[Federal Register Volume 64, Number 236 (Thursday, December 9, 1999)]
[Notices]
[Pages 69054-69055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31962]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42192; File No. SR-DTC-99-23]
Self-Regulatory Organizations; Depository Trust Company; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Tax Services
December 1, 1999.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 8, 1999, 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 parties.
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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 revises the fee structure and clarifies
the features of DTC's TaxInfoSM 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 these 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 TaxInfoSM (formerly TAXI) was developed to provide
information on withholding tax relief opportunities for DTC-eligible
securities for various foreign countries of investment from the point
of view of four countries of the investor: U.S., Canada, U.K., and
Japan.\3\ TaxInfo is currently available on DTC's Participant Terminal
System (``PTS'') and currently contains information on ten countries of
investment from a U.S. investor's perspective. TaxInfo was originally
made available to participants in March of 1997 in support of DTC's
foreign withholding tax relief service available via the Elective
Dividend Service or EDS (which has been renamed TaxReliefSM
\4\ function on PTS with withholding tax information relative to France
and the United Kingdom.\5\ Additional country documents have been added
and updated in 1999, and more will be added over time. The information
contained in TaxInfo on PTS is provided to participants so that they
may be able to make informed elections on TaxInfo.SM \6\
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\3\ In September 1999, DTC introduced TaxVantage--a new family
of tax products. The TaxVantage family includes the following
products: TaxReclaim, TaxInfo, and TaxRelief. For a complete
description of TaxVantage, refer to DTC's website at http://
www.dtc.org.
\4\ TaxReliefSM allows DTC participants to
electronically certify shares of record date positions at DTC that
are eligible for tax relief opportunities.
\5\ Securities Exchange Act Release No. 32171 (April 19, 1993),
58 FR 22003.
\6\ The following disclaimer relates to DTC
TaxInfoSM: DTC does not represent or warrant the
accuracy, adequacy, timeliness, completeness, or fitness for any
particular purpose for the information contained in DTC TaxInfo,
which is based in part on information obtained from third parties
and not independently verified by DTC and which is provided as is.
The information contained in DTC TaxInfo is not intended to be a
substitute for obtaining tax advice from an appropriate professional
advisor. In providing this service, DTC shall not be liable for (1)
any loss resulting directly or indirectly from mistakes, errors,
omissions, interruptions, delays, or defects in such service, unless
caused directly by gross negligence or willful misconduct on the
part of DTC, and (2) any special, consequential, exemplary,
incidental, or punitive damages.
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TaxInfo advises participants of the opportunities, risks, and legal
conditions for using TaxRelief and provides information on filing tax
reclaims. Additional, TaxInfo provides information on tax withholding
rates for various investor types (e.g., individuals, mutual funds,
pension plans, and charities) as well as information on tax treaties,
tax relief processing procedures, and documentation requirements.
TaxInfo also provides tax relief information for cross-border portfolio
investments and simplifies and expedites tax-withholding research for
DTC-eligible securities.
DTC proposes to offer DTC TaxInfo to DTC Participants over DTC's
closed website.\7\ TaxInfo via the Internet may be used in conjunction
with TaxRelief or by itself as a withholding tax information resource.
According to DTC, Internet delivery opens up the availability of
TaxInfo to a much wider audience for participants because its contents
may be accessed via any computer with Internet access rather than
requiring a specialized PTS terminal. For example, this increased
audience may include participants' internal tax advisory staff and
other non-operational areas. Members of DTC's foreign taxes legal
working group, who often need to advise their operations staff on DTC
related tax matters, have expressed to DTC a need to have a way to
access TaxInfo which is more accessible than PTS.
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\7\ DTC's website is located at http://www.dtc.org.
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TaxInfo provided via PTS will only relate to countries where DTC
has in place a DTC TaxRelief mechanism. The charge for this service
will continue to be $.09 per inquiry.
TaxInfo provided via the Internet will include the same information
provided on PTS as well as information on other countries and security
types that are not supported by TaxRelief. Additionally, TaxInfo via
the Internet will have increased functionality, including the
[[Page 69055]]
ability to hyperlink to related websites (containing for example, the
text of tax treaties), internal hyperlinks, a search capability, and
better means of navigation within each document, which PTS is not able
to accommodate. The proposed fee for TaxInfo via the Internet is $2,400
annually per subscribing participant (with automatic annual renewals).
DTC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \8\ and the rules and
regulations thereunder applicable to DTC because it provides for the
equitable allocation of dues, fees, and other charges among DTC's
participants.
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\8\ 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
Written comments relating to the proposed rule change have not yet
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii)\9\ of the Act and Rule 19b-4(f)(2)\10\ promulgated
thereunder because the proposal establishes or changes a due, fee, or
other charge imposed by DTC. At any time within sixty days of the
filing of such 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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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4(f)(2).
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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, NW, Washington, DC 20549-0609.
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, NW,
Washington, DC 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-99-23 and should be submitted by
December 30, 1999.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 99-31962 Filed 12-8-99 8:45 am]
BILLING CODE 8010-01-M
