[Federal Register Volume 64, Number 69 (Monday, April 12, 1999)]
[Notices]
[Page 17704]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9014]



[[Page 17704]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41249; File No. SR-EMCC-99-03]


Self-Regulatory Organizations; Emerging Markets Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change Regarding Year 2000 Testing

April 5, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 26, 1999, the 
Emerging Markets Clearing Corporation (``EMCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I and II below, which items have been 
prepared primarily by EMCC. The Commission is publishing this notice 
and order to solicit comments from interested persons and to grant 
accelerated approval of the proposal.
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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

    Under the proposed rule change, EMCC will require that all EMCC 
members participate in Year 2000 testing with EMCC no later than August 
31, 1999.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the commission, EMCC 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. EMCC 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 EMCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    EMCC's Rule 13 provides that, ``The Corporation shall establish, as 
it deems necessary or appropriate, standards of financial 
responsibility, operational capability, experience and competence for 
membership.'' In connection with this standard, EMCC has determined 
that members that utilize its services must validate their Year 2000 
readiness through participation in Year 2000 testing with EMCC. Members 
will be required to submit scripted data containing various dates to 
EMCC for processing and will be required to verify that they have 
received back the scripted results.
    Members that fail to participate in Year 2000 testing with EMCC 
will be subject to appropriate disciplinary action in accordance with 
EMCC's rules. Such disciplinary action permits EMCC to limit or 
restrict a member's access to EMCC.
    EMCC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder. In 
particular, the proposed rule change is consistent with Section 
17A(b)(3)(F) of the Act,\3\ which requires that the rules of a clearing 
agency be designated to promote the prompt and accurate clearance and 
settlement of securities transactions and, in general, to protect 
investors and the public interest.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    EMCC 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

    EMCC will advise its members of the Year 2000 member testing 
requirement by Important Notice. No written comments have been 
solicited or received. EMCC will notify the Commission of any written 
comments received by EMCC.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Section 17A(b)(3)(F) of the Act \4\ requires that the rules of a 
clearing agency has designed to promote the prompt and accurate 
clearance and settlement and securities transactions. The Commission 
believes that the proposed rule change is consistent with this 
obligation because the required Year 2000 testing should allow EMCC to 
address potential problems associated with its members' Year 2000 
readiness. As a result, EMCC should be able to continue to provide 
prompt and accurate clearance and settlement of securities transactions 
before, on, and after Year 2000 without interruption.
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    \4\ 15 U.S.C. 78q-1(b)(3)(F).
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    EMCC requested that the Commission find good cause for approving 
the proposed rule change prior to the thirtieth day after the 
publication of notice of the filing. The Commission finds good cause to 
approving the proposed rule change prior to the thirtieth day after the 
publication of notice of the filing because such approval will allow 
EMCC to implement its mandatory Year 2000 testing program in a timely 
manner.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, 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 20549-0609. 
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 EMCC. All submissions should 
refer to the File No. SR-EMCC-99-03 and should be submitted by May 3, 
1999.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\5\ that the proposed rule change (File No. SR-EMCC-99-03) be and 
hereby is approved.

    \5\ 15 U.S.C. 78s(b)(2).
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    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. 99-9014 Filed 4-9-99; 8:45 am]
BILLING CODE 8010-01-M