[Federal Register Volume 64, Number 167 (Monday, August 30, 1999)]
[Notices]
[Pages 47207-47208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22376]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41770; File No. SR-EMCC-99-09]


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

August 20, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 19, 1999, the 
Emerging Markets Clearing Corporation (``EMCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items II and II below, which items have been 
prepared primarily by EMCC. The Commission is publishing this notice

[[Page 47208]]

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 not activate any new or 
additional participant accounts or provide new services to participants 
after November 1, 1999, and until reasonably practicable in January 
2000.

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

    The proposed rule change provides that, EMCC will not activate any 
new or additional participants accounts or provide new services to 
participants after November 1, 1999, and until reasonably practicable 
in January, 2000. Among other things, EMCC announced in its August 6, 
1999, Important Notice that after November 1, 1999, and for the 
remainder of the calendar year, EMCC will not: (1) permit new 
participants to utilize EMCC's services; (2) allow current participants 
to utilize new FMCC services; and (3) assign additional participant 
numbers to current participants.
    EMCC's Rule 2 provides in part that:

the Corporation may deny an application to become a Member or to use 
one or more additional services of the Corporation upon a 
determination by the Corporation that the Corporation does not have 
adequate personnel, space, data processing capacity or other 
operational capability at such time to perform its services for the 
applicant or Member without impairing the ability of the Corporation 
to provide services for its existing Settling Members, to assure the 
prompt, accurate and orderly processing and settlement of securities 
transactions or to otherwise carry out its functions; provided, 
however, that any such applications which are denied pursuant to 
this paragraph shall be approved as promptly as the capabilities of 
the Corporation permit.

    EMCC believes that continuing to activate numerous new or 
additional participant accounts or to provide new services to 
participants after November 1st could potentially be disruptive to the 
rest of its Year 2000 efforts. Specifically, EMCC will be devoting a 
great deal of resources to confirming the Year 2000 readiness of its 
systems and applications in November of 1999. Additionally, EMCC would 
like to ensure that it has enough time to deal with any unanticipated 
issues that arise before the end of the calendar year.
    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 designed 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 advised members of the Year 2000 policy modifications in an 
Important Notice, dated August 6, 1999. No written comments relating to 
the Important Notice or proposed rule change 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 be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. The Commission 
finds that the proposed rule change is consistent with this obligation 
because the proposed modifications to EMCC's Year 2000 policies will 
permit EMCC sufficient time before year end to complete its Year 2000 
preparations. 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 
for 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 better prepare for a smooth Year 2000 transition.

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-99-09 and should be submitted by 
September 20, 1999.
    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\5\ that the proposed rule change (File No. SR-EMCC-99-09) be and 
hereby is approved.
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    \5\ 15 U.S.C. 78s(b)(2).

    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. 99-22376 Filed 8-27-99; 8:45 am]
BILLING CODE 8010-01-M