[Federal Register Volume 60, Number 112 (Monday, June 12, 1995)]
[Notices]
[Pages 30914-30915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14322]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35808; File No. SR-SCCP-95-1]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Order Granting Accelerated Approval 
of Proposed Rule Change Relating to One-Day Settlement

June 5, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 5, 1995, the Stock 
Clearing Corporation of Philadelphia (``SCCP'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change (File No. SR-SCCP-95-1) as described in Items I and II below, 
which items have been prepared primarily by SCCP. The Commission is 
publishing this notice to solicit comments from interested persons and 
grant accelerated approval of the proposed rule change.

    \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

    SCCP is filing the proposed rule change to offer its participants 
the ability to effect one-day settlements.

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

    In its filing with the Commission, SCCP included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments that it received on the proposed rule change. 
The text of these statements may be examined at the places specified in 
Item IV below. SCCP has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\2\

    \2\ The Commission has modified the language in these sections.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Under the proposed filing, SCCP proposes to offer one-day 
settlement capability to its participants through an interface with the 
one-day settlement system offered by the National Securities Clearing 
Corporation (``NSCC'').\3\ In the current T+5 settlement environment, 
trades compared or recorded after T+3 typically settle two days 
thereafter and therefore are not included in the normal settlement 
cycle on T+5. For example, trades received on T+4 presently settle on 
T+6. As the industry converts to a T+3 settlement environment, trades 
may miss the settlement date if the registered clearing corporations 
cannot effect one-day settlements. Without a one-day settling 
capability, trades compared and recorded on T+2 will not settle until 
T+4.

    \3\ For a complete description of NSCC's one-day settlement 
system, refer to Securities Exchange Act Release No. 35442 (March 3, 
1995), 60 FR 13196.
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    SCCP proposes to interface with NSCC to offer one-day settlement 
for trades submitted prior to SCCP's cut-off time on T+4 in a T+5 
settlement environment and submitted prior to SCCP's cut-off time on 
T+2 in a T+3 settlement environment, including over-the-counter trades, 
fixed income transaction system trades, and other regional interface 
operator trades. SCCP will receive and accept input from participants 
up to approximately 7:00 p.m. in order to interface with the 
established NSCC cut-off time of 9 p.m. Those trades received before 
the 7 p.m. daily cut-off time on T+2 and thereafter (i.e., trades 
received before the daily cut-off time on T+3, T+4, etc.) will settle 
on the next business day. Trades received subsequent to the daily cut-
off time on T+2 and thereafter will continue to settle two business 
days later.
    SCCP believes the proposed rule change is consistent with the 
requirements of the Act, specifically Section 17A of the Act, and the 
rules and regulations thereunder because the rule proposal will 
facilitate the prompt and accurate clearance and settlement of 
securities transactions.

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

    SCCP does not believe that the proposed rule change will 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 have been solicited or received. SCCP will 
notify the Commission of any written comments received.

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

    Section 17A(b)(3)(F) of the Act \4\ requires the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. The Commission 
believes that SCCP's one-day settling capability should help promote 
prompt and accurate clearing and settlement because it will increase 
the number of trades that are included in the normal settlement cycle. 
Thus, the number of failed trades and the time required for settlement 
should be reduced.

    \4\ 15 U.S.C. 78q-1(b)(3)(F) (1988).
    As of June 7, 1995, Rule 15c6-1 will require securities 
transactions to be completed within a three-day settlement cycle.\5\ 
The Commission believes that settlement of trades in a shorter time 
frame will reduce risk to the securities market, including risk to 
clearing corporations as a result of member failure. Without one-day 
settling capability, it is possible that many trades may fail to settle 
within the new three-day cycle. Thus, the proposal advances the risk 
reduction goals of Rule 15c6-1.

    \5\ Securities Exchange Act Release Nos. 33023 (October 6, 
1993), 58 FR 52891 (adoption of Rule 15c6-1) and 34952 (November 9, 
1994), 59 FR 59137 (change of effective date of Rule 15c6-1 from 
June 1, 1995 to June 7, 1995).
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    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice of the filing because such approval will permit SCCP to 
implement the interface with NSCC and to provide one-day settling 
capability prior to the conversion to a three-day settlement cycle.

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 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 [[Page 30915]] Room, 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 SCCP. 
All submissions should refer to the file number SR-SCCP-95-01 and 
should be submitted by July 3, 1995.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-SCCP-95-01) be and 
hereby is approved.

    \6\ 15 U.S.C. 78s(b)(2) (1988).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\

    \7\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-14322 Filed 6-9-95; 8:45 am]
BILLING CODE 8010-01-M