Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 6751 

7 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78s(b)(3)(A)(iii). 

3 17 CFR 240.19b–4(f)(4). 

4The Commission has modified the text of the 

summaries prepared by DTC. 

5Securities Exchange Act Release No. 26896 

(June 5, 1989), 54 FR 25185. DTC filed a proposed 

rule change with the Commission on April 4, 1989 

to establish procedures for covering short positions 

using DTC’s Participant Terminal System. The 

purpose of the rule change was to provide a means 

of reducing short positions at DTC. The ICS 

program is detailed in DTC’s PTS Function Guide. 

6 If the Participant initiating the ICS request holds 

a security similar to the security in which it has a 

short position, then its invitation may include an 

offer to sell or swap the similar security. 

7This message includes a quantity, price range, 

description, and CUSIP for the security. The 

Participant submitting the invitation also includes 

a contact name and phone number as well as any 

information about substitute securities. 

8Because of its role as a securities depository, 

DTC is uniquely positioned to identify Participants 

with long positions in certain securities. 

which it is responsible and (ii) does not 

significantly affect the respective rights 

or obligations of the clearing agency or 

persons using the service. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

may summarily abrogate such rule 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. 

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. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

No. SR–OCC–2010–01 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC, 20549–1090. 

All submissions should refer to File No. 

SR–OCC–2010–01. This file number 

should be included on the subject line 

if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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 Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at OCC’s principal office and on 

OCC’s Web site at http:// 

www.optionsclearing.com/components/ 

docs/legal/rules_and_bylaws/ 

sr_occ_10_01.pdf. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submission 

should refer to File No. SR–OCC–2010– 

01 and should be submitted on or before 

March 3, 2010. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2860 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61477; File No. SR–DTC– 

2010–01] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Expand Its 

Invitation To Cover Shorts Capability 

To Include Short Positions Outside 

DTC 

February 3, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

January 15, 2010, 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. DTC filed 

the proposal pursuant to Section 

19(b)(3)(A)(iii) of the Act 2 and Rule 

19b–4(f)(4) 3 thereunder so that the 

proposal was effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The purpose of the proposed rule 

change is to expand the Invitation to 

Cover Shorts (‘‘ICS’’) capability to 

include short positions outside DTC. 

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.4

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change. 

DTC rules require Participants to 

cover short positions immediately and 

provide 130% of the market value of the 

relevant security until the position is 

covered. DTC’s ICS capability offers 

Participants a means to cover short 

positions by inviting tenders of 

securities from other Participants that 

hold long positions.5 Communication 

about these requests is facilitated 

through DTC’s automated Participant 

Terminal System (‘‘PTS’’).6

Participants initiate ICS requests by 

broadcasting a message to DTC.7 DTC in 

turn automatically identifies 

Participants with long positions in the 

relevant security 8 and sends those 

Participants an automated PTS message 

asking for a response if the Participant 

wants to tender its securities. 

Participants inviting the tender are 

informed by DTC of any affirmative 

responses and the Participant 

responding to the tender offer is asked 

to send DTC an e-mail or letter of 

authorization stating its willingness to 

sell its shares at the price agreed upon 


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6752 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 

9 Involvement in ICS transactions is purely 

discretionary by Participants. DTC facilitates 

communication and keeps Participant identities 

confidential until both parties agree to the 

transaction. 

10Until DTC develops an automated solution, 

these requests would be processed manually in a 

manner similar to the existing PTS application. 

11 15 U.S.C. 78q–1. 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 17 CFR 240.19b–4(f)(4). 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78s(b)(3)(A)(ii). 

3 17 CFR 240.19b–4(f)(2). 

with the short Participant.9 Once the 

appropriate authorizations are received, 

DTC staff inputs journal adjustments to 

debit the long Participant’s account and 

credit the short Participant’s account. A 

special payment order is then created by 

DTC to move the corresponding funds 

from the settlement account of the short 

Participant to that of the long 

Participant. 

Participants recently asked DTC to 

expand its ICS capability to include 

short positions outside DTC.10

Expanding ICS in this way would help 

Participants holding short positions 

outside DTC to avoid financial risks by 

locating Participants with long positions 

in those securities. Participants using 

the ICS capability for short positions 

outside DTC would be subject to similar 

procedures as apply to current use of 

the ICS capability. Once Participants 

agree to the transaction, DTC would 

either process it through the journal 

entry method described above or ask the 

Participants to communicate directly 

with one other and settle the obligation 

through a DTC delivery order. 

DTC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the 

Act 11 and the rules and regulations 

thereunder applicable to DTC because 

the proposed rule change expands the 

existing ICS capability to increase 

efficiency by eliminating short positions 

of DTC Participants and will not 

adversely affect the safeguarding of 

securities and funds in DTC’s custody or 

control. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

DTC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change have not yet been 

solicited or received. DTC will notify 

the Commission of any written 

comments received by DTC. 

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) of the Act 12 and Rule 

19b–4(f)(4) 13 thereunder because the 

proposed rule change effects a change in 

an existing service of a registered 

clearing agency that: (i) Does not 

adversely affect the safeguarding of 

securities or funds in the custody or 

control of the clearing agency or for 

which it is responsible and (ii) does not 

significantly affect the respective rights 

or obligations of the clearing agency 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. 

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. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Electronic comments may be 

submitted by using the Commission’s 

Internet comment form (http:// 

www.sec.gov/rules/sro.shtml), or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

No. SR–DTC–2009–01 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington DC 

20549–1090. 

All submissions should refer to File 

Number SR–DTC–2010–01. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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 Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street, NE., 

Washington DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filings 

also will be available for inspection and 

copying at the principal office of DTC 

and on DTC’s Web site at http:// 

www.dtcc.com/downloads/legal/ 

rule_filings/2009/dtc/2010–01.pdf. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to file number 

SR–DTC–2010–01 and should be 

submitted on or before March 3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2859 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61476; File No. SR–DTC– 

2010–02] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Establish 

Fees Related to Invitation to Cover 

Short Requests 

February 3, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

January 15, 2010, 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. DTC filed 

the proposal pursuant to Section 

19(b)(3)(A)(ii) of the Act 2 and Rule 19b– 

4(f)(2) 3 thereunder so that the proposal 

was effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 


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