Document ID: SEC-2009-1821-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Order Granting AcceleratedApproval of a Proposed Rule Change Regarding the Depository Trust Company's Board of Directors Election Process
Posted Date: 2009-12-29T05:00Z

[Federal Register: December 29, 2009 (Volume 74, Number 248)]
[Notices]               
[Page 68877-68878]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de09-130]                         

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-61216; File No. SR-DTC-2009-16]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Order Granting Accelerated Approval of a Proposed 
Rule Change Regarding the Depository Trust Company's Board of Directors 
Election Process

December 22, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 16, 2009, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II below, which items have been prepared 
primarily by DTC. The Commission is publishing this notice and order 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

    DTC's parent company, The Depository Trust & Clearing Corporation 
(``DTCC'') intends in the future to consider nominating for election, 
to its Board of Directors candidates that are not participants of its 
clearing agency subsidiaries (``non-participant candidates'').\2\ 
Because certain of DTCC's organizational documents mandate that the 
directors of DTCC shall be the same as the directors of DTC, in the 
future DTC's Board of Directors (``DTC Board'') may include directors 
who are not employees of its participants (``non-participant 
directors'').
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    \2\ DTCC's clearing corporation subsidiary participants include 
The Depository Trust Company, National Securities Clearing 
Corporation, and Fixed Income Clearing Corporation.
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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 such 
statements.\3\
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    \3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    DTCC has in the past nominated for election to its Board of 
Directors employees of its clearing corporation subsidiaries' 
participants. In the future, DTCC intends to consider nominating for 
election to its Board of Directors people who are not employees of its 
clearing corporation subsidiaries' (``non-participant candidates''). 
Because certain of DTCC's organizational documents mandate that the 
directors of DTCC shall be the same as the directors of DTC, in the 
future DTC's Board may include directors who are not employees of its 
clearing corporation subsidiaries' (``non-participant directors''). DTC 
believes that non-participant directors may bring additional skills and 
expertise and introduce different perspectives to the Board. This 
change will conform DTC's Board of Directors election process to those 
of DTCC's other clearing corporation subsidiaries--National Securities 
Clearing Corporation and Fixed Income Clearing Corporation.
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules and regulations 
thereunder applicable to DTC because DTC's rules will continue to 
provide for a fair representation of its participants in the selection 
of its directors and in the administration of its affairs.

[[Page 68878]]

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

    DTC does not believe that the proposed rule change would have any 
impact on 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

    Section 17A(b)(3)(C) of the Act requires that the rules of a 
clearing agency assure a fair representation of its shareholders (or 
members) and participants in the selection of its directors and 
administration of its affairs. The Commission has previously found that 
DTC's participants are fairly represented in the selection of its Board 
and in the administration of its affairs.\4\ This rule change should 
not have any adverse effect on DTC's participants' representation in 
the selection of NSCC's Board or in the administration of NSCC's 
affairs. The Commission also recognizes that it may benefit DTC to have 
non-participants directors on the Board because such directors may 
provide skills or perspectives not possessed by participant directors. 
Therefore, the Commission finds that DTC's proposed rule change to have 
non-participant directors serve on its Board should provide benefits 
while continuing to provide for the fair representation of DTC's 
participants in the selection of its directors and administration of 
its affairs.
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    \4\ See, e.g., Securities Exchange Act Release No. 52922 
(December 7, 2005), 70 FR 74070 (December 14, 2005) (File Nos. SR-
DTC-2005-16, SR FICC-2005-19, and SR-NSCC-2005-14).
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    DTC has requested that the Commission approve this rule change 
prior to the thirtieth day after the date of publication of notice of 
the filing. The Commission finds good cause for approving the proposed 
rule change prior to the thirtieth day after publication of notice 
because by so approving DTC will be able to implement the rule change 
in time to include non-participant directors on its Board for the 2010 
Board term.

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-2009-16 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-2009-16. 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, on official business days between the hours 
of 10 am and 3 pm. Copies of such filing also will be available for 
inspection and copying at the principal office of DTC and on DTC's Web 
site at http://www.dtcc.com/legal/rule_filings/dtc/2009-16.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-2009-16 and should be 
submitted on or before January 19, 2010.

V. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular with the requirements of Section 17A of the Act and the 
rules and regulations thereunder applicable.\5\
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    \5\ In approving the proposed rule changes, the Commission 
considered the proposals' impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DTC-2009-16) be, and hereby 
is, approved on an accelerated basis.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30783 Filed 12-28-09; 8:45 am]

BILLING CODE 8011-01-P