Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 46693 

26Pursuant to Section 19(b)(2) of the Act, 15 

U.S.C. 78s(b)(2), the Commission may not approve 

any proposed rule change, or amendment thereto, 

prior to the thirtieth day after the date of 

publication of the notice thereof, unless the 

Commission finds good cause for so doing. 

27See supra note 5. 

28 15 U.S.C. 78s(b)(2). 

29 17 CFR 200.30–3(a)(12). 

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

2The exact text of the DTC’s proposed rule 

change can be found at http://www.dtcc.com/legal/ 

rule_filings/dtc/2008. 

3The Commission has modified portions of the 

text of the summaries prepared by the DTC. 

4Transfer agents acting as DRS Limited 

Participants must meet certain criteria established 

by DTC, which includes, among other things, that 

the transfer agent also be eligible to participate in 

DTC’s Fast Automated Securities Transfer Program 

(‘‘FAST’’). For securities that are part of FAST, the 

DRS Limited Participants hold the securities 

registered in the name of DTC’s nominee, Cede & 

Co., in the form of balance certificates. As 

additional securities are deposited or withdrawn 

(‘‘deposit-by-transfer’’ and ‘‘withdrawal-bytransfer’’, respectively) from DTC, the DRS Limited 

Participant adjusts the denomination of the balance 

Continued 

modified by Amendment No. 1, prior to 

the thirtieth day after the date of 

publication of notice of filing of 

Amendment No. 1 in the Federal 

Register.26 In Amendment No. 1, NYSE 

Arca provided additional information 

concerning the dissemination of 

information relating to the Shares, and 

clarified the continued listing 

requirement with respect to the 

calculation and dissemination of an 

intraday Reference Price.27 Accordingly, 

Amendment No. 1 does not raise any 

new issues about the proposed rule 

change, and the Commission finds good 

cause for approving the NYSE Arca’s 

proposal, as modified by Amendment 

No. 1, on an accelerated basis, pursuant 

to Section 19(b)(2) of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning Amendment No. 

1, including whether Amendment No. 1 

is consistent with the Act. Comments 

may be submitted by any of the 

following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2008–63 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2008–63. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2008–63 and 

should be submitted on or before 

September 2, 2008. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,28 that the 

proposed rule change (SR–NYSEArca–

2008–63), as modified by Amendment 

No. 1 thereto, be, and it hereby is, 

approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18486 Filed 8–8–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58292; File No. SR–DTC–

2008–07] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of Proposed Rule Change to 

Implement Processing Enhancements 

to the Profile Modification System 

Used in the Direct Registration System 

August 1, 2008. 

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

Securities Exchange Act of 1934 

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

July 7, 2008, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) proposed rule change 

No. SR–DTC–2008–07. The Commission 

is publishing this notice to solicit 

comments from interested parties on the 

proposed rule change as described in 

Items I, II, and III below, which items 

have been prepared primarily by the 

DTC.2

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

DTC is proposing to enhance its 

Profile Modification System in order to 

allow a ‘‘move all’’ instruction and to 

allow a second taxpayer identification 

number or social security number to be 

used to verify instructions, DTC is also 

proposing to impose new participant 

fees to reimburse transfer agents for the 

cost of implementing and maintaining 

the proposed Profile enhancements. 

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 

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 these statements.3

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Direct Registration System 

(‘‘DRS’’) allows investors to hold their 

securities positions on the records of the 

issuer in book-entry form rather than in 

certificated form. In May 2000, DTC 

established the Profile Modification 

System (‘‘Profile’’) which allows its 

participants (i.e., broker-dealers and 

banks) and DRS Limited Participants 

(i.e., transfer agents) to electronically 

change an investor’s securities positions 

from street-name ownership to direct 

registration book-entry position and vice 

versa.4 Specifically, Profile allows 


rmajette on PRODPC74 with NOTICES
46694 Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 

certificate as appropriate, and electronically 

confirms these changes with DTC. As such, the 

program reduces the movement of physical 

certificates between DTC and DRS Limited 

Participants, reducing costs and risks to DTC, its 

participants, issuers and transfer agents associated 

with the creation, movement, and storing of 

certificates. For a description of DTC’s current rules 

relating to FAST, see Securities Exchange Act 

Release Nos. 13342 (March 8, 1977) (File No. SR–

DTC–76–3); 14997 (July 26, 1978) (File No. Sr–

DTC–78–11); 21401 (October 16, 1984) (File No. SR 

DTC–84–8); 31941 (March 3, 1993) (SR–DTC–92–

15); and 46956 (December 2, 2002) (File No. SR–

DTC 2002–15). 

In addition, DTC has filed a proposed rule change 

with the Commission relating to updating its FAST 

and DRS program requirements. See Securities 

Exchange Act Release No. 57362 (February 20, 

2008) [File No. SR–DTC–2006–16]. 

5 DTC’s systems only process whole shares, not 

fractional shares and only allow whole shares to be 

held in participants’ accounts at DTC. 

6Some transfer agents maintain separate investor 

accounts for DRIP shares and DRS positions. The 

participant’s instruction via Profile to close the 

account would require a DRS Limited Participant to 

close both the DRIP and the DRS account. 

7Although DRS Limited Participants are able to 

enter Profile instructions to move DRS positions 

from a participant account at DTC to the investor’s 

account on the books of the issuer, the proposed 

rule change will not permit the ‘‘move all’’ function 

in Profile to be available to the DRS Limited 

Participant at this time. 

8 It is anticipated that for those users that 

communicate Profile instructions through DTC via 

a dedicated terminal (PTS or PBS), they will only 

need to update their internal procedures and 

workflow. 

participants to electronically submit an 

investor’s instruction that its share 

positions be moved from the investor’s 

DRS account to the investor’s brokerdealer’s participant account at DTC. 

Profile also allows DRS Limited 

Participants to submit an investor’s 

instruction for the movement of its 

share positions from the investor’s 

broker-dealer’s participant account at 

DTC to an account maintained by the 

DRS Limited Participant. Currently, 

DTC receives on average approximately 

50,000 Profile instructions per month 

and that volume is expected to rise. 

As the use of DRS continues to grow, 

attention has centered on reducing the 

number of rejected instructions 

submitted through Profile. In order to 

effectively transfer an investor’s 

securities position using Profile, the 

participant must enter into Profile an 

instruction containing certain 

identifying criteria of the investor, such 

as share quantity and a taxpayer 

identification number (‘‘TIN’’) or Social 

Security number. If the submitted 

information does not match the 

information the DRS Limited Participant 

has on its file, the Profile instruction is 

rejected, which may result in a rejection 

fee assessed by the DRS Limited 

Participant. More importantly, the 

rejection can also result in delays in 

transferring the position, possibly 

causing financial harm to an investor. 

Today, nearly 25% of all Profile 

instructions are rejected by the transfer 

agents. The two most common reasons 

for rejections are the Profile instruction 

not matching the share quantity and the 

Profile instruction not matching the 

investor’s TIN or Social Security 

number on the transfer agent’s records. 

The DRS Ad Hoc Committee, an 

industry committee established to 

address operational issues related to 

DRS, believes that by implementing 

certain system and processing 

improvements, the industry can 

potentially eliminate about 7,000 Profile 

rejections per month. 

a. Proposed Changes to Profile 

In an effort to decrease the number of 

rejections in Profile, members of the 

DRS Ad Hoc Committee have agreed 

that DTC should enhance the Profile 

functionality and that these changes 

should be required of all Profile users. 

Accordingly, DTC is proposing to make 

the following enhancements to Profile 

functionality: 

Move All Instruction. Currently, 

Profile requires a participant to enter a 

specific share quantity or dollar value 

(in the case of debt) in their Profile 

instruction. Under the proposed rule 

change, the participant submitting an 

instruction in Profile would be allowed 

to select one of the following options: 

(1) Enter a specific share quantity or 

dollar value; (2) move all of the 

investor’s whole shares 5 to the 

requesting participant’s account at DTC; 

(3) move all of the investor’s whole 

shares to the requesting participant’s 

account at DTC, liquidate any fractional 

share positions remaining in the 

account at the transfer agent, and have 

the cash proceeds mailed directly to the 

investor; (4) move all of the investor’s 

whole shares to the requesting 

participant’s account at DTC, liquidate 

any fractional share positions remaining 

in the account at the transfer agent, have 

the cash proceeds mailed directly to the 

investor, and close the investor’s DRS 

and Dividend Reinvestment Plan 

(‘‘DRIP’’) account.6 By using the ‘‘moveall’’ functionality, participants can forgo 

referencing a specific share quantity in 

the Profile instruction, which DTC 

believes should eliminate a major cause 

of Profile rejections.7

Dual TIN or Social Security Numbers. 

Currently, participants are permitted to 

enter only one TIN or Social Security 

number in its Profile instruction. Under 

the proposed rule change, participants 

may elect to submit a Profile instruction 

with two TINs or Social Security 

numbers instead of one. The option to 

submit a Profile instruction with two 

TIN or Social Security numbers may be 

necessary, for example, where the 

investor’s account is a joint account. For 

those Profile instructions with two TIN 

or Social Security Numbers, the DRS 

Limited Participant will only need to 

match one of the TIN or Social numbers 

on the Profile instruction to the DRS 

Limited Participant’s records for the 

investor account. 

The proposed rule change will require 

participants and DRS Limited 

Participants that process their DRS 

transactions through a direct electronic 

computer-to-computer link with DTC to 

make internal system enhancements to 

accommodate DTC’s changes to Profile.8

Specifically, internal systems will need 

to be enhanced so that they are able to 

accept DRS Profile instructions to 

‘‘move all’’ shares from the investor’s 

DRS Limited Participant account to the 

investor’s participant’s account at DTC. 

They will also need to be enhanced so 

that they are able to allow participants 

to submit Profile transactions with a 

second TIN/Social security number. 

b. Proposed Remuneration 

Members of the DRS Ad Hoc 

Committee have also agreed that 

participants will pay DRS Limited 

Participants two types of remuneration: 

(1) Reimbursement to compensate for 

the initial system development of the 

enhancements contemplated under the 

move-all proposal and (2) a transaction 

fee to pay for the on-going 

administration of the proposed new 

functions. Accordingly, DTC is 

proposing to require participants to pay 

for seventy-five percent of all system 

costs with a maximum payment of 

$200,000 per DRS Limited Participant 

for project plans submitted by DRS 

Limited Participants to DTC by 

September 1, 2008. For project plans 

that will be managed by a third party 

vendor, participants would be required 

to pay a remuneration based on the 

vendor’s total project cost. DTC would 

act as a conduit to collect and distribute 

the remuneration from the participants 

to DRS Limited Participants. 

Under the proposed rule change, DRS 

Limited Participants will be required to 

submit a project plan to DTC by 

September 1, 2008, and be ready to 

implement the ‘‘move all’’ Profile 

functionality by November 1, 2008, in 

order to be eligible to receive the system 

cost remuneration. DTC will make a one 

time payment to eligible DRS Limited 

Participants no later than 90 calendar 

days after the completion of the move 

all and dual TIN or Social security 

functionality going live. DTC proposes 

to collect a surcharge of $1.00 from 

participants, for no more than twentyVerDate Aug<31>2005 15:22 Aug 08, 2008 Jkt 214001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 E:\FR\FM\11AUN1.SGM 11AUN1

rmajette on PRODPC74 with NOTICES
Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 46695 

9 15 U.S.C. 78q–1. 

10 15 U.S.C. 78q–1. 

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

2 17 CFR 240.19b–4. 

four calendar months, for each Profile 

transaction submitted by a participant 

in order to offset the up-front 

remuneration made by DTC to DRS 

Limited Participants. DTC will 

eliminate the surcharge at the end of 

twenty-four calendar months or sooner 

if the total amount of up-front 

remuneration paid by DTC is collected 

before the twenty-four month period has 

expired. 

DTC also proposed to charge 

participants $.75 per Profile transaction 

to offset the on-going cost to DRS 

Limited Participants of supporting the 

‘‘move all’’ function. The transaction fee 

will be adjusted annually to reflect DRS 

Profile transactional volume changes. 

The proposed rule change will require 

DRS Limited Participants that wish to 

receive a transaction fee to submit their 

project plan by September 1, 2008. The 

DRS Limited Participants represented 

on the DRS Ad Hoc Committee have 

agreed that the monthly transactional 

fee will be no more than $25,000 per 

year per DRS Limited Participant. DTC 

will pay each eligible DRS Limited 

Participant with 2,000 or more Profile 

transactions monthly a set monthly 

amount of $2,080, or $24,960 annually. 

DTC will pay each eligible DRS Limited 

Participant with at least 200 

transactions monthly but less than 2,000 

transactions monthly a set monthly 

amount of $800, or $9,600 annually. 

DTC will not pay DRS Limited 

Participants with less than 200 

transactions a month. 

c. Proposed DRS Limited Participant 

Eligibility Requirements 

DTC proposes to amend its DRS 

Limited Participant rules to require 

transfer agents to be able to process 

Profile instructions requesting the 

‘‘move all’’ options and instructions 

including dual TIN or Social Security 

numbers. To maintain eligibility as a 

DRS Limited Participant, all current 

DRS Limited Participants must provide 

‘‘move all’’ and dual TIN or Social 

Security number processing capability 

by no later than December 31, 2008. 

2. Statutory Basis 

DTC believes the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act, 

as amended,9 and the rules and 

regulations thereunder because it 

improves efficiency and reduces risks 

associated with processing DRS 

transaction through Profile and 

improves the standards relating to the 

eligibility of transfer agents effecting 

DRS transactions. 

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 has neither solicited nor received 

written comments on the proposed rule 

change. 

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 the self-regulatory 

organization 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, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml) or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–DTC–2008–07 in the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–DTC–2008–07. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3:30 

p.m. Copies of such filings also will be 

available for inspection and copying at 

the principal office of the DTC and on 

the DTC’s Web site, http:// 

www.dtcc.com. All comments received 

will be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–DTC–

2008–07 and should be submitted on or 

before September 2, 2008. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18421 Filed 8–8–08; 8:45 am] 

BILLING CODE 8025–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58298; File No. SR–

NASDAQ–2008–055] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Approving Proposed Rule Change 

Regarding Fees for Orders Routed Via 

the Options Intermarket Linkage 

I. Introduction 

On June 18, 2008, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to section 

19(b)(1) of the Securities Exchange Act 

of 1934 (the ‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change 

regarding fees for orders routed via the 

Options Intermarket Linkage (‘‘Options 

Linkage’’). The proposed rule change 

was published for comment in the 


rmajette on PRODPC74 with NOTICES