[Federal Register Volume 60, Number 228 (Tuesday, November 28, 1995)]
[Notices]
[Pages 58697-58698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28934]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36495; File No. SR-NSCC-95-13]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of a Proposed Rule Change Enabling 
Members Settling Mutual Fund Transactions in Same Day Funds to Settle 
Through a Settling Bank

November 20, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 3, 1995, 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. On November 14, 1995, NSCC amended the 
filing to make technical changes.\2\ The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.

    \1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
    \2\ Letter from Karen L. Saperstein, Vice President/Director of 
Legal & Deputy General Counsel, NSCC, to Jerry W. Carpenter, 
Assistant Director, Division of Market Regulation, Commission 
(November 13, 1995).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    NSCC proposes modifying its rules to establish a new membership 
category for settling banks that will enable members settling mutual 
fund transactions in same day funds to settle their obligations through 
a settling bank.\3\

    \3\ The text of the proposed rule change is attached as Exhibit 
A to File No. SR-NSCC-95-13 and is available for review in the 
Public Reference Section of the Commission.
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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 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 
prepared 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 modify NSCC's rules 
to enable members settling mutual fund transactions in same day funds 
to settle their obligations through a settling bank. The proposed rules 
will establish a new membership category for settling banks. Any bank 
that wants to become a settling bank will be required to meet the 
operational and financial requirements established by NSCC. To qualify 
as a settling bank, each bank must have short-term obligation ratings 
of at least A-2 by Standard and Poor's Corp. or P-2 by Moody's 
Investors Services Inc. Banks that do not meet this standard will be 
considered on an exception basis. Each bank that qualifies as a 
settling bank will be required to enter into a separate agreement with 
each member on whose behalf it will perform settlement functions.
    The proposed rules provide that settling banks will have the 
opportunity to refuse to settle for one or more members by notifying 
NSCC within the time established by NSCC. The proposed rules also 
specify that settling banks will be required to wire funds by the 
deadline imposed by NSCC or be subject to a penalty fee. In addition, 
settling banks that fail to pay on settlement day will be required to 
cover NSCC's interest costs due as a result of their failure to settle 
in a timely manner. NSCC's proposed rule change also makes conforming 
changes to relevant sections of NSCC's rules.
    NSCC believes the proposed rule change is consistent with the 
requirements of 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 perceive that the proposed rule change will have an 
impact on 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.

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 that are filed with 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 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. 

[[Page 58698]]
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-95-13 and should be submitted by December 19, 1995.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\

    \5\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-28934 Filed 11-27-95; 8:45 am]
BILLING CODE 8010-01-M