Document ID: SEC-2012-1351-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2012-08-15T04:00Z

[Federal Register Volume 77, Number 158 (Wednesday, August 15, 2012)]
[Notices]
[Pages 49048-49049]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19980]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67629; File No. SR-DTC-2012-05]

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Enable The Depository Trust Company To Collect and Pass Through Certain 
Fees Owed by Participants to Transfer Agents in Connection With the 
Deposit and Withdrawal at Custodian System

August 9, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 30, 2012, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared 
primarily by DTC. DTC filed the proposal pursuant to Section 
19(b)(3)(A)(ii) of the Act,\2\ and Rule 19b-4(f)(2) \3\ thereunder 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 persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \3\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of this proposed rule change is to enable DTC to 
collect and pass through certain fees owed by participants to transfer 
agents in connection with the Deposit and Withdrawal at Custodian 
(``DWAC'') system.

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 such 
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

    DWAC can be utilized to electronically transfer securities between 
Participants and transfer agents, acting as custodians.\5\ DWAC is 
designed for utilization by any Participant with respect to certain 
issues of securities in DTC's Fast Automated Securities Transfer 
program (``FAST''). For securities that are part of the FAST program, 
the transfer agents 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 from DTC, the transfer agents 
adjust the denomination of the certificate as appropriate, and 
electronically confirm these changes with DTC. Transfer agents charge 
Participants a fee for the processing of a DWAC request. Participants 
must submit a check in the amount of the DWAC fee upon presentation of 
the transfer instructions, or the transfer agent invoices the 
Participant.
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    \5\ For more information about the DWAC service, see Securities 
Exchange Act Release No. 29952 (November 18, 1991) 56 FR 59307 
(November 25, 1991) (SR-DTC-91-16) (order granting approval of the 
DWAC service).
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    In order to facilitate a more efficient DWAC fee collection 
process, DTC is proposing to collect and pass through DWAC fees owed by 
Participants to transfer agents.\6\ DTC will only collect DWAC fees 
from an entity that is a Participant of DTC at the close of business on 
the 7th business day of each month that DTC is collecting the fee. The 
introduction of this process has been discussed with and endorsed by 
the Securities Transfer Association. Furthermore, DTC has discussed 
this proposal with several of its Participants and all agree that it 
should be implemented as soon as possible. In order to cover costs 
incurred in collecting fees associated with DWAC transactions, DTC will 
retain a monthly collection charge equal to 1.5% of the DWAC fee 
collected on behalf of each transfer agent.\7\ This collection charge 
will appear in the DTC Fee Schedule as follows:
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    \6\ Transfer agents that use DTC's DWAC services are not 
required to use this collection service.
    \7\ DTC is charging this 1.5% collection fee to the transfer 
agent to cover its cost of administering the program.

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                   Service                       Current fee      Proposed fee                 Per
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Collection of transfer agent DWAC fees.......             N/A             1.5%   Per monthly amount collected
                                                                                  for each transfer agent.
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DTC expects to begin collecting DWAC fees in the first quarter of 2013. 
DTC will announce the implementation date by Important Notice.

    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act,\8\ and the rules and 
regulations thereunder applicable to it because the proposed fee change 
is designed to provide for the equitable allocation of reasonable fees 
and charges among the users of DTC's services.
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    \8\ 15 U.S.C. 78q-1.
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(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. 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 upon filing pursuant 
to Section 19(b)(3)(A)(ii) \9\ of the Act and Rule 19b-4(f)(2) \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

[[Page 49049]]

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)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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-2012-05 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-DTC-2012-05. 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 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 Section, 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 filings will also be available for 
inspection and copying at the principal office of DTC and on DTC's Web 
site (http://www.dtcc.com/downloads/legal/rule_filings/2012/dtc/DTC_Rule_Filing_2012_05.pdf).
    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-2012-05 
and should be submitted on or before September 5, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19980 Filed 8-14-12; 8:45 am]
BILLING CODE 8011-01-P