[Federal Register Volume 61, Number 216 (Wednesday, November 6, 1996)]
[Notices]
[Pages 57506-57507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28517]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37904; File No. SR-NSCC-96-19]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of a Proposed Rule Change To Discontinue
the Operation of the Securities Clearing Group's Data Base
October 31, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 3, 1996, the
National Securities Clearing Corporation (``NSCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change (File No. SR-NSCC-96-19) as described in Items I, II, and III
below, which items have been prepared primarily by NSCC. 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) (1988).
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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 the Securities
Clearing Group Agreement of the Securities Clearing Group (``SCG'') \2\
to discontinue the operation of the SCG data base.
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\2\ The SCG was established in 1989 as a result of developments
surrounding the October Market Break and subsequent studies on the
causes of the Market Break. The stated purpose of the SCG is to
increase cooperation and coordination among securities clearing
entities and to facilitate the sharing of certain clearance and
settlement information regarding surveillance and member risk
monitoring. For a further description of the SCG refer to Securities
Exchange Act Release No. 27044 (July 25, 1989), 54 FR 30963 [File
Nos. SR-DTC-88-20, SR-MCC-88-10, SR-MSTC-88-07, SR-NSCC-88-09, SR-
OCC-89-02, SR-Philadep-89-01, and SR-SCCP-89-01] (order approving
the establishment of the SCG).
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I. Self-Regulatory Organization's Statement of the Purpose of, the
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 that 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.\3\
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\3\ The Commission has modified the text of the summaries
submitted by NSCC.
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(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 the SCG
Agreement to discontinue operation of SCG data base. The SCG database
contains information on common participants of the SCG members relating
to settlement payment obligations and clearing fund and margin
requirements and deposits and other related information. The members of
the SCG created the SCG data base as a means to coordinate and share
information on common participants and increase cooperation among the
SCG members.
NSCC believes termination of the SCG data base is desirable for
several reasons. First, NSCC has established and agreed to make
available to the SCG members access to its Collateral Management
Service (``CMS'').\4\ The CMS will make available to the SCG members
similar information contained in the SCG data base plus provide them
with enhanced features and capabilities through a more robust system.
For example, the SCG data base contains aggregate information on
clearing fund and margin deposits including excess and deficit amounts
whereas the CMS contains both aggregate information on clearing fund
and margin deposits including excess and deficit amounts as well as
detailed information on the underlying collateral (i.e., cash,
securities, and letters of credit). The SCG members recognize that
termination of the SCG data base is desirable at this point to avoid
redundancies with the CMS. Second, the SCG members recognize that
termination of the SCG data base will eliminate the occurrence of a
significant increase in costs that would be required to maintain the
SCG data base. Third, NSCC believes termination of the SCG data base
and the availability of the CMS will enable the SCG members to better
coordinate and share information and monitor clearing fund and margin
deposits.
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\4\ For a description of the Collateral Management service refer
to Securities Exchange Act Release No. 36091 (August 10, 1995), 60
FR 42931 [File No. SR-NSCC-95-06] (order approving a proposed rule
change establishing the Collateral Management Service).
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Accordingly, the SCG members have executed Amendment No. 6 to the
SCG Agreement.\5\ The Amendment: (i) authorizes the termination of the
SCG data base, (ii) authorizes NSCC to use all data, information,
computer coding, and programs contained in the SCG data base in
establishing and maintaining the operation of CMS, and (iii) grants to
each SCG Member a nonexclusive and nontransferable license to use
NSCC's CMS.
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\5\ A copy of the Amendment is attached as Exhibit A to NSCC's
filing. A copy of the filing is available for copying and inspection
in the Commission's Public Reference Room or through NSCC.
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NSCC believes the proposed rule change is consistent with the
requirements of Section 17A of the Act and the rules and regulations
thereunder because the rule proposal will promote the prompt and
accurate clearance and settlement of securities transactions and will
assure the safeguarding of securities and funds in the custody or
control of NSCC or for which NSCC is responsible.
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not believe that the proposed rule change will impact 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 by NSCC.
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 NSCC 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
[[Page 57507]]
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 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 Room, 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 NSCC.
All submissions should refer to the file number SR-NSCC-96-16 and
should be submitted by November 27, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12) (1996).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-28517 Filed 11-5-96; 8:45 am]
BILLING CODE 8010-01-M
