[Federal Register Volume 65, Number 112 (Friday, June 9, 2000)]
[Notices]
[Pages 36749-36750]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14574]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42893; File No. SR-NSCC-00-03]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Order Granting Accelerated Approval
of a Proposed Rule Relating to Processing Government Securities Trades
June 2, 2000.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on April 5, 2000, National
Securities Clearing Corporation (``NSCC'') 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 NSCC. The Commission is publishing this notice and order
to solicit comments from interested parties and to grant accelerated
approval of the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The proposed rule change will allow NSCC to receive government
securities trade data from the American Stock Exchange (``AMEX''),
process the trade data, and transmit the trade data to the Government
Securities Clearing Corporation (``GSCC'').
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A),
(B) and (C) below, of the most significant aspects of these
statements.\2\
---------------------------------------------------------------------------
\2\ The Commission has modified the text of the summaries
prepred by NSCC.
---------------------------------------------------------------------------
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the rule change is to amend NSCC's rules and
procedurres to permit NSCC to: (1) Receive trade data concerning
members' government security transactions conducted on the AMEX; (2)
record trade information about those transactions on NSCC members'
contract lists; and (3) transmit at the request of members the trade
information to GSCC for processing.
Specifically, the rule change amends NSCC's rules and procedures as
follows:
The AMEX may submit locked-in trade data for transactions
in ``eligible government securities'' included in the AMEX Order File
(``AOF'') System to NSCC. NSCC will maintain a list of ``eligible
government securities'' which must be unmatured, marketable debt
securities in book-entry form that are direct obligations of the United
States Government; securities issued or guaranteed by the United
States, a U.S. government agency or instrumentality, or a U.S.
government-sponsored corporation; or such other security as determined
by NSCC from time to time.\3\
---------------------------------------------------------------------------
\3\ NSCC Rule 3, Section 10.
---------------------------------------------------------------------------
The AMEX may submit its trade data throughout trade date
(``T'') until a time specified by NSCC. The trade data must include
quantity, security identification, identification of the marketplace of
execution, contra-broker, trade value, and other identifying details
that NSCC may require or permit.\4\
---------------------------------------------------------------------------
\4\ NSCC Procedure 11.D4(a)(ii).
---------------------------------------------------------------------------
NSCC will report back to members their AOF trade data
items, including final contract amount as calculated by NSCC, on the
morning of T+1 in a separate section of NSCC's regular way T+1 contract
list.\5\
---------------------------------------------------------------------------
\5\ Id. at (iii).
---------------------------------------------------------------------------
Unless otherwise processed through GSCC, as described
below, the settlement of AFO trade data items will be the
responsibility of parties to the trade. Such items will not be settled
through the facilities of NSCC.\6\
---------------------------------------------------------------------------
\6\ Id. at (iv).
---------------------------------------------------------------------------
The rule change permits NSCC to transmit, at the request of
members, AOF trade data items to GSCC for processing as follows \7\:
---------------------------------------------------------------------------
\7\ NSCC Procedure 11.D.4(b).
---------------------------------------------------------------------------
Each member that would like to settle its AFO trades
through GSCC must complete and deliver to NSCC an authorization
agreement.\8\
---------------------------------------------------------------------------
\8\ Id. at 4(b)(i).
---------------------------------------------------------------------------
NSCC will submit AOF trade data items to GSCC within the
timeframes established by NSCC.\9\
---------------------------------------------------------------------------
\9\ Id. at 4(b)(ii).
---------------------------------------------------------------------------
NSCC believes that the proposed rule change is consistent with the
requirements of the Act,\10\ and the rules and regulations thereunder.
In particular, the proposed rule change is consistent with section
17A(b)(3)(F) of the Act, which requires that the rules of a clearing
agency be designed to promote the prompt and accurate clearance and
settlement of securities transactions and, in general, to protect
investors and the public interest.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not believe that the proposed rule change will impact 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 have been solicited or received. NSCC will
notify the Commission of any written comments received by NSCC.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Section 17A(b)(3)(F) \11\ of the Act requires that the rules of a
clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions. For the reasons
set forth below, the Commission believes that NSCC's rule change is
consistent with this obligation.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The rule change permits NSCC to build upon its existing facilities
to receive and process trade data concerning government securities
traded through the AMEX's AOF System by NSCC members. After processing
this information, NSCC will report back to members trade information
relating to their AOF trades. At the request of members who wish to
settle these trades through GSCC, NSCC will then transmit trade data to
GSCC for processing. By providing this service, NSCC will be
facilitating the prompt and accurate clearance and settlement of Amex-
traded government securities. Therefore, the Commission finds that the
proposed rule change is consistent with NSCC's obligations to promote
the prompt and
[[Page 36750]]
accurate clearance and settlement of securities transactions.
NSCC has requested that the Commission find good cause for
approving the proposed rule change prior to the thirtieth day after
publication of the notice of filing. The Commission finds good cause
for approving the proposed rule change prior to the thirtieth day after
publication of the notice because accelerated approval will enable NSCC
to coordinate with GSCC and the AMEX in order to begin providing these
clearance and settlement services on the target start date of June 2,
2000.
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
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 the principal office of NSCC. All submissions
should refer to File No. SR-NSCC-00-03 and should be submitted by June
30, 2000.
It Is Therefore Ordered, pursuant to section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-NSCC-00-03) be and hereby is
approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-14574 Filed 6-8-00; 8:45 am]
BILLING CODE 8010-01-M