Text of the proposed DTC rule change from the Federal Register:
Federal Register: February 21, 2003 (Volume 68, Number 35)]
[Notices]
[Page 8535-8536]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21fe03-71]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47365; File No. SR-DTC-2003-02]
Self-Regulatory Organizations; the Depository Trust Company;
Notice of Filing of Proposed Rule Change Concerning Requests for
Withdrawal of Certificates by Issuers
February 13, 2003.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 3, 2003, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') and on February 11, 2003, amended
the proposed rule change as described in Items I, II, and III below,
which items have been prepared primarily by the DTC. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to clarify that DTC will
only honor requests for withdrawal of certificates submitted by its
participants and not by the issuer of the securities.
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. The DTC has prepared summaries, set forth in sections
(A), (B), and (C) below, of the most significant aspects of these
statements.\2---------------------------------------------------------------------------
\2\ The Commission has modified the text of the summaries
prepared by the DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Recently a number of issuers of securities have requested that DTC
exit from the depository all securities of their issues (``Issuer
Withdrawal Request'' or ``Issuer Withdrawal Requests''). The issuers
have also advised DTC that they will refuse to reregister any
securities into the name of DTC or its nominee, Cede & Co. These
issuers have no legal or beneficial interest in the securities they are
requesting to be exited from DTC. The securities at issue generally
became eligible for DTC services at the request, or for the
convenience, of DTC's participants who wish to utilize DTC's book-entry
transfer system. The subject securities are held by DTC for the benefit
of its participants.
DTC's current rules and procedures permit participants to submit
withdrawal requests if they wish to withdraw their securities from DTC.
However, DTC's current rules and procedures do not provide for DTC to
comply with an Issuer Withdrawal Request without participants'
instructions. Through the proposed rule filing, DTC is seeking to
clarify the procedures that it will follow upon receiving an Issuer
Withdrawal Request. Upon receipt of an Issuer Withdrawal Request, DTC
will, among other things:
[sbull] Issue an ``Important Notice'' notifying participants of the
receipt of the Issuer Withdrawal Request and reminding participants
that they can utilize DTC withdrawal procedures if they wish to
withdraw their securities from DTC.
[sbull] Notify the transfer agent for the issuer that failure to
reregister certificates pursuant to DTC's instructions is a violation
of the transfer agent's obligations under, among other things, DTC's
rule and procedures, such as DTC's Operational Arrangements.
[sbull] Process in the ordinary course of business withdrawal
requests submitted by participants and refuse to effectuate withdrawals
based upon the Issuer Withdrawal Request.
Since this is a clarification of DTC's rules and procedures, DTC
will
[[Page 8536]]
continue to not honor Issuer Withdrawal Requests regardless of any
purported approval of the Issuer Withdrawal Request by the shareholders
or board of directors of the issuer.\3---------------------------------------------------------------------------
\3\ The proposed rule filing is not applicable to securities
that may not legally be held at DTC (e.g., securities restricted
pursuant to Rule 144 or Rule 145 under the Securities Act of 1933).
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DTC believes that the proposed rule filing is consistent with
Section 17A of the Act and the rules and regulations thereunder because
it will promote the prompt and accurate clearance and settlement of
securities transactions
(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will have an
impact on or impose a burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
DTC has discussed the substance of this proposed rule change with
various DTC participants and industry groups and has received favorable
reaction.
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 is consistent with the Act. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
Comments may also be submitted electronically at the following e-mail
address: rule-comments@sec.gov. All comment letters should refer to
File No. SR-DTC-2003-03. This file number should be included on the
subject line if e-mail is used. 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, NW., Washington, DC 20549 Copies
of such filing also will be available for inspection and copying at the
principal office of the DTC. All submissions should refer to File No.
SR-DTC-2003-03 and should be submitted by March 14, 2003.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\4---------------------------------------------------------------------------
\4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-4200 Filed 2-20-03; 8:45 am]
BILLING CODE 8010-01-P
a257.g.akamaitech.net
For those with Adobe Acrobat Reader or similar software, the proposed rule change can also be found at a257.g.akamaitech.net |
