[Federal Register Volume 65, Number 62 (Thursday, March 30, 2000)]
[Notices]
[Pages 16980-16981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7844]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release 34-42568; File No. 600-22]


Self-Regulatory Organizations; MBS Clearing Corporation; Notice 
of Filing and Order Extending Temporary Registration as a Clearing 
Agency

March 23, 2000.
    Notice is hereby given that on February 8, 2000, MBS Clearing 
Corporation (``MBSCC'') filed with the Securities and Exchange 
Commission (``Commission'') an application pursuant to Section 19(a) of 
the Securities Exchange Act of 1934 (``Act'') \1\ requesting that the 
Commission grant MBSCC full registration as a clearing agency or in the 
alternative extend MBSCC's temporary registration as a clearing agency 
until such time as the Commission is able to grant MBSCC permanent 
registration.\2\ The Commission is publishing this notice and order to 
solicit comments from interested persons and to extend MBSCC's 
temporary registration as a clearing agency through March 31, 2001.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(a).
    \2\ Letter from Anthony Davidson, Managing Director and General 
Counsel, MBSCC (February 8, 2000).
---------------------------------------------------------------------------

    On February 2, 1987, pursuant to Sections 17A(b) and 19(a) of the 
Act \3\ and Rule 17Ab2-1 promulgated thereunder,\4\ the Commission 
granted MBSCC registration as a clearing agency on a temporary basis 
for a period of eighteen months.\5\ The Commission subsequently has 
extended MBSCC's registration through March 31, 2000.\6\
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78q-1(b) and 78s(a).
    \4\ 17 CFR 240.17Ab2-1.
    \5\ Securities Exchange Act Release No. 24046 (February 2, 
1987), 52 FR 4218.
    \6\ Securities Exchange Act Release Nos. 25957 (August 2, 1988), 
53 FR 29537; 27079 (July 31, 1989), 54 FR 34212; 28492 (September 
28, 1990), 55 FR 41148; 29751 (September 27, 1991), 56 FR 50602; 
31750 (January 21, 1993), 58 FR 6424; 33348 (December 15, 1993), 58 
FR 68183; 35132 (December 21, 1994) 59 FR 67743; 37372 (June 26, 
1996) 61 FR 35281; 38784 (June 27, 1997), 62 FR 36587; 39776 (March 
20, 1998), 63 FR 14740; and 41211 (March 24, 1999), 64 FR 15854.
---------------------------------------------------------------------------

    As discussed in detailed in the original order granting MBSCC's 
registration, one of the primary reasons for MBSCC's registration was 
to enable it to provide for the safe and efficient clearance and 
settlement of transactions in mortgage-backed securities. Since its 
original temporary registration order, MBSCC has implemented many 
improvements and continues to work towards enhancing the safety and 
efficiency of its operations. For example, during the past year, MBSCC 
amended its risk management rules to: (i) Implement a net-out report, 
(ii) modify financial reporting by participants, (iii) modify certain 
special provisions applicable to non-domestic participants, (iv) add a 
provision for additional assurances, and (v) clarify MBSCC's role as a 
agent in a liquidation.\7\ MBSCC also modified its rules regarding 
letters of credit to implement the Uniform Letter of Credit developed 
by the Unified Clearing Group.\8\ In addition, MBSCC amended its rules 
to add net position and net-out position components to the formula 
MBSCC uses to calculate market margin differential deposits to the 
participants fund.\9\ MBSCC adopted rules to

[[Page 16981]]

facilitate a smooth Year 2000 transition.\10\
---------------------------------------------------------------------------

    \7\ Securities Exchange Act Release No. 41714 (August 6, 1999), 
64 FR 44250.
    \8\ Securities Exchange Act Release No. 41803 (August 27, 1999), 
64 FR 48692.
    \9\ Securities Exchange Act Release No. 42173 (November 23, 
1999), 64 FR 67363.
    \10\ Securities Exchange Act Release No. 41910 (September 23, 
1999), 64 FR 52816.
---------------------------------------------------------------------------

    MBSCC has functioned effectively as a registered clearing agency 
for over ten years. Accordingly, in light of MBSCC's past performance 
and the need for continuity in the services MBSCC provides to its 
participants, the Commission believes that it is necessary and 
appropriate in the public interest and for the prompt and accurate 
clearance and settlement of securities transactions to extend MBSCC's 
temporary registration through March 31, 2001. During this temporary 
registration period, the Commission anticipates that it will act on 
MBSCC's application for permanent registration. Any comments received 
during MBSCC's temporary registration will be considered in conjunction 
with the Commission's review of MBSCC's request for permanent 
registration as a clearing agency under Section 17A of the Act.\11\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments with respect to whether the Commission should grant MBSCC 
permanent registration as a clearing agency. 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 request for permanent 
registration as a clearing agency that are filed with the Commission, 
and all written communications relating to the extension between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with 5 U.S.C. 552, will be available for 
inspection and copying at the Commission's Public Reference Room, 450 
Fifth Street, NW, Washington, DC 20549. Copies of such filing also will 
be available for inspection and copying at the principal office of 
MBSCC. All submissions should refer to File No. 600-22 and should be 
submitted by April 20, 2000.

Conclusion

    It is therefore ordered pursuant to Sections 17A(b) and 19(a) of 
the Act that MBSCC's temporary registration as a clearing agency (File 
No. 600-22) be and hereby is extended through March 31, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(16).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-7844 Filed 3-29-00; 8:45 am]
BILLING CODE 8010-01-M