Self-Regulatory Organizations; Philadelphia Depository Trust Company; Notice of Filing of Proposed Rule Change Seeking To Implement the Fully Automated Securities Transfer Reconciliation Accounting Control System on a Permanent Basis

[[Page 50232]]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-36264; File No. SR-PHILADEP-95-07]

Self-Regulatory Organizations; Philadelphia Depository Trust

Company; Notice of Filing of Proposed Rule Change Seeking To Implement

the Fully Automated Securities Transfer Reconciliation Accounting

Control System on a Permanent Basis

September 21, 1995.

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

(``Act''),\1\ notice is hereby given that on July 14, 1995, 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

parties.

\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 seeks permanent approval for its Fully Automated

Securities Transfer Reconciliation Accounting Control System

(``FASTRACS'').\2\

\2\ For a complete description of FASTRACS, refer to Securities

Exchange Act Release Nos. 34404 (July 19, 1994), 59 FR 38010 [File

No. SR-PHILADEP-90-03] (order approving proposed rule change

relating to implementation of an automated balance certificate

program on a temporary basis until December 30, 1994) and 35676 (May

4, 1995), 60 FR 24951 [File No. SR-PHILADEP-94-06] (order granting

temporary approval of a proposed rule change extending the pilot

program for FASTRACS until December 29, 1995).

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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 the 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, as set forth in

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

these statements.\3\

\3\ The Commission has modified the text of the summaries

prepared by PHILADEP.

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

Statutory Basis for, the Proposed Rule Change

On July 19, 1994, the Commission approved a proposed rule change

establishing a pilot program for FASTRACS for the transfer of certain

securities between PHILADEP and certain transfer agents.\4\ On March

10, 1995, the Commission extended its approval of the pilot program

through December 29, 1995.\5\ FASTRACS is an automated program by which

PHILADEP and the participating transfer agents use a master balance

certificate to evidence the number of securities of a particular issue

that are registered in PHILADEP's nominee name. The transfer agents

have custody of the securities in the form of balance certificates. The

transfer agents adjust daily the balance certificates to reflect

PHILADEP's withdrawal and deposit activity.

\4\ Securities Exchange Act Release No. 34404 (July 19, 1994),

59 FR 38010 [File No. SR-PHILADEP-90-03] (order approving FASTRACS

program on a temporary basis).

\5\ Securities Exchange Act Release No. 35676 (May 4, 1995), 60

FR 24951 [File No. SR-PHILADEP-94-06] (order granting temporary

approval of a proposed rule change extending the pilot program for

FASTRACS until December 29, 1995). The Commission extended the

temporary approval of the FASTRACS program so that PHILADEP could

complete adequate testing. The program was limited to three transfer

agents for the duration of the temporary approval period.

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Since obtaining temporary approval of the original filing, PHILADEP

has provided the Commission with copies of the test results of FASTRACS

activity among the three designated transfer agents. PHILADEP now seeks

permanent approval of FASTRACS and requests that the Commission allow

it to implement FASTRACS with an unlimited number of transfer agents.

PHILADEP states that FASTRACS has enhanced PHILADEP's operational

efficiency, has substantially reduced its burdens in reconciling its

positions, and has saved costs associated with these functions.

PHILADEP represents that it has encountered no significant operational

problems and believes the system operated effectively during the

testing phase. Furthermore, PHILADEP believes the current filing is

consistent with the Commission's Direct Registration System (``DRS'')

initiative \6\ insofar as DRS compels PHILADEP and other participating

clearing agencies to establish fully operational automated programs for

the transfer of certain securities between participating clearing

agencies and their transfer agents.

\6\ For a complete description of DRS, refer to Securities

Exchange Act Release No. 35038 (December 1, 1994), 59 FR 63652 [File

No. S7-34-94] (concept release soliciting comment on proposed

transfer agent operated direct registration system).

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PHILADEP believes that the proposed rule change is consistent with

its requirements under Section 17A of the Act because it is

contemplated to foster cooperation and coordination with persons

engaged in the clearance and settlement of securities transactions by

providing an efficient administrative mechanism to operate its deposit

and transfer operation.

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

PHILADEP contends that the proposed rule change poses no

appreciable threat or 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 Changes 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 changes or

(B) Institute proceeding to determine whether the proposed rule

changes should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and

arguments concerning the foregoing. Persons making such 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 respecting the proposed rule change that are filed with the

Commission, and all written communications concerning the proposed rule

change between the Commission and any person, other than those that may

be withheld from the public pursuant to 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, N.W.,

Washington, D.C.

[[Page 50233]]

20549. Copies of such filings will also be available for inspection and

copying at the principal office of PHILADEP. All submissions should

refer to File No. SR-PHILADEP-95-07 and should be submitted within

October 19, 1995.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\7\

\7\ 17 CFR 200.30-3(a)(12)(1994).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95-24028 Filed 9-27-95; 8:45 am]

BILLING CODE 8010-01-M