[Federal Register Volume 69, Number 62 (Wednesday, March 31, 2004)]
[Notices]
[Pages 17004-17005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7209]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49463; File No. SR-FICC-2004-04]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Technical Corrections

March 24, 2004.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 19, 2004, the 
Fixed Income Clearing Corporation (``FICC'') filed with the Securities 
and Exchange Commission (``Commission'') the

[[Page 17005]]

proposed rule change as described in Items I, II, and III below, which 
Items have been prepared primarily by FICC. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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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 will make several technical corrections to 
FICC's Mortgage-Backed Securities Division's (``MBSD'') rules.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.

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

    FICC proposes to make the following technical corrections to its 
Mortgage-Backed Securities Division's (``MBSD'') rules:
1. Minimum Financial Requirements Applicable to Dealer Participants
    In Rule Filing SR-MBSCC-2001-06, FICC inadvertently created a $5 
million minimum net capital or liquid capital requirement for 
``registered broker-dealers.'' \2\ This requirement has historically 
applied only to brokers, which act as intermediaries and present less 
risk to FICC and its participants. Notwithstanding MBSCC-2001-06, FICC 
has continued to subject dealers to a $10 million minimum net worth 
requirement and this rule filing restores the language in MBSD's rules 
setting forth the different minimum requirements to the language as it 
existed prior to Rule Filing SR-MBSCC-2001-06.
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    \2\ Securities Exchange Act Release No. 49156 (Jan. 30, 2004); 
69 FR 5881 (Feb. 6, 2004). FICC's corporate predecessor, MBSCC, 
submitted this rule filing.
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2. Reference to FICC's Office
    MBSD's current rules refer to MBSCC's Chicago office. FICC no 
longer maintains this office and wishes to delete the reference to the 
Chicago office in MBSD's rules.
3. References to EPN User Fund and Basic Deposit
    MBSD's rules currently reference the ``EPN User Fund'' (``Fund'') 
and ``Basic Deposit'' (``Deposit''). MBSCC initially had planned to 
supply its participants with equipment for the EPN service and intended 
to have each EPN user post a Deposit to the Fund for the using the 
equipment. The purpose of this was to create an incentive for 
participants to return the equipment upon terminating their MBSCC 
membership. However, the EPN system was developed without the need to 
supply users with equipment; therefore, the use of the Fund was never 
implemented. FICC proposes to delete all references to the Fund and to 
the Deposit.
    FICC believes that the proposed rule change is consistent with 
section 17A of the Act \3\ and the rules and regulations thereunder as 
the proposed rule change makes technical corrections to the MBSD's 
rules.
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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

    FICC believes that the proposed rule change will not impact or 
impose any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    FICC has not solicited or received written comments relating to the 
proposed rule change. FICC 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 foregoing rule change has become effective pursuant to section 
19(b)(3)(A)(iii) of the Act \4\ and Securities Exchange Act Rule 19b-
4(f)(4) \5\ because it effects a change in an existing service of FICC 
that does not adversely affect the safeguarding of securities or funds 
in the custody or control of FICC or for which FICC is responsible and 
does not significantly affect the respective rights or obligations of 
FICC or person using the service. At any time within 60 days of the 
filing of such proposed rule change, the Commission may summarily 
abrogate such rule change if it appeared to the Commission that such 
action was necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.
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    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(f)(4).
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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-FICC-2004-04. This file number should be included on the 
subject line if e-mail is used. To help the Commission process and 
review your 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 FICC's principal office and on 
FICC's Web site at http://www.ficc.com/mbs/mbs.docs.jsp?NS-query=. All 
submissions should refer to File No. SR-FICC-2004-04 and should be 
submitted by April 21, 2004.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-7209 Filed 3-30-04; 8:45 am]
BILLING CODE 8010-01-P