[Federal Register Volume 67, Number 247 (Tuesday, December 24, 2002)]
[Notices]
[Pages 78556-78557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32319]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47016; File No. SR-SCCP-2001-12]


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

December 17, 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'') and on November 26, 
2002, amended 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 through 
December 31, 2002.
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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, 
2003, the Commission's approval of its providing 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 whose transactions are 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 obtain Commission 
approval of SCCP's restructured and limited clearance and settlement 
business for an additional one year period ending December 31, 2003. In 
an agreement dated as of June 18, 1997, (``Agreement'') by and among 
the SCCP, Phlx, Philadelphia Depository Trust Company (``Philadep''), 
NSCC and The Depository Trust Company (``DTC''), SCCP and Philadep 
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 
CNS system open positions of SCCP participants on the books of SCCP.
    In December 1997, the Commission approved proposed rule changes 
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 approval order, 
the Commission stated, ``However, 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 appropriate 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.'' Subsequent to that approval, 
one-year extensions of such approval have been 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 FR 1264 (January 8, 1999) (SR-SCCP-98-05); 42320 (January 
6, 2000), 65 FR 2218 (January 13, 2000) (SR-SCCP-99-04); 43781 
(December 28, 2000), 66 FR 1167 (January 5, 2001) (SR-SCCP-00-05), 
and 45227 (January 3, 2002), 67 FR 1259 (January 9, 2002) (SR-SCCP-
2001-11).
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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 temporarily 
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 
clearance and settlement of securities transactions by integrating and 
consolidating clearing services available to the industry.

[[Page 78557]]

(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 Organization'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 
in order to determine whether permanent approval of SCCP's restructured 
business is warranted.
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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 30th day after publication of the notice of the 
filing. The Commission finds good cause for approving the rule change 
prior to the 30th 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. 
Comments may also be submitted electronically at the following e-mail 
address: [email protected]. All comment letters should refer to 
File No. SR-SCCP-2001-12. This file number should be included on the 
subject line if e-mail is used. 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-2001-12 and should be submitted by January 14, 2003.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\7\ that the proposed rule change (File No. SR-SCCP-2001-12) be and 
hereby is approved on an accelerated basis through December 31, 2003.
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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\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32319 Filed 12-23-02; 8:45 am]
BILLING CODE 8010-01-P