[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] ----------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- 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\ --------------------------------------------------------------------------- \2\ The Commission has modified the text of the summaries prepared by MBSCC. --------------------------------------------------------------------------- (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\ --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- (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. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- 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). --------------------------------------------------------------------------- For the Commission by the Division of Market Regulation, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-25384 Filed 9-29-99; 8:45 am] BILLING CODE 8010-01-M