[Federal Register Volume 61, Number 4 (Friday, January 5, 1996)]
[Notices]
[Pages 430-431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-167]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36656; International Series Release No. 912; File No.
SR-ISCC-95-06]
Self-Regulatory Organizations; International Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change Relating to
Global Clearance Network Service
December 29, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 2, 1995, the
International Securities Clearing Corporation (``ISCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which items have
prepared primarily by ISCC. On December 12, 1995, and on December 13,
1995, ISCC filed amendments to its proposed rule change.\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\ Letters from Julie Beyers, Associate Counsel, ISCC, to
Michele Bianco, Division of Market Regulation, Commission (December
12, 1995, and December 13, 1995).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule changed is to accommodate an additional service
provider, Standard Chartered Bank (``SCB'') in ISCC's Global Clearance
Network (``GCN'') service.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change.
In its filing with the Commission, ISCC 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. ISCC has prepared summaries, set forth in sections (A),
(B),
[[Page 431]]
and (C) below, of the most significant aspects of such statements.\3\
\3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change.
ISCC's Rule 50 provides that ISCC may establish a foreign
clearance, settlement, and custody service known as the GCN in
conjunction with banks, trust companies, and other entities. Presently,
ISCC has established GCN relationships with Citibank, N.S., Standard
Bank of South Africa, Westpac Custodian Nominees Limited of Australia,
Westpac Nominees-NZ Limited,\4\ and S.C. Indeval, S.A. de C.V.\5\ The
proposed rule change is to accommodate SCB as an additional GCN service
provider.
\4\ Securities Exchange Act Release Nos. 29841 (October 18 1991)
56 FR 55960; 35392 (February 16, 1995), 60 FR 10415; and 36339
(October 5, 1995), 60 FR 53447.
\5\ The Commission is currently reviewing ISCC's proposed link
with Indeval, S.A. de C.V. Securities Exchange Act Release No. 36605
(December 20, 1995), 60 FR 67004 [Notice of filing of proposed rule
change].
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SCB has been providing securities clearance, settlement, and
custody services in the Asia Pacific Region for over forty years and
has had a banking presence in this region for over one hundred and
forty years. The value of overall assets under SCB's administration is
approximately US $55 billion. It is presently anticipated that ISCC
members will be offered clearance, settlement, and custody services in
the Philippines, South Korea, and Taiwan through a division of SCB,
Standard Chartered Equitor Group (``The Equitor Group'').\6\ The
Equitor Group provides clearance and custody services in fifteen
markets in the Asia-Pacific Region. The Equitor Group established a
branch office in the Philippines in 1872, which has provided local
custody services since 1935 and currently has US $1.12 billion in
assets under custody. The Equitor Group established a branch office in
South Korea in 1984, which has provided local custody services since
1991 and currently has US $1.47 billion in assets under custody. The
Equitor Group established a branch office in Taiwan in 1985, which has
provided local custody services since 1992 and currently has US $810
million in assets under custody. In the future, ISCC may offer
clearance, settlement, and custody services through SCB in other
countries, including Bangladesh, Hong Kong India, Indonesia, Japan,
Malaysia, Pakistan, Shanghai, Shenzhen, Singapore, Sri Lanka, and
Thailand, SCB has represented that acting through its branches it meets
the requirements under Rule 17f-5 under the Investment Company Act of
1940 to be an eligible foreign custodian.\7\ In Malaysia, SCB operates
through its wholly-owned subsidiary, Standard Charted Bank Malaysia
Berhad (``SCBM''). SCB has received a exemptive order under Rule 17f-5
on behalf of SCBM.\8\
\6\ The Equitor Group is not a separate legal entity.
\7\ Letters from Julie Beyers, Associate Counsel, ISCC, to
Michele Bianco, Division of Market Regulation, Commission (December
12, 1995 and December 13, 1995). Pursuant to Rule 17f-5(c)(2), an
eligible foreign custodian includes a banking institution or trust
company, incorporated or organized under the laws of a country other
than the United States, that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in
excess of $200 million. 17 CFR 270.17-5(c)(2) (1994). SCB has
represented that it has over $200 Million in shareholders' equity.
\8\ Investment Company Act of 1940 Release No. 20019,
International Series Release No. 628 (January 14, 1994).
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SCB and ISCC will enter into an agreement pursuant to which SCB
will provide access to clearance, settlement, and custody services to
GCN participants that qualify to be customers of SCB. SCB has agreed to
provide the services at reduced prices. ISCC will not provide any
volume guarantees to SCB. ISCC will collect fees from the participants
on behalf of SCB.\9\ The agreement will be terminable by mutual
agreement of the parties or on ninety days prior notice.
\9\ ISCC is not responsible for fees not rendered by
participants.
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The proposed change will facilitate and centralize the processing
of international transactions at a beneficial cost to members which
ultimately will be reflected in services to the investing public.
Accordingly, ISCC believes that these changes are consistent with the
requirements of Section 17A of the Act and the rules and regulation
thereunder.
(B) Self-Regulatory Organization's Statement on Burden on Competition
ISCC does not believe 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 relating to the proposed rule change have been
solicited or received. ISCC will notify the Commission of any written
comments received by ISCC.
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 published its reason 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 approved.
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 NW., Washington, DC 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 provisions of 5
U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room in Washington, DC 20549. Copies of
such filing will also be available for inspection and copying at the
principal office of ISCC. All submissions should refer to the file
number SR-ISCC-95-06 and should be submitted by January 26, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
FR Doc. 96-167 Filed 1-4-96; 8:45 am]
BILLING CODE 8010-01-M