5876 Federal Register / Vol. 74, No. 20 / Monday, February 2, 2009 / Notices 

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 language explains that ‘‘if the effective date 

of the corporate action is three years or less, 

allocation occurs one day after the deposit. If the 

effective date is over three years, allocation of new 

stock entitlement will not occur until DTC has 

received the security from the agent. Allocations for 

cash will not occur on any reorg deposit until DTC 

receives the funds from the agent, regardless of the 

effective date of the corporate action.’’ 

5 15 U.S.C. 78s(b)(3)(A)(ii). 

6 17 CFR 240.19b–4(f)(2). 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–2161 Filed 1–30–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59286; File No. SR–DTC– 

2009–01] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Relating to the 

Deposits Service Guide 

January 23, 2009. 

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

Securities Exchange Act of 1934 

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

January 5, 2009, 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 proposed rule change pursuant to 

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

Rule 19b–4(f)(4) thereunder 3 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 proposed rule change will amend 

DTC’s Deposits Service Guide. 

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 

Under this rule change, DTC will 

amend its Deposits Service Guide by 

eliminating the Legal Guidance System 

(‘‘LGS’’) and by making other minor 

clarifications. 

LGS is a Participant Terminal Service 

function that enables DTC participants 

to obtain comprehensive information on 

state and local regulations that must be 

followed when making a legal deposit. 

This function has been superseded by 

the Securities Transfer Association 

(‘‘STA’’) Guidelines that are consistent 

with DTC’s processing and is now 

obsolete. All DTC participants have 

access to the STA guidelines through 

the public STA Web site (http:// 

www.stai.org). 

Additionally, DTC is making some 

minor corrections and clarifications to 

the Deposits Service Guide. Specifically, 

an inadvertent reference to ‘‘restricted’’ 

deposit in the legal deposits section of 

the Deposit Service Guide is removed; 

clarifying language to the time it takes 

for appropriate payments and exchange 

of shares to be made through DTC’s 

settlement area is being added,4 and 

detailed narrative describing custody 

services is being removed from the 

Deposits Service Guide since such 

narrative is contained in the Custody 

Service Guide. 

DTC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 

and the rules and regulations 

thereunder applicable to DTC because it 

will facilitate the prompt and accurate 

clearance and settlement of securities 

transactions by enhancing the 

utilization of DTC’s existing services. 

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 

DTC has not solicited or received 

written comments relating to the 

proposed rule change. DTC will notify 

the Commission of any written 

comments it receives. 

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 5 and Rule 

19b–4(f)(4) 6 thereunder because it 

effects a change in an existing service of 

a registered clearing agency that does 

not adversely affect the safeguarding of 

securities and funds in the custody or 

control of the clearing agency or for 

which it is responsible and 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 

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 

• Use the Commission’s Internet 

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

rules/sro.shtml) or 

• Send an e-mail to rulecomment@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 No. 

SR–DTC–2009–01. 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 


dwashington3 on PROD1PC60 with NOTICES
Federal Register / Vol. 74, No. 20 / Monday, February 2, 2009 / Notices 5877 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 52521 

(September 28, 2005), 70 FR 57909 (October 4, 

2005). 

6See Securities Exchange Act Release No. 53580 

(March 30, 2006), 71 FR 17529 (April 6, 2006). In 

2006, the exemptive provision was also relocated 

from NASD Rule 6955(d) to NASD Rule 6958. As 

of December 15, 2008, NASD Rule 6958 was 

renumbered as FINRA Rule 7470. See FINRA 

Regulatory Notice 08–57 (October 2008). 

7See Securities Exchange Act Release No. 54585 

(October 10, 2006), 71 FR 61112 (October 17, 2006). 

8See Securities Exchange Act Release No. 55440 

(March 9, 2007), 72 FR 12852 (March 19, 2007). 

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 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. to 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

DTC’s principal office and on DTC’s 

Web site at <http://www.dtc.org/ 

impNtc/mor/index.html>. 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 No. DTC–2009–01 

and should be submitted on or before 

February 23, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–2162 Filed 1–30–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59274; File No. SR–FINRA– 

2009–001] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to the Exemptive 

Criteria in FINRA Rule 7470 

January 22, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 7, 

2009, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

constituting a ‘‘non-controversial’’ rule 

change pursuant to Section 

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

19b–4(f)(6) thereunder,4 which renders 

the proposal effective upon receipt of 

this filing by the Commission. On 

January 16, 2009, FINRA submitted 

Amendment No. 1 to the proposed rule 

change. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to amend FINRA 

Rule 7470 to revise the criteria 

necessary to qualify for an exemption 

from the order recording and data 

transmission requirements in the Order 

Audit Trail System (‘‘OATS’’) Rules for 

manual orders. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA and at the 

Commission’s public reading room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA 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. FINRA 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 

1. Purpose 

On September 28, 2005, the SEC 

approved amendments to the OATS 

Rules that, among other things, 

permitted FINRA to grant exemptive 

relief from the OATS reporting 

requirements for manual orders.5 The 

exemptive authority was broadened in 

2006 to give FINRA the authority to 

exempt members from the OATS 

recording requirements, in addition to 

the reporting requirements.6 At a 

minimum, members must meet the 

following criteria to be eligible to 

request an exemption from the OATS 

recording and reporting requirements 

for manual orders: (1) The member and 

current control affiliates and associated 

persons of the member have not been 

subject within the last five years to any 

final disciplinary action, and within the 

last ten years to any disciplinary action 

involving fraud; (2) the member has 

annual revenues of less than $2 million; 

(3) the member does not conduct any 

market making activities in Nasdaq 

Stock Market equity securities; (4) the 

member does not execute principal 

transactions with its customers (with 

limited exceptions for principal 

transactions executed pursuant to error 

corrections); and (5) the member does 

not conduct clearing or carrying 

activities for other firms. 

In addition to the amendments to the 

exemptive provision in the OATS Rules 

in 2006, the SEC separately approved 

amendments to the OATS Rules to 

require members to record and report to 

OATS order information relating to OTC 

equity securities.7 The extension of the 

OATS requirements to OTC equity 

securities became effective on February 

4, 2008.8

When the Commission approved the 

exemptive provision in the OATS Rules 

and the amendment extending FINRA’s 

authority under that provision in 2006, 

the OATS Rules applied only to equity 

securities listed on the Nasdaq Stock 

Market. Consequently, at that time, one 

of the minimum criteria for a member to 

request an exemption from the OATS 

requirements, specifically the 

requirement that the member not 

conduct any market making activities, 

was limited to Nasdaq Stock Market 

equity securities. This requirement, 

similar to the other exemptive criteria 

such as the prohibition on principal 

transactions with customers and 

conducting clearing or carrying 

activities for other firms, reflects 

FINRA’s conclusion that exemptive 

relief should only be available to 

members that conduct very limited 

types of trading activities. 

When the OATS recording and 

reporting requirements were extended 

to OTC equity securities, the exemptive 

provision was not similarly extended to 

account for market-making activities in 

OTC equity securities. The proposed 

rule change would amend the minimum 


dwashington3 on PROD1PC60 with NOTICES