[Federal Register Volume 66, Number 155 (Friday, August 10, 2001)]
[Notices]
[Pages 42245-42246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20082]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44648; File No. SR-NSCC-2001-11]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change Regarding IntraDay Contract Reports

August 2, 2001.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 14, 2001, the 
National Securities Clearing Corporation (``NSCC'') 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 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 modifies NSCC's Procedures to provide that 
contract lists may be made available to members on an intraday basis. 
The proposed rule change also amends NSCC's Rules to provide that the 
earlier production of trade reports will not change the timing of 
NSCC's trade guaranty.

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

    Delivering trade data output to NSCC's participants throughout the 
day has been identified as one of many components necessary to meet the 
challenge of shortening the clearance and settlement process as the 
securities industry moves towards settlement on a T+1 basis. 
Accordingly and in preparation for the move towards shortened 
settlement cycles, NSCC is modifying its Procedures\3\ to provide that 
contract lists may be issued to participants on a multibatch intraday 
basis to report trade activity that has been submitted by or on behalf 
of participants through such intraday processing time. NSCC states that 
such reporting will provide its participants with trade information on 
an earlier and more frequent basis as well as increase NSCC's 
processing capacity.
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    \3\ NSCC's Procedure II, Trade Comparison Service.
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    The provisions of intraday reports is not at this time intended to 
impact or change the timing of NSCC's trade guaranty obligations, which 
under the current rules become effective at midnight of the day on 
which trades are reported to participants as compared or recorded. NSCC 
generally reports trades on T+1. The timing of the guaranty was based 
on the fact that NSCC has historically provided its participants with 
end of day contract reporting early in the morning of T+1. NSCC wants 
to make contract sheets available intraday throughout the day on trade 
date but does not want at this time to be required to provide an 
earlier trade guaranty. NSCC is currently analyzing what risk 
procedures it needs to cover an early guaranty.
    To ensure that the earlier trade reporting does not impact the 
trade guaranty, NSCC is modifying Addenda K and M. As both addenda 
currently set forth NSCC's trade guaranty policies, these provisions 
are being consolidated in Addendum K, and Addendum M will be deleted. 
The revised Addendum K will now provide that NSCC will guaranty the 
completion of CNS and balance order trades as of the later of: (i) 
Midnight of T + 1 or (ii) midnight of the day the trades are reported 
to participants as compared or recorded on contracts. In addition, 
certain changes are being made to Addendum K to delete provisions 
relating to services (relating to New York Windows and the 
International Securities Clearing Corporation) NSCC no longer provides.
    NSCC states that this rule change permits trade information to be 
made available to NSCC's participants on an earlier and more frequent 
basis and therefore will facilitate the prompt and accurate clearance 
and settlement of securities transactions without jeopardizing the 
safety and soundness of the clearing process. NSCC believes that the 
proposed rule change is therefore consistent with the requirements with 
Section 17A(b)(3)(F) of the Act and the rules and regulations 
thereunder.

(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 written 
comments it receives.

[[Page 42246]]

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

    Because the foregoing rule change constitutes an interpretation 
with respect to the meaning, administration, or enforcement of an 
existing rule of NSCC, it has become effective pursuant to Section 
19(b)(3)(A)(i) of the Act \4\ and Rule 19b-4(f).\5\ At any time within 
sixty days of the filing of the proposed rule change, the Commission 
may summarily abrogate such rule change if it appears to the Commission 
that such action is necessary or appropriate in the public interest, 
for the protection of investors, or otherwise in furtherance of the 
purposes of the Act.
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    \4\ 15 U.S.C. 78s(b)(3)(A)(i).
    \5\ 17 CFR 240.19b-4(f).
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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 proposal 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 the NSCC. All 
submissions should refer to the File No. SR-NSCC-2001-11 and should be 
submitted by August 31, 2001.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-20082 Filed 8-9-01; 8:45 am]
BILLING CODE 8010-01-M