[Federal Register Volume 61, Number 45 (Wednesday, March 6, 1996)]
[Notices]
[Pages 9000-9001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5152]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36899; File No. SR-PHILADEP-95-10]
Self-Regulatory Organizations; Philadelphia Depository Trust
Company; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Modifying the Customer Name Mailing Transfer Return Procedures
February 28, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 11, 1995, the
Philadelphia Depository Trust Company (``PHILADEP'') 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 PHILADEP. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
parties.
\1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
PHILADEP proposes to modify its Customer Name Mailing (``CNM'')
transfer return procedures to allow a participant to have securities
certificates that are registered in a customer's name deposited
directly into the participant's PHILADEP account.
II. Self-Regulatory Organization's Statements of the Purpose of, and
the Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, PHILADEP included statements
concerning the purpose of and the 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. PHILADEP has prepared summaries, as set forth in
sections (A), (B), and (C) below, of the most significant aspects of
these statements.\2\
\2\ The Commission has modified the text of the summaries
prepared by PHILADEP.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to modify the CNM
transfer return procedures. Transfer return is the method by which
PHILADEP returns to participants securities that the participant
requested to be registered in customer name but for which the customer
is no longer the beneficial owner. A typical transfer return situation
arises when a customer requests that securities certificates be
registered in its name. The participant notifies PHILADEP's CNM
department of its request, and the CNM department notifies the
appropriate transfer agent. The transfer agent issues the securities
certificates in the customer's name and sends them back to PHILADEP.
PHILADEP then mails the securities certificates to the customer.\3\ If
the participant notifies PHILADEP before PHILADEP has mailed the
securities to the participant's customer that the customer has sold the
securities, PHILADEP employs the transfer return procedures and returns
the certificates directly to the participant. At this point, if the
participant wants to deposit the certificates in its PHILADEP account,
it must return the certificates to PHILADEP with the appropriate
deposit information. PHILADEP will send the certificates to the
transfer agent to have the certificates reregistered in PHILADEP's
nominee name (i.e., PHILADEP & Co.). The transfer agent will send the
securities back to PHILADEP, and PHILADEP will deposit them in the
participant's PHILADEP account.
\3\ Once PHILADEP receives these securities from the transfer
agent, a participant may request that PHILADEP delay mailing these
securities for a couple of days in order to verify that the customer
in whose name the securities are registered still is the beneficial
owner (``Hold Mail Request''). Many participants prefer to check the
beneficial ownership of securities before PHILADEP mails them.
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The new transfer return procedures eliminate the need for PHILADEP
to return to the participant securities certificates that the
participant wants deposited in its PHILADEP account. Under the proposed
modifications to the transfer return procedures, a participant now will
be able to have the securities directly deposited into its PHILADEP
account without first having the securities returned to it. For those
securities registered in customer name that a participant chooses to
directly deposit, the participant will send to PHILADEP a deposit
ticket along with a Medallion Guaranteed letter of indemnity or a
signed stock or bond power. PHILADEP will send the securities, which
are registered in the participant's customer's name, to the transfer
agent to be reregistered in the name of PHILADEP & Co. The transfer
agent will send the securities back to PHILADEP, and PHILADEP will
deposit them into the participant's PHILADEP account.
PHILADEP participants can choose this alternative transfer return
procedure by including a letter ``D'' in the transmission with the Hold
Mail Request. The letter ``D'' indicates to PHILADEP that the
participant would like the item directly deposited into their deposit
account at PHILADEP.
PHILADEP believes the proposed rule change is consistent with the
requirements of the Act and specifically with Sections 17A(b)(3)(A) and
(F) \4\ because it fosters cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions and
further assures the safeguarding of securities which are in the custody
or control of PHILADEP.
\4\ 15 U.S.C. Secs. 78q-1(b)(3)(A) and (F) (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
PHILADEP does not believe that the proposed rule change will have
an impact on or impose a burden on competition.
[[Page 9001]]
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received from Members, Participants or Others
Written comments were neither solicited nor received with respect
to 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) \5\ of the Act and pursuant to Rule 19b-4(e)(4) \6\
promulgated thereunder because the proposal effects a change in an
existing service of PHILADEP that does not adversely affect the
safeguarding of securities or funds in the custody or control of
PHILADEP and does not significantly affect the respective rights or
obligations or PHILADEP or persons using the service. 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.
\5\ 15 U.S.C. Sec. 78s(b)(3)(A)(iii) (1988).
\6\ 17 CFR 240.19b-4(e)(4) (1995).
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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, 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
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 Room, 450 Fifth Street, NW, Washington,
D.C. 20549. Copies of such filings will also be available for
inspection and copying at the principal office of PHILADEP. All
submissions should refer to File Number SR-PHILADEP-95-10 and should be
submitted by March 27, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
\7\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-5152 Filed 3-5-96; 8:45 am]
BILLING CODE 8010-01-M
