[Federal Register Volume 65, Number 112 (Friday, June 9, 2000)]
[Notices]
[Pages 36749-36750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14574]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42893; File No. SR-NSCC-00-03]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Relating to Processing Government Securities Trades

June 2, 2000.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 5, 2000, National 
Securities Clearing Corporation (``NSCC'') 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 NSCC. The Commission is publishing this notice and order 
to solicit comments from interested parties and to grant accelerated 
approval of the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change will allow NSCC to receive government 
securities trade data from the American Stock Exchange (``AMEX''), 
process the trade data, and transmit the trade data to the Government 
Securities Clearing Corporation (``GSCC'').

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A), 
(B) and (C) below, of the most significant aspects of these 
statements.\2\
---------------------------------------------------------------------------

    \2\ The Commission has modified the text of the summaries 
prepred by NSCC.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the rule change is to amend NSCC's rules and 
procedurres to permit NSCC to: (1) Receive trade data concerning 
members' government security transactions conducted on the AMEX; (2) 
record trade information about those transactions on NSCC members' 
contract lists; and (3) transmit at the request of members the trade 
information to GSCC for processing.
    Specifically, the rule change amends NSCC's rules and procedures as 
follows:
     The AMEX may submit locked-in trade data for transactions 
in ``eligible government securities'' included in the AMEX Order File 
(``AOF'') System to NSCC. NSCC will maintain a list of ``eligible 
government securities'' which must be unmatured, marketable debt 
securities in book-entry form that are direct obligations of the United 
States Government; securities issued or guaranteed by the United 
States, a U.S. government agency or instrumentality, or a U.S. 
government-sponsored corporation; or such other security as determined 
by NSCC from time to time.\3\
---------------------------------------------------------------------------

    \3\ NSCC Rule 3, Section 10.
---------------------------------------------------------------------------

     The AMEX may submit its trade data throughout trade date 
(``T'') until a time specified by NSCC. The trade data must include 
quantity, security identification, identification of the marketplace of 
execution, contra-broker, trade value, and other identifying details 
that NSCC may require or permit.\4\
---------------------------------------------------------------------------

    \4\ NSCC Procedure 11.D4(a)(ii).
---------------------------------------------------------------------------

     NSCC will report back to members their AOF trade data 
items, including final contract amount as calculated by NSCC, on the 
morning of T+1 in a separate section of NSCC's regular way T+1 contract 
list.\5\
---------------------------------------------------------------------------

    \5\ Id. at (iii).
---------------------------------------------------------------------------

     Unless otherwise processed through GSCC, as described 
below, the settlement of AFO trade data items will be the 
responsibility of parties to the trade. Such items will not be settled 
through the facilities of NSCC.\6\
---------------------------------------------------------------------------

    \6\ Id. at (iv).
---------------------------------------------------------------------------

    The rule change permits NSCC to transmit, at the request of 
members, AOF trade data items to GSCC for processing as follows \7\:
---------------------------------------------------------------------------

    \7\ NSCC Procedure 11.D.4(b).
---------------------------------------------------------------------------

     Each member that would like to settle its AFO trades 
through GSCC must complete and deliver to NSCC an authorization 
agreement.\8\
---------------------------------------------------------------------------

    \8\ Id. at 4(b)(i).
---------------------------------------------------------------------------

     NSCC will submit AOF trade data items to GSCC within the 
timeframes established by NSCC.\9\
---------------------------------------------------------------------------

    \9\ Id. at 4(b)(ii).
---------------------------------------------------------------------------

    NSCC believes that the proposed rule change is consistent with the 
requirements of the Act,\10\ and the rules and regulations thereunder. 
In particular, the proposed rule change is consistent with section 
17A(b)(3)(F) of the Act, 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change will impact 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 have been solicited or received. NSCC will 
notify the Commission of any written comments received by NSCC.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Section 17A(b)(3)(F) \11\ of the Act requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. For the reasons 
set forth below, the Commission believes that NSCC's rule change is 
consistent with this obligation.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The rule change permits NSCC to build upon its existing facilities 
to receive and process trade data concerning government securities 
traded through the AMEX's AOF System by NSCC members. After processing 
this information, NSCC will report back to members trade information 
relating to their AOF trades. At the request of members who wish to 
settle these trades through GSCC, NSCC will then transmit trade data to 
GSCC for processing. By providing this service, NSCC will be 
facilitating the prompt and accurate clearance and settlement of Amex-
traded government securities. Therefore, the Commission finds that the 
proposed rule change is consistent with NSCC's obligations to promote 
the prompt and

[[Page 36750]]

accurate clearance and settlement of securities transactions.
    NSCC has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of the notice of filing. The Commission finds good cause 
for approving the proposed rule change prior to the thirtieth day after 
publication of the notice because accelerated approval will enable NSCC 
to coordinate with GSCC and the AMEX in order to begin providing these 
clearance and settlement services on the target start date of June 2, 
2000.

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 Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing also will be available for 
inspection and copying at the principal office of NSCC. All submissions 
should refer to File No. SR-NSCC-00-03 and should be submitted by June 
30, 2000.
    It Is Therefore Ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-NSCC-00-03) be and hereby is 
approved.

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

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

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-14574 Filed 6-8-00; 8:45 am]
BILLING CODE 8010-01-M