[Federal Register Volume 68, Number 180 (Wednesday, September 17, 2003)]
[Notices]
[Pages 54512-54513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23656]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48465; File No. SR-EMCC-2003-01]


Self-Regulatory Organizations; Emerging Markets Clearing 
Corporation; Order Granting Approval of a Proposed Rule Change Relating 
to EMCC's Capital Requirements for Members

September 9, 2003.

I. Introduction

    On April 8, 2003, Emerging Markets Clearing Corporation (``EMCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change SR-EMCC-2003-01 pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act''). \1\ Notice of the 
proposal was published in the Federal Register on July 29, 2003.\2\ No 
comment letters were received. For the reasons discussed below, the 
Commission is granting approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 48209 (July 22, 2003), 
68 FR 44554.
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II. Description

    EMCC's Rule 2 (``Members''), Section 6 (``Admission Criteria for 
Members''), provides that if an applicant does not meet the minimum 
capital requirements set forth in Section 6, EMCC's Board of Directors 
may include for such purposes the capital of an affiliate of the 
applicant if the affiliate delivers to EMCC a satisfactory guaranty. 
The purpose of the proposed rule change is to permit any existing 
member of EMCC that no longer meets the capital requirements set forth 
in Section 6 to also have the capital of an affiliate be included in 
calculating the member's continuance requirements provided that the 
affiliate enters in a similar form of guaranty.

III. Discussion

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of a clearing agency be designed to assure the safekeeping of 
securities and funds which are in its possession or control or for 
which it is responsible.\3\ The proposed rule change eliminates an 
inconsistency in EMCC's rules that prevented an existing member who did 
not use the guaranty of an affiliate as an applicant from using such a 
guaranty, but an existing member who did use the guaranty of an 
affiliate as an applicant could continue to include the affiliate's 
capital for purposes of satisfying its capital requirement as a 
continuing EMCC member. Allowing an existing member that was admitted 
to EMCC membership without using an affiliate's capital to include the 
capital of an affiliate to satisfy its EMCC capital requirement with an 
appropriate guaranty, similarly as can other members, should not 
adversely affect EMCC's ability to safeguard securities and funds. As 
such the Commission finds the proposed rule change is consistent with 
EMCC's requirements under Section 17A(b)(3)(F) of the Act.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F).
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IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the

[[Page 54513]]

requirements of the Act and in particular with the requirements of 
Section 17A of the Act and the rules and regulations thereunder 
applicable.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-EMCC-2003-01) be and hereby 
is approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-23656 Filed 9-16-03; 8:45 am]
BILLING CODE 8010-01-P