[Federal Register Volume 65, Number 206 (Tuesday, October 24, 2000)]
[Notices]
[Pages 63662-63663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-27237]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43457; File No. SR-NSCC-00-12]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of Proposed Rule Change Relating the 
Submission of Extended Corrections in Fund/Serv

October 17, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 28, 2000, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission (``Commission'') and on October 16, 
2000, amended the proposed rule change as described in Items I, II, and 
II below, which items have been prepared primarily by NSCC. 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

    The proposed rule change will modify NSCC's rules to allow Fund 
Members and Mutual Fund Processors to submit extended (post settlement) 
corrections in NSCC's Fund/Serv.

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\
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    \2\ The Commission has modified the text of the summaries 
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Pursuant to NSCC's Rule 52A, Section 12, only a Settling Member or 
TPA Member may currently submit extended (post settlement) correction 
instructions. These types of instructions are submitted when a Settling 
Member or TPA Member determines that data previously transmitted to a 
Fund Member or Mutual Fund Processor with respect to a settled order is 
in need of correction.\3\
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    \3\ Securities Exchange Act Release No. 31937 (March 1, 1993), 
58 FR 12609 [SR-NSCC-92-14] (order approving post settlement 
correction initiated by Settling Members and TPA Members).
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    Under the proposed rule change, Section 12 will be amended to also 
permit Fund Members and Mutual Fund Processors to submit extended (post 
settlement) corrections to Settling Members or TPA Members. No action 
will be required by a Settling Member or TPA Member if it determines to 
accept the extended correction of a Fund Member or Mutual Fund 
Processor. A Settling Member or TPA Member will be able to reject the 
extended correction instruction within the time frame established by 
NSCC.\4\ In addition, Section 12 will be revised to permit extended 
corrections for exchange orders.
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    \4\ NSCC will issue an ``Important Notice'' at least 30 days 
prior to implementing changes in the time frames required for 
rejections of extended corrections. Telephone conversation with 
Richard J. Paley, Associate Counsel, NSCC (October 16, 2000).
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    The rule change also proposes to make two additional changes to 
Rule 52A. Sections 4 and 8 of Rule 52A will be amended to allow NSCC to 
delete certain orders, corrections, and extended corrections that have 
not been confirmed or rejected, respectively, within a time frame 
established by NSCC. Section 21 will permit NSCC to reduce the maximum 
time frame within which a Delivering Fund Member must confirm the value 
of Fund/Serv eligible mutual fund shares, investment funds, or UIT 
units from sixty days to ten days.\5\
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    \5\ Pursuant to Section 21 of Rule 52A, a Fund Member or Mutual 
Fund Processor (``Receiving Fund Member'') may initiate a request 
for the transfer of a customer's mutual fund shares, investment 
fund, or UIT units from another Fund Member or Mutual Fund Processor 
(``Delivering Fund Member''). The Delivering Fund Member must 
acknowledge or reject the transfer request within two business days. 
Once the transfer is acknowledged, the Delivering Fund Member must 
also confirm the value of the shares to be transferred within the 
time frame specified under Section 21. Under the proposed rule 
change, a Delivering Fund Member must submit the confirmation no 
earlier than one business day and no later than ten business days 
after acknowledging the transfer.
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    NSCC intends to implement these changes, subject to SEC approval, 
on November 20, 2000.
    NSCC believes the proposed rule change is consistent with Section 
17A(b)(3)(F) of the Act and the rules thereunder because it will 
facilitate the prompt and accurate clearance and settlement of 
securities transactions.

[[Page 63663]]

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

    NSCC does not believe that the proposed rule change will have an 
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

    The Investment Company Institute's Enhancement Subcommittee of its 
Broker/Dealer Committee was advised of and concurs in the modifications 
to NSCC's rules. No written comments relating to the proposed rule 
change 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

    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 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-00-12 and should be submitted by 
November 14, 2000.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-27237 Filed 10-23-00; 8:45 am]
BILLING CODE 8010-01-M