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Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Establishment of “LENS-on-the-Web” Procedures and Fees

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Start Preamble February 14, 2001.

Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on November 17, 2000, 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 parties.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The proposed rule change establishes “LENS-on-the-Web” procedures and fees whereby DTC participants may order copies of certain notices received by DTC from a menu on DTC's Internet website ( through DTC's Legal Notice System (“LENS”).[2]

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 Start Printed Page 11191proposed 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.[3]

(A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In 1991, DTC created LENS to reduce the amount of paper that its participants receive.[4] LENS has been offered to DTC Participants since 1991 over DTC's proprietary PTS 3270 terminal network. Through the proposed rule change, DTC is seeking to offer the same LENS service to its participants over the Internet.[5]

LENS and LENS-on-the-Web allow participants to prescreen certain notices [6] so that participants can avoid receiving and, ultimately, paying for the duplication and distribution of notices that are irrelevant to them. LENS has allowed, where practical, certain enhancements to the historical notice distribution system. Enhancements have included: (1) The identification of CUSIP numbers; (2) participants' ability to search by CUSIP; (3) participants' access to a computer record of past notices with automatic order capability; (4) DTC's distribution of certain notices which would otherwise not be distributed by DTC, given their length or relative importance; and (5) equitable billing.[7]

Pricing for LENS-on-the-Web will be as follows:

ActivityDescriptionProposed fee
Access a NoticeUnlimited viewing and/or downloading of a notice during a single user's online session$5 per notice.
SubscriptionUnlimited viewing and/or downloading of notice(s) by one or more users$999 per month per participant number.
E-MailE-mail a notice to one or more recipients$5 per e-mail form.

DTC believes that the proposed rule change is consistent with the requirements of section 17A of the Act [8] and the rules and regulations thereunder applicable to DTC because it promotes efficiencies in the 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 impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, in the public interest, and for the protection of investors.

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

DTC has neither solicited nor received written comments from participants. DTC will notify the Commission of any written comments received by DTC.

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) [9] of the Act and Rule 19b-4(f)(4) [10] promulgated thereunder because it effects a change in an existing service of DTC that does not adversely affect the safeguarding of securities or funds in the custody or control of the clearing agency or for which it is responsible and does not significantly affect the respective rights or obligations of the clearing agency or persons using the service and pursuant to section 19(b)(3)(A)(ii) [11] of the Act and Rule 19b-4(f)(2) [12] promulgated thereunder because the proposal establishes or changes a due, fee, or other charge imposed by DTC. At any time within sixty days of the filing of such 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.

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 submission should file six copies therof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 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 DTC.

All submissions should refer to File No. SR-DTC-00-18 and should be submitted by March 15, 2001.

Start Signature

For the Commission by the Division of Market Regulation, pursuant to delegated authority.[13]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


2.  The proposed procedures, attached as Exhibit B to DTC's proposed rule change, are available for inspection and copying in the Commission's Public Reference Room and the principal office of DTC.

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3.  The Commission has modified the text of the summaries prepared by DTC.

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4.  Securities Exchange Act Release No. 29291 (June 12, 1991), 56 FR 28190 (File No. SR-DTC-91-08) (order approving LENS use by DTC participants).

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5.  Initially, DTC intends to make only certain categories of LENS notices and LENS services available through LENS-on-the-Web (For example, asset backed notices and position-check capability will not be included at the outset.). DTC will ultimately, however, make most, if not all, LENS notices and services available over LENS-on-the-Web, provided security issues and processing capacity permit.

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6.  These include notices relating to bankruptcies, tax information, corporate status, and transfer agents which are received by DTC and which DTC chooses to make available to participants via LENS and LENS-on-the-Web.

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7.  A participant only pays for those notices that it orders.

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9.  15 U.S.C. 78s(b)(3)(A)(iii).

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11.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 01-4354 Filed 2-21-01; 8:45 am]