[Federal Register Volume 59, Number 152 (Tuesday, August 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19377]


[[Page Unknown]]

[Federal Register: August 9, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34476; File No. SR-NSCC-94-14]

 

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
on a Temporary Basis of a Proposed Rule Change Regarding an Expansion 
of the Limited Money Settlement Service for a New York Window 
Participant

August 1, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 1, 1994, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, and II, below, which Items have been 
prepared primarily by NSCC. The Commission is publishing this notice 
and order to solicit comment from interested persons and to grant 
accelerated approval of the proposed rule change on a temporary basis 
until January 31, 1995.
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    \1\15 U.S.C. 78s(b)(i) (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 allow NSCC to offer the limited money 
settlement service to an additional participant in the New York Window 
pilot program.

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 the 
Statutory Basis for, the Proposed Rule Change

    NSCC currently operates a pilot program for the New York Window 
service.\2\ In January 1994, the pilot program was expanded to include 
a limited money settlement service for two New York Window 
participants.\3\ The current proposed rule change will expand the pilot 
program to provide limited money settlement services to an additional 
New York Window participant.\4\
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    \2\For a complete description of the New York Window program, 
refer to Securities Exchange Act Release No. 32221 (April 26, 1993), 
58 FR 26570 [File No. SR-NSCC-93-03] (order approving pilot program 
on a temporary basis until April 30, 1994).
    \3\For a complete description of limited money settlement 
service, refer to Securities Exchange Act Release No. 33558 (January 
31, 1994), 59 FR 5807 [File No. SR-NSCC-93-14] (order approving 
pilot program on a temporary basis until January 31, 1995, and 
expanding the pilot program to offer limited money settlement 
services to two participants).
    \4\This filing covers the period of the temporary approval. 
Currently, NSCC is seeking permanent approval of the New York Window 
services, which includes the money settlement service. Securities 
Exchange Act Release No. 34470 (August 1, 1994) [File No. SR-NSCC-
94-12] (notice of filing seeking permanent approval of New York 
Window service).
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    NSCC has stated that the proposed rule change will be implemented 
consistent with NSCC's statutory obligation under Section 17A of the 
Act to safeguard securities and funds in NSCC's custody or control and 
to promote the prompt and accurate clearance and settlement of 
securities transactions.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule will have an 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 not solicited or received any comments. NSCC will notify 
the Commission of any written comments received by NSCC.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Section 17(A)(a)(1)(B) of the Act sets forth Congress findings that 
inefficient procedures for clearance and settlement of securities 
transactions impose unnecessary costs on investors and persons 
facilitating transactions by and acting on behalf of investors.\5\ The 
Commission reasserts its belief, as stated in the previous New York 
Window approval orders, that NSCC's pilot program should help minimize 
inefficient procedures employed by individual New York City 
participants by concentrating these operations in one centralized 
facility.\6\ The Commission believes that expanding the limited money 
settlement service to include an additional New York Window participant 
should provide a more efficient mechanism by which the participant can 
settle its debits and credits generated by the New York Window 
processing. Furthermore, it will give NSCC an expanded field in its 
study of its limited money settlement service during the pilot program.
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    \5\15 U.S.C. 78q-1(a)(1)(B).
    \6\Supra notes 2 and 3.
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    Section 17A(b)(3)(F) of the Act requires that the rules of a 
clearing agency be designed to assure the safeguarding of securities 
and funds which are in its custody or control or for which it is 
responsible.\7\ The Commission believes that the safety procedures 
established for the limited money settlement service and approved in 
the previous New York Window approval order\8\ will continue to enable 
NSCC to meet its obligations under Section 17A of the Act with an 
additional participant using the limited money settlement service. For 
example, NSCC will continue to not make any payment on behalf of or to 
the limited money settlement services participants until NSCC has 
received funds sufficient to cover the amount of NSCC's payment.
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    \7\15 U.S.C. 79Q-1 (b) (3) (F).
    \8\Supra Note 3.
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    NSCC has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after the 
date of publication of notice of the filing. The Commission finds good 
cause for so approving the proposed rule change because the Commission 
has previously published notice of and has approved the limited money 
settlement service. NSCC's previous proposed rule change did not 
generate any comment letters, and none are expected on this proposal. 
In addition, accelerated approval will allow the additional participant 
to begin utilizing the limited money settlement service immediately and 
to begin benefiting from the efficient and centralized payment 
procedures provided by NSCC. During the temporary approval period, NSCC 
will continue to evaluate the limited money settlement service.

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. 552, will be available for inspection and copying in the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549 and the principal offices of NSCC. All submissions 
should refer to File No. SR-NSCC-94-14 and should be submitted by 
August 30, 1994.

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\9\ that the proposed rule change (File No. SR-NSCC-94-14) be, and 
hereby is, approved until January 31, 1995.
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    \9\15 U.S.C. 78s(b)(2) (1988).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-19377 Filed 8-8-94; 8:45 am]
BILLING CODE 8010-01-M