[Federal Register Volume 59, Number 241 (Friday, December 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30913]
[[Page Unknown]]
[Federal Register: December 16, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35078; File No. SR-MCC-94-14]
Self-Regulatory Organizations; Midwest Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Automated Customer Account Transfer Service and the
ACAT-Fund/SERV Interface
December 9, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934\1\ (``Act''), notice is hereby given that on November 8, 1994, the
Midwest Clearing Corporation (``MCC'') 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 MCC. 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
MCC proposes to amend its procedures to comply with New York Stock
Exchange (``NYSE'') Rule 412 which sets forth the time for transferring
customer accounts\2\ and with National Securities Clearing Corporation
(``NSCC'') Rule 50, Section 9\3\ regarding NSCC's Automated Customer
Account Transfer (``ACAT'') Service.\4\ MCC also proposes to amend its
procedures regarding the ACAT-Fund/SERV interface to comply with the
NYSE requirement that all mutual fund account transfers be accomplished
by use of an automated system where the NYSE member organizations are
participants in a registered clearing agency which has such a facility.
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\2\For a complete description of the recent amendments to NYSE
Rule 412, refer to Securities Exchange Act Release No. 34633
(September 2, 1994), 59 FR 46872 [File No. SR-NYSE-94-21] (order
approving amendments to NYSE Rule 412).
\3\For a complete description of the recent amendments to NSCC's
Rule 50, Section 9, refer to Securities Exchange Act Release No.
34879 (October 21, 1994), 59 FR 54229 [File No. SR-NSCC-94-13]
(order approving modifications to NSCC's ACAT Service to accelerate
the time in which customer accounts are transferred).
\4\For a complete description of NSCC's ACAT system, refer to
Securities Exchange Act Release No. 22481 (September 30, 1985), 50
FR 41274 [File No. SR-NSCC-85-7] (order approving proposed rule
change establishing ACAT Service).
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filng with the Commission, MCC 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. MCC 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
Statutory Basis for, the Proposed Rule Change
NSCC's ACAT Service is an input, comparison, and settlement service
for customer account transfers from one brokerage firm to another. MCC
Article VI, Rule 3 authorizes MCC to establish procedures for its
linkage to NSCC's ACAT Service including the establishment of time
periods. MCC's proposal is consistent with NSCC's recent amendments to
NSCC Rule 50, Section 9 shortening NSCC's recent amendments to NSCC
Rule 50, Section 9 shortening the period in which a participant that is
to receive a transferred account has to review the transfer
instructions and reply thereto. The completed transfer cycle will be
reduced from ten business days to seven business days for transferring
cash or margin accounts and from fifteen business days to seven
business days for transferring retirement accounts. The portion of
MCC's filing containing these procedures is consistent with the NYSE
and NSCC proposals; therefore, MCC's procedures also will take effect
on December 2, 1994.
MCC's proposed rule change also proposes to make minor changes to
the ACAT-Fund/SERV interface\5\ to comply with the NYSE requirement
that generally all mutual fund account transfers must be accomplished
by using the automated systems of a registered clearing agency where
both the receiving broker-dealer and the delivering broker-dealer are
participants in a registered clearing agency which has such a
facility.\6\ In accordance with a NYSE Rule 412, this change will be
effective March 3, 1995. In addition, under its proposal MCC no longer
will treat account transfers containing option positions differently
from transfers of accounts without option positions.
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\5\For a detailed description of NSCC's ACAT-Fund/SERV
interface, refer to Securities Exchange Act Release No. 27454
(November 20, 1989), 54 FR 48962 [File No. SR-NSCC-89-12] (order
approving modification of NSCC's ACAT Service rules to provide for
the automated transfer of eligible book share mutual fund assets).
\6\Supra note 2.
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MCC believes the proposed rule change is consistent with Section
17A of the Act in that it promotes the prompt and accurate clearance
and settlement of securities transactions. MCC's procedures setting
forth the shortened time period for transferring accounts are
appropriate because they properly reflect the changes set forth by the
NYSE and NSCC in their efforts to enhance automation of the transfer
process. In addition, the revised procedures are consistent with the
Commission's effort to reduce the settlement cycle as required by Rule
15c6-1\7\ which mandates a three business day settlement cycle for most
broker-dealer transactions effective June 7, 1995.\8\
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\7\For a complete description of Rule 15c6-1, refer to
Securities Exchange Act Release No. 33023 (October 6, 1993), 58 FR
52891 [File No. S7-5-93] (adopting Commission Rule 52c6-1).
\8\Securities Exchange Act Release No. 34952 (November 9, 1994),
59 FR 59137 [File No. S7-5-93] (change of effective date of Rule
15c6-1).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
MCC does not believe 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
MCC has not solicited or received comments on the proposed rule
change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii)\9\ of the Act and pursuant to Rule 19b-4(e)(4)\10\
promulgated thereunder because the proposal effects a change in an
existing service of MCC that does not adversely affect the safeguarding
of securities or funds in the custody or control of MCC and does not
significantly affect the respective rights or obligations of MCC or
persons using the service. At any time within 60 days of the filing of
such rule change, the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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\9\15 U.S.C. 78s(b)(3)(A)(iii) (1988).
\10\17 CFR 240.19b-4(e)(4) (1994).
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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 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 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 MCC. All
submissions should refer to File No. SR-MCC-94-14 and should be
submitted by January 6, 1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-30913 Filed 12-15-94; 8:45 am]
BILLING CODE 8010-01-M
