Self-Regulatory Organizations; Philadelphia Depository Trust Company; Notice of Filing of Proposed Rule Change Modifying Philadep Rule 2, Section 1 To Require Execution of a Participant's Agreement by Participants and Pledgees

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34540; File No. SR-Philadep-94-04]

Self-Regulatory Organizations; Philadelphia Depository Trust

Company; Notice of Filing of Proposed Rule Change Modifying Philadep

Rule 2, Section 1 To Require Execution of a Participant's Agreement by

Participants and Pledgees

August 17, 1994.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act'')\1\ notice is hereby given that on August 8, 1994, the

Philadelphia Depository Trust Company (``Philadep'') 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 Philadep. 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) (1988).

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

of the Proposed Rule Change

Philadep proposes to modify Philadep Rule 2, Section 1 to require

participants and pledgees to sign a Participant's Agreement.

II. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, Philadep 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. Philadep has prepared summaries set forth in section

(A), (B), and (C) below, of the most significant aspects of such

statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

The proposed rule change will amend Philadep Rule 2, Section 1 with

respect to participants' and pledges' obligations to Philadep. The

proposed rule change will add language requiring participants to

execute a Participant's Agreement and language stating that Philadep's

by-laws, rules, and procedures shall supersede any conflicting

provision[s] of the Participant's Agreement. The proposed rule change

also will delete language requiring participants to execute and deliver

a written instrument specifying their adherence to certain obligations

set forth in Philadep Rule 2. This second written agreement will be

unnecessary because once a Participant's Agreement is signed, the

participant has agreed to abide by all of the rules and obligations of

Philadep, including those set forth in Philadep Rule 2. Accordingly,

all provisions of Rule 2 will be directly enforceable against

participants without the necessity of executing a written agreement

specifying selected provisions of Philadep's Rule 2.

The proposed rule change will codify Philadep's existing but

unwritten policy and practice of requiring all participants to execute

a Participant's Agreement. The proposed rule change is consistent with

Section 17A of the Act and, in particular, with Section 17A(b)(3) (A)

and (F) in that Philadep is organized and its rules are designed to

promote the prompt and accurate clearance and settlement of securities

transactions for which it is responsible and to assure the safeguarding

of securities and funds which are in the custody and control of the

clearing agency.

B. Self-Regulatory Organization's Statement on Burden on Competition

Philadep does not believe that the proposed rule change will impose

an inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received From Members, Participants, or Others

Written comments were neither solicited nor received with respect

to 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 Philadep consents, the Commission will:

(A) by order approve such 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. Persons making written submissions

should file 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. Sec. 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 will also be available for

inspection and copying at the principal office of Philadep. All

submissions should refer to File No. SR-Philadep-94-04 and should be

submitted within September 14, 1994.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\2\

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\2\17 CFR 200.30-3(a)(12) (1993).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-20776 Filed 8-23-94; 8:45 am]

BILLING CODE 8010-01-M