98-10505. Self-Regulatory Organizations; National Securities Clearing Corporation; Order Granting Approval of a Proposed Rule Change to Modify NSCC's Rules Regarding its Trade Comparison Service

[Federal Register Volume 63, Number 76 (Tuesday, April 21, 1998)]
[Notices]
[Pages 19781-19782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10505]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39864; File No. SR-NSCC-97-14]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Granting Approval of a Proposed Rule Change to 
Modify NSCC's Rules Regarding its Trade Comparison Service

April 14, 1998.
    On December 9, 1997, the National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change (File No. SR-NSCC-97-14) 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ to modify NSCC's procedures regarding its trade 
comparison system for over-the-counter (``OTC'') securities. Notice of 
the proposal was published in the Federal Register on January 28, 
1998.\2\ No comment letters were received. For the reasons discussed 
below, the Commission is granting approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 39563 (January 20, 1998) 
63 FR 4336.
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I. Description

    The rule change modifies NSCC's trade comparison service by 
discontinuing the ability of members to submit the following 
instructions: ``delete of original trade input,'' 3

[[Page 19782]]

``demand withhold,'' 4 and ``demand as of.'' 5 
Such instructions are used very infrequently by NSCC members due to the 
growth of automated processing systems. Additionally, the change 
eliminates members' ability to submit an advisory listing after the 
first day after trade date (``T+1'') for original input and as of 
trades.6 Under the third change, the supplemental contract 
lists and the added trade contract lists no longer carry forward totals 
from prior days.7
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    \3\ NSCC members used the ``delete of original trade input'' 
instruction to delete any item for which the comparison process 
resulted in an uncompared trade.
    \4\ The ``demand withhold'' instruction deleted previously 
compared OTC transactions that have been canceled by mutual 
agreement of the buyer and the seller.
    \5\ The ``demand as of'' instruction permitted uncompared OTC 
trade data submitted by members to be resubmitted.
    \6\ Advisory listings indicate trades that were submitted by 
another party against the member but that did not match any trade 
the member submitted.
    \7\ The supplemental contract lists show all compared trades 
resulting from adjustments submitted on T+1. The added trade 
contract lists show trades that are compared on T+2 and thereafter.
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II. Discussion

    Section 17A(b)(3)(F) \8\ provides that the rules of a clearing 
agency must be designed to facilitate the prompt and accurate clearance 
and settlement of securities transactions. The Commission believes that 
the rule change is consistent with NSCC's obligations under the Act 
because it permits NSCC to discontinue certain functions that are 
rarely used or that no longer serve a useful function. Discontinuing 
these functions permits NSCC to focus its resources on functions that 
provide greater benefits to its members. Thus, the proposal may assist 
NSCC in fulfilling its obligation to facilitate the prompt and accurate 
clearance and settlement of securities transactions.
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).
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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-97-14) be and hereby is 
approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-10505 Filed 4-20-98; 8:45 am]
BILLING CODE 8010-01-M