[Federal Register Volume 69, Number 88 (Thursday, May 6, 2004)]
[Notices]
[Pages 25449-25450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10279]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49632; File No. SR-EMCC-2004-02]


Self-Regulatory Organizations; The Emerging Markets Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change Relating to Letter of Credit Issuers

April 29, 2004.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 2, 2004, the 
Emerging Markets Clearing Corporation (``EMCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II, and III below, which items have 
been prepared primarily by EMCC. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will allow EMCC to revise Rule 1 to modify 
the definition of ``Approved Letter of Credit Issuer'' to remove 
references to long-term obligations ratings and to conform EMCC's 
criteria with criteria used by the National Securities Clearing 
Corporation (``NSCC'').\2\
---------------------------------------------------------------------------

    \2\ NSCC Rule 4 sets forth criteria for letter of credit 
issuers.
---------------------------------------------------------------------------

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 these 
statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified the text of the summaries 
prepared by EMCC.
---------------------------------------------------------------------------

(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 to modify the criteria 
EMCC uses in approving a letter of credit issuer. Currently, EMCC Rule 
1, Approved Letter of Credit Issuer, indicates that to be acceptable an 
issuer must meet certain rating criteria for its long-term and short-
term obligations. In order to be consistent with the criteria used by 
NSCC, EMCC is modifying its criteria to remove any reference to long-
term obligations ratings requirements and to conform its short-term 
obligations ratings requirements to mirror those of NSCC. Under its 
revised rule, EMCC will not approve a letter of credit issuer unless, 
among other requirements, it has and maintains at least $500 million in 
total shareholders equity and a short-term obligations rating of at 
least A-2 (by Standard & Poor's Corporation) or P-2 (by Moody's 
Investors Service, Inc.) and does not have a short-term obligations 
rating of lower than A-2 or P-2.
    The proposed rule change is consistent with the requirements of 
section 17A(b)(3)(F) of the Act \4\ and the rules and regulations 
thereunder applicable to EMCC because it will standardize the criteria 
used in approving letter of credit issuers and foster cooperation and 
coordination amongst entities engaged in the clearance and settlement 
of securities transactions.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

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

    EMCC 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.

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 \5\ and Rule 19b-4(f)(4) \6\ thereunder 
because the proposed rule change by EMCC does not adversely affect the 
safeguarding of securities or funds in the custody or control of EMCC 
or for which it is responsible and does not significantly affect the 
respective rights or obligations of EMCC or the persons using the 
service. At any time within sixty days of the filing of such rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \6\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------

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. Comments may be submitted by any of 
the following methods:
    Electronic comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-EMCC-2004-02 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609. All submissions should refer to File Number 
SR-EMCC-2004-02. 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, please use only one method. The Commission 
will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 also will be available for inspection and copying at the 
principal office of EMCC. All comments received

[[Page 25450]]

will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-EMCC-2004-02 and should be submitted on 
or before May 27, 2004.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-10279 Filed 5-5-04; 8:45 am]
BILLING CODE 8010-01-P