[Federal Register Volume 61, Number 13 (Friday, January 19, 1996)]
[Notices]
[Pages 1417-1418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-509]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36685; File No. SR-DTC-95-23]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change Seeking to Implement the
Matching Feature in the Institutional Delivery System
January 5, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on November 8, 1995, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change (File No
SR-DTC-95-23) 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 proposed rule change seeks to implement the matching feature in
DTC's Institutional Delivery (``ID'') system.
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\
\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
The Commission previously approved a proposed rule change filed by
DTC generally describing several enhancements to the ID system,
including the matching feature which is the subject of this proposed
rule change, that it planned to implement.\3\ This proposed rule change
seeks to implement the matching feature.
\3\ Securities Exchange Act Release No. 33466 (January 12,
1994), 59 FR 3139 [File No. SR-DTC-93-07] (order approving proposed
rule change relating to the enhanced ID system.
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The matching feature is an alternative to the current procedures
for confirmation and affirmation processing in the ID system. If a
broker-dealer and an institution elect to use the matching feature, the
ID system will interactively match trade data received from the broker-
dealer with institution instructions received from the institution. If
the trade data and institution instructions match and if the
institution also is the affirming party, the ID system will produce a
matched affirmed confirmation. At this point, the broker-dealer and
institution will not have to take any other action for the trade to
settle other than action that normally would have to be taken if the
standard confirm/affirm procedures were followed. If the trade data and
institution instructions match but the institution does not have
affirming authority, the ID system will produce a matched confirmation
requiring affirmation by the designated affirming party. In the ID
system, the affirming party may be an institution, an agent, or an
interested party.
Throughout the day, broker-dealers and institutions will be able to
use the ID system's inquiry capabilities to view any unmatched items.
At the end of the day, an Unmatched Report will be generated for each
broker-dealer and institution. This report will list all broker-dealer
trade input and institution instructions that were not matched by end
of day. Unmatched trades appearing on this report will be carried over
from day to day unless the broker-dealer cancels its instruction or the
institution affirms the trade.
DTC believes the proposed rule change is consistent with the
requirements of Sections 17A(b)(3) (A) and (F)\4\ of the Act because
the proposed rule change will promote efficiencies in the clearance and
settlement of securities transactions. DTC 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 proposed rule change will be implemented as
enhancements to DTC's existing ID system.
\4\ 15 U.S.C. 78q-1(b)(3) (A) and (F) (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC perceives no impact on competition by reason of the proposed
rule change.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received from Members, Participants or Others
The proposed rule change has been developed through widespread
consultations with securities industry members, as described in DTC's
earlier filing describing the ID system enhancements.\5\ Written
comments from DTC participants or others have not been solicited or
received on the proposed rule change.
\5\ Supra note 3.
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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 the self-regulatory organization 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, Washington, DC 20549. 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
[[Page 1418]]
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 Room, 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 File No. SR-
DTC-95-23 and should be submitted by February 9, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
\6\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-509 Filed 1-18-96; 8:45 am]
BILLING CODE 8010-01-M
