[Federal Register Volume 61, Number 11 (Wednesday, January 17, 1996)]
[Notices]
[Pages 1199-1200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-425]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36686; File No. SR-DTC-95-25]
Self-Regulatory Organizations; the Depository Trust Company;
Notice of Filing of a Proposed Rule Change To Allow Participants To
Make Intraday Withdrawals of Principal and Income Payments
January 5, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 15, 1995, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change (File No.
SR-DTC-95-25) as described in Items I, II, and III 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) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to allow DTC
participants to make intraday withdrawals of certain principal and
income payments (``P&I payments'') \2\ that have been credited to the
participants' money settlement accounts at DTC.
\2\ These payments include dividend, interest, reorganization
and redemption payments, and other periodic payments.
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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 that 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.\3\
\3\ The Commission has modified the text of the summaries
submitted by DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In a memorandum dated July 29, 1994, which was issued jointly with
the National Securities Clearing Corporation (``NSCC'') and which
described the planned conversion of DTC's money settlement system to an
entirely same-day funds settlement (``SDFS'') system, DTC announced
plans to offer a service for intraday withdrawal of P&I payments. The
service was developed in response to participants' requests to have the
funds resulting from P&I payments available for participants' use prior
to the time of DTC money settlement at the end of the day. DTC plans to
begin the new service in the first quarter of 1996.
In the current next-day funds settlement (``NDFS'') environment,
P&I payment allocations are credited to participants' accounts on a
regular basis at a specific time during the day. Under the proposed
rule change, P&I payment allocations for SDFS issues will be credited
to participants' money settlement accounts throughout each processing
day as funds are received by DTC from issuers and their paying agents.
A participant only may withdraw P&I payments that have been credited to
its account. Withdrawal requests for P&I payments will be subject to
the risk management controls of the SDFS system (i.e., collateral
monitor and net debit caps). Any withdrawal request that is blocked due
to insufficient collateral or a net debit cap will recycle until enough
collateral or settlement credits have been generated to satisfy the
collateral or net debit cap deficiency or until the end of the recycle
period on that day. Any early withdrawal requests still recycling at
the end of the recycle period will be dropped from the system, and the
P&I payment allocation will be included in the end-of-day settlement.
DTC believes the proposed rule change is consistent with Section
17A of the Act and the rules and regulations thereunder because the
proposed rule change will facilitate the processing of P&I payments
through DTC's facilities. DTC also believes the proposed rule change
will be implemented consistently with the safeguarding of securities
and funds in DTC's custody or control or for which it is responsible
because the intraday withdrawals of P&I payments will be subject to
DTC's existing SDFS system risk management controls.
(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will impact or
impose a burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
All participants were informed of the proposed rule change by a DTC
Important Notice dated October 12, 1995, as well as by the 1994
memorandum referred to above. Written comments from DTC participants or
others have not been solicited or received on the proposed rule change.
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 DTC consents, the Commission will:
(a) By order approve such 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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
Copies of the
[[Page 1200]]
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 inspection and copying in the Commission's
Public Reference Section, 450 Fifth Street, NW., Washington, DC 20549.
Copies of such filing will also be available for inspection and copying
at the principal office of DTC. All submissions should refer to the
file number SR-DTC-95-25 and should be submitted by February 7, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\4\
\4\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-425 Filed 1-16-96; 8:45 am]
BILLING CODE 8010-01-M