Document ID: SEC-2005-0271-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Depository Trust Co.
Posted Date: 2005-11-25T05:00Z

[Federal Register: November 25, 2005 (Volume 70, Number 226)]
[Notices]               
[Page 71180-71181]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25no05-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52785; File No. SR-DTC-2005-17]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to a Systems Enhancement for the Processing of Information in 
Its Restricted Deposit Service

November 16, 2005.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 11, 2005, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change and on 
November 16, 2005, 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 proposed rule change would effect a systems enhancement in 
DTC's Restricted Deposit Service (``RDS'') to permit users to transmit 
restricted stock information directly to DTC rather than manually 
entering the information.

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

    RDS allows DTC participants to use the depository to handle the 
removal of restrictions on securities. DTC provides negotiability and 
documentation review of deposited restricted securities, images and 
delivers them to transfer agents, and arranges for their prompt 
transfer into unrestricted securities. Restricted securities generally 
are securities purchased in private placements directly from an issuer 
before the company is public. They may also be stock acquired through a 
corporate reorganization or acquisition, in return for services, or 
from an original shareholder.\3\
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    \3\ See Securities Exchange Act Release No. 41891 (September 20, 
1999), 64 FR 52115 (September 27, 1999) [File No. SR-DTC-99-101].
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    Currently, a participant seeking to initiate use of RDS will 
transmit restricted securities deposit information to DTC through the 
Restricted Deposit Service by Participant function (``RDSP'') of DTC's 
Participant Terminal System. Until now the transmission of such 
information has required the participant to manually input data 
directly into RDSP; however, participants often have already input such 
information into other applications and thus transmitting the 
information to RDSP requires duplication of effort.
    With this filing, DTC proposes to enhance this process to permit 
participants to transfer such information directly from another 
application containing the information to RDSP. The application used 
for transmission of information to RDSP would either be one selected by 
DTC or at the election of the participant another application so long 
as such application meets technical requirements as determined by DTC.
    The proposed change is consistent with section 17A of the Act \4\ 
and the rules and regulations thereunder applicable to DTC because it 
is designed to remove impediments to and perfect a mechanism for the 
prompt and accurate clearance ad settlement of securities transactions.
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    \4\ 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

    Written comments relating to the proposed rule change have not yet 
been solicited or received.

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

[[Page 71181]]

19(b)(3)(A)(iii) of the Act \5\ and Rule 19b-4(f)(4) \6\ thereunder 
because the proposed rule effects a change in an existing service of 
DTC that (i) does not adversely affect the safeguarding of securities 
or funds in the custody or control of DTC or for which it is 
responsible and (ii) does not significantly affect the respective 
rights or obligations of DTC or persons using the service. 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.\7\
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    \5\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \6\ 17 CFR 249.19b-4(f)(4)
    \7\ 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 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, 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-2005-17 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.

All submissions should refer to File Number SR-DTC-2005-17. 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 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-2005-17 and should be submitted on 
or before December 16, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-6470 Filed 11-23-05; 8:45 am]

BILLING CODE 8010-01-P