[Federal Register Volume 62, Number 45 (Friday, March 7, 1997)]
[Notices]
[Pages 10601-10602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5671]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38350; File No. SR-NSCC-96-20]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change To Revise Rules
February 27, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'')\1\, notice is hereby given that on November 14, 1996, the
National Securities Clearing Corporation (``NSCC'') 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 NSCC. The Commission is publishing this
notice to solicit comments from interested persons on the proposed rule
change.
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\1\ 15 U.S.C. 78s(b)(1).
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[[Page 10602]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change revises NSCC's rules to modify the
definition of ``Clearing Agency Cross-Guaranty Agreement''.
II. Self-Regulatory Organization's Statement of the Purpose of, and
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 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.\2\
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\2\ The Commission has modified the text of the summaries
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In 1993, the Commission approved a proposed rule change filed by
NSCC to establish a Netting Contract and Limited Cross-Guaranty
Agreement between it and The Depository Trust Company (``DTC'').\3\ In
connection with the implementation of the NSCC-DTC Agreement, a
definition of a ``Clearing Agency Cross-Guaranty Agreement'' was added
to NSCC's rules. The definition was limited to registered clearing
agencies because NSCC and DTC believed that only registered clearing
agencies would enter into such arrangements.
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\3\ Securities Exchange Act Release No. 33145 (November 3,
1993), 58 FR 59766 [File No. SR-NSCC-93-07] (order approving
proposed rule change relating to a netting contract and limited
cross guaranty agreement (``NSCC-DTC Agreement'')).
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In 1995, the Commission approved a proposed rule change filed by
NSCC to establish the Collateral Management Service (``CMS'').\4\ In
order to provide their participants with a more accurate and broader
picture of the aggregate amount of their clearing fund deposits and
collateral, NSCC and other participating clearing entities recognized
that other types of clearing entities should be included in the CMS.
This broad category of participating entities is reflected in Rule 53
(CMS Rule) of NSCC's rules which includes clearing organizations
affiliated with or designated by contract markets trading specific
futures products under the oversight of the Commodity Futures Trading
Commission. NSCC believes the rationale of providing a broad range of
clearing entities in the scope of the CMS should be similarly applied
to NSCC's ability to enter into limited cross-guaranty agreements.\5\
Therefore, the purpose of the proposed rule change is to modify the
definition of ``Clearing Agency Cross-Guaranty Agreement'' to permit
NSCC to enter into limited cross guaranty agreements with the same
broad category of clearing entities as provided in the CMS.
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\4\ Securities Exchange Act Release No. 35809 (June 5, 1995), 60
FR 30912 [File No. SR-NSCC-93-06] (order approving proposed rule
change establishing CMS).
\5\ The rules of the International Securities Clearing
Corporation (Rule 1--Definition of ``Limited Cross-Guaranty
Agreement''), the MBS Clearing Corporation (Rule 1--Definition of
``Limited Cross-Guaranty Agreement''), and the Government Securities
Clearing Corporation (Rule 1--Definition of ``Limited Cross-Guaranty
Agreement'') permit entering into cross-guaranty agreements with
futures clearing entities.
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NSCC believes the proposed rule change is consistent with the
requirements of Section 17A of the Act and the rules and regulations
thereunder because it makes technical modifications to rules so that
they coincide with intended practice.
(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 DTC 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. 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 also will be available
for inspection and copying at the principal office of NSCC. All
submissions should refer to File No. SR-NSCC-96-20 and should be
submitted by March 28, 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. 97-5671 Filed 3-6-97; 8:45 am]
BILLING CODE 8010-01-M