Document ID: SEC-2010-0770-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Depository Trust Co.
Posted Date: 2010-05-25T04:00Z

[Federal Register: May 25, 2010 (Volume 75, Number 100)]
[Notices]               
[Page 29374-29375]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25my10-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62119; File No. SR-DTC-2010-08]

 
Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Revise Its Procedures Regarding the Participant Tender Offer Program 
Function

May 18, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 29, 2010, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
primarily by DTC. DTC filed the proposal pursuant to Section 
19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) \3\ thereunder so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
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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 
Procedures regarding the Participant Tender Offer Program function.

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.\4\
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    \4\ 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 distributes information to Participants regarding the 
reorganization activity that it handles.\5\ Upon receiving notice of 
such reorganization activity, Participants may use DTC's Participant 
Tender Offer Program (``PTOP'') function to elect participation in the 
reorganization event and to place related instructions for DTC to 
process. Current examples of reorganization activity managed through 
the PTOP function include the processing of voluntary corporate 
actions, tenders and exchanges, cash conversions, and mandatory event 
processing of mergers with elections.
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    \5\ Generally, this information is distributed through the 
Participant Tender Offer Program Function (``PTOP'') or the 
Reorganization Inquiry for Participants (``RIPS'') function of the 
Participant Terminal System (``PTS'').
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    In an effort to promote the use of a streamlined and efficient 
process for making elections regarding corporate action events, DTC 
proposes updating its Procedures to reflect that Participants may use 
the PTOP function to facilitate the processing of corporate action 
events that DTC deems appropriate.\6\ Because of the large number of 
corporate action events in which Participants may make elections, DTC 
believes the ability to process such events through the PTOP function 
would provide Participants with the efficiency benefits that result 
from automation. For instance, Participants could identify appropriate 
tax treatment prior to allocation which would help decrease alternative 
reliance on the reclaim process. DTC believes this proposal would also 
offer greater automation and efficiency to consent solicitation 
collection, which is currently a manual and paper-driven process.
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    \6\ The proposed changes to DTC's Procedures can be found in 
Exhibit 5 to proposed rule change SR-DTC-2010-08 at http://
www.dtcc.com/downloads/legal/rule_filings/2010/dtc/2010-08.pdf.
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    DTC believes the proposed rule change is consistent with the 
requirements of Section 17A of the Act \7\ and the rules and 
regulations thereunder applicable to DTC because the proposed rule 
change promotes efficiencies in the clearance and settlement of 
securities transactions by revising DTC's Procedures to promote use of 
the PTOP function for elections in corporate action events.
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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 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(4) \9\ thereunder 
because the proposed rule change effects a change in an existing 
service of a registered clearing agency that: (i) Does not adversely 
affect the safeguarding of securities or funds in the custody or 
control of the clearing agency or for which it is responsible and (ii) 
does not significantly affect the respective rights or obligations of 
the clearing agency or persons using the service. At any time within 
sixty days of the filing of such 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

[[Page 29375]]

investors, or otherwise in furtherance of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(4).
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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

     Electronic comments may be submitted by using 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 No. SR-DTC-2010-04 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-2010-08. 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 Web site viewing and 
printing 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 filings 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/downloads/legal/rule_filings/2010/dtc/
2010-08.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-
2010-08 and should be submitted on or before June 15, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12508 Filed 5-24-10; 8:45 am]
BILLING CODE 8010-01-P