[Federal Register Volume 60, Number 112 (Monday, June 12, 1995)]
[Notices]
[Pages 30912-30914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14324]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35809; File No. SR-NSCC-95-06]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of a Proposed Rule Change Seeking To 
Establish the Collateral Management Service

June 5, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 22, 1995, the National 
Securities Clearing Corporation (``NSCC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change (File 
No. SR-NSCC-95-06) as described in Items I, II, and III below, which 
items have been [[Page 30913]] prepared primarily by NSCC. On June 2, 
1995, NSCC filed an amendment to the proposed rule change to clarify 
which entities may be permitted to participate in the proposed 
service.\2\ The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.

    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \2\ Letter from Anthony H. Davidson, Associate Counsel, NSCC, to 
Peter Geraghty, Division of Market Regulation, Commission (May 26, 
1995).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the proposed rule change is to establish the 
Collateral Management Service (``CMS'') which will provide access to 
information regarding participants' clearing fund, margin, and other 
similar requirements and deposits at NSCC and other participating 
clearing entities. As proposed, participating clearing entities will 
include clearing agencies registered pursuant to Section 17A of the 
Securities Exchange Act \3\ and clearing organizations affiliated with 
or designated by contract markets trading specific futures products 
under the oversight of the Commodity Futures Trading Commission.

    \3\ 15 U.S.C. 78q-1 (1988).
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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 that 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.\4\

    \4\ The Commission has modified the text of the summaries 
submitted by NSCC.
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(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 establish the CMS. 
The CMS will provide access to information regarding participants' 
clearing fund, margin, and other similar requirements and deposits at 
NSCC and other Participating Clearing Entities including excess or 
deficit amounts and comprehensive data on underlying collateral (``CMS 
data''). NSCC may provide the CMS data to participants of NSCC, to 
participating clearing entities, and, if a participating clearing 
entity requests, to participants of such participating clearing entity. 
Each participant that desires access to the CMS data will be required 
to complete a CMS participation application. A participant's access to 
CMS data will be limited to the participant's own information. 
Similarly, a participating clearing entity's access to CMS data will be 
limited to only the CMS data of participants of such entity. A 
participant may request that NSCC exclude data relating to such 
participant from the CMS by completing a request to exclude data form.
    Participating clearing entities will be required to sign and 
execute NSCC's CMS agrement. The CMS agreement sets forth NSCC's 
authorization from participating clearing entities to collect and 
provide information relating to participants' clearing fund and margin 
requirements and participants' clearing fund and margin deposits as 
contained in the Securities Clearing Group's (``SCG'') \5\ data base 
and the Chicago Board of Trade Clearing Corporation's Pay Collect 
System (``BTCC System'').\6\ The CMS agreement also authorizes NSCC to 
disseminate additional information provided by the participating 
clearing entities. The CMS agreement also addresses such matters as the 
confidentiality of CMS Data, additional parties, costs, and limitation 
of liability. At the time of this filing, The Depository Trust Company 
and The Options Clearing Corporation have agreed in principle to 
participate in CMS.

    \5\ The SCG was established in 1989 as a result of developments 
surrounding the October 1987 Market Break and subsequent studies on 
the causes of the Market Break. The stated purpose of the SCG is to 
increase cooperation and coordination among securities clearing 
entities and to facilitate the sharing of certain clearance and 
settlement information regarding surveillance and member risk 
monitoring. For a further description of the SCG, refer to 
Securities Exchange Act Release No. 27044 (July 25, 1989), 54 FR 
30963 [File Nos. SR-DTC-88-20, SR-MCC-88-10, SR-MSTC-88-07, SR-NSCC-
88-09, SR-OCC-89-02, SR-Philadep-89-01, and SR-SCCP-89-01] (order 
approving the establishment of the SCG).
    \6\ The Chicago Board of Trade, through the Board of Trade 
Clearing Corporation, established the Shared Pay/Collect System 
which disseminates the daily pay/collects of all futures clearing 
firms which are affiliated with a participating futures exchanges.
    NSCC believes the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules and regulations 
thereunder because the rule proposal will facilitate cooperation and 
coordination with persons engaged in the 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 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. 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 NSCC 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. Person making written submission 
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 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 NSCC. All 
submissions should refer to the file number SR-NSCC-95-06 and should be 
submitted by July 3, 1995.

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

    \7\ 17 CFR 200.30-3(a)(12) (1994). [[Page 30914]] 
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-14324 Filed 6-9-95; 8:45 am]
BILLING CODE 8010-01-M