[Federal Register Volume 59, Number 121 (Friday, June 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15428]


[[Page Unknown]]

[Federal Register: June 24, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34221; File No. SR-NSCC-94-07]

 

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of Proposed Rule Change Modifying NSCC's 
Trade Comparison Service

June 16, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ notice is hereby given that on June 3, 1994, the National 
Securities Clearing Corporation (``NSCC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change (File 
No. SR-NSCC-94-07) as described in Items I, II, and III below, which 
Items have been prepared primarily by NSCC. The Commission is 
publishing this notice to solicit comments on the proposed rule changes 
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

    The proposed rule change will modify NSCC's Rules and Procedures 
relating to trade comparison.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections 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 purpose of the proposed rule change is to support the New York 
Stock Exchange, Inc. (``NYSE'') and the American Stock Exchange, Inc. 
(``Amex'') in their efforts to implement trade-date comparison 
systems.\2\ To achieve trade-date comparison, the NYSE and Amex will 
require their member organizations to submit trade-comparison data to 
their respective exchanges rather than to NSCC for comparison 
processing.
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    \2\For information on NYSE's trade-date comparison proposal, 
refer to Securities Exchange Act Release No. 34153 (June 3, 1994), 
59 FR 30071 [File No. SR-NYSE-94-08] (order approving proposed rule 
change).
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    Currently, NSCC receives locked-in trade data from the NYSE and 
Amex and initial two-sided, compared trade data from its member 
organizations. The uncompared trades data from its members are matched 
by NSCC and are reported back to the members on contract lists. The 
locked-in trade data, which is compared at the point of execution by 
the exchanges, bypass NSCC's comparison process but for record purposes 
is reported back to the member organizations on contract lists.
    Under the proposed system, the NYSE and Amex will process the 
initial two-sided, uncompared trade data in their trade-date comparison 
systems. Some of these trades may not compare, and the NYSE and Amex 
will report such unmatched trades (known as ``questioned trades'' or 
``QTs'' at the NYSE and ``don't knows'' or ``DKs'' at the Amex) to NSCC 
along with the matched, two-sided trades and the locked-in trades. The 
compared trades (including the locked-trades and the matched, two-sided 
trades) will bypass NSCC comparison processing, but the unmatched 
trades will be included in NSCC's comparison process and in NSCC's 
trade correction process if necessary.
    NSCC states that the proposed rule change will permit the NYSE and 
Amex, on behalf of NSCC members, to submit uncompared trade data 
relating to trades for regular way, when-issued, cash, next day, and 
sellers-option settlement in equity securities executed on such 
exchanges directly to NSCC for inclusion in NSCC's comparison process. 
Even though NSCC's revised Rules and Procedures will require NSCC's 
members to submit their trade data to the exchanges, the revisions 
still will permit members to submit such data directly to NSCC in order 
to have the data included in that day's processing. This authority is 
necessary because a member may miss the exchanges' submission 
timeframes. NSCC notes that the NYSE and Amex have concurred in this 
procedure.
    As member organizations become accustomed to the trade-date 
comparison systems, NSCC expects that the NYSE and Amex will no longer 
permit members to submit data directly to NSCC. At that time, NSCC, 
upon the request of the NYSE and Amex, will file a rule change 
eliminating the ability of members to submit such data directly to NSCC 
other than on an exception basis.
    Because the proposed rule change will support efforts by the NYSE 
and Amex to implement trade-date comparison systems, NSCC believes that 
the proposed rule change is consistent with the requirements of Section 
17A of the Act and the rules thereunder in that it will facilitate the 
prompt and accurate clearance and settlement of securities 
transactions.

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

    NSCC believes that the proposed rule changes will not have any 
impact or impose a burden on competition.

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

    NSCC has neither solicited nor received any written comments.

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 reason for so 
finding or (ii) as to which the self-regulatory organization 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 approved.

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 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 will also be available for 
inspection and copying at the principal office of NSCC. All submissions 
should refer to File No. SR-NSCC-94-07 and should be submitted by July 
15, 1994.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\
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    \3\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-15428 Filed 6-23-94; 8:45 am]
BILLING CODE 8010-01-M