[Federal Register Volume 75, Number 72 (Thursday, April 15, 2010)]
[Notices]
[Pages 19667-19668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8614]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61877; File No. SR-DTC-2010-06]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Elective Dividends Service
April 8, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 22, 2010, 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
primarily by DTC. DTC filed the proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) \3\
thereunder so that the proposal 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\ 15 U.S.C. 78s(b)(3)(A)(iii).
\3\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change will provide various technical updates to
DTC's Elective Dividend service.
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.
[[Page 19668]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In 1991, DTC filed a rule change with the Commission to establish
the Elective Dividends (``EDS'') function.\4\ The EDS function allows
participants to use DTC's Participant Terminal System (``PTS'') or
Participant Browser System (``PBS'') instead of hard copy for their
instructions concerning distributions on certain issues of securities.
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\4\ Securities Exchange Release Act No. 29814 (Oct. 11, 1991),
56 FR 55563 (Oct. 21, 1991).
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At the request of its participants, DTC has created an automated
election instruction approval process accessible through PBS (``EDS
approval process'').\5\ The EDS approval process will provide
participants with a streamlined, electronic means of internally
reviewing and approving election instructions and will be used for the
following EDS services: Cash-in Lieu/Round Up, Dividend Reinvestment
Program, Foreign Currency Payments, Optional Dividend Distribution, and
Tax Relief. Participants that chose to use the EDS approval process
will be required to assign an administrator in their firm to enable or
disable the EDS approval process at the firm. The EDS approval process
will have three basic entitlements to allow for the creation and
approval of instructions: (i) Creator, which allows the user to only
create instructions, (ii) approver, which allows the user to approve
instructions created by others and (iii) creator/approver, which allows
the user to create its own instructions that are automatically
approved. Once an instruction is created, it will appear with a status
of ``Pending'' for the approver to approve or reject. Once approved,
the instruction becomes an approved election that will appear in the
election window and will be processed in the same way that DTC
currently processes such elections.\6\
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\5\ When the EDS approval process is enabled for a given
service, a participant will be required to create and update its
instructions in PBS for that service; PTS may not be used.
\6\ If left unapproved, the instruction will remain pending
until the cutoff date. If the instruction is pending on the cutoff
date, it will be deleted from the EDS system at the end of the day,
and the instruction will revert to the last approved election or if
one does not exist, to the default for the event.
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Additionally, DTC is making technical updates to its procedures in
order to properly reflect DTC contact information and the input methods
available to participants.
DTC states that the proposed rule change is consistent with the
requirements of Section 17A of the Act \7\ and the rules and
regulations thereunder because it promotes efficiencies in the
clearance and settlement of securities transactions by providing
participants with a streamlined, electronic means of internally
reviewing and approving election instructions.
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\7\ 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 any
impact or impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
DTC has not solicited or received written comments relating to the
proposed rule change. DTC will notify the Commission of any written
comments it receives.
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 \8\ and Rule 19b-4(f)(4) \9\
thereunder because the proposed rule change effects a change in an
existing service of DTC that (i) does not adversely affect the
safeguarding of securities or funds in DTC's custody or control or for
which it is responsible and (ii) does not significantly affect the
respective rights of DTC or persons using the service. At any time
within sixty days of the filing of such rule change, the Commission may
summarily abrogate 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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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 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 e-mail to [email protected]. Please include
File No. SR-DTC-2010-06 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 No. SR-DTC-2010-06. 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 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
a.m. and 3 p.m. Copies of such filings also will be available for
inspection and copying at DTC's principal office and DTC's Web site at
http://www.dtc.org/impNtc/mor/index.html. 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-2010-06 and should be submitted on or
before May 6, 2010.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8614 Filed 4-14-10; 8:45 am]
BILLING CODE 8011-01-P