[Federal Register Volume 61, Number 216 (Wednesday, November 6, 1996)]
[Notices]
[Pages 57506-57507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28517]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37904; File No. SR-NSCC-96-19]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of a Proposed Rule Change To Discontinue 
the Operation of the Securities Clearing Group's Data Base

October 31, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 3, 1996, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change (File No. SR-NSCC-96-19) as described in Items I, II, and III 
below, which items have been prepared primarily by NSCC. 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).
---------------------------------------------------------------------------

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 amend the Securities 
Clearing Group Agreement of the Securities Clearing Group (``SCG'') \2\ 
to discontinue the operation of the SCG data base.
---------------------------------------------------------------------------

    \2\ The SCG was established in 1989 as a result of developments 
surrounding the October 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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Purpose of, the 
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.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified the text of the summaries 
submitted by NSCC.
---------------------------------------------------------------------------

(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 amend the SCG 
Agreement to discontinue operation of SCG data base. The SCG database 
contains information on common participants of the SCG members relating 
to settlement payment obligations and clearing fund and margin 
requirements and deposits and other related information. The members of 
the SCG created the SCG data base as a means to coordinate and share 
information on common participants and increase cooperation among the 
SCG members.
    NSCC believes termination of the SCG data base is desirable for 
several reasons. First, NSCC has established and agreed to make 
available to the SCG members access to its Collateral Management 
Service (``CMS'').\4\ The CMS will make available to the SCG members 
similar information contained in the SCG data base plus provide them 
with enhanced features and capabilities through a more robust system. 
For example, the SCG data base contains aggregate information on 
clearing fund and margin deposits including excess and deficit amounts 
whereas the CMS contains both aggregate information on clearing fund 
and margin deposits including excess and deficit amounts as well as 
detailed information on the underlying collateral (i.e., cash, 
securities, and letters of credit). The SCG members recognize that 
termination of the SCG data base is desirable at this point to avoid 
redundancies with the CMS. Second, the SCG members recognize that 
termination of the SCG data base will eliminate the occurrence of a 
significant increase in costs that would be required to maintain the 
SCG data base. Third, NSCC believes termination of the SCG data base 
and the availability of the CMS will enable the SCG members to better 
coordinate and share information and monitor clearing fund and margin 
deposits.
---------------------------------------------------------------------------

    \4\ For a description of the Collateral Management service refer 
to Securities Exchange Act Release No. 36091 (August 10, 1995), 60 
FR 42931 [File No. SR-NSCC-95-06] (order approving a proposed rule 
change establishing the Collateral Management Service).
---------------------------------------------------------------------------

    Accordingly, the SCG members have executed Amendment No. 6 to the 
SCG Agreement.\5\ The Amendment: (i) authorizes the termination of the 
SCG data base, (ii) authorizes NSCC to use all data, information, 
computer coding, and programs contained in the SCG data base in 
establishing and maintaining the operation of CMS, and (iii) grants to 
each SCG Member a nonexclusive and nontransferable license to use 
NSCC's CMS.
---------------------------------------------------------------------------

    \5\ A copy of the Amendment is attached as Exhibit A to NSCC's 
filing. A copy of the filing is available for copying and inspection 
in the Commission's Public Reference Room or through NSCC.
---------------------------------------------------------------------------

    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 promote the prompt and 
accurate clearance and settlement of securities transactions and will 
assure the safeguarding of securities and funds in the custody or 
control of NSCC or for which NSCC is responsible.

(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. Persons making written submissions 
should file six copies thereof with the

[[Page 57507]]

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 Room, 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-96-16 and 
should be submitted by November 27, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12) (1996).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-28517 Filed 11-5-96; 8:45 am]
BILLING CODE 8010-01-M