[Federal Register Volume 66, Number 138 (Wednesday, July 18, 2001)]
[Notices]
[Page 37509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17931]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44550; File No. SR-NSCC-2001-08]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Granting Approval of a Proposed Rule Change Relating 
to Processing Commission Payments

July 12, 2001.
    On April 27, 2001, the National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change (File No. SR-NSCC-2001-08) 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'').\1\ Notice of the proposal was published in the Federal 
Register on May 29, 2001.\2\ No comment letters were received. For the 
reasons discussed below, the Commission is granting approval of the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 44330 (May 29, 2001), 66 
FR 29192.
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I. Description

    The purpose of the filing is to further standardize and automate 
NSCC's processing of commission payments to non-clearing members. In 
accordance with NSCC Rule 16, NSCC's Commission Bill Service currently 
permits non-clearing members entitled to a credit to receive their 
monthly commission bill payments either electronically by Automated 
Clearing House (``ACH'') wire transfer or manually by check. At 
present, slightly less than 50% of NSCC's approximate 350 non-clearing 
members receive their commission bill payments by check. Such manual 
distributions are made on the floors of the New York Stock Exchange 
(``NYSE'') and the American Stock Exchange (``AMEX''). The proposed 
rule change will require all non-clearing members to execute 
appropriate ACH documentation and to receive their credit payments by 
ACH wire transfer.
    In the event a non-clearing member does not pay an amount it owes 
to NSCC, the rule is being changed to explicitly permit NSCC to set-off 
any future commission bill credits to which the non-clearing member is 
entitled.
    Subject to Commission approval, NSCC will implement the proposed 
rule changes on July 13, 2001. Any non-clearing member that has not 
executed the appropriate ACH wire transfer documentation will not 
receive any credit payments until it does.

II. Discussion

    Section 17A(b)(3)(F) \3\ of the Act requires that the rules of a 
clearing agency be designed to remove impediments to and perfect the 
mechanism of a national system. The proposed rule change allows NSCC to 
require non-clearing members to receive their monthly commission 
payments by wire transfer rather than by check. By electronically 
transferring such funds, NSCC can further standardize and automate its 
processing systems which is consistent with NSCC's obligation to remove 
impediments to and perfect the mechanism of the national system for 
clearance and settlement. Therefore, the Commission finds that NSCC's 
proposed rule change is consistent with its obligations under section 
17A(b)(3)(F) of the Act.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular Section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-NSCC-2001-08) be and hereby 
is approved.

    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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Jonathan G. Katz,
Secretary.
[FR Doc. 01-17931 Filed 7-17-01; 8:45 am]
BILLING CODE 8010-01-M