[Federal Register Volume 59, Number 92 (Friday, May 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11698]


[[Page Unknown]]

[Federal Register: May 13, 1994]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34018; File No. SR-DTC-94-04]

 

Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of Proposed Rule Change Relating to the Implementation 
of the Interactive Capabilities and of the Electronic Mail Features of 
the Enhanced Institutional Delivery System

May 5, 1994.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ notice is hereby given that on April 13, 1994, 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 
the self-regulatory organization. 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) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change consists of procedures for electronic mail 
features and for the interactive use of DTC's enhanced Institutional 
Delivery (``ID'') system.\2\
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    \2\The enhanced ID system concept was approved in an earlier 
Commission order. The order specified that each individual feature 
of the enhanced ID system would be the subject of a separate filing 
under section 19(b)(1) of the Act. Securities Exchange Act Release 
No. 33466 (January 12, 1994), 59 FR 3139 [File No. SR-DTC-93-07] 
(order approving concept of enhanced ID system).
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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.

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The proposed rule change will enable ID system users to use the ID 
system interactively with the capability of accomplishing all ID system 
processing within a single business day. ID system users will have the 
option to continue to use the ID system in a batch mode.
    The proposal also seeks to implement two electronic mail features. 
These features will enable ID system users to send and receive 
``notification of order execution'' and ``institution instruction'' 
messages. A notification of order execution can be sent by a broker-
dealer to communicate the details of an order execution to an 
institution. If the institution accepts the notification of order 
execution, the institution can send the broker-dealer an institution 
instruction containing information, such as the allocation of block 
trades, which is needed by the broker-dealer to enter trade data into 
the ID system for the preparation of confirmations. Currently, broker-
dealers and institutions make telephone calls or send facsimile 
transmissions to communicate this information.
    The proposed rule change is consistent with the requirements of 
section 17A of the Act and the rules and regulations thereunder because 
the proposed rule change will further automate the process by which 
securities transactions are cleared and settle and thereby will 
facilitate the prompt and accurate clearance and settlement of 
securities transactions. The proposal also is consistent with section 
17A in that because the proposed rule change enhances DTC's existing ID 
system it will be implemented consistently with the safeguarding of 
securities and funds in DTC's custody or control or for which DTC is 
responsible.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    DTC perceives no impact on competition by reason of the proposed 
rule change.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    The interactive capability and electronic mail features have been 
developed through widespread consultations with securities industry 
members. Written comments from DTC participants or others have not been 
solicited on the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within thirty-five 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 such proposed rule change or
    (b) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

    DTC requests accelerated effectiveness for the proposed rule change 
pursuant to section 19(b)(2) of the Act so that the proposed rule 
change can be implemented as soon as possible. Recently, the Commission 
adopted Rule 15c6-1 under the Act which, effective June 1, 1995, 
establishes three business days as the standard settlement timeframe 
for broker-dealers.\3\ The proposed rule change, particularly the 
interactive capability of the ID system, will facilitate three business 
day settlement. Accelerated effectiveness of the proposed rule change 
will enable ID system users to become accustomed to the ID system well 
in advance of conversion to a three business day settlement cycle.
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    \3\For a detailed description and discussion of the conversion 
to a three business day settlement cycle, refer to Securities and 
Exchange Commission Release Nos. 33-7022, 34-33023, and IC-19768 
(October 13, 1993), 58 FR 52891 [File No. S7-5-93] (order adopting 
Commission Rule 15c6-1).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. 
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, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at the principal office of DTC. All submissions 
should refer to File No. SR-DTC-94-04 and should be submitted by June 
3, 1994.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\17 CFR 200.30-3(a)(12) (1992).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-11698 Filed 5-12-94; 8:45 am]
BILLING CODE 8010-01-M