[Federal Register Volume 62, Number 141 (Wednesday, July 23, 1997)] [Notices] [Pages 39560-39561] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-19345] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-38843; File No. SR-DCC-97-07] Self-Regulatory Organizations; Delta Clearing Corp.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fees and Charges for Repurchase Agreements July 17, 1997. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ notice is hereby given that on June 13, 1997, Delta Clearing Corp. (``DCC'') filed with the Securities and Exchange Commission (``Commission'') and on June 27, 1997, amended the proposed rule change as described in Items I, II, and III below, which items have been prepared primarily by DCC. The Commission is publishing this notice to solicit comments on the [[Page 39561]] proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- 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 DCC's fees for the settlement of repurchase and reverse repurchase agreement (``repo'') transactions involving U.S. Treasury securities. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, DCC 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. DCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.\2\ --------------------------------------------------------------------------- \2\ The Commission has modified the text of the summaries prepared by DCC. --------------------------------------------------------------------------- (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 DCC's fees for the settlement of repo transactions on U.S. Treasury securities. Previously, DCC's fees for the settlement of repo transactions on U.S. Treasury securities were the greater of either $9.00 per ticket, which included both the on-leg and off-leg deliveries, or a percentage of the notional amount of the trade based on the term of the trade. The specific percentages were: (1) for trades up to fifteen days in length, one-half basis point per million per day; (2) for trades from fifteen to thirty-five days in length, one-third basis point per million per day; and (3) for trades greater than thirty-five days in length, one- fifth basis point per million per day.\3\ --------------------------------------------------------------------------- \3\ Securities Exchange Act Release No. 38334 (February 24, 1997), 62 FR 9472 [File No. SR-DCC-97-01]. --------------------------------------------------------------------------- DCC's new fee schedule will establish two sets of fees based on whether the trade is over or under thirty-five days in length. For trades under thirty-five days in length, participants will be charged $1.30 for each of the on-leg and off-leg deliveries. Participants also will be charged all out-of-pocket charges incurred with each delivery including charges by Federal Reserve banks for delivery of securities through FedWire; charges by DCC's clearing bank, the Bank of New York, for delivery of securities; and money wire charges.\4\ DCC will charge participants that request substitutions $1.30 for each substitution. --------------------------------------------------------------------------- \4\ Money wire charges are charges by Federal Reserve banks or the Bank of New York for money transfers where DCC nets two security deliver obligations against one another resulting only in a net payment of money. In general, Federal Reserve banks and the Bank of New York do not charge for the transfer of funds on a delivery versus payment transaction but do charge for the transfer of funds in transactions where two delivery obligations are netted resulting only in a net payment of money. --------------------------------------------------------------------------- For trades thirty-five days in length and longer, participants will be charged one-fifth basis point per million per day of the notional amount of the trade. Participants will not be charged for out-of-pocket expenses or for substitutions. Interdealer brokers will be charged $1.50 for all trades submitted to DCC. This fee covers both on-date and off-date deliveries and both delivery of securities by the repro party to DCC and delivery of securities by DCC to the reverse repo party. DCC believes that the proposed rule change complies with Section 17A(b)(3)(D) of the Act \5\ which requires that the rules of a registered clearing agency provide for equitable allocation of reasonable dues, fees, and other charges for services which it provides to its participants. DCC believes that the proposed rule change will result in increased utilization of its clearing services thereby resulting in more securities transactions being cleared and settled through a registered clearing agency environment. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78q-1(b)(3)(D). --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition DCC does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of 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. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by DCC, it has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act \6\ and Rule 19b-4(e)(2) thereunder.\7\ At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A)(ii). \7\ 17 CFR 240.19b-4(e)(2). --------------------------------------------------------------------------- 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 Section, 450 Fifth Street, N.W., Wasnington, D.C. 20549. Copies of such filing also will be available for inspection and copying at the principal office of DCC. All submissions should refer to File No. SR-DCC-97-07 and should be submitted by August 13, 1997. For the Commission by the Division of Market Regulation, pursuant to delegated authority.\8\ --------------------------------------------------------------------------- \8\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 97-19345 Filed 7-22-97; 8:45 am] BILLING CODE 8010-01-M