[Federal Register Volume 67, Number 6 (Wednesday, January 9, 2002)]
[Notices]
[Pages 1259-1260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-529]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45227; File No. SR-SCCP-2001-11]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Order Granting Accelerated Approval 
on a Temporary Basis of a Proposed Rule Change Extending Approval of 
Restructured and Limited Clearing Services

January 3, 2002.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 17, 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 and II below, which items have been 
prepared primarily by SCCP. The Commission is publishing this notice 
and order to solicit comments from interested persons and to grant 
accelerated approval of the proposal.
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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

    SCCP proposes to extend, for a one year period ending December 31, 
2002, the ability to provide limited clearance and settlement services. 
Specifically, SCCP seeks to continue to provide trade confirmation and 
recording services for members of the Philadelphia Stock Exchange, Inc. 
(``Phlx'') effecting transactions through Regional Interface Operations 
(``RIO'') and ex-clearing accounts. SCCP will also continue to provide 
margin accounts to certain participants cleared through an account 
established by SCCP at the National Securities Clearing Corporation 
(``NSCC'').\2\
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    \2\ See SCCP Rule 1.
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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 such 
statements.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by SCCP.
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(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 continue SCCP's 
restructured and limited clearance and settlement business for an 
additional one year period ending December 31, 2002. In an agreement 
dated as of June 18, 1997, (``Agreement'') by and among the Phlx, SCCP, 
Philadelphia Depository Trust Company (``Philadep''), NSCC and The 
Depository Trust Company (``DTC''), Philadep and SCCP agreed to certain 
provisions, including that: (i) Philadep would cease providing 
securities depository services; (ii) SCCP would make available to its 
participants access to the facilities of one or more other 
organizations providing depository services; (iii) SCCP would make 
available to SCCP participants access to the facilities of one or more 
other organizations providing securities clearing services; and (iv) 
SCCP would transfer to the books of such other organizations the CNSS 
system open positions of SCCP participants on the books of SCCP.
    In December, 1997, the Commission approved a proposed rule change 
which gave effect to this Agreement and which reflected Philadep's 
withdrawal from the depository business and SCCP's restructured and 
limited clearance and settlement business.\4\ In that approving order, 
the Commission stated, ``because a part of SCCP's proposed rule change 
concerns the restructuring of SCCP's operations to enable SCCP to offer 
limited clearing and settlement services to certain Phlx members, the 
Commission finds that it is approprirate to grant only temporary 
approval to the portion of SCCP's proposed rule change that amends 
SCCP's By-Laws, Rules or Procedures. This will allow the Commission and 
SCCP to see how well SCCP's restructured operations are functioning 
under actual working conditions and to determine whether any 
adjustments are necessary. Thus, the Commission is approving the 
portion of SCCP's proposal that amends its By-Laws, Rules and 
Procedures through December 31, 1998.'' In December 1998, December 
1999, and December 2000, one-year extensions of such approval were 
granted by the Commission to continue SCCP's restructured and limited 
clearance and settlement services.\5\
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    \4\ Securities Exchange Act Release No. 39444 (December 11, 
1997), 62 FR 66703 (December 19, 1997) (SR-SCCP-97-04).
    \5\ Securities Exchange Act Release Nos. 40872 (December 31, 
1998), 64 1264 (January 8, 1999) (SR-SCCP-98-05); 42320 (January 6, 
2000), 65 FR 2218 (January 13, 2000) (SR-SCCP-99-04); and 43781 
(December 28, 2000), 66 FR 1167 (January 5, 2001) (SR-SCCP-00-05).
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    SCCP is hereby requesting an additional one year extension of such 
approval noting that such extension is appropriate in order that SCCP 
may continue to provide services to its participants. SCCP believes 
that its restructured operations have functioned consistent with the 
original proposed rule change, and SCCP will continue to evaluate 
whether any adjustments are necessary.
    In the original proposed rule change and order approving SCCP's 
restructured business, many SCCP rules were amended and discussed at 
length. No new rule changes are proposed at this time. Thus, the 
purpose of the proposed rule change is to extend the effectiveness of 
SCCP's restructured business.
    SCCP believes that the extension of the Commission's temporary 
approval to permit SCCP's continued operation of its restructured and 
limited clearance and settlement services is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to SCCP and in particular with Section 17A(b)(3)(F) which 
requires that a clearing agency be organized and its rules be designed, 
among other things, to promote the prompt and accurate clearance and 
settlement of securities transactions. SCCP believes that the extension 
of SCCP's restructured business should promote the prompt and accurate

[[Page 1260]]

clearance and settlement of securities transactions by integrating and 
consolidating clearing services available to the industry.

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

    SCCP does not believe that this extension should impose any burden 
on competition not necessary or appropriate in furtherance of the 
purposes of the Act.

(C) Self-Regulatory's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

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

    Section 17A(b)(3)(F) of the Act \6\ requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. Based on the 
information the Commission has to date, the Commission believes that 
SCCP's restructured operations have functioned satisfactorily to 
provide prompt and accurate clearance and settlement. During the 
upcoming temporary approval period, the Commission expects to review 
with SCCP in detail the functioning of SCCP's restructured operations.
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    \6\ 15 U.S.C. 78q-1(b)(3)(F).
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    SCCP has requested that the Commission approve the proposed rule 
change prior to the thirtieth day after publication of the notice of 
the filing. The Commission finds good cause for approving the rule 
change prior to the thirtieth day after publication because such 
approval will allow SCCP to continue to offer its restructured clearing 
operations for another year without interruption.

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 Room, 450 Fifth Street, NW., Washington, 
DC 20549. Copies of such filing will also be available for inspection 
and copying at the principal office of SCCP. All submissions should 
refer to File No. SR-SCCP-2001-11 and should be submitted by January 
30, 2002.
    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (File No. SR-SCCP-2001-11) be and 
hereby is approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
Margaret H. McFarland,
Deputy Secretary.
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    \8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 02-529 Filed 7-8-02; 8:45 am]
BILLING CODE 8010-01-M