[Federal Register Volume 68, Number 81 (Monday, April 28, 2003)]
[Notices]
[Pages 22430-22431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10383]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47711; File No. SR-DTC-2002-11]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Revision of DTC Rules 2, 5, and 26

April 21, 2003.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 9, 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 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 and modernizes existing rules 2 
(section 7), 5, and 26 of DTC. The changes relate to participant and 
pledgee compliance with applicable laws, reflect guidelines of the 
Office of Foreign Assets Control of the U.S. Department of the Treasury 
(``OFAC'') and USA Patriot Act (``Patriot Act''), and allow DTC to rely 
on signatures transmitted by electronic or other similar means.

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

    The purpose of this filing is to require participant and pledgee 
compliance with applicable laws, add rule provisions reflecting 
guidelines of OFAC and the Patriot Act, and allow DTC to rely on 
signatures transmitted by electronic or other similar means. These 
changes will enhance DTC's compliance initiatives and ease 
administrative burdens currently experienced by DTC and its 
participants.
i. Compliance Initiatives
    The proposed revisions require compliance by participants and 
pledgees with applicable laws. Among other things, this relates to 
applicable laws concerning money laundering, securities, and taxation. 
In addition, participants will be prohibited from seeking to make 
eligible at DTC those issues that have been banned by OFAC. The 
adoption of the proposed rules will reinforce DTC's compliance efforts 
in these areas.
ii. Signatures
    In the interest of modernizing its rules and easing administrative 
burdens, DTC is proposing to amend its rules to allow it to rely on 
``electronic'' and other modern forms of signatures in lieu of original 
signatures.
    The proposed rule change is consistent with the requirements of 
section 17A of the Act and the rules and regulations thereunder because 
it will both increase administrative efficiency and enhance compliance 
with applicable laws thereby reducing risks and associated costs to DTC 
and its participants.

(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 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 \3\ and rule 19b-4(f)(4) \4\ promulgated 
thereunder because the proposal effects a change in an existing service 
of DTC that (i) does not adversely affect the safeguarding of 
securities or funds in the custody or control of DTC or for which it is 
responsible and (ii) does not significantly affect the respective 
rights or obligations of DTC or persons using the service. At any time 
within 60 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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    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 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. 
Comments may also be submitted electronically at the following e-mail 
address: [email protected]. All comment letters should refer to 
File No. SR-DTC-2002-11. This file number should be included on the 
subject line if e-mail is used. To help us process and review comments 
more efficiently, comments should be sent in hardcopy or by e-mail but 
not by both methods. 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

[[Page 22431]]

refer to File No. SR-DTC-2002-11 and should be submitted by May 19, 
2003.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 03-10383 Filed 4-25-03; 8:45 am]
BILLING CODE 8010-01-P