Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update Existing Procedures as They Relate to Processing Mandatory Corporate Actions, 18748-18749 [2014-07470]

Download as PDF 18748 Federal Register / Vol. 79, No. 64 / Thursday, April 3, 2014 / Notices as recited in its current registration statement, because the shares will be redeemed at their net asset value in conformity with rule 22c–1 under the 1940 Act. Likewise, the proposed sale of shares of each Replacement Portfolio for investment securities will be consistent with its investment policies, as recited in its registration statement, because: (1) The shares will be sold at their net asset value; and (2) the investment securities will be of the type and quality that the Replacement Portfolio could have acquired with the proceeds from the sale of their shares had the shares been sold for cash. 9. The Section 17 Applicants submit that the proposed In-Kind Transactions, are consistent with the general purposes of the 1940 Act as stated in the Findings and Declaration of Policy in Section 1 of the 1940 Act. The proposed In-Kind Transactions do not present any conditions or abuses that the 1940 Act was designed to prevent. 10. The Section 17 Applicants respectfully submit that, for all the reasons stated above, the Commission should issue an order pursuant to Section 17(b) of the 1940 Act exempting them from the provisions of Section 17(a) of the 1940 Act to the extent necessary to permit them to carry out the proposed In-Kind Transactions. The Section 17 Applicants assert that the terms of the proposed In-Kind Transactions, including the consideration to be paid and received, are reasonable and fair to: (1) Each Existing Portfolio and corresponding Replacement Portfolio; and (2) Contract Owners. The Section 17 Applicants also assert that the proposed In-Kind Transactions do not involve overreaching on the part of any person concerned. Furthermore, the Section 17 Applicants represent that the proposed In-Kind Transactions are, or will be, consistent with all relevant policies of (1) each Existing Portfolio and corresponding Replacement Portfolio as stated in their respective registration statements and reports filed under the 1940 Act, and (2) the general purposes of the 1940 Act. pmangrum on DSK3VPTVN1PROD with NOTICES Conclusion For the reasons and upon the facts set forth in this Application, the Section 26 Applicants and Section 17 Applicants, respectively, submit that the Proposed Substitutions and the related In-Kind Transactions meet the standards of Section 26(c) of the 1940 Act and Section 17(b) of the 1940 Act and respectfully request that the Commission issue an order of approval pursuant to Section 26(c) of the 1940 VerDate Mar<15>2010 15:17 Apr 02, 2014 Jkt 232001 Act and an order of exemption pursuant to Section 17(b) of the 1940 Act. For the Commission, by the Division of Investment Management, under delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–07424 Filed 4–2–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71828; File No. SR–DTC– 2014–03] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update Existing Procedures as They Relate to Processing Mandatory Corporate Actions March 28, 2014. 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 March 27, 2014, 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 by DTC. DTC filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) 3 of the Act and Rule 19b–4(f)(4) 4 thereunder; the proposed rule change was effective upon filing with the Commission. 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 As discussed below, this rule change will mitigate risk associated with mandatory corporate actions processing by eliminating inaccurate allocations caused by Participants’ adjusting their positions after the position capture. The change will also bring operational efficiencies to DTC by reducing the number of post allocation adjustments. 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(4). 2 17 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 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 1. Purpose DTC processes mandatory corporate actions through its Reorganization, Dividends, Proxy (‘‘RDP’’) system. Currently, when processing a mandatory corporate action in which new securities are exchanged for existing securities held at DTC, one day prior to processing allocation of the new securities to Participant Accounts, the RDP system will automatically identify the positions of the existing securities in the Participant’s Account (including the Segregated Account) to allocate the new securities in accordance with the Participant’s holdings of the existing securities on the day preceding the effective date of the corporate action, referred to as ‘‘position capture.’’ However, in certain instances, between its segregated position and free position, a Participant may have adjusted its position between its segregated position and free position,5 or may have delivered out the securities from its accounts. To eliminate discrepancies due to these changes between the time of position capture and allocation, DTC is updating its systems to add a second position capture immediately prior to allocation (referred to as ‘‘real-time position capture’’). This real time position capture will recognize any adjustments a Participant made between the time of position capture and the time of allocation. This change will mitigate risk associated with mandatory corporate actions processing by selfcorrecting allocations for changes made between position capture and real-time position capture. The change will also improve efficiency by reducing the number of post allocation adjustments. Implementation Timeframe DTC expects to implement these changes by end of the first quarter of 2014. DTC will announce the 5 The Sub-Accounting Service allows Participants to protect securities on deposit at DTC by moving them from their free position to their segregated position. The securities remain segregated and unavailable for any transactions until the Participant authorizes DTC to release them and return them to their free position. E:\FR\FM\03APN1.SGM 03APN1 Federal Register / Vol. 79, No. 64 / Thursday, April 3, 2014 / Notices implementation date by Important Notice. 2. Statutory Basis By adding real time position capture immediately prior to allocation, the proposed rule change streamlines processes associated with corporate action events and mitigates risk associated with such processing; it allows for more prompt and accurate crediting of corporate action securities to the Accounts of Participants. Therefore, DTC believes the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to DTC, in particular Section 17A(b)(3)(F) 6 of the Act which requires that DTC’s Rules be designed to promote the prompt and accurate clearance and settlement of securities transactions. 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. As stated above, the proposed change adds a real-time position capture to facilitate accurate corporate actions processing which will benefit all Participants’ equally and should have no effect on competition within or without DTC. pmangrum on DSK3VPTVN1PROD with NOTICES 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 The foregoing rule change became effective on March 27, 2014, pursuant to Section 19(b)(3)(A) 7 of the Act and paragraph (f)(4) of Rule 19b–4 8 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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 Aclor International, Inc., Acrongenomics, Inc., Diversified Global Holdings Group, Inc., FutureIT, Inc., Southern Star Energy, Inc., and W Holding Co., Inc.; Order of Suspension of Trading • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– DTC–2014–03 on the subject line. Paper Comments • Send in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC, 20549–1090. All submissions should refer to File No. SR–DTC–2014–03. This file number should be included on the subject line if email 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 Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filings will also be available for inspection and copying at the principal office of DTC. 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–2014–03 and should be submitted on or before April 24, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–07470 Filed 4–2–14; 8:45 am] BILLING CODE 8011–01–P 6 15 U.S.C. 78q–1(b)(3)(F). U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b–4(f)(2) 7 15 VerDate Mar<15>2010 15:17 Apr 02, 2014 9 17 Jkt 232001 18749 PO 00000 CFR 200.30–3(a)(12). Frm 00087 Fmt 4703 Sfmt 4703 [File No. 500–1] April 1, 2014. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Aclor International, Inc. because it has not filed any periodic reports since it filed a Form 10 registration statement on December 1, 2011. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Acrongenomics, Inc. because it has not filed any periodic reports since the period ended June 30, 2011. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Diversified Global Holdings Group, Inc. because it has not filed any periodic reports since the period ended September 30, 2011. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of FutureIT, Inc. because it has not filed any periodic reports since the period ended September 30, 2009. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Southern Star Energy, Inc. because it has not filed any periodic reports since the period ended November 30, 2009. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of W Holding Co., Inc. because it has not filed any periodic reports since the period ended September 30, 2009. The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed companies is suspended for the period from 9:30 a.m. EDT on April 1, 2014, through 11:59 p.m. EDT on April 14, 2014. E:\FR\FM\03APN1.SGM 03APN1

Agencies

[Federal Register Volume 79, Number 64 (Thursday, April 3, 2014)]
[Notices]
[Pages 18748-18749]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-07470]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71828; File No. SR-DTC-2014-03]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Update Existing Procedures as They Relate to Processing Mandatory 
Corporate Actions

March 28, 2014.
    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 March 27, 2014, 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 by DTC. DTC filed the proposed rule change pursuant to 
Section 19(b)(3)(A)(ii) \3\ of the Act and Rule 19b-4(f)(4) \4\ 
thereunder; the proposed rule change was effective upon filing with the 
Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------

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

    As discussed below, this rule change will mitigate risk associated 
with mandatory corporate actions processing by eliminating inaccurate 
allocations caused by Participants' adjusting their positions after the 
position capture. The change will also bring operational efficiencies 
to DTC by reducing the number of post allocation adjustments.

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

1. Purpose
    DTC processes mandatory corporate actions through its 
Reorganization, Dividends, Proxy (``RDP'') system. Currently, when 
processing a mandatory corporate action in which new securities are 
exchanged for existing securities held at DTC, one day prior to 
processing allocation of the new securities to Participant Accounts, 
the RDP system will automatically identify the positions of the 
existing securities in the Participant's Account (including the 
Segregated Account) to allocate the new securities in accordance with 
the Participant's holdings of the existing securities on the day 
preceding the effective date of the corporate action, referred to as 
``position capture.'' However, in certain instances, between its 
segregated position and free position, a Participant may have adjusted 
its position between its segregated position and free position,\5\ or 
may have delivered out the securities from its accounts.
---------------------------------------------------------------------------

    \5\ The Sub-Accounting Service allows Participants to protect 
securities on deposit at DTC by moving them from their free position 
to their segregated position. The securities remain segregated and 
unavailable for any transactions until the Participant authorizes 
DTC to release them and return them to their free position.
---------------------------------------------------------------------------

    To eliminate discrepancies due to these changes between the time of 
position capture and allocation, DTC is updating its systems to add a 
second position capture immediately prior to allocation (referred to as 
``real-time position capture''). This real time position capture will 
recognize any adjustments a Participant made between the time of 
position capture and the time of allocation. This change will mitigate 
risk associated with mandatory corporate actions processing by self-
correcting allocations for changes made between position capture and 
real-time position capture. The change will also improve efficiency by 
reducing the number of post allocation adjustments.
Implementation Timeframe
    DTC expects to implement these changes by end of the first quarter 
of 2014. DTC will announce the

[[Page 18749]]

implementation date by Important Notice.
2. Statutory Basis
    By adding real time position capture immediately prior to 
allocation, the proposed rule change streamlines processes associated 
with corporate action events and mitigates risk associated with such 
processing; it allows for more prompt and accurate crediting of 
corporate action securities to the Accounts of Participants. Therefore, 
DTC believes the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to DTC, in particular Section 17A(b)(3)(F) \6\ of the Act 
which requires that DTC's Rules be designed to promote the prompt and 
accurate clearance and settlement of securities transactions.
---------------------------------------------------------------------------

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

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. As stated above, the 
proposed change adds a real-time position capture to facilitate 
accurate corporate actions processing which will benefit all 
Participants' equally and should have no effect on competition within 
or without DTC.

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

    The foregoing rule change became effective on March 27, 2014, 
pursuant to Section 19(b)(3)(A) \7\ of the Act and paragraph (f)(4) of 
Rule 19b-4 \8\ thereunder. At any time within 60 days of the filing of 
the proposed rule change, the Commission may temporarily suspend such 
rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2)
---------------------------------------------------------------------------

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 email to rule-comments@sec.gov. Please include 
File No. SR-DTC-2014-03 on the subject line.

Paper Comments

     Send in triplicate to Secretary, Securities and Exchange 
Commission, 100 F Street NE., Washington, DC, 20549-1090.

All submissions should refer to File No. SR-DTC-2014-03. This file 
number should be included on the subject line if email 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 Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filings will also be available 
for inspection and copying at the principal office of DTC.
    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-2014-03 and 
should be submitted on or before April 24, 2014.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-07470 Filed 4-2-14; 8:45 am]
BILLING CODE 8011-01-P
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