96-9638. Self-Regulatory Organizations; International Securities Clearing Corporation; Order Granting Accelerated Approval of a Proposed Rule Change To Permit ISCC 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 17338-17339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9638]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37109; International Series Release No. 966; File No. 
SR-ISCC-96-02]


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

April 12, 1996.
    On March 19, 1996, the International Securities Clearing 
Corporation (``ISCC'') filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change (File No. SR-ISCC-
96-02) pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934 (``Act'') \1\ to permit ISCC 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. 37000 (March 21, 1996), 
61 FR 13908.
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I. Description

    The proposed rule change expands ISCC'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 ISCC member 
charges in one invoice to ISCC, and ISCC will include the third 
parties' charges to individual members on the members' settlement 
statements.\3\ ISCC's current rules permit ISCC to charge members for 
fees imposed by banks and trust companies in conjunction with the 
Global Clearance Network Service. The proposed rule change permits ISCC 
to include on its members' settlement statements charges imposed by 
entities or organizations with which ISCC has entered into agreements 
and which provide services or equipment to ISCC members which are 
integral to the services provided by ISCC. If a member does not consent 
to such charges or otherwise disputes such charges, ISCC will not fine 
the member for not paying to ISCC the third party's charges. In 
addition, ISCC 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 ISCC and which provide ISCC members with certain 
services or equipment that facilitate access to an ISCC service 
request that ISCC directly bill its members for the services or 
equipment that the third parties provide to members. For example, if 
ISCC members wanted to obtain computer hardware and/or software to 
access certain ISCC services, ISCC 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 ISCC reflecting each individual member's 
charge. ISCC would then include the appropriate charge on each 
member's monthly statement. ISCC would remit to the vendor within 
the agreed upon time period the amount that ISCC 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 ISCC's proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(F) of the Act because it will 
facilitate access to ISCC's services by making it easier for ISCC 
members to obtain hardware, software, or related services or equipment 
necessary to fully utilize ISCC. Specifically, the proposed rule change 
allows ISCC to consolidate third party billings and ISCC payment 
obligations. Consolidation of members' payment obligations should not 
only simplify members' disbursement processes, it should facilitate 
ISCC

[[Page 17339]]

members' ability to obtain equipment or services that are integral to 
ISCC's services and that are provided by third parties. By enhancing 
the ability of ISCC's members to access ISCC'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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    ISCC 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 ISCC members' ability to obtain on a timely 
basis certain computer hardware presently being offered by third 
parties in connection with certain ISCC services.

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-ISCC-96-02) 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. 96-9638 Filed 4-18-96; 8:45 am]
BILLING CODE 8010-01-M