Document ID: SEC-2006-0402-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Depository Trust Co.
Posted Date: 2006-03-27T05:00Z

[Federal Register: March 27, 2006 (Volume 71, Number 58)]
[Notices]               
[Page 15237-15238]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27mr06-102]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53503; SR-DTC-2006-01]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to the Participant Exchange System

March 16, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 19, 2006, 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. 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 will disable its Participant 
Exchange (``PEX'') buy-in functionality for the National Securities 
Clearing Corporation's (``NSCC'') Continuous Net Settlement (``CNS'') 
buy-ins on or about February 10, 2006.

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

    Between 2003 and 2005, DTC made several rule filings to establish 
and enhance its SMART/Track service.\2\ In rule filing SR-DTC-2005-19, 
DTC added the SMART/Track for Buy-Ins service that provides automated 
communication, warehousing, and tracking of various types of buy-in 
related notices.\3\ As part of that filing, DTC announced that the 
SMART/Track for Buy-Ins service would replace the buy-in functionality 
of DTC's PEX platform.
    Under this proposed rule change, DTC will disable the PEX 
functionality for NSCC's CNS buy-ins on or about February 10, 2006.\4\ 
Accordingly, DTC participants and NSCC CNS users must register for the 
SMART/Track for Buy-Ins service. DTC has been assisting its 
participants and CNS users in this regard.
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    \2\ Securities Exchange Act Release Nos. 50029 (July 15, 2004), 
69 FR 43870 (July 22, 2004) (Universal Hub, Stock Loan notification 
service); 50887 (Dec. 20, 2004), 69 FR 77802 (Dec. 28, 2004) 
(Corporate Action Liability Notification Service); 52104 (July 21, 
2005), 70 FR 43730 (July 28, 2005) (SMART/Track for Agency Lending 
Disclosure); and 53032 (Dec. 28, 2005), 71 FR 1457 (Jan. 9, 2006) 
(SMART/Track for Buy-Ins) [SR-DTC-2005-19].
    \3\ Securities Exchange Act Release No. 53032 supra note 2.
    \4\ DTC and NSCC have notified their respective participants of 
this action. DTC Important Notice B9049-06 (Jan. 19, 2006) 
available online at http://www.dtc.org/impNtc/ope/ope_9049-06.pdf; 

NSCC Important Notice A6189 (Jan. 19, 2006), available 
online at http://www.nscc.com/impnot/notices/notice2006/a6189.pdf.

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    The PEX buy-in functionality for buy-ins other than NSCC CNS buy-
ins (i.e. NYSE, AMEX, NASD, and NSCC Balance Order buy-ins) and for 
Municipal Securities Rulemaking Board closeouts will remain active 
until the final phase of SMART/Track for Buy-Ins is implemented, which 
is currently anticipated to happen in June 2006. When that happens, all 
PEX buy-in functionality will be disabled pursuant to a rule filing 
that DTC will file at that time.\5\ DTC and NSCC will notify their 
participants of the exact date of such termination through Important 
Notices.
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    \5\ PEX will remain a DTC service for other functions not 
related to buy-ins.
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    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \6\ and the rules and 
regulations thereunder because it is consistent with DTC's obligation 
to safeguard securities and funds in its custody or control.
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    \6\ 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

    DTC has not solicited or received written comments relating to the 
proposed rule change. DTC will notify the Commission of any written 
comments it receives.

[[Page 15238]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) \7\ of the Act and Rule 19b-4(f)(4) \8\ thereunder 
because it effects a change in an existing service of DTC that does not 
adversely affect the safeguarding of securities or funds in DTC's 
control or for which DTC is responsible and does not significantly 
affect DTC's or its participants' respective rights or obligations. At 
any time within 60 days of the filing of the proposed rule change, the 
Commission may summarily abrogate 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, 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-2006-01 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-DTC-2006-01. 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 
submissions should refer to File No. SR-DTC-2006-01 and should be 
submitted on or before April 17, 2006.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Nancy M. Morris,
Secretary.
[FR Doc. E6-4345 Filed 3-24-06; 8:45 am]

BILLING CODE 8010-01-P