[Federal Register Volume 63, Number 208 (Wednesday, October 28, 1998)]
[Notices]
[Pages 57717-57718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28848]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40589; File No. SR-DTC-98-17]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Enhancements of Its Memo Segregation Procedures

October 22, 1998.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''), notice is hereby given that on August 21, 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. 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. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change adds three options to DTC's Memo 
Segregation (``Memo Seg'') procedures.

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\
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    \2\ The Commission has modified the text of the summaries 
prepared by DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    This proposed rule change is adding three Memo Seg options made 
possible by the modification. The three memo seg options being added 
are: (1) an instruction to increase the instructing participant's Free 
position and Memo Seg position upon the receipt of deliver orders (free 
or valued) with certain reclaim reason codes; (2) an instruction to 
increase the instructing participant's Free position and Memo Seg 
position upon the receipt of certain continuous net settlement system 
account allocations; and (3) an instruction to turn around all 
positions received from deliver orders except for certain positions. 
These enhancements will be made available to participants starting 
August 24, 1998.
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \3\ and the rules and 
regulations thereunder because it provided for the safeguarding of 
securities and funds in DTC's custody or control or for which it is 
responsible.
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    \3\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    DTC perceives no impact on competition by reason of the proposed 
rule change.

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

    DTC informed participants of the proposed rule change in Important 
Notices dated May 5, 1998, and August 12, 1998. Written comments from 
DTC participants or others have not been solicited or received on the 
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) \4\ of the Act and pursuant

[[Page 57718]]

to Rule 19b-4(e)(4) \5\ promulgated thereunder because the proposal 
effects a change in an existing service of a registered clearing agency 
that: 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 does not significantly affect the respective rights or 
obligations of DTC 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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    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(e)(4).
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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-98-17 and should be 
submitted by November 18, 1998.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-28848 Filed 10-27-98; 8:45 am]
BILLING CODE 8010-01-M