[Federal Register Volume 59, Number 169 (Thursday, September 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21573]
[[Page Unknown]]
[Federal Register: September 1, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34595; File No. SR-NSCC-94-15]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change Modifying Rules
and Procedures Relating to Compared Trade Summaries
August 25, 1994.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 2, 1994, the
National Securities Clearing Corporation (``NSCC'') 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 NSCC. The Commission is publishing this
notice to solicit comments on the proposed rule change 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 consists of modifications to NSCC's rules
and procedures to replace NSCC's current Continuous Net Settlement
(``CNS'') and Non-CNS Compared Trade Summaries with a new Consolidated
Trade Summary.
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 replace NSCC's
current CNS and Non-CNS Compared Trade Summaries with a new
Consolidated Trade Summary which will report both CNS and Non-CNS
trades. Presently, each business day NSCC issues to members CNS and
Non-CNS Compared Trade Summaries which contain all transactions for
settlement on the following day. Consistent with current practice, the
Consolidated Trade Summary will be issued the day before settlement
On both the CNS and Non-CNS Compared Trade Summary, each
transaction appears at the original contract price, and quantities and
money are totalled and netted for each security issue. The contract
output provided to broker-dealers on T+1 contains much of the trade
detail given on the Compared Trade Summaries.\2\ Under the proposed
rule change, the Consolidated Trade Summary will report only the net
positions due for settlement on the following day. Each position, in
CUSIP order, will be reported as broad buys and sells by marketplace or
source, netted by issue, quantity, and money. The Consolidated Trade
Summary will eliminate trade details, such as the contra-broker, price,
and trade date, currently included on the Compared Trade Summaries.
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\2\Prime broker transactions do not have contract output.
Instead, the details of these transactions are reported on the
Regional Interface Operation (``RIO'') Blotter.
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The reduced output will enhance processing efficiency and reduce
costs. Introduction of the Consolidated Trade Summary also constitutes
part of NSCC's effort to move towards a T+3 settlement date.\3\ In
order to give participants an opportunity to become familiar with the
Consolidated Trade Summary, NSCC will initially distribute the
Consolidated Trade Summary and in addition to the CNS and Non-CNS
Compared Trade Summaries. NSCC will begin distribution of the
Consolidated Trade Summary on or about September 30, 1994. NSCC intends
to eliminate distribution of the CNS and Non-CNS Compared Trade
Summaries no sooner than ninety (90) days after the Consolidated Trade
Summary is first distributed by NSCC.\4\
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\3\On October 6, 1993, the Commission adopted Rule 15c6-1 under
the Act, which establishes three business days after the trade date
(``T+3'') instead of five business days (``T+5'') as the standard
settlement timeframe for most broker-dealer transactions. The rule
becomes effective June 1, 1995. Securities Exchange Act Release No.
33023 (October 6, 1993), 58 FR 52891.
\4\NSCC will not eliminate the CNS and Non-CNS Compared Trade
Summaries in connection with the Reconfirmation and Pricing Service
(``RECAPS''). RECAPS is a fail clearance system that provides an
opportunity to reconfirm and reprice transactions that already have
been compared. NSCC's Procedure II(G).
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The proposed rule change is consistent with section 17A of the Act
and the rules and regulations thereunder because it will facilitate 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 change 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
No written comments relating to the proposed rule change have been
solicited or received. 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
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 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 disapproved.
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. 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-94-15 and should be submitted by
September 22, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-21573 Filed 8-31-94; 8:45 am]
BILLING CODE 8010-01-M