Self-regulatory organizations; proposed rule changes: Depository Trust Co.,
[Federal Register: December 27, 2005 (Volume 70, Number 247)]
[Notices]
[Page 76474-76475]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de05-70]
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52977; File No. SR-DTC-2005-20]
Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Discontinue Its Domestic Tax Reporting Service
December 19, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ notice is hereby given that on November 21, 2005, The Depository Trust Company (``DTC'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change and on November 23, 2005, amended the proposed rule change 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) thereunder \3\ 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 parties.
\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).
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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The proposed rule allows DTC to discontinue the Domestic Tax Reporting Service (``DTax''). The termination of this service took effect on December 1, 2005.
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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.\4\
\4\ The Commission has modified the text of the summaries prepared by DTC.
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Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
Although the Commission approved DTC's offering of DTax, DTC has determined that it will not offer the service in the future through DTC. The purpose of the proposed rule change is to terminate DTax as a DTC service offering. DTC participants will be informed of the termination of DTax at DTC by Important Notice.
DTax is a tax reporting service that accumulates and provides year- end tax recharacterization information on various securities types, including mutual funds, real estate investment trusts (REITs), Exchange Traded Funds (ETFs), and common stock, to facilitate accurate and timely Internal Revenue Service Form 1099 tax reporting. DTC began offering the service in 1998, and it has grown to have a database of 13,000 securities, both DTC-eligible and (predominantly) non-DTC- eligible securities. The service is available through the Web and other proprietary computer-to-computer communications systems.
For purposes of efficiency and enhanced customer service, a wholly- owned subsidiary of The Depository Trust & Clearing Corporation, DTC's parent, will instead offer DTax. DTC participants will be given information regarding how to purchase the service outside of DTC. It is anticipated that DTax will be offered to customers at the same cost as it has been provided through DTC in the past.
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The proposed change is consistent with Section 17A of the Act \5\ and the rules and regulations thereunder applicable to DTC because it will allow for more efficient allocation of DTC's resources. The proposed rule change will be implemented consistently with the safeguarding of securities and funds in DTC's custody or control or for which it is responsible inasmuch as the DTax service merely facilitates tax reporting of non-DTC eligible securities and does not affect the clearance and settlement of securities in DTC's custody or control.
\5\ 15 U.S.C. 78q-1.
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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.
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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 not yet been solicited or received.
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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 \6\ and Rule 19b-4(f)(4) \7\ thereunder because the proposed rule effects a change in an existing service of DTC that (i) does not adversely affect the safeguarding of securities or funds in the custody or control of DTC or for which it is responsible and (ii) 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 the proposed 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\
\6\ 15 U.S.C. 78s(b)(3)(A)(iii).
\7\ 17 CFR 240.19b-4(f)(4).
\8\ For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on the date on which the last amendment to the proposed rule change was filed with the Commission. 15 U.S.C. 78s(b)(3)(C).
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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 rule-comments@sec.gov. Please include
File Number SR-DTC-2005-20 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-DTC-2005-20. 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. 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 https://login.dtcc.com/dtcorg/. 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-2005-20 and should be submitted on or before January 17, 2006.
\9\ 17 CFR 200.30-3(a)(12).
For the Commission by the Division of Market Regulation, pursuant to delegated authority.\9\ Jonathan G. Katz, Secretary.
[FR Doc. E5-7856 Filed 12-23-05; 8:45 am]
BILLING CODE 8010-01-P
