[Federal Register Volume 68, Number 67 (Tuesday, April 8, 2003)]
[Notices]
[Pages 17139-17140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8444]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47603; File No. SR-NSCC-2003-02]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change Relating to Creating New Cost Basis Reporting 
Service

March 31, 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ notice is hereby given that on January 24, 2003, the National 
Securities Clearing Corporation (``NSCC'') 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 NSCC. The Commission is publishing this notice and order 
to solicit comments on the proposed rule change from interested persons 
and to grand accelerated approval.
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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 creates a new Cost Basis Reporting Service 
(``CBRS'') that will facilitate the automated exchange of cost basis 
information regarding a customer account transfer.

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 the text of the summaries 
prepared by NSCC.

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[[Page 17140]]

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 add a new Rule 30 to 
NSCC's Rules and Procedures (``Rules'') in order to create a new CBRS 
that will facilitate the automated exchange of cost basis information 
related to a customer account transfer.
    NSCC has developed a cost basis reporting service to augment its 
current Automated Customer Account Transfer Service (``ACATS'') 
processing. Cost basis reporting is useful to customers for tax 
reporting purposes. Cost basis information is currently captured and 
entered into many firm's portfolio systems manually. NSCC was requested 
to centralize and standardize the transmission of cost basis 
information.
    CBRS will be available to NSCC members and qualified securities 
depositories acting on behalf of their participants and will permit 
them to transmit between themselves on an automated basis cost basis 
information with respect to accounts that have previously been 
transferred via ACATS. Participants may send cost basis data to NSCC 
multiple times during the day up to a predetermined cutoff.
    NSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \3\ and the rules and 
regulations thereunder because it will facilitate the prompt and 
accurate clearance and settlement of securities transactions.
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    \3\ 15 U.S.C. 78q-1.
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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 has notified its member of the terms of the 
proposed service by an Important Notice on November 4, 2002. NSCC will 
notify the Commission of any written comments it receives.

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

    The Commission finds that NSCC's proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder and particularly with the requirements of Section 
17A(b)(3)(F)\4\ of the Act. Section 17A(b)(3)(F) requires that the 
rules of a clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions. Providing 
an automated and standardized method of transmitting cost basis 
information related to securities accounts that are transferred from 
one broker-dealer to another through ACATS should reduce NSCC's 
members' administrative burdens and as such should promote the prompt 
and accurate clearance and settlement of securities transactions.
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    \4\ 15 U.S.C. 78q-1(b)(3)(F).
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    NSCC has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after the 
date of publication of notice of filing. The Commission finds good 
cause for approving the proposed rule change prior to the thirtieth day 
after the date of publication of notice of filing because such approval 
will allow NSCC to implement this new service in time for it to provide 
benefits for brokers, dealers, and investors for the current tax filing 
period and will also enable NSCC to implement CBRS in accordance with 
its systems implementation schedule.

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 5th Street NW., Washington, DC 20549-0069. 
Comments may also be submitted electronically at the following e-mail 
address: [email protected]. All comment letters should refer to 
File No. SR-NSCC-2003-02. This file number should be included on the 
subject line if e-mail is used. To help us process and review comments 
more efficiently, comments should be sent in hardcopy or by e-mail but 
not by both methods. Copies of the submission, all subsequent 
amendments, all written statements with respect to the rule filing that 
are filed with the Commission, and all written communications relating 
to the rule filing between the Commission and any person, other than 
those that may be withheld from the public in accordance with 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room in Washington, DC. 
Copies of such filing will also be available for inspection and copying 
at NSCC's principal office. All submissions should refer to File No. 
SR-NSCC-2003-02 and should be submitted by April 29, 2003.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-NSCC-2003-02) be, and hereby 
is, approved on an accelerated basis.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-8444 Filed 4-7-03; 8:45 am]
BILLING CODE 8010-01-P