[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]


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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.
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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 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\
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    \2\ The Commission has modified the text of the summaries 
prepared by DCC.
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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 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\
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    \3\ Securities Exchange Act Release No. 38334 (February 24, 
1997), 62 FR 9472 [File No. SR-DCC-97-01].
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    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.
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    \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.
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    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.
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    \5\ 15 U.S.C. 78q-1(b)(3)(D).
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(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.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(e)(2).
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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\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-19345 Filed 7-22-97; 8:45 am]
BILLING CODE 8010-01-M