[Federal Register Volume 60, Number 228 (Tuesday, November 28, 1995)]
[Notices]
[Pages 58697-58698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28934]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36495; File No. SR-NSCC-95-13]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of a Proposed Rule Change Enabling
Members Settling Mutual Fund Transactions in Same Day Funds to Settle
Through a Settling Bank
November 20, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 3, 1995, the
National Securities Clearing Corporation (``NSCC'') 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 NSCC. On November 14, 1995, NSCC amended the
filing to make technical changes.\2\ The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
\1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
\2\ Letter from Karen L. Saperstein, Vice President/Director of
Legal & Deputy General Counsel, NSCC, to Jerry W. Carpenter,
Assistant Director, Division of Market Regulation, Commission
(November 13, 1995).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
NSCC proposes modifying its rules to establish a new membership
category for settling banks that will enable members settling mutual
fund transactions in same day funds to settle their obligations through
a settling bank.\3\
\3\ The text of the proposed rule change is attached as Exhibit
A to File No. SR-NSCC-95-13 and is available for review in the
Public Reference Section of the Commission.
---------------------------------------------------------------------------
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.\4\
\4\ 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
The purpose of the proposed rule change is to modify NSCC's rules
to enable members settling mutual fund transactions in same day funds
to settle their obligations through a settling bank. The proposed rules
will establish a new membership category for settling banks. Any bank
that wants to become a settling bank will be required to meet the
operational and financial requirements established by NSCC. To qualify
as a settling bank, each bank must have short-term obligation ratings
of at least A-2 by Standard and Poor's Corp. or P-2 by Moody's
Investors Services Inc. Banks that do not meet this standard will be
considered on an exception basis. Each bank that qualifies as a
settling bank will be required to enter into a separate agreement with
each member on whose behalf it will perform settlement functions.
The proposed rules provide that settling banks will have the
opportunity to refuse to settle for one or more members by notifying
NSCC within the time established by NSCC. The proposed rules also
specify that settling banks will be required to wire funds by the
deadline imposed by NSCC or be subject to a penalty fee. In addition,
settling banks that fail to pay on settlement day will be required to
cover NSCC's interest costs due as a result of their failure to settle
in a timely manner. NSCC's proposed rule change also makes conforming
changes to relevant sections of NSCC's rules.
NSCC believes the proposed rule change is consistent with the
requirements of Section 17A of the Act and the rules and regulations
thereunder because it will facilitate the prompt and accurate clearance
and settlement of securities transactions.
B. Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not perceive that the proposed rule change 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 have been solicited or received. NSCC will
notify the Commission of any written comments received.
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 that are filed with 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 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.
[[Page 58698]]
20549. Copies of such filing will also be available for inspection and
copying at the principal office of NSCC. All submissions should refer
to File No. SR-NSCC-95-13 and should be submitted by December 19, 1995.
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. 95-28934 Filed 11-27-95; 8:45 am]
BILLING CODE 8010-01-M
