Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Fee in Connection With Its Offering of a Mechanism by Which It Collects and Passes-Through Fees Owed by Participants to American Depositary Receipt Agents for Certain Issues, 8217-8218 [E7-3072]
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Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55306; File No. SR–DTC–
2006–21]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify Fee
in Connection With Its Offering of a
Mechanism by Which It Collects and
Passes-Through Fees Owed by
Participants to American Depositary
Receipt Agents for Certain Issues
February 15, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
December 29, 2006, 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 filed the
proposed rule change pursuant to
Section 19(b)(3)(A)(ii) of the Act 2 and
Rule 19b–4(f)(2) 3 thereunder so that the
proposal was 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 the rule change is to
modify DTC’s fee for offering the
mechanism by which it collects and
passes-through fees owed by
participants to American Depositary
Receipt (‘‘ADR’’) agents for certain
issues.
cprice-sewell on PROD1PC61 with NOTICES
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.4
1 15
U.S.C. 78s(b)(1).
U.S.C. 78s(b)(3)(A)(ii).
3 17 CFR 240.19b–4(f)(2).
4 The Commission has modified the text of the
summaries prepared by DTC.
2 15
VerDate Aug<31>2005
15:07 Feb 22, 2007
Jkt 211001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Typically, an ADR agent is authorized
under its agreement with the issuer to
impose a custody fee on holders of the
issue. A common practice for collection
of this fee is for the ADR agent to
subtract the amount of the fee from the
gross dividend payable to the ADR
holders. This practice is effectuated by
DTC announcing to participants both
the gross dividend rate and the net
dividend rate after deduction of the
ADR custody fee, and the ADR agent
paying DTC the net dividend and DTC
allocating the net dividend to
participants. However, a number of ADR
issues do not pay periodic dividends,
which prevents the associated fees from
being collected through the abovedescribed mechanism.
Pursuant to discussions with industry
representatives and in order to facilitate
a more efficient ADR fee collection
process, DTC recently introduced a
mechanism by which it collects from
participants and passes through to ADR
agents custody fees for issues that do
not pay periodic dividends as such fees
are reported to DTC by the ADR agents.5
DTC discussed that proposal with three
divisions of the Securities Industry
Association (‘‘SIA’’), the Corporate
Actions Division, Dividends Division,
and Securities Operations Divisions
(‘‘SOD’’). The SOD Regulatory and
Clearance Committee prepared and sent
to DTC a memorandum on DTC’s
proposal. The memorandum concluded
that DTC should collect such fees
through its normal monthly billing
process.6
In order to cover costs incurred in
collecting fees associated with ADR
issues that do not pay periodic
dividends, DTC currently retains a
collection charge equal to three percent
(3%) of the ADR agent fee amount
collected from each participant up to a
maximum of $4,000 per CUSIP per
participant position. DTC does not
retain a fee if the computed collection
charge is less than $50.
Due to recently implemented
processing improvements, DTC has
determined that the costs incurred in
providing the collection function have
decreased. DTC is modifying the fee it
5 Securities Exchange Act Release No. 34–53970
(June 12, 2006), 71 FR 34974 (June 16, 2006) [File
No. SR–DTC–2006–08].
6 Memorandum from Albert Howell, Chairman,
Regulatory & Clearance Committee, Securities
Operations Division, Securities Industry
Association, to William Hodash, Managing Director,
The Depository Trust and Clearing Company
(March 7, 2006).
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
8217
retains for this service by changing the
frequency of the charge from one levied
per CUSIP per participant position to
one levied per CUSIP only. DTC is also
changing the maximum amount
collected from $4,000 per CUSIP per
participant position to $10,000 per
CUSIP. DTC projects that these changes
will result in an overall reduction in the
charges DTC retains for this service in
an amount consistent with the overall
reduction in the cost of offering the
service. The modified fee became
effective January 2, 2007.
DTC believes the proposed rule
change is consistent with Section 17A of
the Act,7 as amended, because it
updates its fee schedule. As such, it
provides for the equitable allocation of
fees among its participants and aligns
fees for services with the associated cost
to deliver the service.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
DTC does not believe that the
proposed rule change will 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
The foregoing proposed rule change
has become effective upon filing
pursuant to Section 19(b)(3)(A)(ii) of the
Act 8 and Rule 19b–4(f)(2) 9 thereunder
because the rule establishes a due, fee,
or other charge. At any time within sixty
days of the filing of the proposed rule
change, the Commission may summarily
abrogate such rule change if it appears
to the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
7 15
U.S.C. 78q–1.
U.S.C. 78s(b)(3)(A)(ii).
9 17 CFR 240.19b–4(f)(2).
8 15
E:\FR\FM\23FEN1.SGM
23FEN1
8218
Federal Register / Vol. 72, No. 36 / Friday, February 23, 2007 / Notices
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–2006–21 on the
subject line.
Paper Comments
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55289; File No. SR–ISE–
2007–04]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Network Fee
Changes
February 13, 2007.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
17, 2007, the International Securities
Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
All submissions should refer to File
Commission (‘‘Commission’’) the
Number SR–DTC–2006–21. This file
proposed rule change as described in
number should be included on the
subject line if e-mail is used. To help the Items I, II, and III below, which Items
have been substantially prepared by the
Commission process and review your
ISE. The ISE has designated this
comments more efficiently, please use
only one method. The Commission will proposal as one establishing or changing
post all comments on the Commission’s a due, fee, or other charge applicable
only to a member under section
Internet Web site (https://www.sec.gov/
19(b)(3)(A)(ii) of the Act,3 and rule 19b–
rules/sro.shtml). Copies of the
4(f)(2) thereunder,4 which renders the
submission, all subsequent
proposal effective upon filing with the
amendments, all written statements
Commission. The Commission is
with respect to the proposed rule
publishing this notice to solicit
change that are filed with the
comments on the proposed rule change
Commission, and all written
from interested persons.
communications relating to the
proposed rule change between the
I. Self-Regulatory Organization’s
Commission and any person, other than Statement of the Terms of Substance of
those that may be withheld from the
the Proposed Rule Change
public in accordance with the
The ISE is proposing to amend its
provisions of 5 U.S.C. 552, will be
Schedule of Fees to adopt a tiered
available for inspection and copying in
structure for one of the Exchange’s
the Commission’s Public Reference
network fees. The text of the proposed
Section, 100 F Street, NE., Washington,
rule change is available at the Exchange,
DC 20549. Copies of such filings also
the Commission’s Public Reference
will be available for inspection and
Room, and at https://
copying at the principal office of DTC
www.iseoptions.com.
and on DTC’s Web site at https://
II. Self-Regulatory Organization’s
login.dtcc.com/dtcorg/. All comments
received will be posted without change; Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
the Commission does not edit personal
Change
identifying information from
submissions. You should submit only
In its filing with the Commission, the
information that you wish to make
ISE included statements concerning the
available publicly. All submissions
purpose of, and basis for, the proposed
should refer to File Number SR–DTC–
rule change and discussed any
2006–21 and should be submitted on or comments it received on the proposed
before March 16, 2007.
rule change. The text of these statements
may be examined at the places specified
For the Commission by the Division of
in item IV below. The ISE has prepared
Market Regulation, pursuant to delegated
summaries, set forth in sections A, B,
authority.10
and C below, of the most significant
Florence E. Harmon,
aspects of such statements.
Deputy Secretary.
cprice-sewell on PROD1PC61 with NOTICES
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
[FR Doc. E7–3072 Filed 2–22–07; 8:45 am]
BILLING CODE 8010–01–P
10 17
15:07 Feb 22, 2007
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
1 15
Jkt 211001
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposed rule
change is to amend the Exchange’s
Schedule of Fees to adopt a tiered
structure for the Ethernet/Managed
Service Provider fee charged to
members.
The Ethernet/Managed Service
Provider fee is a fee charged to ISE
members to access the ISE’s trading
system via an Ethernet connection or a
third-party managed service provider.
The Ethernet/Managed Service Provider
connection carries the same information
(such as quotation and trade
information) as other forms of
connection (such as T–1 and T–3 pointto-point connections) and does not
require any changes to the Exchange’s
surveillance or communications rules.
There is no change to, or impact on, the
Exchange’s trading systems as a result of
this method of connection.
An Ethernet/Managed Service
Provider connection enables users to
acquire bandwidth in megabit
increments. The ISE currently charges
members $25.00 per Megabit (MB), and
members may purchase up to 15MBs.
The Exchange recently launched a new
service whereby members will now be
able to purchase up to 1000MBs. To
bring this network fee in line with the
new service, the ISE proposes to
establish a new pricing structure for
connection speeds. Specifically, the ISE
proposes to charge members $100.00 per
month for a member’s purchase of up to
10MBs of connection speed, $250.00 per
month for the purchase of 11 to 100MBs
of connection speed, and $500.00 per
month for the purchase of 101MBs to
1GB (1000MBs) of connection speed.
These fees will be charged on a per
connection basis. As noted above, the
Exchange previously limited any
connection to a maximum of 15MBs.
The Exchange notes that the fees
proposed herein are intended to cover
and reasonably relate to its costs in
rolling out and supporting the new
service.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under section 6(b)(4) 5 that an exchange
have an equitable allocation of
reasonable dues, fees and other charges
among its members and other persons
using its facilities. In particular, these
fees will enable the Exchange to cover
5 15
E:\FR\FM\23FEN1.SGM
U.S.C. 78f(b)(4).
23FEN1
]]>Agencies
[Federal Register Volume 72, Number 36 (Friday, February 23, 2007)]
[Notices]
[Pages 8217-8218]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3072]
[[Page 8217]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55306; File No. SR-DTC-2006-21]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Fee in Connection With Its Offering of a Mechanism by Which It
Collects and Passes-Through Fees Owed by Participants to American
Depositary Receipt Agents for Certain Issues
February 15, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 29, 2006, 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 filed the proposed rule change pursuant to Section
19(b)(3)(A)(ii) of the Act \2\ and Rule 19b-4(f)(2) \3\ thereunder so
that the proposal was 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\ 15 U.S.C. 78s(b)(3)(A)(ii).
\3\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the rule change is to modify DTC's fee for offering
the mechanism by which it collects and passes-through fees owed by
participants to American Depositary Receipt (``ADR'') agents for
certain issues.
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.\4\
---------------------------------------------------------------------------
\4\ 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
Typically, an ADR agent is authorized under its agreement with the
issuer to impose a custody fee on holders of the issue. A common
practice for collection of this fee is for the ADR agent to subtract
the amount of the fee from the gross dividend payable to the ADR
holders. This practice is effectuated by DTC announcing to participants
both the gross dividend rate and the net dividend rate after deduction
of the ADR custody fee, and the ADR agent paying DTC the net dividend
and DTC allocating the net dividend to participants. However, a number
of ADR issues do not pay periodic dividends, which prevents the
associated fees from being collected through the above-described
mechanism.
Pursuant to discussions with industry representatives and in order
to facilitate a more efficient ADR fee collection process, DTC recently
introduced a mechanism by which it collects from participants and
passes through to ADR agents custody fees for issues that do not pay
periodic dividends as such fees are reported to DTC by the ADR
agents.\5\ DTC discussed that proposal with three divisions of the
Securities Industry Association (``SIA''), the Corporate Actions
Division, Dividends Division, and Securities Operations Divisions
(``SOD''). The SOD Regulatory and Clearance Committee prepared and sent
to DTC a memorandum on DTC's proposal. The memorandum concluded that
DTC should collect such fees through its normal monthly billing
process.\6\
---------------------------------------------------------------------------
\5\ Securities Exchange Act Release No. 34-53970 (June 12,
2006), 71 FR 34974 (June 16, 2006) [File No. SR-DTC-2006-08].
\6\ Memorandum from Albert Howell, Chairman, Regulatory &
Clearance Committee, Securities Operations Division, Securities
Industry Association, to William Hodash, Managing Director, The
Depository Trust and Clearing Company (March 7, 2006).
---------------------------------------------------------------------------
In order to cover costs incurred in collecting fees associated with
ADR issues that do not pay periodic dividends, DTC currently retains a
collection charge equal to three percent (3%) of the ADR agent fee
amount collected from each participant up to a maximum of $4,000 per
CUSIP per participant position. DTC does not retain a fee if the
computed collection charge is less than $50.
Due to recently implemented processing improvements, DTC has
determined that the costs incurred in providing the collection function
have decreased. DTC is modifying the fee it retains for this service by
changing the frequency of the charge from one levied per CUSIP per
participant position to one levied per CUSIP only. DTC is also changing
the maximum amount collected from $4,000 per CUSIP per participant
position to $10,000 per CUSIP. DTC projects that these changes will
result in an overall reduction in the charges DTC retains for this
service in an amount consistent with the overall reduction in the cost
of offering the service. The modified fee became effective January 2,
2007.
DTC believes the proposed rule change is consistent with Section
17A of the Act,\7\ as amended, because it updates its fee schedule. As
such, it provides for the equitable allocation of fees among its
participants and aligns fees for services with the associated cost to
deliver the service.
---------------------------------------------------------------------------
\7\ 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 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
The foregoing proposed rule change has become effective upon filing
pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-4(f)(2)
\9\ thereunder because the rule establishes a due, fee, or other
charge. 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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.
[[Page 8218]]
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-2006-21 on the subject line.
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-2006-21. 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://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-2006-21 and should be
submitted on or before March 16, 2007.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3072 Filed 2-22-07; 8:45 am]
BILLING CODE 8010-01-P
