[Federal Register Volume 64, Number 189 (Thursday, September 30, 1999)]
[Notices]
[Pages 52816-52817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25384]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41910; File No. SR-MBSCC-99-07]


Self-Regulatory Organizations; MBS Clearing Corporation; Notice 
of Filing and Order Granting Accelerated Approval of a Proposed Rule 
Change Modifying Rules Regarding Year 2000

September 23, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 20, 1999, MBS 
Clearing Corporation (``MBSCC'') 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 
MBSCC. 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, MBSCC will not activate any new or 
additional clearing participant accounts or electronic pool 
notification (``EPN'') participant accounts (other than updating EPN 
subaccount information) or provide any new or additional services to 
clearing participants or EPN participants and will freeze all 
nonemergency code releases after November 30, 1999, through January 26, 
2000, which is the completion date of the first settlement cycle in the 
Year 2000, or such later date as MBSCC reasonably determines.

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 proposed rule change provides that MBSCC will not activate any 
new or additional clearing participant accounts or EPN participant 
accounts (other than updating EPN subaccount information) or provide 
any new or additional services to clearing participants or EPN 
participants and will freeze all nonemergency code release after 
November 30, 1999, through January 26, 2000, which is the completion 
date of the first settlement cycle in the Year 2000, or such later date 
as MBSCC reasonably determines.\3\
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    \3\ The proposed rule change modified Addendum A of MBSCC's 
rules regarding mandatory Year 2000 testing. See Securities Exchange 
Act Release No. 40889 (January 6, 1999), 64 FR 2691.
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    MBSCC believes that continuing to activate new or additional 
participant accounts (other than updating EPN subaccount information) 
or to provide new or additional services to participants or to 
implement nonemergency code release after November 30, 1999, could 
potentially be disruptive to the rest of its Year 2000 efforts. 
Accordingly, MBSCC believes that the proposed rule change will 
facilitate a smooth Year 2000 transition.
    MBSCC 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) and the Act \4\ 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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    \4\ 15 U.S.C. 78q-1(b)(3)(F).
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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 Comment on the Proposed 
Rule Change Received from Members, Participants, 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

    Section 17A(b)(3)(F) of the Act \5\ 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 MBSCC's Year 2000 rules will 
permit MBSCC sufficient time before year end to complete its Year 2000 
preparations. As a result, MBSCC 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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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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    MBSCC 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 MBSCC 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, N.W., Washington, D.C. 20549-
0609. Copies of the submission, all subsequent

[[Page 52817]]

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 Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies 
of such filing will also be available for inspection and copying at the 
principal office of MBSCC. All submissions should refer to the File No. 
SR-MBSCC-99-07 and should be submitted by October 21, 1999.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (file No. SR-MBSCC-99-07) be and 
hereby is approved.

    \6\ 15 U.S.C. 78s(b)(2).
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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-25384 Filed 9-29-99; 8:45 am]
BILLING CODE 8010-01-M