[Federal Register: May 26, 1999 (Volume 64, Number 101)] [Notices] [Page 28541-28542] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr26my99-162] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-41418; File No. SR-DTC-99-04] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding Revisions to MBS Division Rules May 18, 1999. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ notice is hereby given that on March 15, 1999 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 on the proposed rule change from interested persons. --------------------------------------------------------------------------- \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 revises the rules of DTC's MBS Division to comply with the current financial reporting practices of existing MBS Division participants and potential applicants. 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 The purpose of the proposed rule change is to make the rules of the MBS Division consistent with current practice in the areas of financial reporting of existing MBS participants and potential applicants. The rule change revises Sections 7(b) and 8(b) of Article IV, Rule 1, to clarify that the quarterly financial reports required by appropriate federal or state regulators, such as call reports for banks and FOCUS reports for broker-dealers, can be used to satisfy the requirement in Sections 7(b) and 8(b) for the submission of ``unaudited Financial Statements''. The rule change also revises Section 7(c) of Article IV, Rule 1, to eliminate the requirement that the chief executive officer or chief financial officer of a potential applicant submit a certificate stating that no material adverse changes have occurred in the applicant's financial condition since the applicant submitted the financial statement required by other provisions in MBS Division rules. The MBS Division believes this requirement is unnecessary in light of DTC's access to other sources of information concerning MBS Division applicants. DTC believes that the proposed rule change is consistent with Section 17A(b)(3)(A) of the Act \3\ and the rules and regulations thereunder because, in accordance with the Commission's recommendations, the proposal conforms DTC's rules to current financial reporting practices and MBS division rules to DTC's rules generally.\4\ --------------------------------------------------------------------------- \3\ 15 U.S.C. 78q-1(b)(3)(A). \4\ DTC's rules affecting non-MBS Division participants have no similar requirements. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition DTC does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No comments on the proposed rule change have been solicited, and no written comments have been received. 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)(i) of the Act \5\ and pursuant to Rule 19b-4(f)(1) \6\ promulgated thereunder because the proposal constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. 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. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78s(b)(3)(A)(i). \6\ 17 CFR 240.19b-4(f)(1). --------------------------------------------------------------------------- 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- 0609. 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-99-04 and should be submitted by June 16, 1999. [[Page 28542]] For the Commission by the Division of Market Regulation, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-13356 Filed 5-25-99; 8:45 am] BILLING CODE 8010-01-M