[Federal Register Volume 62, Number 60 (Friday, March 28, 1997)]
[Notices]
[Pages 14954-14955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7872]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38428; File No. SR-NSCC-97-02]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of a Proposed Rule Change To Modify
NSCC's Rules To Permit Unit Investment Trusts To Be Processed Through
Fund/SERV, Networking, and Mutual Fund Commission Settlement Services
March 21, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 10, 1997, the
National Securities Clearing Corporation (``NSCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change (File No. SR-NSCC-97-02) 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.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change consists of modifications to NSCC's rules
in order to permit unit investment trusts (``UITs'') to be processed
through NSCC's Fund/SERV, Networking, and Mutual Fund Commission
Settlement Services, which collectively constitute NSCC's Mutual Fund
Services.
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
submitted by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
A group of NSCC participants, bank trustees, and industry
organizations such as the Securities Industry Association's Securities
Operation Division, the Regional Municipal Operations Association, and
National Unit Trust Association have requested that NSCC permit UITs to
be eligible for processing through its Fund/SERV, Networking, and
Mutual Fund Commission Settlement Services.\3\ Such eligibility will
allow broker-dealers that are Mutual Fund Services only members (i.e.,
primarily bank broker-dealers and insurance company subsidiaries) and
therefore, that are not permitted to process these transactions through
NSCC's continuous net settlement (``CNS'') system to process UIT trades
through the Fund/SERV, Networking, and Mutual Fund Commission
Settlement systems. Currently, UITs are eligible for NSCC processing
through NSCC's CNS system only. However, because Mutual Fund Services
only members are not permitted access to NSCC's CNS system, they must
settle UIT trades ex-clearing with their UIT
[[Page 14955]]
positions held with a trustee in book-entry form.
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\3\ For a complete description of NSCC's Fund/SERV, Networking,
and Mutual Fund Commission Services, refer to Securities Exchange
Act Release Nos. 31937 (March 1, 1993), 58 FR 12609 [File No. SR-
NSCC-92-14] (order approving proposed rule change regarding Fund/
SERV system); 26376 (December 20, 1988), 53 FR 52546 [File No. SR-
NSCC-88-08] (order approving Networking); and 31579 (December 17,
1992), 57 FR 60018 [File No. SR-NSCC-92-13] (order approving the
Mutual Fund Commissions Settlement System and consolidating the
Mutual Fund Commissions Settlement, Fund/SERV, and Networking
Systems under NSCC's Mutual Fund Services.
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In terms of the settlement process, UIT transactions will be
processed through NSCC's Mutual Fund Services in the same manner as
they are processed in the CNS system. However, UIT transactions
processed through any Mutual Fund Services will not be guaranteed. If a
Mutual Fund Services only member wants its UIT transactions submitted
to NSCC to be guaranteed, such member must apply to NSCC for a full-
service membership, meet the applicable membership requirements, and
submit such transactions to NSCC's CNS system.
NSCC believes that by permitting these transactions to be processed
through NSCC's Fund/SERV, Networking, and Mutual Fund Commissions
Settlement systems, Mutual Fund Services only members will no longer
have to handle UIT trades through exception processing, which will
result in reduced processing costs and increased standardization.
NSCC believes that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder since
it will facilitate the prompt and accurate clearance and settlement of
securities transactions and, in general, will protect investors and the
public interest.
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC 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. 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 Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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-97-02 and should be submitted by April
18, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 97-7872 Filed 3-27-97; 8:45am]
BILLING CODE 8010-01-M