

[Federal Register: December 3, 2007 (Volume 72, Number 231)]
[Notices]               
[Page 67987-67988]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03de07-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56840; File No. SR-DTC-2007-13]

 
Self-Regulatory Organizations; the Depository Trust Company; 
Notice of Filing of a Proposed Rule Change Relating to the Foreign 
Currency Payment Option

November 27, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 26, 2007, 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.
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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 would provide that DTC's Foreign Currency 
Payment Option (``FCP Option'') may be used (1) in relation to 
securities denominated in U.S. dollars and (2) regardless of whether 
the terms of the issue originally contemplated the option of payment in 
one or more currencies.

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\
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    \2\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Currently, DTC offers the FCP Option in order for participants to 
elect the payment of dividend, interest, principal, redemption, or 
maturity payments either in foreign currency outside of DTC or in U.S. 
dollars within DTC with respect to a foreign denominated issue when the 
foreign currency option is included in the initial offering terms of 
the DTC-eligible issue.\3\
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    \3\ Participants may make FCP Option elections for the payment 
of (a) dividends, interest, and principal through the EDS function 
and (b) redemption and maturity through the RCUR function.
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U.S. Denominated Securities
    The proposed rule change would clarify that the FCP Option would be 
made available with respect to U.S. denominated securities as well as 
foreign denominated securities. The method of payment (U.S. dollars 
within DTC and foreign currency outside of DTC) and the election 
process would remain the same. When DTC initially filed to implement 
the FCP Option, the issues providing for multiple currencies payments 
were foreign denominated.\4\ The wording inadvertently put U.S. 
denominated securities at a disadvantage with respect to the FCP 
Option. The proposed rule change seeks to clarify this unintentional 
result by allowing the FCP Option to be used with respect to U.S. 
denominated securities.
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    \4\ Securities Exchange Act Release Nos. 33597 (February 8, 
1994), 59 FR 7272 (February 15, 1994) (File No. SR-DTC-93-10) and 
29144 (April 30, 1991), 56 FR 21182 (May 7, 1991) (File No. SR-DTC-
90-09).
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Designation of Payment Option After Initial Issuance
    The proposed rule change would allow for the use of the FCP Option 
in relation to DTC-eligible securities that were not initially issued 
with the option of payment in multiple currencies. Additionally, DTC 
proposes that an issuer or its agent could use the FCP Option to add an 
additional currency to the payment options originally offered in 
relation to a DTC-eligible security.\5\ In such a case, the issuer or 
its agent would instruct DTC, within prescribed timeframes and in a 
form satisfactory to DTC to send out a notice to participants holding 
positions in the subject security to inform them of the payment options 
for a particular payment event. Such a notice would contain all 
necessary information for a participant to be able to elect a 
particular currency option. The method of payment (U.S. dollars within 
DTC and foreign currency outside of DTC) and the election process would 
remain the same.
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    \5\ Payment in a different currency than offered when a security 
was initially issued might be desirable for example in the event of 
a change in tax withholding legislation subsequent to the initial 
issuance, which might make it more attractive for investors from a 
particular country to hold position in a security. It would in turn 
be helpful for such investors to have the ability to receive 
payments in relation to the subject security in their home country 
currency.
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    The proposed rule change is consistent with the requirements of 
Section 17A of the Act and the rules and regulations thereunder 
applicable to DTC because it promotes the prompt and accurate clearance 
and settlement of securities transactions by (1) not unnecessarily 
limiting payment options for U.S. denominated securities and (2) 
promoting efficiencies for payment in multiple currencies with respect 
to DTC-eligible securities.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    DTC perceives no impact on competition by reason of the proposed 
rule change.

[[Page 67988]]

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    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

    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 the 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. 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-2007-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-DTC-2007-13. 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 Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of DTC. 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-2007-13 and should be 
submitted on or before December 24, 2007.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-23315 Filed 11-30-07; 8:45 am]

BILLING CODE 8011-01-P
