Self-Regulatory Organizations; the Depository Trust Company; Notice of Filing of Proposed Rule Change To Revise Its Procedures Regarding Securities Delivered To or From Participant Accounts Through the Automated Customer Account Transfer Service of National Securities Clearing Corporation, 38581-38583 [2010-16107]

Download as PDF Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices proposed change also includes a technical correction to clarify that ACATS transactions enter the CNS Accounting Operation on the day before Settlement Date (SD–1), rather than T+1. NSCC proposes implementing the changes proposed in this filing during the third quarter of 2010 and advising Members of the implementation date through issuance of NSCC Important Notices. NSCC believes the proposed rule change is consistent with the requirements of Section 17A of the Act 12 and the rules and regulations thereunder because the proposed modifications would facilitate NSCC’s prompt and accurate clearance and settlement of securities transactions by implementing a tracking mechanism to distinguish ACATS activity from other items processed through CNS and by clarifying that NSCC does not maintain a lien on ACATS assets delivered to a Receiving Member through CNS. B. Self-Regulatory Organization’s Statement on Burden on Competition NSCC does not believe that the proposed rule change would impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the proposed rule change have not been solicited or received. NSCC will notify the Commission of any written comments received by NSCC. 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: emcdonald on DSK2BSOYB1PROD with NOTICES (A) By order approve the 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: SECURITIES AND EXCHANGE COMMISSION 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–NSCC–2009–05 on the subject line. [Release No. 34–62384; File No. SR–DTC– 2010–09] 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–NSCC–2010–05. 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 Web site viewing and printing in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549–1090, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings will also be available for inspection and copying at the principal office of the NSCC and on NSCC’s Web site at https://www.dtcc.com/downloads/legal/ rule_filings/2010/nscc/2010–05.pdf. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NSCC–2009–05 and should be submitted on or before July 23, 2010. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–16108 Filed 7–1–10; 8:45 am] Self-Regulatory Organizations; the Depository Trust Company; Notice of Filing of Proposed Rule Change To Revise Its Procedures Regarding Securities Delivered To or From Participant Accounts Through the Automated Customer Account Transfer Service of National Securities Clearing Corporation June 25, 2010. 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 June 4, 2010, 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 substantially prepared 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 the Substance of the Proposed Rule Change The purpose of this proposed rule change is to revise DTC’s Procedures regarding securities delivered to or from Participant accounts through the Automated Customer Account Transfer Service (‘‘ACATS’’) of National Securities Clearing Corporation (‘‘NSCC’’). II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change DTC proposes modifying certain provisions of its Settlement Services Guide (‘‘Guide’’) in connection with BILLING CODE 8010–01–P 1 15 12 15 U.S.C. 78q–1. VerDate Mar<15>2010 18:27 Jul 01, 2010 13 17 Jkt 220001 38581 PO 00000 CFR 200.30–3(a)(12). Frm 00126 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\02JYN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 02JYN1 38582 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices concurrent rule changes proposed by NSCC concerning ACATS transfers through NSCC’s Continuous Net Settlement (‘‘CNS’’) system.3 NSCC’s ACATS enables members to effect automated transfers of customer accounts among themselves.4 For ACATS transfers processed through NSCC’s Continuous Net Settlement (‘‘CNS’’) system,5 long and short positions are passed against Members’ positions at The Depository Trust Company (‘‘DTC’’). Available securities are delivered from short Members’ accounts at DTC and allocated to long Members’ accounts by book-entry. An NSCC Member to which a customer’s securities account is to be transferred through ACATS (‘‘Receiving Member’’) may initiate the transfer process by submitting a Transfer Initiation Request (‘‘TIF’’) to NSCC. For the transfer to be processed, the TIF must be accepted by the NSCC Member from which the customer’s securities account is being transferred (‘‘Delivering Member’’). After a Delivering Member accepts a customer account transfer and all other preconditions of NSCC’s rules for processing ACATS transfer are met, all CNS-eligible items in the account will be entered into NSCC’s CNS accounting operation on the day before settlement date unless the Receiving Member notifies NSCC that certain items should be withheld.6 DTC proposes modifying the Guide in several ways to clarify that securities moving through NSCC’s ACATS system are not subject to a lien by DTC when they are debited from a delivering Participant’s DTC account or when they are credited to a receiving Participant’s DTC account.7 DTC believes its emcdonald on DSK2BSOYB1PROD with NOTICES 3 NSCC is proposing these concurrent changes in filing SR–NSCC–2010–05 with the Commission. 4 ACATS complements a Financial Industry Regulatory Authority (‘‘FINRA’’) rule requiring FINRA members to use automated clearing agency customer account transfer services and to effect customer account transfers within specified time frames. 5 CNS is an ongoing accounting system which nets today’s Settling Trades with yesterday’s Closing Positions to produce a net short or long position for a particular security for a particular Member. NSCC is the contra party for all positions. The positions are then passed against the Member’s Designated Depository positions and available securities are allocated by book-entry. This allocation of securities is accomplished through an evening cycle followed by a day cycle. Positions which remain open after the evening cycle may be changed as a result of trades accepted for settlement that day. CNS allocates deliveries in both the night and day cycles using an algorithm based on priority groups in descending order, age of position within a priority group, and random numbers within age groups. 6 NSCC Rule 50 (Automated Customer Account Transfer Service). 7 As part of NSCC’s companion rule filing, NSCC proposes amending its Rules to provide that any VerDate Mar<15>2010 18:27 Jul 01, 2010 Jkt 220001 proposed clarifications would help NSCC Members and DTC Participants meet their legal obligations to maintain securities possession or control of certain customer securities 8 and would concurrently protect the interests of NSCC and DTC. DTC proposes modifying the CNS section of the Guide to clarify that when a Participant holds securities in its DTC account in a no-lien location 9 and those securities are part of an ACATS transfer through CNS, then DTC would not have any lien on such securities to satisfy the Participant’s CNS ACATS delivery obligation. DTC also proposes clarifying within the Guide that ACAT deliveries from CNS would be deemed to be designated by the receiving Participant as ‘‘Minimum Amount Securities’’ when they are credited to the receiving Participant’s account.10 Minimum Amount Securities are not considered collateral under DTC’s rules.11 Additional clarification would be included to explain that an ACATS transfer would be deemed null and void and the underlying securities could be used to satisfy settlement obligations to NSCC if NSCC determines that a Delivering Member and a Receiving Member defaulted on their settlement obligations to NSCC and the Delivering Member also fails to meet its ACATS delivery obligation. DTC proposes implementing the proposed changes in this filing during the third quarter of 2010 and advising Members of the specific implementation date through issuance of DTC Important Notices. DTC believes the proposed rule changes are consistent with the deliveries and receives in a particular security processed through CNS would be designated by NSCC to satisfy a Member’s ACATS receive or deliver obligation prior to satisfaction of other CNSrelated obligations for that Member in the same security. This would allow NSCC to track the completion status of CNS ACATS deliveries and would facilitate NSCC’s ability to notify DTC of which CNS deliveries are ACATS transfers. 8 Commission Rule 15c3–3 provides that a broker dealer shall promptly obtain and shall thereafter maintain the physical possession or control of all fully-paid securities and excess margin securities, in each case, carried by a broker or dealer for the account of customers. 9 For example, when the securities are designated as ‘‘Minimum Amount Securities’’ and not as Net Additions. 10 As ‘‘Minimum Amount Securities’’, DTC would not have any lien on such securities transferred through ACATS and received from CNS. Such securities would not constitute collateral to which DTC could assert a claim, and accordingly they would not be counted as part of the Participant’s Collateral Monitor unless the receiving Participant designates such securities as ‘‘Net Additions’’ in accordance with DTC Rules and Procedures. 11 DTC Rule 1 and DTC Rule 4(A) respectively for the definition of Minimum Amount Securities and for the implications of this designation in protecting such securities from any lien or other claim of DTC. PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 requirements of Section 17A of the Act 12 and the rules and regulations thereunder because the proposed changes would facilitate DTC’s prompt and accurate clearance and settlement of securities transactions by clarifying when securities involved in ACATS transfers through CNS are subject to a lien by DTC. B. Self-Regulatory Organization’s Statement on Burden on Competition DTC does not believe that the proposed rule change would impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the proposed rule change have not been solicited or received. DTC will notify the Commission of any written comments received by DTC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve the 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 Commissions 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–2010–09 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 12 15 E:\FR\FM\02JYN1.SGM U.S.C. 78q–1. 02JYN1 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–DTC–2010–09. 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 Web site viewing and printing in the Commission’s Public Reference Section, 100 F Street, NE., Washington, DC 20549–1090, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings will also be available for inspection and copying at the principal office of the DTC and on DTC’s Web site at https:// www.dtcc.com/downloads/legal/ rule_filings/2010/dtc/2010-09.pdf. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–DTC–2010–09 and should be submitted on or before July 23, 2010. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–16107 Filed 7–1–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION emcdonald on DSK2BSOYB1PROD with NOTICES [Release No. 34–62394; File No. SR–Phlx– 2010–89] Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing of Proposed Rule Change Relating to Pricing for Direct Circuit Connections June 28, 2010. 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 June 24, 2010, NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ 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 the Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) a proposed rule change to establish pricing for 10Gb direct circuit connections and codify pricing for 10Gb [sic] direct circuit connections for customers who are not co-located in the Exchange’s datacenter. The text of the proposed rule change is available at https://nasdaqtrader.com/ micro.aspx?id=PHLXfilings, on the Commission’s Web site at https:// www.sec.gov, at the Exchange’s principal office, 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 Exchange 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 Exchange 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 is proposing to establish fees for direct 10Gb circuit connections, and codify fees for direct circuit connections capable of supporting up to 1Gb, for customers who are not co-located at the Exchange’s datacenter. Currently, the Exchange already makes available to co-located customers a 10Gb circuit connection and charges for each a $1000 initial installation charge as well as an ongoing monthly fee of $5000. The Exchange is 1 15 13 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 18:27 Jul 01, 2010 2 17 Jkt 220001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00128 Fmt 4703 Sfmt 4703 38583 establishing the same fees for non colocated customers with a 10Gb circuit.3 The Exchange also already makes available to both co-located and non colocated customers direct connections capable of supporting up to 1Gb, with per connection monthly fees of $500 for co-located customers and $1000 for non co-located customers. Monthly fees are higher for non co-located customers because direct connections require the Exchange to provide cabinet space and middleware for those customers’ thirdparty vendors to connect into the datacenter and, ultimately, to the trading system. Finally, for non colocated customers the Exchange charges an optional installation fee of $925 if the customer chooses to use an on-site router. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,4 in general, and with Sections 6(b)(5) of the Act,5 in particular, in that the proposal is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. In particular, the proposal will provide greater transparency into the connectivity options available to market participants. The Exchange also believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,6 in general, and with Section 6(b)(4) of the Act,7 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the Exchange operates or controls. The filing codifies and makes transparent the fees imposed for direct connections to non co-located customers. These fees are uniform for all such customers and are either 3 The Exchange provides an additional 1Gb copper connection option to the Exchange for colocated customers. Given the technological constraints of copper connections over longer distances, the Exchange does not offer a copper connection option to users outside of its datacenter. 4 15 U.S.C. 78f. 5 15 U.S.C. 78f(b)(5). 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(4). E:\FR\FM\02JYN1.SGM 02JYN1

Agencies

[Federal Register Volume 75, Number 127 (Friday, July 2, 2010)]
[Notices]
[Pages 38581-38583]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-16107]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62384; File No. SR-DTC-2010-09]


Self-Regulatory Organizations; the Depository Trust Company; 
Notice of Filing of Proposed Rule Change To Revise Its Procedures 
Regarding Securities Delivered To or From Participant Accounts Through 
the Automated Customer Account Transfer Service of National Securities 
Clearing Corporation

June 25, 2010.
    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 June 4, 2010, 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 substantially prepared 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).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The purpose of this proposed rule change is to revise DTC's 
Procedures regarding securities delivered to or from Participant 
accounts through the Automated Customer Account Transfer Service 
(``ACATS'') of National Securities Clearing Corporation (``NSCC'').

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    DTC proposes modifying certain provisions of its Settlement 
Services Guide (``Guide'') in connection with

[[Page 38582]]

concurrent rule changes proposed by NSCC concerning ACATS transfers 
through NSCC's Continuous Net Settlement (``CNS'') system.\3\
---------------------------------------------------------------------------

    \3\ NSCC is proposing these concurrent changes in filing SR-
NSCC-2010-05 with the Commission.
---------------------------------------------------------------------------

    NSCC's ACATS enables members to effect automated transfers of 
customer accounts among themselves.\4\ For ACATS transfers processed 
through NSCC's Continuous Net Settlement (``CNS'') system,\5\ long and 
short positions are passed against Members' positions at The Depository 
Trust Company (``DTC''). Available securities are delivered from short 
Members' accounts at DTC and allocated to long Members' accounts by 
book-entry.
---------------------------------------------------------------------------

    \4\ ACATS complements a Financial Industry Regulatory Authority 
(``FINRA'') rule requiring FINRA members to use automated clearing 
agency customer account transfer services and to effect customer 
account transfers within specified time frames.
    \5\ CNS is an ongoing accounting system which nets today's 
Settling Trades with yesterday's Closing Positions to produce a net 
short or long position for a particular security for a particular 
Member. NSCC is the contra party for all positions. The positions 
are then passed against the Member's Designated Depository positions 
and available securities are allocated by book-entry. This 
allocation of securities is accomplished through an evening cycle 
followed by a day cycle. Positions which remain open after the 
evening cycle may be changed as a result of trades accepted for 
settlement that day. CNS allocates deliveries in both the night and 
day cycles using an algorithm based on priority groups in descending 
order, age of position within a priority group, and random numbers 
within age groups.
---------------------------------------------------------------------------

    An NSCC Member to which a customer's securities account is to be 
transferred through ACATS (``Receiving Member'') may initiate the 
transfer process by submitting a Transfer Initiation Request (``TIF'') 
to NSCC. For the transfer to be processed, the TIF must be accepted by 
the NSCC Member from which the customer's securities account is being 
transferred (``Delivering Member''). After a Delivering Member accepts 
a customer account transfer and all other preconditions of NSCC's rules 
for processing ACATS transfer are met, all CNS-eligible items in the 
account will be entered into NSCC's CNS accounting operation on the day 
before settlement date unless the Receiving Member notifies NSCC that 
certain items should be withheld.\6\
---------------------------------------------------------------------------

    \6\ NSCC Rule 50 (Automated Customer Account Transfer Service).
---------------------------------------------------------------------------

    DTC proposes modifying the Guide in several ways to clarify that 
securities moving through NSCC's ACATS system are not subject to a lien 
by DTC when they are debited from a delivering Participant's DTC 
account or when they are credited to a receiving Participant's DTC 
account.\7\ DTC believes its proposed clarifications would help NSCC 
Members and DTC Participants meet their legal obligations to maintain 
securities possession or control of certain customer securities \8\ and 
would concurrently protect the interests of NSCC and DTC.
---------------------------------------------------------------------------

    \7\ As part of NSCC's companion rule filing, NSCC proposes 
amending its Rules to provide that any deliveries and receives in a 
particular security processed through CNS would be designated by 
NSCC to satisfy a Member's ACATS receive or deliver obligation prior 
to satisfaction of other CNS-related obligations for that Member in 
the same security. This would allow NSCC to track the completion 
status of CNS ACATS deliveries and would facilitate NSCC's ability 
to notify DTC of which CNS deliveries are ACATS transfers.
    \8\ Commission Rule 15c3-3 provides that a broker dealer shall 
promptly obtain and shall thereafter maintain the physical 
possession or control of all fully-paid securities and excess margin 
securities, in each case, carried by a broker or dealer for the 
account of customers.
---------------------------------------------------------------------------

    DTC proposes modifying the CNS section of the Guide to clarify that 
when a Participant holds securities in its DTC account in a no-lien 
location \9\ and those securities are part of an ACATS transfer through 
CNS, then DTC would not have any lien on such securities to satisfy the 
Participant's CNS ACATS delivery obligation. DTC also proposes 
clarifying within the Guide that ACAT deliveries from CNS would be 
deemed to be designated by the receiving Participant as ``Minimum 
Amount Securities'' when they are credited to the receiving 
Participant's account.\10\ Minimum Amount Securities are not considered 
collateral under DTC's rules.\11\ Additional clarification would be 
included to explain that an ACATS transfer would be deemed null and 
void and the underlying securities could be used to satisfy settlement 
obligations to NSCC if NSCC determines that a Delivering Member and a 
Receiving Member defaulted on their settlement obligations to NSCC and 
the Delivering Member also fails to meet its ACATS delivery obligation.
---------------------------------------------------------------------------

    \9\ For example, when the securities are designated as ``Minimum 
Amount Securities'' and not as Net Additions.
    \10\ As ``Minimum Amount Securities'', DTC would not have any 
lien on such securities transferred through ACATS and received from 
CNS. Such securities would not constitute collateral to which DTC 
could assert a claim, and accordingly they would not be counted as 
part of the Participant's Collateral Monitor unless the receiving 
Participant designates such securities as ``Net Additions'' in 
accordance with DTC Rules and Procedures.
    \11\ DTC Rule 1 and DTC Rule 4(A) respectively for the 
definition of Minimum Amount Securities and for the implications of 
this designation in protecting such securities from any lien or 
other claim of DTC.
---------------------------------------------------------------------------

    DTC proposes implementing the proposed changes in this filing 
during the third quarter of 2010 and advising Members of the specific 
implementation date through issuance of DTC Important Notices.
    DTC believes the proposed rule changes are consistent with the 
requirements of Section 17A of the Act \12\ and the rules and 
regulations thereunder because the proposed changes would facilitate 
DTC's prompt and accurate clearance and settlement of securities 
transactions by clarifying when securities involved in ACATS transfers 
through CNS are subject to a lien by DTC.
---------------------------------------------------------------------------

    \12\ 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 would impose any 
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments relating to the proposed rule change have not been 
solicited or received. DTC will notify the Commission of any written 
comments received by DTC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) By order approve the 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 Commissions 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-2010-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission,

[[Page 38583]]

100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2010-09. 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 Web site viewing and 
printing in the Commission's Public Reference Section, 100 F Street, 
NE., Washington, DC 20549-1090, on official business days between the 
hours of 10 a.m. and 3 p.m. Copies of such filings will also be 
available for inspection and copying at the principal office of the DTC 
and on DTC's Web site at https://www.dtcc.com/downloads/legal/rule_filings/2010/dtc/2010-09.pdf. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-DTC-2010-09 and should be submitted on or before July 
23, 2010.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-16107 Filed 7-1-10; 8:45 am]
BILLING CODE 8010-01-P
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