[Federal Register Volume 61, Number 162 (Tuesday, August 20, 1996)]
[Notices]
[Pages 43110-43111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21156]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37558; File No. SR-PHILADEP-96-13]
Self-Regulatory Organizations, Philadelphia Depository Trust
Company; Notice of Filing of Proposed Rule Change Relating to
Modifications of Procedures To Implement Rule 17Ad-16
August 12, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on July 2, 1996, 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.
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\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
Philadep proposes to comply with the Commission's Rule 17Ad-16 \2\
by (i) making the material information available from the transfer
agent notices available to Philadep participants over Philanet for
Philadep-eligible securities and (ii) transmitting broadcast messages
over Philanet to Philadep-only participants for securities not eligible
for deposit at Philadep.
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\2\ 17 CFR 240.17Ad-16.
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II. Self-Regulatory Organization's Statements 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.\3\
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\3\ The Commission has modified parts of these statements.
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A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
On December 1, 1994, the Commission adopted Rule 17Ad-16 which
requires a registered transfer agent to provide written notice to the
``appropriate qualified registered
[[Page 43111]]
securities depository'' \4\ when terminating or assuming transfer agent
services on behalf of an issuer or when changing its name or
address.\5\ Rule 17Ad-16 also requires (1) the appropriate qualified
registered securities depository that receives such a notice from a
transfer agent to deliver within twenty-four hours a copy of such
notice to all ``qualified registered securities depositories'' \6\ and
(2) each qualified registered securities depository that receives such
a notice to notify its participants of such transfer agent change
within twenty-four hours. The purpose of Rule 17Ad-16 is to facilitate
the prompt and accurate clearance and settlement of securities
transactions by assuring that clearing agencies have the most recent
information regarding the respective transfer agents.
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\4\ Rule 17Ad-16 defines ``appropriate qualified registered
securities depository'' to mean the qualified registered securities
depository that the Commission so designates by order or in the
absence of such designation the qualified securities depository that
is the largest holder of record of all qualified registered
depositories as of the most recent record date. The Commission
designated The Depository Trust Company (``DTC'') as the appropriate
qualified registered securities depository for Philadep. Securities
Exchange Act Release No. 35378 (February 15, 1995), 60 FR 9875.
\5\ Securities Exchange Act Release No. 35039 (December 1,
1994), 59 FR 63656.
\6\ Rule 17Ad-16 defines ``qualified registered securities
depository'' to mean a clearing agency registered under Section 17A
of the Act that performs clearing agency functions and that has
rules and procedures concerning its responsibility for maintaining,
updating, and providing appropriate access to the information it
receives pursuant to Rule 17Ad-16.
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DTC, as the appropriate qualified registered securities depository,
will inform Philadep of all transfer agent changes within twenty-four
hours regardless of whether the issue is eligible at Philadep. For
issues that are eligible at Philadep, Philadep will update its security
masterfile to reflect the changes in transfer agents for affected
issues. Philadep participants may access this information via
Philanet.\7\ In addition, many Philadep participants are also DTC
members and therefore have access to DTC's Participants Terminal System
(``PTS''), whereby this information also is disclosed. For issues that
are eligible at DTC but not at Philadep, dually affiliated participants
may access this information through PTS. In order to comply with Rule
17Ad-16 for issues that are DTC eligible but are not Philadep eligible,
Philadep will make transfer agent information available to its
participants in the form of a Philanet broadcast message. The Philanet
broadcast messages will print at the participants' offices.
Furthermore, if participants want to call Philadep for transfer agent
information for securities that are not Philadep eligible, they may
contact Philadep Operations.
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\7\ Philanet is an on-line terminal network system. Philanet
allows Participants to access information affecting their accounts
through an on-site terminal located at the Participants' offices.
In order to specifically access the transfer agent information,
Participants must access the ``RQST,'' must enter the account and
CUSIP number, and then access the SPOL screen. This screen will
reveal the current transfer agent and its address.
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Whether eligible or not eligible at Philadep, Philadep will serve
to inform its participants of the status of the current transfer agent.
Philadep anticipates that few, if any, Philadep only participants will
deal directly with transfer agents. Assuming that any such participants
do deal with directly transfer agents, Philadep further anticipates
that these participants will conduct de minimus activity in issues that
are not Philadep-eligible. Moreover, all Philadep participants may
request that Philadep review a security not eligible at Philadep with
respect to making the issue eligible at Philadep on the same day of the
request.
Philadep will keep the broadcast messages and its ``transfer agent
changes notification manifest'' at its offices in accordance with the
record retention requirement contemplated in Rule 17Ad-16.
The proposed change complies with Section 17A of the Act insofar as
it fosters cooperation and coordination with persons engaged in the
clearance and settlement of securities transactions.
B. Self-Regulatory Organization's Statement on Burden on Competition
This modification will not impose a burden on competition not
contemplated under the Act.
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 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 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 provisions of 5
U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Section in Washington D.C. 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-96-13 and should be submitted by September 10, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-21156 Filed 8-19-96; 8:45 am]
BILLING CODE 8010-01-M