[Federal Register Volume 61, Number 163 (Wednesday, August 21, 1996)]
[Notices]
[Pages 43288-43289]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21325]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37571; File No. SR-PHILADEP-96-12]


Self-Regulatory Organizations; Philadelphia Depository Trust 
Company; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change Relating to Legal Deposit Processing

August 14, 1996.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''), 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 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 from interested persons on the proposed rule 
change.
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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 allow its participants to access Philadep's 
legal deposit processing services through the participants' Philanet 
terminal system.

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 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 
prepared 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 permit Philadep 
participants to access Philadep's legal processing services through the 
participants' Philanet terminal system.\3\ Currently, participants 
access Philadep's legal deposit processing services by forwarding to 
Philadep a security certificate with a manually-completed legal deposit 
ticket attached.\4\ Under the proposed rule change, participants will 
be able to initiate legal deposit processing by utilizing their 
Philanet terminals to input legal deposit information directly to 
Philadep. Once the information is entered by the participant, the 
Philanet system will print a deposit ticket at the participant's local 
printer for attachment to the securities to be deposited at Philadep. 
Participants then will forward the securities and deposit ticket to 
Philadep, and legal deposit processing will proceed in the regular 
manner according to Philadep's current rules and procedures.
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    \3\ Philanet is an electronic communication system that links 
Philadep to its participants. Philanet allows participants to access 
information affecting their accounts through a terminal located at 
participants' offices. For a more complete description of the 
Philanet system, refer to Securities Exchange Act Release No. 34250 
(June 23, 1994), 59 FR 33808 [File No. SR-PHILADEP-93-02] (notice 
and order granting accelerated approval of the Philanet system on a 
permanent basis).
    \4\ The legal deposit ticket contains information regarding the 
identity of the depositing participant, the number of shares 
deposited, and the CUSIP and certificate numbers relating to the 
deposited securities.
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    The proposed rule change also includes one system enhancement to 
legal deposit processing. Because information regarding the securities 
to be deposited will be transmitted directly to Philadep through the 
Philanet terminals, legal deposit processing can begin before Philadep 
receives the physical certificates from its participants.\5\ This 
additional processing time will permit Philadep to compare its 
participants' deposit information against the Security Information 
Center (``S.I.C.'') \6\ database to determine whether a certificate has 
been reported lost or stolen. The proposed rule change should permit 
Philadep to alert its participants by phone or facsimile if a 
certificate has been reported lost or stolen prior to the

[[Page 43289]]

completion of full legal deposit processing and before a participant 
credits its customer's account.
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    \5\ Although preliminary processing may begin prior to receipt 
of the certificates, Philadep will not credit any participant's 
account prior to the receipt of such certificates. Telephone 
Conversation between Joseph E. DiNunzio, Senior Vice President, 
Philadep, and Mark A. Steffensen, Senior Counsel, Division of Market 
Regulation, Commission (August 6, 1996).
    \6\ S.I.C. is the Commission's current designee to receive, 
store, and disseminate information with regard to missing, lost, 
counterfeit, or stolen securities pursuant to Section 17(f) of the 
Act and Rule 17f-1 thereunder.
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    Philadep believes that the proposed rule change is consistent with 
the requirements of Section 17A of the Act \7\ because it fosters 
cooperation and coordination with persons engaged in the clearance and 
settlement of securities transactions and assures the safeguarding of 
securities which are in the custody and control of Philadep or for 
which it is responsible.
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    \7\ 15 U.S.C. Sec. 78q-1 (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    Philadep believes the proposed rule change will not impose a burden 
on competition.

(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. However, several participants have 
requested that Philadep enhance Philanet as described in this 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) \8\ of the Act and pursuant to Rule 19b-4(e)(4) \9\ 
promulgated thereunder because the proposal effects a change in an 
existing service of a registered clearing agency that (i) does not 
adversely affect the safeguarding of securities or funds in the custody 
or control of the clearing agency or for which it is responsible and 
(ii) does not significantly affect the respective rights or obligations 
of the clearing agency 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.
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    \8\ 15 U.S.C. Sec. 78s(b)(3)(A)(iii) (1988).
    \9\ 17 CFR 240.19b-4(e)(4) (1996).
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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, 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 Section, 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 File No. SR-PHILADEP-96-12 and should be 
submitted by September 11, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-21325 Filed 8-20-96; 8:45 am]
BILLING CODE 8010-01-M