Self-Regulatory Organizations; The Depository Trust Company; Order Granting Approval of a Proposed Rule Change Relating to the Foreign Currency Payment Option, 8921-8922 [E8-2823]

Download as PDF rwilkins on PROD1PC63 with NOTICES Federal Register / Vol. 73, No. 32 / Friday, February 15, 2008 / Notices notes that it approved the original listing and trading of the Units on Amex.26 The Commission also finds that the proposal is consistent with Rule 12f–5 under the Act,27 which provides that an exchange shall not extend UTP to a security unless the exchange has in effect a rule or rules providing for transactions in the class or type of security to which the exchange extends UTP. The Exchange has represented that it meets this requirement because it deems the Units to be equity securities, thus rendering trading in the Units subject to the Exchange’s existing rules governing the trading of equity securities. The Commission further believes that the proposal is consistent with section 11A(a)(1)(C)(iii) of the Act,28 which sets forth Congress’ finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Quotations and last-sale information regarding the Units will be disseminated through the facilities of the CTA and Consolidated Quote High Speed Lines. The daily settlement prices for the Futures Contracts are publicly available on various Web sites, and market data vendors and news publications publish futures prices and related data, including quotation and last-sale information for the Futures Contracts. Amex will disseminate through the facilities of the CTA an updated Indicative Partnership Value on a perUnit basis at least every 15 seconds during regular Amex trading hours. Amex intends to disseminate for each Partnership on a daily basis information with respect to the Indicative Partnership Value, the NAV, the number of Units outstanding, the Basket Amount, and daily trading volumes and closing prices of the Units. Finally, USHO’s and USG’s total portfolio composition will be disclosed, each business day that the Amex is open for trading, on their respective Web sites. The Commission also believes that the Exchange’s trading halt rules are reasonably designed to prevent trading in the Units when transparency is impaired. If the listing market halts trading when the Indicative Fund Value is not being calculated or disseminated, the Exchange would halt trading in the listed and registered on the exchange even though it is not so listed and registered. 26 See supra note 3. 27 17 CFR 240.12f–5. 28 15 U.S.C. 78k–1(a)(1)(C)(iii). VerDate Aug<31>2005 15:58 Feb 14, 2008 Jkt 214001 Units. The Exchange has represented that it would follow the procedures with respect to trading halts set forth in NYSE Arca Equities Rule 7.34. The Commission notes that, if the Units should be delisted by the listing exchange, the Exchange would no longer have authority to trade the Units pursuant to this order. In support of this proposal, the Exchange has made the following representations: 1. The Exchange’s surveillance procedures are adequate to properly monitor Exchange trading of the Units in all trading sessions and to deter and detect violations of Exchange rules. 2. Prior to the commencement of trading, the Exchange would inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Units, including risks inherent with trading the Units during the Opening and Late Trading Sessions when the updated Indicative Partnership Value is not calculated and disseminated, and of suitability recommendation requirements. 3. The Information Bulletin also would discuss the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Units prior to or concurrently with the confirmation of a transaction. 4. Trading in the Units will be subject to NYSE Arca Equities Rule 8.300(e), which sets forth certain restrictions on ETP Holders acting as registered Market Makers in Units to facilitate surveillance. This approval order is based on these representations. The Commission finds good cause for approving this proposal before the thirtieth day after the publication of notice thereof in the Federal Register. As noted previously, the Commission previously found that the listing and trading of the Units on Amex is consistent with the Act.29 The Commission presently is not aware of any regulatory issue that should cause it to revisit that finding or would preclude the trading of the Units on the Exchange pursuant to UTP. Therefore, accelerating approval of this proposal should benefit investors by creating, without undue delay, additional competition in the market for the Units. V. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,30 that the proposed rule change (SR–NYSEArca– 2007–78) thereto, be and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.31 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–2822 Filed 2–14–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57298; File No. SR–DTC– 2007–13] Self-Regulatory Organizations; The Depository Trust Company; Order Granting Approval of a Proposed Rule Change Relating to the Foreign Currency Payment Option February 8, 2007. I. Introduction On September 26, 2007, The Depository Trust Company (‘‘DTC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) proposed rule change SR–DTC–2007–13 pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’).1 Notice of the proposal was published in the Federal Register on December 3, 2007.2 No comment letters were received. For the reasons discussed below, the Commission is granting approval of the proposed rule change. II. Description The proposed rule change provides that DTC’s Foreign Currency Payment Option (‘‘FCP Option’’) may be used (1) in relation to securities denominated in U.S. dollars and (2) regardless of whether the terms of the issue originally contemplated the option of payment in one or more currencies. Currently, DTC offers the FCP Option in order for participants to elect to receive dividend, interest, principal, redemption, or maturity payments either in foreign currency outside of DTC or in U.S. dollars within DTC with respect to a foreign denominated issue when the foreign currency option is included in the initial offering terms of the DTCeligible issue. U.S. Denominated Securities The rule change clarifies that the FCP Option will be made available for U.S. denominated securities as well as foreign denominated securities. When 31 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 56840 (November 27, 2007), 72 FR 67987. 1 15 29 See 30 15 PO 00000 supra note 3. U.S.C. 78s(b)(2). Frm 00078 Fmt 4703 Sfmt 4703 8921 E:\FR\FM\15FEN1.SGM 15FEN1 8922 Federal Register / Vol. 73, No. 32 / Friday, February 15, 2008 / Notices DTC initially filed to implement the FCP Option, the issues providing for multiple currencies payments were foreign denominated.3 The wording of the filing inadvertently put participants holding U.S. denominated securities at a disadvantage with respect to the FCP Option. This rule change remedies this unintentional result by allowing the FCP Option to be used with respect to U.S. denominated securities. Designation of Payment Option After Initial Issuance The rule change allows for the use of the FCP Option for DTC-eligible securities that were not initially issued with the option of payment in multiple currencies. Additionally, DTC is amending its rules to allow an issuer or its agent to use the FCP Option to add an additional currency to the payment options originally offered in relation to a DTC-eligible security.4 In such a case, the issuer or its agent would instruct DTC within prescribed time frames and in a form satisfactory to DTC to send out a notice to participants holding positions in the subject security to inform them of the payment options for a particular payment event. Such a notice would contain all necessary information for a participant to be able to elect a particular currency option. The method of payment (U.S. dollars within DTC or foreign currency outside of DTC) and the election process would remain the same. III. Discussion rwilkins on PROD1PC63 with NOTICES Section 17A(b)(3)(F) of the Act requires that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions. In the 1994 order approving DTC’s original rule allowing the foreign currency payment option, the Commission found that the FCP Option facilitates the immobilization of certificates at DTC and therefore reduces the costs to secondary market participants by increasing the use of book-entry 3 Securities Exchange Act Release Nos. 33597 (February 8, 1994), 59 FR 7272 (February 15, 1994) (File No. SR–DTC–93–10) and 29144 (April 30, 1991), 56 FR 21182 (May 7, 1991) (File No. SR– DTC–90–09). 4 For example, payment in a different currency than that offered when a security was initially issued might be desirable in the event of a change in tax withholding legislation subsequent to the initial issuance which might make it more attractive for investors from a particular country to hold position in a security. It would in turn be helpful for such investors to have the ability to receive payments in relation to the subject security in their home country currency. VerDate Aug<31>2005 15:58 Feb 14, 2008 Jkt 214001 settlement.5 Similarly, we find that the proposed rule change by extending the FCP Option to U.S. denominated securities and to securities not originally issued with the option of receiving payments in multiple currencies should achieve the same result. As a result of the proposed rule change, DTC participants holding these securities will no longer have to withdraw their shares from DTC in order to receive payments in foreign currencies offered by an issuer or its agent. The proposed rule change should, therefore, provide cost savings and should expand the efficiencies related to book-entry transfer for DTC participants. For these reasons we find that the proposed rule change is designed to promote the prompt and accurate clearance and settlement of securities transactions consistent with DTC obligations under section 17A(b)(3)(F). IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular section 17A of the Act and the rules and regulations thereunder.6 It is therefore ordered, pursuant to section 19(b)(2) of the Act, that the proposed rule change (File No. SR– DTC–2007–13) be and hereby is approved. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–2823 Filed 2–14–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57308; File No. S7–03–08] Notice of Solicitation of Public Views Regarding Practices Being Developed To Deal With the Increasing Number of Senior Investors On February 8, 2008, the Commission issued Press Release No. 2008–16 announcing that the Commission staff, in coordination with FINRA and NASAA, would be seeking information from all interested parties (including investors, broker-dealers and investment 5 Securities Exchange Act Release No. 29144 (April 30, 1991), 56 FR 21182 (May 7, 1991) (File No. SR–DTC–90–09). 6 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 7 17 CFR 200.30–3(a)(12). PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 advisers) concerning the particular practices that have been developed and are being developed to responsibly deal with the increasing number of senior investors. The goal of the project is to identify industry practices in dealing with senior investors that appear to be effective in ensuring that the firms deal fairly with senior investors, and to provide information about these practices publicly. It is anticipated that the staff will prepare a report summarizing the project and practices identified. The Commission asks all parties to share effective practices in the following areas: • Marketing and advertising to seniors (including information such as procedures to review this material); • Account opening (including information such as any additional disclosures provided to seniors, any review conducted on account opening documents; and information obtained about the customer); • Product and account review (including information such as whether the firm has any specific guidelines for selling particular products to senior investors, additional or enhanced reviews of purchases); • Ongoing review of the relationship and appropriateness of products (including information such as who conducts review, frequency of review, any guidelines for appropriateness of products and procedures); • Discerning and meeting the changing needs of customers as they age (including information such as procedures for handling customer accounts if the customer becomes unable to make their own investment decisions, required documentation, and any review of customer accounts as the customer ages to ensure customers investment objectives are being met); • Surveillance and compliance reviews (including information such as exception reports; description of the types of reviews conducted, and procedures or guidance given to the reviewer); and • Training for firm employees (including information such as who is required to attend the training, when was training implemented, and any written procedures). If you wish to send us your views, please submit them by hard copy or email, but not by both methods on or before April 1, 2008. We strongly encourage electronic submissions. You may submit your written views electronically at the following electronic mail address: rule-comments@sec.gov. We do not edit personal identifying information, such as names or electronic E:\FR\FM\15FEN1.SGM 15FEN1

Agencies

[Federal Register Volume 73, Number 32 (Friday, February 15, 2008)]
[Notices]
[Pages 8921-8922]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2823]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57298; File No. SR-DTC-2007-13]


Self-Regulatory Organizations; The Depository Trust Company; 
Order Granting Approval of a Proposed Rule Change Relating to the 
Foreign Currency Payment Option

February 8, 2007.

I. Introduction

    On September 26, 2007, The Depository Trust Company (``DTC'') filed 
with the Securities and Exchange Commission (``Commission'') proposed 
rule change SR-DTC-2007-13 pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'').\1\ Notice of the proposal 
was published in the Federal Register on December 3, 2007.\2\ No 
comment letters were received. For the reasons discussed below, the 
Commission is granting approval of the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 56840 (November 27, 
2007), 72 FR 67987.
---------------------------------------------------------------------------

II. Description

    The proposed rule change provides that DTC's Foreign Currency 
Payment Option (``FCP Option'') may be used (1) in relation to 
securities denominated in U.S. dollars and (2) regardless of whether 
the terms of the issue originally contemplated the option of payment in 
one or more currencies. Currently, DTC offers the FCP Option in order 
for participants to elect to receive dividend, interest, principal, 
redemption, or maturity payments either in foreign currency outside of 
DTC or in U.S. dollars within DTC with respect to a foreign denominated 
issue when the foreign currency option is included in the initial 
offering terms of the DTC-eligible issue.

U.S. Denominated Securities

    The rule change clarifies that the FCP Option will be made 
available for U.S. denominated securities as well as foreign 
denominated securities. When

[[Page 8922]]

DTC initially filed to implement the FCP Option, the issues providing 
for multiple currencies payments were foreign denominated.\3\ The 
wording of the filing inadvertently put participants holding U.S. 
denominated securities at a disadvantage with respect to the FCP 
Option. This rule change remedies this unintentional result by allowing 
the FCP Option to be used with respect to U.S. denominated securities.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release Nos. 33597 (February 8, 
1994), 59 FR 7272 (February 15, 1994) (File No. SR-DTC-93-10) and 
29144 (April 30, 1991), 56 FR 21182 (May 7, 1991) (File No. SR-DTC-
90-09).
---------------------------------------------------------------------------

Designation of Payment Option After Initial Issuance

    The rule change allows for the use of the FCP Option for DTC-
eligible securities that were not initially issued with the option of 
payment in multiple currencies. Additionally, DTC is amending its rules 
to allow an issuer or its agent to use the FCP Option to add an 
additional currency to the payment options originally offered in 
relation to a DTC-eligible security.\4\ In such a case, the issuer or 
its agent would instruct DTC within prescribed time frames and in a 
form satisfactory to DTC to send out a notice to participants holding 
positions in the subject security to inform them of the payment options 
for a particular payment event. Such a notice would contain all 
necessary information for a participant to be able to elect a 
particular currency option. The method of payment (U.S. dollars within 
DTC or foreign currency outside of DTC) and the election process would 
remain the same.
---------------------------------------------------------------------------

    \4\ For example, payment in a different currency than that 
offered when a security was initially issued might be desirable in 
the event of a change in tax withholding legislation subsequent to 
the initial issuance which might make it more attractive for 
investors from a particular country to hold position in a security. 
It would in turn be helpful for such investors to have the ability 
to receive payments in relation to the subject security in their 
home country currency.
---------------------------------------------------------------------------

III. Discussion

    Section 17A(b)(3)(F) of the Act requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. In the 1994 order 
approving DTC's original rule allowing the foreign currency payment 
option, the Commission found that the FCP Option facilitates the 
immobilization of certificates at DTC and therefore reduces the costs 
to secondary market participants by increasing the use of book-entry 
settlement.\5\ Similarly, we find that the proposed rule change by 
extending the FCP Option to U.S. denominated securities and to 
securities not originally issued with the option of receiving payments 
in multiple currencies should achieve the same result. As a result of 
the proposed rule change, DTC participants holding these securities 
will no longer have to withdraw their shares from DTC in order to 
receive payments in foreign currencies offered by an issuer or its 
agent. The proposed rule change should, therefore, provide cost savings 
and should expand the efficiencies related to book-entry transfer for 
DTC participants. For these reasons we find that the proposed rule 
change is designed to promote the prompt and accurate clearance and 
settlement of securities transactions consistent with DTC obligations 
under section 17A(b)(3)(F).
---------------------------------------------------------------------------

    \5\ Securities Exchange Act Release No. 29144 (April 30, 1991), 
56 FR 21182 (May 7, 1991) (File No. SR-DTC-90-09).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular section 17A of the Act and the rules and regulations 
thereunder.\6\
---------------------------------------------------------------------------

    \6\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DTC-2007-13) be and hereby 
is approved.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-2823 Filed 2-14-08; 8:45 am]
BILLING CODE 8011-01-P
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