[Federal Register Volume 61, Number 13 (Friday, January 19, 1996)]
[Notices]
[Pages 1418-1419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-510]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36697; File No. SR-NSCC-95-16]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Order Granting Accelerated Approval
of a Proposed Rule Change Regarding an Agreement Between the National
Securities Clearing Corporation (``NSCC'') and the New York Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc.
Concerning the Provision of Financial and Operation Information With
Respect to NSCC Members and Correspondent Broker-Dealers of Such
Members
January 11, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 11, 1995, the
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 persons and to grant
accelerated approval of the proposed rule change.
\1\ 15 U.S.C. 78s(b)(1) (1988).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The proposed rule change relates to agreements between NSCC and the
National Association of Securities Dealers, Inc. (``NASD'') and between
NSCC and the New York Stock Exchange, Inc. (``NYSE'') concerning the
provision of financial and operational information to NSCC with respect
to its members and its members' correspondent broker-dealers.
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 such
statements.\2\
\2\ The Commission has modified the text of the summaries
prepared by NSCC.
---------------------------------------------------------------------------
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
NSCC has entered into agreements (``Agreements'') with the NASD and
with the NYSE pursuant to which the NASD and the NYSE are to provide
certain information directly to NSCC.\3\ The information to be provided
will include, without limitation, financial, trading, and operational
information relating to NSCC members and correspondent broker-dealers
of such members. Under its rules, NSCC is entitled to obtain such
information directly from its members.
\3\ Copies of the Agreements are attached as Exhibit A to NSCC's
proposed rule change filed with the Commission.
---------------------------------------------------------------------------
The Agreements are based on NSCC's existing Rule 2 and Rule 15.
NSCC Rule 2, Section 2(f) provides that each applicant seeking to
become a member of NSCC shall agree in writing that its books and
records shall at all times be open to inspection by the duly authorized
representatives of NSCC and that NSCC shall be furnished with all such
information with respect to its business and transactions as NSCC may
require. Rule 15, Section 2 provides that NSCC shall have the authority
to examine the financial responsibility and operational capability of
any settling member. Rule 15, Section 2 further provides that in
conducting such examinations NSCC may require a settling member to
furnish such information, to make its books and records available, and
to demonstrate the financial responsibility and operational capability
of the settling member. Rule 15 also provides that NSCC may require
adequate assurances of the financial responsibility or operational
capability of a settling member.
The information contemplated by NSCC Rules 2 and 15 includes
information relating to correspondent broker-dealers that clear through
settling members. Under these rules, NSCC also may require a settling
member to obtain information on its correspondent broker-dealers and
provide it to NSCC. NSCC has routinely asked for and received such
information from its settling members. By having the NASD and the NYSE
directly provide NSCC with information regarding its members and their
correspondent broker-dealers that NSCC is entitled to obtain from its
settling members under NSCC Rules 2 and 15, the Agreements will permit
a more rapid integration of such information into NSCC's risk
management system and will alleviate the administrative burdens on its
members of providing this information.
NSCC believes the proposed rule change is consistent with Section
17A of the Act and the rules and regulations thereunder because it is
intended to foster cooperation and coordination with persons engaged in
the clearance and settlement of securities transactions and to assure
the safeguarding of securities and funds which are in the custody or
control of NSCC or for which it is responsible.
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not believe that the rule filing will have an impact on
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 relating to the rule filing 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) of the Act\4\ requires the rules of a clearing
agency be designed to foster cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions and
to assure the safeguarding of securities and funds which are in the
custody or control of
[[Page 1419]]
NSCC or for which it is responsible. The Commission believes the
proposed rule change is consistent with these requirements because it
will allow NSCC faster and more efficient access to critical risk-based
data of its members and its members' correspondent broker-dealers which
should allow for more rapid integration of such information into NSCC's
risk management system. Moreover, because NSCC now will have direct
access to this information from the NASD and the NYSE, NSCC should be
able to better monitor the activities of its members and their
correspondent broker-dealers which should assist NSCC in fulfilling its
obligation under Section 17A to safeguard securities and funds under
NSCC's custody or control or for which it is responsible
\4\ 15 U.S.C. 78q-1(b)(3)(F) (1988).
---------------------------------------------------------------------------
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
because accelerated approval will permit NSCC to receive the risk-based
information regarding its members and their correspondent broker-
dealers directly from the NASD and the NYSE thus enabling NSCC to
include the information in its risk management system in a more timely
fashion. Furthermore, because the risk-based information NSCC will
receive from the NASD and the NYSE is information NSCC's members are
obligated to and already do submit to NSCC, the Commission does not
expect to receive any adverse comments on the proposed rule change.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submission
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street NW., Washington, DC 20549. Copies
of the submissions, 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. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Room, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such filings will also be available for
inspection and copying at the principal office of NSCC. All submissions
should refer to the file number SR-NSCC-95-16 and should be submitted
by February 9, 1996.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-NSCC-95-16) be, and hereby
is, approved on an accelerated basis.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
\5\ 17 CFR 200.30-3(a)(12)(1994).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-510 Filed 1-18-96; 8:45 am]
BILLING CODE 8010-01-M
