[Federal Register Volume 63, Number 71 (Tuesday, April 14, 1998)]
[Notices]
[Pages 18240-18242]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9803]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39838; File No. SR-DTC-98-04]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Fees and Charges

April 8, 1998.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''), notice is hereby given that on February 20, 1998, The 
Depository Trust Company (``DTC'') 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 DTC. DTC amended the proposed rule change on February 25, 
1998. The Commission is publishing this notice to solicit comments from 
interested persons on the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change revises DTC's fee schedule for its 
transfer agent drop (``TAD'') service, which is attached as Exhibit 1.

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

    In its filing with the Commission, DTC 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. DTC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\2\
---------------------------------------------------------------------------

    \2\ The Commission has modified the text of the summaries 
prepared by DTC.

---------------------------------------------------------------------------

[[Page 18241]]

(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 revise the fees 
associated with DTC's TAD service. The TAD service provides transfer 
agents located outside of New York City with a central location within 
Manhattan for the receipt of securities from banks, broker-dealers, 
depositories, and shareholders.\3\ Until 1996, a similar service was 
offered by the New York office of the Midwest Clearing Corporation 
(``MCC'').\4\
---------------------------------------------------------------------------

    \3\ For a complete description of the TAD services, refer to 
Securities Exchange Act Release No. 37562 (August 13, 1996), 61 FR 
43283 [File No. SR-DTC-96-09] (order approving proposed rule 
change).
    \4\ MCC withdrew from the clearing business in 1996. Securities 
Exchange Act Release No. 36684 (January 5, 1996), 61 FR 1195 [File 
Nos. SR-CHX-95-27, SR-DTC-95-22, SR-MCC-95-04, SR-MSTC-95-10, SR-
NSCC-95-15] (order approving MCC's withdrawal from the clearance and 
settlement business).
---------------------------------------------------------------------------

    DTC continually strives to align service fees with estimated 
service costs, and the subject revisions are part of that effort. DTC 
believes that the proposed rule change is consistent with the 
requirements of section 17A of the Act \5\ and the rules and 
regulations thereunder because it provides for the equitable allocation 
of dues, fees, and other charges among DTC's participants and other 
parties who use DTC's TAD service.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

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

    DTC does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purpose of the Act.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received from Members, Participants or Others

    Comments on the proposed rule change were solicited and two comment 
letters from transfer agents were received.\6\ Both comment letters 
express concern with certain fee increases and questioned the rationale 
of certain fees.
---------------------------------------------------------------------------

    \6\ Letters from Achille Retolatto, Vice President, First 
Chicago Trust Company of New York, to Al DeMaio, The Depository 
Trust Company (January 23, 1998) and from William P. Tatler, Vice 
President, Registrar and Transfer Company, to Mario Delli Pizzi, 
Securities Processing Director, The Depository Trust Company 
(January 28, 1998).
---------------------------------------------------------------------------

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)(ii) \7\ of the Act and pursuant to Rule 19b-4(e)(2) \8\ 
promulgated thereunder because the proposal establishes or changes a 
due, fee, or other change imposed by DTC. 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(e)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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. 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 also will be available 
for inspection and copying at the principal office of DTC. All 
submissions should refer to File No. SR-DTC-98-04 and should be 
submitted by May 5, 1998.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.

                                 Transfer Agent Drop Service (TAD) Fee Schedule                                 
----------------------------------------------------------------------------------------------------------------
              Description                           1997 Fee                             1998 Fee               
----------------------------------------------------------------------------------------------------------------
Monthly Service Fee....................  $500..........................  No change.                             
Window Tickets.........................  1.............................  No change.                             
Microfilm Labor........................  15............................  No change.                             
Microfilm Roll.........................  16............................  No change.                             
Daily Valuation:                                                                                                
    Up to 25 window tickets............  $25 per day...................  $25 per day.                           
    More than 25 tickets...............  175 per day                                                            
        26 to 75 tickets...............  ..............................  75 per day.                            
        76 to 100 tickets..............  ..............................  150 per day.                           
        More than 100 tickets..........  ..............................  250 per day.                           
Late Closings:                                                                                                  
     Midnight..................  $1,000 per occurrence.........  2,000 per occurrence.                  
     Same Day Notification.....  No Charge.....................  5,000 per occurrence.                  
     Cancellation--same day....  No Charge.....................  1,000 per occurrence.                  
     DTC holiday--closing......  $2,000 per occurrence.........  5,000 per occurrence.                  
Items Returned to DTC in Error.........  No Charge.....................  $50 per Item.                          
Aging Untransferred Items (Older Than    No Charge.....................  50 per Item.                           
 15 Business Days).                                                                                             
----------------------------------------------------------------------------------------------------------------


[[Page 18242]]

[FR Doc. 98-9803 Filed 4-13-98; 8:45 am]
BILLING CODE 8010-01-M