Document ID: SEC-2006-0359-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Depository Trust Co.
Posted Date: 2006-03-17T05:00Z

[Federal Register: March 17, 2006 (Volume 71, Number 52)]
[Notices]               
[Page 13872-13873]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17mr06-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53471; File No. SR-DTC-2005-21]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Order Approving Proposed Rule Change To Implement and Revise Fees 
Related to Non-Participant Services

March 13, 2006.

I. Introduction

    On December 20, 2005, The Depository Trust Company (``DTC'') filed 
with the Securities and Exchange Commission (``Commission'') and on 
December 20, 2005, January 23, 2006, and January 25, 2006,\1\ amended 
the proposed rule change SR-DTC-2005-21 pursuant to section 19(b)(1) of 
the

[[Page 13873]]

Securities Exchange Act of 1934 (``Act'').\2\ Notice of the proposal as 
amended was published in the Federal Register on February 9, 2006.\3\ 
The Commission received no comment letters in response to the proposed 
rule change. For the reasons discussed below, the Commission is 
approving the proposed rule change.
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    \1\ The proposed rule change filing was amended twice on January 
25, 2006.
    \2\ 15 U.S.C. 78s(b)(1).
    \3\ Securities Exchange Act Release No. 53219 (February 3, 
2006), 71 FR 6800.
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II. Description

    DTC is (1) revising fees for special requests for Security Position 
Reports (``SPRs'') and for weekly, monthly, and quarterly dividend 
record date SPR subscriptions,\4\ (2) revising existing fees for audit 
confirmations provided to issuers and their agents, and (3) 
implementing new fees for (a) audit confirmations for certificates of 
deposit (``CDs'') provided to issuers and their agents and (b) access 
by transfer agents to DTC's imaging database.
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    \4\ Weekly reports, monthly reports, and quarterly dividend 
record date reports are available by annual subscription only.
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Fees for Issuance of Security Position Reports

    Several types of SPRs are available through DTC. These include: (1) 
Weekly reports showing daily closing positions during that week; (2) 
monthly reports showing closing positions on the last business day of 
the month; (3) quarterly dividend record date reports showing closing 
positions on the dividend record date; and (4) special requests showing 
closing positions for the date specified.
    DTC charges fees for SPRs. Currently, the fee charged to issuers or 
trustees for weekly, monthly, and quarterly dividend record date SPR 
subscriptions is $1,950, $450, and $150, respectively. The fee charged 
to issuers or trustees for special requests is $85 per special request. 
The purpose of this filing is to formally seeks Commission approval of 
these fees. Because DTC incurs significantly higher costs for the 
production of special request SPRs relative to the costs of producing 
reports by subscription and because DTC has determined that a fee 
increase is necessary to more fully recover costs associated with such 
production, DTC is increasing the fee charged to issuers or trustees 
for special request SPRs from $85 to $120 per special request. The 
increase will become effective on a date in the first quarter of 2006 
to be announced by DTC upon the Commission's approval of this proposed 
rule change.

Fees Charged to Issuers/Agents

1. Audit Confirmations
    DTC receives frequent requests from issuers and/or their agents for 
confirmations of audit information relating to securities held by DTC. 
In connection with the processing of such requests for audit 
confirmations, DTC currently charges a fee of $10.00 per request 
containing up to and including five CUSIPs and $2.13 for each CUSIP 
beyond the fifth CUSIP. DTC also receives requests from issuers and/or 
their agents for confirmations relating to information concerning CDs 
deposited at DTC. A fee is not currently charged to process these CD 
audit confirmation requests. Providing issuers and/or their agents with 
audit confirmation information requires the allocation of significant 
resources to process the requests resulting in considerable cost to 
DTC. To more fully recover the costs associated with such audit 
confirmation processing, DTC is (1) increasing fees related to 
processing of audit confirmations to $22 per request for requests of up 
to and including five CUSIPs and an additional $5.00 per item for each 
CUSIP beyond the fifth CUSIP and (2) implementing fees for CD 
confirmation requests that are identical to those for audit 
confirmation requests relating to securities. The proposed audit 
confirmation fees will be effective upon approval by the Commission.
2. Imaging
    DTC frequently receives requests from transfer agents for access to 
DTC's security image database to obtain copies of certificates 
deposited at DTC. DTC incurs significant costs to maintain the database 
but currently does not charge transfer agents for access to the 
database. Therefore, in order to recover costs associated with this 
function, DTC is implementing a new subscription fee of $350 per month 
for access to the DTC security image database. This fee will be 
effective upon approval by the Commission.\5\
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    \5\ DTC has separately filed a proposed rule change (File No. 
SR-DTC-2005-22) with the Commission to impose a subscription fee in 
the same amount on participants who subscribe for access to the DTC 
security image database. Securities Exchange Act Release No. 53463 
(March 10, 2006).
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III. Discussion

    Section 19(b) of the Act directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to such 
organization. Section 17A(b)(3)(D) of the Act requires that the rules 
of a clearing agency provide for the equitable allocation of reasonable 
dues, fees, and other charges.\6\ The Commission believes that DTC's 
rule change is consistent with this section because it will provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among the users of DTC's services.
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    \6\ 15 U.S.C. 78q-1(b)(3)(D).
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IV. 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 section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DTC-2005-21) be and hereby 
is approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-3900 Filed 3-16-06; 8:45 am]

BILLING CODE 8010-01-P