[Federal Register Volume 68, Number 189 (Tuesday, September 30, 2003)]
[Notices]
[Page 56367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24749]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48526; File No. SR-NSCC-2003-14]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Granting Approval of a Proposed Rule Change Relating 
to Anonymity Features on Trading Systems

September 23, 2003.

I. Introduction

    On June 19, 2003, the National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') and on June 23, 2003, amended proposed rule change SR-
NSCC-2003-14 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 11, 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. 48122 (July 2, 2003), 68 
FR 41410.
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II. Description

    Pursuant to the rule filing, NSCC is adding language to Section 
II.C.1 of NSCC Rules and Procedures \3\ whereby NSCC may receive 
locked-in trade data from a self-regulatory organization (``SRO'') that 
operates a trading system that provides trade anonymity.\4\ If trade 
data received from an SRO is from an anonymous trade, NSCC in reporting 
back to its members may report such trades identifying as the 
countraside an acronym selected by the SRO instead of naming the actual 
contraside. In the case of anonymous trades, the contraside shall be 
deemed to be one of the entities the SRO includes as an entity eligible 
to participate in the anonymous trading system. New language is also 
being added to Section II.C.1 to provide that if NSCC ceases to act for 
a member which is the unnamed contraside of an anonymous trade or 
trades and if NSCC determines that the anonymous trade or trades should 
be exited from trade processing, the SRO providing the anonymous 
trading system will be responsible for identifying to other members 
which of their trades are with the member for which NSCC has ceased to 
act.
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    \3\ NSCC recently added a new Section II.C.1 to its rules. 
Securities Exchange Act Release No. 48141 (July 8, 2003), 68 FR 
42153 (July 16, 2003) [File No. SR-NSCC-2003-12].
    \4\ In a trading system that provides trade anonymity, the 
identity of at least one side of a trade is not revealed to the 
other side at the time of the trade.
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    In connection with this filing, the National Association of 
Securities Dealers, Inc. (``NASD'') filed and the Commission approved a 
proposed rule change that allows the NASD to add an anonymity feature 
to the Nasdaq Stock Market's SuperMontage trading system.\5\
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    \5\ Securities Exchange Act Release Nos. 48088 (June 25, 2003), 
68 FR 39605 (July 2, 2003) [File No. SR-NASD-2003-85] and 48526 
(September 23, 2003).
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I. Discussion

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of a clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions.\6\ The 
trade anonymity feature is a valued service that trading systems like 
the Nasdaq want to be able to provide to their members. The Commission 
finds that by amending its rules to provide for the clearance and 
settlement of anonymous trades, NSCC's proposed rule change should help 
to promote the prompt and accurate clearance and settlement of such 
transactions.
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    \6\ 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 requirements of the Act and 
in particular Section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-NSCC-2003-14) be and hereby 
is approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-24749 Filed 9-29-03; 8:45 am]
BILLING CODE 8010-01-P