[Federal Register Volume 65, Number 2 (Tuesday, January 4, 2000)]
[Notices]
[Page 311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-40]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42274; File No. SR-ISCC-99-01]


Self-Regulatory Organizations; International Securities Clearing 
Corporation; Order Granting Accelerated Approval of a Proposed Rule 
Change Relating to International Security Clearing Corporation's 
Withdrawal From the Clearance and Settlement Business

December 27, 1999.
    On September 23, 1999, the International Securities Clearing 
Corporation (``ISCC'') filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change (File No. SR-ISCC-
99-01) pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934 (``Act'') \1\ to transfer its clearance and settlement services to 
the National Securities Clearing Corporation (``NSCC'') and to withdraw 
its registration as a clearing agency. Notice of the proposal was 
published in the Federal Register on December 1, 1999.\2\ No comment 
letters were received. For the reasons discussed below, the Commission 
is granting accelerated approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 42175 (November 23, 
1999), 64 FR 67362.
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I. Description

    On May 12, 1989, the Commission granted, pursuant to Sections 17A 
and 19(a) of the Act \3\ and Rule 17Ab2-1,\4\ the application of ISCC 
for registration as a clearing agency on a temporary basis for a period 
of eighteen months.\5\ Since that time, the Commission has extended 
ISCC's temporary registration through February 29, 2000.\6\
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    \3\ 15 U.S.C. 78q-1 and 78s(a),
    \4\ 17 CFR 240.17Ab2-1(c).
    \5\ Securities Exchange Act Release No. 26812 (May 12, 1989), 54 
FR 21691.
    \6\ Securities Exchange Act Release Nos. 28606 (November 16, 
1990), 55 FR 47976; 30005 (November 27, 1991), 56 FR 63747; 33233 
(November 22, 1993), 58 FR 63195; 36529 (November 29, 1995), 60 FR 
62511; 37986 (November 25, 1996), 61 FR 64184; 38703 (May 30, 1997), 
62 FR 31183; 39700 (February 26, 1998), 63 FR 10669; and 41103 
(February 24, 1999), 64 FR 10521.
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    Under the rule change, ISCC, a wholly owned subsidiary of NSCC, 
will transfer its clearance and settlement services to NSCC because it 
is no longer cost-effective to provide such services through a separate 
company.\7\ ISCC is also requesting that it be allowed to withdraw from 
registration as a clearing agency. The transfer of services to NSCC 
will be transparent to ISCC users. They will not be required to perform 
any system modifications, and they will be charged the same fees for 
the services at NSCC as they are currently paying ISCC.
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    \7\ In connection with this rule filing, NSCC has submitted a 
proposed rule change to amend its rules to allow it to provide 
clearance and settlement services previously offered by ISCC. (File 
No. SR-NSCC-99-12).
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II. Discussion

    Section 17A(b)(3)(F) \8\ of the Act requires that the rules of a 
clearing agency be designed to assure the prompt and accurate clearance 
and settlement of securities transactions. ISCC was created to provide 
safe and efficient clearance and settlement of securities transactions 
between United States broker-dealers and foreign financial 
institutions. ISCC serves this function through its core services, the 
Global Clearance Network (``GCN'') and the International Link Services 
(``ILS'').\9\
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ Securities Exchange Act Release Nos. 29841 (October 18, 
1991), 56 FR 55960 (order approving GCN) and 32564 (June 30, 1993), 
58 FR 36722 (order approving a data transmission link with Euroclear 
Systems).
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    Under the proposed rule change, ISCC will cease offering clearance 
and settlement services, NSCC will offer similar services under the 
same terms and conditions as ISCC, and ISCC will be allowed to withdraw 
from registration as a clearing agency. According to ISCC, it is no 
longer cost-effective to provide such services through a separate 
company. Because NSCC will continue ISCC's role as a provider of 
services for international securities transactions, the Commission 
believes that ISCC's rule change is consistent with NSCC's obligations 
under the Act.
    ISCC has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after the 
date of publication of notice of the filing. The Commission finds good 
cause for so approving the proposed rule change because accelerated 
approval will permit ISCC to cease providing clearance and settlement 
services before the end of the year.

III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular Section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-ISCC-99-01) be and hereby is 
approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-40 Filed 1-3-00; 8:45 am]
BILLING CODE 8010-01-M