Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Amend the Hearing Procedures Afforded to an Interested Person and Harmonize Them With Similar Rules of Its Affiliates, 68920-68922 [E7-23591]
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68920
Federal Register / Vol. 72, No. 234 / Thursday, December 6, 2007 / Notices
mstockstill on PROD1PC66 with NOTICES
Makers, Remote Market-Makers,
Designated Primary Market-Makers,
Electronic Designated Primary MarketMakers and Lead Market-Makers
(collectively referred to as ‘‘MarketMakers’’) 5 with respect to opening
rotations in CBOE Hybrid Trading
System (‘‘Hybrid’’) classes. Specifically,
the 10-up requirement would continue
to apply, except that a Market-Maker
would be permitted to enter an opening
quote for as low as one contract if the
underlying primary market 6
disseminates less than a 1000-share best
bid or offer quote (which is the
equivalent of ten contracts) immediately
prior to an option series opening. In
contrast to the intra-day quoting
requirements under CBOE Rule 8.7, this
exception would not require that the
opening quote process be automated or
that the Market-Maker’s quote size
automatically return to at least 10-up
when the underlying primary market no
longer disseminates a minimum 1000share quote.
The Commission notes that, while the
Exchange believes that the existing
opening quote size requirement imposes
a reasonable obligation on MarketMakers who receive certain benefits for
satisfying this and other obligations, the
Exchange also believes that there are
instances where requiring MarketMakers to quote 10-up during an
opening rotation imposes a heightened
level of risk on them.7 Accordingly,
CBOE’s proposal would provide limited
relief from this quoting requirement
during the opening rotation only.
The Commission finds that the
proposed rule change is consistent with
the requirements of Section 6 of the
Act 8 and the rules and regulations
thereunder applicable to a national
securities exchange.9 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,10 which requires that
a national securities exchange’s rules be
5 Currently, Designated Primary Market-Makers,
Electronic Designated Primary Market-Makers and
Lead Market-Makers are required to enter opening
quotes in accordance with CBOE Rule 6.2B in 100%
of the series of each appointed class; other MarketMakers and Remote Market-Makers are permitted,
but not required, to enter opening quotes in
accordance with CBOE Rule 6.2B. See CBOE Rules
6.2B, 8.15A (subparagraph (b)(iv) of this rule has
been interpreted by the Exchange to require an
LMM to enter opening quotes in 100% of the series
of each appointed class), 8.85, and 8.93.
6 CBOE Rule 1.1(v) defines the term ‘‘primary
market’’ of an underlying security as ‘‘the principal
market in which the underlying security is traded.’’
7 See Notice, supra note 3, at 60698.
8 15 U.S.C. 78(f)(b).
9 In approving this rule change, the Commission
notes that it has considered the proposal’s impact
on efficiency, competition, and capital formation.
See 15 U.S.C. 78c(f).
10 15 U.S.C. 78f(b)(5).
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18:57 Dec 05, 2007
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designed to facilitate transactions in
securities, to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts and,
in general, to protect investors and the
public interest. The Commission notes
that Market-Makers hedge their options
transactions by buying and/or selling
the underlying securities. When the
underlying primary market for the
particular equity security on which a
CBOE option is based disseminates less
than a 1000-share quote during CBOE’s
opening rotation in the respective
option series, the amount of readilyaccessible liquidity available to a CBOE
Market-Maker in the underlying security
on that particular side of the market to
hedge a 10-up quote in the respective
option may potentially be limited.
Correspondingly, Market-Makers’ ability
to hedge their positions at the open
might be restricted, increasing their
financial exposure and risk, particularly
when the Market-Maker is required to
quote over multiple series during the
typically active open rotation period.11
While the Commission continues to
believe that CBOE’s existing quote size
requirements are appropriate, given the
benefits that are provided to MarketMakers such as favorable margin
treatment, the Commission also believes
that it is reasonable to allow a limited
exception for Market-Makers to lower
their quote sizes to as low as one
contract during opening rotations on
HOSS when there is a diminished
amount of liquidity in the underlying
primary market. By permitting MarketMakers to limit their exposure at the
opening, the Commission believes that
this proposal may encourage MarketMakers to quote more competitively
during HOSS opening rotations.12 The
Commission notes that CBOE’s proposal
would permit Market-Makers to submit
an opening quote for as low as one
contract only in connection with
opening rotations on HOSS, though a
Market-Maker would be free to quote
more if it so choose. Further, the
proposal would permit a Market-Maker
to maintain its 1-up quote during the
opening rotation until it is decremented
or the Market-Maker updates its quote,
at which point CBOE’s continuous
quoting obligation rules would apply.
Finally, the Commission believes that
the proposal should not detract from
11 According to the Exchange, an options
exchange may list 20 or more options series for an
underlying stock. For example, if a Market-Maker
posts 10-up markets in twenty series, that MarketMaker would provide liquidity equivalent to 20,000
shares.
12 Nothing in this proposal would affect a MarketMaker’s obligation to honor its firm quote
obligations imposed by CBOE Rule 8.51.
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CBOE’s ability to maintain fair and
orderly openings on HOSS because, to
the extent that there may be a market
order imbalance on the opening, such
imbalances would continue to be
addressed in the same manner as they
are currently handled under existing
CBOE rules.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,13 that the
proposed rule change (SR–CBOE–2007–
59) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–23608 Filed 12–5–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56863; File No. SR–DTC–
2007–06]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing of Proposed Rule Change To
Amend the Hearing Procedures
Afforded to an Interested Person and
Harmonize Them With Similar Rules of
Its Affiliates
November 29, 2007.
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 April 30,
2007, 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.
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 proposed rule change seeks (1) to
modify DTC’s rules regarding hearing
procedures afforded to Interested
Persons 3 and (2) where practicable or
beneficial, to harmonize them with
similar rules of DTC’s affiliates, the
National Securities Clearing Corporation
13 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 ‘‘A Participant or Pledgee, [or] applicant to
become a Participant or Pledgee or issuer of a
Security.’’ Rule 22, Section 1.
14 17
E:\FR\FM\06DEN1.SGM
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Federal Register / Vol. 72, No. 234 / Thursday, December 6, 2007 / Notices
(‘‘NSCC’’) and the Fixed Income
Clearing Corporation (‘‘FICC’’).
decision to a panel comprised of DTC
officers (‘‘Minor Rule Violation Panel’’).
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
2. Hearings for All Other Violations and
Minor Rule Violation Appeals
For matters involving (i) an alleged
violation of a DTC rule or procedure for
which a fine in an amount of over
$5,000 is assessed, (ii) applicants for
participation, or (iii) other disciplinary
actions to which the Minor Rule
Violation Plan would not apply or for
appeals from a Minor Rule Violation
Panel decision adverse to an Interested
Person, the Interested Person would be
entitled to a hearing before a panel
comprised of three individuals selected
by the Chairman of the Board from a
pool of persons employed by or partners
of participants. Persons shall be
appointed members of the pool by the
Board. Decisions of the panel would be
final; however, the full Board of
Directors would retain the right to
modify any sanction or reverse any
decision of the Board panel that is
adverse to the Interested Person.
Currently with respect to hearings, an
Interested Person is afforded the
opportunity to be heard and may be
represented by counsel if desired. A
record is kept of the hearing, and at the
discretion of the Board panel, the
associated cost may be charged in whole
or part to the Interested Person in the
event that the decision is adverse to the
Interested Person. The Interested Person
is advised of the Board panel’s decision
within ten business days after the
conclusion of the hearing. These
procedures would also apply with
respect to the Minor Rule Violation
Plan.
mstockstill on PROD1PC66 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Minor Rule Violation Plan
In 1984, the Commission adopted
amendments to Rule 19d–1(c) under the
Act 5 that allow self-regulatory
organizations to adopt with Commission
approval plans for the disposition of
minor violations of rules.6
Currently under DTC’s rules, an
Interested Person subject to disciplinary
action has a right to a hearing before a
member or members of a panel selected
by the Chairman of the Board from a
pool of persons employed by or partners
of participants. Because some rule
violations are not sufficiently serious to
merit Board review, DTC is proposing to
adopt a Minor Rule Violation Plan
within the meaning of Rule 19d–1(c)(2)
of the Act for those rule violations DTC
deems minor. Consistent with Rule
19d–1(c)(2) of the Act, DTC would
designate those rule violations for
which a fine may be assessed in an
amount not to exceed $5,000 as minor
rule violations. If a member were to
dispute a fine imposed by DTC by filing
a written request for hearing and a
written statement, DTC management
would have the authority to waive the
fine. DTC management would notify the
Board of Directors (or a Committee
authorized by the Board of Directors) of
its determination to waive the fine and
would provide the reasons for the
waiver. The Board or Committee could
in its discretion decide to reinstate any
fine waived by DTC management. If
DTC management were not to waive the
fine, the member could appeal the
4 The Commission has modified the text of the
summaries prepared by DTC.
5 17 CFR 240.19d–1(c).
6 Securities Exchange Act Release No. 21013
(June 1, 1984), 49 FR 23828 (June 8, 1984) [File No.
S7–983A].
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3. Administrative Changes: Uniformity
of Time Frames
The proposed rule changes seek to
implement uniform time periods among
DTC, NSCC, and FICC governing actions
an Interested Person would be required
to take in order to request a hearing. The
deadlines an Interested Person must
adhere to in order to request a hearing
currently vary between DTC, NSCC, and
FICC. Under the proposed rule change,
an Interested Person would have five
business days from the date on which
DTC first informed it of a sanction or a
denial of membership by which to
request a hearing.
Within seven business days, or three
days in the case of a summary action
taken against the Interested Person, after
filing a request for a hearing with DTC,
the Interested Person would be required
to submit to DTC a clear and concise
written statement setting forth the
action or proposed action of DTC with
respect to which the hearing is
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Fmt 4703
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68921
requested, the basis for objection to such
action, whether the Interested Person
intends to attend the hearing, and
whether the Interested Person chooses
to be represented by counsel at the
hearing. The proposed time frames
would be consistent with time frames
being proposed by FICC and NSCC.
DTC believes that the proposed rule
change is consistent with the
requirements of Section 17A of the Act 7
and the rules and regulations
thereunder because the adoption of a
Minor Rule Violation Plan furthers the
statutory objective of providing a fair
procedure for disciplining Participants
and will provide DTC with the ability to
impose a meaningful sanction for those
rule violations that do not necessarily
rise to a level of meriting a full
disciplinary proceeding. Accordingly,
the proposed rule change promotes the
prompt and accurate clearance and
settlement of securities transactions.
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 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 thirty-five 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 ninety 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 such 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.
7 15
E:\FR\FM\06DEN1.SGM
U.S.C. 78q–1.
06DEN1
68922
Federal Register / Vol. 72, No. 234 / Thursday, December 6, 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–2007–06 on the
subject line.
mstockstill on PROD1PC66 with 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–2007–06. 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 on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filings also will be
available for inspection and copying at
the principal office of DTC and on
DTC’s Web site at https://www.dtcc.com/
downloads/legal/rule_filings/2007/dtc/
2007–06.pdf. 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–
2007–06 and should be submitted on or
before December 21, 2007.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–23591 Filed 12–5–07; 8:45 am]
BILLING CODE 8011–01–P
8 17
18:57 Dec 05, 2007
and (C) below, of the most significant
aspects of these statements.4
[Release No. 34–56864; File No. SR–FICC–
2007–06]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing of Proposed Rule Change To
Modify the Hearing Procedures
Afforded to Members and Applicants
for Membership and Harmonize Them
With Similar Rules of Its Affiliates
November 29, 2007.
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 April 30,
2007, the Fixed Income Clearing
Corporation (‘‘FICC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) and on July 24, 2007,
amended 3 the proposed rule change
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 parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change seeks (1) to
modify the rules of FICC’s Government
Securities Division (‘‘GSD’’) and
Mortgage-Backed Securities Division
(‘‘MBSD’’) (GSD and MBSD are
collectively referred to as the
‘‘Divisions’’), including the EPN rules of
MBSD, regarding hearing procedures
afforded to members and applicants for
membership and (2) where practicable
or beneficial, to harmonize them with
similar rules of FICC’s affiliates, The
Depository Trust Company (‘‘DTC’’) and
the National Securities Clearing
Corporation (‘‘NSCC’’).
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),
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The amendment corrected a typographical error
in the proposed rule text.
2 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
SECURITIES AND EXCHANGE
COMMISSION
Jkt 214001
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Frm 00066
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1. Minor Rule Violation Plan
In 1984, the Commission adopted
amendments to Rule 19d–1(c) under the
Act 5 that allow self-regulatory
organizations to adopt with Commission
approval plans for the disposition of
minor violations of rules.6
Currently under each Division’s rules,
a member or applicant subject to
disciplinary action has a right to a
hearing before a panel comprised of
members of FICC’s Board of Directors
regardless of the severity of the action
for which the member or applicant is
being disciplined.7 Because some rule
violations are not sufficiently serious to
merit Board review, FICC is proposing
to adopt a Minor Rule Violation Plan
within the meaning of Rule 19d–1(c)(2)
of the Act for those rule violations FICC
deems minor. Consistent with Rule
19d–1(c)(2) of the Act, FICC would
designate those rule violations for
which a fine may be assessed in an
amount not to exceed $5,000 as minor
rule violations. If a member were to
dispute a fine imposed by FICC by filing
a written request for hearing and a
written statement, FICC management
would have the authority to waive the
fine. FICC management would notify the
Board of Directors (or a Committee
authorized by the Board of Directors) of
its determination to waive the fine and
would provide the reasons for the
waiver. The Board or Committee could
in its discretion decide to reinstate any
fine waived by FICC management. If
FICC management were not to waive the
fine, the member could appeal the
decision to a panel comprised of FICC
officers (‘‘Minor Rule Violation Panel’’).
2. Hearings for All Other Violations and
Minor Rule Violation Appeals
For matters involving (i) an alleged
violation of a GSD or MBSD rule for
which a fine in an amount of over
$5,000 is assessed, (ii) applicants for
membership, or (iii) other disciplinary
actions to which the Minor Rule
Violation Plan would not apply or for
appeals from a Minor Rule Violation
4 The Commission has modified the text of the
summaries prepared by FICC.
5 17 CFR 240.19d–1(c).
6 Securities Exchange Act Release No. 21013
(June 1, 1984), 49 FR 23828 (June 8, 1984) File No.
S7–983A].
7 MBSD Article V, Rule 7 (‘‘Appeals’’); EPN
Article X, Rule 7 (‘‘Appeals’’); and GSD Rule 37
(‘‘Hearing Procedures’’).
E:\FR\FM\06DEN1.SGM
06DEN1
]]>Agencies
[Federal Register Volume 72, Number 234 (Thursday, December 6, 2007)]
[Notices]
[Pages 68920-68922]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23591]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56863; File No. SR-DTC-2007-06]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change To Amend the Hearing
Procedures Afforded to an Interested Person and Harmonize Them With
Similar Rules of Its Affiliates
November 29, 2007.
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 April 30, 2007, 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. 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).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change seeks (1) to modify DTC's rules regarding
hearing procedures afforded to Interested Persons \3\ and (2) where
practicable or beneficial, to harmonize them with similar rules of
DTC's affiliates, the National Securities Clearing Corporation
[[Page 68921]]
(``NSCC'') and the Fixed Income Clearing Corporation (``FICC'').
---------------------------------------------------------------------------
\3\ ``A Participant or Pledgee, [or] applicant to become a
Participant or Pledgee or issuer of a Security.'' Rule 22, Section
1.
---------------------------------------------------------------------------
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
1. Minor Rule Violation Plan
In 1984, the Commission adopted amendments to Rule 19d-1(c) under
the Act \5\ that allow self-regulatory organizations to adopt with
Commission approval plans for the disposition of minor violations of
rules.\6\
---------------------------------------------------------------------------
\5\ 17 CFR 240.19d-1(c).
\6\ Securities Exchange Act Release No. 21013 (June 1, 1984), 49
FR 23828 (June 8, 1984) [File No. S7-983A].
---------------------------------------------------------------------------
Currently under DTC's rules, an Interested Person subject to
disciplinary action has a right to a hearing before a member or members
of a panel selected by the Chairman of the Board from a pool of persons
employed by or partners of participants. Because some rule violations
are not sufficiently serious to merit Board review, DTC is proposing to
adopt a Minor Rule Violation Plan within the meaning of Rule 19d-
1(c)(2) of the Act for those rule violations DTC deems minor.
Consistent with Rule 19d-1(c)(2) of the Act, DTC would designate those
rule violations for which a fine may be assessed in an amount not to
exceed $5,000 as minor rule violations. If a member were to dispute a
fine imposed by DTC by filing a written request for hearing and a
written statement, DTC management would have the authority to waive the
fine. DTC management would notify the Board of Directors (or a
Committee authorized by the Board of Directors) of its determination to
waive the fine and would provide the reasons for the waiver. The Board
or Committee could in its discretion decide to reinstate any fine
waived by DTC management. If DTC management were not to waive the fine,
the member could appeal the decision to a panel comprised of DTC
officers (``Minor Rule Violation Panel'').
2. Hearings for All Other Violations and Minor Rule Violation Appeals
For matters involving (i) an alleged violation of a DTC rule or
procedure for which a fine in an amount of over $5,000 is assessed,
(ii) applicants for participation, or (iii) other disciplinary actions
to which the Minor Rule Violation Plan would not apply or for appeals
from a Minor Rule Violation Panel decision adverse to an Interested
Person, the Interested Person would be entitled to a hearing before a
panel comprised of three individuals selected by the Chairman of the
Board from a pool of persons employed by or partners of participants.
Persons shall be appointed members of the pool by the Board. Decisions
of the panel would be final; however, the full Board of Directors would
retain the right to modify any sanction or reverse any decision of the
Board panel that is adverse to the Interested Person.
Currently with respect to hearings, an Interested Person is
afforded the opportunity to be heard and may be represented by counsel
if desired. A record is kept of the hearing, and at the discretion of
the Board panel, the associated cost may be charged in whole or part to
the Interested Person in the event that the decision is adverse to the
Interested Person. The Interested Person is advised of the Board
panel's decision within ten business days after the conclusion of the
hearing. These procedures would also apply with respect to the Minor
Rule Violation Plan.
3. Administrative Changes: Uniformity of Time Frames
The proposed rule changes seek to implement uniform time periods
among DTC, NSCC, and FICC governing actions an Interested Person would
be required to take in order to request a hearing. The deadlines an
Interested Person must adhere to in order to request a hearing
currently vary between DTC, NSCC, and FICC. Under the proposed rule
change, an Interested Person would have five business days from the
date on which DTC first informed it of a sanction or a denial of
membership by which to request a hearing.
Within seven business days, or three days in the case of a summary
action taken against the Interested Person, after filing a request for
a hearing with DTC, the Interested Person would be required to submit
to DTC a clear and concise written statement setting forth the action
or proposed action of DTC with respect to which the hearing is
requested, the basis for objection to such action, whether the
Interested Person intends to attend the hearing, and whether the
Interested Person chooses to be represented by counsel at the hearing.
The proposed time frames would be consistent with time frames being
proposed by FICC and NSCC.
DTC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \7\ and the rules and
regulations thereunder because the adoption of a Minor Rule Violation
Plan furthers the statutory objective of providing a fair procedure for
disciplining Participants and will provide DTC with the ability to
impose a meaningful sanction for those rule violations that do not
necessarily rise to a level of meriting a full disciplinary proceeding.
Accordingly, the proposed rule change promotes the prompt and accurate
clearance and settlement of securities transactions.
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\7\ 15 U.S.C. 78q-1.
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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 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 thirty-five 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 ninety 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 such 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.
[[Page 68922]]
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-2007-06 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-2007-06. 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 on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filings also will be available for
inspection and copying at the principal office of DTC and on DTC's Web
site at https://www.dtcc.com/downloads/legal/rule_filings/2007/dtc/
2007-06.pdf. 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-
2007-06 and should be submitted on or before December 21, 2007.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-23591 Filed 12-5-07; 8:45 am]
BILLING CODE 8011-01-P
