[Federal Register Volume 60, Number 57 (Friday, March 24, 1995)]
[Notices]
[Pages 15614-15615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7239]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35513; File No. SR-DTC-95-05]
Self-Regulatory Organizations; the Depository Trust Company;
Notice of Filing of a Proposed Rule Change Seeking Permanent Approval
of Money Market Instrument Program
March 17, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 7, 1995, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change (File No.
SR-DTC-95-05) 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 permanent approval of DTC's expanded
money market instrument (``MMI'') programs to which the Commission
previously granted temporary approval through April 30, 1995.\2\
\2\For a complete discussion of the issues regarding DTC's
expanded MMI program, refer to Securities Exchange Act Release No.
33958 (April 22, 1994), 59 FR 22878 [File No. SR-DTC-93-12] (order
temporarily approving proposed rule change).
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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 and basis for the proposed rule change and
discussed any comments that 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.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed rule change seeks permanent approval of DTC's
settlement services for transactions in additional types of MMIs,
including institutional certificates of deposit, municipal commercial
paper, and bankers' acceptances. The proposed rule change also seeks to
permanently expand and to improve DTC's existing MMI programs for
corporate commercial paper (``CP''), medium-term notes, preferred stock
in a CP-like mode, short-term bank notes, and discount notes. The
Commission previously granted DTC's expanded MMI program temporary
approval through April 30, 1995.\3\
\3\Supra note 2.
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The new MMI programs, along with the existing MMI programs, are an
extension of DTC's Same-Day Funds Settlement (``SDFS'') system.\4\ The
[[Page 15615]] automated operating procedures for MMIs are virtually
the same as those followed by SDFS participants and by Institutional
Delivery system users for basic depository services in other eligible
SDFS securities. The MMI issues being made SDFS-eligible will be
distributed in book-entry-only form by the issuer's issuing agent that,
as in the commercial paper and medium-term note MMI programs, will send
MMI issuance instructions to DTC electronically. Settlement of an issue
will be on the same day as the issuance or on a specified future day.
The issuer's paying agent, that will also serve as DTC's custodian,
will hold a master or balance MMI certificate for DTC unless the issuer
and its issuing and paying agent bank choose to distribute
uncertificated MMIs through DTC.\5\ Because SDFS-eligible MMIs will be
book-entry only, participant operating procedures for deposits and
withdrawals will not apply to MMIs.
\4\DTC's SDFC system currently includes the following issue
types: corporate commercial paper, municipal notes and bonds,
municipal variable-rate demand obligations, zero coupon bonds backed
by U.S. Government securities, continuously offered medium-term
corporate notes, short-term bank notes, auction-rate and tender-rate
preferred stocks and notes, collateralized mortgage obligations and
other asset-backed securities, Government trust certificates and
Government agency securities not eligible for the Fed's book-entry
system, retail certificates of deposit, corporate and municipal
variable mode obligations, corporate bonds, discount notes, and unit
trusts. For a detailed description and discussion of DTC's SDFC
system, including the implementation of the commercial paper
program, refer to Securities Exchange Act Release Nos. 26051 (August
31, 1988), 53 FR 34853 [File No. SR-DTC-88-06] (order permanently
approving DTC's SDFS system) and 30986 (July 31, 1992), 57 FR 35856
[File No. SR-DTC-92-01] (order approving implementation of
commercial paper program).
\5\Uncertificated MMIs are not evidenced by any certificate
whatsoever. Bills, notes, bonds, and other securities have been
issued in uncertificated form by U.S. government and federal
agencies for many years.
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DTC believes the proposed rule change is consistent with the
requirements of the Act, specifically Section 17A(b)(3)(A)\6\ of the
Act, and the rules and regulations thereunder because the rule proposal
will facilitate the prompt and accurate clearance and settlement of
securities transactions in MMIs.
\6\15 U.S.C. 78q-1(b)(3)(A) (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will impact or
impose a burden on competition that is 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
DTC has not solicited comments on the proposed rule change.
Discussions with DTC participants, including those on the Task Force
established by the Public Securities Association's Money Market
Committee to advise DTC on the operation of its MMI programs, indicate
wide support for the proposed permanent expansion of the MMI program.
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 DTC 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 NW., 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
than 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,
D.C. 20549. Copies of such filing will also be available for inspection
and copying at the principal office of DTC. All submissions should
refer to the file number SR-DTC-95-05 and should be submitted by April
14, 1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
\7\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-7239 Filed 3-23-95; 8:45 am]
BILLING CODE 8010-01-M
