pay for the allocation
of shares.
V. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule changes are consistent with the requirements of the Act
and in particular section 17A of the Act and the rules and regulations
thereunder.
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\11\ that the proposed rule changes (File Nos. SR-DTC-2005-16, SR-
FICC-2005-19, and SR-NSCC-2005-14) be and hereby is approved.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(2).
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jonathan G. Katz,
Secretary.
[FR Doc. E5-7305 Filed 12-13-05; 8:45 am]
BILLING CODE 8010-01-P
