[Federal Register Volume 62, Number 35 (Friday, February 21, 1997)]
[Notices]
[Pages 8067-8068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4236]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38272; File No. SR-DTC-96-24]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Revision of Fees
February 11, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 31, 1996, 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 amends DTC's schedule of fees to establish
a 3.5 percent surcharge on all service fees DTC charges to
participants, pledge banks, limited participants, and other DTC users
(``participants and users'').
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\
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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
The purpose of the proposed rule change is to establish a surcharge
of 3.5 percent on all service fees DTC charges to its participants and
users beginning on January 1, 1997. According to DTC, the surcharge is
necessary to recover the costs of upgrading its systems to recognize
data fields containing dates incorporating the year 2000 and the years
thereafter (``Year 2000 Project''). DTC estimates that the total cost
of its compliance initiatives will range from $25 million to $35
million over the duration of the Year 2000 Projects. These costs
reflect new staff to be hired for year 2000 conversion efforts, the
cost associated with diverting present DTC staff from service-related
development, other staff related costs, and the cost of consulting
assistance. The cost of the Year 2000 Project for 1996 has been charged
against DTC's excess revenues for the year.
DTC will list the surcharge as a separate line item on its monthly
bill to its participants and users and will continue the surcharge
indefinitely until all compliance costs have been
[[Page 8068]]
recovered. Pass-through charges to participants, such as the cost of
Participant Terminal System terminals and lines and transfer agent
fees, will be excluded from the surcharge. DTC anticipates that the
surcharge will raise $11 million in 1997. DTC will evaluate the
surcharge at least annually and will modify the rate if necessary.
DTC believes that the proposed rule change is consistent with
Section 17A(b)(3)(D) of the Act \3\ and the rules and regulations
thereunder because it provides for the equitable allocation of
reasonable dues, fees, and other charges among DTC's participants.
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\3\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
No written comments have 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) of the Act \4\ and pursuant to Rule 19b-4(e)(2) \5\
promulgated thereunder because the proposal changes a due, fee, or
other charge imposed by DTC. 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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\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(e)(2).
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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, N.W., Washington, D.C. 20549.
Copies of the submission, all subsequent amendments, all written
statements with respected 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. Sec. 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-96-24 and should be
submitted by March 14, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-4236 Filed 2-20-97; 8:45 am]
BILLING CODE 8010-01-M
