[Federal Register Volume 59, Number 92 (Friday, May 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11698]
[[Page Unknown]]
[Federal Register: May 13, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34018; File No. SR-DTC-94-04]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change Relating to the Implementation
of the Interactive Capabilities and of the Electronic Mail Features of
the Enhanced Institutional Delivery System
May 5, 1994.
Pursuant to section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on April 13, 1994, 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
the self-regulatory organization. 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) (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 consists of procedures for electronic mail
features and for the interactive use of DTC's enhanced Institutional
Delivery (``ID'') system.\2\
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\2\The enhanced ID system concept was approved in an earlier
Commission order. The order specified that each individual feature
of the enhanced ID system would be the subject of a separate filing
under section 19(b)(1) of the Act. Securities Exchange Act Release
No. 33466 (January 12, 1994), 59 FR 3139 [File No. SR-DTC-93-07]
(order approving concept of enhanced ID system).
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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 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 will enable ID system users to use the ID
system interactively with the capability of accomplishing all ID system
processing within a single business day. ID system users will have the
option to continue to use the ID system in a batch mode.
The proposal also seeks to implement two electronic mail features.
These features will enable ID system users to send and receive
``notification of order execution'' and ``institution instruction''
messages. A notification of order execution can be sent by a broker-
dealer to communicate the details of an order execution to an
institution. If the institution accepts the notification of order
execution, the institution can send the broker-dealer an institution
instruction containing information, such as the allocation of block
trades, which is needed by the broker-dealer to enter trade data into
the ID system for the preparation of confirmations. Currently, broker-
dealers and institutions make telephone calls or send facsimile
transmissions to communicate this information.
The proposed rule change is consistent with the requirements of
section 17A of the Act and the rules and regulations thereunder because
the proposed rule change will further automate the process by which
securities transactions are cleared and settle and thereby will
facilitate the prompt and accurate clearance and settlement of
securities transactions. The proposal also is consistent with section
17A in that because the proposed rule change enhances DTC's existing ID
system it will be implemented consistently with the safeguarding of
securities and funds in DTC's custody or control or for which DTC is
responsible.
(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC perceives no 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 interactive capability and electronic mail features have been
developed through widespread consultations with securities industry
members. Written comments from DTC participants or others have not been
solicited on the proposed rule change.
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 the self-regulatory organization 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.
DTC requests accelerated effectiveness for the proposed rule change
pursuant to section 19(b)(2) of the Act so that the proposed rule
change can be implemented as soon as possible. Recently, the Commission
adopted Rule 15c6-1 under the Act which, effective June 1, 1995,
establishes three business days as the standard settlement timeframe
for broker-dealers.\3\ The proposed rule change, particularly the
interactive capability of the ID system, will facilitate three business
day settlement. Accelerated effectiveness of the proposed rule change
will enable ID system users to become accustomed to the ID system well
in advance of conversion to a three business day settlement cycle.
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\3\For a detailed description and discussion of the conversion
to a three business day settlement cycle, refer to Securities and
Exchange Commission Release Nos. 33-7022, 34-33023, and IC-19768
(October 13, 1993), 58 FR 52891 [File No. S7-5-93] (order adopting
Commission Rule 15c6-1).
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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, DC 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, NW.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of DTC. All submissions
should refer to File No. SR-DTC-94-04 and should be submitted by June
3, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\17 CFR 200.30-3(a)(12) (1992).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-11698 Filed 5-12-94; 8:45 am]
BILLING CODE 8010-01-M
