[Federal Register Volume 70, Number 44 (Tuesday, March 8, 2005)]
[Notices]
[Pages 11290-11291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-971]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51290; File No. SR-DTC-2005-02]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Order Granting Accelerated Approval of a Proposed 
Rule Change to Establish a Set Up Fee for Open-Ended Mutual Funds

March 2, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 16, 2005, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change described 
in Items I and II below, which items have been prepared primarily by 
DTC. The Commission is publishing this notice and order to solicit 
comments from interested persons and to grant accelerated approval of 
the proposal.
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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 purpose of the proposed rule change is to establish a set up 
fee for open-ended mutual funds.

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.\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 establish a set up 
fee for open-ended mutual funds deposited at DTC. The $10,000 fee, 
payable by the family of funds,\3\ will be for the first CUSIP in the 
family of funds to become eligible for deposit at DTC.\4\ The fee must 
be paid before the first CUSIP becomes eligible for deposit at DTC. DTC 
will not charge the set up fee for additional CUSIPs issued by the same 
family of funds. Limiting the DTC services available to an open-ended 
mutual fund involves manual processing at the time of making it 
eligible, which leads to significant processing costs for DTC.
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    \3\ A family of funds is a group of mutual funds that is managed 
by the same fund company.
    \4\ Open-Ended Funds will have limited use of DTC's services.
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    The proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to DTC because 
the proposed rule change allows for Open-Ended Funds to be deposited at 
DTC assuring the safeguarding of securities and funds which are in the 
custody or control of DTC because DTC will safeguard Open-Ended Funds 
in a manner consistent with the manner it safeguards other securities.

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

    DTC does not believe that the proposed rule change will have an 
impact on or impose a burden on competition.

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

    No written comments relating to the proposed rule change have 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 Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder and particularly with the requirements of Section 
17A(b)(3)(F).\5\ Section 17A(b)(3)(F) requires that the rules of a 
clearing agency be designed to remove impediments to and to perfect the 
mechanism of a national system for the prompt and accurate clearance 
and settlement of securities transactions. The Commission believes that 
the approval of DTC's rule change is consistent with this section 
because it will allow DTC to provide this service whereby those 
pledging and those taking pledges of open-ended mutual funds will be 
able to benefit from an automated service with uniform procedures.
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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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    DTC has requested that the Commission approve the proposed rule 
change prior to the thirtieth day after

[[Page 11291]]

publication of the notice of the filing. The Commission finds good 
cause for approving the proposed rule change prior to the thirtieth day 
after the publication of notice because such approval will allow DTC to 
establish a set up fee for open-ended mutual funds deposited at DTC at 
the same time it makes open-ended mutual funds depository eligible.\6\
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    \6\ Securities Exchange Act Release No. 51289 (March 2, 2005) 
[File No. SR-DTC-2005-01].
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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. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) or
     Send an E-mail to [email protected]. Please include 
File Number SR-DTC-2005-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-DTC-2005-02. 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, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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. All comments received will be 
posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-DTC-2005-02 and should be submitted on 
or before March 29, 2005.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (File No. SR-DTC-2005-02) be and 
hereby is approved on an accelerated basis.
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    \7\ 15 U.S.C. 78s(b)(2).

    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. E5-971 Filed 3-7-05; 8:45 am]
BILLING CODE 8010-01-P