[Federal Register Volume 64, Number 40 (Tuesday, March 2, 1999)]
[Notices]
[Pages 10170-10171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5088]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41087; File No. SR-MBSCC-99-01]
Self-Regulatory Organizations; MBS Clearing Corporation; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Eliminating
the Investment Service Fee
February 22, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on January 29, 1999, the MBS
Clearing Corporation (``MBSCC'') 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
MBSCC. 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 eliminates the investment service fee that
MBSCC charges a participant to recover the handling costs associated
with investing the cash the participant has on deposit in the
participants fund.
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.\2\
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\2\ The Commission has modified the text of the summaries
prepared by MBSCC.
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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 eliminate the
investment service fee that MBSCC charges its participants. MBSCC's
rules allow it to charge this fee to recover the handling costs
associated with investing the cash that a participant has on deposit in
the participants fund.\3\ MBSCC has historically charged a flat fee of
one half of one percent of the amount invested.\4\
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\3\ Specifically, Article IV, Rule 2, Section 7 of MBSCC's rules
provides that investment income, if any, on cash deposits in excess
of required basic deposits, less an amount to compensate the
corporation for its handling costs, shall be paid to participants at
such intervals, in such manner, and in such amounts as the
corporation from time to time may determine. Under the proposed rule
change, the provision ``less an amount to compensate the corporation
for its handling costs,'' has been deleted.
\4\ Telephone conversation between Anthony Davidson, Vice
President and Associate General Counsel, MBSCC; Jeffrey Mooney,
Special Counsel, Division of Market Regulation (``Division''),
Commission; and Jessie L. Nice, Attorney, Division, Commission
(February 2, 1999).
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MBSCC has determined that the investment service fee significantly
exceeds the actual cost to MBSCC of handling investments. In addition,
MBSCC does not charge participants for handling costs associated with
other forms of collateral such as securities or letters of credit
deposited to the participants fund. Accordingly, the proposed rule
change deletes the provision of MBSCC's rules that allows it to recover
its handling costs.
MBSCC believes that the proposed rule change is consistent with
Section 17A(b)(3)(D) of the Act \5\ and the rules and regulations
thereunder because it provides for the equitable allocation of
reasonable dues, fees, and other charges among MBSCC participants.
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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
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, Partipants, 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of Act \6\ and pursuant to Rule 19b-4(f)(2) \7\
promulgated thereunder because the proposal changes a due, fee, or
other charge imposed by MBSCC. At any time within sixty days of the
filing of such rule change, the Commission may summarily abrogate such
rule change if it appears to the Commission that such action is
[[Page 10171]]
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(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written date, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. 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, NW, Washington,
DC 20549. Copies of such filing will also be available for inspection
and copying at the principal office of MBSCC.
All submissions should refer to File No. SR-MBSCC-99-01 and should
be submitted by March 23, 1999.
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. 99-5088 Filed 3-1-99; 8:45 am]
BILLING CODE 8010-01-M