Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of a Proposed Rule Change Relating to the Wind-Down of a Participant, 76397-76398 [E6-21683]

Download as PDF Federal Register / Vol. 71, No. 244 / Wednesday, December 20, 2006 / Notices change that are filed with the Commission, and all written communications relating to the proposed rule changes 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 will also be available for inspection and copying at the principal office of the CHX. 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 No. SR–CHX–2006–36 and should be submitted on or before January 10, 2007. a situation where a participant notifies DTC that it intends to wind down its activities and DTC determines in its discretion that it must take special action in order to protect itself and its participants.3 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21655 Filed 12–19–06; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The proposed rule change would allow DTC to make a determination that a participant is a wind-down participant and would set forth the conditions DTC using its discretion could place on a wind-down participant and the actions DTC using its discretion could take with respect to a wind-down participant to protect itself and its participants. Such actions would include restricting or modifying the wind-down participant’s use of any or all of DTC’s services and requiring the wind-down participant to post increased participants fund deposits. DTC would retain all of its other rights set forth in its rules and participant agreements, including the right to cease to act for the wind-down participant. DTC believes that the proposed rule will ensure that it has the needed flexibility to appropriately manage the risks presented by an entity in crisis that remains a participant of DTC. This is particularly important to preserve orderly settlement in the marketplace and to minimize the risk of loss to DTC and its participants. The proposed rule summarizes in a single rule DTC’s rights and the actions it may take in such a situation. These rights and actions are either permitted elsewhere in DTC’s rules or are permitted pursuant to DTC’s emergency authority. By summarizing them in a single rule, however, the proposed rule change should provide BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54927; File No. SR-DTC– 2006–07] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of a Proposed Rule Change Relating to the Wind-Down of a Participant December 13, 2006. sroberts on PROD1PC70 with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on March 28, 2006, The Depository Trust Company (‘‘DTC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) and on September 29, 2006, amended the proposed rule change as 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 persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change would add a new Rule 32, Wind Down of a Participant,2 to DTC’s Rules to address 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 The text of DTC’s proposed Rule 32 can be found DTC’s Web site at http://www.dtc.org. 1 15 VerDate Aug<31>2005 20:03 Dec 19, 2006 Jkt 211001 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 such statements.4 3 Similar proposed rule changes have been filed by the Fixed Income Clearing Corporation [File No. SR–FICC–2006–05] and the National Securities Clearing Corporation [File No. SR–NSCC–2006–05]. 4 The Commission has modified parts of these statements. PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 76397 clarity and a clear legal basis for DTC’s rights or actions taken with respect to a wind-down participant. DTC also believes that the proposed rule is designed to minimize the need for rule waivers. DTC believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder because it is designed to enhance DTC’s rules regarding DTC’s rights and the actions it may take with respect to a wind-down of a participant that presents risk to DTC. B. Self-Regulatory Organization’s Statement on Burden on Competition DTC does not believe that the proposed rule change would have any impact 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 Written comments relating to the proposed rule change have not yet 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve the proposed rule change or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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 (http://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR-DTC–2006–07 on the subject line. E:\FR\FM\20DEN1.SGM 20DEN1 76398 Federal Register / Vol. 71, No. 244 / Wednesday, December 20, 2006 / Notices Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR-DTC–2006–07. 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 (http://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 http://www.dtc.org. 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–2006–07 and should be submitted on or before January 10, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority.5 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21683 Filed 12–19–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54929; File No. SR–FICC– 2006–05] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to the Wind-Down of a Participant December 13, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on March 28, 2006, Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) and on September 28, 2006, amended the proposed rule change as described in Items I, II, and III below, which items have been prepared primarily by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change would add a new Rule 21A, Wind-Down of a Netting Member, to the Rules of FICC’s Government Securities Division (‘‘GSD’’) and a new Rule 2A, WindDown of a Participant, to the Rules of FICC’s Mortgage-Backed Securities Division (‘‘MBSD’’) 2 to address a situation where a participant notifies FICC that it intends to wind down its activities and FICC determines, in its discretion, that it must take special action in order to protect itself and its participants.3 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.4 1 15 U.S.C. 78s(b)(1). text of FICC’s GSD’s proposed Rule 21A and MBSD’s Rule 2A can be found on FICC’s Web site at http://www.ficc.com. 3 Similar proposed rule changes have been filed by The Depository Trust Company [File No. SR– DTC–2006–07] and the National Securities Clearing Corporation [File No. SR–NSCC–2006–05]. 4 The Commission has modified parts of these statements. sroberts on PROD1PC70 with NOTICES 2 The 5 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 20:03 Dec 19, 2006 Jkt 211001 PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The proposed rule would allow FICC to determine that a participant is a wind-down member or wind-down participant and would set forth the conditions FICC using its discretion could place on a wind-down participant and the actions FICC using its discretion could take with respect to a wind-down participant to protect itself and its members or participants. Such actions would include restricting or modifying the wind-down member or participant’s use of any or all of FICC’s services and requiring the wind-down member or participant to post increased clearing fund deposits. FICC would retain all of its other rights set forth in its rules and participant agreements, including the right to declare the wind-down participant insolvent, if applicable, and to cease to act for the participant. FICC believes that the proposed rule would ensure that it has the needed flexibility to appropriately manage the risks presented by an entity in crisis that remains a participant of FICC. This is particularly important to preserve orderly settlement in the marketplace and to minimize the risk of loss to FICC and its members and participants. The proposed rule summarizes in a single rule FICC’s rights and the actions it may take in such a situation. These rights and actions are either permitted elsewhere in FICC’s rules or are permitted pursuant to FICC’s emergency authority. By summarizing them in a single rule, however, the proposed rule change is designed to provide clarity and a clear legal basis for FICC’s rights or actions taken with respect to a winddown member or participant. FICC also believes that the proposed rule is designed to minimize the need for rule waivers. FICC believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder because it will enhance the rules of both divisions of FICC regarding actions that FICC may take with respect to a wind-down of a participant that presents risk to FICC. B. Self-Regulatory Organization’s Statement on Burden on Competition FICC does not believe that the proposed rule change would have any impact or impose any burden on competition. E:\FR\FM\20DEN1.SGM 20DEN1

Agencies

[Federal Register Volume 71, Number 244 (Wednesday, December 20, 2006)]
[Notices]
[Pages 76397-76398]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-21683]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54927; File No. SR-DTC-2006-07]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of a Proposed Rule Change Relating to the Wind-Down of 
a Participant

December 13, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 28, 2006, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') and on September 29, 2006, amended 
the proposed rule change as 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 persons.
---------------------------------------------------------------------------

    \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 proposed rule change would add a new Rule 32, Wind Down of a 
Participant,\2\ to DTC's Rules to address a situation where a 
participant notifies DTC that it intends to wind down its activities 
and DTC determines in its discretion that it must take special action 
in order to protect itself and its participants.\3\
---------------------------------------------------------------------------

    \2\ The text of DTC's proposed Rule 32 can be found DTC's Web 
site at http://www.dtc.org.
    \3\ Similar proposed rule changes have been filed by the Fixed 
Income Clearing Corporation [File No. SR-FICC-2006-05] and the 
National Securities Clearing Corporation [File No. SR-NSCC-2006-05].
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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 such 
statements.\4\
---------------------------------------------------------------------------

    \4\ The Commission has modified parts of these statements.
---------------------------------------------------------------------------

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

    The proposed rule change would allow DTC to make a determination 
that a participant is a wind-down participant and would set forth the 
conditions DTC using its discretion could place on a wind-down 
participant and the actions DTC using its discretion could take with 
respect to a wind-down participant to protect itself and its 
participants. Such actions would include restricting or modifying the 
wind-down participant's use of any or all of DTC's services and 
requiring the wind-down participant to post increased participants fund 
deposits. DTC would retain all of its other rights set forth in its 
rules and participant agreements, including the right to cease to act 
for the wind-down participant.
    DTC believes that the proposed rule will ensure that it has the 
needed flexibility to appropriately manage the risks presented by an 
entity in crisis that remains a participant of DTC. This is 
particularly important to preserve orderly settlement in the 
marketplace and to minimize the risk of loss to DTC and its 
participants. The proposed rule summarizes in a single rule DTC's 
rights and the actions it may take in such a situation. These rights 
and actions are either permitted elsewhere in DTC's rules or are 
permitted pursuant to DTC's emergency authority. By summarizing them in 
a single rule, however, the proposed rule change should provide clarity 
and a clear legal basis for DTC's rights or actions taken with respect 
to a wind-down participant. DTC also believes that the proposed rule is 
designed to minimize the need for rule waivers.
    DTC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
because it is designed to enhance DTC's rules regarding DTC's rights 
and the actions it may take with respect to a wind-down of a 
participant that presents risk to DTC.

B. Self-Regulatory Organization's Statement on Burden on Competition

    DTC does not believe that the proposed rule change would have any 
impact 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

    Written comments relating to the proposed rule change have not yet 
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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) As the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 (http://
www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-DTC-2006-07 on the subject line.

[[Page 76398]]

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2006-07. 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 (http://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 http://www.dtc.org. 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-2006-07 and should be submitted on or before January 
10, 2007.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E6-21683 Filed 12-19-06; 8:45 am]
BILLING CODE 8011-01-P