Self-Regulatory Organizations; The Depository Trust Company; Order Approving Proposed Rule Change To Implement a Maturity Presentment Pend Function to Replace the Maturity Presentment Contingency System, 16028-16029 [E9-7977]

Download as PDF 16028 Federal Register / Vol. 74, No. 66 / Wednesday, April 8, 2009 / Notices Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59627; File No. SR– NYSEAmex–2009–02] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE All submissions should refer to File Amex LLC Formally Adopting and Number SR–NASDAQ–2009–031. This Codifying Its Wireless Data file number should be included on the subject line if e-mail is used. To help the Communications Initiatives Commission process and review your April 2, 2009. comments more efficiently, please use Correction: In FR Document No. E9– only one method. The Commission will 7291, published on Wednesday, April 1, post all comments on the Commission’s 2009, beginning on page 14834, third Internet Web site (https://www.sec.gov/ column, first paragraph, fifth line, the rules/sro.shtml). Copies of the name of the exchange is corrected to submission, all subsequent read ‘‘NYSE Amex LLC’’. amendments, all written statements Florence E. Harmon, with respect to the proposed rule Deputy Secretary. change that are filed with the [FR Doc. E9–7973 Filed 4–7–09; 8:45 am] Commission, and all written BILLING CODE 8010–01–P communications relating to the proposed rule change between the Commission and any person, other than SECURITIES AND EXCHANGE those that may be withheld from the COMMISSION public in accordance with the [Release No. 34–59695; File No. SR–DTC– provisions of 5 U.S.C. 552, will be 2009–02] available for inspection and copying in the Commission’s Public Reference Self-Regulatory Organizations; The Room, 100 F Street, NE., Washington, Depository Trust Company; Order DC 20549, on official business days Approving Proposed Rule Change To between the hours of 10 a.m. and 3 p.m. Implement a Maturity Presentment Copies of such filing also will be Pend Function to Replace the Maturity available for inspection and copying at Presentment Contingency System the principal office of Nasdaq. All April 2, 2009. comments received will be posted without change; the Commission does I. Introduction not edit personal identifying On January 13, 2009, The Depository information from submissions. You Trust Company (‘‘DTC’’) filed with the should submit only information that Securities and Exchange Commission you wish to make available publicly. All (‘‘Commission’’) proposed rule change submissions should refer to File SR–DTC–2009–02 pursuant to Section Number SR–NASDAQ–2009–031 and 19(b)(1) of the Securities Exchange Act should be submitted on or before April of 1934 (‘‘Act’’).1 The proposed rule 29, 2009. change was published for comment in the Federal Register on February 19, For the Commission, by the Division of 2009.2 No comment letters were Trading and Markets, pursuant to delegated received on the proposal. This order 9 authority. approves the proposal. Florence E. Harmon, Deputy Secretary. [FR Doc. E9–7866 Filed 4–7–09; 8:45 am] rwilkins on PROD1PC63 with NOTICES BILLING CODE 1080–01–P II. Description The proposed rule change implements a Maturity Presentment Pend function (‘‘IPA MP Pend Function’’) that will replace the Maturity Presentment Contingency System. A. Current MMI Maturity Payment Procedure: Maturity Presentment Contingency System Currently, as part of DTC’s Money Market Instrument (‘‘MMI’’) program 1 15 U.S.C. 78s(b)(1). Exchange Act Release No. 59388 (Feb. 11, 2009), 74 FR 7714. 2 Securities 9 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 17:05 Apr 07, 2009 Jkt 217001 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 maturity payment procedures, DTC sweeps maturing MMI positions from investors’ custodians accounts and generates Maturity Presentments (‘‘MPs’’) 3 to the designated Issuing Agent or Paying Agent’s (collectively, ‘‘IPA’’) accounts. DTC debits the IPA’s account by the amount of the maturity proceeds for settlement that day and credits the same amount to the investor’s custodian account for payment that day. Because MPs are processed against an IPA’s DTC account, IPAs may refuse to pay for a specific issuer’s MP in the event that the issuer defaults on its obligation to the IPA. DTC allows IPAs to enter refusal to pay notifications through the Participant Terminal System (‘‘PTS’’) until 3 p.m. Eastern Time on the date of maturity.4 Under extraordinary circumstances or in times of unusual market stress, DTC may use the Maturity Presentment Contingency System (‘‘MPCS’’) after consultation with the Commission on the days following a disaster to allow IPAs to review and manually release MPs. IPAs are able to release MPs for processing on a CUSIP or issuer acronym level basis. At the close of settlement, MPs that have not been released are rolled into the next business day’s processing queue for presentation along with that day’s scheduled obligations. This process continues until all maturities are funded and the IPA releases the MP, the IPA notifies DTC of its refusal to pay, or the MPCS contingency procedure is terminated. B. Proposed MMI Maturity Payment Procedure: Maturity Presentment Pend Function DTC is enhancing its systems in order to provide IPAs the ability to monitor their credit exposure to MMI issuers. DTC’s IPA MP Pend Function will enable IPAs to review and manually release MPs in the ordinary course of business. IPAs will have the ability to set the pend request anytime prior to the MP sweep or at any point during the day for unknown rate maturities, based on acronym, product type, or the issuer MMI base CUSIP number. Each day by 3 References to MPs also cover other payment obligations of MMI issuers such as periodic payments and periodic interest payments. 4 If the IPA refuses to pay, then DTC follows its Defaulting Issuer procedures, which include devaluing the collateral value of all of the defaulting issuer’s MMI to zero, reversing all of the issuer’s issuances and maturities processed that day, notifying DTC participants of the default, and blocking all further issuances by the issuer from entering DTC. If an IPA then contacts DTC to reverse the refusal to pay instruction, DTC undoes all the actions it took under its Defaulting Issuer procedures. E:\FR\FM\08APN1.SGM 08APN1 Federal Register / Vol. 74, No. 66 / Wednesday, April 8, 2009 / Notices 3 p.m. Eastern Time, the IPA will be required to (1) release all items held in pend or (2) invoke its right to refuse to pay.5 If the IPA takes no action by 3 p.m. Eastern Time, the pending items will be released by DTC for normal processing. All MP Pend requests will be timestamped and will be immediately effective. Participants with MMI positions will be able to ascertain which MPs have been placed in pend status by the IPA. Each time it uses the IPA MP Pend Function to create a pend request or make a change to its profile, the IPA will be required to represent and warrant that it has authority to submit the request appearing on the IPA’s screen and that it will either release the items held in pend by 3 p.m. Eastern Time on the date of maturity or by such time communicate to DTC that it refuses to pay. Additionally, the IPA must acknowledge that it understands and agrees that all MPs will be released for normal processing if it does not communicate its intention to refuse to pay DTC by 3 p.m. Eastern Time. In extraordinary circumstances, DTC will maintain its ability to set the pend request based on an issuer acronym, product, program, base number, or globally for all IPAs or for individual IPAs. In all circumstances, the IPA will maintain its right to notify DTC of its refusal to pay. III. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered clearing agency. In particular, the Commission believes the proposal is consistent with the requirements of Section 17A(b)(3)(F),6 which requires, among other things, that the rules of a clearing agency are designed to remove impediments to and perfect the mechanisms of a national system for the prompt and accurate clearance and settlement of securities transactions. IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act7 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (File No. SR– DTC–2009–02) be, and hereby is, approved.9 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–7977 Filed 4–7–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59684; File No. SR–NYSE– 2009–32] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To Extend Until August 31, 2009, the Application of the NYSE Arca Transfer Standard April 1, 2009. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that on March 17, 2009, New York Stock Exchange LLC (the ‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal eligible for immediate effectiveness pursuant to Rule 19b–4(f)(6) 4 under the Exchange Act. 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 proposes to amend Section 102.01C of the Listed Company Manual (the ‘‘Manual’’) to extend until August 31, 2009, the application of the special initial listing standard applicable only to companies that are listed on NYSE Arca, Inc. (‘‘NYSE Arca’’). 8 15 U.S.C. 78s(b)(2). approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 4 17 CFR 240.19b–4(f)(6). rwilkins on PROD1PC63 with NOTICES 9 In 5 The IPA MP Pend Function differs from the MPCS in this regard. Under the MPCS system, IPAs are not required to release items or invoke their right to refuse to pay each day since the MPs not acted on are rolled over into the next business day’s processing queue. 6 15 U.S.C. 78q–1(b)(3)(F). 7 15 U.S.C. 78q–1. VerDate Nov<24>2008 17:35 Apr 07, 2009 Jkt 217001 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 16029 The text of the proposed rule change is available on the Exchange’s Web site (https://www.nyse.com), at the Exchange’s Office of the Secretary and at the Commission’s Public Reference room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization 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. The NYSE has prepared summaries, set forth in Sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Section 102.01C of the Manual includes an initial listing standard that is applicable only to companies that are listed on NYSE Arca, Inc. (‘‘NYSE Arca’’) as of October 1, 2008 and that transfer to the Exchange on or before March 31, 2009 (the ‘‘NYSE Arca Transfer Standard’’).5 The NYSE Arca Transfer Standard was adopted in connection with NYSE Euronext’s business strategy of consolidating its equities listings on two of the three U.S. registered securities exchanges it owns—the NYSE and NYSE Alternext US LLC. As part of this transition, the Exchange wished to offer the opportunity to list on the NYSE to all suitable NYSE Arca companies. Most companies currently listed on NYSE Arca would meet the NYSE’s continued listing requirements set forth in Section 802.01B of the Manual for companies listed under the Exchange’s Earnings Test.6 However, a number of these companies that meet the NYSE’s continued listing standards do not qualify to list under any of the existing 5 See Securities Exchange Act Release No. 58741 (October 6, 2008), 73 FR 60378 (October 10, 2008) (SR–NYSE–2008–97). 6 Companies listed under the Earnings Test are considered to be below compliance standards if their average global market capitalization over a consecutive 30-trading-day period is less than $75,000,000 and, at the same time, total stockholders’ equity is less than $75,000,000. In addition Section 802.01B requires all listed companies to maintain a minimum of $25 million in global market capitalization and Section 802.01C requires all listed companies to maintain a $1.00 minimum stock price. E:\FR\FM\08APN1.SGM 08APN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 66 (Wednesday, April 8, 2009)]
[Notices]
[Pages 16028-16029]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7977]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59695; File No. SR-DTC-2009-02]


Self-Regulatory Organizations; The Depository Trust Company; 
Order Approving Proposed Rule Change To Implement a Maturity 
Presentment Pend Function to Replace the Maturity Presentment 
Contingency System

April 2, 2009.

I. Introduction

    On January 13, 2009, The Depository Trust Company (``DTC'') filed 
with the Securities and Exchange Commission (``Commission'') proposed 
rule change SR-DTC-2009-02 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'').\1\ The proposed rule change 
was published for comment in the Federal Register on February 19, 
2009.\2\ No comment letters were received on the proposal. This order 
approves the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 59388 (Feb. 11, 2009), 
74 FR 7714.
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II. Description

    The proposed rule change implements a Maturity Presentment Pend 
function (``IPA MP Pend Function'') that will replace the Maturity 
Presentment Contingency System.

A. Current MMI Maturity Payment Procedure: Maturity Presentment 
Contingency System

    Currently, as part of DTC's Money Market Instrument (``MMI'') 
program maturity payment procedures, DTC sweeps maturing MMI positions 
from investors' custodians accounts and generates Maturity Presentments 
(``MPs'') \3\ to the designated Issuing Agent or Paying Agent's 
(collectively, ``IPA'') accounts. DTC debits the IPA's account by the 
amount of the maturity proceeds for settlement that day and credits the 
same amount to the investor's custodian account for payment that day. 
Because MPs are processed against an IPA's DTC account, IPAs may refuse 
to pay for a specific issuer's MP in the event that the issuer defaults 
on its obligation to the IPA. DTC allows IPAs to enter refusal to pay 
notifications through the Participant Terminal System (``PTS'') until 3 
p.m. Eastern Time on the date of maturity.\4\
---------------------------------------------------------------------------

    \3\ References to MPs also cover other payment obligations of 
MMI issuers such as periodic payments and periodic interest 
payments.
    \4\ If the IPA refuses to pay, then DTC follows its Defaulting 
Issuer procedures, which include devaluing the collateral value of 
all of the defaulting issuer's MMI to zero, reversing all of the 
issuer's issuances and maturities processed that day, notifying DTC 
participants of the default, and blocking all further issuances by 
the issuer from entering DTC. If an IPA then contacts DTC to reverse 
the refusal to pay instruction, DTC undoes all the actions it took 
under its Defaulting Issuer procedures.
---------------------------------------------------------------------------

    Under extraordinary circumstances or in times of unusual market 
stress, DTC may use the Maturity Presentment Contingency System 
(``MPCS'') after consultation with the Commission on the days following 
a disaster to allow IPAs to review and manually release MPs. IPAs are 
able to release MPs for processing on a CUSIP or issuer acronym level 
basis. At the close of settlement, MPs that have not been released are 
rolled into the next business day's processing queue for presentation 
along with that day's scheduled obligations. This process continues 
until all maturities are funded and the IPA releases the MP, the IPA 
notifies DTC of its refusal to pay, or the MPCS contingency procedure 
is terminated.

B. Proposed MMI Maturity Payment Procedure: Maturity Presentment Pend 
Function

    DTC is enhancing its systems in order to provide IPAs the ability 
to monitor their credit exposure to MMI issuers. DTC's IPA MP Pend 
Function will enable IPAs to review and manually release MPs in the 
ordinary course of business. IPAs will have the ability to set the pend 
request anytime prior to the MP sweep or at any point during the day 
for unknown rate maturities, based on acronym, product type, or the 
issuer MMI base CUSIP number. Each day by

[[Page 16029]]

3 p.m. Eastern Time, the IPA will be required to (1) release all items 
held in pend or (2) invoke its right to refuse to pay.\5\ If the IPA 
takes no action by 3 p.m. Eastern Time, the pending items will be 
released by DTC for normal processing.
---------------------------------------------------------------------------

    \5\ The IPA MP Pend Function differs from the MPCS in this 
regard. Under the MPCS system, IPAs are not required to release 
items or invoke their right to refuse to pay each day since the MPs 
not acted on are rolled over into the next business day's processing 
queue.
---------------------------------------------------------------------------

    All MP Pend requests will be time-stamped and will be immediately 
effective. Participants with MMI positions will be able to ascertain 
which MPs have been placed in pend status by the IPA.
    Each time it uses the IPA MP Pend Function to create a pend request 
or make a change to its profile, the IPA will be required to represent 
and warrant that it has authority to submit the request appearing on 
the IPA's screen and that it will either release the items held in pend 
by 3 p.m. Eastern Time on the date of maturity or by such time 
communicate to DTC that it refuses to pay. Additionally, the IPA must 
acknowledge that it understands and agrees that all MPs will be 
released for normal processing if it does not communicate its intention 
to refuse to pay DTC by 3 p.m. Eastern Time. In extraordinary 
circumstances, DTC will maintain its ability to set the pend request 
based on an issuer acronym, product, program, base number, or globally 
for all IPAs or for individual IPAs. In all circumstances, the IPA will 
maintain its right to notify DTC of its refusal to pay.

III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a registered clearing agency. In particular, 
the Commission believes the proposal is consistent with the 
requirements of Section 17A(b)(3)(F),\6\ which requires, among other 
things, that the rules of a clearing agency are designed to remove 
impediments to and perfect the mechanisms of a national system for the 
prompt and accurate clearance and settlement of securities 
transactions.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act\7\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. SR-DTC-2009-02) be, and 
hereby is, approved.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 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).
    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7977 Filed 4-7-09; 8:45 am]
BILLING CODE 8010-01-P

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