[Federal Register Volume 61, Number 45 (Wednesday, March 6, 1996)]
[Notices]
[Pages 9000-9001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5152]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36899; File No. SR-PHILADEP-95-10]


Self-Regulatory Organizations; Philadelphia Depository Trust 
Company; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Modifying the Customer Name Mailing Transfer Return Procedures

February 28, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 11, 1995, the 
Philadelphia Depository Trust Company (``PHILADEP'') 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 PHILADEP. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
parties.

    \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 modify its Customer Name Mailing (``CNM'') 
transfer return procedures to allow a participant to have securities 
certificates that are registered in a customer's name deposited 
directly into the participant's PHILADEP account.

II. Self-Regulatory Organization's Statements of the Purpose of, and 
the Statutory Basis for, 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.\2\

    \2\ The Commission has modified the text of the summaries 
prepared by PHILADEP.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to modify the CNM 
transfer return procedures. Transfer return is the method by which 
PHILADEP returns to participants securities that the participant 
requested to be registered in customer name but for which the customer 
is no longer the beneficial owner. A typical transfer return situation 
arises when a customer requests that securities certificates be 
registered in its name. The participant notifies PHILADEP's CNM 
department of its request, and the CNM department notifies the 
appropriate transfer agent. The transfer agent issues the securities 
certificates in the customer's name and sends them back to PHILADEP. 
PHILADEP then mails the securities certificates to the customer.\3\ If 
the participant notifies PHILADEP before PHILADEP has mailed the 
securities to the participant's customer that the customer has sold the 
securities, PHILADEP employs the transfer return procedures and returns 
the certificates directly to the participant. At this point, if the 
participant wants to deposit the certificates in its PHILADEP account, 
it must return the certificates to PHILADEP with the appropriate 
deposit information. PHILADEP will send the certificates to the 
transfer agent to have the certificates reregistered in PHILADEP's 
nominee name (i.e., PHILADEP & Co.). The transfer agent will send the 
securities back to PHILADEP, and PHILADEP will deposit them in the 
participant's PHILADEP account.

    \3\ Once PHILADEP receives these securities from the transfer 
agent, a participant may request that PHILADEP delay mailing these 
securities for a couple of days in order to verify that the customer 
in whose name the securities are registered still is the beneficial 
owner (``Hold Mail Request''). Many participants prefer to check the 
beneficial ownership of securities before PHILADEP mails them.
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    The new transfer return procedures eliminate the need for PHILADEP 
to return to the participant securities certificates that the 
participant wants deposited in its PHILADEP account. Under the proposed 
modifications to the transfer return procedures, a participant now will 
be able to have the securities directly deposited into its PHILADEP 
account without first having the securities returned to it. For those 
securities registered in customer name that a participant chooses to 
directly deposit, the participant will send to PHILADEP a deposit 
ticket along with a Medallion Guaranteed letter of indemnity or a 
signed stock or bond power. PHILADEP will send the securities, which 
are registered in the participant's customer's name, to the transfer 
agent to be reregistered in the name of PHILADEP & Co. The transfer 
agent will send the securities back to PHILADEP, and PHILADEP will 
deposit them into the participant's PHILADEP account.
    PHILADEP participants can choose this alternative transfer return 
procedure by including a letter ``D'' in the transmission with the Hold 
Mail Request. The letter ``D'' indicates to PHILADEP that the 
participant would like the item directly deposited into their deposit 
account at PHILADEP.
    PHILADEP believes the proposed rule change is consistent with the 
requirements of the Act and specifically with Sections 17A(b)(3)(A) and 
(F) \4\ because it fosters cooperation and coordination with persons 
engaged in the clearance and settlement of securities transactions and 
further assures the safeguarding of securities which are in the custody 
or control of PHILADEP.

    \4\ 15 U.S.C. Secs. 78q-1(b)(3)(A) and (F) (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    PHILADEP does not believe that the proposed rule change will have 
an impact on or impose a burden on competition.

[[Page 9001]]


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

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) \5\ of the Act and pursuant to Rule 19b-4(e)(4) \6\ 
promulgated thereunder because the proposal effects a change in an 
existing service of PHILADEP that does not adversely affect the 
safeguarding of securities or funds in the custody or control of 
PHILADEP and does not significantly affect the respective rights or 
obligations or PHILADEP or persons using the service. 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.

    \5\ 15 U.S.C. Sec. 78s(b)(3)(A)(iii) (1988).
    \6\ 17 CFR 240.19b-4(e)(4) (1995).
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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, 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. 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 filings will also be available for 
inspection and copying at the principal office of PHILADEP. All 
submissions should refer to File Number SR-PHILADEP-95-10 and should be 
submitted by March 27, 1996.

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

    \7\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-5152 Filed 3-5-96; 8:45 am]
BILLING CODE 8010-01-M