[Federal Register Volume 69, Number 249 (Wednesday, December 29, 2004)]
[Notices]
[Pages 78059-78060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3875]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 50925]


Securities Exchange Act of 1934; Order Regarding Alternative Net 
Capital Computation for Merrill Lynch, Pierce, Fenner & Smith 
Incorporated, Which Has Elected to be Supervised on a Consolidated 
Basis

December 23, 2004.
    Merrill Lynch, Pierce, Fenner & Smith Incorporated (``MLPF&S''), a 
broker-dealer registered with the Securities and Exchange Commission 
(``Commission''), and its ultimate holding company, Merrill Lynch & 
Co., Inc., (``ML & Co.''), have indicated their desire to be supervised 
by the Commission as a consolidated supervised entity (``CSE''). 
MLPF&S, therefore, has submitted an application to the Commission for 
authorization to use the alternative method of computing net capital 
contained in Appendix E to Rule 15c3-1 (17 CFR 240.15c3-1e) to the 
Securities Exchange Act of 1934 (``Exchange Act'').
    Based on a review of the application that MLPF&S submitted, the 
Commission has determined that the application meets the requirements 
of Appendix E. The Commission also has determined that ML & Co. is in 
compliance with the terms of its undertakings, as provided to the 
Commission under Appendix E. The Commission, therefore, finds that 
approval of the application is necessary or appropriate in the public 
interest or for the protection of investors.

[[Page 78060]]

    Accordingly,
    It is ordered under paragraph (a)(7) of Rule 15c3-1 (17 CFR 
240.15c3-1) to the Exchange Act, that MLPF&S may calculate net capital 
using the market risk standards of Appendix E to compute a deduction 
for market risk on some or all of its positions, instead of the 
provisions of paragraphs (c)(2)(vi) and (c)(2)(vii) of Rule 15c3-1, and 
using the credit risk standards of Appendix E to compute a deduction 
for credit risk on certain credit exposures arising from transactions 
in derivatives instruments, instead of the provision of paragraph 
(c)(2)(iv) of Rule 15c3-1.

    By the Commission.
Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E4-3875 Filed 12-28-04; 8:45 am]
BILLING CODE 8010-01-P