[Federal Register Volume 64, Number 233 (Monday, December 6, 1999)]
[Notices]
[Pages 68124-68125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31529]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42183; File No. SR-GSCC-99-04]
Self-Regulatory Organizations; Government Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Fees and Charges
November 29, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 68125]]
(``Act''),\1\ notice is hereby given that on August 19, 1999, the
Government Securities Clearing Corporation (``GSCC'') 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 GSCC. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested parties.
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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, GSCC will reduce the clearance fee
that it charges to its netting members.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, GSCC 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. GSCC has prepared summaries, set forth in sections (A),
(B) and (C) below, of the most significant aspects of these
statements.\2\
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\2\ The Commission has modified the text of the summaries
prepared by GSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
GSCC passes through to its netting members (with the exception of
category 1 interdealer broker netting members engaged in blind broker
repo activity) the cost to GSCC of obtaining and providing clearance
services. Currently, the fee charged by GSCC to netting members to
recoup its own external and internal clearance costs is $2.90 per
deliver and receive obligation. The level of this fee is periodically
reviewed to ensure that it equates sufficiently close to GSCC's actual
expense.
Recently, the Board of Governors of the Federal Reserve System
(``Federal Reserve'') lowered its Fedwire funds and securities transfer
fees.\3\ GSCC's clearance fee is a blended combination of the clearance
charges levied upon GSCC by both its clearing banks and by the Federal
Reserve Bank of New York for transfers made through the Fedwire book
entry system. Internalized settlements at the clearing banks (i.e.,
those settlements occurring between GSCC and dealers within the same
clearing bank) substantially reduce the amount of Federal Reserve fees
included in GSCC's blended rate. As a result, there is not a direct
correlation between Federal Reserve clearance fees and GSCC's clearance
fee. Nonetheless, GSCC's processing costs were lowered because of the
Federal Reserve's action, and a reduction in GSCC's clearance fee is
therefore warranted.
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\3\ 63 FR 63552 (November 13, 1998) (notice of schedule of fees
for Federal Reserve Bank Services).
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GSCC has determined that the clearance fee level now needed to
offset its own clearance costs is roughly $2.75 per settlement. Thus,
GSCC has determined it appropriate, effective as of October 1, 1999, to
reduce GSCC's unit fee for clearance from $2.90 to $2.75. This adjusted
fee reflects GSCC's ongoing commitment to effectively translate
reductions in GSCC's processing costs into membership savings. The
level of clearance fee will continue to be periodically monitored for
appropriateness.
GSCC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \4\ and the rules and
regulations thereunder applicable to GSCC because it involves a fee
change which fairly reflects the costs incurred by GSCC in providing
services to its members.
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\4\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition
GSCC does not believe that the proposed rule change will have any
impact or impose any burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received from members, Participants or Others
Written comments relating to the proposed rule change have not yet
been solicited or received. GSCC will notify the Commission of any
written comments received by GSCC.
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) \5\ of the Act and Rule 19b-4(f)(2) \6\ promulgated
thereunder because the proposal establishes or changes a due, fee, or
other charge imposed by GSCC. At any time within sixty days of the
filing of such proposed rule change, the Commission may summarily
abrogate such rule change if it appears to the Commission that such
action is 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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\5\ 15 U.S.C. 78s(b)(3)(A)(ii).
\6\ 17 CFR 240.19b-4(f)(2).
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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 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 Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing also will be available
for inspection and copying at the principal office of GSCC. All
submissions should refer to File No. SR-GSCC-99-04 and should be
submitted by December 27, 1999.
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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Jonathan G. Katz,
Secretary.
[FR Doc. 99-31529 Filed 12-3-99 8:45 am]
BILLING CODE 8010-01-M