63554 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Notices

14 15 U.S.C. 78s(b)(2) (1988).

15 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b)(1) (1988).

2Letter from Piku K. Thakkar, Assistant Counsel,

DTC, to Mark Steffensen, Esq., Division of Market

Regulation (‘‘Division’’), Commission (October 26,

1995).

3The Commission has modified the text of the

summaries prepared by DTC.

4The validity of the coupon number, bond

number, payable date, and payable amount of the

mutilated coupon will be guaranteed by the

depositing participant by a stamp affixed to the

coupon executed by an authorized officer of such

participant. In cases of a badly mutilated coupon,

DTC may require a letter of indemnity. In the event

a paying agent rejects a mutilated coupon, any

credit made to the depositing participant’s account

with respect to such coupon will be reversed.

Telephone conversation between Piku K. Thakkar,

Assistant Counsel, DTC; Ann Reich, DTC; and Mark

Steffensen, Attorney, Division, Commission

(October 17, 1995).

5When the coupons are due in the future, each

deposit ticket can have up to 50 shells attached to

it, but each of the attached shells must have the

same payable date. For past due coupons, shells

with different deposit dates may be listed on the

same deposit ticket. Letter from Piku K. Thakkar,

Assistant Counsel, DTC, to Mark Steffensen, Esq.,

Division, Commission (October 26, 1995).

6A ‘‘stopped certificate’’ is a certificate for which

a stop transfer instruction has been requested. A

stop transfer instruction typically is initiated as the

result of a lost or stolen stock certificate. Telephone

conversation between Piku K. Thakkar, Assistant

Counsel, DTC, and Mark Steffensen, Attorney,

Division, Commission (September 26, 1995).

consistent with the requirements of the

Act.

IV. Conclusion

For the reasons discussed above, the

Commission finds that the proposal is

consistent with the Act, and, in

particular, Section 6 of the Act.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,14 that the

proposed rule change (File No. SR–

CBOE–95–49) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.15

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30073 Filed 12–8–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36545; File No. SR–DTC–

95–18]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing of a Proposed Rule Change to

Establish a Coupon Collection Service

for Municipal Bearer Bonds

December 1, 1995.

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

Securities Exchange Act of 1934

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

September 18, 1995, The Depository

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

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change (File No. SR–DTC–95–18) as

described in Items I, II, and III below,

which items have been prepared

primarily by DTC. On October 30, 1995,

DTC filed an amendment to the

proposed rule change.2 The Commission

is publishing this notice to solicit

comments on the proposed rule change

for interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

DTC is filing the proposed rule

change to establish a coupon collection

service program in order to provide its

participants with a cost effective

method for the collection of interest

relating to the coupons from municipal

bearer bonds.

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 Items IV below. DTC has prepared

summaries, set forth in sections (A), (B),

(C) below, of the most significant

aspects of such statements.3

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

DTC seeks to establish a coupon

collection service in order to provide

DTC’s participants with a cost-effective

method for the collection of interest

relating to the coupons from municipal

bearer bonds. This service will include

collection of coupons which are due in

the future as well as past due coupons

for DTC eligible and ineligible

municipal issues payable in the United

States. Past due coupons will be

accepted for up to three years after the

payable date.

DTC participants will be required to

deposit coupons in a standard sealed

envelope or ‘‘shell’’ with no more than

two hundred coupons contained in any

one shell. Only coupons for the same

CUSIP number, series, and payable date

can be enclosed in any one shell.

Mutilated coupons will be required to

be guaranteed by the depositing

participant and placed into separate

shells.4 DTC will require that each shell

contain the following information on its

face: (i) CUSIP number; (ii) a description

of the issue including municipality,

state, purpose, series, date of issue, and

maturity date; (iii) payable date; (iv)

quantity of coupons enclosed; (v) dollar

value of individual coupons; (vi) total

shell value; (vii) participant number;

and (viii) contact name and telephone

number of the depositing participant.

All shells must be accompanied by a

complete deposit ticket that includes: (i)

DTC participant number; (ii) shell

quantity; (iii) total dollar value; (iv)

CUSIP number per shall; (v) coupon

quantity per shell; (vi) dollar value per

shell; and (vii) whether the coupons are

payable on a future date or are past

due.5

DTC will verify the number of shells

listed on the deposit ticket and give the

participant a time-stamped copy of the

ticket. If the number of shells listed on

the deposit ticket does not agree with

the physical number of shells, DTC will

immediately reject the entire deposit

and will return it to the participant.

DTC will neither inspect nor verify the

shell contents prior to presentation to

the paying agent. The depositing

participant is responsible for the

integrity of the shell contents. In the

event of a coupon shell loss, the

participant will be required to provide

DTC with a full description (including

certificate number) of the coupons

contained in the shell.

Coupons may be rejected by the

paying agent and returned to the

depositing participant for a variety of

reasons. The most common reasons for

rejection are likely to include: (i) Mixed

shell contents including mixed payable

dates, mixed series or purposes, or

mixed maturity years; (ii) incorrect

count of shell contents; (iii) called

certificate; (iv) mutilated coupon; (v)

stopped certificate; 6 or (vi) issue in

default.

DTC will act simply as a conduit

between the participant and the paying

agent. In this capacity, DTC will pass

through rejected shells to DTC

participants in the form received from

the paying agent together with any

paying agent documentation. DTC will

neither inspect nor verify the contents

of rejected shells. For shells rejected

after the payable date, appropriate funds

will be debited from the participant’s

account on the day the rejected coupons

are returned to the participant.

Interest for coupons for which the

paying agent is located outside of New

York City that are deposited at least
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Notices 63555

7 DTC will accept past due coupons into the

coupon collection service program for up to three

years after the original coupon payment date.

8According to DTC, payments due DTC from

issuers and paying agents are received on or before

the payable date between 97 and 98 percent of the

time. Typically, late payments are the result of

transmission problems or equipment failures that

are unrelated to the ability of the issuer or paying

agent to actually make such payments. Telephone

conversation between Piku K. Thakkar, Assistant

Counsel, DTC; Ann Reich, DTC; and Mark

Steffensen, Attorney, Division, Commission

(October 17, 1995).

9 15 U.S.C. § 78q–1 (1988).

10 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b)(1) (1988).

2Letter from Jeffrey F. Ingber, General Counsel

and Secretary, GSCC, to Jerry W. Carpenter,

Assistant Director, Division of Market Regulation,

Commission (October 26, 1995).

3The netting system is a system for aggregating

and matching offsetting obligations resulting from

trades submitted by or on behalf of members in

eligible securities. The resulting deliver, receive,

and payment obligations are settled through

designated clearing banks.

eight business days prior to payable date

will be credited to the participant on the

payable date. Interest for coupons for

which the paying agent is located

outside of New York City that are

deposited less than eight business days

prior to payable date will be credited to

the participant ten business days

following the date of the deposit.

Interest for coupons for which the

paying agent is located in New York

City that are deposited at least five

business days prior to the payable date

will be credited to the participant on the

payable date. Interest for coupons for

which the paying agent is located in

New York City that are deposited less

than five business days prior to payable

date will be credited to the participant

seven business days following the date

of the deposit. Interest for past due

coupons will be credited to the

participant as if they were received less

than eight business days prior to the

original payable date if the paying agent

is located outside New York City and

less than five business days prior to the

original payable date if the paying agent

is located in New York City.7

DTC will credit the accounts of its

depositing participants on the foregoing

payable dates without regard to whether

DTC actually has received the interest

payment from the issuer or paying agent

as of such date.8 All coupons deposited

after 11:00 a.m. will be considered to be

received the following business day. In

addition, during the first quarter of

1996, a new Participant Terminal

System function will be made available

which will enable DTC participants to

view the status of their coupon deposits.

DTC proposes to charge its

participants the following fees for this

service:

Shells deposited a minimum of 15 days

before payable date: $4.50.

Shells deposited less than 15 days

before payable date (including past

due coupons): $5.25.

Rejected shells: $15.00.

DTC believes the proposed rule

change is consistent with the

requirements of Section 17A of the Act 9

and the rules and regulations

thereunder because it promotes

efficiencies in the clearance and

settlement of securities transactions.

The proposed rule change will be

implemented in a manner designed to

safeguard the securities and funds in

DTC’s custody or under its 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, in the public

interest, and for the protection of

investors.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants, or Others

Written comments from DTC

participants and others have not been

solicited nor received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

ninety days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which DTC consents, the

Commission will:

(a) By order approve such proposed

rule change or

(b) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

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, N.W.,

Washington, D.C. 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, N.W.,

Washington, D.C. 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–95–18

and should be submitted by January 2,

1996.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30072 Filed 12–8–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36544; International Series

Release No. 897; File No. SR–GSCC–95–

05]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Notice of Filing of a

Proposed Rule Change Permitting

Entities Established or Organized in a

Foreign Country to Become Members

of GSCC’s Netting System

December 1, 1995.

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

Securities Exchange Act of 1934

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

October 6, 1995, Government Securities

Clearing Corporation (‘‘GSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

GSCC–95–05) as described in Items, I, II,

and III below, which items have been

prepared primarily by GSCC. On

October 30, 1995, GSCC filed an

amendment to the proposed rule

change.2 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 purpose of the proposed rule

change is to amend GSCC’s rules to

enable entities that are established or

organized in a foreign country and

regulated in a manner comparable to

domestic entities eligible for GSCC

membership to become members of

GSCC’s netting system.3