Document ID: SEC-2012-1421-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2012-08-28T04:00Z

[Federal Register Volume 77, Number 167 (Tuesday, August 28, 2012)]
[Notices]
[Pages 52082-52083]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-21107]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67707; File No. SR-DTC-2012-06]

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Make Updates to Its Custody Service

August 22, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder \2\ notice is hereby given that 
on August 13, 2012, 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 primarily by DTC. DTC filed the proposed rule change 
pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-4(f)(4)(i) 
\4\ thereunder, so that 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 parties.
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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)(4)(i).
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I. Self-Regulatory Organization's Statement of Terms of Substance of 
the Proposed Rule Change

    The purpose of the proposed rule change is to update the DTC 
Custody Guide with respect to which assets are eligible to be held for 
Custody Safekeeping and to make other administrative changes and 
clarifications.

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

    In its filing with the Commission, DTC included statements 
concerning the purpose 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 Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The Custody Service enables Participants that hold securities which 
are not presently eligible for book-entry

[[Page 52083]]

services at DTC to deposit those securities with DTC for safe-keeping 
and certain limited depository services. Certificates deposited through 
the Custody Service are held by DTC in customer or Participant name and 
are not transferred into DTC's nominee name. With this rule filing, DTC 
is making the following updates to the Custody Guide:
     Clarifying which assets are eligible to be held for 
Custody Safekeeping by noting DTC's Custody Service will hold certain 
``Non-Standard'' type assets, fully disclosed, for safekeeping only. 
These assets include, but are not limited to, Option Agreements and 
Warrant to Purchase. DTC does not accept any liability should such 
assets be lost, stolen or destroyed. Depositing participants assume 
full liability as well as responsibility for replacement of lost, 
stolen or destroyed fully disclosed ``Non-Standard'' assets;
     Modifying the timeframe within which DTC must receive 
settlement delivery instructions from Participants in order to meet 
industry cutoff times;
     Removing duplicative language and language regarding the 
funds only settlement system and the dividend settlement system since 
such systems were incorporated into the Envelope Settlement Service;\5\ 
and
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    \5\ For more information regarding this changes, see Securities 
Exchange Act Release No. 34-65032 (August 4, 2011), 76 FR 49511 
(August 10, 2011) [File No. SR-NSCC-2011-04].
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     Making clarifications regarding the description of custody 
services, the vault, inputs and methods of notification.
    DTC believes that the proposed rule change is consistent with the 
requirements of the Securities Exchange Act of 1934, as amended (the 
``Act''), and the rules and regulations thereunder, applicable to DTC 
in that it promotes efficiencies in the prompt and accurate clearance 
and settlement of securities transactions by enhancing the utilization 
of DTC's existing services. Moreover, the proposed rule change reduces 
the costs, inefficiencies and risks associated with the physical safe-
keeping of securities by clarifying the procedures associated with the 
Custody 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. 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 was filed pursuant to Section 19(b)(3)(A) 
\6\ of the Act and Rule 19b-4(f)(4)(i) \7\ thereunder and thus became 
effective upon filing because it is effecting a change in an existing 
service of DTC that does not adversely affect the safeguarding of 
securities or funds in the custody or control of DTC or for which it is 
responsible and 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 such 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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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(4)(i).
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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 No. SR-DTC-2012-06 on the subject line.

Paper Comments

     Send 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-2012-06. 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 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 filings will also be available for 
inspection and copying at the principal office of DTC and on DTC's Web 
site at http://dtcc.com/downloads/legal/rule_filings/2012/dtc/SR-DTC-2012-06.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-2012-06 
and should be submitted on or before September 18, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated
    authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-21107 Filed 8-27-12; 8:45 am]
BILLING CODE 8011-01-P