[Federal Register Volume 64, Number 116 (Thursday, June 17, 1999)]
[Notices]
[Pages 32574-32575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15353]
[[Page 32574]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41508; File No. SR-DTC-99-07]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding Fees and Charges
June 10, 1999.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act''), notice is hereby given that on March 15, 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 from interested persons on the proposed rule change.
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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 schedule for DTC's
services.\2\
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\2\ The revised fee schedule is attached as Exhibit 2 to DTC's
filing, which is available for inspection and copying in the
Commission's public reference room and through DTC.
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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.\3\
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\3\ 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
Under the proposed rule change, DTC is adjusting the fees that it
charges for various services so that the fees are aligned with their
respective estimated service costs for 1999. The adjusted fees are
effective with respect to services provided on and after April 1, 1999.
DTC's Board of Directors has completed a review of DTC's estimated unit
service costs for 1999, and DTC's service fees have been adjusted to
reflect the results of the review.
The revised 1999 fee schedule has been set to yield $7.5 million
more in operating revenue on an annual basis than the present fee
schedule (which had been based on 1998 unit service costs) would have
yielded. Studies of the impact of the new fees on all participants
based on their monthly bills from DTC for October, November, and
December 1998 shows an average monthly fee increase of 1.4%.
The revised fee schedule includes transaction based fees for DTC's
custody service, which has previously been billed as a flat monthly fee
that is negotiated with respect to each participant based on its
projected overall usage of the service.\4\ Since DTC has completed its
analysis of the various activities included in the custody service and
the respective costs associated with each activity, the flat monthly
fee will be replaced with individual transaction fees applied to all
participants uniformly and based on the nature of the transaction.
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\4\ Securities Exchange Act Release No. 39761 (March 16, 1998)
63 FR 13893 [File No. SR-DTC-97-09].
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DTC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \5\ and the rules and
regulations thereunder applicable to DTC because fees will be allocated
more equitably among DTC participants based on respective estimated
1999 unit service costs.
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\5\ 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 impose any
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
Participants and other users of DTC's services were informed that
DTC anticipated that annual service fees would likely increase in 1999
by $7.5 million by an Important Notice dated July 31, 1998, (B#4612)
entitled ``Preliminary Projections for 1998 and Anticipated 1999
Services Fees.'' An Executive Important Notice dated February 5, 1999,
(B#6063) entitled ``1999 Revisions of DTC Service Fees'' was then
circulated to participants and other users of DTC services on February
5, 1999, advising them of the new fees effective with respect to
services provided on and after April 1, 1999, and inviting their
questions or comment. Because participants have supported cost based
fees in the past and because overall the subject fee changes are
modest, a more formal period for participant comment was not considered
necessary.
No written comments from participants or others have been received
with respect to this 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)(ii) \6\ of the Act and Rule 19b-4(g)(2) \7\ 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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\6\ 15 U.S.C. 78s(b)(3)(A)(ii).
\7\ 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, N.W., Washington, D.C. 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, 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-99-07 and should be
submitted by July 8, 1999.
[[Page 32575]]
For the Commission by the Division of Market Regulaton, pursuant
to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland
Deputy Secretary.
[FR Doc. 99-15353 Filed 6-16-99; 8:45 am]
BILLING CODE 8010-01-M
