[Federal Register Volume 60, Number 5 (Monday, January 9, 1995)]
[Notices]
[Pages 2416-2417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-380]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35182; File No. SR-PTC-94-07]


Self-Regulatory Organizations; Participants Trust Company; Notice 
of Filing of Proposed Rule Change Establishing a Daily Penalty Fee 
Applicable to Late Funding of Shortfalls in Participants Mandatory 
Deposits to the Participants Fund

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 14, 1994, the 
Participants Trust Company (``PTC``) filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change (File No. 
SR-PTC-94-070 as described in Items I, II, and III below, which Items 
have been prepared primarily by the self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
purposed rule change from interested persons.

    \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 establish a daily penalty fee 
applicable to a participant's failure to fund on a timely basis a 
shortfall in its mandatory deposit to the participants fund.

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

    In its filing with the Commission, the self-regulatory organization 
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. The self-regulatory organization 
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

    The purpose of the proposed rule change is to establish a daily 
penalty fee applicable to a participant's failure to fund on a timely 
basis a shortfall in its mandatory deposit to the participants fund. 
Pursuant to Rule 2 of Article V of PTC's rules, PTC maintains a 
participants fund to secure obligations of participants and limited 
purpose participants to PTC and to provide PTC with an additional 
source of cash collateral to meet its temporary financing needs. Each 
participant is required to maintain a mandatory deposit in the 
participants fund which is calculated as a percentage of its average 
gross debits over the previous month's three major settlement days, 
subjects to a minimum of $1 million and a maximum of $10 million. A 
limited purpose participant is required to maintain a lower mandatory 
deposit because of the limited nature of its activity in the 
depository. At least $150 thousand of the mandatory deposit must be 
made in cash. The remainder may be made in cash or United States 
Treasury obligations with a remaining maturity of one year or less.
    The adequacy of each participant's mandatory deposit is evaluated 
monthly based on the prior month's activity. Participants are notified 
of any shortfall and required to fund the deficiency within five 
business days. The securities portion of the mandatory deposit is 
marked-to-market weekly, and participants are required to fund any 
deficiency in this portion within two business days.
    The proposed rule change establishes a daily penalty fee for a 
participant's failure to fund a shortfall in its mandatory deposit to 
the participants fund by the required date in the amount of the greater 
of (i) $200 or (ii) an amount, calculated at an annual rate, equal to 
the daily average Fed Funds rate plus 250 basis points (2.5%) on the 
outstanding balance of the shortfall in the mandatory deposit to the 
participants fund.
    PTC believes that because the proposed rule change provides for the 
equitable allocation of reasonable dues, fees, and other charges among 
participants, it is consistent with Section 17A of the Act and the 
rules and regulations thereunder applicable to PTC. [[Page 2417]] 

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

    PTC does not believe that the proposed rule change will impose any 
burden on competition.

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

    PTC has neither solicited nor received comments on the proposed 
rule change.

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, N.W., Washington, D.C. 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 maybe 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, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of PTC. All 
submissions should refer to file number SR-PTC-94-07 and should be 
submitted by January 30, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-380 Filed 1-6-95; 8:45 am]
BILLING CODE 8010-01-M