[Federal Register Volume 66, Number 4 (Friday, January 5, 2001)]
[Notices]
[Pages 1167-1168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-315]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43781; File No. SR-SCCP-00-05]


Self-Regulatory Organization; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Order Granting Accelerated Approval 
on a Temporary Basis of a Proposed Rule Change Extending Approval of 
Restructured and Limited Clearing Services

December 28, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 6, 2000, the 
Stock Clearing Corporation of Philadelphia (``SCCP'') 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 SCCP. The Commission is publishing this notice 
and order to solicit comments from interested persons and to grant 
accelerated approval of the proposal.
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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

    SCCP proposes to extend, for a one year period ending December 31, 
2001, the ability to provide limited clearance and settlement services. 
Specifically, SCCP seeks to continue to provide trade confirmation and 
recording services for members of the Philadelphia Stock Exchange, Inc. 
(``Phlx'') effecting transactions through Regional Interface Operations 
(``RIO'') and ex-clearing accounts. SCCP will also continue to provide 
margin accounts to certain participants cleared through an account 
established by SCCP at the National Securities Clearing Corporation 
(``NSCC'').

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

    In its filing with the Commission, SCCP 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. The self-regulatory organization has prepared summaries, 
set forth is sections (A), (B), and (C) below, of the most significant 
aspects of such statements.

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

    The purpose of the proposed rule change is to continue SCCP's 
restructured business for an additional one year period through 
December 31, 2001.
Background
    In an Agreement dated as of June 18, 1997, by and among the Phlx, 
SCCP, Philadelphia Depository Trust Company (``Philadep''), NSCC, and 
The Depository Trust Company (``DTC''), Philadep and SCCP agreed to 
certain provisions, including that: (i) Philadep would cease providing 
securities depository services; (ii) Philadep would make available to 
its participants access to the facilities of one or more other 
organizations providing depository services; (iii) SCCP would make 
available to SCCP participants access to the facilities of one or more 
other organizations providing securities clearing services; and (iv) 
SCCP would transfer to the books of such other organizations the CNS 
system open positions of SCCP participants on the books of SCCP.
    In December, 1997, the Commission approved a proposed rule change 
which gave effect to the Agreement and which reflected Philadep's 
withdrawal from the depository business and SCCP's restructured and 
limited clearance and settlement business.\2\ At that time, the 
Commission stated that ``because a part of SCCP's proposed rule change 
concerns the restructuring of SCCP's operations to enable SCCP to offer 
limited clearing and settlement services to certain Phlx members, the 
Commission finds that it is appropriate to grant only temporary 
approval to the portion of SCCP's proposed rule change that amends 
SCCP's By-laws, Rules, or Procedures. This will allow the Commission 
and SCCP to see how well SCCP's restructured operations are functioning 
under actual working conditions and to determine whether any 
adjustments are necessary. Thus, the Commission is approving the 
portion of SCCP's proposal that amends its By-laws, Rules, or 
Procedures through December 31, 1998.'' In December 1998 and December 
1999, one year extensions of such approval were granted by the 
Commission to allow SCCP to continue its restructured and

[[Page 1168]]

limited clearance and settlement services.\3\
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    \2\ Securities Exchange Act Release No. 39444 (December 11, 
1997), 62 FR 66703 [File Nos. SR-SCCP-97-04, SR-DTC-97-16, SR-NSCC-
97-08, and SR-Philadep-97-04].
    \3\ Securities Exchange Act Release Nos. 40872 (December 31, 
1998) [File Number SR-SCCP-98-05] and 42320 (January 6, 2000) [File 
Number SR-SCCP-99-04].
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    SCCP is hereby requesting that the Commission extend its approval 
of SCCP's restructured and limited clearance and settlement services 
for an additional year. SCCP believes that such extension is 
appropriate so that it may continue to offer its limited clearance and 
settlement services to its participants. SCCP believes that its 
restructured operations have functioned consistent with the original 
proposed rule change and SCCP will continue to evaluate whether any 
adjustments are necessary.
Purpose
    In the original proposed rule filing and order approving SCCP's 
restructured business, many SCCP rules were amended and discussed at 
length.\4\ No new rule changes are proposed at this time. Thus, the 
purpose of the proposed rule change is to extend without change or 
modification the effectiveness of SCCP's restructured business.
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    \4\ Supra note 2.
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    SCCP believes the extension of the Commission's temporary approval 
to permit SCCP's continued operation of its restructured and limited 
clearance and settlement services is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to SCCP 
and in particular with Section 17A(b)(3)(F) which requires that a 
clearing agency be organized and its rules be designed, among other 
things, to promote the prompt and accurate clearance and settlement of 
securities transactions. SCCP believes that the extension of SCCP's 
restructured business should promote the prompt and accurate clearance 
and settlement of securities transactions by integrating and 
consolidating clearing services available to the industry.

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

    Similar to the original proposed rule change and subsequent 
renewals, SCCP does not believe that this extension should impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

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

    Section 17A(b)(3)(F) of the Act \5\ requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. Based on the 
information the Commission has to date, the Commission believes that 
SCCP's restructured operations have functioned satisfactorily to 
provide prompt and accurate clearance and settlement. During the 
upcoming temporary approval period, the Commission expects to review 
with SCCP in detail the functioning of SCCP's restructured operations.
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    \5\ 15 U.S.C. 79q-1(b)(3)(F).
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    SCCP 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 
the publication of notice of the filing. Approving prior to the 
thirtieth day after publication of notice will allow SCCP to continue 
to offer its restructured clearing operations for another year without 
interruption when the current temporary order expires on December 31, 
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 Room, 450 Fifth Street, NW., Washington, 
DC 20549. Copies of such filing will also be available for inspection 
and copying at the principal office of SCCP.
    All submissions should refer to the File No. SR-SCCP-00-05 and 
should be submitted by January 26, 2001.
    It is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-SCCP-00-05) be and 
hereby is approved through December 31, 2001.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-315 Filed 1-4-01; 8:45 am]
BILLING CODE 8010-01-M