Document ID: SEC-2011-1996-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2011-12-22T05:00Z

[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Notices]
[Pages 79732-79734]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32755]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65993; File No. SR-DTC-2011-11]

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rules Relating To Update DTC's Custody Service Guide

 December 16, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 7, 2011, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change described 
in Items I and II 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 and Rule 19b-4(f)(4) thereunder so that the 
proposed rule change was effective upon filing with the Commission.\2\ 
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) and 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The purpose of this proposed rule change is to update DTC's Custody 
Service Guide in order to streamline the

[[Page 79733]]

document and to mitigate certain risks associated with custody 
processes.\3\
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    \3\ The text of the proposed rule change is attached as Exhibit 
5 to DTC's filing, which is available at www.dtcc.com/downloads/legal/rule_filings/2011/dtc/2011-11.pdf.
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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

(1) Purpose
    DTC's custody service enables DTC participants to deposit 
securities with DTC for safe-keeping. Certificates deposited through 
the custody service (``Custody Issue'') are held by DTC but remain 
registered in the name of the participant's customer or in the name of 
the participant (i.e., the securities are not registered in DTC's 
nominee name, Cede & Co.). Therefore, a security deposited through the 
custody service is not eligible for DTC's book-entry services, but may 
be eligible for other depository services, unless the depositing 
participant directs DTC to transfer the position originally credited to 
the participant's custody free account to the participant's general 
free account.
    DTC is proposing to update its Custody Service Guide in order to 
streamline the document and to address certain risks associated with 
various aspects of its custody processes. Specifically, DTC is 
proposing, among other technical changes, to clarify its rules relating 
to imaging requests and required methods of notification in order to 
provide a more concise and coherent description of the procedures. In 
order to mitigate risks associated with the use of Medallion Signature 
Guarantee stamps, Attorney Release stamps, and Tax waiver/Cede & Co. 
Assignment stamps, DTC is also proposing to update its procedures 
regarding the process used at DTC to safeguard the use and storage of 
such stamps.\5\ Finally, DTC is proposing to remove the detailed 
narrative describing its branch deposit services because the 
description of this service and participants' compliance obligations 
are currently described in DTC's Deposit Service Guide.\6\
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    \5\ When processing certificates in connection with its custody 
services, DTC may use a participant's Medallion Signature Guarantee 
stamp, Attorney Release stamp, Tax waiver/Cede & Co. Assignment 
stamp, or any combination of these stamps to facilitate making 
negotiable a participant's securities for transfer or sale in 
accordance with the participant's instructions.
    \6\ The language DTC is proposing to eliminate from the Custody 
Service Guide continues to be included in the Deposits Service 
Guide.
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(2) Statutory Basis
    The proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to DTC because 
the proposed revisions to the procedures associated with DTC's custody 
service should facilitate the prompt and accurate clearance and 
settlement of securities transactions by reducing the costs, 
inefficiencies and risks associated with the physical safekeeping of 
securities. In so doing, these revisions should in turn also enhance 
the use of DTC's existing services.

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

    DTC does not believe that the proposed rule change would 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 been 
solicited DTC. 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)(iii) of the Act \7\ and Rule 19b-4(f)(4) \8\ 
thereunder because it is a change in an existing service that does not 
adversely affect the safeguarding of securities or funds in the custody 
or control of the clearing agency and does not significantly affect the 
respective rights or obligations of the clearing agency 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 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:

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-2011-11 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-2011-11. 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 20549-1090, 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 NSCC 
and on NSCC's Web site at http://www.dtcc.com/downloads/legal/rule_filings/2011/dtc/2011-11.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

[[Page 79734]]

you wish to make available publicly. All submissions should refer to 
File Number SR-DTC-2011-11 and should be submitted on or before January 
12, 2012.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32755 Filed 12-21-11; 8:45 am]
BILLING CODE 8011-01-P