[Federal Register Volume 61, Number 250 (Friday, December 27, 1996)]
[Notices]
[Pages 68324-68325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32954]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38065; File No. SR-SCCP-96-08]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing of a Proposed Rule Change to Amend the 
Participants Fund Formula for Continuous Net Settlement Participants

December 19, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 21, 1996, the Stock 
Clearing Corporation of Philadelphia (``SCCP'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change (File No. SR-SCCP-96-08) as described in Items, I, II, and III 
below, which items have been prepared primarily by SCCP. On October 8, 
and November 20, 1996, SCCP filed amendments to the proposed rule 
change.\2\ 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. 78s(b)(1).
    \2\ Letters from Linda S. Christie, Staff Counsel, SCCP, to 
Jerry Carpenter, Assistant Director, Division of Market Regulation, 
Commission (September 18, September 30, and November 18, 1996).
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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 SCCP's 
participants fund formula for its continuous net settlement (``CNS'') 
participants.

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

    In its filing with the Commission, SCCP included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments they received on the proposed rule changes. The 
text of these statements may be examined at the places specified in 
Item IV below. SCCP has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\3\
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    \3\ The Commission has modified the text of the summaries 
submitted by SCCP.
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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 amend SCCP's 
participants fund formula relating to its CNS participants. Currently, 
the participants

[[Page 68325]]

fund contribution of each of SCCP's CNS participants is based upon the 
larger of (1) $1,000 for every twenty-five trading units of one hundred 
shares based on the participant's monthly average of trading activity 
during the preceding three months or (2) the participant's aggregate 
dollar amount of all long trades at their execution price for the prior 
three months divided by the number of days in the prior three months 
multiplied by two percent.\4\
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    \4\ Securities Exchange Act Release Nos. 37623 (August 29, 
1996), 61 FR 47229 [File No. SR-SCCP-96-07] (notice of filing and 
order granting accelerated approval on a temporary basis of a 
proposed rule change seeking permanent approval of the participants 
fund formulas).
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    SCCP proposes to amend its CNS participants fund formula to assess 
each CNS participant (1) two percent (2%) of the value of its average 
daily gross buy trades derived over a rolling three month period, plus 
(2) one-half of one percent (.5%) of the gross value of its sell trades 
to the extent that value exceeds the gross value of the buy trades 
derived over the same rolling three month period. The terminology of 
buys or sells for purposes of calculating participants fund 
contributions refer to a participant's gross trades and not netted 
positions.
    CNS automatically nets each participants buy and sell trades to a 
net long or a net short position thereby giving rise to only a net 
exposure to any particular participant. SCCP's CNS participants fund 
formula bases its calculation of fund contributions on the basis of 
gross trade positions which should yield a greater amount upon which to 
base participants' fund computations than an amount derived from net 
trade positions. SCCP will recalculate each participant's deposit 
requirement at the end of each month based upon the previous three 
months prior to the most recent month.\5\ The required participants 
fund contribution will be rounded up in $5,000 increments. SCCP also 
proposes to create a $15,000 minimum contribution for CNS participants.
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    \5\ For example, at the end of December, SCCP will use activity 
from September, October, and November to calculate each 
participant's deposit requirement.
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    SCCP believes the proposed rule change is consistent with Section 
17A of the Act and the rules and regulations thereunder because the 
proposal should assure the safeguarding of securities and funds in its 
custody or control or for which it is responsible.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    SCCP believes that the proposed rule change will not impose any 
burden on competition not permitted by the Act.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received from Members, Participants, or Others

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

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 SCCP 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 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. 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 SCCP. All submissions should 
refer to the file number SR-SCCP-96-08 and should be submitted by 
January 17, 1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-32954 Filed 12-26-96; 8:45 am]
BILLING CODE 8010-01-M