[Federal Register Volume 70, Number 121 (Friday, June 24, 2005)]
[Notices]
[Pages 36678-36679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3283]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51870; File No. SR-DTC-2005-03]


Self-Regulatory Organizations; The Depository Trust Company; 
Order Granting Approval of a Proposed Rule Change Relating to a 
Modification of the Fee Structure

June 17, 2005.

I. Introduction

    On April 26, 2005, The Depository Trust Company (``DTC'') filed 
with the Securities and Exchange Commission (``Commission'') proposed 
rule change SR-DTC-2005-03 pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'').\1\ Notice of the proposal 
was published in the Federal Register on May 13, 2005.\2\ No comment 
letters were received. For the reasons discussed below, the Commission 
is granting approval of the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 51675, (May 9, 2005), 70 
FR 25630.
---------------------------------------------------------------------------

II. Description

    DTC is a subsidiary of the Depository Trust and Clearing 
Corporation (``DTCC''). Participants of DTC and their affiliates may 
from time to time utilize the services of DTCC subsidiaries that are 
not registered as clearing agencies with the Commission. Such 
subsidiaries include Global Asset Solutions LLC and DTCC Deriv/Serv 
LLC. In addition, participants of DTC and their affiliates may utilize 
the services of other third parties through DTCC. DTC has determined 
that it would be more efficient and less costly if the fees that 
participants agree to pay for such services were collected by DTC 
rather than through independent billing mechanisms that would otherwise 
have to be established by each subsidiary of DTCC that is not a 
registered clearing agency and by each third party that is not a 
registered clearing agency.
    The proposed rule change will make clear that DTC may collect from 
its participants fees and charges of other subsidiaries of DTCC and of 
other third party service providers. DTC will enter into appropriate 
agreements with such subsidiaries and other third party service 
providers regarding DTC's collection of fees. Furthermore, the rule 
change makes clear that as a part of its collecting fees and charges 
for services provided to its participants, DTC may similarly collect 
fees and charges for services provided to affiliates of its 
participants.

III. Discussion

    Section 17A(a)(1)(B) of the Act provides that inefficient 
procedures for clearance and settlement impose unnecessary costs on 
investors and persons facilitating transactions by and acting on behalf 
of investors.\3\ Although the services provided by unregulated DTCC 
subsidiaries and by other third parties are not core clearance and 
settlement services, they are related to the clearance and settlement 
operations of DTC and of its participants. By streamlining the fee 
collection process for these services so that DTC's participants will 
pay these fees to DTC as a part of their normal monthly DTC bills, the 
proposed rule change should help to improve efficiency in the 
operations of DTC participants and thereby should remove unnecessary 
cost for DTC participants and for the persons (i.e., the DTCC 
subsidiaries and the other entities providing services to DTC 
participants) facilitating transactions by and acting on behalf of 
investors. Accordingly, the Commission finds that

[[Page 36679]]

the proposed rule change is consistent with the requirements of Section 
17A of the Act.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78q-1(a)(A)(B).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular Section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DTC-2005-03) be and hereby 
is approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3283 Filed 6-23-05; 8:45 am]
BILLING CODE 8010-01-P