February 12, 2004
Mr. Jonathan G. Katz
Re: File No. SR-DTC-2003-09
Dear Mr. Katz:
Wachovia Securities, LLC welcomes the opportunity to provide comments on the Depository Trust Company's (DTC) proposed rule change to establish a new service to destroy certain certificates and to implement a fee for custody of certain certificates not to be destroyed.
The proposed rule change is clearly consistent with section 17A of the Act which provides rules and regulations to promote the prompt and accurate clearance and settlement of securities transactions. In addition, acceptance of this rule change will provide the opportunity for DTC and it's participants to improve the efficiency of their internal operations.
While the physical certificates in DTC's vault are currently not in circulation, withdrawal requests remain available, which may lead to an increased physical float. The further addition of physical securities to the system, after years of moving in the opposite direction, would be counter productive to the industry's stated goal of certificate immobilization. It would also add unnecessary costs and risks to the settlement process.
Wachovia Securities, LLC has also reviewed the fee structure related to the proposed rule change and we have found it to reasonable. Active participation in the process may actually reduce overall participant custody costs as fees will not be charged for each position moved to PREM.
In view of the above, Wachovia Securities, LLC strongly supports the proposed rule change as put forth by DTC.
We appreciate the opportunity to share our views on this subject.