[Federal Register Volume 70, Number 12 (Wednesday, January 19, 2005)]
[Notices]
[Pages 3078-3079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-171]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51026; File No. SR-EMCC-2005-01]


Self-Regulatory Organizations; Emerging Markets Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change To Establish Procedures for Exiting Open Fail 
Positions Prior to Dissolution

January 12, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 5, 2005, the 
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 on the proposed rule change from 
interested persons and to grant accelerated approval.
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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 establishes a cut-off date for processing 
securities transactions and implements procedures for EMCC to exit open 
fail positions prior to its dissolution.

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

    At EMCC's October 27, 2004, Board of Directors (``Board'') meeting, 
the Board authorized EMCC's dissolution and deregistration as a 
clearing agency effective no later than March 31, 2005. In order to 
accomplish this, EMCC has

[[Page 3079]]

set a cut-off date of February 18, 2005,\3\ for the input of 
transactions.\4\ While EMCC management expects that all trades 
submitted to it by February 15, 2005, will settle promptly, it is 
possible that some trades may not settle timely. Accordingly, EMCC is 
establishing February 23, 2005, as EMCC's final settlement date. This 
means that EMCC will exit from any trades that remain open as of 
February 23, 2005. Under revised Rule 3, Section 1 of EMCC's rules, 
EMCC will issue deliver and receive instructions to the original buyers 
and sellers for any trades that have not settled by February 23, 2005. 
The legal obligations of those parties will continue to be subject to 
EMCC's rules even though such trades will no longer settle pursuant to 
EMCC's rules. To the extent that EMCC discontinues processing before 
the end of February 2005, EMCC will prorate its members' February 
charges and will reflect any proration on the members' final bill.
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    \3\ Telephone conversation between Karen Saperstein, General 
Counsel and Secretary, EMCC, and Jerry Carpenter, Assistant Director 
of Market Regulation, Commission (January 12, 2005).
    \4\ While EMCC expects that the dates set forth in this filing 
will be used, EMCC reserves the right to postpone these dates if, in 
its sole discretion, circumstances warrant. In the event EMCC 
postpones these dates, it will provide notice to the Commission and 
to its members.
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    EMCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \5\ and the rules and 
regulations thereunder because it will enable EMCC to process its final 
transactions in an orderly manner thereby promoting the prompt and 
accurate clearance and settlement of securities.
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    \5\ 15 U.S.C. 78q-1.
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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 by EMCC. EMCC 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 Commission finds that EMCC's proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder and particularly with the requirements of Section 
17A(b)(3)(F) \6\ of the Act. Section 17A(b)(3)(F) requires that the 
rules of a clearing agency be designed to promote the prompt and 
accurate clearance and settlement of securities transactions. The 
proposed rule change will enable EMCC to process its final transactions 
in an orderly and transparent manner thereby promoting the prompt and 
accurate clearance and settlement of securities.
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    \6\ 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 the 
date of publication of notice of filing. The Commission finds good 
cause for approving the proposed rule change prior to the thirtieth day 
after the date of publication of notice of filing because such approval 
will afford EMCC sufficient time to give its members notice of its 
decision to cease operations and to wind down its clearing agency 
operations in an orderly fashion.

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-2005-01 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-2005-01. 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 EMCC's principal office and on 
EMCC's Web site at <http://www.e-m-c-c. com/legal/>. All comments 
received 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-2005-01 and should be 
submitted on or before February 9, 2005.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-EMCC-2005-01) be, and hereby 
is, approved on an accelerated basis.

    For the Commission by the Division of Market Regulation pursuant 
to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E5-171 Filed 1-18-05; 8:45 am]
BILLING CODE 8010-01-P