94-32256. Self-Regulatory Organizations; The Stock Clearing Corporation of Philadelphia; Order Approving Proposed Rule Change To Amend Rules To Require Execution of a Participant's Agreement by Participants

[Federal Register Volume 60, Number 1 (Tuesday, January 3, 1995)]
[Notices]
[Page 162]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32256]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35143; File No. SR-SCCP-05]


Self-Regulatory Organizations; The Stock Clearing Corporation of 
Philadelphia; Order Approving Proposed Rule Change To Amend Rules To 
Require Execution of a Participant's Agreement by Participants

December 23, 1994.
    On October 3, 1994 the Stock Clearing Corporation of Philadelphia 
(``SCCP'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change (File No. SR-SCCP-94-05) under 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')\1\ to 
amend SCCP Rule 2 Section 1. Notice of the proposal was published in 
the Federal Register on November 1, 1994.\2\ No comment letters were 
received regarding the proposed rule change. For the reasons discussed 
below, the Commission is approving the proposed rule changes.

    \1\15 U.S.C. Sec. 78s(b)(1) (1988).
    \2\Securities Exchange Act Release No. 34886 (October 24, 1994), 
59 FR 54653.
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I. Description

    SCCP is amending Rule 2, Section 1 with respect to its 
participants' obligations to SCCP. The amended Rule 2 adds language 
codifying SCCP's existing but unwritten policy and practice of 
requiring participants to execute a Participant's Agreement and 
language stating that SCCP's by-laws, rules, and procedures shall 
supersede any conflicting provision of the Participant's Agreement. The 
proposed rule change deletes language requiring participants to execute 
and deliver a written instrument specifying their adherence to certain 
obligations set forth in SCCP Rule 2. Such a second written agreement 
is unnecessary because once a Participant's Agreement is signed, the 
participant has agreed to abide by all of the rules and obligations of 
SCCP, including those set forth in SCCP Rule 2. Accordingly, all 
provisions of Rule 2 will be directly enforceable against participants 
without the necessity of executing a separate written agreement 
specifying selected provisions of SCCP's Rule 2.

II. Discussion

    The Commission believes that the proposed rule change is consistent 
with Section 17A of the Act and specifically with Section 
17A(b)(3)(F).\3\ Section 17A(b)(3)(F) requires that a clearing agency's 
rules assure the safe guarding of securities and funds which are in the 
custody or control of the clearing agency or for which it is 
responsible. Amended SCCP Rule 2 complies with the requirements of 
Section 17A(b)(3)(F) in that it requires all participants of SCCP to 
sign a Participant's Agreement setting forth their rights and 
obligations. Requiring a signed participant's Agreement should help 
assure the safekeeping of securities and funds which are in the custody 
or control of SCCP by creating a contract which binds participants to 
the provisions of SCCP's by-laws and rules.

    \3\15 U.S.C. Sec. 78q-1(b)(3)(F) (1988).
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III. 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.
    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File Nos. SR-SCCP-94-05) be, and hereby 
is approved.


    For the Commission by the Division of Market Regulations, 
pursuant to delegated authority.\4\

    \4\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-32256 Filed 12-30-94; 8:45 am]
BILLING CODE 8010-01-M