[Federal Register Volume 65, Number 29 (Friday, February 11, 2000)]
[Notices]
[Pages 7078-7080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3169]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42390; File No. SR-MBSCC-99-8]


Self-Regulatory Organizations; MBS Clearing Corporation; Notice 
of Filing of Proposed Rule Change Relating to the Electronic Pool 
Notification Service Rules

February 7, 2000.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''), notice is hereby given that on October 20, 1999, 
MBS Clearing Corporation (``MBSCC'') filed with the Securities and 
Exchange Commission

[[Page 7079]]

(``Commission'') and on November 8, 1999, amended the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by MBSCC. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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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

    The proposed rule change will amend MBSCC's rules to clarify 
MBSCC's procedures when there is a disruption in the Electronic Pool 
Notification (``EPN'') service. The proposed rule change will also 
allow MBSCC members to terminate their EPN service by providing MBSCC 
with written notice ten days prior to termination instead of thirty 
days prior to termination.

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

    Currently, Article VIII, Rule 1, Section 3(d) of MBSCC's Rules 
requires EPN users to utilize the EPN service for all messages relating 
to EPN eligible securities except for messages that MBSCC specifically 
exempts in the EPN procedures and messages that both parties agree not 
to send through the EPN service. The proposed rule change makes 
explicit that in the event of an EPN system disruption and an extension 
of the cut-off times for communicating pool allocation information 
pursuant to The Bond Market Association Guidelines, EPN users will be 
relieved of their obligation to process messages through the EPN 
service until the beginning of the next business day after the EPN 
system has been recovered. This modification is intended to confirm an 
EPN's user's ability to revert to phone and fax communication of pool 
allocation information in the event of an EPN system disruption that 
results in a pool notification extension. EPN users will be relieved of 
their obligation to process messages through EPN until the beginning of 
the next business day after the EPN system has been recovered to give 
them flexibility in such situations. MBSCC believes, however, that if 
the EPN system recovers during a pool notification extension, EPN users 
will choose to utilize EPN rather than phone and fax communication to 
the extent possible.
    The proposed rule change also changes Article VIII, Rule 2 of 
MBSCC's Rules, which currently provides that an EPN user may cease to 
maintain an EPN account or withdraw as an EPN user by giving MBSCC 
thirty days written notice prior to termination. The proposed rule 
change modifies this provision to require written notice ten days prior 
to termination. MBSCC believes that written notice ten days prior to 
termination is appropriate and is consistent with the notice of 
termination provision contained in MBSCC's rules governing its 
comparison and clearing services.
    The proposed rule change also will:
     Delete references in the cover page and in Article VI, 
Rule 1 of MBSCC's Rules to the ``EPN Division'' because while EPN is a 
separate service from the comparison and clearing service, it is not a 
separately constituted division.
     Replace references in Article VI, Rule 1 of MBSCC's Rules 
to ``Federal National Mortgage Association'' with ``Fannie Mae'' to 
reflect the name change of such organization.
     Renumber the rules contained in Article IX that were 
inadvertently misnumbered and makes corresponding changes to cross-
references to such rules and to the table of contents.
     Add Managing Director to Article X, Rules 1 and 3 as a 
person who may take certain actions with respect to certain actions 
taken by MBSCC.
     Renumber the EPN portion of MBSCC's Rules with consecutive 
page numbers throughout rather than page numbers by article for ease of 
reference.
    MBSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(F) of the Act and the rules and 
regulations thereunder because the proposal is designed to promote the 
prompt and accurate clearance and settlement of securities transactions 
and, in general, to protect investors and the public interest.

(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 Comments 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

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) by order approve such proposed rule change or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 in Washington, D.C. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the above-mentioned self-regulatory organization. 
All submissions should refer to File No. SR-MBSCC-99-8 and should be 
submitted by March 3, 2000.


[[Page 7080]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\
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    \3\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-3169 Filed 2-10-00; 8:45 am]
BILLING CODE 8010-01-M