[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1280]
[[Page Unknown]]
[Federal Register: January 20, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33462; File No. SR-PTC-93-05]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by Participants Trust Company Relating to Restrictions in the
Intraday Payment of Principal and Interest
January 12, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 12, 1993,
Participants Trust Company (``PTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
primarily by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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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
The purpose of the proposed rule change is to amend PTC's rules to
restrict intraday payments of principal and interest (``P&I'') from PTC
to its participants and limited purpose participants, to the amount of
funds from collected P&I payments available to PTC at such time.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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. The self-regulatory organization
has prepared summaries, set forth in sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to amend PTC Rule 2,
Article III to restrict intraday payments of P&I from PTC to its
participants and limited purpose participants, to the amount of funds
from collected P&I payments available to PTC at such time.
PTC's Rules and Procedures formerly provided that PTC disburse P&I
on securities deposited at PTC by means of a credit to the
Participant's applicable account cash balance. As a result, a
participant would receive available funds in the amount of the P&I, net
of any account debits and/or credits, at the end of the day as part of
the settlement payment process.
PTC's rules were amended on November 2, 1993\2\ to eliminate the
requirement that P&I be disbursed by means of a credit to a
participant's cash balance, to permit PTC to make payment of P&I either
by intraday Fedwire transfer of immediately available funds or by means
of a credit to the applicable cash balance, as PTC deems advisable from
time to time. In the order approving the proposed rule change on a
temporary basis until April 30, 1994, the Commission required PTC to
limit intraday disbursement of P&I to the amount of collected and
available P&I payments, on the basis that funds available to PTC for
P&I disbursement from other sources, such as PTC's own funds, the cash
portion of the mandatory deposits to the participant's fund, borrowed
funds secured by the P&I receipts or by the securities portion of the
mandatory deposits to the participant's fund, and PTC capital, should
be available if required to achieve end-of-day settlement. The purpose
of this proposed rule change is to incorporate that restriction
explicitly into PTC's Rules.
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\2\Securities Exchange Act Release No. 33132 (November 2, 1993),
58 FR 59501.
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The proposed rule change is consistent with Section 17A of the Act
and the rules and regulations thereunder because the orderly
disbursement of P&I funds to participants and the preservation of
alternate sources of funds to achieve settlement, facilitates the
prompt and accurate clearance and settlement of securities
transactions, and promotes the safeguarding of securities and funds in
PTC's custody and control.
B. Self-Regulatory Organization's Statement of Burden on Competition
PTC does not believe that the proposed rule change will have an
impact on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
PTC has not solicited, and does not intend to solicit, comments on
this proposed rule change. PTC has not received any unsolicited
comments from participants or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
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 will also be available for
inspection and copying at the principal office of PTC. All submissions
should refer to File Number SR-PTC-93-05 and should be submitted by
February 10, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-1280 Filed 1-19-94; 8:45 am]
BILLING CODE 8010-01-M
