[Federal Register Volume 70, Number 247 (Tuesday, December 27, 2005)]
[Notices]
[Pages 76474-76475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-7856]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52977; File No. SR-DTC-2005-20]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Discontinue Its Domestic Tax Reporting Service

December 19, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 21, 2005, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') a proposed rule change and on 
November 23, 2005, amended the proposed rule change described in Items 
I, II, and III below, which items have been prepared primarily by DTC. 
DTC filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) 
of the Act \2\ and Rule 19b-4(f)(4) thereunder \3\ so that the proposal 
was effective upon filing with the Commission. 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).
    \2\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule allows DTC to discontinue the Domestic Tax 
Reporting Service (``DTax''). The termination of this service took 
effect on December 1, 2005.

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.\4\
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    \4\ 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

    Although the Commission approved DTC's offering of DTax, DTC has 
determined that it will not offer the service in the future through 
DTC. The purpose of the proposed rule change is to terminate DTax as a 
DTC service offering. DTC participants will be informed of the 
termination of DTax at DTC by Important Notice.
    DTax is a tax reporting service that accumulates and provides year-
end tax recharacterization information on various securities types, 
including mutual funds, real estate investment trusts (REITs), Exchange 
Traded Funds (ETFs), and common stock, to facilitate accurate and 
timely Internal Revenue Service Form 1099 tax reporting. DTC began 
offering the service in 1998, and it has grown to have a database of 
13,000 securities, both DTC-eligible and (predominantly) non-DTC-
eligible securities. The service is available through the Web and other 
proprietary computer-to-computer communications systems.
    For purposes of efficiency and enhanced customer service, a wholly-
owned subsidiary of The Depository Trust & Clearing Corporation, DTC's 
parent, will instead offer DTax. DTC participants will be given 
information regarding how to purchase the service outside of DTC. It is 
anticipated that DTax will be offered to customers at the same cost as 
it has been provided through DTC in the past.

[[Page 76475]]

    The proposed change is consistent with Section 17A of the Act \5\ 
and the rules and regulations thereunder applicable to DTC because it 
will allow for more efficient allocation of DTC's resources. The 
proposed rule change will be implemented consistently with the 
safeguarding of securities and funds in DTC's custody or control or for 
which it is responsible inasmuch as the DTax service merely facilitates 
tax reporting of non-DTC eligible securities and does not affect the 
clearance and settlement of securities in DTC's custody or control.
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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.

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 \6\ and Rule 19b-4(f)(4) \7\ 
thereunder because the proposed rule 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 sixty 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.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(4).
    \8\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on the date on which the last amendment to the proposed 
rule change was filed with the Commission. 15 U.S.C. 78s(b)(3)(C).
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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, as amended, 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-2005-20 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.

All submissions should refer to File Number SR-DTC-2005-20. 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, 100 F Street, 
NE., 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 https://login.dtcc.com/dtcorg/. 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-2005-20 and should be submitted on 
or before January 17, 2006.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-7856 Filed 12-23-05; 8:45 am]
BILLING CODE 8010-01-P