Document ID: SEC-2006-0356-0001
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 13873-13875]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17mr06-125]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53463; File No. SR-DTC-2005-22]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Revise Fee Schedule

March 10, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 22, 2005, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') and on February 22, 2006, amended 
the proposed rule change 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 parties.
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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 revise DTC's fee 
schedule.

[[Page 13874]]

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.\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

    The purpose of the proposed rule change is to revise fees for 
certain services provided by DTC.
    These changes include: \3\
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    \3\ The specific changes to DTC's fee schedule are attached as 
an exhibit to the filing.
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    (1) Elimination of fees charged for Mainframe Dual Host (``MDH'') 
messaging and computer-to-computer (``CCF'') file transfer services. 
The costs previously covered by these charges will be absorbed into the 
overall cost structure of the business lines affected (principally DTC 
Settlement and Asset Services) and will be covered by service fees.\4\
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    \4\ MDH and CCF are communications platforms used by 
participants to interact with DTC.
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    (2) Decreases to Settlement Services fees as part of DTC's 
continuing efforts to realign fees with costs.
    (3) Restructuring of fees for Corporate Actions by charging fees 
per announcement and to compensate for the elimination of CCF charges.
    (4) Increases in Custody and Asset Servicing, Underwriting, and Tax 
Services to realign fees with costs.
    In addition, DTC is implementing certain disincentive fees to 
discourage activities which increase industry inefficiencies. These 
disincentive fees include fees for Withdrawals by Transfer, fees 
related to requirements for physical presentation on corporate action 
transactions, and fees for late submissions of deposits on restricted 
securities.
    Also, DTC is introducing fees associated with new services. In 
particular, such fees relate to Canadian Settlement services, SMART/
Track for Buy-Ins, and Agency Lender Disclosure.\5\ In addition, a new 
fee is being added for a processing enhancement, known as the 
Certificate Verification process, to the existing Deposits service 
which allows participants to submit files through DTC to appropriate 
transfer agents in order to verify that certificates destined for 
transfer are valid certificates prior to physical processing of 
certificates. Such verification provides for a decrease in deposit 
rejects and for improved transaction turnaround.\6\
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    \5\ For further information regarding Canadian Settlement 
services, see Securities Exchange Act Release No. 52784 (November 
16, 2005), 70 FR 70902 (November 23, 2005) [File No. SR-DTC-2005-
08]. For further information regarding SMART/Track for Buy-Ins, see 
Securities Exchange Act Release No. 53032 (December 28, 2005), 71 FR 
1457 (January 9, 2006) [File No. SR-DTC-2005-19]. For further 
information regarding SMART/Track for Agency Lending Disclosure, see 
Securities Exchange Act Release No. 52104 (July 21, 2005), 70 FR 
43730 [File No. SR-DTC-2005-06].
    \6\ For further information regarding DTC's Deposits service, 
see Securities Exchange Act Release No. 46391 (August 21, 2002), 67 
FR 55050 (August 27, 2002) [File No. SR-DTC-2002-07].
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    These proposed fee revisions are consistent with DTC's overall 
pricing philosophy to align service fees with underlying costs, to 
discourage manual and exception processing, and to encourage 
immobilization and dematerialization of securities. The effective date 
for these fee adjustments was January 1, 2006.
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(D) of the Act \7\ and the rules and 
regulations thereunder applicable to DTC because it provides for the 
equitable allocation of reasonable dues, fees, and other charges among 
DTC's participants.
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    \7\ 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 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

    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)(ii) of the Act \8\ and Rule 19b-4(f)(2) \9\ 
thereunder because the proposed rule change establishes or changes a 
due, fee, or other charge applicable only to a participant. At any time 
within sixty 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.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
    \10\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on February 22, 2006, the date on which the last 
amendment to the proposed rule change was filed with the Commission. 
15 U.S.C. 78s(b)(3)(C).
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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-2005-22 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 Number SR-DTC-2005-22. 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

[[Page 13875]]

be available for inspection and copying at the principal office of DTC 
and on DTC's Web site at https://login.dtcc.com/dtcorg/. 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-2005-22 and 
should be submitted on or before April 7, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-3901 Filed 3-16-06; 8:45 am]

BILLING CODE 8010-01-P