[Federal Register Volume 72, Number 153 (Thursday, August 9, 2007)]
[Notices]
[Pages 44902-44903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15542]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56189; File No. SR-FICC-2007-07]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule To Make 
Technical Changes To Update and Align Provisions With Current Practice

August 2, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 21, 2007, 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. FICC filed the proposal pursuant to section 19(b)(3)(A)(i) and 
(ii) of the Act \2\ and Rule 19b-4(f)(1) and (2) \3\ thereunder so that 
the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the rule 
change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(i) and (ii).
    \3\ 17 CFR 240.19b-4(f)(1) and (2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the rule change is to make technical changes to 
certain provisions of the Government Securities Division (``GSD'') 
rules and the Mortgage-Backed Securities Division (``MBSD'') rules to 
update and to align them with current practice.

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.\4\
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    \4\ 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

(1) Off-the-Market Transactions
    The definition of Off-the-Market Transactions in the GSD rules is 
outdated and does not allow for adjustments in market conditions. FICC 
proposes to amend this definition by (i) Deleting the reference to 
``option exercises'' so that they are no longer automatically 
considered to be Off-the-Market Transactions, (ii) establishing a 
System Price \5\ as the basis for determining whether a transaction 
will be an Off-the-Market Transactions, and (iii) allowing FICC to 
establish the percentage, based on factors such as market conditions, 
by which the price of a transaction must exceed or fall short of the 
System Price in order to constitute an Off-the-Market Transaction.
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    \5\ Rule 1 defines System Price as ``the uniform price 
(expressed in dollars per unit of par value), not including accrued 
interest, established by [FICC] on each Business Day, based on 
current market information, for each Eligible Netting Security with 
a separate CUSIP Number. Notwithstanding the above, the System Price 
for the Generic CUSIP Number that underlies a GCF Net Settlement 
Position shall be equal to principal value.''
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(2) The Bond Market Association
    The Bond Market Association (``BMA'') has merged with the 
Securities Industry Association to form the Securities Industry and 
Financial Markets Association (``SIFMA''). FICC is proposing to revise 
the MBSD Clearing Rules and MBSD EPN Rules to replace references to the 
BMA and BMA Guidelines with references to SIFMA and SIFMA Guidelines.
(3) Omnibus Account Fees and Access Fees
    MBSD's EPN Schedule of Charges currently provides for Omnibus 
Account fees and for Access fees. These fees no longer exist. FICC is 
proposing to amend the MBSD EPN Schedule of Charges to delete the 
reference to Omnibus Account fees and Access fees.
    The proposed rule change is consistent with section 17A of the 
Act,\6\ as amended, because it constitutes technical changes that do 
not adversely affect the safeguarding of securities or funds in the 
custody or control of FICC or for which it is responsible.
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    \6\ 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 any written 
comments received by FICC.

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

    The foregoing proposed rule change has become effective upon filing 
pursuant to section 19(b)(3)(A)(i) and (ii) of the Act \7\ and Rule 
19b-4(f)(1) and (2) \8\ thereunder because the proposed rule change 
constitutes a stated policy and interpretation with respect to the 
meaning of existing FICC rules and changes a fee imposed by FICC. At 
any time within sixty days of the filing of the proposed rule change, 
the Commission may summarily abrogate such rule change if it appears to 
the Commission that such action is necessary or appropriate in the 
public interest, for the protection of investors, or otherwise in 
furtherance of the purposes of the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(i) and (ii).
    \8\ 17 CFR 240.19b-4(f)(1) and (2).
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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-2007-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.


[[Page 44903]]


All submissions should refer to File Number SR-FICC-2007-07. 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, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. 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://ficc.com/commondocs/rule.filings/rule.filing.07-07.pdf. 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-2007-07 and should be submitted on or before August 30, 2007.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-15542 Filed 8-8-07; 8:45 am]
BILLING CODE 8010-01-P