Self-Regulatory Organizations, Participants Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Declaring a Dividend

[Federal Register Volume 62, Number 35 (Friday, February 21, 1997)]
[Notices]
[Pages 8072-8073]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4237]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38280; FIle No. SR-PTC-96-09]


Self-Regulatory Organizations, Participants Trust Company; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Declaring 
a Dividend

February 12, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 23, 1996, the 
Participants Trust Company (``PTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change (File No. 
SR-PTC-96-09) as described in Items I, II, and III below, which Items 
have been prepared primarily by PTC. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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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 proposed rule change declares a dividend payable on January 21, 
1997, to PTC's stockholders of record as of December 31, 1996.

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

    In its filing with the Commission, PTC 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. PTC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by PTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    As a condition to approving PTC's application for stock in the 
Federal Reserve Bank of New York, the Board of Governors of the Federal 
Reserve System (``Board of Governors'') prohibited PTC from paying 
dividends to its stockholders.\3\ The Board of Governors subsequently 
relieved PTC of the restriction on payment of dividends with the 
understanding that dividends, if declared, would be declared 
periodically by PTC's Board of Directors and would be paid at a rate 
not to exceed the 90-day United States Treasury bill rate in effect at 
the time the dividend is declared.\4\
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    \3\ Letter from William A. Wiles, Secretary of the Board, Board 
of Governors, to Thomas A. Williams, Milbank, Tweed, Hadley & McCloy 
(March 27, 1989).
    \4\ Letter from Jennifer J. Johnson, Associate Secretary, to the 
Board, Board of Governors, to Leopold S. Rassnick, Vice President 
and General Counsel, PTC (June 9, 1992)
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    The Commission approved PTC's practice of paying dividends out of 
net profits subject to the limitations imposed by the Board of 
Governors and subject to the limitations imposed by the Board of 
Governors and subject to the further requirements that (i) prior to 
using excess income from invested principal and interest (``P&I'') to 
pay a dividend, PTC's Board of Directors be advised of any amount 
related to the investment of P&I which has not been rebated and is part 
of the net profits used to declare the dividend and affirmatively 
approve the application of such excess P&I income for the dividend and 
(ii) PTC file a proposed rule change pursuant to Section 19(b)(3)(A) of 
the Act each time it declares a dividend.\5\
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    \5\ Securities Exchange Act Release No. 31746 (January 15, 
1993), 58 FR 6319 [File No. SR-PTC-92-15].
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    PTC has paid dividends on January 18, 1993, in the amount of $.52 
per share to stockholders of record as of the close of business on 
December 31, 1992,\6\ on January 20, 1994, in the amount of $.525 per 
share to stockholders of record as of the close of business on December 
31, 1993,\7\ on January 20, 1995, in the amount of $1.00 per share to 
stockholders of record as of the close of business on December 31, 
1994,\8\ and on December 29, 1995, in the amount of $.98 per share to 
stockholders of record as of the close of business on December 21, 
1995.\9\ At its meeting on December 19, 1996, PTC's Board of Directors 
declared a dividend payable on January 21, 1997, in the amount of $.98 
per share to stockholders of record as of the close of business on 
December 31, 1996. This dividend rate does not exceed the 90-day United 
States Treasury bill rate in effect on December 19, 1996.\10\ The 
dividend does not include any excess income attributable to investments 
of P&I as all such P&I related income with respect to fiscal year ended 
December 31, 1996, will be rebated to participants on a pro rata basis 
based on the amount of P&I disbursements to each participant.
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    \6\ Id.
    \7\ Securities Exchange Act Release No. 33487 (January 18, 
1994), 59 FR 3900 [File No. SR-PTC-93-07].
    \8\ Securities Exchange Act Release No. 35205 (January 9, 1995), 
59 FR 3444 [File No. SR-PTC-94-08].
    \9\ Securities Exchange Act Release No. 36790 (January 30, 
1996), 61 FR 4507 [File No. SR-PTC-95-09].
    \10\ The 90-day United States Treasury bill rate, as published 
in The Wall Street Journal on December 19, 1996, was 5.00%.
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    PTC believes that the proposed rule change is consistent with 
Section 17A(b)(3)(D) of the Act \11\ and the rules and regulations 
thereunder in that it provides for the equitable allocation of 
reasonable fees and other charges among participants.
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    \11\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    PTC 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

    PTC has not solicited comments with respect to the proposed rule 
change, and none have been received.

[[Page 8073]]

III. Date for Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(A)(i) of the Act \12\ and subparagraph (e)(1) of Rule 19b-4 \13\ 
thereunder because the proposed rule change constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule of the self-
regulatory organization. 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(i).
    \13\17 CFR 240.19b-4(e)(1). 
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. 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 will also be available 
for inspection and copying at the principal office of PTC. All 
submissions should refer to File No. SR-PTC-96-09 and should be 
submitted by March 14, 1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-4237 Filed 2-20-97; 8:45 am]
BILLING CODE 8010-01-M