[Federal Register Volume 61, Number 178 (Thursday, September 12, 1996)] [Notices] [Page 48193] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-23347] [[Page 48193]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-37650 File No. SR-MBSCC-96-03] Self-Regulatory Organizations; MBS Clearing Corporation; Order Approving Proposed Rule Change Relating to Eliminating the Monthly Audit Package Requirements. September 5, 1996. On June 18, 1996, the MBS Clearing Corporation (``MBSCC'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change (File No. SR-MBSCC-96-03) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'').\1\ Notice of the proposal was published on July 17, 1996, in the Federal Register to solicit comments on the proposed rule change.\2\ No comment letters were received. For the reasons discussed below, the Commission is approving the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1) (1988). \2\ Securities Exchange Act Release No. 37420 (July 11, 1996), 61 FR 37307. --------------------------------------------------------------------------- I. Description MBSCC is modifying 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 the participant and returned to MBSCC whether or not any exceptions are found. In connection with this rule change, MBSCC will eliminate the late audit confirmation penalties from its schedule of penalty fees. II. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder and particularly with the requirements of Section 17A(b)(3)(F).\3\ Section 17A(b)(3)(F) requires that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions. The Commission believes that MBSCC's rule change meets this requirement because 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 should be eliminated without any substantive effect. Such elimination should facilitate efficiencies in the administration of participant operations thereby promoting the prompt and accurate clearance and settlement of securities transactions. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78q-1(b)(3)(F) (1988). --------------------------------------------------------------------------- III. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act, particularly with Section 17A(b)(3)(F) of the Act, and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR-MBSCC-96-03) be, and hereby is, approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.\4\ --------------------------------------------------------------------------- \4\ 17 CFR 200.30-3(a)(12) (1996). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 96-23347 Filed 9-11-96; 8:45 am] BILLING CODE 8010-01-M