Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Existing Operational Arrangements, 1266-1268 [E9-349]
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Federal Register / Vol. 74, No. 7 / Monday, January 12, 2009 / Notices
All submissions should refer to File
Number SR–CBOE–2008–125. 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
Room, 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 filing also will be
available for inspection and copying at
the principal office of the CBOE. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File No.
SR–CBOE–2008–125 and should be
submitted on or before February 2, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–350 Filed 1–9–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59199; File No. SR–DTC–
2008–14]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify
Existing Operational Arrangements
sroberts on PROD1PC70 with NOTICES
January 6, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
October 21, 2008, The Depository Trust
Company (‘‘DTC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
16 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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20:34 Jan 09, 2009
Jkt 217001
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 purpose of the proposed rule
change is to modify DTC’s existing
Operational Arrangements (‘‘OA’’)
necessary for a securities issue to
become and remain eligible for the
services of DTC.
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.2
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
DTC’s OA was first published in June
1987.3 It was then updated in June 1988,
in February 1992, in December 1994, in
January 1998, and most recently in May
2002.4 DTC’s OA is designed to
maximize the number of issues that can
be made eligible while ensuring orderly
processing and timely payments to its
participants. DTC’s experience
demonstrates that when issuers,
underwriters, and their counsel are
aware of DTC’s requirements, those
requirements can be met almost without
exception. The purpose of this rule
change is not substantive in nature in
that it is merely an update to the OA in
an attempt to assemble relevant
requirements, including requirements
resulting from Commission approval of
2 The Commission has modified the text of the
summaries prepared by DTC.
3 Securities Exchange Act Release No. 24818
(August 19, 1987), 52 FR 31833 (August 24, 1987)
(File No. SR–DTC–87–10).
4 Securities Exchange Act Release Nos. 25948
(July 27, 1988), 53 FR 29294 (August 3, 1988) (File
No. SR–DTC–88–13); 30625 (April 30, 1992), 57 FR
18534 (April 30, 1992) (File No. SR–DTC–92–06);
35342 (February 8, 1995), 60 FR 8434 (February 14,
1995) (File No. SR–DTC–94–19); 39894 (April 21,
1998), 63 FR 23310 (April 28, 1998) (SR–DTC–97–
23); and 45994 (May 29, 2002), 68 FR 35037 (June
11, 2003) (File No. SR–DTC–2002–02).
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Fmt 4703
Sfmt 4703
prior DTC rule changes, in one place.
Additionally, some clerical changes,
reorganization, and clarification of
language have been made in order to
provide a concise and coherent version
of the OA.
The primary differences between the
attached modified OA and the OA filed
with the Commission in 2002 are as
follows:
1. In an effort to update the OA and make
it more comprehensive, DTC has included a
description of the following, all of which
have been previously approved by the
Commission:
(a) In 1988, the Commission approved a
DTC rule filing related to certificates of
deposit.5 The OA has been updated to
include a section describing procedures
unique to retail certificates of deposit.
(b) In 1994, the Commission approved a
DTC rule filing which consisted of
enhancements to the reorganization and
deposit services of DTC. The OA has been
updated accordingly to specify that issuers’
agents are required to provide timely
notification to DTC for conversions with
variable rate (cash and share) entitlements.6
(c) In 1995, the Commission approved a
DTC rule filing in which DTC was designated
as the ‘‘appropriate qualified registered
securities depository’’ to receive notices of
transfer agent changes pursuant to Rule
17Ad–16 of the Act.7 The OA has been
updated to reflect the procedures for
notifying DTC of transfer agency changes.8
(d) In 1996, the Commission approved a
DTC rule filing which established procedures
for the Direct Registration System (‘‘DRS’’).9
DRS permits an investor to hold a security as
the registered owner of the security in
electronic form on the books of the issuer
rather than (i) indirectly through a financial
intermediary that holds the security in street
name; or (ii) in the form of a certificate. The
OA has been updated to include a
description of DRS.
(e) In 1997, the Commission approved a
rule filing amending DTC’s Return-of-Funds
Policy.10 The rule change amended DTC’s
charge back and return of funds policies to
shorten from ten business days to one
business day after the payable date the period
within which a paying agent can request that
DTC return principal and income payments
that have been allocated to participants. The
rule change also amended the procedure so
if a paying agent requests the return of a
principal and income payment more than
5 Securities Exchange Act Release No. 25870 (May
7, 1988), 53 FR 25870 (May 12, 1988) (File No. SR–
DTC–88–3).
6 Securities Exchange Act Release No. 34189
(June 9, 1994), 59 FR 30818 (June 15, 1994) (File
No. SR–DTC–94–06).
7 15 U.S.C. 78 et seq.
8 Securities Exchange Act Release Act No. 35378
(February 15, 1995), 60 FR 9875 (February 22, 1995)
(File No. SR–DTC–95–02).
9 Securities Exchange Act Release Act No. 37931
(November 7, 1996), 61 FR 58600 (November 15,
1996) (File No. SR–DTC–96–15).
10 Securities Exchange Act Release Act No. 38564
(April 30, 1997), 62 FR 25008 (May 7, 1997) (File
No. SR–DTC–96–22).
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Federal Register / Vol. 74, No. 7 / Monday, January 12, 2009 / Notices
sroberts on PROD1PC70 with NOTICES
one business day after a payable date, DTC
will work with the paying agent and
participants to resolve the matter, but DTC
will not return the allocated payments
without each participant’s consent. The OA
has been updated to describe DTC’s Returnof-Funds Policy.
(f) In 2005, DTC filed a rule change with
the Commission in order to establish a fine
for participants that are required to conduct
connectivity testing for business continuity
purposes and who fail to do so.11 The OA has
been updated to reflect a description of
DTC’s business continuity procedure and to
reflect its right to impose a fine for
noncompliance.
(g) In 2005, the Commission approved a
DTC filing which described Security Position
Report type information, known as ‘‘call
lottery results’’ for auction rate securities.12
The OA has been updated to include the
description of auction rate securities.
(h) In 2006, the Commission approved a
DTC rule change in which DTC proposed to
revise its Deposit Service, Custody Service,
and Withdrawals-by-Transfer Service
procedures based upon guidance from the
U.S. Department of the Treasury’s Office of
Foreign Assets Control (‘‘OFAC’’) to DTC.13
The OA has been updated to reflect a
description of DTC’s OFAC procedures.
(i) In 2007, the Commission approved a
DTC rule change which consisted of new
Rule 30, Canadian-Link Service. Rule 30
describes the operation of a service that DTC
offers to participants, through the facilities of
DTC and The CDS Clearing and Depository
Services Inc. (‘‘CDS’’).14 Rule 30 permits
participants using the service (‘‘CanadianLink Participants’’) to: (i) Clear and settle
valued securities transactions with
participants of CDS (‘‘CDS Participants’’) and
other Canadian-Link Participants in
Canadian dollars and (ii) transfer Canadian
dollars to or receive Canadian dollars from
CDS Participants and other Canadian-Link
Participants without any corresponding
delivery or receipt of securities.15 The OA
has been updated to describe this service.
(j) In 2007, the Commission approved a
rule filing intended to provide greater
efficiency by making available more
automated functions to be utilized for a
broader range of voluntary reorganization
events (e.g., DTC’s Automated Tender Offer
Program (‘‘ATOP’’)).16 The OA has been
updated to include a description of these
procedures.
(k) In 2007, DTC filed a rule change with
the Commission in order to amend DTC’s OA
11 Securities Exchange Act Release No. 52446
(September 15, 2005), 70 FR 55435 (September 21,
2005) (File No. SR–DTC–2005–04).
12 Securities Exchange Act Release No. 52393
(September 8, 2005), 70 FR 54598 (September 15,
2005) (File No. SR–DTC–2005–12).
13 Securities Exchange Act Release No. 54120
(July 10, 2006), 71 FR 40562 (July 17, 2006) (File
No. SR–DTC–2005–14).
14 Formerly known as ‘‘The Canadian Depository
for Securities Limited.’’
15 Securities Exchange Act Release Act No. 55239
(February 5, 2007), 72 FR 6797 (February 13, 2007)
(File No. SR–DTC 2006–15).
16 Securities Exchange Act Release No. 56538
(September 26, 2007), 72 FR 56409 (October 3,
2007) (File No. SR–DTC–2007–09).
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20:34 Jan 09, 2009
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as it applies to structured securities.17 That
rule filing: (i) Extended the deadline by
which paying agents of such securities must
submit periodic payment rate information to
DTC to preferably five business days but no
less than one business day prior to the
payable date; (ii) extended the processing
deadline for payment rate files from 7 p.m.
Eastern Standard Time (‘‘EST’’) to 11:30 p.m.
EST; (iii) established two classes of
structured securities, ‘‘conforming’’ and
‘‘non-conforming;’’ (iv) imposed an exception
processing fee which applies to certain
structured securities whose features prevent
paying agents from complying with the
extended deadline; and (v) provided that
DTC track and make publicly available
reports on paying agent performance as it
relates to timeliness and accuracy of
structured securities payment rate
information submitted to DTC. DTC has
extended the deadlines by which paying
agents of such structured securities must
submit periodic payment rate information to
DTC to no later than 3:00 am EST on the
payable date and has extended the processing
deadline for payment rate files to 3:00 am
EST on the payable date. The OA has been
updated to include this product and to reflect
these extensions.
(l) In 2007, the Commission approved a
DTC rule filing which provided that DTC’s
foreign currency payment option may be
used: (i) In relation to securities denominated
in U.S. dollars and (ii) regardless of whether
the terms of the issue originally
contemplated the option of payment in one
or more currencies.18 The OA has been
updated to reflect this change.
(m) In 2007, the Commission approved a
DTC rule change which added a new Policy
Statement on the Eligibility of Foreign
Securities to DTC’s rules.19 The purpose of
the policy statement is to set forth in a single
place and in an accessible manner the criteria
and procedures for making the securities of
foreign issuers eligible for deposit and bookentry transfer through the facilities of DTC in
accordance with the Securities Act of 1933 20
and the rules and regulations of the SEC
thereunder. A description of the policy
statement has been added to the OA.
(n) In 2008, the Commission approved a
DTC rule filing to implement the New Issue
Information Dissemination System (‘‘NIIDS’’)
for municipal securities. NIIDS is an
automated system developed by DTC at the
request of the Securities Industry and
Financial Markets Association (‘‘SIFMA’’) in
order to improve the mechanism for
disseminating new issue information
regarding municipal securities.21 DTC has
mandated the use of NIIDS in connection
17 Securities Exchange Act Release No. 57542
(March 20, 2008), 73 FR 16403 (March 27, 2008)
(File No. SR–DTC–2007–11).
18 Securities Exchange Act Release No. 57298
(February 8, 2008), 73 FR 8921(February 15, 2008)
(File No. SR–DTC–2007–13).
19 Securities Exchange Act Release No. 56277
(August 17, 2007), 72 FR 48709 (File No. SR–DTC–
2007–04).
20 15 U.S.C. 77 et seq.
21 Securities Exchange Act Release No. 57513
(March 17, 2008), 73 FR 15548 (March 24, 2008)
(File No. SR–DTC–2007–10).
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
1267
with eligibility processing of municipal
securities issuances in order to assist
underwriters in meeting the reporting
standards set forth by the Municipal
Securities Rule Making Board (‘‘MSRB’’). The
OA has been updated to include a
description of NIIDS.
2. DTC has updated the OA to describe the
modification in cutoff time for Fast
Automated Securities Transfer (‘‘FAST’’)
Agents to approve or reject a deposit or
withdrawal instruction submitted by a
participant. This adjustment was
implemented on October 2, 2001.22
3. Additionally, DTC has updated the OA
to indicate that voluntary unit separations 23
are now processed under the FAST program.
The volume of voluntary unit separations has
declined significantly throughout the years
(to one or two per year) thereby reducing the
need for a separate program to process such
transactions. Voluntary units have been
processed under the Fast program since the
late 1990s.
DTC believes that the proposed rule
change is consistent with the
requirements of Section 17A of the
Act 24 and the rules and regulations
thereunder applicable to DTC because
the proposed rule change should
facilitate the prompt and accurate
clearance and settlement of securities
transactions by expediting the process
of making securities eligible for DTC’s
services.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
DTC does not believe that the
proposed rule change will have any
impact on 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
No written comments relating to the
proposed rule change have 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 rule change has become
effective upon filing pursuant to Section
22 The modification explains that the cutoff has
been changed to 5:30 p.m. EST from 6:30 p.m. EST.
For more information regarding this change, see
DTC Important Notice B#2358–01 available at
https://www.dtcc.com/downloads/legal/imp_notices/
2001/dtc/exe/exe_2358.pdf.
23 A unit is a security comprised of more than one
class of securities such as common stock and
warrants (‘‘components’’). In a voluntary unit
separation, the separation and recombination
between the security component and the security is
done by the Participant and transfer agent using
DTC’s Deposit/Withdrawal At Custodian (‘‘DWAC’’)
system.
24 15 U.S.C. 78q–1.
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Federal Register / Vol. 74, No. 7 / Monday, January 12, 2009 / Notices
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/
legal/rule_filings/ficc/2008.php. 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–2008–14 and should
be submitted on or before January 29,
2009.
offerings and to revise the unit of count
that determines the device fees payable
by data recipients.
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:
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.27
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–349 Filed 1–9–09; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
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–2008–14 on the
subject line.
sroberts on PROD1PC70 with NOTICES
19(b)(3)(A)(iii) of the Act 25 and Rule
19b–4(f)(4) 26 thereunder because the
proposed rule change effects a change in
an existing service of DTC that (i) does
not adversely affect the safeguarding of
securities or funds in the custody or
control of DTC or for which it is
responsible and (ii) does not
significantly affect the respective rights
of the clearing agency or persons using
the service. At any time within sixty
days of the filing of such 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.
SECURITIES AND EXCHANGE
COMMISSION
(a) Background. NYSE OpenBook
responds to the desire of some market
participants for depth-of-book data. It is
a compilation of limit order data that
the Exchange provides to market data
vendors through a data feed.
NYSE OpenBook is a packaged suite
of data feed products. It includes:
i. NYSE OpenBook Realtime, by
which the Exchange makes NYSE
OpenBook Realtime available on a
snapshot basis, with updates distributed
in real-time at intervals of one second;
and
ii. NYSE OpenBook Ultra, by which
the Exchange updates NYSE OpenBook
information upon receipt of each
displayed limit order, or upon an event
that removes limit orders from NYSE
OpenBook (i.e., cancellation or
execution).
For no additional charge, the
Exchange makes available to recipients
of NYSE OpenBook additional data
feeds containing:
iii. NYSE BestQuote,3 which allows
customers to see NYSE’s best bid and
offer as made available through the
Consolidated Quotation System, and
which may contain additional market
interest that is not displayed in the
NYSE limit order book and that,
therefore, is not available in NYSE
OpenBook; and
iv. Order Imbalance Information,
which includes information regarding
order imbalances prior to the market
opening and closing auctions.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–DTC–2008–14. 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
[Release No. 34–59198; File No. SR–NYSE–
2008–131]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change To
Introduce a NYSE OpenBook®
Nonprofessional Subscriber Fee and
To Revise the Unit of Count That
Determines the Device Fees Payable
by Data Recipients
January 5, 2009.
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 December
18, 2008, the New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
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 Exchange is proposing to
introduce a nonprofessional subscriber
fee for its NYSE OpenBook® product
27 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
25 15
U.S.C. 78s(b)(3)(A)(iii).
26 26 17 CFR 240.19b–4(f)(4).
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20:34 Jan 09, 2009
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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,
NYSE 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. NYSE has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
1. Purpose
3 NYSE added NYSE BestQuote to the NYSE
OpenBook Realtime package in October 2006. See
Release No. 34–54594 (October 12, 2006); 71 FR
61819 (October 19, 2006); File No. SR–NYSE–2006–
81.
E:\FR\FM\12JAN1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 7 (Monday, January 12, 2009)]
[Notices]
[Pages 1266-1268]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-349]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59199; File No. SR-DTC-2008-14]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Existing Operational Arrangements
January 6, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 21, 2008, 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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to modify DTC's existing
Operational Arrangements (``OA'') necessary for a securities issue to
become and remain eligible for the services of DTC.
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.\2\
---------------------------------------------------------------------------
\2\ 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
DTC's OA was first published in June 1987.\3\ It was then updated
in June 1988, in February 1992, in December 1994, in January 1998, and
most recently in May 2002.\4\ DTC's OA is designed to maximize the
number of issues that can be made eligible while ensuring orderly
processing and timely payments to its participants. DTC's experience
demonstrates that when issuers, underwriters, and their counsel are
aware of DTC's requirements, those requirements can be met almost
without exception. The purpose of this rule change is not substantive
in nature in that it is merely an update to the OA in an attempt to
assemble relevant requirements, including requirements resulting from
Commission approval of prior DTC rule changes, in one place.
Additionally, some clerical changes, reorganization, and clarification
of language have been made in order to provide a concise and coherent
version of the OA.
---------------------------------------------------------------------------
\3\ Securities Exchange Act Release No. 24818 (August 19, 1987),
52 FR 31833 (August 24, 1987) (File No. SR-DTC-87-10).
\4\ Securities Exchange Act Release Nos. 25948 (July 27, 1988),
53 FR 29294 (August 3, 1988) (File No. SR-DTC-88-13); 30625 (April
30, 1992), 57 FR 18534 (April 30, 1992) (File No. SR-DTC-92-06);
35342 (February 8, 1995), 60 FR 8434 (February 14, 1995) (File No.
SR-DTC-94-19); 39894 (April 21, 1998), 63 FR 23310 (April 28, 1998)
(SR-DTC-97-23); and 45994 (May 29, 2002), 68 FR 35037 (June 11,
2003) (File No. SR-DTC-2002-02).
---------------------------------------------------------------------------
The primary differences between the attached modified OA and the OA
filed with the Commission in 2002 are as follows:
1. In an effort to update the OA and make it more comprehensive,
DTC has included a description of the following, all of which have
been previously approved by the Commission:
(a) In 1988, the Commission approved a DTC rule filing related
to certificates of deposit.\5\ The OA has been updated to include a
section describing procedures unique to retail certificates of
deposit.
---------------------------------------------------------------------------
\5\ Securities Exchange Act Release No. 25870 (May 7, 1988), 53
FR 25870 (May 12, 1988) (File No. SR-DTC-88-3).
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(b) In 1994, the Commission approved a DTC rule filing which
consisted of enhancements to the reorganization and deposit services
of DTC. The OA has been updated accordingly to specify that issuers'
agents are required to provide timely notification to DTC for
conversions with variable rate (cash and share) entitlements.\6\
(c) In 1995, the Commission approved a DTC rule filing in which
DTC was designated as the ``appropriate qualified registered
securities depository'' to receive notices of transfer agent changes
pursuant to Rule 17Ad-16 of the Act.\7\ The OA has been updated to
reflect the procedures for notifying DTC of transfer agency
changes.\8\
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\6\ Securities Exchange Act Release No. 34189 (June 9, 1994), 59
FR 30818 (June 15, 1994) (File No. SR-DTC-94-06).
\7\ 15 U.S.C. 78 et seq.
\8\ Securities Exchange Act Release Act No. 35378 (February 15,
1995), 60 FR 9875 (February 22, 1995) (File No. SR-DTC-95-02).
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(d) In 1996, the Commission approved a DTC rule filing which
established procedures for the Direct Registration System
(``DRS'').\9\ DRS permits an investor to hold a security as the
registered owner of the security in electronic form on the books of
the issuer rather than (i) indirectly through a financial
intermediary that holds the security in street name; or (ii) in the
form of a certificate. The OA has been updated to include a
description of DRS.
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\9\ Securities Exchange Act Release Act No. 37931 (November 7,
1996), 61 FR 58600 (November 15, 1996) (File No. SR-DTC-96-15).
\10\ Securities Exchange Act Release Act No. 38564 (April 30,
1997), 62 FR 25008 (May 7, 1997) (File No. SR-DTC-96-22).
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(e) In 1997, the Commission approved a rule filing amending
DTC's Return-of-Funds Policy.\10\ The rule change amended DTC's
charge back and return of funds policies to shorten from ten
business days to one business day after the payable date the period
within which a paying agent can request that DTC return principal
and income payments that have been allocated to participants. The
rule change also amended the procedure so if a paying agent requests
the return of a principal and income payment more than
[[Page 1267]]
one business day after a payable date, DTC will work with the paying
agent and participants to resolve the matter, but DTC will not
return the allocated payments without each participant's consent.
The OA has been updated to describe DTC's Return-of-Funds Policy.
(f) In 2005, DTC filed a rule change with the Commission in
order to establish a fine for participants that are required to
conduct connectivity testing for business continuity purposes and
who fail to do so.\11\ The OA has been updated to reflect a
description of DTC's business continuity procedure and to reflect
its right to impose a fine for noncompliance.
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\11\ Securities Exchange Act Release No. 52446 (September 15,
2005), 70 FR 55435 (September 21, 2005) (File No. SR-DTC-2005-04).
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(g) In 2005, the Commission approved a DTC filing which
described Security Position Report type information, known as ``call
lottery results'' for auction rate securities.\12\ The OA has been
updated to include the description of auction rate securities.
(h) In 2006, the Commission approved a DTC rule change in which
DTC proposed to revise its Deposit Service, Custody Service, and
Withdrawals-by-Transfer Service procedures based upon guidance from
the U.S. Department of the Treasury's Office of Foreign Assets
Control (``OFAC'') to DTC.\13\ The OA has been updated to reflect a
description of DTC's OFAC procedures.
(i) In 2007, the Commission approved a DTC rule change which
consisted of new Rule 30, Canadian-Link Service. Rule 30 describes
the operation of a service that DTC offers to participants, through
the facilities of DTC and The CDS Clearing and Depository Services
Inc. (``CDS'').\14\ Rule 30 permits participants using the service
(``Canadian-Link Participants'') to: (i) Clear and settle valued
securities transactions with participants of CDS (``CDS
Participants'') and other Canadian-Link Participants in Canadian
dollars and (ii) transfer Canadian dollars to or receive Canadian
dollars from CDS Participants and other Canadian-Link Participants
without any corresponding delivery or receipt of securities.\15\ The
OA has been updated to describe this service.
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\12\ Securities Exchange Act Release No. 52393 (September 8,
2005), 70 FR 54598 (September 15, 2005) (File No. SR-DTC-2005-12).
\13\ Securities Exchange Act Release No. 54120 (July 10, 2006),
71 FR 40562 (July 17, 2006) (File No. SR-DTC-2005-14).
\14\ Formerly known as ``The Canadian Depository for Securities
Limited.''
\15\ Securities Exchange Act Release Act No. 55239 (February 5,
2007), 72 FR 6797 (February 13, 2007) (File No. SR-DTC 2006-15).
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(j) In 2007, the Commission approved a rule filing intended to
provide greater efficiency by making available more automated
functions to be utilized for a broader range of voluntary
reorganization events (e.g., DTC's Automated Tender Offer Program
(``ATOP'')).\16\ The OA has been updated to include a description of
these procedures.
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\16\ Securities Exchange Act Release No. 56538 (September 26,
2007), 72 FR 56409 (October 3, 2007) (File No. SR-DTC-2007-09).
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(k) In 2007, DTC filed a rule change with the Commission in
order to amend DTC's OA as it applies to structured securities.\17\
That rule filing: (i) Extended the deadline by which paying agents
of such securities must submit periodic payment rate information to
DTC to preferably five business days but no less than one business
day prior to the payable date; (ii) extended the processing deadline
for payment rate files from 7 p.m. Eastern Standard Time (``EST'')
to 11:30 p.m. EST; (iii) established two classes of structured
securities, ``conforming'' and ``non-conforming;'' (iv) imposed an
exception processing fee which applies to certain structured
securities whose features prevent paying agents from complying with
the extended deadline; and (v) provided that DTC track and make
publicly available reports on paying agent performance as it relates
to timeliness and accuracy of structured securities payment rate
information submitted to DTC. DTC has extended the deadlines by
which paying agents of such structured securities must submit
periodic payment rate information to DTC to no later than 3:00 am
EST on the payable date and has extended the processing deadline for
payment rate files to 3:00 am EST on the payable date. The OA has
been updated to include this product and to reflect these
extensions.
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\17\ Securities Exchange Act Release No. 57542 (March 20, 2008),
73 FR 16403 (March 27, 2008) (File No. SR-DTC-2007-11).
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(l) In 2007, the Commission approved a DTC rule filing which
provided that DTC's foreign currency payment option may be used: (i)
In relation to securities denominated in U.S. dollars and (ii)
regardless of whether the terms of the issue originally contemplated
the option of payment in one or more currencies.\18\ The OA has been
updated to reflect this change.
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\18\ Securities Exchange Act Release No. 57298 (February 8,
2008), 73 FR 8921(February 15, 2008) (File No. SR-DTC-2007-13).
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(m) In 2007, the Commission approved a DTC rule change which
added a new Policy Statement on the Eligibility of Foreign
Securities to DTC's rules.\19\ The purpose of the policy statement
is to set forth in a single place and in an accessible manner the
criteria and procedures for making the securities of foreign issuers
eligible for deposit and book-entry transfer through the facilities
of DTC in accordance with the Securities Act of 1933 \20\ and the
rules and regulations of the SEC thereunder. A description of the
policy statement has been added to the OA.
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\19\ Securities Exchange Act Release No. 56277 (August 17,
2007), 72 FR 48709 (File No. SR-DTC-2007-04).
\20\ 15 U.S.C. 77 et seq.
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(n) In 2008, the Commission approved a DTC rule filing to
implement the New Issue Information Dissemination System (``NIIDS'')
for municipal securities. NIIDS is an automated system developed by
DTC at the request of the Securities Industry and Financial Markets
Association (``SIFMA'') in order to improve the mechanism for
disseminating new issue information regarding municipal
securities.\21\ DTC has mandated the use of NIIDS in connection with
eligibility processing of municipal securities issuances in order to
assist underwriters in meeting the reporting standards set forth by
the Municipal Securities Rule Making Board (``MSRB''). The OA has
been updated to include a description of NIIDS.
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\21\ Securities Exchange Act Release No. 57513 (March 17, 2008),
73 FR 15548 (March 24, 2008) (File No. SR-DTC-2007-10).
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2. DTC has updated the OA to describe the modification in cutoff
time for Fast Automated Securities Transfer (``FAST'') Agents to
approve or reject a deposit or withdrawal instruction submitted by a
participant. This adjustment was implemented on October 2, 2001.\22\
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\22\ The modification explains that the cutoff has been changed
to 5:30 p.m. EST from 6:30 p.m. EST. For more information regarding
this change, see DTC Important Notice B2358-01 available at
https://www.dtcc.com/downloads/legal/imp_notices/2001/dtc/exe/exe_
2358.pdf.
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3. Additionally, DTC has updated the OA to indicate that
voluntary unit separations \23\ are now processed under the FAST
program. The volume of voluntary unit separations has declined
significantly throughout the years (to one or two per year) thereby
reducing the need for a separate program to process such
transactions. Voluntary units have been processed under the Fast
program since the late 1990s.
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\23\ A unit is a security comprised of more than one class of
securities such as common stock and warrants (``components''). In a
voluntary unit separation, the separation and recombination between
the security component and the security is done by the Participant
and transfer agent using DTC's Deposit/Withdrawal At Custodian
(``DWAC'') system.
DTC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \24\ and the rules and
regulations thereunder applicable to DTC because the proposed rule
change should facilitate the prompt and accurate clearance and
settlement of securities transactions by expediting the process of
making securities eligible for DTC's services.
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\24\ 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 on 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
No written comments relating to the proposed rule change have 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 rule change has become effective upon filing pursuant
to Section
[[Page 1268]]
19(b)(3)(A)(iii) of the Act \25\ and Rule 19b-4(f)(4) \26\ thereunder
because the proposed rule change effects a change in an existing
service of DTC that (i) does not adversely affect the safeguarding of
securities or funds in the custody or control of DTC or for which it is
responsible and (ii) does not significantly affect the respective
rights of the clearing agency or persons using the service. At any time
within sixty days of the filing of such 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.
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\25\ 15 U.S.C. 78s(b)(3)(A)(iii).
\26\ 26 17 CFR 240.19b-4(f)(4).
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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 (https://
www.sec.gov/rules/sro.shtml) or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-DTC-2008-14 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-DTC-2008-14. 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/legal/rule_filings/ficc/2008.php. 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-2008-14 and should be
submitted on or before January 29, 2009.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-349 Filed 1-9-09; 8:45 am]
BILLING CODE 8011-01-P
