[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