[Federal Register Volume 66, Number 153 (Wednesday, August 8, 2001)]
[Notices]
[Page 41647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19860]



[[Page 41647]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44640; File No. SR-SCCP-2001-02]


Self-Regulatory Organizations; the Stock Clearing Corporation of 
Philadelphia; Order Granting Approval of a Proposed Rule Change 
Relating to the Deletion of Rule 20

August 1, 2001.
    On February 5, 2001, the Stock Clearing Corporation of Philadelphia 
(``SCCP'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change (File No. SR-SCCP-2001-02) 
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 April 4, 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. 44129, (March 28, 2001), 
66 FR 17983.
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I. Description

    The purpose of the filing 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 
statement 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 issued by SCCP 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 duplicative 
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 requirements of SCCP Rule 20 are unnecessary in light 
of the requirements of SCCP Rule 6.

II. Discussion

    Section 17A(b)(3)(F) \3\ of the Act requires that the rule of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. The rule change 
relives SCCP and its participants from providing and reviewing 
duplicative reports that are unnecessary due to compliance with other 
SCCP rules. By eliminating the report requirements of SCCP Rule 20, 
SCCP's rule change fosters more efficient procedures and thereby 
facilitates a more prompt and accurate clearance and settlement system 
at SCCP. Therefore, the Commission finds that the rule change is 
consistent with SCCP's obligation under Section 17A to have rules that 
are 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 for clearance and 
settlement.
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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-SCCP-2001-02) 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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-19860 Filed 8-7-01; 8:45 am]
BILLING CODE 8010-01-M