[Federal Register Volume 60, Number 1 (Tuesday, January 3, 1995)]
[Notices]
[Pages 161-162]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32255]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35153; File No. SR-Philadep-94-05]


Self-Regulatory Organization; Philadelphia Depository Trust 
Company; Notice of Proposed Rule Change Concerning Disposal of Expired 
Securities Certificates of Warrants and Rights

December 27, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 6, 1994, the 
Philadelphia Depository Trust Company (``Philadep'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change (File No. SR-Philadep-94-05) as described in Items I, II, and 
III below, which Items have been prepared primarily by Philadep, a 
self-regulatory organization (``SRO''). The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.

    \1\15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Philadep proposes to implement a rule change that would allow the 
disposal of expired securities certificates of warrants and rights. The 
proposed rule change would enable Philadep to reduce its administrative 
expenses associated with keeping expired warrants and rights related 
certificates in its vault.

II. Self-Regulatory Organization's Statement Regarding the Proposed 
Rule Change

    In its filing with the Commission, Philadep included statements 
concerning the purpose of and the 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. Philadep has prepared summaries, as set forth in 
sections (A), (B) and (C) below, of the most significant aspects of 
these statements.

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

    In order to reduce costs and increase operational efficiency, 
Philadep proposes to implement a program which would allow it to 
destroy certain expired securities certificates, specifically expired 
warrants and rights. This destruction policy would enable Philadep to 
reduce the administrative and safekeeping expenses associated with 
keeping expired warrants and rights related certificates in its vault. 
In implementing this program, Philadep will adhere to serveral 
procedures to assure that Philadep does not assume any undue risk. 
First, Philadep will contact the transfer agent or the issuer of the 
securities after the securities has reached their expiration dates to 
verify that the respective warrants or rights have expired. Second, 
Philadep will obtain written confirmation from the transfer agent or 
the issuer that the certificates representing such warrants or rights 
have expired. If there is no transfer agent, Philadep personnel will 
exercise all reasonable due diligence to confirm the expired nature of 
the respective certificates, including (1) consulting with Philadep's 
legal department, its internal audit department, and its senior 
management and (2) receiving a confirmation from the issuer. Third, 
Philadep (1) will notify its participants that the certificates have 
expired in the judgment of the transfer agent or, where there is no 
transfer agent exist, other appropriate parties; (2) will delete such 
securities positions from its participants' account on or after the 
thirtieth day following the date of the notice; and (3) will mark the 
securities certificates and send them to the internal audit department 
for destruction. Additionally, at Philadep's discretion, it may retain 
copies of the certificates on microfilm or on other mediums.
    Philadep believes that the proposed program complies with Section 
17A of the Act\2\ in that it is contemplated to foster cooperation and 
coordination with persons engaged in the clearance and settlement of 
securities transactions by providing an efficient administrative 
mechanism to destroy expired securities.

    \2\15 U.S.C. Sec. 78q-1 (1988).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Philadep believe that the proposed rule change will not pose any 
burden on competition.

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

    Philadep has neither solicited nor received any comments with 
respect to the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Changes 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 Philadep 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making such submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
Copies of the submission, all subsequent amendments, all written 
statements respecting the proposed rule change that [[Page 162]] are 
filed with the Commission, and all written communications concerning 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public pursuant to the 
provisions of 5 U.S.C. Sec. 552, will be available for inspection and 
copying in the Commission's Public Reference Section, 450 Fifth Street, 
N.W., Washington, D.C. 20549. Copies of such filings will also be 
available for inspection and copying at the principal office of 
Philadep. All submissions should refer to File Number SR-Philadep-94-05 
and should be submitted by January 24, 1995.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\

    \3\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-32255 Filed 11-30-94; 8:45 am]
BILLING CODE 8010-01-M