96-9637. Self-Regulatory Organizations; National Securities Clearing Corporation; Order Granting Accelerated Approval of a Proposed Rule Change To Permit NSCC To Charge and To Collect from Members Charges Imposed by Certain Third Parties

[Federal Register Volume 61, Number 77 (Friday, April 19, 1996)]
[Notices]
[Pages 17341-17342]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9637]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37110; File No. SR-NSCC-96-07]

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Granting Accelerated Approval of a Proposed Rule 
Change To Permit NSCC To Charge and To Collect from Members Charges 
Imposed by Certain Third Parties

April 12, 1996.
    On March 19, 1996, the National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change (File No. SR-NSCC-96-07) 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ to permit NSCC to charge and to collect from members 
charges imposed by certain third parties. Notice of the proposal was 
published in the Federal Register on March 28, 1996.\2\ No comment 
letters were received. For the reasons discussed below, the Commission 
is granting accelerated approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \2\ Securities Exchange Act Release No. 37001 (March 21, 1996), 
61 FR 13912.
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I. Description
    The proposed rule change expands NSCC's authority to charge and to 
collect from its members fees imposed by certain third parties. In such 
situations, third parties will include all individual NSCC member 
charges in one invoice to NSCC, and NSCC will include the third 
parties' charges to individual members on the members' settlement 
statements.\3\ NSCC's current rules permit NSCC to charge members for 
fees imposed by self-regulatory organizations or other security 
industry organizations or entities with which NSCC has entered into 
agreements. The proposed rule change permits NSCC to include on its 
members' settlement statements charges imposed by entities or 
organizations with which NSCC has entered into agreements and which 
provide services or equipment to NSCC members which are integral to the 
services provided by NSCC. If a member does not consent to such charges 
or otherwise dispute such charges, NSCC will not fine the member for 
not paying to NSCC the third party's charges. In addition, NSCC will 
have no liability to any third party vendors for such charges.
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    \3\ From time to time, third parties which have entered into 
agreements with NSCC and which provide NSCC members with certain 
services or equipment that facilitate access to an NSCC service 
request that NSCC directly bill its members for the services or 
equipment that the third parties provide to members. For example, if 
NSCC members wanted to obtain computer hardware and/or software to 
access certain NSCC services, NSCC could make arrangements with a 
third party vendor to supply members with the appropriate hardware 
and/or software. The third party vendor would send a detailed 
monthly invoice directly to NSCC reflecting each individual member's 
charge. NSCC would then include the appropriate charge on each 
member's monthly statement. NSCC would remit to the vendor within 
the agreed upon time period the amount that NSCC actually collected 
from members in connection with the vendor's charges .
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II. Discussion
    Section 17A(b)(3)(F) \4\ of the Act requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. The Commission 
believes NSCC's proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(F) of the Act because it will 
facilitate access to NSCC's services by making it easier for NSCC 
members to obtain hardware, software, or related services or equipment 
necessary to fully utilize NSCC. Specifically, the proposed rule change 
allows NSCC to consolidate for its members third party billings and 
ISCC payment obligations. Consolidation of members' payment obligations 
should not only simplify members' disbursement processes, it should 
facilitate ISCC members' ability to obtain equipment or services that 
are integral to NSCC's services and that are provided by third parties. 
by enhancing the ability of NSCC's members to access NSCC's securities 
settlement services, the proposed rule change should promote the prompt 
and accurate clearance and settlement of securities transactions.
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    \4\ 15 U.S.C. 78q-1(b)(3)(F) (1988).
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    NSCC has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after the 
date of publication of notice of the filing. The Commission finds good 
cause for so approving the proposed rule change because accelerated 
approval will facilitate NSCC members' ability to obtain on a timely 
basis certain computer hardware presently being offered by third 
parties in connection with certain NSCC services.

[[Page 17342]]

III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular Section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-NSCC-96-07) be and hereby is 
approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-9637 Filed 4-18-96; 8:45 am]
BILLING CODE 8010-01-M