[Federal Register Volume 64, Number 236 (Thursday, December 9, 1999)]
[Notices]
[Pages 69054-69055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31962]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42192; File No. SR-DTC-99-23]


Self-Regulatory Organizations; Depository Trust Company; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Tax Services

December 1, 1999.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 8, 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 parties.
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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 fee structure and clarifies 
the features of DTC's TaxInfoSM service.

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 these 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

    DTC TaxInfoSM (formerly TAXI) was developed to provide 
information on withholding tax relief opportunities for DTC-eligible 
securities for various foreign countries of investment from the point 
of view of four countries of the investor: U.S., Canada, U.K., and 
Japan.\3\ TaxInfo is currently available on DTC's Participant Terminal 
System (``PTS'') and currently contains information on ten countries of 
investment from a U.S. investor's perspective. TaxInfo was originally 
made available to participants in March of 1997 in support of DTC's 
foreign withholding tax relief service available via the Elective 
Dividend Service or EDS (which has been renamed TaxReliefSM 
\4\ function on PTS with withholding tax information relative to France 
and the United Kingdom.\5\ Additional country documents have been added 
and updated in 1999, and more will be added over time. The information 
contained in TaxInfo on PTS is provided to participants so that they 
may be able to make informed elections on TaxInfo.SM \6\
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    \3\ In September 1999, DTC introduced TaxVantage--a new family 
of tax products. The TaxVantage family includes the following 
products: TaxReclaim, TaxInfo, and TaxRelief. For a complete 
description of TaxVantage, refer to DTC's website at http://
www.dtc.org.
    \4\ TaxReliefSM allows DTC participants to 
electronically certify shares of record date positions at DTC that 
are eligible for tax relief opportunities.
    \5\ Securities Exchange Act Release No. 32171 (April 19, 1993), 
58 FR 22003.
    \6\ The following disclaimer relates to DTC 
TaxInfoSM: DTC does not represent or warrant the 
accuracy, adequacy, timeliness, completeness, or fitness for any 
particular purpose for the information contained in DTC TaxInfo, 
which is based in part on information obtained from third parties 
and not independently verified by DTC and which is provided as is. 
The information contained in DTC TaxInfo is not intended to be a 
substitute for obtaining tax advice from an appropriate professional 
advisor. In providing this service, DTC shall not be liable for (1) 
any loss resulting directly or indirectly from mistakes, errors, 
omissions, interruptions, delays, or defects in such service, unless 
caused directly by gross negligence or willful misconduct on the 
part of DTC, and (2) any special, consequential, exemplary, 
incidental, or punitive damages.
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    TaxInfo advises participants of the opportunities, risks, and legal 
conditions for using TaxRelief and provides information on filing tax 
reclaims. Additional, TaxInfo provides information on tax withholding 
rates for various investor types (e.g., individuals, mutual funds, 
pension plans, and charities) as well as information on tax treaties, 
tax relief processing procedures, and documentation requirements. 
TaxInfo also provides tax relief information for cross-border portfolio 
investments and simplifies and expedites tax-withholding research for 
DTC-eligible securities.
    DTC proposes to offer DTC TaxInfo to DTC Participants over DTC's 
closed website.\7\ TaxInfo via the Internet may be used in conjunction 
with TaxRelief or by itself as a withholding tax information resource. 
According to DTC, Internet delivery opens up the availability of 
TaxInfo to a much wider audience for participants because its contents 
may be accessed via any computer with Internet access rather than 
requiring a specialized PTS terminal. For example, this increased 
audience may include participants' internal tax advisory staff and 
other non-operational areas. Members of DTC's foreign taxes legal 
working group, who often need to advise their operations staff on DTC 
related tax matters, have expressed to DTC a need to have a way to 
access TaxInfo which is more accessible than PTS.
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    \7\ DTC's website is located at http://www.dtc.org.
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    TaxInfo provided via PTS will only relate to countries where DTC 
has in place a DTC TaxRelief mechanism. The charge for this service 
will continue to be $.09 per inquiry.
    TaxInfo provided via the Internet will include the same information 
provided on PTS as well as information on other countries and security 
types that are not supported by TaxRelief. Additionally, TaxInfo via 
the Internet will have increased functionality, including the

[[Page 69055]]

ability to hyperlink to related websites (containing for example, the 
text of tax treaties), internal hyperlinks, a search capability, and 
better means of navigation within each document, which PTS is not able 
to accommodate. The proposed fee for TaxInfo via the Internet is $2,400 
annually per subscribing participant (with automatic annual renewals).
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \8\ and the rules and 
regulations thereunder applicable to DTC because it provides for the 
equitable allocation of dues, fees, and other charges among DTC's 
participants.
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    \8\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    DTC does not believe that the proposed rule change will have any 
impact or impose any burden, on competition.

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

    Written comments relating to the proposed rule change have not yet 
been solicited or received. DTC will notify the Commission of any 
written comments received by DTC.

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)\9\ of the Act and Rule 19b-4(f)(2)\10\ promulgated 
thereunder because the proposal establishes or changes a due, fee, or 
other charge imposed by DTC. At any time within sixty days of the 
filing of such proposed 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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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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, NW, Washington, DC 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, NW, 
Washington, DC 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-99-23 and should be submitted by 
December 30, 1999.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 99-31962 Filed 12-8-99 8:45 am]
BILLING CODE 8010-01-M