[Federal Register Volume 66, Number 65 (Wednesday, April 4, 2001)]
[Notices]
[Pages 17983-17984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8273]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44129; File No. SR-SCCP-01-02]


Self-Regulatory Organizations; The Stock Clearing Corporation of 
Philadelphia; Notice of Filing of Proposed Rule Change Relating to the 
Deletion of Rule 20

March 28, 2001.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), as amended, notice is hereby given that on February 5, 2001, 
the Stock Clearing Corporation of Philadelphia (``SCCP'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and III below, which items 
have been prepared primarily by SCCP. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
parties.\1\
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    \1\ A copy of the text of SCCP's proposed rule change and the 
attached exhibit are available at the Commission's Public Reference 
Section or through SCCP.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The purpose of the proposed rule change is to delete SCCP Rule 20.

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. SCCP has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
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 delete SCCP Rule 20. 
Rule 20 requires SCCP to provide a daily bookkeeping form to margin 
members that utilize SCCP's omnibus account. SCCP participants must 
verify the form upon receipt and promptly report any exceptions or 
corrections. Additionally, Rule 20 provides that as of the last Friday 
of each month SCCP requests each participant to respond in writing as 
to whether their monthly account statement is accurate for each type of 
account. If a statement is incorrect, any differences should be 
reported on research requests and enclosed with the written reply. The 
reply must be signed by the participant and returned to SCCP by the 
twentieth day of the month following the date of the statement. 
Pursuant to the rule, penalties may be imposed on a participant who 
fails to respond to confirmation requests in a timely manner, the rule 
provides for a hearing process for such participants.
    SCCP believes that Rule 20 is unnecessary because the information 
provided to participants on a monthly basis is essentially duplictive 
of information provided daily pursuant to SCCP Rule 6. Moreover, SCCP 
believes that the participant certification requirement in Rule 20 is 
unnecessary, burdensome, and inconsistent with general practices in the 
financial services industry. SCCP Rule 6 provides that all transactions 
executed on the Philadelphia Stock exchange, Inc., and all other 
transactions submitted by a participant to SCCP are subject to SCCP 
trade recording and confirmation. All transactions are recorded and 
confirmed to SCCP participants daily. SCCP considers each transaction 
complete and accurate unless notified by the participant of any 
inaccuracy prior to settlement date. Participants are liable for any 
loss resulting from their failure to notify SCCP of any discrepancies. 
Accordingly, the monthly reports required by SCCP Rule 20 are 
unnecessary given compliance with Rule 6. Deletion of Rule 20 will 
relieve SCCP participants of a monthly requirement that they are 
required in any event to perform daily under Rule 6.
    For these reasons, the proposed rule change is consistent with 
Section 17A of the Act in general and with Section 17A(b)(3)(F) of the 
Act specifically in that it is designed to promote the prompt and 
accurate clearance and settlement of securities transactions and to 
remove impediments to and perfect the mechanism of a national system 
and to protect investors and the public interest, by relieving SCCP and 
its participants from providing and reviewing duplicative reports that 
are unnecessary.

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

    SCCP does not believe that the proposed rule change will impose any 
inappropriate 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 were either solicited or received.

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 SCCP 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 SCCP. All submissions 
should

[[Page 17984]]

refer to File No. SR-SCCP-01-02 and should be submited by April 25, 
2001.

    For the Commission by the Division of Market Regulation, 
Pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-8273 Filed 4-3-01; 8:45 am]
BILLING CODE 8010-01-M