[Federal Register Volume 75, Number 72 (Thursday, April 15, 2010)]
[Notices]
[Pages 19667-19668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8614]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61877; File No. SR-DTC-2010-06]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Elective Dividends Service

April 8, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 22, 2010, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
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) \3\ 
thereunder 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 persons.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will provide various technical updates to 
DTC's Elective Dividend service.

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.

[[Page 19668]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In 1991, DTC filed a rule change with the Commission to establish 
the Elective Dividends (``EDS'') function.\4\ The EDS function allows 
participants to use DTC's Participant Terminal System (``PTS'') or 
Participant Browser System (``PBS'') instead of hard copy for their 
instructions concerning distributions on certain issues of securities.
---------------------------------------------------------------------------

    \4\ Securities Exchange Release Act No. 29814 (Oct. 11, 1991), 
56 FR 55563 (Oct. 21, 1991).
---------------------------------------------------------------------------

    At the request of its participants, DTC has created an automated 
election instruction approval process accessible through PBS (``EDS 
approval process'').\5\ The EDS approval process will provide 
participants with a streamlined, electronic means of internally 
reviewing and approving election instructions and will be used for the 
following EDS services: Cash-in Lieu/Round Up, Dividend Reinvestment 
Program, Foreign Currency Payments, Optional Dividend Distribution, and 
Tax Relief. Participants that chose to use the EDS approval process 
will be required to assign an administrator in their firm to enable or 
disable the EDS approval process at the firm. The EDS approval process 
will have three basic entitlements to allow for the creation and 
approval of instructions: (i) Creator, which allows the user to only 
create instructions, (ii) approver, which allows the user to approve 
instructions created by others and (iii) creator/approver, which allows 
the user to create its own instructions that are automatically 
approved. Once an instruction is created, it will appear with a status 
of ``Pending'' for the approver to approve or reject. Once approved, 
the instruction becomes an approved election that will appear in the 
election window and will be processed in the same way that DTC 
currently processes such elections.\6\
---------------------------------------------------------------------------

    \5\ When the EDS approval process is enabled for a given 
service, a participant will be required to create and update its 
instructions in PBS for that service; PTS may not be used.
    \6\ If left unapproved, the instruction will remain pending 
until the cutoff date. If the instruction is pending on the cutoff 
date, it will be deleted from the EDS system at the end of the day, 
and the instruction will revert to the last approved election or if 
one does not exist, to the default for the event.
---------------------------------------------------------------------------

    Additionally, DTC is making technical updates to its procedures in 
order to properly reflect DTC contact information and the input methods 
available to participants.
    DTC states that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \7\ and the rules and 
regulations thereunder because it promotes efficiencies in the 
clearance and settlement of securities transactions by providing 
participants with a streamlined, electronic means of internally 
reviewing and approving election instructions.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

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

    DTC has not solicited or received written comments relating to the 
proposed rule change. DTC will notify the Commission of any written 
comments it receives.

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 \8\ and Rule 19b-4(f)(4) \9\ 
thereunder because the proposed rule change effects a change in an 
existing service of DTC that (i) does not adversely affect the 
safeguarding of securities or funds in DTC's custody or control or for 
which it is responsible and (ii) does not significantly affect the 
respective rights of DTC or persons using the service. 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------

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 No. SR-DTC-2010-06 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-DTC-2010-06. 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 Web site viewing and 
printing in the Commission's Public Reference Room, 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 filings also will be available for 
inspection and copying at DTC's principal office and DTC's Web site at 
http://www.dtc.org/impNtc/mor/index.html. 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 No. SR-DTC-2010-06 and should be submitted on or 
before May 6, 2010.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8614 Filed 4-14-10; 8:45 am]
BILLING CODE 8011-01-P