[Federal Register Volume 61, Number 13 (Friday, January 19, 1996)]
[Notices]
[Pages 1417-1418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-509]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-36685; File No. SR-DTC-95-23]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of Proposed Rule Change Seeking to Implement the 
Matching Feature in the Institutional Delivery System

January 5, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ notice is hereby given that on November 8, 1995, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change (File No 
SR-DTC-95-23) 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 to implement the matching feature in 
DTC's Institutional Delivery (``ID'') system.

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.\2\

    \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

    The Commission previously approved a proposed rule change filed by 
DTC generally describing several enhancements to the ID system, 
including the matching feature which is the subject of this proposed 
rule change, that it planned to implement.\3\ This proposed rule change 
seeks to implement the matching feature.

    \3\ Securities Exchange Act Release No. 33466 (January 12, 
1994), 59 FR 3139 [File No. SR-DTC-93-07] (order approving proposed 
rule change relating to the enhanced ID system.
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    The matching feature is an alternative to the current procedures 
for confirmation and affirmation processing in the ID system. If a 
broker-dealer and an institution elect to use the matching feature, the 
ID system will interactively match trade data received from the broker-
dealer with institution instructions received from the institution. If 
the trade data and institution instructions match and if the 
institution also is the affirming party, the ID system will produce a 
matched affirmed confirmation. At this point, the broker-dealer and 
institution will not have to take any other action for the trade to 
settle other than action that normally would have to be taken if the 
standard confirm/affirm procedures were followed. If the trade data and 
institution instructions match but the institution does not have 
affirming authority, the ID system will produce a matched confirmation 
requiring affirmation by the designated affirming party. In the ID 
system, the affirming party may be an institution, an agent, or an 
interested party.
    Throughout the day, broker-dealers and institutions will be able to 
use the ID system's inquiry capabilities to view any unmatched items. 
At the end of the day, an Unmatched Report will be generated for each 
broker-dealer and institution. This report will list all broker-dealer 
trade input and institution instructions that were not matched by end 
of day. Unmatched trades appearing on this report will be carried over 
from day to day unless the broker-dealer cancels its instruction or the 
institution affirms the trade.
    DTC believes the proposed rule change is consistent with the 
requirements of Sections 17A(b)(3) (A) and (F)\4\ of the Act because 
the proposed rule change will promote efficiencies in the clearance and 
settlement of securities transactions. DTC believes the proposed rule 
change will be implemented consistently with the safeguarding of 
securities and funds in DTC's custody or control or for which it is 
responsible because the proposed rule change will be implemented as 
enhancements to DTC's existing ID system.

    \4\ 15 U.S.C. 78q-1(b)(3) (A) and (F) (1988).
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(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 proposed rule change has been developed through widespread 
consultations with securities industry members, as described in DTC's 
earlier filing describing the ID system enhancements.\5\ Written 
comments from DTC participants or others have not been solicited or 
received on the proposed rule change.

    \5\ Supra note 3.
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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.

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, 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 

[[Page 1418]]
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 Room, 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-95-23 and should be submitted by February 9, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\

    \6\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-509 Filed 1-18-96; 8:45 am]
BILLING CODE 8010-01-M