[Federal Register Volume 70, Number 121 (Friday, June 24, 2005)]
[Notices]
[Page 36683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3282]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51871; File No. SR-NSCC-2005-03]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Granting Approval of a Proposed Rule Change Relating 
to the Collecting of Fees for Services Provided by Other Entities

June 17, 2005.

I. Introduction

    On April 26, 2005, National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') proposed rule change SR-NSCC-2005-03 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 May 13, 
2005.\2\ No comment letters were received. For the reasons discussed 
below, the Commission is granting approval of the proposed rule change.
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    \1\ U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 51674, (May 9, 2005), 70 
FR 25636.
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II. Description

    NSCC is a subsidiary of the Depository Trust and Clearing 
Corporation (``DTCC''). Members of NSCC and their affiliates may from 
time to time utilize the services of DTCC subsidiaries that are not 
registered as clearing agencies with the Commission. Such subsidiaries 
include Global Asset Solutions LLC and DTCC Deriv/Serv LLC. In 
addition, members of NSCC and their affiliates may utilize the services 
of other third parties. NSCC has determined that it would be more 
efficient and less costly if the fees that members agree to pay for 
such services were collected by NSCC rather than through independent 
billing mechanisms that would otherwise have to be established by each 
subsidiary of DTCC and third party that is not a registered clearing 
agency.
    NSCC's rules currently allow for fee collection arrangements with 
respect to collection of fees from members. The rule change further 
clarifies this practice and makes clear that NSCC may similarly collect 
fees and charges for services provided to affiliates of its members. 
NSCC will enter into appropriate agreements with such subsidiaries and 
others regarding the collection of fees.

III. Discussion

    Section 17A(a)(1)(B) of the Act provides that inefficient 
procedures for clearance and settlement impose unnecessary costs on 
investors and persons facilitating transactions by and acting on behalf 
of investors.\3\ Although the services provided by unregulated DTCC 
subsidiaries and by other third parties are not core clearance and 
settlement services, they are related to the clearance and settlement 
operations of NSCC and of its members. By streamlining the fee 
collection process for these services so that NSCC's members will pay 
these fees to NSCC as a part of their normal monthly NSCC bills, the 
proposed rule change should help to improve efficiency in the 
operations of NSCC members and thereby should remove unnecessary cost 
for NSCC members and for the persons (i.e., the DTCC subsidiaries and 
the other entities providing services to NSCC members) facilitating 
transactions by and acting on behalf of investors. Accordingly, the 
Commission finds that the proposed rule change is consistent with the 
requirements of Section 17A of the Act.
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    \3\ 15 U.S.C. 78q-1(a)(A)(B).
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IV. 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-2005-03) be and hereby 
is approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority. \4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3282 Filed 6-23-05; 8:45 am]
BILLING CODE 8010-01-P