[Federal Register Volume 66, Number 219 (Tuesday, November 13, 2001)]
[Notices]
[Pages 56869-56870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28278]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45025; File No. SR-DTC-2001-04]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of Proposed Rule Change Relating to the Implementation 
of the Global Corporate Action Hub Service

November 5, 2001.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\, notice is hereby given that on March 30, 2001, 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.
---------------------------------------------------------------------------

    \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 purpose of the proposed rule change is to activate the Global 
Corporate Action Hub (``GCAH''), a new service that will provide 
efficient means of systemically transmitting corporate actions 
information and consolidating related messages between investment 
managers and their multiple custodians.

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\
---------------------------------------------------------------------------

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

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    DTC proposes to activate GCAH that will provide an efficient means 
of systemically transmitting corporate actions information and 
consolidating related messages between investment managers and their 
multiple custodians using GCAH.
    GCAH will (1) Provide a single, automated point of access through a 
centralized communications conduit for custodians and investment 
managers; (2) standardize corporate action market practice and embrace 
the recently released ISO 15022 MT56X message formats; (3) use 
Internet-based technology to provide easy access to all parties; (4) 
offer a seamless exchange of information between bank and broker 
custodians, investment managers and DTC; and (5) enhance service 
delivery by providing an efficient, industry-wide corporate action 
processing solution.
    Each custodian will create the corporate action message for its 
recipients, who are investment managers servicing mutual customers. 
Custodians may, but are not required to, use information supplied by 
DTC in

[[Page 56870]]

creating their corporate action message. Regardless of whether or not 
custodians use information supplied by DTC, custodians remain 
responsible for the content of the messages. Using event-specific 
templates with standardized election options, each custodian will 
provide or validate the terms and conditions, then add account and 
position information for each customer. GCAH will route these 
announcements, along with those generated by other custodians, to the 
specified investment managers. DTC will ensure that mandatory fields 
are completed but will not edit, change, or validate the terms and 
conditions of the announcements that remain unique to the custodians.
    Each investment manager will receive all of its custodians' (and, 
where available, DTC's) announcements for a single event on a single 
display. Investment managers will select their election option for 
voluntary offers. Investment managers will have the opportunity to make 
their election decisions for all accounts, for accounts handled by 
individual custodians, or by customer account, and their election 
decisions will be sent back to the custodians using GCAH. Investment 
managers will receive status updates reflecting the state of the 
message (e.g., unread).
    GCAH contains built-in, real-time status flow monitoring that keeps 
all parties informed of a transaction's status at all times, with each 
party seeing changing status indicators that effectively track the 
progressive stages in the communication process. The GCAH home page 
includes summary alerts to highlight pending transactions and deadlines 
with additional protection provided by e-mail alert built into the 
system that also provide warning messages well in advance of 
transaction deadlines. Each party, therefore, sees both status 
indicators and affirmative messages warning of any problem.
    Users of GCAH who are not DTC participants will sign an agreement 
substantially in the form of the agreement attached hereto as Exhibit B 
to DTC's filing. ``Participant Operating Procedures,'' containing more 
detailed information about GCAH, are attached hereto as Exhibit C to 
DTC's filing.
    The proposed rule change is consistent with the requirements of 
section 17A(b)(3)(A) of the Act and the rules and regulations 
thereunder applicable to DTC because it will increase the speed of data 
transmission between investment managers and custodians, thereby 
promoting efficiencies in corporate actions matters.

(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 purposes of the Act, in the public interest, and for 
the protection of investors.

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

    Written comments from DTC Participants or others have not been 
solicited or received on the proposed ruled change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register, or within such longer period: (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which DTC consents, the Commission will:
    (A) by order approve such proposed rule change or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2001-04 and should be submitted by 
December 4, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\3\
---------------------------------------------------------------------------

    \3\ 17 CFR 200.30-3(a0(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-28278 Filed 11-9-01; 8:45 am]
BILLING CODE 8010-01-M