[Federal Register Volume 73, Number 160 (Monday, August 18, 2008)]
[Notices]
[Pages 48259-48260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-19028]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58343; File No. SR-DTC-2008-06]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing of Proposed Rule Change as Amended To Modify End of 
Day Settlement Procedures Relating to Settlement Acknowledgement Cut-
off Time Frames for Settling Banks

August 12, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 19, 2008, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') and on August 7, 2008, amended 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 as amended 
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

    DTC is seeking to modify its end of day settlement procedures 
relating to settlement acknowledgement cut-off timeframes for Settling 
Banks.\2\
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    \2\ The term ``Settling Bank'' means a Participant, which is a 
bank or trust company, subject to supervision or regulation pursuant 
to Federal or State banking laws, and a party to an effective 
Settling Bank Agreement.
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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.\3\
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    \3\ 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
    DTC's End-of-Day Settlement Processing controls and coordinates the 
settling of Participant accounts and Settling Bank accounts on DTC's 
systems. The settlement process occurs through the Fedwire system and 
is initiated when DTC posts final figures for Participants and Settling 
Banks. Although the actual settlement process begins with the posting 
of the final settlement figures at approximately 3:45 pm each day,\4\ 
DTC operates a settlement system that provides Participants and 
Settling Banks with online reports throughout the processing day. These 
reports reflect gross debits, gross credits, and the net debit or 
credit for each Participant, and a net-net figure for each Settling 
Bank. Settling Banks, which settle for themselves, may also settle for 
other Participants. Currently, cut-off for Settling Banks to 
acknowledge their net-net settlement balance or to refuse to settle for 
a specific Participant is the later of 4:30 pm or 30 minutes after net-
net settlement balances are first made

[[Page 48260]]

available by DTC.\5\ Any Participant for which a Settling Bank has 
refused to settle must make arrangement for any payment due DTC.
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    \4\ All times are Eastern Standard Time.
    \5\ The end-of-day net-net figure is the net of all 
participants' net balances after cross endorsement with the National 
Securities Clearing Corporation for which a Settling Bank settles, 
including its own accounts.
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    Once the Settling Bank acknowledgement process has been completed, 
DTC utilizes the Federal Reserve Bank's National Settlement Service 
(``NSS'') to effect end-of-day cash settlement.
    DTC is proposing that the cut-off time for Settling Banks to 
acknowledge their settlement balance be the later of 4:15 pm or 30 
minutes after DTC has posted final net-net settlement balances. DTC is 
proposing this change to enable DTC to be in a position to release the 
credit amount due Participants at an earlier time. Since DTC provides 
each Settling Bank with online reports throughout the processing day, 
which reflect gross debits, gross credits, and the net debit or credit 
for each Participant and a net-net figure for the Settling Bank, DTC 
believes that this earlier cut-off time should not cause any undo 
burden. In the event that a Settling Bank is experiencing difficulty in 
identifying customer cash flows or has another extenuating circumstance 
and as a result needs more time to acknowledge settlement, that 
Settling Bank would have to notify the Settlement department of its 
request for additional time prior to 4:15 pm.
    DTC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \6\ and the rules and 
regulations thereunder applicable to DTC because it should promote the 
prompt and accurate clearance and settlement of securities transactions 
by enabling DTC to send the NSS file to the Federal Reserve Bank of New 
York earlier in the day thus completing settlement earlier.
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    \6\ 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 would 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 been 
received and addressed by amendment to the proposed rule change. DTC 
will notify the Commission if it receives additional comments.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) By order approve such proposed rule change or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2008-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2008-06. 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, on official business days between the hours 
of 10 a.m. and 3 p.m. 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.dtcc.com/downloads/legal/rule_filings/2008/dtc/2008-06.pdf. 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-
2008-06 and should be submitted on or before September 8, 2008.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-19028 Filed 8-15-08; 8:45 am]
BILLING CODE 8010-01-P