[Federal Register Volume 62, Number 38 (Wednesday, February 26, 1997)]
[Notices]
[Pages 8809-8810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4671]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38314; File No. SR-MBSCC-96-08]


Self-Regulatory Organizations; MBS Clearing Corporation; Notice 
of Filing of a Proposed Rule Change Relating to Liens on Participants' 
Property

February 19, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 20, 1996, the MBS 
Clearing Corporation (``MBSCC'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change (File No. SR-
MRSCC-96-08) as described in Items I, II, and III below, which items 
have been prepared primarily by MBSCC. On January 3, 1997, and January 
14, 1997, MBSCC 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 Julie Beyers, Associate Counsel, MBSCC (January 
3, 1997, and January 14, 1997).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change modifies MBSCC's rules to explicitly state 
that MBSCC has a lien on all property placed in MBSCC's possession by 
its 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, 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.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by MBSCC.

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[[Page 8810]]

(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 modify MBSCC's rules 
to explicitly state that MBSCC has a lien on all property placed in its 
possession by its participants. Unlike other clearing organizations, 
MBSCC's rules do not contain specific language stating that MBSCC has 
such a lien.\4\ However, according to MBSCC, MBSCC always intended to 
have a lien on all property placed in its possession by its 
participants. Therefore, in order to clarify this issue, the proposed 
rule change adds language providing MBSCC with assurances that, in the 
event one of its participants fails to discharge its liabilities, MBSCC 
will have first priority with respect to the participant's property in 
MBSCC's possession. The proposed rule change also revises MBSCC's rules 
to clarify that any cash received with respect to any deposits to 
MBSCC's participants fund and not yet distributed to a participant is 
available to MBSCC for satisfaction of participant liabilities.
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    \4\ For example, the rules of the National Securities Clearing 
Corporation (``NSCC'') and the International Securities Clearing 
Corporation (``ISCC'') provide NSCC and ISCC with liens on property 
placed in their possession by their participants. The language 
contained in the present proposed rule change is substantially 
similar to the language contained in NSCC's and ISCC's respective 
rules. NSCC Rule 18, Section 2(f) and ISCC Rule 18, Section 3.
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    MBSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(F) of the Act \5\ and the rules and 
regulations thereunder because it will facilitate the prompt and 
accurate clearance and settlement of securities transactions.
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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    MBSCC 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. 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 MBSCC 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 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 MBSCC. All 
submissions should refer to the file number SR-MBSCC-96-08 and should 
be submitted by March 19, 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. 97-4671 Filed 2-25-97; 8:45 am]
BILLING CODE 8010-01-M