[Federal Register Volume 67, Number 80 (Thursday, April 25, 2002)]
[Notices]
[Pages 20562-20563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10156]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45780; File No. SR-DTC-2001-04]


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

April 18, 2002.
    On March 30, 2001, The Depository Trust Company (``DTC'') filed 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change, File No. SR-DTC-2001-04, pursuant to section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'').\1\ Notice of the 
proposal was published in the Federal Register on November 13, 2001.\2\ 
No comment letters were received. For the reasons discussed below, the 
Commission is granting approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 45025 (November 5, 
2001), 66 FR 56869.
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I. Description

    The Global Corporate Action Hub (``GCAH'') is 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. 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.
    Under the GCAH, 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 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 will 
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' 
announcements and any DTC 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 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 at all times of a transaction's status, 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. Additional protection is provided by an e-mail alert built 
into the system that provides warning messages well in advance of 
transaction deadlines. Each party, therefore, sees both status 
indicators and affirmative messages.
    Users of GCAH who are not DTC participants will sign an agreement 
substantially in the form of the agreement attached as Exhibit B to 
DTC's filing. ``Participant Operating Procedures'' containing more 
detailed information about GCAH are attached to DTC's filing as Exhibit 
C.

II. Discussion

    Section 17A(b)(3)(F) \3\ of the Act requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. The GCAH service 
will facilitate efficient, industry-wide corporate action processing. 
GCAH will provide its users with a single point of access to automated, 
real-time transaction information. The GCAH service will allow DTC to 
further standardize and automate the processing of corporate actions. 
Therefore, the Commission finds that DTC's proposed rule change is 
consistent with its obligation under

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section 17A(b)(3)(F) of the Act to remove impediments to and perfect 
the mechanism of the national system for clearance and settlement.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DTC-2001-04) be and hereby 
is approved.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-10156 Filed 4-24-02; 8:45 am]
BILLING CODE 8010-01-P