94-380. Self-Regulatory Organizations; Participants Trust Company; Notice of Filing of Proposed Rule Change Establishing a Daily Penalty Fee Applicable to Late Funding of Shortfalls in Participants Mandatory Deposits to the Participants Fund  

  • [Federal Register Volume 60, Number 5 (Monday, January 9, 1995)]
    [Notices]
    [Pages 2416-2417]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-380]
    
    
    
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    SECURITIES AND EXCHANGE COMMISSION
    [Release No. 35182; File No. SR-PTC-94-07]
    
    
    Self-Regulatory Organizations; Participants Trust Company; Notice 
    of Filing of Proposed Rule Change Establishing a Daily Penalty Fee 
    Applicable to Late Funding of Shortfalls in Participants Mandatory 
    Deposits to the Participants Fund
    
        Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
    (``Act''),\1\ notice is hereby given that on December 14, 1994, the 
    Participants Trust Company (``PTC``) filed with the Securities and 
    Exchange Commission (``Commission'') the proposed rule change (File No. 
    SR-PTC-94-070 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 
    purposed rule change from interested persons.
    
        \1\15 U.S.C. 78s(b)(1) (1988).
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    I. Self-Regulatory Organization's Statement of the Terms of Substance 
    of the Proposed Rule Change
    
        The proposed rule change will establish a daily penalty fee 
    applicable to a participant's failure to fund on a timely basis a 
    shortfall in its mandatory deposit to the participants fund.
    
    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 the 
    Statutory Basis for, the Proposed Rule Change
    
        The purpose of the proposed rule change is to establish a daily 
    penalty fee applicable to a participant's failure to fund on a timely 
    basis a shortfall in its mandatory deposit to the participants fund. 
    Pursuant to Rule 2 of Article V of PTC's rules, PTC maintains a 
    participants fund to secure obligations of participants and limited 
    purpose participants to PTC and to provide PTC with an additional 
    source of cash collateral to meet its temporary financing needs. Each 
    participant is required to maintain a mandatory deposit in the 
    participants fund which is calculated as a percentage of its average 
    gross debits over the previous month's three major settlement days, 
    subjects to a minimum of $1 million and a maximum of $10 million. A 
    limited purpose participant is required to maintain a lower mandatory 
    deposit because of the limited nature of its activity in the 
    depository. At least $150 thousand of the mandatory deposit must be 
    made in cash. The remainder may be made in cash or United States 
    Treasury obligations with a remaining maturity of one year or less.
        The adequacy of each participant's mandatory deposit is evaluated 
    monthly based on the prior month's activity. Participants are notified 
    of any shortfall and required to fund the deficiency within five 
    business days. The securities portion of the mandatory deposit is 
    marked-to-market weekly, and participants are required to fund any 
    deficiency in this portion within two business days.
        The proposed rule change establishes a daily penalty fee for a 
    participant's failure to fund a shortfall in its mandatory deposit to 
    the participants fund by the required date in the amount of the greater 
    of (i) $200 or (ii) an amount, calculated at an annual rate, equal to 
    the daily average Fed Funds rate plus 250 basis points (2.5%) on the 
    outstanding balance of the shortfall in the mandatory deposit to the 
    participants fund.
        PTC believes that because the proposed rule change provides for the 
    equitable allocation of reasonable dues, fees, and other charges among 
    participants, it is consistent with Section 17A of the Act and the 
    rules and regulations thereunder applicable to PTC. [[Page 2417]] 
    
    B. Self-Regulatory Organization's Statement on Burden on Competition
    
        PTC does not believe that the proposed rule change will impose any 
    burden on competition.
    
    C. Self-Regulatory Organization's Statement on Comments on the Proposed 
    Rule Change Received From Members, Participants, or Others
    
        PTC has neither solicited nor received comments on the proposed 
    rule change.
    
    III. Date of Effectiveness of the Proposed Rule Change and Timing for 
    Commission Action
    
        Within thirty-five 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 ninety 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, N.W., Washington, D.C. 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 maybe 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, N.W., 
    Washington, D.C. 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-94-07 and should be 
    submitted by January 30, 1995.
    
        For the Commission, by the Division of Market Regulation, 
    pursuant to delegated authority.
    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. 94-380 Filed 1-6-95; 8:45 am]
    BILLING CODE 8010-01-M
    
    

Document Information

Published:
01/09/1995
Department:
Securities and Exchange Commission
Entry Type:
Notice
Document Number:
94-380
Pages:
2416-2417 (2 pages)
Docket Numbers:
Release No. 35182, File No. SR-PTC-94-07
PDF File:
94-380.pdf