[Federal Register Volume 70, Number 76 (Thursday, April 21, 2005)]
[Notices]
[Pages 20781-20782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1877]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51550; File No. SR-FICC-2005-07]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing of Proposed Rule Change To Establish a Firm Deadline 
by Which Members of the Government Securities Division Must Satisfy 
Clearing Fund Deficiencies

April 15, 2005.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 18, 2005, the Fixed 
Income Clearing Corporation (``FICC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change 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 parties.
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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 purpose of this proposed rule change is to establish a firm 
deadline by which members of FICC's Government Securities Division 
(``GSD'') must satisfy clearing fund deficiencies.

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 these 
statements.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by FICC.
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(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 establish a firm 
deadline by which members of GSD must meet clearing fund deficiencies. 
Currently, GSD's rules provide a deadline for a member's satisfaction 
of a clearing fund deficiency of two hours after GSD has issued a 
notice of deficiency to that

[[Page 20782]]

member. Under current practice, GSD issues its clearing fund deficiency 
notices by telephone calls typically at 8:30 a.m. eastern time, and by 
a facsimile containing (i) a cover letter summarizing the deficiency 
status and (ii) a detailed report reflecting the firm's current 
clearing fund requirement and collateral on deposit. Therefore, 
deficiency calls typically must be satisfied by approximately 10:30 
a.m. eastern time.
    Notwithstanding GSD's issuance of clearing fund calls, each member 
has the ability to access a report each day detailing its clearing fund 
balances and any deficiency thereof generally by 12:30 a.m. eastern 
time.
    To further ensure the timely satisfaction of clearing fund 
deficiency calls and taking into account members' ready access to 
clearing fund deficiency information, the proposed rule change would 
establish a firm deadline of 10:30 a.m. eastern time for such 
satisfaction and eliminate current provisions which correlate the 
timing of the deadline to the issuance of the notice by FICC.\3\ As a 
result, it would be incumbent upon members to access directly the 
appropriate report detailing their clearing fund deposit requirements 
so they might satisfy any deficiencies.
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    \3\ Under the proposed rule, FICC may extend this deadline if 
operational or systems difficulties arise that reasonably prevent 
members from satisfying the 10:30 a.m. eastern time deadline.
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    FICC believes the proposed rule change is consistent with the 
requirements of section 17A of the Act \4\ and the rules and 
regulations thereunder applicable to FICC because it promotes timely 
satisfaction of clearing fund deficiency calls and reduces the amount 
of risk to FICC and its members. As such, FICC believes the proposed 
rule assures the safeguarding of securities and funds that are in the 
custody and control of FICC or for which it is responsible.
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    \4\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    FICC does not believe that the proposed rule change will have any 
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

    Written comments relating to the proposed rule change have not yet 
been solicited or received. FICC will notify the Commission of any 
written comments received by FICC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period: (i) As the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding; or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) By order approve such proposed rule change or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-FICC-2005-07 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-FICC-2005-07. 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 filings also will be 
available for inspection and copying at the principal office of FICC 
and on FICC's Web site at http://www.ficc.com. 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-FICC-2005-07 and should be submitted on 
or before May 12, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1877 Filed 4-20-05; 8:45 am]
BILLING CODE 8010-01-P