Document ID: SEC-2010-1491-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Depository Trust Co.
Posted Date: 2010-09-29T04:00Z

[Federal Register: September 29, 2010 (Volume 75, Number 188)]
[Notices]               
[Page 60158-60159]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29se10-116]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62990; File No. SR-DTC-2010-12]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of a Proposed Rule Change To Automate the Approval 
Process in Providing Trustee Access to the Security Position Report 
Service

September 24, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 14, 2010, 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 to solicit 
comments 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

    The purpose of the proposed rule change is to replace the manual 
approval process whereby trustees of an issue receive access to DTC's 
Security Position Report (``SPR'') service with an automated approval 
process.

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.\2\
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    \2\ 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

    DTC's SPR service provides valuable information on the record date 
holdings of an issuer's security in DTC Participant accounts. An SPR 
provides information needed to contact shareholders on corporate-
related events such as annual meetings. DTC currently provides SPRs to 
Issuers, Trustees, and authorized third parties.
    DTC's Proxy area receives requests for SPR services access and 
reviews such requests to ensure that only appropriate parties receive 
access. The review process to approve a Trustee's access to the SPR 
service for a security is done manually, and the process is therefore 
subject to error. Currently, the SPR system sends an e-mail to the DTC 
Proxy mailbox notifying the Proxy staff that a Trustee has added a 
CUSIP to its eligible issues list. Any Trustee can add a CUSIP to its 
eligible issues list. The CUSIP will show ``unauthorized'' until 
reviewed and approved by the DTC Proxy staff. DTC Proxy staff requires 
that the Trustee provide to it one of the following: Trust agreement, 
Annual Report, 10K, 10Q, SEC filing, and/or any other document deemed 
necessary and appropriate. Generally, it takes two or more days for a 
response on access requests because of the manual process associated 
with the review of trustee information.
    To increase the efficiency by which DTC provides Trustees with 
access to the SPR service, DTC is seeking to collect Trustee data at 
the point of eligibility of the issue. This will allow DTC to store and 
maintain Trustee data on the Entity Master File and the Security Master 
File (``Master Files''). DTC will then have the ability to automate the 
validation done by the SPR system against the information stored on the 
Master Files in response to a Trustee request for SPR access.
    Initially, DTC will populate and update the Trustee field on the 
Master Files through DTC's Participant Terminal System. Ultimately, and 
as set forth below, this information will be updated through DTC's UW 
(underwriting) Source System by underwriters at the time of issue 
eligibility. This change requires DTC to update the UW Source System to

[[Page 60159]]

designate trustee data as a mandatory field at the time of eligibility. 
In order to provide the time it may take for underwriters to update 
their systems to populate the information required by this new 
mandatory field, DTC plans to implement the change to the UW Source 
System in the fourth quarter of 2011. In the event of a change in 
trustee, DTC will require that the new and the prior trustees both 
update the trustee information using the 17Ad-16 form used today to 
update transfer agent changes. By making the trustee authorization 
process more efficient, DTC will increase information flow to industry 
participants and will reduce the risk associated with the manual 
processing of trustee data.
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act,\3\ as amended, and the rules 
and regulations thereunder applicable to DTC because the proposed rule 
change is designed to remove impediments to and perfect the mechanism 
of a national system for the prompt and accurate clearance and 
settlement of securities transactions by replacing the manual approval 
process whereby trustees of an issue receive access to DTC's SPR 
service with an automated approval process.
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    \3\ 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 an 
impact on or impose a burden on competition.

(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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to ninety days of such date if it finds such longer period 
to be appropriate and publishes its reasons for so finding or (ii) as 
to which the self-regulatory organization consents, the Commission 
will:
    (A) By order approve or disapprove the proposed rule change or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 Number SR-DTC-2010-12 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-2010-12. 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 a.m. and 3 p.m. 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/2010.php. 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-2010-12 and should be 
submitted on or before October 20, 2010.
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    \4\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\4\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24452 Filed 9-28-10; 8:45 am]
BILLING CODE 8010-01-P