[Federal Register Volume 64, Number 101 (Wednesday, May 26, 1999)]
[Notices]
[Pages 28541-28542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13356]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41418; File No. SR-DTC-99-04]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Regarding Revisions to MBS Division Rules

May 18, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 15, 1999 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 on the proposed rule change from interested persons.
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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 revises the rules of DTC's MBS Division to 
comply with the current financial reporting practices of existing MBS 
Division participants and potential applicants.

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

    The purpose of the proposed rule change is to make the rules of the 
MBS Division consistent with current practice in the areas of financial 
reporting of existing MBS participants and potential applicants.
    The rule change revises Sections 7(b) and 8(b) of Article IV, Rule 
1, to clarify that the quarterly financial reports required by 
appropriate federal or state regulators, such as call reports for banks 
and FOCUS reports for broker-dealers, can be used to satisfy the 
requirement in Sections 7(b) and 8(b) for the submission of ``unaudited 
Financial Statements''.
    The rule change also revises Section 7(c) of Article IV, Rule 1, to 
eliminate the requirement that the chief executive officer or chief 
financial officer of a potential applicant submit a certificate stating 
that no material adverse changes have occurred in the applicant's 
financial condition since the applicant submitted the financial 
statement required by other provisions in MBS Division rules. The MBS 
Division believes this requirement is unnecessary in light of DTC's 
access to other sources of information concerning MBS Division 
applicants.
    DTC believes that the proposed rule change is consistent with 
Section 17A(b)(3)(A) of the Act \3\ and the rules and regulations 
thereunder because, in accordance with the Commission's 
recommendations, the proposal conforms DTC's rules to current financial 
reporting practices and MBS division rules to DTC's rules generally.\4\
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    \3\ 15 U.S.C. 78q-1(b)(3)(A).
    \4\ DTC's rules affecting non-MBS Division participants have no 
similar requirements.
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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 not necessary or appropriate in furtherance of 
the purposes of the Act.

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

    No comments on the proposed rule change have been solicited, and no 
written comments have been received.

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)(i) of the Act \5\ and pursuant to Rule 19b-4(f)(1) \6\ 
promulgated thereunder because the proposal constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule. 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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    \5\ 15 U.S.C. 78s(b)(3)(A)(i).
    \6\ 17 CFR 240.19b-4(f)(1).
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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-
0609. 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-99-04 and should be 
submitted by June 16, 1999.


[[Page 28542]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-13356 Filed 5-25-99; 8:45 am]
BILLING CODE 8010-01-M