Document ID: SEC-2010-1692-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2010-11-04T04:00Z

[Federal Register: November 4, 2010 (Volume 75, Number 213)]
[Notices]               
[Page 68013-68014]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04no10-84]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63208; File No. SR-DTC-2010-13]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Implement a Disincentive Fee Associated With the Deposit Automation 
Management System

October 28, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 18, 2010, 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.\2\ DTC filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) and Rule 19b-4(f)(3) thereunder so that the proposed 
rule change was effective upon filing with the Commission.\3\ 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\ The text of the proposed rule change is attached as Exhibit 
5 to DTC's filing, which is available at http://www.dtcc.com/
downloands/legal/rule_filings/2010/dtc/2010-13.pdf.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii) and 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will amend DTC rules to provide that DTC 
will impose a new disincentive fee for certain deposits made through 
DTC's Deposit Automation Management (``DAM'') 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 these 
statements.\4\
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    \4\ The Commission has modified the text of the summaries 
prepared by the DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The DAM system allows participants to transmit details of a deposit 
before forwarding physical securities to DTC. Under the DAM system, a 
participant is able to send to DTC details regarding securities that 
the participant plans to deposit.\5\ DTC uses the deposit details to 
determine whether the proposed deposit is acceptable by checking for 
such things as issue eligibility, chill status, correct CUSIP 
information, etc. The deposit detail information is stored in DTC's 
database. Upon the submitting participant's initiation, DTC's systems 
send a transmission to the submitting participant's printer using a 
Systems Network Architecture (``SNA'') connection.\6\ The transmission 
causes bar-coded deposit tickets to print at the participant's office 
on dedicated thermal printers.\7\ The bar-coded deposit tickets contain 
a variety of information required for DTC's processing of deposits.
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    \5\ Participants send the deposit details to DTC using either a 
Participant Terminal System message (``DAMP''), a PBS transmission, 
or a CF2DEP file.
    \6\ SNA is a network system developed by IBM in the early 1980s 
to move large amounts of data through the Internet.
    \7\ Some participants with low volumes of deposits have elected 
to use ``peel-off'' adhesive bar code labels instead of investing in 
expensive thermal printers.
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    Since IBM's recent announcement that it would no longer support 
SNA, DTC has begun making the deposit tickets available in PDF format. 
The method used by participants to initiate the print process did not 
change but rather than send the deposit tickets to a dedicated thermal 
printer at the participant's location, DTC ``pushes'' the deposit 
tickets to the requesting participant's work station in PDF format 
where the ticket can then be printed from any printer attached to that 
work station (``PDF method''). This process eliminates the need for 
participants to use expensive thermal printers or ``peel-off'' bar code 
labels.
    Effective October 8, 2010, DTC retired the outdated and unsupported 
SNA ticket print stream and the use of ``peel-off'' adhesive bar code 
labels. Participants continue to have the ability to produce DAM 
deposit tickets for submission to DTC using the PDF method. Effective 
Monday, November 1, 2010, all DAM deposits received by DTC must be 
accompanied by a deposit ticket printed using the PDF method. Pursuant 
to this rule change, all deposits received without a DAM deposit ticket 
generated using the PDF method will continue to be processed by DTC but 
will incur a $100.00 processing fee in addition to the current DAM 
deposit fee.
    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 that are applicable to DTC

[[Page 68014]]

because the proposed rule will promote efficiencies in DTC's DAM 
service, and as such, it should help DTC remove undue impediments to 
and perfect the mechanism of a national system for the clearance and 
settlement of securities transactions.
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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 impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    No written comments relating to the proposed rule change have 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)(iii) of the Act \9\ and Rule 19b-4(f)(3)\10\ 
thereunder because it establishes or changes a due, fee, or other 
charge imposed by DTC. 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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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(3).
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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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-DTC-2010-13 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-2010-13. 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 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 also will be available for 
inspection and copying at the principal office of DTC and on DTC's Web 
site, http://www.dtcc.com. 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-2010-13 and should be submitted on or before November 26, 2010.

    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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27856 Filed 11-3-10; 8:45 am]
BILLING CODE 8011-01-P