[Federal Register Volume 69, Number 146 (Friday, July 30, 2004)]
[Notices]
[Page 45872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17395]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50085; File No. SR-NSCC-2003-05]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Granting Approval of a Proposed Rule Change 
Permitting Elimination of All Hard Copies of Important Notices

July 26, 2004.

I. Introduction

    On March 14, 2003, the National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') proposed rule change SR-NSCC-2003-05 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 January 
23, 2004.\2\ One comment letter was received.\3\ 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. 49094 (January 16, 
2004), 69 FR 3418.
    \3\ Letter from Richard Eustice, Vice President, Dimensional 
Fund Advisors (April 25, 2003).
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II. Description

    NSCC currently distributes notices to its members in a hard copy 
form using U.S. mail for members outside of the New York area, the 
Direct Drop Boxes for each member with a New York presence, and using 
fax when necessary. The proposed rule change modifies NSCC's Rule 45 to 
allow NSCC to post notices on its website and to have these postings 
satisfy NSCC's notification obligations. The rule change would require 
members to access that website throughout the day. The proposed rule 
change also modifies NSCC's Rule 45 to allow NSCC to serve notices on 
interested persons as defined in Rule 37 by emailing the notices to an 
interested person's email address.
    NSCC believes that the proposed rule change would facilitate the 
timely dissemination of information necessary for participation in NSCC 
and therefore is consistent with the requirements of the Act and the 
rules and regulations thereunder.

III. Comment

    The Commission received one comment letter.\4\ The commenter, which 
is an NSCC member, objects to the proposed rule change because it 
believes that the requirement under the proposed rule change to check 
NSCC's website on a daily basis for notices would require it to 
allocate special staffing to monitor the website and would be an 
inefficient use of its resources.
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    \4\ Supra note 3.
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IV. 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.\5\ The 
timely dissemination of information to clearing corporation members is 
an important factor in the operation of a clearing agency. By allowing 
NSCC to post notices on its website instead of having to mail, put into 
a drop box, or fax, the proposed rule change should help to ensure that 
NSCC's members receive information from NSCC as quickly as possible and 
in a manner that is easily accessible. Furthermore, elimination of 
paper notices should reduce the possibility of nonreceipt of notices by 
members and should add efficiencies to NSCC's operations. Accordingly, 
the proposed rule change should help to promote the prompt and accurate 
clearance and settlement of securities transactions.
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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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    In response to the comment letter, the Commission appreciates that 
the proposed rule change imposes a new burden on NSCC's members to 
periodically look for notices on NSCC's website instead of receiving 
them in physical form; however, the Commission believes this burden is 
small given the minimal amount of time it should take each NSCC member 
to review NSCC's website for notices. Furthermore, the Commission 
believes that any inconvenience or expense that may be incurred by 
NSCC's members as a result of the proposed rule change is outweighed by 
the benefit of having the notices be quickly and readily available to 
NSCC's members.

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 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-2003-05) be and hereby 
is approved.

    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. 04-17395 Filed 7-29-04; 8:45 am]
BILLING CODE 8010-01-P