[Federal Register Volume 65, Number 2 (Tuesday, January 4, 2000)]
[Notices]
[Page 311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-40]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42274; File No. SR-ISCC-99-01]
Self-Regulatory Organizations; International Securities Clearing
Corporation; Order Granting Accelerated Approval of a Proposed Rule
Change Relating to International Security Clearing Corporation's
Withdrawal From the Clearance and Settlement Business
December 27, 1999.
On September 23, 1999, the International Securities Clearing
Corporation (``ISCC'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change (File No. SR-ISCC-
99-01) pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934 (``Act'') \1\ to transfer its clearance and settlement services to
the National Securities Clearing Corporation (``NSCC'') and to withdraw
its registration as a clearing agency. Notice of the proposal was
published in the Federal Register on December 1, 1999.\2\ No comment
letters were received. For the reasons discussed below, the Commission
is granting accelerated approval of the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ Securities Exchange Act Release No. 42175 (November 23,
1999), 64 FR 67362.
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I. Description
On May 12, 1989, the Commission granted, pursuant to Sections 17A
and 19(a) of the Act \3\ and Rule 17Ab2-1,\4\ the application of ISCC
for registration as a clearing agency on a temporary basis for a period
of eighteen months.\5\ Since that time, the Commission has extended
ISCC's temporary registration through February 29, 2000.\6\
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\3\ 15 U.S.C. 78q-1 and 78s(a),
\4\ 17 CFR 240.17Ab2-1(c).
\5\ Securities Exchange Act Release No. 26812 (May 12, 1989), 54
FR 21691.
\6\ Securities Exchange Act Release Nos. 28606 (November 16,
1990), 55 FR 47976; 30005 (November 27, 1991), 56 FR 63747; 33233
(November 22, 1993), 58 FR 63195; 36529 (November 29, 1995), 60 FR
62511; 37986 (November 25, 1996), 61 FR 64184; 38703 (May 30, 1997),
62 FR 31183; 39700 (February 26, 1998), 63 FR 10669; and 41103
(February 24, 1999), 64 FR 10521.
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Under the rule change, ISCC, a wholly owned subsidiary of NSCC,
will transfer its clearance and settlement services to NSCC because it
is no longer cost-effective to provide such services through a separate
company.\7\ ISCC is also requesting that it be allowed to withdraw from
registration as a clearing agency. The transfer of services to NSCC
will be transparent to ISCC users. They will not be required to perform
any system modifications, and they will be charged the same fees for
the services at NSCC as they are currently paying ISCC.
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\7\ In connection with this rule filing, NSCC has submitted a
proposed rule change to amend its rules to allow it to provide
clearance and settlement services previously offered by ISCC. (File
No. SR-NSCC-99-12).
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II. Discussion
Section 17A(b)(3)(F) \8\ of the Act requires that the rules of a
clearing agency be designed to assure the prompt and accurate clearance
and settlement of securities transactions. ISCC was created to provide
safe and efficient clearance and settlement of securities transactions
between United States broker-dealers and foreign financial
institutions. ISCC serves this function through its core services, the
Global Clearance Network (``GCN'') and the International Link Services
(``ILS'').\9\
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\8\ 15 U.S.C. 78q-1(b)(3)(F).
\9\ Securities Exchange Act Release Nos. 29841 (October 18,
1991), 56 FR 55960 (order approving GCN) and 32564 (June 30, 1993),
58 FR 36722 (order approving a data transmission link with Euroclear
Systems).
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Under the proposed rule change, ISCC will cease offering clearance
and settlement services, NSCC will offer similar services under the
same terms and conditions as ISCC, and ISCC will be allowed to withdraw
from registration as a clearing agency. According to ISCC, it is no
longer cost-effective to provide such services through a separate
company. Because NSCC will continue ISCC's role as a provider of
services for international securities transactions, the Commission
believes that ISCC's rule change is consistent with NSCC's obligations
under the Act.
ISCC has requested that the Commission find good cause for
approving the proposed rule change prior to the thirtieth day after the
date of publication of notice of the filing. The Commission finds good
cause for so approving the proposed rule change because accelerated
approval will permit ISCC to cease providing clearance and settlement
services before the end of the year.
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 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 No. SR-ISCC-99-01) be and hereby is
approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-40 Filed 1-3-00; 8:45 am]
BILLING CODE 8010-01-M
