Document ID: SEC-2007-0092-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Depository Trust Co.
Posted Date: 2007-01-19T05:00Z

[Federal Register: January 19, 2007 (Volume 72, Number 12)]
[Notices]               
[Page 2566-2567]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ja07-96]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55098; File No. SR-DTC-2006-19]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating To Enhancements to Its SMART/Track for Corporate Action 
Liability Notification Service

January 12, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 5, 2006, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change described 
in Items I, II, and III below, which items have been prepared primarily 
by DTC. DTC filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) thereunder \3\ so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change would enhance DTC's SMART/Track for 
Corporate Action Liability Notification 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, 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.\4\
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    \4\ The Commission has modified the text of the summaries 
prepared by DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In 2004, DTC submitted rule filing SR-DTC-2004-11 that established 
the SMART/Track for Corporate Action Liability Notification Service for 
the transmission of liability notices between counterparties.\5\ The 
purpose of this filing is to propose an enhancement to the Corporate 
Action Liability Notification Service by creating a link between SMART/
Track and the National Securities Clearing Corporation's (``NSCC'') 
Continuous Net Settlement (``CNS'') system. The link will enable 
participants to utilize the SMART/Track interface to notify CNS of 
their intention to participate in a voluntary corporate event for a 
security that is being processed in CNS.
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    \5\ Securities Exchange Act Release No. 50887 (December 20, 
2004), 69 FR 77802 (December 28, 2004).
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    Participants currently notify CNS that they plan to participate in 
a voluntary corporate action event for a security being processed in 
CNS using the ``CNSR'' function of DTC's Participant Terminal System 
(``PTS''). The proposed enhancement will enable DTC participants to 
create and transmit a CNS liability notice, as well as search or view 
liability notices, directly from the SMART/Track home page on the web. 
The link will provide participants with a central point of access for 
creating, transmitting, and tracking all of their voluntary corporate 
action liability notices through SMART/Track.
    Once all CNS participants have registered for the SMART/Track for 
Corporate Action Liability Notification Service, DTC will disable the 
CNSR function on PTS, and SMART/Track will be the only way for 
participants to notify CNS that they plan to participate in a voluntary 
corporate action event for a security being processed in CNS.
    The proposed rule change is consistent with Section 17A of the Act 
and the rules and regulations thereunder applicable to DTC because it 
will promote important disclosures relating to corporate action 
liability notices between participant counterparties. The proposed rule 
change will be implemented consistently with the safeguarding of 
securities and funds in the custody or control of DTC because DTC will 
be acting as a notification service.

(B) Self-Regulatory Organization's Statement on Burden on Competition

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

(C) Self-Regulatory Organization'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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(4) \7\ 
thereunder because the proposed rule effects a change in an existing 
service of DTC that (i) does not adversely affect the safeguarding of 
securities or funds in the custody or control of DTC or for which it is 
responsible and (ii) does not significantly affect the respective 
rights or obligations of DTC or persons using the service. At any time 
within sixty days of the filing of the proposed 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(4).
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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:

[[Page 2567]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
) or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-DTC-2006-19 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

    All submissions should refer to File Number SR-DTC-2006-19. 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
). The text of the proposed rule change is available at 

DTC, the Commission's Public Reference Room, and http://www.dtc.org. 

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-2006-19 
and should be submitted on or before February 9, 2007.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-692 Filed 1-18-07; 8:45 am]

BILLING CODE 8011-01-P