[Federal Register Volume 66, Number 47 (Friday, March 9, 2001)]
[Notices]
[Pages 14237-14238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5796]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44032; File No. SR-NSCC-00-09]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of Proposed Rule Change Relating to 
Certain Securities Undergoing Reorganization

March 3, 2001.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on July 12, 2000, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission the proposed rule change as 
described in Items I, II, and III 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 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 would permit NSCC to process otherwise 
ineligible securities in the continuous net settlement (``CNS''), 
balance order or other related system.

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 such statements.\2\
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    \2\ The Commission has modified parts of these statements.
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A. Self-Regulator Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    NSCC's rules permit NSCC to continue to process certain securities 
undergoing reorganization or issuing dividends and specify how NSCC 
shall handle those issues. However, not all types of reorganizations or 
dividends fit the procedures specifically set forth in the rules. 
Ordinarily, this would require that the affected security be exited 
from the applicable system. Exiting the affected security from the 
applicable system poses a burden on the financial investment community 
when the issue is widely traded.
    The purpose of the proposed rule filing is to permit NSCC the 
flexibility to process in the CNS, balance order, or other related 
system, on an exception basis, securities that would not otherwise have 
been eligible for processing to the extent NSCC has the capability to 
do so. The proposed rule change would provide that in such 
circumstance, NSCC would issue a notice to its members setting forth 
how NSCC would process the security. The proposed rule change further 
would provide that the procedures set forth in the notice would have 
the same effect as if they were set forth in NSCC's rules.
    NSCC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder. In 
particular, NSCC believes that the proposed rule change is consistent 
with section 17A(b)(3)(F) of the Act \3\ which requires that the rules 
of a clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).

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[[Page 14238]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    NSCC 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. NSCC will notify the Commission of any other 
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 NSCC consents, the Commission will:
    (a) By order approve the 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 will also be available for 
inspection and copying at the principal office of NSCC. All submissions 
should refer to File No. SR-NSCC-00-09 and should be submitted by March 
30, 2001.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-5796 Filed 3-8-01; 8:45 am]
BILLING CODE 8010-01-M