9474 Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices

28 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.

3For a more detailed description of the Foreign

Tax Withholding Service, refer to Securities

Exchange Act Release No. 3211 (April 19, 1993), 58

FR 22003 [File No. SR–DTC–92–17] (notice of filing

and immediate effectiveness relating to eligibility in

the foreign securities option of the existing elective

dividends function).

4EDS was developed for issues from foreign

countries that have tax treaties with the U.S. that

permit the withholding of foreign taxes from

distributions of foreign issues at different rates for

different classes of beneficial owners. EDS enables

a DTC participant to use PTS to certify the number

of foreign securities credited to the participant’s

account as of the record date that are entitled to

favorable tax treatment at source (i.e., the tax

exempt benefit to which the participant is entitled

will be included in the payment DTC receives from

the foreign payor). Without this service, many DTC

participants that are entitled to favorable tax

treatment find the procedures for claiming refunds

so burdensome that they forgo their refund and

thereby frustrate the purpose of the tax treaty.

5Securities Exchange Act Release No. 31673

(December 30, 1992), 58 FR 3046 [File No. SR–

DTC–92–16] (order approving proposed rule

change).

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 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

Room, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of DTC.

All submissions should refer to the

file number SR–DTC–97–01 and should

be submitted by March 24, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland

Deputy Secretary.

[FR Doc. 97–5079 Filed 2–28–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38333; File No. SR–DTC–

97–02]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

a Proposed Rule Change Relating to

Fees and Charges

February 24, 1997.

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

Securities Exchange Act of 1934

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

February 3, 1997, 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 from interested

persons on the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change establishes

fees for DTC’s Foreign Tax Withholding

Service and Non-Transferable Issue

Safekeeping Service and eliminates the

fee DTC charges its participants for

unnecessary inquiries.

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

(1) Foreign Tax Withholding Service Fee

DTC’s Foreign Tax Withholding

Service allows DTC participants to

certify to foreign-issue paying agents for

DTC-eligible issues the tax-treaty and,

where applicable, the tax exempt

withholding rates that they are entitled

to based on the tax classes of their

customers.3 DTC’s participants make the

certification to the foreign-issue paying

agents by using the Elective Dividend

Service (‘‘EDS’’) which is supported by

DTC’s Participant Terminal System

(‘‘PTS’’). This procedure eliminates the

need for processing more complex and

time-consuming reclamations of

previously withheld taxes.4

According to DTC, it has expended

considerable time and incurred

significant legal fees to implement the

Foreign Tax Withholding Service and

continues to devote its resources to

monitoring individual distributions to

ensure that existing arrangements are

processed correctly or to facilitate any

special arrangements, if necessary. DTC

also states that the processing of

withholding certifications on individual

distributions sometimes requires DTC’s

staff to contact the participant to obtain

additional information to complete the

certifications. Accordingly, the

proposed rule change establishes a fee

for DTC’s Foreign Tax Withholding

Service of $7.00 per CUSIP regardless of

the number of tax classifications

requested by a participant for a single

CUSIP. This fee is in addition to the

cash or stock dividend fee, as

applicable, which is charged on a per

credit basis.

(2) Non-Transferable Issue Safekeeping

Fee

DTC established the Non-Transferable

Issue Safekeeping Service to allow

nontransferable securities to be

deposited at DTC.5 The service requires

DTC’s staff to periodically follow up on

each nontransferable security (i.e.,

generally, at least annually) to

determine the issuer’s status in its state

of incorporation, to determine if the

issue is again transferable, and to make

the results of these inquiries available to

interested participants.

According to DTC, as a result of its

absorption of the Midwest Securities

Trust Company, the number of

nontransferable issues on DTC’s books

has doubled from roughly 8,000 to more

than 16,000. DTC also believes that the

ongoing effort and cost to carefully

monitor these additional nontransferable issues should be

apportioned among those holding

positions in these securities. Therefore,

the proposed rule change establishes a

fee for DTC’s Non-Transferable Issue

Safekeeping Service of $.17 per CUSIP

per month in addition to regular

monthly long position charges for these

issues.

(3) Elimination of Fees Regarding

Unnecessary Dividend, Reorganization

and Reconciliation Inquiries

Currently, DTC charges its

participants $6.00 when a participant

submits certain unnecessary inquiries

for processing at DTC’s Dividends,

Reconciliation, and Reorganization

departments. DTC classifies an inquiry

as unnecessary if a participant could

have obtained the information

independently from automated DTC

sources readily available to a participant

rather than have DTC staff conduct the

research. An inquiry with incomplete or

inaccurate data from a participant also

is considered unnecessary. Because the

average daily volume of unnecessary
Federal Register / Vol. 62, No. 41 / Monday, March 3, 1997 / Notices 9475

6 15 U.S.C. 78q–1.

7 15 U.S.C. 78s(b)(3)(A)(ii).

8 17 CFR 240.19b–4(e)(2).

9 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 MBSCC.

3 15 U.S.C. 78q–1(b)(3)(D).

inquiries has declined to less than

twenty submissions, DTC proposes to

eliminate the fee related to such

unnecessary inquiries.

DTC believes the proposed rule

change is consistent with the

requirements of Section 17A of the Act 6

and the rules and regulations

thereunder because DTC’s fees will be

more equitably allocated among DTC

participants. DTC also believes that the

proposed rule change will not affect the

safeguarding of the 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 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

Written comments from DTC

participants 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) 7 of the Act and pursuant

to Rule 19b–4(e)(2) 8 promulgated

thereunder because the proposal

establishes or changes a due, fee, or

other charge imposed by DTC. 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, NW.,

Washington, DC 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, 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–97–02 and

should be submitted by March 24, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–5080 Filed 2–28–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38330; File No. SR–

MBSCC–97–01]

Self-Regulatory Organizations; MBS

Clearing Corporation; Notice of Filing

and Immediate Effectiveness of a

Proposed Rule Change Relating to

Modification of Electronic Pool

Notification Fee Schedule

February 24, 1997.

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

Securities Exchange Act of 1934

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

January 29, 1997, the MBS Clearing

Corporation (‘‘MBSCC’’) 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 MBSCC. 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 makes

technical modifications to the schedule

of charges for the Electronic Pool

Notification (‘‘EPN’’) service.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

MBSCC 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. MBSCC 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

The purpose of the proposed rule

change is to make technical

modifications to the schedule of charges

for the EPN service. The EPB schedule

of charges currently reflects that MBSCC

charges its participants access fees for

connectivity to the EPN service based

on each circuit that they have to

MBSCC’s MetroTech facility only.

However, MBSCC also charges its

participants access fees for each circuit

that they have to MBSCC’s Water Street

facility. The proposed rule change

modifies the EPN schedule of charges to

reflect that MBSCC charges its access

fees ‘‘per circuit to MetroTech and

Water Street.’’

The proposed rule change also makes

an additional technical modification to

the EPN schedule of charges to delete

the reference to an AutoLink Request.

AutoLink was a method to request a

retransmission of previously transmitted

messages. Participants no longer use

AutoLink but instead use the

Retransmission Request as the method

to request a retransmission of previously

transmitted messages.

MBSCC believes that the proposed

rule change is consistent with Section

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

and regulations thereunder because it

provides for the equitable allocation of

reasonable dues, fees, and other charges

among MBSCC’s participants.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

MBSCC 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

No written comments have been

solicited or received. MBSCC will notify

the Commission of any written

comments received by MBSCC.