[Federal Register Volume 61, Number 35 (Wednesday, February 21, 1996)]
[Notices]
[Pages 6670-6672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3839]



-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36844; File No. SR-DTC-96-04]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Revision of Certain Fees

February 14, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 25, 1996, 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. 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).
---------------------------------------------------------------------------

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 the fees 
charged for deliveries, money market instruments (``MMI'') 
transactions, and long positions because of the conversion to same-day 
funds settlement.\2\

    \2\ A copy of the revised fee schedule is attached to this 
notice of DTC's proposed rule change as Appendix A.
---------------------------------------------------------------------------

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.\3\

    \3\ The Commission has modified the text of the summaries 
prepared by DTC.
---------------------------------------------------------------------------

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

    DTC plans to convert its existing next-day funds settlement and 
same-day funds settlement (``SDFS'') systems into an entirely SDFS 
system on February 22, 1996. Most of the fees currently charged for 
services in each of the two settlement systems are identical and will 
not at this time be affected by the conversion. The purpose of the 
proposed rule change is to revise the 

[[Page 6671]]
fees charged for deliveries, MMI transactions, and long positions which 
will be affected by the conversion. These fees need to be changed in 
order to establish a single fee for each of these services and to take 
into account the substantially greater volumes of book-entry 
transactions, numbers of issues to be included in the SDFS system, and 
DTC's increased costs to process a book-entry delivery in the SDFS 
systems.
    The subject fee schedule revisions are revenue neutral to DTC 
(i.e., the new fee should yield the same amount of revenue to DTC as 
the old fees would have yielded when applied to anticipated 1996 
volumes). The new fees represent a ``blending'' of the existing fees in 
each settlement system reflecting last year's total costs for these 
services. These historical costs may or may not represent the actual 
processing costs in the new settlement system. DTC will need at least 
several months after the conversion to evaluate the related unit 
service costs for these three services.
    DTC believes the proposed rule change is consistent with Section 
17A of the Act \4\ and the rules and regulations thereunder because it 
will provide for the equitable allocation of dues, fees, and other 
charges among participants.

    \4\ 15 U.S.C. 78q-1 (1988).
---------------------------------------------------------------------------

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

    DTC does not believe that the proposed rule change will impose any 
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

    The conversion was described in three memoranda issued jointly by 
the National Securities Clearing Corporation and DTC \5\ and was 
discussed in a DTC proposed rule change approved by the Commission on 
May 16, 1995.\6\ DTC informed participants and other users of its 
services of the proposed fee revisions by an Important Notice.\7\ No 
written comments have been received. DTC will notify the Commission of 
any written comments received by DTC.

    \5\ The Depository Trust Company and National Securities 
Clearing Corporation, Memorandum (July 1, 1992; July 26, 1993; and 
July 29, 1994).
    \6\ For additional information regarding DTC's SDFS system, 
refer to Securities Exchange Act Release No. 35720 (May 16, 1995), 
60 FR 27360 [File No. SR-DTC-95-06] (order granting accelerated 
approval of a proposed rule change modifying the SDFS system).
    \7\ DTC Important Notice (January 17, 1996).
---------------------------------------------------------------------------

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

    The foregoing rule change has become effective pursuant to Sections 
19(b)(3)(A)(ii) \8\ of the Act and pursuant to Rules 19b-4(e)(2) \9\ 
promulgated thereunder because the proposal establishes a due, fee, or 
other charge. 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 investors, or otherwise 
in furtherance of the purposes of the Act.

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii) (1988).
    \9\ 17 CFR 240.19b-4(e)(2) (1995).
---------------------------------------------------------------------------

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, N.W., 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 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. Sec. 552, will be available for inspection and copying in 
the Commission's Public Reference Room, 450 Fifth Street, N.W., 
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 File No. SR-DTC-96-04 and should be 
submitted by March 13, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\

    \10\ 17 CFR 200.30-3(a)(12) (1995).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.

   Appendix A--Fee Changes Arising From the Conversion to an All-SDFS   
                                 System                                 
------------------------------------------------------------------------
           Service                 Present fee           Revised fee    
------------------------------------------------------------------------
  A. Registered Securities                                              
                                                                        
I. NDFS Deliveries:                                                     
    Deliver orders via CNS..  $.07 for each item    $.08 for each item  
                               delivered or          delivered or       
                               received.             received.          
    Deliver orders via ID     .17 for each item     .20 for each item   
     System.                   delivered or          delivered or       
                               received.             received.          
    Deliver orders via PTS,                                             
     MDH or CCF                                                         
        For each deliver      .15 to the deliverer  .18 to the deliver. 
         item presented.                                                
        Prior PM............  .40 to the deliverer  .47 to the          
                                                     deliverer.         
        AM opening to cut-    .25 for each item     .29 for each item   
         off.                  received              received           
                               (regardless of        (regardless of     
                               time).                time).             
II. SDFS Deliveries/Money                                               
 Market Instruments                                                     
 Activity:                                                              
  SDFS Deliveries:                                                      
    Deliver orders via PTS,                                             
     MDH or CCF                                                         
        For each deliver      .93 to the deliverer  .18 to the          
         item presented.                             deliverer.         
        Prior PM............  1.18 to the           .47 to the          
                               deliverer.            deliverer.         
        AM opening to cut-    1.03 for each item    .29 for each item   
         off.                  received              received           
                               (regardless of        (regardless of     
                               time).                time).             
    Deliver orders via ID     .93 for each item     .20 for each item   
     system.                   delivered or          delivered or       
                               received.             received.          
    Money Market Instruments                                            
     Activity                                                           
    Deliver orders..........  1.07 to the           .59 to the          
                               deliverer.            deliverer.         
                              .92 to the deliverer  .41 to the receiver.
    Maturity or               .87 for each item     .59 for each item   
     reorganization            delivered or          delivered or       
     presentments.             received.             received.          

[[Page 6672]]
                                                                        
    Issuance instruction      1.66 to the issuer's  .59 to the issuer's 
     (both dealer-placed and   agent.                agent.             
     directly-placed).                                                  
                                                                        
    B. Bearer Securities                                                
                                                                        
I. Deliver Orders:                                                      
    ID......................  .17 for each item     .20 for each item   
                               delivered or          delivered or       
                               received.             received.          
    PTS, MDH or CCF.........  .33 for each item     .39 for each item   
                               delivered.            delivered.         
                              .25 for each item     .29 for each item   
                               received.             received.          
II. Long Position:                                                      
    For each active issue     .58 per issue.......  .59 per issue.      
     per month (held by more                                            
     than 2 Participants).                                              
    For each less-active      1.33 per issue......  1.34 per issue.     
     issue per month (held                                              
     by 1 or 2 Participants).                                           
    Monthly charge on face                                              
     value                                                              
        $0-$.5 billion......  .000006790..........  No Change.          
        Excess over .5        .0000016988.........  No Change.          
         billion up to $1                                               
         billion.                                                       
        Excess over $1        .00000084025........  No Change.          
         billion up to $8                                               
         billion.                                                       
        Excess over $8        .00000042012........  No Change.          
         billion.                                                       
    A monthly surcharge on    1.05 per issue......  No Change.          
     all positions in Book                                              
     Bond issues.                                                       
    A monthly surcharge on    .25 per issue.......  No Change.          
     all positions requiring                                            
     coupon collection from                                             
     paying agents located                                              
     outside Metropolitan                                               
     New York area.                                                     
    A monthly surcharge on    .50 per issue.......  No Change.          
     all positions in                                                   
     multiple purpose issues.                                           
    A monthly surcharge on    .50 per issue.......  No Change.          
     all positions in issues                                            
     denominated in units of                                            
     $1,000.                                                            
III. Long Position:                                                     
    For each active issue     .47 per issue.......  .50 per issue.      
     monthly (for registered                                            
     corporate issues when a                                            
     daily average of more                                              
     than 15 Participants                                               
     have positions; and for                                            
     registered municipal                                               
     issues when a daily                                                
     average of more than 2                                             
     Participants have                                                  
     positions).                                                        
    For each less-active      .72 per issue.......  .75 per issue.      
     registered corporate                                               
     issue monthly (when a                                              
     daily average of 15 or                                             
     fewer Participants have                                            
     position).                                                         
    For each less-active      1.22 per issue......  1.25 per issue.     
     registered municipal                                               
     issue monthly (when a                                              
     daily average of 1 or 2                                            
     Participants have                                                  
     position).                                                         
    For each 100 shares or                                              
     $4,000 bonds (monthly)                                             
     based on the average                                               
     daily number of shares                                             
     or bonds:                                                          
        0-25 million shares.  .0052...............  No Change.          
        Excess over 25        .0013...............  No Change.          
         million up to 200                                              
         million shares.                                                
        Excess over 200       .000652.............  No Change.          
         million up to 300                                              
         million shares.                                                
        Excess over 300       .00005..............  No Change.          
         million shares.                                                
    For each book-entry-only  .31 per issue, no     No Change.          
     issue (monthly).          per bond/per share                       
                               charge.                                  
    For each Medium-Term      .56 per issue, no     No Change.          
     Note (MTN) and Money      per bond/per share                       
     Market Instrument (MMI)   charge.                                  
     issue (monthly).                                                   
------------------------------------------------------------------------


[FR Doc. 96-3839 Filed 2-20-96; 8:45 am]
BILLING CODE 8010-01-M