[Federal Register Volume 68, Number 201 (Friday, October 17, 2003)]
[Notices]
[Pages 59831-59832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26256]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48615; File No. SR-EMCC-2003-05]


Self-Regulatory Organizations; Emerging Markets Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change Relating to Return of Clearing Fund Deposits

October 9, 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 29, 2003, 
Emerging Markets Clearing Corporation (``EMCC'') 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 EMCC. The Commission is publishing this notice 
and order to solicit comments from interested persons and to grant 
accelerated approval of the proposed rule change.
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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 consists of changes to EMCC's rules 
relating to the return of clearing fund deposits.

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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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In File No. SR-EMCC-2003-02, EMCC sought Commission approval (1) to 
establish a fixed clearing fund requirement for inter-dealer brokers 
(``IDBs'') or members who clear for IDBs and (2) to have the difference 
between an IDB's calculated clearing fund requirement and the fixed 
amount be paid by other members on a pro rata basis. As part of that 
filing, EMCC also sought Commission approval to eliminate the ``look 
back'' feature from its clearing fund formula. EMCC expected that the 
elimination of the look back feature would offset its non-IDB members' 
obligation to deposit additional clearing fund to cover the difference 
between the IDB's calculated clearing fund requirement and the fixed 
amount. On August 19, 2003, the Commission approved the proposed rule 
change.\3\
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    \3\ Securities Exchange Act Release No. 48366, 68 FR 51311 
(August 26, 2003).
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    In connection with its members' depositing additional clearing fund 
to cover the difference between the IDB's calculated clearing fund 
requirement and the fixed amount, EMCC had planned on allowing its 
members to receive upon request the return of excess clearing fund 
deposits on a daily basis instead of on a monthly basis. The 
appropriate change to EMCC's rules to accomplish the daily return of 
excess clearing fund deposits was inadvertently omitted from that 
filing. Accordingly, the purpose of this filing is to modify EMCC Rule 
to provide for a daily return upon request of excess clearing fund 
deposits and to provide that EMCC will begin honoring such requests 
concurrent with the implementation of the changes covered by File No. 
SR-EMCC-2003-02.
    EMCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules and regulations 
thereunder applicable to EMCC because it will permit the equitable 
allocation of charges among participants.

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

    EMCC does not believe that the proposed rule change will have any 
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. 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

    Section 17A(b)(3)(F) requires, among other things, that the rules 
of a clearing agency be designed to assure the safeguarding of 
securities and funds which are in its custody or control or for which 
it is responsible.\4\ Approval of File No. SR-EMCC-2003-02 resulted in 
a more accurate clearing fund calculation and a more timely collection 
of members' required clearing fund deposits. It also resulted in EMCC's 
members having to pay the difference between the calculated clearing 
fund requirement and the fixed clearing fund amount for each IDB or 
member who clears for IDBs. Under EMCC's existing rule, if a member had 
on deposit clearing fund in excess of its required deposit, the excess 
could be returned to the member no more frequently than once a month. 
By providing that members are entitled to have their excess clearing 
fund deposits returned to them upon request on a daily basis, the 
proposed rule change allows EMCC to implement the changes in File No. 
SR-EMCC-2003-02 in a way that accommodates the needs of EMCC's members 
while not affecting EMCC's ability to safeguard securities and funds 
which are in its custody or control or for which it is responsible.
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    \4\ 15 U.S.C. 78q-1(b)(3)(F).
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    EMCC has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of the notice. The Commission finds good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of the notice because accelerated approval will facilitate 
the implementation of File No. SR-EMCC-2003-02 which the Commission 
previously determined met the requirements of Section 17A(b)(3)(F) of 
the Act.

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.

[[Page 59832]]

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-EMCC-2003-05. 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 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 the 
File No. SR-EMCC-2003-05 and should be submitted by November 7, 2003.

V. 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 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-2003-05) 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. 03-26256 Filed 10-16-03; 8:45 am]
BILLING CODE 8010-01-P