75984 Federal Register / Vol. 65, No. 234 / Tuesday, December 5, 2000 / Notices

4Currently, an order of the Massachusetts

Department of Telecommunications and Energy

limits WMECO’s authority to make loans under the

Money Pool to CL&P and HWP and three nonutility

subsidiaries. WMECO has requested that the

Commission reserve jurisdiction over its authority

to lend to other Money Pool participants, pending

completion of the record. PSNH may not lend to the

Money Pool participants under a New Hampshire

Public Utilities Commission (‘‘NHPUC’’) order

authorizing such lending, subject to the elimination

of certain write-offs associated with restructuring

mandated by the NHPUC. WMECO and PSNH may

borrow from the Money Pool.

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

2A copy of the Tax Certificate is set forth in

Exhibit 2 of DTC’s proposed rule change, which is

available through the Commission’s Public

Reference Room or through DTC.

3The Commission has modified the text of the

summaries prepared by DTC.

4 It has been DTC’s practice to require applicants

to submit the Tax Certificate prior to becoming DTC

participants in order to continue as a participant.

Under the proposed rule change, applicants will no

longer be required to submit the certificate, and all

such certificates previously submitted will be null

and void.

5The Tax Certificate defines a ‘‘foreign security’’

as ‘‘any security any income from which would be

subject to withholding tax imposed by any country

other than the United States.’’

NU to the Utility Subsidiaries and

Money Pool borrowings.

In particular, the Applicants propose

that any Notes issued by NU or the

Utility Subsidiaries will bear interest at

a rate not exceeding 500 basic points

over the base rate in effect from time to

time of the lending institution or the

base rate of a representative institution.

The Notes may be secured or unsecured

and will mature no later than 364 days

from the date of their issuance. The

Applicants further propose that Paper

issued by NU, WMECO, CL&P, Yankee

Gas and PSNH (‘‘Issuers’’) will be issued

at rates not exceeding the annual rate

prevailing at the time of issuance for

commercial paper of comparable

qualities and maturities. The Paper will

mature no later than 270 days from the

date of issuance and will not be

repayable prior to maturity. The

Applicants state that each of the Issuers

will not issue Paper unless the effective

cost of the Paper will be equal to or less

than that for the issuance of Notes in an

amount at least equal to the principal

amount of Paper proposed to be issued.

The Applicant finally propose,

through the New Authorization Period,

that the Subsidiaries be authorized to

borrow from NU and each other, and to

lend to each other under the Money

Pool, as authorized in the Prior Orders

and subject to the Debt Limitation.4

Service will continue to administer the

Money Pool under the same terms and

conditions approved by the Commission

in the Prior Orders. The Applicants state

that all other terms, conditions,

limitations and reporting obligations

contained in the Prior Orders will apply

to the proposed transactions.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30875 Filed 12–4–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43628; File No. SR–DTC–

00–8]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Relating to the

Tax Certificate as to Beneficial

Ownership

November 28, 2000.

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

Securities Exchange Act of 1934

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

June 1, 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 by DTC. 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 eliminates

the requirement for DTC’s participants

to submit a ‘‘Tax Certificate as to

Beneficial Ownership’’ form.2

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 that 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.3

A. Self-Regulatory Organization’s

Statement of the Purpose of, and the

Statutory Basis for, the Proposed Rule

Change

The proposed rule change eliminates

the requirement that DTC participants

file a ‘‘Tax Certificate as to Beneficial

Ownership’’ form (‘‘Tax Certificate’’).4

The Tax Certificate requires participants

to certify that each beneficial owner of

a ‘‘foreign security’’ 5 credited to the

participant’s DTC account will be

entitled to the same reduction in rate or

exemption from any applicable

withholding tax as would apply if the

owner of such foreign security were an

individual citizen of the United States

who (1) was a resident in the United

States and (2) who had no connection

with the jurisdiction imposing the tax

that would affect the rate at which the

tax is to be withheld or an exemption

from the tax. By submitting the Tax

Certificate, participants also represent

that they will withdraw from custody

outside of DTC any foreign security

which becomes beneficially owned by a

person not entitled to such tax

treatment.

DTC began requiring the Tax

Certificate in 1976, in conjunction with

DTC’s program to make foreign

securities eligible for a full range of DTC

services, in order to stop its participants

from depositing at DTC physical

certificates evidencing foreign issues

beneficially owned by customers

(primarily foreign persons) not entitled

to a treaty rate or to an exemption.

Based on the Tax Certificate, issuers

could make payment of dividends and

other distributions on foreign securities

at single rate without regard to the

varying withholding tax rates that might

otherwise apply.

DTC believes that developments in

industry practices and DTC initiatives

over the last twenty years make

continued reliance upon the Tax

Certificate inappropriate and

unnecessary. Reliance on the Tax

Certificate is no longer necessary

because DTC has developed the

TaxRelief service over DTC’s Elective

Dividend Service (‘‘EDS’’). Using this

service, DTC can solicit certifications

from participants regarding the

characteristics of beneficial owners of

foreign securities held in the

participant’s account at DTC. The

certification can reflect various

categories of the tax attributes of the

beneficial owners, as relevant under the

tax laws of the foreign jurisdictions and

any relevant tax treaties, and in

accordance with the extent of the

participant’s knowledge of the

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