[Federal Register Volume 68, Number 241 (Tuesday, December 16, 2003)]
[Notices]
[Pages 70057-70058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30938]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48885; File No. SR-DTC-2002-17]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Elimination of Matching Criteria for DRS Transactions

December 5 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 11, 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 provides for a processing enhancement to 
the Profile Modification System (``Profile'') of the Direct 
Registration System (``DRS'') by eliminating the matching criteria for 
the investor's account registration for certain DRS transactions using 
Profile.

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 the proposed rule change is to enhance Profile 
processing by eliminating investor's account registration information 
\3\ as a matching criteria for certain DRS transactions processed 
through Profile. Implemented by DTC in May 2000, Profile provides an 
electronic means for both participants and DRS limited participants 
(i.e., transfer agents) to convey an investor's request to move from 
one form of securities ownership to another with the actual position 
movements taking place in DRS.\4\ Currently the investor's social 
security number (``SS'') or taxpayer identification number (``TIN''), 
DRS account number, CUSIP, share quantity to be moved through Profile, 
and the account registration information are used by participants and 
DRS limited participants as matching criteria when processing DRS 
transactions through Profile. DTC will eliminate the use of the account 
registration information as a matching criteria for certain DRS 
transactions processed through Profile in order to increase processing 
efficiencies. For those transactions where the investor's SS or TIN is 
available, participants and limited participants will be required to 
use the SS or TIN, CUSIP, DRS account number, and share quantity as 
matching criteria to process DRS transactions through Profile. In the 
event an investor's SS or TIN is not available, the registration, in 
addition to the other criteria, will continue to be required as 
matching criteria.
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    \3\ Account registration information generally includes, but is 
not limited to, the investor's name, designation (i.e., title), and 
form of ownership.
    \4\ Profile allows a broker-dealer to electronically submit an 
instruction to a transfer agent to move an investor's securities 
held in DRS at the transfer agent to the investor's account at the 
broker-dealer and allows a transfer agent to submit an instruction 
to a broker-dealer to move securities held in the investor's account 
at the broker-dealer to the investor's DRS account at the transfer 
agent.
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    DTC's Profile System will be enhanced to accommodate the 
registration elimination for incoming and outgoing files. The following 
rules will apply to Profile transactions submitted by participants and 
DRS limited participants:
    [sbull] For Profile transactions where the participant or limited 
participant inputs the investor's SS or TIN, DTC will no longer require 
registration information. DTC will not forward the registration 
information to the party receiving the Profile instruction.
    [sbull] The registration information will be required when a 
participant or DRS limited participant does not know the investor's SS 
or TIN or that information is not available. Participants and DRS 
limited participants will be required to input nine ``1s'' if the SS or 
TIN is not known or input nine ``9s'' if the SS or TIN is not available 
(as in the case of a foreign investor) and to input the investor's 
registration as it appears on the investor's DRS statement. DTC will 
forward the registration information to the party receiving the Profile 
instruction.
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \5\ and the rules and 
regulations thereunder applicable to DTC because the proposed rule 
change will provide for more efficient use of DRS by participants and 
DRS limited participants. The proposed rule change will be implemented 
consistently with the safeguarding of securities and funds in DTC's 
custody or control for which it is responsible since the operation of 
DRS, as modified by the proposed rule change, will be similar to the 
current operation of DRS.
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    \5\ 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)(iii) \6\ of the Act and Rule 19b-4(f)(4) \7\ promulgated 
thereunder because the proposal effects a change in an existing service 
of a registered clearing agency that does not adversely affect the 
safeguarding of securities or funds in the custody or control of the 
clearing agency or for which it is responsible and does not 
significantly affect the respective rights or obligations of DTC or 
persons using the service. At

[[Page 70058]]

any time within sixty days of the filing of such proposed rule change, 
the Commission could have summarily abrogated such rule change if it 
appeared to the Commission that such action was 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. 
Comments may also be submitted electronically at the following e-mail 
address: [email protected]. All comment letters should refer to 
File No. SR-DTC-2002-17. This file number should be included on the 
subject line if e-mail is used. To help the Commission process and 
review your 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 and on DTC's Web site at http://www.dtc.org/impNtc/mor/index.html. All submissions should refer to File 
No. SR-DTC-2002-17 and should be submitted by January 6, 2004.

    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. 03-30938 Filed 12-15-03; 8:45 am]
BILLING CODE 8010-01-P