[Federal Register Volume 75, Number 188 (Wednesday, September 29, 2010)]
[Notices]
[Pages 60158-60159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24452]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62990; File No. SR-DTC-2010-12]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of a Proposed Rule Change To Automate the Approval
Process in Providing Trustee Access to the Security Position Report
Service
September 24, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on September 14, 2010, 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 from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
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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 replace the manual
approval process whereby trustees of an issue receive access to DTC's
Security Position Report (``SPR'') service with an automated approval
process.
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.\2\
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\2\ 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
DTC's SPR service provides valuable information on the record date
holdings of an issuer's security in DTC Participant accounts. An SPR
provides information needed to contact shareholders on corporate-
related events such as annual meetings. DTC currently provides SPRs to
Issuers, Trustees, and authorized third parties.
DTC's Proxy area receives requests for SPR services access and
reviews such requests to ensure that only appropriate parties receive
access. The review process to approve a Trustee's access to the SPR
service for a security is done manually, and the process is therefore
subject to error. Currently, the SPR system sends an e-mail to the DTC
Proxy mailbox notifying the Proxy staff that a Trustee has added a
CUSIP to its eligible issues list. Any Trustee can add a CUSIP to its
eligible issues list. The CUSIP will show ``unauthorized'' until
reviewed and approved by the DTC Proxy staff. DTC Proxy staff requires
that the Trustee provide to it one of the following: Trust agreement,
Annual Report, 10K, 10Q, SEC filing, and/or any other document deemed
necessary and appropriate. Generally, it takes two or more days for a
response on access requests because of the manual process associated
with the review of trustee information.
To increase the efficiency by which DTC provides Trustees with
access to the SPR service, DTC is seeking to collect Trustee data at
the point of eligibility of the issue. This will allow DTC to store and
maintain Trustee data on the Entity Master File and the Security Master
File (``Master Files''). DTC will then have the ability to automate the
validation done by the SPR system against the information stored on the
Master Files in response to a Trustee request for SPR access.
Initially, DTC will populate and update the Trustee field on the
Master Files through DTC's Participant Terminal System. Ultimately, and
as set forth below, this information will be updated through DTC's UW
(underwriting) Source System by underwriters at the time of issue
eligibility. This change requires DTC to update the UW Source System to
[[Page 60159]]
designate trustee data as a mandatory field at the time of eligibility.
In order to provide the time it may take for underwriters to update
their systems to populate the information required by this new
mandatory field, DTC plans to implement the change to the UW Source
System in the fourth quarter of 2011. In the event of a change in
trustee, DTC will require that the new and the prior trustees both
update the trustee information using the 17Ad-16 form used today to
update transfer agent changes. By making the trustee authorization
process more efficient, DTC will increase information flow to industry
participants and will reduce the risk associated with the manual
processing of trustee data.
DTC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act,\3\ as amended, and the rules
and regulations thereunder applicable to DTC because the proposed rule
change is designed to remove impediments to and perfect the mechanism
of a national system for the prompt and accurate clearance and
settlement of securities transactions by replacing the manual approval
process whereby trustees of an issue receive access to DTC's SPR
service with an automated approval process.
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\3\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will have an
impact on 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
No written comments relating to the proposed rule change have 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
Within 45 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, as amended, 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 [email protected]. Please include
File Number SR-DTC-2010-12 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-2010-12. 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 inspection and
copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of DTC and on DTC's Web
site at http://www.dtcc.com/legal/rule_filings/dtc/2010.php. 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-2010-12 and should be
submitted on or before October 20, 2010.
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\4\ 17 CFR 200.30-3(a)(12).
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\4\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24452 Filed 9-28-10; 8:45 am]
BILLING CODE 8010-01-P