[Federal Register Volume 70, Number 44 (Tuesday, March 8, 2005)]
[Notices]
[Pages 11291-11292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-972]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51289; File No. SR-DTC-2005-01]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Make Open-Ended Funds Depository Eligible

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, 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 purpose of the proposed rule change is to make open-ended funds 
depository eligible.

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

    Due to processing problems that DTC has experienced with open-ended 
funds in the past, open-ended funds are not eligible for deposit at 
DTC. The proposed rule change allows DTC to accept open-ended funds for 
deposit but will not make the full range of DTC services available for 
these funds. Participants will be able to hold open-ended funds in 
their accounts at DTC and will be able to pledge open-ended funds to 
other DTC participants using DTC's system. Other than holding and 
pledging, no other services (i.e., redemption services, reorganization 
services, dividend payments, or valued transactions) will be available 
to participants for open-ended funds. Dividends paid on open-ended 
funds will not be paid to DTC but will be paid to participants outside 
of DTC's system pursuant to instructions the open-ended fund's issuer 
or its agent receives from participants. Participants will deposit 
shares in open-ended funds into their DTC accounts and will withdraw 
shares in open-ended funds from their DTC accounts through the Deposit 
or Withdrawal at Custodian (``DWAC'') service.
    The proposed rule change is consistent with the requirements of 
Section 17A of the Act \3\ and the rules and regulations thereunder 
applicable to DTC because it assures 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. It will also promote efficiencies related 
to pledges of open-ended funds.
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    \3\ 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 on 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

    No written comments relating to the proposed rule change have been

[[Page 11292]]

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 upon filing pursuant 
to Section 19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(4) \5\ 
thereunder because the proposed rule does not significantly affect the 
respective rights or obligations of the clearing agency or persons 
using the service and 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. At any time within sixty days of the 
filing of such 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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    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 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. 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-2005-01 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-2005-01. 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-2005-01 and should be submitted on 
or before March 29, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-972 Filed 3-7-05; 8:45 am]
BILLING CODE 8010-01-P