[Federal Register Volume 61, Number 138 (Wednesday, July 17, 1996)]
[Notices]
[Pages 37307-37308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18082]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 37420; File No. SR-MBSCC-96-03]


Self-Regulatory Organizations; MBS Clearing Corporation; Notice 
of Proposed Rule Change Relating to Eliminating the Monthly Audit 
Package Requirements

July 11, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 18, 1996, the MBS 
Clearing Corporation (``MBSCC'') 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 
MBSCC. The Commission is publishing this notice to solicit comments on 
the proposed rule change from interested persons.
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    \1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    MBSCC proposes to modify its rules and procedures to eliminate the 
requirement that it provide a monthly audit package to each participant 
and the requirement that such participant review and respond to the 
package.

[[Page 37308]]

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

    In its filing with the Commission, MBSCC 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. MBSCC has prepared summaries, set forth in sections A, 
B, and C below, of the most significant aspects of such statements.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by MBSCC.
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A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

    MBSCC proposes to modify its rules and procedures to eliminate the 
requirement that it provide a monthly audit package to each participant 
and the requirement that such participant review and respond to the 
package. MBSCC currently provides each participant with the 
participant's Open Commitment Report on a daily basis pursuant to its 
rules. Participants have a duty under the rules to review each report 
for errors and discrepancies and to report any error or discrepancy to 
MBSCC. MBSCC's rules and source book also require MBSCC to send each 
participant a monthly audit package which consists of a copy of the 
participant's Open Commitment Report dated the last business day of the 
previous month and an Audit Exception Reporting Form which must be 
completed by each participant and returned to MBSCC whether or not any 
exceptions are found.
    Participants are obligated to review daily Open Commitment Reports 
and will continue to be so required. By eliminating the monthly audit 
package and the participants' requirement to review it, the 
administrative and economic burdens on participants' resources due to 
the duplicative nature of the requirements will be eliminated without 
any substantive effect.
    In connection with this proposed rule change, MBSCC will eliminate 
the late audit confirmation penalties from its schedule of penalty 
fees.
    MBSCC believes the proposed rule change is consistent with its 
obligations under Section 17A of the Act because by eliminating the 
monthly audit package and the participants' requirement to review it, 
MBSCC will facilitate the prompt and accurate clearance and settlement 
of securities transactions.

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

    MBSCC does not believe that the proposed rule change will have an 
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

    Comments on the proposed rule change have not yet been solicited or 
received. Members will be notified of the rule filing, and comments 
will be solicited by an important notice. MBSCC will notify the 
Commission of any written comments received by MBSCC.

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 may be withheld from the public in accordance with the provisions 
of 5 U.S.C. Sec. 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 MBSCC. All 
submissions should refer to File No. SR-MBSCC-96-03 and should be 
submitted by August 7, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\
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    \3\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-18082 Filed 7-16-96; 8:45 am]
BILLING CODE 8010-01-M