Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Notices 75985

6For a more complete discussion of DTC’s EDS

service (now called TaxRelief), refer to Securities

Exchange Act Release Nos. 29814 (October 11,

1991), 56 FR 52563 (October 21, 1991) and 32171

(April 19, 1993), 58 FR 22003 (April 26, 1993).

7See Securities Exchange Act Release Nos. 38600

(May 9, 1997), 62 FR 27086 (May 16, 1997); 40064

(June 3, 1998), 63 FR 31818 (June 10, 1998); and

41466 (May 28, 1999), 64 FR 30077 (June 4, 1999).

8 15 U.S.C. 78q–1.

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

10 17 CFR 240.19b–4(f)(4).

11 17 CFR 200.30–3(a)(12).

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

beneficial owners’ characteristics.6 In

contrast, under the Tax Certificate, the

participant was required to certify that

every underlying beneficial owner was

subject to the same withholding tax rate

as would be a U.S. individual and to

withdraw any foreign securities held by

beneficial owners that were subject to

different withholding rates (as for

example might be the case for charitable

organizations, pensions, and residents

of certain other countries holding

securities directly or indirectly in the

participant’s DTC account).

In addition, DTC now admits foreign

participants, which may be expected to

hold securities on behalf of beneficial

owners not meeting the criteria set forth

in the text of the Tax Certificate.7 With

regard to U.S. participants, most of

which executed the Tax Certificates in

the 1970s, it is doubtful that they have

systems in place to prevent the

prohibited deposits or to insure

withdrawal after book-entry delivery for

a prohibited beneficial owner. Also,

book-entry only securities are now

eligible for processing at DTC. In such

cases, a participant may be unable to

comply with the requirement that it

withdraw a security in the event it

becomes held by a beneficial owner not

meeting the criteria.

Under current investment practices,

beneficial owners of securities may now

hold securities through several layers of

custodians that cross country lines and

even through foreign central securities

depositories that have accounts at DTC.

Given these practices, DTC believes that

continued reliance on the Tax

Certificate, in which every participant

certifies that all beneficial owners have

the same withholding tax status as U.S.

individual residents, is no longer

realistic.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act 8

and the rules and regulations

thereunder because it promotes the

prompt and accurate clearance and

settlement of securities transactions

while ensuring the safeguarding of

funds and securities in DTC’s

possession or control.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impose any

burden on competition that is 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

DTC proposed eliminating the Tax

Certificate at meetings of the DTC

Foreign Tax Legal Working Group, most

recently at a meeting held on September

29, 1999, and requested comments from

the participant representatives that

comprise the group. No written

comments were received and the

members of the Foreign Tax Legal

Working Group concurred with the

proposal.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective pursuant to Section

19(b)(3)(A)(iii) of the Act 9 and Rule

19b–4(f)(4) 10 promulgated thereunder

because the proposed rule change

effects a change in an existing DTC

service that does not adversely affect the

safeguarding of securities or funds in

DTC’s custody or control or for which

DTC is responsible and does not

significantly affect DTC’s respective

rights and obligations or persons using

the service. 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, NW.,

Washington, DC 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

Room, 450 Fifth Street, N.W.,

Washington, DC. Copies of such filing

also will be available for inspection and

copying at DTC’s principal office. All

submissions should refer to File No.

SR–DTC–00–8 and should be submitted

by December 26, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30877 Filed 12–4–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43634; File No. SR–DTC–

00–15]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Relating to

DTAX Fees in Connection With

Providing Internet

November 29, 2000.

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

Securities Exchange Act of 1934

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

November 2, 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 interested parties.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change will allow

DTC to modify its current fees for its

domestic tax reporting service

(‘‘DTAX’’) in connection with providing

Internet access to the DTAX information

database.

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

75986 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Notices

2The Commission has modified the text of the

summaries prepared by DTC.

3For a description of DTAX, refer to Securities

Exchange Act Release No. 41105 (February 25,

1999), 64 FR 10523 (March 4, 1999) [File No. DTC–

99–02].

4Before expanding access to non-participants,

DTC will file a proposed rule change under Section

19(b) of the Act.

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

2The Commission has modified the text of the

summaries prepared by DTC.

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 revise current fees for

DTAX 3 in connection with providing

Internet access to the DTAX information

database.

DTAX is a data service containing tax

information on distributions received

with respect to domestic securities. It is

available through DTC’s PTS and CCF

facilities and effective on or about

December 1, 2000, will also be

accessible over the Internet through

DTC’s website.

Annual subscription fees for DTAX

accessed over the Internet will be as

follows:

$4,999 Unlimited interactive

inquiries and master file download of

all available CUSIPs.

$999 Unlimited interactive

inquiries.

Initially, DTAX will be available only

to participants although usage may be

expanded to include non-participant

customers at a later date.4

The proposed rule change is

consistent with the requirements

Section 17A of the Act and the rules and

regulations thereunder applicable to

DTC because fees will be equitably

allocated among users of DTC services.

(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

Written comments from DTC

participants or others have not been

solicited or received on the proposed

rule change.

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)(ii) of the Act and Rule 19b–

4(f)(2) thereunder, because the proposed

rule change is changing a due, fee or

other charge. At any time within 60

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, NW.,

Washington, DC 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, NW.,

Washington, DC 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–00–15 and

should be submitted by December 26,

2000.

For the Commission by the Division of

Market Regulations, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30878 Filed 12–04–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43631; File No. SR–DTC–

00–14]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Relating to

Creating a United States Withholding

Tax Service Available Through The

Depository Trust Company’s Elective

Dividend Service

November 28, 2000.

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

Securities Exchange Act of 1934

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

October 31, 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 interested parties.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change would

allow DTC to institute a U.S.

withholding tax service available to

foreign participants beginning January

1, 2001, in which DTC will act as

withholding agent to deduct and

withhold U.S. tax on U.S.-source

income paid to foreign participants.

II. Self-Regulatory Organization’s

Statement of 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 institute a U.S. withholding

tax service available to foreign

participants beginning January 1, 2001,

in which DTC will act as withholding