5714 Federal Register / Vol. 65, No. 24 / Friday, February 4, 2000 / Notices

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

2The Commission has modified the text of the

summaries prepared by DTC.

3For a description of the DRS facility

administered by DTC, see Securities Exchange Act

Release No. 37931 (November 7, 1996), 61 FR 58600

(November 15, 1996) [File No. SR–DTC–96–15]

(order relating to the establishment of DRS);

Securities Exchange Act Release No. 41862

(September 10, 1999), 64 FR 51162 (September 21,

1999) [file No. SR–DTC–99–16] (order relating to

implementation of the Profile Modification System). 4A DRS Limited Participant is a transfer agent

who is permitted under DTC rules to facilitate DRS

transactions. Securities Exchange Act Release No.

37931 (November 7, 1996), 61 FR 58600 (November

15, 1996) [File No. SR–DTC–96–15]. 5 Id. 6Representatives of the New York Stock

Exchange, which operates the Medallion Stamp

Program (a signature guarantee program), the

Securities Transfer Association, the Securities

Industry Association, and issuers have been

negotiating in order to implement an electronic

medallion program. Such an electronic medallion

program would operate under a mutually agreedupon indemnification agreement that would

address the risks undertaken by the respective

parties participating in transferring customer

positions in DRS.

7 DTC will be to submitting to the Commission in

the near future a proposed rule change to

implement Profile.

8 15 U.S.C. 78q–1.

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Meeting

Notice is hereby given, pursuant to

the provisions of the Government in the

Sunshine Act, Pub. L. 94–409, that the

Securities and Exchange Commission

will hold the following meeting during

the week of February 7, 2000.

A closed meeting will be held on

Wednesday, February 9, 2000 at 11:00

a.m.

Commissioner Unger, as duty officer,

determined that no earlier notice thereof

was possible.

Commissioners, Counsel to the

Commissioners, the Secretary to the

Commission, and recording secretaries

will attend the closed meeting. Certain

staff members who have an interest in

the matters may also be present.

The General Counsel of the

Commission, or his designee, has

certified that, in his opinion, one or

more of the exemptions set forth in 5

U.S.C. 552b(c)(4), (8), (9)(A) and (10)

and 17 CFR 200.402(a)(4), (8), (9)(A) and

(10), permit consideration for the

scheduled matters at the closed meeting.

Commissioner Unger, as duty officer,

voted to consider the item listed for the

closed meeting in a closed session.

The subject matter of the closed

meeting scheduled for Wednesday,

February 9, 2000 is: amicus

participation.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postponed, please contact: The office

of the Secretary at (202) 942–7070.

Dated: February 2, 2000.

Jonathan G. Katz,

Secretary.

[FR Doc. 00–2721 Filed 2–2–00; 4:02 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42366; File No. SR–DTC–

00–01]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Relating to an

Interpretation of an Existing Rule

Pertaining to the Direct Registration

System

January 28, 2000.

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

Securities Exchange Act of 1934

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

January 20, 2000, 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. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interest parties.

I. Self-Regulatory Organization’s

Statement of the Terms of substance of

the Proposed Rule Change

The proposed rule change provides an

interpretation of DTC’s rule relating to

the Profile Modification System feature

of the Direct Registration System

facility.

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 these statements.2

(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 provide an interpretation

with respect to the meaning of DTC’s

current rule relating to the

administration of the Direct Registration

System (‘‘DRS’’) facility and the Profile

Modification System (‘‘Profile’’), a

specific feature of the DRS facility.3

Under DTC’s rule, only those DRS

limited participants 4 who ‘‘implement

Profile’’ are allowed to make additional

securities eligible for inclusion in DRS.5

With this filing, DTC is interpreting the

phrase ‘‘implements Profile’’ to be

satisfied when a DRS limited participant

enters into a written agreement with

DTC stating that the DRS limited

participant will continue to use DRS,

including Profile, when Profile becomes

operational. DTC will make Profile

operational using either an electronic

medallion program 6 or a screen-based

indemnity.7

In the case of a screen-based

indemnity, before an instruction relating

to a customer’s DRS position is

permitted to be sent via DRS to the DRS

limited participant, a DTC participant

would have to agree to a screen-based

indemnity in substantially the following

form:

(1) Participant represents that it has

customer authority for the request

appearing on the following screen and

that all information shown is accurate

and complete, except that, with respect

to the taxpayer identification number

included in such information, to the

best knowledge of participant, such

information is accurate and complete;

and

(2) Participant indemnifies the issuer

and its transfer agent against any breach

of such representations in connection

with the transaction that is the subject

of such request.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act 8

Federal Register / Vol. 65, No. 24 / Friday, February 4, 2000 / Notices 5715

9 15 U.S.C. 78s(b)(3)(A)(i).

10 17 CFR 240.19b–4(f)(1).

11 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)(i).

4 17 CFR 240.19b–4(f)(1).

and the rules and regulations

thereunder applicable to DTC because it

clarifies DTC’s interpretation of its rule,

thereby eliminating confusion in the

industry relating to the implementation

of the Profile feature and providing for

more expeditious implementation of

Profile. The proposed rule change will

be implemented consistently with the

safeguarding of securities and funds in

DTC’s custody or control or for which

it is responsible.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC perceives no impact on

competition by reason of the proposed

rule change.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The proposed rule change has been

developed through discussions with

several DTC participants and DRS

limited participants. Written comments

relating to the proposed rule change

have not yet been solicited or received

on the proposed rule change. 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)(i) 9 of the Act and Rule 19b–

4(f)(1) 10 promulgated thereunder

because the proposal interprets the

meaning of an existing rule. At any time

within sixty days of the filing of such

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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549–0609. 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 also will be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to File No. SR–DTC–00–01 and

should be submitted by February 25,

2000.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–2487 Filed 2–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42363; File No. SR–NASD–

00–01]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. Relating to a Notice to

Members on Extended Hours Trading

January 28, 2000.

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

11, 2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its wholly

owned subsidiary, NASD Regulation,

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

Securities and Exchange Commission

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

rule change as described in Items I, II,

and III below, which Items have been

prepared by NASD Regulation. NASD

Regulation has designated this proposal

as one constituting a stated policy and

interpretation with respect to the

meaning of an existing rule under

Section 19(b)(3)(A)(i) of the Act 3 and

Rule 19b–4(f)(1) 4 thereunder, which

renders the rule effective upon the

Commission’s receipt of this filing. 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

NASD Regulation is issuing a Notice

of Members reminding members of their

obligation under just and equitable

principles of trade and the advertising

rules to disclose to customers the

material risks of extended hours trading.

The text of the Notice to Members is

provided below.

* * * * *

NASD Notice to Members

Disclosure To Customers Engaging In

Extended Hours Trading

Suggested Routing

Legal & Compliance; Senior

Management

Executive Summary

NASD Regulation, Inc. (NASD

Regulation) reminds members of their

obligation under just and equitable

principles of trade and the advertising

rule to disclose to customers the

material risks of extended hours trading.

A model disclosure statement is

included with this Notice in Attachment

A.

Questions concerning this Notice may

be directed to Gary L. Goldsholle,

Assistant General Counsel, Office of

General Counsel, NASD Regulation, at

(202) 728–8104.

Background and Discussion

A number of member firms recently

have started offering their retail

customers various opportunities to trade

stocks after regular market hours in

what is known as ‘‘extended hours

trading.’’ An even greater number of

member firms have announced plans to

offer extended hours trading in coming

months.

The growth of extended hours trading

provides retail customers with greater

opportunities to trade securities and

manage their portfolios, and in so doing,

provides access to markets that were

previously limited to institutional

customers. Participation in extended

hours trading may offer certain benefits

to retail customers, but entails several

material risks. Depending on the

particular extended hours trading

environment, these risks may include:

• lower liquidity

• high volatility

• changing prices

• unlinked markets

• an exaggerated effect from news

announcements; and

• wider spreads.

In light of these risks, members have

an obligation to their retail customers to