[Federal Register Volume 67, Number 160 (Monday, August 19, 2002)]
[Notices]
[Pages 53819-53820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20978]



[[Page 53819]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46340; File No. SR-DTC-2002-10]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to an Enhancement to the New York Window Service Allowing 
Participants To Custody Promissory Notes at DTC

August 12, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on July 16, 2002, 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 provides an enhancement to the New York 
Window service \2\ of DTC, which is part of DTC's Custody service.\3\ 
The enhancement allows DTC participants to custody promissory notes at 
DTC.
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    \2\ For additional information on DTC's New York Window service, 
see Securities Exchange Act Release No. 40179 (July 8, 1998), 63 FR 
30543 [File No. SR-DTC-98-9].
    \3\ For additional information on DTC's Custody service, see 
Securities Exchange Act Release No. 37314 (June 14, 1996), 61 FR 
29158 [File No. SR-DTC-96-8].
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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.\4\
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    \4\ The Commission has modified parts of these statements.
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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 enhance DTC's New 
York Window service, which is part of DTC's Custody service. Earlier 
this year, DTC filed a rule change that permitted the deposit of 
certain instruments with DTC's Custody service in sealed envelopes 
(``Sealed Envelope Service'').\5\
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    \5\ Securities Exchange Act Release No. 34-46018 (June 3, 2002), 
67 FR 39454 [File No. DTC-2002-03]
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    DTC has been informed by some of its participants that it is 
customary in the industry to safekeep promissory notes outside of 
sealed envelopes and that there is a high volume of promissory notes 
kept in participants' vaults. These participants would like to have the 
option of depositing promissory notes either in sealed envelopes or 
outside of sealed envelopes in the New York Window service. This will 
expand participants' use of the Custody service, which supports the 
industry's goal of immobilization of instruments. DTC will apply the 
liability and indemnity standard applicable to the Sealed Envelope 
Service to promissory notes deposited outside of sealed envelopes.
    DTC will apply its current Custody fees to deposits of promissory 
notes. Those fees are a long position fee of $.56 per month per item, a 
deposit fee of $4.86 per item, and a withdrawal fee of $16.91 per item.
    The proposed rule change is consistent with the requirements of 
section 17A of the Act and the rules and regulations thereunder because 
it supports the securities industry goal of immobilization. The 
proposed rule change will be implemented consistently with the 
safeguarding of securities and funds in DTC's custody or control or for 
which it is responsible because the operation of the New York Window 
service, which is part of the Custody service as modified by the 
proposed rule change, will be similar to the current operation of the 
New York Window and Custody services.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    DTC perceives no adverse 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

    Written comments from DTC's participants have not been solicited 
nor 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) of the Act \6\ and Rule 19b-4(f)(4)\7\ promulgated 
thereunder because the proposal effects a change in an existing service 
of DTC that (A) does not adversely affect the safeguarding of 
securities or funds in the custody or control of DTC or for which it is 
responsible and (B) 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 the 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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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(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 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 will also be available for 
inspection and copying at the principal office of the DTC. All 
submissions should refer to the File No. SR-DTC-2002-10 and should be 
submitted by September 9, 2002.


[[Page 53820]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-20978 Filed 8-16-02; 8:45 am]
BILLING CODE 8010-01-P