[Federal Register Volume 60, Number 73 (Monday, April 17, 1995)]
[Notices]
[Pages 19312-19313]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9397]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35580; File No. SR-CSE-95-04]
Self-Regulatory Organizations; Cincinnati Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change Relating to Implementation of
a Three-Day Settlement Standard
April 7, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on April 4, 1995, the
Cincinnati Stock Exchange Incorporated (``CSE'') filed with the
Securities and Exchange Commission (``Commission'') a proposed rule
change as described in Items I, II, and III below, which items have
been prepared primarily by CSE. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
\1\15 U.S.C. 78s(b)(1) (1988).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CSE proposes to modify its rules to implement a three business day
settlement standard for securities transactions.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change.
In its filing wit the Commission, CSE 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. CSE 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
On October 6, 1993, the Commission adopted Rule 15c6-1 under the
Act which establishes three business days after the trade date
(``T+3'') instead of five business days (``T+5'') as the standard
settlement cycle for most securities transactions.\2\ The rule will
become effective June 7, 1995.\3\
\2\Securities Exchange Act Release No. 33023 (October 6, 1993),
58 FR 52891.
\3\Securities Exchange Act Release No. 34952 (November 9, 1994),
59 FR 59137.
---------------------------------------------------------------------------
Accordingly, in order to implement the new settlement standard
established by Rule 15c6-1, the CSE proposes to amend the following
rules. Currently, Rule 3.8(b)(1)(iii) provides that members receive
reasonable assurance from the customer that a security will be
delivered within five business days of the execution of the order. The
CSE is proposing to replace the term ``five'' with the term ``three''.
CSE also proposes to amend Rule 3.8(b)(2) which provides that members
note on order tickets that the customer has the ability to deliver
stock within five business days. The CSE is proposing to replace the
term ``five'' with the term ``three''.
Rule 11.4 provides that transactions in stocks (other than those
made for ``cash'') shall be ``ex-dividend'' or ``ex-rights'' on the
fourth business day preceding the record date fixed by the company or
the date of the closing of transfer books, except when the Board of
Trustees of CSE otherwise. The CSE is proposing to replace the term
``fourth'' in this provision with the term ``second''. The rule also
provides that should such record date or such closing of transfer books
occur upon a day other than a business day this rule shall apply for
the fifth preceding business day. The CSE is proposing to replace the
term ``fifth'' with the term ``third''.
The CSE's implementation of this proposed rule change will be
consistent with the ``T+3'' conversion schedule which the National
Securities Clearing Corporation has proposed for industry use. The
schedule is as follows:
------------------------------------------------------------------------
Trade date Settlement cycle Settlement date
------------------------------------------------------------------------
June 2 Friday.......... 5 day.................. June 9 Friday.
June 5 Monday.......... 4 day.................. June 9 Friday.
June 6 Tuesday......... 4 day.................. June 12 Monday.
June 7 Wednesday....... 3 day.................. June 12 Monday.
------------------------------------------------------------------------
If the Commission determines to alter the exemptions currently
provided in Rule 15c6-1, CSE may need to undertake additional rule
amendments. It is intended that the proposed rule change will become
effective on the same date as Commission Rule 15c6-1. [[Page 19313]]
The proposed rule change is consistent with Section 6(b)(5) of the
Act in that it is designed to promote just and equitable principles of
trade, to foster cooperation and coordination with persons engaged in
regulating, clearing, processing information with respect to, and
facilitating transactions in securities.
B. Self-Regulatory Organization's Statement on Burden on Competition
CSE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others.
No written comments were either solicited or 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 CSE 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 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 also will be available
for inspection and copying at the principal office of CSE. All
submissions should refer to File No. SR-CSE-95-04 and should be
submitted by May 8, 1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-9397 Filed 4-14-95; 8:45 am]
BILLING CODE 8010-01-M
