[Federal Register Volume 80, Number 6 (Friday, January 9, 2015)]
[Notices]
[Pages 1450-1451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00128]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73982; File No. SR-DTC-2014-13]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Fees Charged for Tax Services
January 5, 2015.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') and Rule 19b-4 \2\ thereunder, notice is hereby given
that on December 23, 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) \3\ of the Act and Rule 19b-4(f)(2) \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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change consists of amendments to the DTC Fee
Schedule (``Fee Schedule'') in order to adjust certain fees related to
DTC's tax services, as more fully described below.\5\
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\5\ Each term not otherwise defined herein has the respective
meaning set forth in DTC's rules (the ``Rules'').
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II. Clearing Agency'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) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Purpose
Pursuant to the proposed rule change DTC would revise certain fees
for the: (i) DTC TaxRelief\SM\ Service,\6\ and (ii) DTC U.S. Tax
Withholding Service, as more fully described below.
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\6\ DTC TaxRelief\SM\ is a service mark of DTC.
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DTC TaxRelief\SM\ Service Fee Increase
The DTC TaxRelief\SM\ Service enables investors to preclude
overwithhholding on income payments in various foreign jurisdictions.
The current fee structure for this service is not aligned with the
costs to DTC of providing this service as it relates to processing of
Canadian securities due to associated volumes and the resources
necessary for such processing.
Therefore, to better align fees with the costs associated with
delivering this aspect of this service to Participants, DTC proposes to
increase the fee per final election (including post-payable) processed
for foreign withholding tax relief for Canadian securities from 0.625%
of tax relief secured to 0.700% of tax relief secured, with the minimum
fee per final election increased from $32.00 to $38.00.\7\
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\7\ As applicable, the existing maximum fee and/or surcharge per
final election as set forth in the Fee Schedule would continue to
remain in effect for Canadian securities. Current fees for non-
Canadian securities would remain unchanged.
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U.S. Tax Withholding Service
The U.S. Tax Withholding Service provides for withholding of U.S.
tax on payments to foreign Participants of DTC. As applicable law has
become increasingly complex, the cost of DTC's offering of this service
is not aligned with fees charged. Accordingly, pursuant to the proposed
change, to better align the Fee Schedule with the costs associated with
providing this service to Participants, DTC would amend the Fee
Schedule for the U.S. Tax Withholding Service as follows:
1. The fee charged for withholding instructions per each Elective
Dividend Service (``EDS'') election for a transaction processed by the
U.S. Tax Withholding Service would increase from $1.80 to $2.50.
2. The monthly fee per account would increase from $150 to $250.
3. DTC would begin charging U.S. branches of foreign banks (``U.S.
Branches'') the above monthly fee of $250 per account. Currently U.S.
Branches are not charged the monthly fee for this service.\8\
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\8\ U.S. Branches utilize this service for tax reporting
purposes only rather than full tax withholding. However, imposition
of the monthly minimum charge is necessary in light of associated
costs incurred by DTC in this regard.
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4. The annual minimum fee charged to Participants for use of the
U.S. Tax Withholding Service would increase from $5,000 to $7,500. For
example, if an account is charged $7,000 in fees for
[[Page 1451]]
use of the service during a calendar year, then the account would be
charged an additional $500 to reach the annual minimum amount of
$7,500. However, the existing annual minimum charge does not apply to
U.S. Branches and this would remain the case. In addition, the Fee
Schedule would be clarified to reflect that this fee does not apply to
U.S. Branches.
The fee changes set forth above would be incorporated into the Fee
Schedule which is available at www.dtcc.com.
Implementation Date
The proposed fee changes would take effect on January 2, 2015.
2. Statutory Basis
The proposed rule change would align DTC's fees for the services
described above with the costs of delivering applicable services, and
the charges would apply equally in accordance with Participants' use of
DTC services. 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)(D) of the Act,\9\ which requires that DTC's Rules provide for
the equitable allocation of reasonable dues, fees, and other charges
among its Participants.
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\9\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Clearing Agency's Statement on Burden on Competition
DTC does not believe that the proposed rule change would have any
impact, or impose any burden, on competition.
(C) Clearing Agency'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 has become effective pursuant to Section
19(b)(3)(A) \10\ of the Act and paragraph (f) of Rule 19b-4 \11\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily 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.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f).
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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 email to [email protected]. Please include
File Number SR-DTC-2014-13 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC, 20549-1090.
All submissions should refer to File Number SR-DTC-2014-13. 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 (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 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 the filing also will be available
for inspection and copying at the principal office of DTC and on DTCC's
Web site at http://dtcc.com/legal/sec-rule-filings.aspx. 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-2014-13 and should be
submitted on or before January 30, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-00128 Filed 1-8-15; 8:45 am]
BILLING CODE 8011-01-P