[Federal Register Volume 67, Number 154 (Friday, August 9, 2002)]
[Notices]
[Pages 51906-51907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20182]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46311; File No. SR-EMCC-2002-01]


Self-Regulatory Organizations; Emerging Markets Clearing 
Corporation; Notice of Filing of a Proposed Rule Change To Expand the 
Types of Instruments Eligible for Processing

August 5, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 10, 2002, Emerging 
Markets Clearing Corporation (``EMCC'') 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 EMCC. 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 change to EMCC's Rules would expand the types of 
instruments eligible for processing by EMCC to include emerging market 
debt that meets certain criteria. These additional eligible instruments 
would be defined in a new definition section of Rule 1 titled 
``eligible corporate debt.''

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

    In its filing with the Commission, EMCC 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. EMCC 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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[[Page 51907]]

(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 expand the types of 
instruments eligible for processing by EMCC to include emerging market 
corporate debt that meets certain criteria. EMCC will accomplish this 
by adding a new definition, ``eligible corporate debt,'' to Rule 1. 
``Eligible corporate debt'' will be defined as those instruments which: 
1. are issued by or on behalf of an issuer domiciled in an emerging 
markets jurisdiction;
    2. The minimum amount of the debt issue outstanding or to be issued 
at the time of determination is $200,000,000, and the issuer has 
cumulatively issued at least $750,000,000 (or equivalent currency) of 
debt securities; and
    3. EMCC does or would include the sovereign debt of the 
jurisidiction where the issuer is domiciled in the list of EMCC 
eligible instruments.
    As with all instruments that are EMCC eligible, such instruments 
will also have to meet the existing criteria set forth in Rule 3 in 
that they will have to be eligible for settlement at a qualified 
securities depository and be U.S. dollar denominated. Accordingly, 
Section 1 of Rule 3 will be amended to include a reference to 
``eligible corporate debt.''
    EMCC believes that the inclusion of dollar denominated emerging 
market corporate debt meeting the foregoing criteria will be beneficial 
to its members because it will help eliminate counterparty risk in 
these instruments when EMCC becomes the central counterparty. EMCC also 
believes that its current clearing fund formula will allow it to 
collect appropriate amounts of collateral to cover the risks posed by 
this class of securities.
    EMCC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
because it will facilitate the prompt and accurate clearance and 
settlement of securities transaction.

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

    EMCC does not believe that the proposed rule change will have an 
impact on or impose any 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. EMCC will notify the Commission of any written 
comments received by EMCC.

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

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which EMCC consents, the Commission will:
    (a) By order approve the proposed rule change or
    (b) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
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 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 EMCC. All submissions should refer to File 
No. SR-EMCC-2002-01 and should be submitted by August 30, 2002.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\
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    \3\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-20182 Filed 8-8-02; 8:45 am]
BILLING CODE 8010-01-P