96-21324. Self-Regulatory Organizations; The Philadelphia Depository Trust Company; Notice of Filing of a Proposed Rule Change Regarding the Destruction of Certain Expired Securities Certificates  

  • [Federal Register Volume 61, Number 163 (Wednesday, August 21, 1996)]
    [Notices]
    [Pages 43287-43288]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 96-21324]
    
    
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    SECURITIES AND EXCHANGE COMMISSION
    [Release No. 34-37570; File No. SR-PHILADEP-96-11]
    
    
    Self-Regulatory Organizations; The Philadelphia Depository Trust 
    Company; Notice of Filing of a Proposed Rule Change Regarding the 
    Destruction of Certain Expired Securities Certificates
    
    August 14, 1996.
        Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
    (``Act''),\1\ notice is hereby given that on June 28, 1996, the 
    Philadelphia Depository Trust Company (``Philadep'') filed with the 
    Securities and Exchange Commission (``Commission'') the proposed rule 
    change (File No. SR-PHILADEP-96-11) 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 persons.
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        \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 amend its rules to permit the destruction of 
    expired securities certificates representing warrants or rights that 
    have expired to be carried out under the supervision of Philadep's 
    internal audit department.
    
    II. Self-Regulatory Organization's Statement of the Purpose of, and 
    Statutory Basis for, the Proposed Rule Change
    
        In its filing with the Commission, Philadep 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. Philadep 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 
    submitted by Philadep.
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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 amend Rule 31 which 
    governs the orderly destruction of securities certificates relating to 
    expired warrants and rights.\3\ Currently, Section (c) of Rule 31 
    requires that all securities to be destroyed pursuant to the rule must 
    be forwarded to Philadep's internal audit department for 
    destruction.\4\ Under the proposed rule change, Philadep will be 
    allowed to destroy the certificates in a designated area of Philadep 
    under the supervision of the internal audit department instead of being 
    required to destroy such certificates in the internal audit department 
    itself.
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        \3\ The procedures for the destruction of expired securities set 
    forth in Rule 31 require Philadep to (i) contact the transfer agent 
    or the issuer of the expired securities to verify that the 
    respective warrants or rights have expired, (ii) obtain written 
    confirmation from such transfer agent or issuer that the 
    certificates representing such warrants or rights have expired (if 
    there is no transfer agent, Philadep personnel must exercise all 
    reasonable due diligence to confirm the expired nature of the 
    respective certificates including consulting with the Philadep's 
    legal department, internal audit department and senior management), 
    (iii) notify its participants that in the judgment of the transfer 
    agent, or other appropriate parties if a transfer agent does not 
    exist, the securities certificates have expired, (iv) delete such 
    securities positions from its participants' account on or after the 
    thirtieth day following the date of such notice, and (v) 
    appropriately mark the securities certificates and forward them to 
    its internal audit department for destruction.
        \4\ Securities Exchange Act Release No. 35426 (February 28, 
    1995) [File No. SR-PHILADEP-94-05] (order approving proposed rule 
    change authorizing Philadep to implement a program for the 
    destruction of securities certificates relating to expired warrants 
    and rights).
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        Philadep believes the proposed rule change complies with Section 
    17A of the Act because it is contemplated to foster cooperation and 
    coordination with persons engaged in the clearance and settlement of 
    securities transactions by providing an efficient administrative 
    mechanism to destroy expired securities that presently and 
    unnecessarily occupy critical space in Philadep's vault.
    
    [[Page 43288]]
    
    (B) Self-Regulatory Organization's Statement on Burden on Competition
    
        Philadep believes that the proposed rule change poses no 
    appreciable threat or burden on competition and should foster 
    competition because it provides for an administratively more effective 
    vault protocol.
    
    (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
    
        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 Philadep 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, N.W., 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. Sec. 552, will be available for inspection and copying in 
    the Commission's Public Reference Room, 450 Fifth Street, N.W., 
    Washington, D.C. 20549. Copies of such filing will also be available 
    for inspection and copying at the principal office of Philadep. All 
    submissions should refer to the file number SR-PHILADEP-96-11 and 
    should be submitted by September 11, 1996.
    
        For the Commission by the Division of Market Regulation, 
    pursuant to delegated authority.\5\
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        \5\ 17 CFR 200.30-3(a)(12) (1995).
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    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. 96-21324 Filed 8-20-96; 8:45 am]
    BILLING CODE 8010-01-M
    
    
    

Document Information

Published:
08/21/1996
Department:
Securities and Exchange Commission
Entry Type:
Notice
Document Number:
96-21324
Pages:
43287-43288 (2 pages)
Docket Numbers:
Release No. 34-37570, File No. SR-PHILADEP-96-11
PDF File:
96-21324.pdf