[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Notices]
[Pages 79732-79734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32755]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65993; File No. SR-DTC-2011-11]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rules Relating To Update DTC's Custody Service Guide
December 16, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 7, 2011, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change described
in Items I and II below, which items have been prepared primarily by
DTC. DTC filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act and Rule 19b-4(f)(4) thereunder so that the
proposed rule change was effective upon filing with the Commission.\2\
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested parties.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78s(b)(3)(A)(iii) and 17 CFR 240.19b-4(f)(4).
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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 update DTC's Custody
Service Guide in order to streamline the
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document and to mitigate certain risks associated with custody
processes.\3\
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\3\ The text of the proposed rule change is attached as Exhibit
5 to DTC's filing, which is available at www.dtcc.com/downloads/legal/rule_filings/2011/dtc/2011-11.pdf.
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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\
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\4\ The Commission has modified the text of the summaries
prepared by DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
(1) Purpose
DTC's custody service enables DTC participants to deposit
securities with DTC for safe-keeping. Certificates deposited through
the custody service (``Custody Issue'') are held by DTC but remain
registered in the name of the participant's customer or in the name of
the participant (i.e., the securities are not registered in DTC's
nominee name, Cede & Co.). Therefore, a security deposited through the
custody service is not eligible for DTC's book-entry services, but may
be eligible for other depository services, unless the depositing
participant directs DTC to transfer the position originally credited to
the participant's custody free account to the participant's general
free account.
DTC is proposing to update its Custody Service Guide in order to
streamline the document and to address certain risks associated with
various aspects of its custody processes. Specifically, DTC is
proposing, among other technical changes, to clarify its rules relating
to imaging requests and required methods of notification in order to
provide a more concise and coherent description of the procedures. In
order to mitigate risks associated with the use of Medallion Signature
Guarantee stamps, Attorney Release stamps, and Tax waiver/Cede & Co.
Assignment stamps, DTC is also proposing to update its procedures
regarding the process used at DTC to safeguard the use and storage of
such stamps.\5\ Finally, DTC is proposing to remove the detailed
narrative describing its branch deposit services because the
description of this service and participants' compliance obligations
are currently described in DTC's Deposit Service Guide.\6\
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\5\ When processing certificates in connection with its custody
services, DTC may use a participant's Medallion Signature Guarantee
stamp, Attorney Release stamp, Tax waiver/Cede & Co. Assignment
stamp, or any combination of these stamps to facilitate making
negotiable a participant's securities for transfer or sale in
accordance with the participant's instructions.
\6\ The language DTC is proposing to eliminate from the Custody
Service Guide continues to be included in the Deposits Service
Guide.
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(2) Statutory Basis
The proposed rule change is consistent with the requirements of the
Act and the rules and regulations thereunder applicable to DTC because
the proposed revisions to the procedures associated with DTC's custody
service should facilitate the prompt and accurate clearance and
settlement of securities transactions by reducing the costs,
inefficiencies and risks associated with the physical safekeeping of
securities. In so doing, these revisions should in turn also enhance
the use of DTC's existing services.
(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 DTC. 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 upon filing pursuant
to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(4) \8\
thereunder because it is a change in an existing service that does not
adversely affect the safeguarding of securities or funds in the custody
or control of the clearing agency and does not significantly affect the
respective rights or obligations of the clearing agency or persons
using the service. At any time within sixty days of the filing of such
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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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(4).
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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-2011-11 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 Number SR-DTC-2011-11. 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 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 NSCC
and on NSCC's Web site at http://www.dtcc.com/downloads/legal/rule_filings/2011/dtc/2011-11.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
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you wish to make available publicly. All submissions should refer to
File Number SR-DTC-2011-11 and should be submitted on or before January
12, 2012.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32755 Filed 12-21-11; 8:45 am]
BILLING CODE 8011-01-P