[Federal Register Volume 61, Number 209 (Monday, October 28, 1996)]
[Notices]
[Pages 55679-55680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27527]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37846; File No. SR-Philadep-96-13]
Self-Regulatory Organizations; Philadelphia Depository Trust
Company; Order Granting Permanent Approval of Proposed Rule Change
Concerning Procedures Relating to Rule 17Ad-16
October 21, 1996.
On July 2, 1996, Philadelphia Depository Trust Company
(``Philadep'') filed a proposed rule change (File No. SR-Philadep-96-
13) with the Securities and Exchange Commission (``Commission'')
pursuant to Section 19(b) of the Securities Exchange Act of 1934
(``Act'').\1\ Notice of the proposal was published in the Federal
Register on August 20, 1996, to solicit comments from interested
persons.\2\ No comments were received. As discussed below, this order
approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b) (1988).
\2\ Securities Exchange Act Release No. 37558 (August 12, 1996),
61 FR 43110.
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I. Description
On July 20, 1995, the Commission approved on a temporary basis a
proposed rule change filed by Philadep to modify its procedures to
implement Exchange Act Rule 17Ad-16.\3\ Rule 17Ad-16 \4\ is designed to
address the current and continuing problem of transfer delays due to
unannounced transfer agent changes, including the change of a transfer
agent for a particular issue and the change of the name or address of a
transfer agent. The rule requires a registered transfer agent to send a
notice to the ``appropriate qualified registered securities
depository'' \5\ when assuming or
[[Page 55680]]
terminating transfer agent services on behalf of an issuer or when
changing its name or address.
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\3\ Securities Exchange Act Release No. 36002 (July 20, 1995),
60 FR 38602.
\4\ 17 CFR 240.17Ad-16. Securities Exchange Act Release No.
35039 (December 1, 1994), 59 FR 63656 (order adopting Rule 17Ad-16).
\5\ An ``appropriate qualified register securities depository''
is defined by Rule 17Ad-16 to mean the qualified registered
securities depository that the Commission so designates by order, or
in the absence of such designation, the qualified registered
securities depository that is the largest holder of record of all
qualified registered securities depositories as of the most recent
record date. A ``qualified registered securities depository'' is
defined by Rule 17Ad-16 to mean a clearing agency registered under
Section 17A of the Act that performs clearing agency functions and
that has rules and procedures concerning its responsibility for
maintaining, updating, and providing appropriate access to the
information it receives.
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Philadep has established the following as procedures for complying
with Rule 17Ad-16. The Depository Trust Company (``DTC''), as the
appropriate qualified registered securities depository, will inform
Philadep of all transfer agent changes within twenty-four hours
regardless of whether the issue is eligible at Philadep.\6\ For issues
that are eligible at Philadep, Philadep will update its security
masterfile to reflect the changes in transfer agents for affected
issues. Philadep participants may access this information through
Philanet.\7\ In order to comply with Rule 17Ad-16 for issues that are
DTC eligible but are not Philadep eligible, Philadep will make transfer
agent information available to its participants in the form of a
Philanet broadcast message. The Philanet broadcast messages will print
at the participants' offices. Furthermore, if participants want to call
Philadep for transfer agent information for securities that are not
Philadep eligible, they may contact Philadep Operations.
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\6\ Securities Exchange Act Release No. 35378, 60 FR 9875
(February 15, 1995).
\7\ Philanet is Philadep's on-line terminal network system.
Philanet allows participants to access information affecting their
accounts through an on-site terminal located at the participants'
offices.
In order to specifically access the transfer agent information,
participants must access ``RQST,'' must enter the account and CUSIP
number, and then must access the ``SPOL'' screen. This screen will
reveal the current transfer agent and its address.
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Philadep will keep the broadcast messages and its transfer agent
changes notification manifest at its office in accordance with the
record retention requirement contemplated in Rule 17Ad-16. Whether
eligible or not eligible at Philadep, Philadep has stated that it will
serve to inform its participants of the status of the current transfer
agent. Philadep anticipates that few, if any, Philadep only
participants will deal directly with transfer agents. Assuming that any
such participants do deal directly with transfer agents, Philadep
further anticipates that these participants will conduct de minimus
activity in issues that are not Philadep-eligible. Moreover, all
Philadep participants may request that Philadep review a security not
eligible at Philadep with respect to making the issue eligible at
Philadep on the same day of the request.
II. Discussion
The Commission believes Philadep's proposed rule change is
consistent with Section 17A of the Act,\8\ and the rules and
regulations thereunder applicable to registered securities
depositories. The proposed rule change will allow Philadep to comply
with Commission Rule 17Ad-16 which requires registered securities
depository to provide their participants with notices received from a
transfer agent, directly or through the appropriate qualified
registered securities depository, when the transfer agent is
terminating or assuming transfer agent services on behalf of an issuer
or when changing its name or address.
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\8\ 15 U.S.C. 78s (1988).
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III. Conclusion
For the reasons stated above, the Commission finds that Philadep's
proposal is consistent with Section 17A of the Act.\9\
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\9\ 15 U.S.C. 78q-1 (1988).
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (File No. SR-Philadep-96-13) be
and hereby is approved.
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\10\ 15 U.S.C. 78s(b)(2) (1988).
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For the Commission by the Division of Market Regulation, pursuant
to delegated authority.\11\
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\11\ 17 CFR 200.30(a)(12) (1996).
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[FR Doc. 96-27527 Filed 10-25-96; 8:45 am]
BILLING CODE 8010-01-M
