[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