Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Concerning DTC's Automated Domestic Tax Reporting Service

[Federal Register Volume 64, Number 42 (Thursday, March 4, 1999)]
[Notices]
[Pages 10523-10524]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5370]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41105; File No. SR-DTC-99-02]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Concerning DTC's Automated Domestic Tax Reporting Service

February 25, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 5, 1999, The 
Depository Trust Company (``DTC '') filed with the Securities 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.
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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 will provide an automated domestic tax 
reporting service (``DTAX'') accessible through DTC's Participant 
Terminal System (``PTS'') and computer-to-computer facility (``CCF'').

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis, the 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 
test 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\
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    \2\ The Commission has modified the text of the summaries 
prepared by DTC.
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(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 provide participants 
with automated access to centralized tax information on securities 
distributions through DTC's PTS DPT and CCF facilities. Many issuers of 
securities announce regular income distributions throughout the year, 
reclassifying their tax status at year-end to indicate long term and 
short term capital gains, return of capital, as well as other taxable 
events. DTC believes that participants require timely access to this 
information to comply with their record keeping and reporting 
requirements and procedures.
    Previously, DTC distributed tax information through its website and 
the PTS Legal Notice System, LENS, as well as in hardcopy notices 
distributed by DTC's Dividend Department. Expansion of this service to 
an automated and centralized data bank, with inquiry capabilities on 
PTS, will provide participants with more efficient and timely access to 
the information.\3\
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    \3\ The fees charged in connection with the automated domestic 
tax reporting service were filed with the Commission on December 10, 
1998 [File No. SR-DTC-98-25].
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    The proposed rule change is consistent with the requirements of 
Section 17A of the Act \4\ and the rules and regulations thereunder 
applicable to DTC since the proposed rule change will give participants 
easier access to necessary tax information on securities distributions. 
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 since the information shall be available to 
DTC's participants through DTC's PTS and CCF facilities.
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    \4\ 15 U.S.C. 78q-1.
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(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 of Comments on the 
Proposed Rule Change Received from Members, Participants or Others

    The proposed rule change was developed through discussions with 
several participants. 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) of the Act \5\ and Rule 19b-4(f)(4) thereunder \6\ 
because the proposal 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 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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    \5\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \6\ 17 CFR 240.19b-4(e)(4).
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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 filed six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 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

[[Page 10524]]

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 DTC. All submissions should refer to File No. SR-
DTC-99-02 and should be submitted by March 25, 1999.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-5370 Filed 3-3-99; 8:45 am]
BILLING CODE 8010-01-M