Federal Register / Vol. 61, No. 106 / Friday, May 31, 1996 / Notices 27377

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

2Securities Exchange Act Release No. 36876

(February 22, 1996), 61 FR 7841 [SR–Philadep–95–

08] (order granting partial temporary approval and

partial permanent approval of a proposed rule

change).

3This report will be distribute on a daily basis to

Philadep management and Philadep’s compliance

officer.

agreement, BTAL will provide specified

custodial or subcustodial services for

the Investment Company or custodian

and will delegate to Pendal Nominees

such of BTAL’s duties and obligations

as will be necessary to permit Pendal

Nominees to hold the Assets custody in

Australia. The agreement will further

provide that BTAL will be liable for any

loss, damage, cost, expense, liability, or

claim arising out of or in connection

with the performance by Pendal

Nominees of its responsibilities under

the agreement to the same extent as if

BTAL had been required to provide

custody services under such agreement.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–13696 Filed 5–30–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37244; File No. SR–

Philadep–96–07]

Self-Regulatory Organizations;

Philadelphia Depository Trust

Company; Notice of Filing of a

Proposed Rule Change To Establish a

Separate Participant Category for

Inactive Accounts

May 24, 1996.

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

Securities Exchange Act of 1934

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

May 8, 1996, the Philadelphia

Depository Trust Company (‘‘Philadep’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

Philadep–96–07) as described in Items I,

II, and III below, which items have been

prepared primarily by Philadep. 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 Philadep’s rules to

establish a separate participant category

for inactive accounts and to amend the

participants fund formulas with respect

to such inactive accounts. Specifically,

the proposed rule change will define the

term ‘‘Inactive Account’’ and will set

forth the mechanism for detecting a

change in a participant’s status from

inactive to active and for the immediate

collection of the additional required

participants fund contribution at such

time.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

Philadep 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.

Philadep 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

Philadep proposes to amend its rules

with respect to the minimum cash

deposit contribution of its inactive

participants to be set at the uniform rate

of $5,000 instead of at the previously

approved rate of $10,000.2 ‘‘Inactive

Accounts’’ are proposed to be defined as

an account which conducts de minimis

activity, currently established to be less

than $100 in monthly billing activities.

Philadep proposes to adjust its

Inactive Account contribution to the

participants fund from $10,000 to

$5,000. In proposing this amendment,

Philadep recognizes that inactive

accounts pose virtually no risk to the

clearing corporation so long as they

remain in such inactive status. In this

regard, Philadep has established

procedures to detect a change in a

participant’s status from inactive to

active and for the immediate collection

of the additional required participants

fund contribution at such time.

Philadep will monitor its participants’

account activities to assure that all

participants post the requisite

participants fund contributions.

Philadep evaluates the nature and

financial integrity of all participants of

Philadep, even if they initially establish

only Inactive Accounts. Philadep

evaluates prospective participants,

develops a customer profile, assesses

the firm’s capital adequacy, determines

the initial participants fund

contribution, contacts the firm’s

Designated Examining Authority for a

review of its regulatory history, and

presents any and all pertinent

information collected to Philadep’s

Admissions Committee. The

Admissions Committee ultimately

makes the determination about whether

to admit the participants and directs

managements where appropriate to

gather additional information so that the

Committee can make such a

determination. After admission,

Philadep monitors participants’ account

activities to assure that the proper

participants fund contribution is being

collected from each participant.

Specifically with respect to Inactive

Accounts, Philadep’s Finance and

Administration (‘‘F&A’’) Department

will identify for Philadep’s Operations

Department which specific accounts are

currently inactive. Thereafter, the

Operations Department will monitor on

a daily basis a report which reflects

daily deposit, transfer, and

miscellaneous deliver order (‘‘MDO’’)

activity of such Inactive Accounts.

Specifically, the Operations Department

will generate a report that maintains

cumulative total of deposits, transfers,

and MDOs occurring in each Inactive

Account for each monthly billing cycle.3

If that total exceeds forty but is less than

seventy-five for any Inactive Account in

any given month, the Operations

Department will immediately notify the

F&A Department and Philadep’s

compliance officer. The F&A

Department will verify this activity and

will immediately call and send a letter

to the affected participant informing the

participant that it must wire the

additional participants fund

contributions associated with an active

account by the next business day or

cease doing any further activity in the

account for the remainder of the month.

If the participant’s total exceeds

seventy-five transfers, deposits, and

MDOs, the participants must wire

additional participants fund

contributions associated with an active

account by the next business day. The

seventy-five count threshold serves as a

reliable proxy to determine $100 of

billing activity. In this regard, the most

expensive activity among deposits,

transfers, and MDOs, multiplied by 75,

typically generates less than $100 in

monthly billings. A participant’s failure

to wire the additional participants fund

contributions in compliance with the

aforementioned procedures subjects the

participant to a $500 fine for the first

offense and a $2,000 fine for the second

offense occurring during the same

calendar year. If the participant does not

wire the additional participants fund

contribution to Philadep by the next

business day, Philadep will disallow
27378 Federal Register / Vol. 61, No. 106 / Friday, May 31, 1996 / Notices

4 17 CFR 200.30–3(a)(12) (1995).

1 15 U.S.C. § 78s(b)(1) (1988).

2The Commission has modified the text of the

summaries prepared by Philadep.

any further business in the account

beginning on the next business day after

the additional contribution was due.

Accordingly, an offense as contemplated

by the foregoing fine schedule refers to

the number of times that the account

was inactivated from conducting any

further business for failure to furnish

Philadep with the additional

contribution during a calendar year.

Once active, an account will be

routinely subject to the normal review

and update process on a monthly basis,

and the F&A Department will

recalculate each participant’s

participants fund deposit requirement at

the end of each month based upon the

participant’s previous three months

activity, prior to the most recent month.

Philadep believes the proposed rule

change is consistent with Section 17A of

the Act and the rules and regulations

thereunder because the proposal should

help to safeguard securities and funds in

their custody or control or for which

they are responsible and foster

cooperation and coordination with

persons engaged in the clearance and

settlement of securities transactions.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

Philadep believes that the proposed

rule change will not impose any burden

on competition not contemplated within

the parameters 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 relating to the

proposed rule change have been

received. Philadep will notify the

Commission of any written comments

received by Philadep.

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 Philadep 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 Philadep. All submissions

should refer to the file number SR–

Philadep–96–07 and should be

submitted by June 21, 1996.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–13694 Filed 5–30–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37234; File No. SR–

PHILADEP–96–06]

Self-Regulatory Organizations;

Philadelphia Depository Trust

Company; Notice of Filing and

Immediate Effectiveness of Proposed

Rule Change to Amend the Fee

Schedule for the Legal Deposit

Service.

May 21, 1996.

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

Securities Exchange Act of 1934

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

April 1, 1996, the Philadelphia

Depository Trust Company (‘‘Philadep’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

PHILADEP–96–06) as described in Items

I, II, and III below, which Items have

been prepared primarily by Philadep.

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

Philadep proposes to consolidate and

modify the fees and the underlying

volume categories for its Legal Deposit

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,

Philadep included statements

concerning the purposes of and the

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.

Philadep has prepared summaries, as 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 the

Statutory Basis for, the Proposed Rule

Change

Philadep proposes to modify its

existing fees for its Legal Deposit

Service. Under the existing schedule,

medium volume depositors pay

significantly greater costs than high

volume depositors. In order to attract

new medium volume business while

offering its current users more cost

competitive pricing, Philadep is

consolidating the number of categories

for its Legal Deposit Service and

modifying the fees that the medium

volume participants pay for this service.

The text of the proposed rule change

is as follows:

Philadelphia Depository Trust

Company—Schedule of Fees

Additions are italicized; deletions

[bracketed]

5. Legal Deposits

Processing fees are based upon

monthly deposit volume:

Volume Level:

[0–100 ....................... $8.50.

101–500 ..................... $6.00.

501–1,000 .................. $5.50.

1,001–1,700 ............... $5.00.

1,701–2,500 ............... $4.50.

2,501–3,000 ............... $3.50 flat fee for all

legal deposits.

3,001 and over .......... $2.75 flat fee for all

legal deposits.]

1–300 ........................................................$8.50

301–3000 ..................................................$3.50

3001 and over...........................................$2.75

No charge for deposit rejects. Transfer

agent charges will be passed through to

the Participant on an item for item basis.

Philadep believes the proposed

change complies with Section 17A of

the Act because it provides for the