[Federal Register Volume 59, Number 208 (Friday, October 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26766]


[Federal Register: October 28, 1994]


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POSTAL RATE COMMISSION
[Release No. 34-34875; File Nos. SR-MCC-94-13 and SCCP-94-06]


Self-Regulatory Organizations; Midwest Clearing Corporation and 
Stock Clearing Corporation of Philadelphia; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Changes Expanding the 
Interfaces With the National Securities Clearing Corporation's Fixed 
Income Transaction System

October 21, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 13, 1994, and 
October 21, 1994, respectively, the Midwest Clearing Corporation 
(``MCC'') and the Stock Clearing Corporation of Philadelphia (``SCCP'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule changes as described in Items I and II below, which Items 
have been prepared primarily by MCC and SCCP. On October 20, 1994, MCC 
amended its filing to exclude the proposed addition of an automated 
fixed income transaction system book entry feature for municipal 
bonds.\2\ The Commission is publishing this notice and order to solicit 
comments from interested persons and to grant accelerated approval of 
the proposed rule changes.
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    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\Letter from David T. Russoff, Attorney, MCC, to Peter 
Geraghty, Attorney, Division of Market Regulation, Securities and 
Exchange Commission (October 20, 1994). The book entry feature is 
the subject of Midwest Securities Trust Company File No. SR-MSTC-94-
14.
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I. Self-Regulatory Organizations' Statement of the Terms of 
Substance of the Proposed Rule Changes

    MCC and SCCP each propose to expand its interface with the National 
Securities Clearing Corporation's (``NSCC'') fixed income transaction 
system (``FITS'')\3\ to include corporate bonds and unit investment 
trusts (``UITs'').\4\
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    \3\For a detailed description of NSCC's FITs, see Securities 
Exchange Act Release No. 32747 (August 13, 1993), 58 FR 44530 [File 
No. SR-NSCC-93-02] (order approving proposed rule change).
    \4\For a complete description of NSCC's expansion of FITS to 
include corporate bonds and unit investment trusts, refer to 
Securities Exchange Act Release No. 34867, (October 20, 1994) [File 
No. SR-NSCC-94-16] (order approving proposed rule change).
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II. Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    In their filings with the Commission, MCC and SCCP included 
statements concerning the purpose of and basis for the proposed rule 
changes and discussed any comments they received on the proposed rule 
changes. The text of these statements may be examined at the places 
specified in Item IV below. MCC and SCCP have prepared summaries, set 
forth in section (A), (B), and (C) below, of the most significant 
aspects of such statements.

(A) Self-Regulatory Organizations' Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    Under the proposed rule filings, MCC and SCCP each propose to 
expand its interface with NSCC's FITS to enable MCC and SCCP 
participants to take advantage of the improved input and comparison 
features of FITS for corporate bonds and UITs.\5\
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    \5\Supra note 4.
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    Similar to MCC's and SCCP's current interfaces with NSCC's FITS for 
municipal securities,\6\ all trade comparisons for corporate bonds and 
UITs will be conducted at NSCC and not at either MCC or SCCP. Under the 
expanded interfaces, the earlier cutoff times for the input by MCC and 
SCCP participants of two-side original trade information that were 
previously applicable for municipal securities trades now will be 
applicable to trades in corporate bonds and unit investment trusts. 
MCC's cutoff time for submission by its participants of original trade 
input will be 7:00 P.M. (central time) on the trade date and 4:00 P.M. 
(central time) on the day following the trade date (``T+1'') for 
supplemental trade input. SCCP's cutoff time for submission by its 
participants of original trade input will be 1:00 A.M. (eastern time) 
on trade date, and adjustments to original trade input must be made 
prior to 4:00 P.M. (eastern time) on T+1.\7\ Because NSCC will be 
transmitting comparison reports to MCC and SCCP reflecting the compared 
trades of MCC and SCCP participants early in the morning on T+1, MCC 
and SCCP will produce contract reports for their participants by 8:00 
A.M. (central time) and 9:00 A.M. (eastern time), respectively, on T+1. 
The interface will enable MCC and SCCP participants to take full 
advantage of the NSCC expansion of FITS.
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    \6\For a complete description of the original MCC and SCCP 
interface with NSCC's FITS, see Securities Exchange Act Release No. 
33524 (January 26, 1994), 59 FR 4958 [File Nos. SR-MCC-93-04 and 
SCCP-93-03] (order approving establishment of interfaces with NSCC's 
FITS).
    \7\The SCCP cutoff times referred to above are for automated 
input. SCCP's cutoff time for manual submission of original trade 
input will be 4:00 P.M. (eastern time) on trade date. Manual input 
adjustments to original trade input must be made prior to 1:00 P.M. 
(eastern time) on T+1.
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(B) Self-Regulatory Organizations' Statement on Burden on Competition

    MCC and SCCP do not believe that the proposed rule changes will 
impose a burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

(C) Self-Regulatory Organizations' Statement on Comments on the 
Proposed Rule Changes Received from Members, Participants or Others

    Comments were neither solicited nor received.

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

    Section 17A(a)(2)(A)(i) of the Act directs the Commission to 
facilitate the establishment of a national system for the prompt and 
accurate clearance and settlement of securities transactions.\8\ 
Because the expanded interfaces enable MCC and SCCP participants to 
utilize FITS with all its benefits, the Commission believes, for all 
the reasons set forth in the FITS approval order,\9\ that the proposed 
rule changes filed by MCC and SCCP further this goal.
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    \8\15 U.S.C. Sec. 78q-1(a)(2)(A)(i) (1988).
    \9\Supra note 4.
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    MCC and SCCP have requested that the Commission find good cause for 
approving the proposed rule changes 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 changes because 
accelerated approval will allow MCC participants and SCCP participants 
to utilize and to take full advantage of the benefits of the expanded 
FITS as soon as it is operational at NSCC. Furthermore, the Commission 
has previously published notice of and approved NSCC's implementation 
of the enhanced FITS. NSCC's proposed rule change did not generate any 
comment letters, and none are expected on MCC's and SCCP's proposals.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submission 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street NW., Washington DC 20549. Copies 
of the submissions, all subsequent amendments, all written statements 
with respect to the proposed rule changes that are filed with the 
Commission, and all written communications relating to the proposed 
rule changes 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 at the 
Commission's Public Reference Section, 450 5th Street NW., Washington, 
DC 20549. Copies of such filings will also be available at the 
principal offices of MCC and SCCP. All submissions should refer to File 
Nos. SR-MCC-94-13 and SR-SCCP-94-06 and should be submitted by November 
18, 1994.
    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act, particularly 
with Section 17A(a)(2)(A)(i) of the Act, and the rules and regulations 
thereunder.
    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule changes (File Nos. SR-MCC-94-13 and SR-SCCP-94-
06) be, and hereby are, approved.

    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) (1994).
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[FR Doc. 94-26766 Filed 10-27-94; 8:45 am]
BILLING CODE 8010-01-M