Document ID: SEC-2005-0237-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Depository Trust Co.
Posted Date: 2005-11-14T05:00Z

[Federal Register: November 14, 2005 (Volume 70, Number 218)]
[Notices]               
[Page 69179-69180]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14no05-77]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52721; File No. SR-DTC-2005-14]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of a Proposed Rule Change Relating to Compliance With 
Regulations Administered by the Office of Foreign Assets Control

November 2, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 9, 2005, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change and on 
October 25, 2005, amended the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared primarily by 
DTC. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Under the proposed rule change, DTC would revise its Deposit 
Service, Custody Service, and Withdrawals-By-Transfer Service 
procedures.

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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Under the proposed rule changes, DTC would revise its Deposit 
Service, Custody Service, and Withdrawals-By-Transfer Service 
procedures. These changes are based upon guidance provided by the U.S. 
Department of the Treasury's Office of Foreign Assets Control 
(``OFAC'') to DTC.
1. Deposit Service
    In order to receive immediate credit in its securities account at 
DTC for a deposit of registered securities, a participant would be 
required to certify to DTC that it has compared the parties identified 
on the deposited certificate (e.g., the issuer, the party in whose name 
the deposited security is registered, and all assignees) against OFAC's 
list of targeted countries, Specially Designated Nationals, and other 
parties designated by OFAC (collectively referred to as the ``OFAC 
list'') and that there were no matches identified by such comparison.
    In the case of a deposit of registered securities by a participant 
located outside the United States, including a deposit by or for the 
benefit of a participant accepted at a depository facility located 
outside the United States, the participant will not receive immediate 
credit in its securities account. DTC will give credit for the deposit 
only after DTC has screened the parties on the deposit against the OFAC 
list and has identified no matches.
2. Custody Service
    With respect to securities and other financial instruments that are 
deposited pursuant to DTC's Custody Service procedures, DTC will act on 
the instructions of the depositing participant only after DTC has 
screened the parties on the deposit against the

[[Page 69180]]

OFAC list and has identified no valid matches.\2\
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    \2\ DTC is already screening the registration information for 
securities it is holding as part of its Custody Service.
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3. Withdrawal-By-Transfer Service
    For securities on deposit that are sought to be withdrawn pursuant 
to DTC's Withdrawal-By-Transfer Service, including Withdrawal-By-
Transfer requests for Direct Registration, DTC will act on the 
instructions of the withdrawing participant only after DTC has screened 
the investor in whose name the securities are to be registered against 
the OFAC list and has identified no valid match.
    For each service, in the event that DTC identifies a match against 
the OFAC list, DTC would attempt to remove false-positive matches. For 
valid matches, DTC would present the matches to participants through a 
new Participant Terminal System function called ``OFAP.'' Participants 
would be required to review each certificate registration identified as 
a potential match through the ``OFAP'' function by comparing the 
certificate registration to the OFAC text information and respond with 
a comment for each registration by providing factual information 
sufficient for DTC to conclude, in its sole discretion, that the 
investor is or is not the person or entity listed on the OFAC list.
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \3\ and the rules and 
regulations thereunder because it will enhance DTC's compliance with 
applicable laws thereby reducing risks and associated costs to DTC and 
its participants.
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    \3\ 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 it receives.

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, as amended, 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 rule-comments@sec.gov. Please include 

File No. SR-DTC-2005-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington DC 20549-9303.

All submissions should refer to File No. SR-DTC-2005-14. 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. Copies of such filing also will be available for 
inspection and copying at DTC's principal office and on DTC's Web site 
at http://www.dtc.org/impNtc/mor/index.html. 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 submission 
should refer to File No. SR-DTC-2005-14 and should be submitted on or 
before December 5, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-6248 Filed 11-10-05; 8:45 am]

BILLING CODE 8010-01-P