Depository Trust Company (DTC) has proposed a policy statement on the ability to use DTC’s book entry system for securities issued by foreign governments and foreign private issuers. Foreign securities registered under the Securities Act of 1933 and those that are exempt from registration under the Securities Act where there are no restrictions on resale are eligible. Securities offered and sold in reliance on Regulation S would be eligible if the issuer gave a supplemental letter to DTC with representations as to a CUSIP or CINS identification number separate from any registered issues of that issuer.
Rule 144A securities of foreign issuers would be eligible if the issuer had a CUSIP or CINS number different from any registered issues of that issuer and the security was listed on PORTAL (Private Offerings, Resales and Trading through Automated Linkages) operated by the NASD. Securities of a foreign issuer not relying on any of the foregoing would be eligible for DTC book entry if they had a separate CUSIP or CINS number and could be resold without Securities Act registration either under Rule 144 or pursuant to any other Securities Act exemption. DTC participants wishing to deposit, deliver and receive foreign issues would have to submit a one time blanket letter of representation that, among other things, they would not deposit unregistered foreign securities unless they are eligible for resale without registration under the Securities Act, and that they would not engage in any transaction in foreign securities in violation of DTC rules, including violation of the Securities Act.