Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Amend Rules Relating to the Early Redemption of Certificates of Deposit, 42149-42150 [2011-17957]

Download as PDF Federal Register / Vol. 76, No. 137 / Monday, July 18, 2011 / Notices 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSEAmex–2011–47 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64864; File No. SR–DTC– 2011–06] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Amend Rules Relating to the Early Redemption of Certificates of Deposit July 12, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b-4 thereunder 2 • Send paper comments in triplicate notice is hereby given that on July 1, to Elizabeth M. Murphy, Secretary, 2011, The Depository Trust Company Securities and Exchange Commission, (‘‘DTC’’) filed with the Securities and 100 F Street, NE., Washington, DC Exchange Commission (‘‘Commission’’) 20549–1090. the proposed rule change as described in Items I and II below, which Items All submissions should refer to File have been prepared primarily by DTC. Number SR–NYSEAmex–2011–47. This The Commission is publishing this file number should be included on the notice to solicit comments on the subject line if e-mail is used. To help the proposed rule change from interested Commission process and review your persons. comments more efficiently, please use only one method. The Commission will I. Self-Regulatory Organization’s post all comments on the Commission’s Statement of the Terms of the Substance Internet Web site (http://www.sec.gov/ of the Proposed Rule Change rules/sro.shtml). Copies of the The purpose of DTC’s proposed rule submission, all subsequent change is to amend its Redemption amendments, all written statements Service Guide as it relates to the early with respect to the proposed rule redemption of certain Certificates of change that are filed with the Deposit held at DTC.3 Commission, and all written II. Self-Regulatory Organization’s communications relating to the Statement of the Purpose of, and proposed rule change between the Commission and any person, other than Statutory Basis for, the Proposed Rule Change those that may be withheld from the public in accordance with the In its filing with the Commission, provisions of 5 U.S.C. 552, will be DTC included statements concerning available for Web site viewing and the purpose of and basis for the printing in the Commission’s Public proposed rule change and discussed any Reference Room on official business comments it received on the proposed days between the hours of 10 a.m. and rule change. The text of these statements 3 p.m. Copies of such filing also will be may be examined at the places specified available for inspection and copying at in Item IV below. DTC has prepared the principal office of the Exchange. All summaries, set forth in sections (A), (B), comments received will be posted and (C) below, of the most significant without change; the Commission does aspects of these statements.4 not edit personal identifying (A) Self-Regulatory Organization’s information from submissions. You Statement of the Purpose of, and should submit only information that you wish to make available publicly. All Statutory Basis for, the Proposed Rule Change submissions should refer to File Recently, several issuers of Number SR–NYSEAmex–2011–47 and Certificates of Deposit (‘‘CDs’’) have should be submitted on or before contacted DTC in an attempt to redeem August 8, 2011. or call their CDs prior to the maturity For the Commission, by the Division of date. The master certificate of these CDs Trading and Markets, pursuant to delegated srobinson on DSK4SPTVN1PROD with NOTICES Paper Comments authority.19 Cathy H. Ahn, Deputy Secretary. 1 15 [FR Doc. 2011–17958 Filed 7–15–11; 8:45 am] BILLING CODE 8011–01–P 19 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 16:43 Jul 15, 2011 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The text of the proposed rule change is attached as Exhibit 5 to DTC’s filing, which is available at http://www.dtcc.com/downloads/legal/rule_filings/ 2010/dtc/2011-06.pdf. 4 The Commission has modified the text of the summaries prepared by DTC. 2 17 Jkt 223001 PO 00000 Frm 00038 Fmt 4703 Sfmt 4703 42149 did not expressly specify that they were callable or subject to redemption. In some instances, the issuer offered to pay DTC participants the principal plus interest through the date of maturity. In other instances, the issuer offered to pay principal plus interest only through the date of redemption. Because the master certificates did not expressly indicate the CDs could be redeemed early, a number of DTC participants expressed their concerns that the CDs had been sold to investors without disclosing the possibility of early redemption. Over the past several months, DTC has worked with the industry, including the Retail Fixed Income Committee of The Securities Industry and Financial Markets Association (‘‘SIFMA’’), to better understand the issues related to the early termination of CDs that do not contain express early termination provisions. As a result of these consultations, DTC is now proposing to amend its Redemption Service Guide to state that DTC will not process early redemptions or calls on CDs unless (i) There is an explicit provision in the master certificate that permits early termination by the issuer and specifies the payment to be made in connection therewith or (ii) written consent to an early redemption in a form designed by DTC is obtained by the issuer from all of the holders of the CD. Furthermore, in the event that an issuer sends such payment to DTC in contravention of the proposed rule, DTC will return the payment to the issuer, less any costs associated with facilitating the attempted redemption and return of funds. The proposed rule change is consistent with the requirements of the Act, as amended, (‘‘Act’’) and the rules and regulations thereunder applicable to DTC because it clarifies the terms and conditions under which DTC will permit the early redemption of certain CDs and thus facilitates the prompt and accurate clearance and settlement of transactions involving these CDs. (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. E:\FR\FM\18JYN1.SGM 18JYN1 42150 Federal Register / Vol. 76, No. 137 / Monday, July 18, 2011 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within forty-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 or disapprove 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 Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–DTC–2011–06 on the subject line. srobinson on DSK4SPTVN1PROD with 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. All submission should refer to File Number SR–DTC–2011–06. 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 (http://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 VerDate Mar<15>2010 16:43 Jul 15, 2011 Jkt 223001 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 DTC and on DTC’s Web site at http:// www.dtcc.com/downloads/legal/ rule_filings/2011/dtc/2011-06.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–2011–06 and should be submitted on or before [insert date 21 days from publication in the Federal Register]. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.5 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–17957 Filed 7–15–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64860; File No. SR–NYSE– 2011–32] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Operative Date of NYSE Rule 92(c)(3) From August 1, 2011 to September 12, 2011 July 12, 2011. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that July 1, 2011, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 extend the operative date of NYSE Rule 92(c)(3) from August 1, 2011 to September 12, 201 [sic]. The text of the proposed rule PO 00000 5 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 Frm 00039 Fmt 4703 Sfmt 4703 change is available at the Exchange, the Commission’s Public Reference Room, on the Commission’s Web site at http://www.sec.gov, and http:// www.nyse.com. 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 those 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 parts 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 extend the delayed operative date of NYSE Rule 92(c)(3) from August 1, 2011 to September 12, 2011. The Exchange believes that this extension will provide the time necessary for the Exchange and the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) to harmonize their respective rules concerning customer order protection to achieve a standardized industry practice. Background On July 5, 2007, the Commission approved amendments to NYSE Rule 92 to permit riskless principal trading at the Exchange.4 These amendments were filed in part to begin the harmonization process between Rule 92 and FINRA’s Manning Rule.5 In connection with those amendments, the Exchange implemented for an operative date of January 16, 2008, NYSE Rule 92(c)(3), which permits Exchange member organizations to submit riskless principal orders to the Exchange, but requires them to submit to a designated Exchange database a report of the execution of the facilitated order. That rule also requires members to submit to that same database sufficient information to provide an electronic link of the execution of the facilitated order to all of the underlying orders. For purposes of NYSE Rule 92(c)(3), the Exchange informed member 4 See Securities Exchange Act Release No. 56017 (July 5, 2007), 72 FR 38110 (July 12, 2007) (SR– NYSE–2007–21). 5 See NASD Rule 2111 and IM–2110–2. E:\FR\FM\18JYN1.SGM 18JYN1

Agencies

[Federal Register Volume 76, Number 137 (Monday, July 18, 2011)]
[Notices]
[Pages 42149-42150]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17957]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64864; File No. SR-DTC-2011-06]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of Proposed Rule Change To Amend Rules Relating to the 
Early Redemption of Certificates of Deposit

 July 12, 2011.
    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 1, 2011, The Depository Trust Company (``DTC'') 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 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).
    \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 DTC's proposed rule change is to amend its 
Redemption Service Guide as it relates to the early redemption of 
certain Certificates of Deposit held at DTC.\3\
---------------------------------------------------------------------------

    \3\ The text of the proposed rule change is attached as Exhibit 
5 to DTC's filing, which is available at http://www.dtcc.com/downloads/legal/rule_filings/2010/dtc/2011-06.pdf.
---------------------------------------------------------------------------

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.\4\
---------------------------------------------------------------------------

    \4\ 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

    Recently, several issuers of Certificates of Deposit (``CDs'') have 
contacted DTC in an attempt to redeem or call their CDs prior to the 
maturity date. The master certificate of these CDs did not expressly 
specify that they were callable or subject to redemption. In some 
instances, the issuer offered to pay DTC participants the principal 
plus interest through the date of maturity. In other instances, the 
issuer offered to pay principal plus interest only through the date of 
redemption. Because the master certificates did not expressly indicate 
the CDs could be redeemed early, a number of DTC participants expressed 
their concerns that the CDs had been sold to investors without 
disclosing the possibility of early redemption.
    Over the past several months, DTC has worked with the industry, 
including the Retail Fixed Income Committee of The Securities Industry 
and Financial Markets Association (``SIFMA''), to better understand the 
issues related to the early termination of CDs that do not contain 
express early termination provisions. As a result of these 
consultations, DTC is now proposing to amend its Redemption Service 
Guide to state that DTC will not process early redemptions or calls on 
CDs unless (i) There is an explicit provision in the master certificate 
that permits early termination by the issuer and specifies the payment 
to be made in connection therewith or (ii) written consent to an early 
redemption in a form designed by DTC is obtained by the issuer from all 
of the holders of the CD. Furthermore, in the event that an issuer 
sends such payment to DTC in contravention of the proposed rule, DTC 
will return the payment to the issuer, less any costs associated with 
facilitating the attempted redemption and return of funds.
    The proposed rule change is consistent with the requirements of the 
Act, as amended, (``Act'') and the rules and regulations thereunder 
applicable to DTC because it clarifies the terms and conditions under 
which DTC will permit the early redemption of certain CDs and thus 
facilitates the prompt and accurate clearance and settlement of 
transactions involving these CDs.

(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.

[[Page 42150]]

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

    Within forty-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 or disapprove 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 Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-DTC-2011-06 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 submission should refer to File Number SR-DTC-2011-06. 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 (http://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 DTC and 
on DTC's Web site at http://www.dtcc.com/downloads/legal/rule_filings/2011/dtc/2011-06.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-2011-06 and should be submitted on or before [insert date 21 
days from publication in the Federal Register].

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17957 Filed 7-15-11; 8:45 am]
BILLING CODE 8011-01-P