Document ID: SEC-2015-0764-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2015-05-05T04:00Z

[Federal Register Volume 80, Number 86 (Tuesday, May 5, 2015)]
[Notices]
[Pages 25761-25763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-10401]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74831; File No. SR-DTC-2015-004]

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to a DTC Custody Service Fee Change

April 29, 2015.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on April 17, 2015, 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. DTC filed the proposed rule change 
pursuant to section 19(b)(3)(A) \3\ of the Act and Rule 19b-4(f)(2) \4\ 
thereunder. The proposed rule change was effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change consists of a change to DTC's Fee Schedule 
(``Fee Schedule'') with respect to the DTC Custody Service.\5\
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    \5\ Each term not otherwise defined herein has its respective 
meaning as set forth in the DTC Rules (the ``Rules''), available at 
http://www.dtcc.com/legal/rules-and-procedures.aspx.
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II. Clearing Agency'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.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    The proposed rule change would revise the Fee Schedule with respect 
to a fee charged to Participants that use the Custody Service, as 
described below.
    The Custody Service provides safe keeping and physical transaction 
processing for securities certificates and other items (collectively, 
``certificates''), including certificates for securities and other 
assets not eligible for deposit in DTC's core depository services.\6\ 
In utilizing the Custody Service, Participants are able to leverage 
DTC's vault facility to outsource the safe

[[Page 25762]]

keeping and subsequent physical transaction processing for 
certificates. DTC charges each Participant a monthly fee (currently 
described in the Fee Schedule as a ``Long Position'' Fee) of $0.70 per 
certificate, per month (``Current Fee'') for safe keeping in the 
Custody Service.
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    \6\ Please see the DTC Custody Service Guide at p. 5, available 
at http://www.dtcc.com/~/media/Files/Downloads/legal/service-guides/
Custody.pdf for an overview on Custody Service eligibility.
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    Pursuant to the proposed rule change, in order to better align fees 
with the cost of offering the Custody Service, DTC would revise the Fee 
Schedule to replace the Current Fee with a reduced fee to be named the 
``Custody Certificate Position'' Fee (``New Fee''). The New Fee would 
be a monthly fee calculated in accordance with a ``tiered'' fee 
structure taking into account the quantity of certificates held in the 
Custody Service for the Participant on a per account basis as follows:

------------------------------------------------------------------------
         Amount ($)                           Conditions
------------------------------------------------------------------------
0.61.......................  Monthly fee per certificate, per account;
                              fee applied for each certificate on
                              deposit counted up to an aggregate
                              quantity of 50,000 certificates for the
                              account (i.e., certificates counted as 1-
                              50,000).
0.20.......................  Monthly fee per certificate, per account;
                              fee applied for each certificate on
                              deposit counted in excess of an aggregate
                              quantity of 50,000 up to an aggregate
                              quantity of 100,000 certificates for the
                              account (i.e., certificates counted as
                              50,001-100,000).
0.10.......................  Monthly fee per certificate, per account;
                              fee applied for each certificate on
                              deposit counted in excess of an aggregate
                              quantity of 100,000 certificates for the
                              account (i.e., certificates counted as
                              100,001 and above).
------------------------------------------------------------------------

    For example, a Participant with 200,000 certificates held in the 
Custody Service as of a month-end for one of its accounts would be 
charged New Fees for the month as follows for that account:

------------------------------------------------------------------------
                                       Fee amount per
   Certificates counted by tier          certificate        Fee totals
------------------------------------------------------------------------
First 50,000 certificates counted.  $0.61...............      $30,500.00
Second 50,000 certificates counted  0.20................       10,000.00
Remaining 100,000 certificates....  0.10................       10,000.00
                                                         ---------------
                                    Total New Fees for         50,500.00
                                     Account.
------------------------------------------------------------------------

    Since the New Fee would be charged on a per account basis, a 
Participant with multiple accounts would be charged a New Fee amount 
for each account, as applicable. The amount would be calculated based 
upon the quantity of certificates held for that account only (i.e., 
excluding certificates held for the other accounts of the 
Participant).\7\
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    \7\ Using the example above, a Participant with two accounts, 
each with a deposit of 200,000 certificates, would be charged a New 
Fee amount of $50,500.00 per account, or total New Fees of 
$101,000.00.
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Implementation Date
    The proposed fee change would take effect on May 1, 2015.
2. Statutory Basis
    The proposed rule change would better align DTC's fees with its 
costs of providing safe keeping for certificates in the Custody 
Service, and the proposed fee would apply equally in accordance with 
Participants' use of the Custody Service. Therefore, DTC believes the 
proposed rule change is consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to DTC, in particular 
section 17A(b)(3)(D) \8\ of the Act, which requires that DTC's Rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Participants.
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    \8\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Clearing Agency's Statement on Burden on Competition

    DTC does not believe that the proposed rule change would have any 
impact, or impose any burden, on competition.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    Written comments relating to the proposed rule change have not yet 
been solicited or received. DTC will notify the Commission of any 
written comments received by DTC.

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) \9\ of the Act and paragraph (f) of Rule 19b-4 \10\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f).
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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 email to rule-comments@sec.gov. Please include 
File Number SR-DTC-2015-004 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2015-004. This file 
number should be included on the subject line if email 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

[[Page 25763]]

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 Web site viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE., Washington, DC 20549 on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of DTC and on DTCC's Web site (http://dtcc.com/legal/sec-rule-filings.aspx). 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-2015-004 and should be submitted on or before May 26, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-10401 Filed 5-4-15; 8:45 am]
 BILLING CODE 8011-01-P