[Federal Register Volume 61, Number 163 (Wednesday, August 21, 1996)]
[Notices]
[Pages 43287-43288]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21324]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37570; File No. SR-PHILADEP-96-11]


Self-Regulatory Organizations; The Philadelphia Depository Trust 
Company; Notice of Filing of a Proposed Rule Change Regarding the 
Destruction of Certain Expired Securities Certificates

August 14, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 28, 1996, the 
Philadelphia Depository Trust Company (``Philadep'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change (File No. SR-PHILADEP-96-11) 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 persons.
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    \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 amend its rules to permit the destruction of 
expired securities certificates representing warrants or rights that 
have expired to be carried out under the supervision of Philadep's 
internal audit department.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Philadep included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments that 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, set forth in sections 
(A), (B), and (C) below, of the most significant aspects of such 
statements.\2\
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    \2\ The Commission has modified the text of the summaries 
submitted by Philadep.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to amend Rule 31 which 
governs the orderly destruction of securities certificates relating to 
expired warrants and rights.\3\ Currently, Section (c) of Rule 31 
requires that all securities to be destroyed pursuant to the rule must 
be forwarded to Philadep's internal audit department for 
destruction.\4\ Under the proposed rule change, Philadep will be 
allowed to destroy the certificates in a designated area of Philadep 
under the supervision of the internal audit department instead of being 
required to destroy such certificates in the internal audit department 
itself.
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    \3\ The procedures for the destruction of expired securities set 
forth in Rule 31 require Philadep to (i) contact the transfer agent 
or the issuer of the expired securities to verify that the 
respective warrants or rights have expired, (ii) obtain written 
confirmation from such transfer agent or issuer that the 
certificates representing such warrants or rights have expired (if 
there is no transfer agent, Philadep personnel must exercise all 
reasonable due diligence to confirm the expired nature of the 
respective certificates including consulting with the Philadep's 
legal department, internal audit department and senior management), 
(iii) notify its participants that in the judgment of the transfer 
agent, or other appropriate parties if a transfer agent does not 
exist, the securities certificates have expired, (iv) delete such 
securities positions from its participants' account on or after the 
thirtieth day following the date of such notice, and (v) 
appropriately mark the securities certificates and forward them to 
its internal audit department for destruction.
    \4\ Securities Exchange Act Release No. 35426 (February 28, 
1995) [File No. SR-PHILADEP-94-05] (order approving proposed rule 
change authorizing Philadep to implement a program for the 
destruction of securities certificates relating to expired warrants 
and rights).
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    Philadep believes the proposed rule change complies with Section 
17A of the Act because it is contemplated to foster cooperation and 
coordination with persons engaged in the clearance and settlement of 
securities transactions by providing an efficient administrative 
mechanism to destroy expired securities that presently and 
unnecessarily occupy critical space in Philadep's vault.

[[Page 43288]]

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

    Philadep believes that the proposed rule change poses no 
appreciable threat or burden on competition and should foster 
competition because it provides for an administratively more effective 
vault protocol.

(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

    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 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 Philadep. All 
submissions should refer to the file number SR-PHILADEP-96-11 and 
should be submitted by September 11, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-21324 Filed 8-20-96; 8:45 am]
BILLING CODE 8010-01-M