75746 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

30 15 U.S.C. 78f(b)(5).

31Telephone conversation between James M.

Flynn, Staff Attorney, CSE, and Michael Gaw,

Attorney-Adviser, Division of Market Regulation,

Commission, on November 1, 2000.

32 15 U.S.C. 78s(b) See supra note 25.

33 15 U.S.C. 78f(b)(6).

34 15 U.S.C. 78s(b)(2).

35 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3 In Amendment No. 1, the CSE requested

accelerated effectiveness of the proposed rule

change and provided reasons therefore. See Letter

from James M. Flynn, Staff Attorney, CSE, to

Michael Gaw, Attorney-Advisor, Division of Market

Regulation, Commission (November 16, 2000). The

CSE in fact meant to request accelerated approval

of the proposal in Amendment No. 1. Telephone

conversation between James M. Flynn, Staff

Attorney, CSE, and Michael Gaw, Attorney-Adviser,

Division of Market Regulation, Commission, on

November 21, 2000. Amendment No. 1 also

corrected a typographical error in the proposed rule

text.

4 17 CFR 240.19b–4(e).

of fair and orderly markets. Specifically,

the proposed generic listing standards

require that a minimum of 100,000

shares of a series of Index fund Shares

be outstanding as of the start of trading.

The Commission believes that this

minimum number of securities is

sufficient to establish a liquid market at

the commencement of trading.

The Commission believes that the

proposed generic listing standards

ensure that the securities composing the

underlying indexes and portfolios are

well capitalized and actively traded.

These capitalization and liquidity

criteria serve to prevent fraudulent or

manipulative acts, and are therefore

consistent with Section 6(b)(5) of the

Act. Furthermore, the Commission finds

that the Exchange’s proposal to trade

Index Fund Shares in increments of 1⁄16, 1⁄32, or 1⁄64, of $1.00, until the Exchange

is required to convert to decimal

trading, is consistent with the Act.

The Exchange also represents that the

Reporting Authority will disseminate

for each series of Index Fund Shares an

estimate, updated every 15 seconds, of

the value of a share of each series. The

Commission believes that the

information the Exchange proposes to

have disseminated will provide

investors with timely and useful

information concerning the value of

each series.

The Commission also notes that

certain concerns are raised when a

broker-dealer is involved in both the

development and maintenance of a

stock index upon which products such

as Index Fund Shares are based. The

proposal requires that, in such

circumstances, the broker-dealer must

have procedures in place to prevent the

misuse of material, non-public

information regarding changes and

adjustments to the index, and that the

index value be calculated by a third

party who is not a broker-dealer. The

Commission believes that these

requirements should help address

concerns raised by a broker-dealer’s

involvement in the management of such

an index.

In its proposed generic listing

standards, the CSE represents that it

will rely upon its existing surveillance

procedures for supervision of trading in

Index Fund Shares listed or traded

pursuant to Rule 19b–4(e). The

Commission believes that these

surveillance procedures are adequate to

address concerns associated with listing

and trading Index Fund Shares,

including those listed or traded under

the generic standards. Accordingly, the

Commission believes that the rules

governing the trading of such securities

provide adequate safeguards to prevent

manipulative acts and practices and to

protect investors and the public interest,

consistent with Section 6(b)(5) of the

Act.30 The Commission further notes

that the Exchange has represented that

it will file form 19b–4(e) with the

Commission within five business days

of commencement of trading a series

under the generic standards, and will

comply with all Rule 19b–4(e)

recordkeeping requirements.31

The Commission finds good cause for

approving the proposed rule change and

Amendment No. 1 thereto prior to the

thirtieth day after the date of

publication of notice thereof in the

Federal Register. The Commission notes

that the CSE’s proposal regarding the

listing and trading of Index Fund Shares

will be substantially similar to the rules

for similar products traded on other

exchanges that the Commission has

previously approved, and that they raise

issues that previously have been the

subject of a full comment period under

Section 19(b) of the Act.32 The

Commission does not believe that the

proposal raises novel regulatory issues

that were not addressed in the previous

filings. Accordingly, the Commission

finds that there is good cause, consistent

with Section 6(b)(5) of the Act,33 to

approve the proposed rule change and

Amendment No. 1 on an accelerated

basis.

It Is Therefore Ordered, pursuant to

Section 19(b)(2) of the Act,34 that the

proposed rule change (SR–CSE–00–06)

and Amendment No. 1 thereto are

hereby approved on an accelerated

basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.35

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30719 Filed 12–1–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43604; File No. SR–CSE–

00–05]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change and Amendment No. 1

Thereto by the Cincinnati Stock

Exchange, Inc. Relating to the Listing

and Trading of Trust Issued Receipts

November 21, 2000.

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

Securities Exchange Act of 1934

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

notice is hereby given that on October

13, 2000, the Cincinnati Stock

Exchange, Inc. (‘‘CSE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I and II below, which Items have

been substantially prepared by the

Exchange. On November 17, 2000, the

CSE filed Amendment No. 1 to the

proposed rule change.3 The Commission

is publishing this notice to solicit

comments on the proposed rule change

and Amendment No. 1 from interested

persons, and to grant accelerated

approval of the proposed rule change

and Amendment No. 1.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CSE proposes to amend its listing

standards for Trust Issued Receipts

(‘‘TIRs’’) to establish generic standards

that permit listing and trading, or

trading pursuant to unlisted trading

privileges (‘‘UTP’’), of TIRs pursuant to

Rule 19b–4(e) under the Act.4 The text

of the proposed rule change is available

at the principal office of the CSE and at

the Commission.

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75747

5See Exchange Act Release No. 43024 (July 17,

2000), 65 FR 45640 (July 24, 2000).

6See CSE Chapter XI, Rule 11.9(w)(3).

7See CSE Chapter XI, Rule 11.9(w)(1). However,

exceptions exist where a trading rule is inconsistent

with the TIR listing standards or where the context

otherwise requires. See id.

8See CSE Chapter XI, Rule 11.9(w)(4)(a).

9See CSE Chapter XI, Rule 11.9(w)(4)(b).

10 15 U.S.C. 78l.

11 15 U.S.C. 78f(b).

12 15 U.S.C. 78f(b)(5).

13 17 CFR 240.19b–4(e).

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

CSE 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 III below. The Exchange 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

The Exchange proposes to amend CSE

Chapter XI, Rule 11.9(w) (Trust Issued

Receipts), to establish generic standards

that permit listing and trading, or

trading pursuant to UTP, of TIRs

pursuant to Rule 19b–4(e) under the

Act.

On July 17, 2000, the Commission

approved a CSE proposal to adopt

certain listing standards for TIRs and to

trade two kinds of TIR—Internet

HOLDRs and Biotech HOLDRs—

pursuant to UTP.5 This proposal

included new rules stating that the CSE

may trade, whether by listing or

pursuant to UTP, TIRs based on one or

more securities.6 In addition, the new

rules provided that the Exchange’s

Constitution and all other rules and

policies of the Board of Trustees apply

to the trading of TIRs on the Exchange.7

For each trust, the CSE will establish a

minimum number of TIRs required to be

outstanding at the time of

commencement of trading on the

Exchange.8 In addition, following the

initial 12-month period after formation

of a trust and commencement of trading

on the Exchange, the CSE will consider

the suspension of trading in, or removal

from listing of a trust upon which a

series of TIRs is based, under any of the

following circumstances: (1) The trust

has more than 60 days remaining until

termination and there are fewer than 50

record and/or beneficial holders of TIRs

for 30 or more consecutive trading days;

(2) the Trust has more than 50,000

receipts issued and outstanding; (3) the

market value of all receipts issued and

outstanding is less than $1,000,000; or

(4) if any other event shall occur or

condition exists which, in the opinion

of the Exchange, makes further dealings

on the Exchange inadvisable.9

The CSE now intends to trade

additional TIR products (e.g.,

Pharmaceutical HOLDRs and

Telecommunications HOLDRs) that

currently are listed on other exchanges

and that are developed from time to

time. To accommodate the efficient

listing or trading, or trading pursuant to

UTP, of additional TIRs, the CSE

proposes to add a new Interpretation to

the Exchange’s existing rules that would

establish generic standards for the

listing and trading of TIRs pursuant to

Rule 19b–4(e). Under the new

Interpretation, the Exchange could list

or trade, pursuant to Rule 19b–4(e), any

TIRs that meet the following additional

criteria: (1) Each security underlying the

TIR must be registered under Section 12

of the Act; 10 (2) each company whose

securities are underlying securities for

the TIR must have a minimum public

float of at least $150 million; (3) each

security underlying the TIR must be

listed on a national securities exchange

or traded through the facilities of

Nasdaq as a reported national market

system security; (4) each company

whose securities are underlying

securities for the TIR must have an

average daily trading volume of at least

100,000 shares during the preceding 60-

day trading period; (5) each company

whose securities are underlying

securities for the TIR must have an

average daily dollar value of shares

traded of at least $1 million; and (6) the

most heavily weighted security in the

TIR cannot initially represent more than

20 percent of the overall value of the

TIR.

The CSE believes that these additional

criteria will ensure that no security

included as an underlying security in a

TIR product will be readily susceptible

to manipulation, while at the same time

permitting sufficient flexibility in the

construction of various TIRs to meet

investors’ needs. The CSE also believes

that these criteria will ensure sufficient

liquidity for those investors seeking to

purchase and deposit the underlying

securities with the trustee to create a

new TIR.

2. Statutory Basis

The CSE believes that the proposed

rule change is consistent with Section

6(b) of the Act 11 in general, and furthers

the objectives of Sections 6(b)(5) 12 in

particular, in that it is designed to

promote just and equitable principles of

trade; to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system; and, in general, to protect

investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The CSE does not believe that the

proposed rule would impose any

inappropriate burden on competition.

The CSE believes that the proposed rule

would encourage competition among

markets by allowing more than one

exchange to list and trade TIRs pursuant

to Rule 19b–4(e) under the Act.13

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments were solicited

or received in connection with the

proposed rule change.

III. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change and Amendment No. 1 are

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, 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 at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to File No.

SR–CSE–00–05 and should be

submitted by December 26, 2000.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change and Amendment

No. 1

The Commission finds that the

proposed rule change and Amendment

No. 1 are consistent with the

75748 Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices

14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78s(b). 16 15 U.S.C. 78f(b)(5). In approving these rules,

the Commission notes that is has considered the

proposed rules’ impact on efficiency, completion,

and capital formation. See 15 U.S.C. 78c(f). 17See Exchange Act Release No. 43396

(September 29, 2000), 65 FR 60230 (October 10,

2000). 18See Exchange Act Release No. 40761

(December 8, 1998), 63 FR 70952 (December 22,

1998) (adopting release for Rule 19b–4(e)).

19See Exchange Act Release No. 43042 (July 17,

2000), 65 FR 45640 (July 24, 2000).

20 15 U.S.C. 78f(b)(5).

21See 65 FR at 45643.

22 15 U.S.C. 78f(b)(5).

23See 65 FR 45643–44.

24 17 CFR 249.820.

25See 17 CFR 19b–4(e)(2).

26 15 U.S.C. 78f(b)(5).

27See supra note 17.

requirements of the Act and the rules

and regulations thereunder applicable to

a national securities exchange and, in

particular, with the requirements of

Section 6(b)(5).14 Specifically, the

Commission finds that establishing

generic standards to permit listing and

trading of TIRs pursuant to Rule 19b–

4(e) will further the intent of that rule

by facilitating commencement of trading

in these securities without the need for

notice and comment and Commission

approval under Section 19(b) of the

Act.15 By establishing generic standards,

the proposal should reduce the CSE’s

regulatory burden, as well as benefit the

public interest, by enabling the

Exchange to bring qualifying products to

the market more quickly. Accordingly,

the Commission finds that the CSE’s

proposal will promote just and equitable

principles of trade; foster cooperation

and coordination with persons engaged

in regulating, clearing, settling,

processing information with respect to,

and facilitating transactions in

securities; and, in general, protect

investors and the public interest

consistent with Section 6(b)(5) of the

Act.16 Furthermore, the Commission

notes that it has previously approved

similar proposals by the Chicago Stock

Exchange (‘‘CHX’’) and the American

Stock Exchange (‘‘Amex’’) to establish

generic listing standards for TIRs.17

Rule 19b–4(e) provides that the listing

and trading of a new derivative

securities product by an SRO shall not

be deemed a proposed rule change,

pursuant to paragraph (c)(1) of Rule

19b–4, if the Commission has approved,

pursuant to Section 19(b) of the Act, the

SRO’s trading rules, procedures, and

listing standards for the product class

that include the new derivative

securities product and the SRO has a

surveillance program for the product

class.18 The Commission’s approval of

the proposed generic listing standards

for TIRs and the CSE will allow TIRs

that meet those standards to start

trading pursuant to Rule 19b–4(e)

without the need for notice an comment

and Commission approval. The

Exchange’s ability to rely on Rule 19b–

4(e) for these products potentially

reduces the time frame for bringing

these securities to the market and thus

enhances investors’ opportunities. The

Commission notes that, while the

proposal reduces the Exchange’s

regulatory burden, the Commission

maintains regulatory oversight over any

TIRs listed under the generic standards

through regular inspections.

The Commission has previously

approved a CSE proposal to establish

certain listing standards for TIRs and to

trade two series of TIRs (Internet

HOLDRs and Biotech HOLDRs)

pursuant to UTP.19 In approving these

securities for trading, the Commission

considered their structure, their

usefulness to investors and the markets,

and the CSE’s rules and surveillance

programs that govern their trading, and

determined that the CSE proposal was

consistent with Section 6(b)(5) of the

Act.20 The Commission also believes

that additional TIRs, that satisfy the

proposed generic standards and thus

can be listed or traded pursuant to Rule

19b–4(e) without prior Commission

approval, should produce the same

benefits to the CSE and to investors. As

the Commission noted in the prior

approval, trading of these products will

be subject to the full panoply of rules

and procedures that govern the trading

of securities on the CSE, including,

among others, rules and procedures

governing trading halts, disclosures to

members, responsibilities of the

specialist, account opening and

customer suitability requirements, the

election of a stop or limit order, and

margin.21

The Commission further finds that: (1)

By requiring that the underlying

securities in a TIR be registered under

Section 12 of the Act and listed on a

national securities exchange or Nasdaq;

and (2) by establishing minimum values

for the number of outstanding receipts,

average daily trading volume, average

daily dollar volume, and public float,

the Exchange’s proposed listing criteria

will help to ensure that a minimum

level of liquidity will exist to allow for

the maintenance of fair and orderly

markets for those trust issued receipt

products listed and traded pursuant to

Rule 19b–4(e). The Commission believes

that these listing criteria will help to

ensure that no security underlying a TIR

will be readily susceptible to

manipulation, while permitting

sufficient flexibility in the construction

of various TIRs to meet investors’ needs.

The Commission further believes that

these criteria should help to ensure that

the securities underlying such TIRs are

well capitalized and actively traded,

which will help ensure that U.S.

securities markets are not adversely

affected by the listing and trading of

new TIRs under Rule 19b–4(e).

Accordingly, the Commission finds that

these criteria are consistent with Section

6(b)(5) of the Act because they serve to

prevent fraudulent or manipulative acts,

to promote just and equitable principles

of trade, to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system, and to protect investors and the

public interest.22

The Commission further notes that, in

connection with its previous review and

approval of the trading of two series of

TIRs on the CSE, it approved the

Exchange’s surveillance procedures and

disclosure and prospectus delivery

requirements for TIRs.23 In accord with

these previous findings, the

Commission believes that these rules,

which will govern the trading of TIRs

pursuant to Rule 19b–4(e), will provide

adequate safeguards to prevent

manipulative acts and practices and to

protect investors and the public interest.

Finally, the Commission notes that

the CSE, when trading a new derivative

securities product under Rule 19b–4(e),

must comply with certain recordkeeping

requirements pertaining to each such

product and must file Form 19b–4(e) 24

with the Commission within five

business days after commencement of

trading a new TIR under the generic

standards.25

In conclusion, the Commission

believes that the CSE’s proposed rules

governing the listing and trading of TIRs

pursuant to Rule 19b–4(e) will provide

adequate safeguards to prevent

manipulative acts and practices and to

protect investors and the public interest,

consistent with Section 6(b)(5) of the

Act.26

The Commission finds good cause for

approving the proposed rule change and

Amendment No. 1 thereto prior to the

thirtieth day after the date of

publication of notice in the Federal

Register, pursuant to Section 19(b)(2) of

the Act. The Commission notes that the

generic listing standards for TIRs at the

CSE will be substantially similar to the

listing standards at the Amex and CHX

that the Commission has approved in

the past.27 The Commission also

observes that the proposal concerns

issues that previously have been the

Federal Register / Vol. 65, No. 233 / Monday, December 4, 2000 / Notices 75749

28 15 U.S.C. 78s(b). See supra note 17.

29 15 U.S.C. 78f(b)(5).

30 15 U.S.C. 78s(b)(2).

31 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 DTC.

3 DTC charges a fee of $2,700 in connection with

low volume tender offers processed through its

facilities. Securities Exchange Act Release No.

41032, (February 9, 1999) 64 FR 7931 (February 17,

1999) [File No. SR–DTC–99–01]. DTC will continue

to charge that fee, which is not affected by the

proposed rule change.

subject of a full comment period

pursuant to Section 19(b) of the Act.28

The Commission does not believe that

the proposal raises novel regulatory

issues that were not addressed in the

previous filings. Accordingly, the

Commission finds that there is good

cause, consistent with Section 6(b)(5) of

the Act,29 to approve the proposed rule

change and Amendment No. 1 on an

accelerated basis.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,30 that the

proposed rule change (SR–CSE–00–05)

and Amendment No. 1 thereto are

hereby approved on an accelerated

basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.31

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30770 Filed 12–1–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43624; File No. SR–DTC–

00–13]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Order Granting Accelerated

Approval of a Proposed Rule Change

Related to the Processing of Low

Volume Tender Offers

November 27, 2000.

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

Securities Exchange Act of 1934

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

September 29, 2000, The Depository

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

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I and II

below, which items have been prepared

primarily by DTC. The Commission is

publishing this notice and order to

solicit comments from interested

persons and to grant accelerated

approval of the proposal.

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 clarify the policy of DTC

regarding low volume tender offers. A

low volume tender offer is an offer in

which the offeror is seeking to purchase

for cash up to 5% of the outstanding

shares of an equity issue or any amount

of a debt issue. Low volume tender

offers do not include an exchange offer

or an offer by the issuer of the target

security. The proposed rule change

clarifies that it is DTC’s policy (i) not to

make an offeror’s information about a

low volume tender offer available to

participants through DTC’s

Reorganization Inquiry for Participants

System (‘‘RIPS’’) unless the offeror uses

DTC’s Automated Tender Offer Program

(‘‘ATOP’’) to process the offer and (ii)

not to make securities available to the

offeror at the conclusion of a low

volume tender offer processed through

ATOP until DTC has received payment

for the securities from the offeror.

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.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

As DTC has gained experience in

processing low volume tender offers

during recent years, DTC has sought to

improve the manner in which it handles

such offers. In a small number of cases,

the offeror making a low volume tender

offer sent DTC information to be entered

into RIPS and paid DTC’s low volume

tender offer fee 3 but did not use ATOP

to process acceptances of the offer. In

such cases the offeror included in the

offering documents an instruction that

participants who wished to accept the

offer should do so by a free book-entry

delivery at DTC to the account of a

participant represented to be acting on

behalf of the offeror. Participants

accepting such an offer did not have all

the benefits of ATOP. Those benefits

include more detailed information in

the RIPS announcement, such as

information about the existence of any

withdrawal rights in the offer and

information about the offeror’s payment

arrangements, and an indication on

their daily participant statements while

the offer is open that a tendered position

is outstanding. In order to assure that its

participants receive the benefits of

ATOP, as a matter of policy DTC does

not announce a low volume tender offer

in RIPS unless the offer is processed

through ATOP.

When a low volume tender offer is not

processed through ATOP, payment for

any securities purchased in the offer

usually, if not always, are made to

participants outside of DTC’s facilities.

It can be difficult for participants to

assure themselves that securities

delivered to the offeror by a free bookentry delivery at DTC are promptly paid

for at the end of the offer. To give its

participants the efficiency and

safeguards of payment through DTC’s

facilities, DTC requires the offeror in a

low volume tender offer processed

through ATOP to send payment to DTC

for any securities purchased in the offer

before DTC makes the securities

available to the offeror.

The proposed rule change is

consistent with the requirements of the

Act and the rules and regulations

thereunder applicable to DTC since the

proposed rule change will facilitate the

processing of low volume tender offers

at DTC. 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 since low volume

tender offers will be processed with the

safeguards of the ATOP procedures.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC perceives no adverse 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. 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 Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder and

particularly with the requirements of