[Federal Register Volume 74, Number 248 (Tuesday, December 29, 2009)]
[Notices]
[Pages 68883-68885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30785]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61214; File No. SR-FICC-2009-10]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Order Granting Accelerated Approval of a Proposed 
Rule Change Regarding Fixed Income Clearing Corporation's Board of 
Directors Election Process and Delegation Authority

December 22, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 16, 2009, Fixed 
Income Clearing Corporation (``FICC'') 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 FICC. The Commission is publishing this notice and order 
to solicit comments on the proposed rule change from interested persons 
and to grant approval on an accelerated basis.
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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

    FICC's parent company, The Depository Trust & Clearing Corporation 
(``DTCC'') intends in the future to consider nominating for election to 
its Board of Directors candidates that are not participants of its 
clearing agency subsidiaries (``non-participant candidates'').\2\ 
Because certain of DTCC's organizational documents mandate that the 
directors of DTCC shall be the same as the directors of FICC, in the 
future FICC's Board of Directors may include directors who are not 
employees of its participants (``non-participant directors'').
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    \2\ DTCC's clearing corporation subsidiary participants include 
The Depository Trust Company, National Securities Clearing 
Corporation, and Fixed Income Clearing Corporation.
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    In addition, the rules of FICC's Government Securities Division 
(``GSD'') and FICC's Mortgage-Backed Securities Division (``MBSD'') are 
being revised to allow the Board to delegate certain responsibilities.

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

[[Page 68884]]

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 such statements.\3\
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    \3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    DTCC has in the past nominated for election to its Board of 
Directors employees of its clearing corporation subsidiaries' 
participants. In the future, DTCC intends to consider nominating for 
election to its Board of Directors people who are not employees of its 
clearing corporation subsidiaries' participants (``non-participant 
candidates''). Because certain of DTCC's organizational documents 
mandate that the directors of DTCC shall be the same as the directors 
of FICC, in the future FICC's Board may include directors who are not 
employees of its participants (``non-participant directors''). FICC 
believes that non-participant directors may bring additional skills and 
expertise and introduce different perspectives to its Board.
    In addition, the rules of FICC's Government Securities Division 
(``GSD'') and FICC's Mortgage-Backed Securities Division (``MBSD'') 
assign to FICC's Board certain administrative responsibilities, 
including, for example, responsibilities related to approving 
membership applications and other related matters. These rules are 
being revised to allow the Board to delegate these responsibilities.\4\
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    \4\ The text of the proposed rule change can be found at http://www.dtcc.com/downloads/legal/rule_filings/2009/ficc/2009-10.pdf.
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    These changes will conform FICC's rules and practices to the rules 
and practices of DTCC's other clearing corporation subsidiaries--The 
Depository Trust Company and National Securities Clearing Corporation.
    FICC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules and regulations 
thereunder applicable to FICC because FICC's rules will continue to 
provide for a fair representation of its participants in the selection 
of its directors and in the administration of its affairs and will 
enable FICC to act in a more expedient manner and therefore, to better 
promote the prompt and accurate clearing and settlement of securities 
transactions.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    FICC does not believe that the proposed rule change would have any 
impact on 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

    Section 17A(b)(3)(C) of the Act requires that the rules of a 
clearing agency assure a fair representation of its shareholders (or 
members) and participants in the selection of its directors and 
administration of its affairs. The Commission has previously found that 
FICC's participants are fairly represented in the selection of its 
Board and in the administration of its affairs.\5\ This rule change 
should not have any adverse effect on FICC's participants' 
representation in the selection of FICC's Board or in the 
administration of FICC's affairs. The Commission also recognizes that 
it may benefit FICC to have non-participants directors on its Board 
because such directors may provide skills or perspectives not possessed 
by participant directors. Therefore, the Commission finds that FICC's 
proposed rule change to have non-participant directors serve on its 
Board should provide benefits while continuing to provide for the fair 
representation of FICC's participants in the selection of its directors 
and administration of its affairs.
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    \5\ See, e.g., Securities Exchange Act Release No. 52922 
(December 7, 2005), 70 FR 74070 (December 14, 2005) (File Nos. SR-
DTC-2005-16, SR FICC-2005-19, and SR-NSCC-2005-14).
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    Section 17A(b)(3)(F) of the Act requires that the rules of a 
clearing agency are designed to promote the prompt and accurate 
clearing and settlement of securities transactions. The Commission 
finds that by providing its Board with additional authority to delegate 
certain of its responsibilities, such as, for example, responsibilities 
related to approving membership applications and other related matters, 
FICC will be able to act in a more expedient manner and therefore, 
better able to promote the prompt and accurate clearing and settlement 
of securities transactions.
    FICC has requested that the Commission approve this rule change 
prior to the thirtieth day after the date of publication of notice of 
the filing. The Commission finds good cause for approving the proposed 
rule change prior to the thirtieth day after publication of notice 
because by so approving FICC will be able to implement the rule change 
in time to include non-participant directors on its Board for the 2010 
Board term.

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-2009-10 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FICC-2009-10. 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 filing also will be available for 
inspection and copying at the principal office of FICC and on FICC's 
Web site at http://www.dtcc.com/downloads/legal/rule_filings/2009/ficc/2009-10.pdf . All comments received

[[Page 68885]]

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-2009-10 and should be submitted on 
or before January 19, 2010.

V. 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 with the requirements of Section 17A of the Act and the 
rules and regulations thereunder applicable.\6\
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    \6\ In approving the proposed rule changes, the Commission 
considered the proposals' impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-FICC-2009-10) be, and hereby 
is, approved on an accelerated basis.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30785 Filed 12-28-09; 8:45 am]
BILLING CODE 8011-01-P