[Federal Register: October 28, 1998 (Volume 63, Number 208)] [Notices] [Page 57717-57718] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr28oc98-114] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-40589; File No. SR-DTC-98-17] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Enhancements of Its Memo Segregation Procedures October 22, 1998. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (``Act''), notice is hereby given that on August 21, 1998, 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. The Commission is publishing this notice to solicit comments from interested persons on the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change adds three options to DTC's Memo Segregation (``Memo Seg'') procedures. 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.\2\ --------------------------------------------------------------------------- \2\ The Commission has modified the text of the summaries prepared by DTC. --------------------------------------------------------------------------- (A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change This proposed rule change is adding three Memo Seg options made possible by the modification. The three memo seg options being added are: (1) an instruction to increase the instructing participant's Free position and Memo Seg position upon the receipt of deliver orders (free or valued) with certain reclaim reason codes; (2) an instruction to increase the instructing participant's Free position and Memo Seg position upon the receipt of certain continuous net settlement system account allocations; and (3) an instruction to turn around all positions received from deliver orders except for certain positions. These enhancements will be made available to participants starting August 24, 1998. DTC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act \3\ and the rules and regulations thereunder because it provided for the safeguarding of securities and funds in DTC's custody or control or for which it is responsible. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78q-1. --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition DTC perceives no impact on competition by reason of the proposed rule change. (C) Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others DTC informed participants of the proposed rule change in Important Notices dated May 5, 1998, and August 12, 1998. Written comments from DTC participants or others have not been solicited or received on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(iii) \4\ of the Act and pursuant [[Page 57718]] to Rule 19b-4(e)(4) \5\ promulgated thereunder because the proposal effects a change in an existing service of a registered clearing agency that: 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; and 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 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. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78s(b)(3)(A)(iii). \5\ 17 CFR 240.19b-4(e)(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. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 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, N.W., Washington, D.C. 20549. Copies of such filing also will be available for inspection and copying at the principal office of DTC. All submissions should refer to File No. SR-DTC-98-17 and should be submitted by November 18, 1998. For the Commission by the Division of Market Regulation, pursuant to delegated authority.\6\ --------------------------------------------------------------------------- \6\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 98-28848 Filed 10-27-98; 8:45 am] BILLING CODE 8010-01-M