99-20304. Self-Regulatory Organizations; The Depository Trust Company; Order Approving a Proposed Rule Change Relating to the Establishment of an Automated Foreign Tax Reclaim Service

[Federal Register Volume 64, Number 151 (Friday, August 6, 1999)]
[Notices]
[Pages 43005-43006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20304]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41677; File No. SR-DTC-99-14]


Self-Regulatory Organizations; The Depository Trust Company; 
Order Approving a Proposed Rule Change Relating to the Establishment of 
an Automated Foreign Tax Reclaim Service

July 30, 1999.
    On May 27, 1999, The Depository Trust Company; (``DTC'') filed with 
the Securities and Exchange Commission

[[Page 43006]]

(``Commission'') a proposed rule change (File No. SR-DTC-99-14) 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'').\1\ Notice of the proposal was published in the Federal 
Register on June 21, 1999.\2\ No comment letters were received. For the 
reasons discussed below, the Commission is approving the proposed rule 
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 41525 (June 14, 1999), 
64 FR 33124.
---------------------------------------------------------------------------

I. Description

    Under the proposed rule change, DTC will establish a service called 
``TaxReclaim.'' Tax Reclaim is intended to assist DTC's participants in 
preparing foreign jurisdictions' tax reclaim forms that are required to 
reclaim tax withheld on income payments on foreign securities. 
Participants will access TaxReclaim through DTC's participant terminal 
system and will input data particular to the beneficial owner, foreign 
security, and payment details as required by the country of issuance. 
DTC will then process the information through a software application 
that includes the reclaim form and tax information template and will 
transmit back to the participant a file containing the completed tax 
reclaim form, reclaim calculation, and information on additional filing 
requirements and filing instructions. DTC will post a disclaimer of 
liability in connection with use of the TaxReclaim service.
    DTC will charge a fee of $10 for each reclaim transaction on a 
printed reclaim form processed through TaxReclaim. A reclaim 
transaction will consist of the reclaim calculation applicable to one 
security, one beneficial owner, and one income payment date. For 
reclaim transactions that are not completed because the reclaimable 
amount fall below a threshold value established by the participant, the 
fee will be $2 per reclaim transaction.

II. Discussion

    Section 17A(b)(3)(F) of the Act \3\ requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. The Commission 
believes that the proposed rule change is consistent with DTC's 
obligations under section 17A(b)(3)(F) because it should improve the 
ability of DTC's participants to obtain tax reclaim payments with 
respect to positions in non-U.S. securities. As a result, the proposed 
rule change should increase the efficiency with which beneficial owners 
of positions in non-U.S. securities that are held at DTC are able to 
obtain tax reclaim payments to which they are entitled.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

III. Conclusion

    On the basis of the foregoing, the Commission finds that DTC's 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of section 17A of the Act and the 
rules and regulations thereunder.
    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (Filed No. SR-DTC-99-14) be and hereby is 
approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-20304 Filed 8-5-99; 8:45 am]
BILLING CODE 8010-01-M