[Federal Register Volume 63, Number 238 (Friday, December 11, 1998)]
[Notices]
[Page 68494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32960]
[[Page 68494]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40753; File No. SR-DTC-98-24]
Self-Regulatory Organizations; the Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to PTS Pending Transaction Inquiry Function
December 7, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 19, 1998, 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. 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).
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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 modify DTC's PTS Pending Transaction
Inquiry (``PEND'') function to allow DTC participants to temporarily
and selectively ``hold'' (exclude from processing) and ``uphold''
(release) deliver orders and pledge transactions that are recycled for
insufficient position.\2\
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\2\ An Important Notice to DTC participants which provides a
detailed description of the modification to the PEND function is
attached as an exhibit to DTC's filing, which is available for
inspection and copying at the Commission's public reference room and
through DTC.
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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 an basis for 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\
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\3\ 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 purpose of the proposed rule change is to provide DTC
participants with additional flexibility in their use of the PEND
function. Under the proposal, DTC participants will be permitted to
hold pending deliver orders and pledge transactions. Held transactions
will not be processed by DTC until the hold is released by the holding
participant. Only the initiator (i.e., the deliverer or pledgor) of a
transaction will be permitted to hold or release a pending transaction.
Furthermore, only transactions that pend for insufficient position may
be held. DTC will charge forty-five cents ($.45) for each hold and hold
release transaction processed, which is the same fee that DTC currently
charges for the cancellation of pending deliver orders.
DTC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \4\ and the rules and
regulations thereunder since the proposed rule change will give DTC
participants greater flexibility in handling transactions that pend for
insufficient position. According to DTC, 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 since
the operation of the PEND function, as modified by the proposed rule
change, will be similar to the current operation of the function.
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\4\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC perceives no adverse 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 was developed through discussions with
several DTC participants. Written comments from DTC participants or
others have not been solicited or received on the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) of the Act \5\ and pursuant to Rule 19b-4(e)(4) \6\
thereunder because the proposal effects a change in an existing service
of DTC that does not adversely affect the safeguarding of securities or
funds in the custody or control of DTC or for which it is responsible
and does not significantly affect the respective rights or obligations
of the clearing agency or persons using the service. At any time within
sixty days of the filing of the proposed 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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\5\ 15 U.S.C. 78s(b)(3)(A)(iii).
\6\ 17 CFR 240.19b-4(e)(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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 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 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, N.W.,
Washington, D.C. 20549. Copies of such filing also will be available
for inspection and copying at the principal office of DTC. All
submissions should refer to File No. SR-DTC-98-24 and should be
submitted by January 4, 1999.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-32960 Filed 12-10-98; 8:45 am]
BILLING CODE 8010-01-M
