[Federal Register Volume 60, Number 57 (Friday, March 24, 1995)]
[Notices]
[Pages 15614-15615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7239]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35513; File No. SR-DTC-95-05]


Self-Regulatory Organizations; the Depository Trust Company; 
Notice of Filing of a Proposed Rule Change Seeking Permanent Approval 
of Money Market Instrument Program

March 17, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 7, 1995, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change (File No. 
SR-DTC-95-05) as 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 
persons.

    \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 seeks permanent approval of DTC's expanded 
money market instrument (``MMI'') programs to which the Commission 
previously granted temporary approval through April 30, 1995.\2\

    \2\For a complete discussion of the issues regarding DTC's 
expanded MMI program, refer to Securities Exchange Act Release No. 
33958 (April 22, 1994), 59 FR 22878 [File No. SR-DTC-93-12] (order 
temporarily approving proposed rule change).
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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 that 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 seeks permanent approval of DTC's 
settlement services for transactions in additional types of MMIs, 
including institutional certificates of deposit, municipal commercial 
paper, and bankers' acceptances. The proposed rule change also seeks to 
permanently expand and to improve DTC's existing MMI programs for 
corporate commercial paper (``CP''), medium-term notes, preferred stock 
in a CP-like mode, short-term bank notes, and discount notes. The 
Commission previously granted DTC's expanded MMI program temporary 
approval through April 30, 1995.\3\

    \3\Supra note 2.
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    The new MMI programs, along with the existing MMI programs, are an 
extension of DTC's Same-Day Funds Settlement (``SDFS'') system.\4\ The 
[[Page 15615]] automated operating procedures for MMIs are virtually 
the same as those followed by SDFS participants and by Institutional 
Delivery system users for basic depository services in other eligible 
SDFS securities. The MMI issues being made SDFS-eligible will be 
distributed in book-entry-only form by the issuer's issuing agent that, 
as in the commercial paper and medium-term note MMI programs, will send 
MMI issuance instructions to DTC electronically. Settlement of an issue 
will be on the same day as the issuance or on a specified future day. 
The issuer's paying agent, that will also serve as DTC's custodian, 
will hold a master or balance MMI certificate for DTC unless the issuer 
and its issuing and paying agent bank choose to distribute 
uncertificated MMIs through DTC.\5\ Because SDFS-eligible MMIs will be 
book-entry only, participant operating procedures for deposits and 
withdrawals will not apply to MMIs.

    \4\DTC's SDFC system currently includes the following issue 
types: corporate commercial paper, municipal notes and bonds, 
municipal variable-rate demand obligations, zero coupon bonds backed 
by U.S. Government securities, continuously offered medium-term 
corporate notes, short-term bank notes, auction-rate and tender-rate 
preferred stocks and notes, collateralized mortgage obligations and 
other asset-backed securities, Government trust certificates and 
Government agency securities not eligible for the Fed's book-entry 
system, retail certificates of deposit, corporate and municipal 
variable mode obligations, corporate bonds, discount notes, and unit 
trusts. For a detailed description and discussion of DTC's SDFC 
system, including the implementation of the commercial paper 
program, refer to Securities Exchange Act Release Nos. 26051 (August 
31, 1988), 53 FR 34853 [File No. SR-DTC-88-06] (order permanently 
approving DTC's SDFS system) and 30986 (July 31, 1992), 57 FR 35856 
[File No. SR-DTC-92-01] (order approving implementation of 
commercial paper program).
    \5\Uncertificated MMIs are not evidenced by any certificate 
whatsoever. Bills, notes, bonds, and other securities have been 
issued in uncertificated form by U.S. government and federal 
agencies for many years.
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    DTC believes the proposed rule change is consistent with the 
requirements of the Act, specifically Section 17A(b)(3)(A)\6\ of the 
Act, and the rules and regulations thereunder because the rule proposal 
will facilitate the prompt and accurate clearance and settlement of 
securities transactions in MMIs.

    \6\15 U.S.C. 78q-1(b)(3)(A) (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    DTC does not believe that the proposed rule change will impact or 
impose a burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    DTC has not solicited comments on the proposed rule change. 
Discussions with DTC participants, including those on the Task Force 
established by the Public Securities Association's Money Market 
Committee to advise DTC on the operation of its MMI programs, indicate 
wide support for the proposed permanent expansion of the MMI program.

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 DTC 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 written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street NW., Washington, D.C. 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 
than 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 Room, 450 Fifth Street NW., Washington, 
D.C. 20549. Copies of such filing will also be available for inspection 
and copying at the principal office of DTC. All submissions should 
refer to the file number SR-DTC-95-05 and should be submitted by April 
14, 1995.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\

    \7\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-7239 Filed 3-23-95; 8:45 am]
BILLING CODE 8010-01-M