[Federal Register Volume 66, Number 209 (Monday, October 29, 2001)]
[Notices]
[Pages 54561-54562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27128]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44968; File No. SR-NSCC-2001-07]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Approving a Proposed Rule Change Relating to Buy-In 
Rules and Procedures

October 22, 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-2001-07) 
pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'').\1\ On April 30, 2001, NSCC filed an amendment to the 
proposed rule change. Notice of the proposal was published in the 
Federal Register on August 29, 2001.\2\ No comment letters were 
received. For the reasons discussed below, the Commission is approving 
the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 44736 (August 22, 2001), 
66 FR 45715.
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I. Description

    NSCC is modifying its buy-in rules and procedures to further 
automate and improve the processing of buy-ins of CNS positions.\3\ The 
revised procedures provide that a Buy-In Notice may be filed by an 
originator on successive days provided the succeeding Buy-In Notice 
does not specify a quantity of securities covered by the prior Buy-In 
Notice and the quantity of securities representing the sum of all Buy-
In Notices does not exceed the member's total long position.\4\
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    \3\ Changes are being made to: NSCC Rule 11, Sections 7(b) and 
(c); NSCC Procedure VII, section J; and NSCC Procedure X, section A. 
Also, proposed changes to NSCC Procedure VII, section E3 to conform 
its language to the language proposed in NSCC Procedure VII, section 
J.
    \4\ NSCC Procedure VII, section J.
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    The Retransmittal Notice is being revised to include the identity 
of the originator on the Retransmittal Notice so that the member owing 
securities can contact the originator to arrange delivery.\5\ 
Regardless of any agreements that may have been entered into between a 
member owing securities and an originator, unless the originator 
notifies NSCC in a timely manner that its Buy-In Order should not be 
executed, members who receive Retransmittal Notices and do not satisfy 
them assume liability for the loss, if any, which occurs as a result of 
an originator's Buy-In Order.\6\
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    \5\ NSCC Rule 11, section 7(b).
    \6\ NSCC Procedure X, section A1.
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    The revisions also require members to electronically transmit Buy-
In Notices and Buy-In Orders through an automated format determined by 
NSCC thereby eliminating the practice of hand and facsimile deliveries. 
Similarly, NSCC will transmit through an automated format Retransmittal 
Notices to members.\7\
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    \7\ NSCC Rule 11, sections 7(b) and (c).
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    Members will be advised of the specific implementation date of the 
Buy-In changes prior to implementation.

II. Discussion

    Section 17A(b)(3)(F) of the Act requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions.\8\ The Commission 
believes that NSCC's rule change is consistent with this section 
because it will facilitate the prompt and accurate clearance and 
settlement of buy-in transactions by further automating and improving 
the processing of buy-ins.
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).

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[[Page 54562]]

III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of 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-2001-07) be and hereby 
is approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 01-27128 Filed 10-26-01; 8:45 am]
BILLING CODE 8010-01-M