8072 Federal Register / Vol. 62, No. 35 / Friday, February 21, 1997 / Notices

5 15 U.S.C. § 78(b)(5).

6 In approving these rules, the Commission has

considered the proposed rules’ impact on

efficiency, competition, and capital formation. 15

U.S.C. § 78c(f).

7 15 U.S.C. § 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

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

2The Commission has modified the text of the

summaries prepared by PTC.

3Letter from William A. Wiles, Secretary of the

Board, Board of Governors, to Thomas A. Williams,

Milbank, Tweed, Hadley & McCloy (March 27,

1989).

4Letter from Jennifer J. Johnson, Associate

Secretary, to the Board, Board of Governors, to

Leopold S. Rassnick, Vice President and General

Counsel, PTC (June 9, 1992)

5Securities Exchange Act Release No. 31746

(January 15, 1993), 58 FR 6319 [File No. SR–PTC–

92–15].

6 Id.

7Securities Exchange Act Release No. 33487

(January 18, 1994), 59 FR 3900 [File No. SR–PTC–

93–07].

8Securities Exchange Act Release No. 35205

(January 9, 1995), 59 FR 3444 [File No. SR–PTC–

94–08].

9Securities Exchange Act Release No. 36790

(January 30, 1996), 61 FR 4507 [File No. SR–PTC–

95–09].

10The 90-day United States Treasury bill rate, as

published in The Wall Street Journal on December

19, 1996, was 5.00%.

11 15 U.S.C. 78q–1(b)(3)(D).

Options Clearing Corporation and the

other exchanges. Thus, the Commission

believes that the proposal is consistent

with the Section 6(b)(5) 5 requirements

that the rules of an exchange be

designed to promote just and equitable

principles of trade, to prevent

fraudulent and manipulative acts, and,

in general, to protect investors and the

public, in that it will foster cooperation

and coordination with persons engaged

in regulating, clearing, selling and

processing information with respect to

transactions in securities.6

III. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,7 that the

proposed rule change (SR–PSE–96–48)

be, and hereby is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4233 Filed 2–20–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38280; FIle No. SR–PTC–

96–09]

Self-Regulatory Organizations,

Participants Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Declaring a

Dividend

February 12, 1997.

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

Securities Exchange Act of 1934

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

December 23, 1996, the Participants

Trust Company (‘‘PTC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change (File No. SR–PTC–96–09) as

described in Items I, II, and III below,

which Items have been prepared

primarily by PTC. 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 declares a

dividend payable on January 21, 1997,

to PTC’s stockholders of record as of

December 31, 1996.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, PTC

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. PTC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

As a condition to approving PTC’s

application for stock in the Federal

Reserve Bank of New York, the Board of

Governors of the Federal Reserve

System (‘‘Board of Governors’’)

prohibited PTC from paying dividends

to its stockholders.3 The Board of

Governors subsequently relieved PTC of

the restriction on payment of dividends

with the understanding that dividends,

if declared, would be declared

periodically by PTC’s Board of Directors

and would be paid at a rate not to

exceed the 90-day United States

Treasury bill rate in effect at the time

the dividend is declared.4

The Commission approved PTC’s

practice of paying dividends out of net

profits subject to the limitations

imposed by the Board of Governors and

subject to the limitations imposed by

the Board of Governors and subject to

the further requirements that (i) prior to

using excess income from invested

principal and interest (‘‘P&I’’) to pay a

dividend, PTC’s Board of Directors be

advised of any amount related to the

investment of P&I which has not been

rebated and is part of the net profits

used to declare the dividend and

affirmatively approve the application of

such excess P&I income for the dividend

and (ii) PTC file a proposed rule change

pursuant to Section 19(b)(3)(A) of the

Act each time it declares a dividend.5

PTC has paid dividends on January

18, 1993, in the amount of $.52 per

share to stockholders of record as of the

close of business on December 31,

1992,6 on January 20, 1994, in the

amount of $.525 per share to

stockholders of record as of the close of

business on December 31, 1993,7 on

January 20, 1995, in the amount of $1.00

per share to stockholders of record as of

the close of business on December 31,

1994,8 and on December 29, 1995, in the

amount of $.98 per share to stockholders

of record as of the close of business on

December 21, 1995.9 At its meeting on

December 19, 1996, PTC’s Board of

Directors declared a dividend payable

on January 21, 1997, in the amount of

$.98 per share to stockholders of record

as of the close of business on December

31, 1996. This dividend rate does not

exceed the 90-day United States

Treasury bill rate in effect on December

19, 1996.10 The dividend does not

include any excess income attributable

to investments of P&I as all such P&I

related income with respect to fiscal

year ended December 31, 1996, will be

rebated to participants on a pro rata

basis based on the amount of P&I

disbursements to each participant.

PTC believes that the proposed rule

change is consistent with Section

17A(b)(3)(D) of the Act 11 and the rules

and regulations thereunder in that it

provides for the equitable allocation of

reasonable fees and other charges among

participants.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

PTC does not believe that the

proposed rule change will impose any

burden on competition 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

PTC has not solicited comments with

respect to the proposed rule change, and

none have been received.
Federal Register / Vol. 62, No. 35 / Friday, February 21, 1997 / Notices 8073

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

1317 CFR 240.19b–4(e)(1).

14 17 CFR 200.30–3(a)(12).

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

2Letter from Kieth Kessel, Compliance Officer,

Philadep (November 12, 1996).

3The Commission has modified the text of the

summaries submitted by Philadep.

4Securities Exchange Act Release Nos. 36875

(February 22, 1996), 61 FR 7846 [File No. SR–

SCCP–95–06] and 36876 (February 22, 1996), 61 FR

7841 [SR–Philadep–95–08] (orders granting partial

temporary approval and partial permanent approval

of proposed rule changes to convert to same-day

funds settlement systems) (‘‘SDFS Approval

Orders’’).

5Philadep’s collateral monitor and net debit cap

analysis are structured to incorporate this netting of

SCCP and Philadep settlements.

III. Date for Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section 19(b)(A)(i)

of the Act 12 and subparagraph (e)(1) of

Rule 19b–4 13 thereunder because the

proposed rule change constitutes a

stated policy, practice, or interpretation

with respect to the meaning,

administration, or enforcement of an

existing rule of the self-regulatory

organization. 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.

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. 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 will also be available for

inspection and copying at the principal

office of PTC. All submissions should

refer to File No. SR–PTC–96–09 and

should be submitted by March 14, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4237 Filed 2–20–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38281; File No. SR–

Philadep–96–15]

Self-Regulatory Organizations;

Philadelphia Depository Trust

Company; Notice of Filing and Order

Granting Accelerated Approval of a

Proposed Rule Change To Amend and

Clarify Certain Same-Day Funds

Settlement Procedures

February 13, 1997.

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

Securities Exchange Act of 1934

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

August 6, 1996, the Philadelphia

Depository Trust Company (‘‘Philadep’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

Philadep–96–15) as described in Items I

and II below, which items have been

prepared primarily by Philadep. On

November 12, 1996, Philadep filed an

amendment to the proposed rule change

to clarify the minimum net debit cap

procedures.2 The Commission is

publishing this notice and order to

solicit comments from interested

persons and to grant accelerated

approval of the proposed rule change.

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 amend and to clarify certain

same-day funds settlement (‘‘SDFS’’)

procedures relating to Philadep’s risk

management controls.

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 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.3

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

On February 22, 1996, the

Commission granted partial permanent

approval and partial temporary approval

of proposed rule changes filed by

Philadep and the Stock Clearing

Corporation of Philadelphia’s (‘‘SCCP’’)

to establish an SDFS system.4 The

purpose of the proposed rule change is

to amend and to clarify certain SDFS

procedures relating to the risk

management controls (i.e., collateral

monitor and net debit cap).

Pursuant to the SDFS Approval

Orders, Philadep provides each

participant with a settlement amount

which is an aggregate of a participant’s

end-of-day net debits and net credits in

their SCCP and Philadep accounts.5

Because of this common net settlement

feature, Philadep’s SDFS Approval

Order sets forth that Philadep’s SDFS

system risk management controls would

be applied in a limited manner to

SCCP’s Continuous Net Settlement

(‘‘CNS’’) activity. However, SCCP and

Philadep will not suspend the

processing of a participant’s CNS

activity when the participant’s collateral

monitor is negative or its net debit cap

is exceeded because CNS activity is

exempt from the risk management

controls.

Philadep’s proposed amendments to

its SDFS system risk management

procedures clarify that the collateral of

a joint SCCP/Philadep participant that is

contained in the participant’s collateral

monitor may be fully utilized by

Philadep to address any settlement

default of such joint participant. In this

regard, Philadep recognizes several

sources of collateral that may be derived

to support a joint participant’s Philadep

activities as well as its SCCP CNS

activities. Collateral derived from a

SCCP CNS participant generally

includes the participant’s SCCP

participants fund contribution and CNS

securities received. Collateral derived

from a Philadep participant generally

includes the participant’s Philadep

participants fund contribution,

miscellaneous delivery order interest,

interest, dividend and reorganization

credits, free receives, and proprietary

positions that the participant designated

as collateral.

Philadep’s procedures make clear that

in the event of a joint participant

insolvency or a joint participant’s

failure to pay its end-of-day settlement