Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change Relating to Municipal Bonds Redemption Process, 38677-38678 [E9-18558]
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Federal Register / Vol. 74, No. 148 / Tuesday, August 4, 2009 / Notices
By the Commission.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–18669 Filed 7–31–09; 4:15 pm]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60394; File No. SR–DTC–
2009–13]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing of Proposed Rule Change
Relating to Municipal Bonds
Redemption Process
July 28, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
July 15, 2009, The Depository Trust
Company (‘‘DTC’’) 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 primarily by DTC. 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
DTC proposes to modify the timing
when an issuer of certain municipal
securities or its agent notifies DTC of a
redemption or an advance refunding of
such municipal securities.
mstockstill on DSKH9S0YB1PROD with NOTICES
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
DTC included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. DTC has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In early 2008, the Association of
Global Custodians (‘‘AGC’’) and DTC
formed a working group to explore
issues associated with redemption
announcements. Several meetings were
1 15
U.S.C. 78s(b)(1).
VerDate Nov<24>2008
16:07 Aug 03, 2009
Jkt 217001
held in 2008 with participation from
members of the AGC, The Securities
Industry and Financial Markets
Association, the agent community, DTC,
and DTC’s participants.
Among other things, the working
group reviewed redemption
announcement data for a six month
period and discovered that many
conventional municipal bond 2 issuers
or their agents were notifying DTC of
the redemption or refund later than the
30 day Publication Date period as
required in DTC’s rules. The working
group then investigated the
ramifications of this and concluded that
if DTC were to amend the Publication
Date from the current standard of ‘‘no
fewer than 30 calendar days’’ prior to
the redemption or advance refund to
‘‘no fewer than 20 calendar days’’ prior
to the redemption or advance refund for
conventional municipal bonds, DTC
would still have sufficient time to
process the redemption announcement
and issuers and their agents would have
more time to notify DTC of a
redemption thereby making the
redemption notification process more
efficient. The working group presented
this proposal to the American Bankers
Association and to the National
Association of Bond Lawyers and both
organizations approved this
recommendation.
Therefore, DTC proposes to amend
Part V.A. of its Operational
Arrangements to redefine the time frame
for an issuer or its agent of a
conventional municipal bond to notify
DTC of a full or partial redemption or
an advance refunding of part of such
outstanding securities. Under the
proposal, the issuer or agent will have
to notify DTC at least two business days
prior to the Publication Date, which will
be redefined as ‘‘no fewer than 20
calendar days nor more than 60
calendar days prior to the redemption
date or, in the case of an advance
refunding, the date that the proceeds are
deposited in escrow (and, in such cases,
final notification must be received no
later than 20 calendar days prior to the
refunding date.)’’ DTC proposes that this
new requirement would be effective
October 1, 2009.
DTC states that the proposed rule
change is consistent with the
requirements of Section 17A of the Act 3
and the rules and regulations
thereunder because it modifies an
existing DTC service in order to make
2 A ‘‘conventional municipal bond’’ was defined
as ‘‘a bond without any derivatives attached to it
and no inherent features that would prevent a
redemption announcement from being provided in
a timely manner.’’
3 15 U.S.C. 78q–1.
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
38677
the redemption process for municipal
bonds more efficient. As such it is a
change to an existing service, which
will not adversely affect the
safeguarding of securities and funds in
DTC’s control or custody.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
DTC does not believe that the
proposed rule change will have any
impact or impose any burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments relating to the
proposed rule change have not yet been
solicited or received. DTC will notify
the Commission of any written
comments received by DTC.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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.
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
No. SR–DTC–2009–13 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 No.
SR–DTC–2009–13. This file number
E:\FR\FM\04AUN1.SGM
04AUN1
38678
Federal Register / Vol. 74, No. 148 / Tuesday, August 4, 2009 / Notices
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
DTC’s principal office and DTC’s Web
site at (https://www.dtc.org/impNtc/mor/
index.html). 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–DTC–2009–
13 and should be submitted on or before
August 25, 2009.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.4
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–18558 Filed 8–3–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60395; File No. SR–CHX–
2009–10]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing of a Proposed Rule Change
To Add the Quote@CHX and
Reprice@CHX Order Types to
Brokerplex System
mstockstill on DSKH9S0YB1PROD with NOTICES
July 28, 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 July 23,
2009, Chicago Stock Exchange, Inc.
4 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Nov<24>2008
16:07 Aug 03, 2009
Jkt 217001
(‘‘CHX’’ or the ‘‘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 CHX. 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 CHX proposes to amend its rules
to allow Exchange-registered
Institutional Brokers to enter two new
order types, known as Quote@CHX and
Reprice@CHX, when using the
Brokerplex® order entry system. The
text of this proposed rule change is
available on the Exchange’s Web site at
(https://www.chx.com) and in 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
CHX included statements concerning
the purpose of and basis for the
proposed rule changes and discussed
any comments it received regarding the
proposal. The text of these statements
may be examined at the places specified
in Item IV below. The CHX 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
The Exchange proposes to add
Interpretations and Policies .04 to the
Article 17 obligations of CHX-registered
Institutional Brokers to permit the entry
of two new order types within
Brokerplex for Institutional Brokers to
use when submitting orders to the CHX
Matching System for display and
potential execution. The new order
types are known as ‘‘Quote@CHX’’ and
‘‘Reprice@CHX.’’
The Brokerplex system is an order
entry and management system
developed and operated by the
Exchange for use on a non-exclusive
basis by CHX-registered Institutional
Brokers to receive and hold orders from
their clients while seeking execution on
the CHX or elsewhere in the National
Market System. The Exchange seeks to
add two new order types within
Brokerplex for Institutional Brokers to
use when submitting orders to the CHX
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
Matching System for display and
potential execution.
In many instances, Institutional
Brokers would like to display orders in
the CHX Matching System when seeking
trade execution rather than simply
hitting bids or lifting offers already
displayed in the marketplace. By doing
so, they could achieve a level of price
improvement for their customers.
Rapidly changing quotes in today’s
market environment often make it
difficult to successfully post a bid or
offer, however, since a standard limit
order entered by the Institutional Broker
may lock or cross the National Best Bid
or Offer (‘‘NBBO’’) by the time that
order entry is complete (by our rules,
the Matching System automatically
rejects orders in such circumstances).3
The new Quote@CHX order type
would allow the Institutional Broker to
submit an order to be priced within
Brokerplex at a defined limit price
which is one minimum price increment
(normally 1 cent for most securities)
from the relevant side of the National
Best Bid or Offer (‘‘NBBO’’) at the time
of order submission. For buy orders, the
relevant side of the NBBO is the offer;
for sell orders it is the bid. The pricing
of the Quote@CHX (and Reprice@CHX)
order is done solely within Brokerplex
and the order is then sent as a limit
order by Brokerplex to the Matching
System. For example, if the Institutional
Broker has set the incremental offset at
1 cent and the NBBO was 20.10 x 20.13,
a Quote@CHX buy order would be
automatically priced and submitted by
Brokerplex to the Matching System as a
20.12 limit order. The systematic
pricing of the Quote@CHX (and
Reprice@CHX) orders is non-dynamic,
i.e., the order does not automatically
reprice upon changes to the NBBO once
it has been accepted by the Matching
System.
The Reprice@CHX order type allows
an Institutional Broker to change an
existing limit order residing in the
Matching System and replace it with an
order generated in the same manner as
a Quote@CHX order type. Submission of
a Reprice@CHX order would generate an
instruction to (1) cancel a limit order
previously submitted by an Institutional
Broker to the Matching System and (2)
generate a new order to either buy or
sell (priced by Brokerplex in the same
manner as for Quote@CHX orders as
described above) and send it to the
Matching System as a limit order.
3 It is important to keep in mind that Institutional
Brokers manually enter orders into the Matching
System through Brokerplex and those orders are
often competing for priority with system-generated
orders of algorithmic order senders.
E:\FR\FM\04AUN1.SGM
04AUN1
]]>Agencies
[Federal Register Volume 74, Number 148 (Tuesday, August 4, 2009)]
[Notices]
[Pages 38677-38678]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18558]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60394; File No. SR-DTC-2009-13]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change Relating to Municipal Bonds
Redemption Process
July 28, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on July 15, 2009, The
Depository Trust Company (``DTC'') 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
primarily by DTC. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
DTC proposes to modify the timing when an issuer of certain
municipal securities or its agent notifies DTC of a redemption or an
advance refunding of such municipal securities.
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 such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In early 2008, the Association of Global Custodians (``AGC'') and
DTC formed a working group to explore issues associated with redemption
announcements. Several meetings were held in 2008 with participation
from members of the AGC, The Securities Industry and Financial Markets
Association, the agent community, DTC, and DTC's participants.
Among other things, the working group reviewed redemption
announcement data for a six month period and discovered that many
conventional municipal bond \2\ issuers or their agents were notifying
DTC of the redemption or refund later than the 30 day Publication Date
period as required in DTC's rules. The working group then investigated
the ramifications of this and concluded that if DTC were to amend the
Publication Date from the current standard of ``no fewer than 30
calendar days'' prior to the redemption or advance refund to ``no fewer
than 20 calendar days'' prior to the redemption or advance refund for
conventional municipal bonds, DTC would still have sufficient time to
process the redemption announcement and issuers and their agents would
have more time to notify DTC of a redemption thereby making the
redemption notification process more efficient. The working group
presented this proposal to the American Bankers Association and to the
National Association of Bond Lawyers and both organizations approved
this recommendation.
---------------------------------------------------------------------------
\2\ A ``conventional municipal bond'' was defined as ``a bond
without any derivatives attached to it and no inherent features that
would prevent a redemption announcement from being provided in a
timely manner.''
---------------------------------------------------------------------------
Therefore, DTC proposes to amend Part V.A. of its Operational
Arrangements to redefine the time frame for an issuer or its agent of a
conventional municipal bond to notify DTC of a full or partial
redemption or an advance refunding of part of such outstanding
securities. Under the proposal, the issuer or agent will have to notify
DTC at least two business days prior to the Publication Date, which
will be redefined as ``no fewer than 20 calendar days nor more than 60
calendar days prior to the redemption date or, in the case of an
advance refunding, the date that the proceeds are deposited in escrow
(and, in such cases, final notification must be received no later than
20 calendar days prior to the refunding date.)'' DTC proposes that this
new requirement would be effective October 1, 2009.
DTC states that the proposed rule change is consistent with the
requirements of Section 17A of the Act \3\ and the rules and
regulations thereunder because it modifies an existing DTC service in
order to make the redemption process for municipal bonds more
efficient. As such it is a change to an existing service, which will
not adversely affect the safeguarding of securities and funds in DTC's
control or custody.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will have any
impact or impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments relating to the proposed rule change have not yet
been solicited or received. DTC will notify the Commission of any
written comments received by DTC.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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. 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 No. SR-DTC-2009-13 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 No. SR-DTC-2009-13. This file
number
[[Page 38678]]
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 DTC's principal office and DTC's Web site at (https://www.dtc.org/impNtc/mor/). 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-DTC-2009-13 and should be submitted on or
before August 25, 2009.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\4\
---------------------------------------------------------------------------
\4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-18558 Filed 8-3-09; 8:45 am]
BILLING CODE 8010-01-P
