[Federal Register Volume 62, Number 83 (Wednesday, April 30, 1997)]
[Notices]
[Pages 23519-23520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11091]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38540; International Series Release No. 1076; File No.
SR-ISCC-97-1]
Self-Regulatory Organizations; International Securities Clearing
Corporation; Notice of Filing and Order Granting Accelerated Approval
of Proposed Rule Change Regarding the London Stock Exchange Link
April 22, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 21, 1997, the
International Securities Clearing Corporation (``ISCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I and II below, which items have been
prepared primarily by ISCC. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested
[[Page 23520]]
persons and to grant accelerated approval of the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(91).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change eliminates ISCC's link with the London
Stock Exchange (``LSE'').
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, ISCC 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. ISCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such
statements.\2\
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\2\ The Commission has modified the text of the summaries.
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A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to permit ISCC to
eliminate its link with the LSE. In 1986, ISCC and the LSE entered into
an Interim Linkage Agreement and an Interim Safe Custody Agreement
pursuant to which ISCC could obtain on behalf of ISCC members
comparison, settlement, and custody services in the United Kingdom from
the LSE. At the same time, ISCC filed an application to become
registered as a clearing agency. While the application was undergoing
the review process, ISCC by letter dated August 22, 1986,\3\ sought
advice from the Commission staff that the Division of Market Regulation
(``Division'') would not recommend enforcement action against ISCC if
it operated the link with the LSE. On September 10, 1986, the Division
issued a no-action letter to ISCC.\4\
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\3\ Letter from Karen Saperstein, Associate General Counsel,
ISCC, to Jonathan Kallman, Assistant Director, Commission (August
22, 1986).
\4\ Letter from Jonathan Kallman, Assistant Director,
Commission, to Karen Saperstein, Associate General Counsel, ISCC
(September 10, 1986).
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Subsequently, ISCC and the LSE renegotiated the linkage agreement
and by letter dated December 23, 1988,\5\ ISCC once again sought no-
action relief with respect to its link with LSE. The Division issued a
new no-action letter on March 12, 1990.\6\
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\5\ Letter from Karen Saperstein, Associate General Counsel,
ISCC, to Jonathan Kallman, Assistant Director, Commission (December
23, 1988).
\6\ Letter from Jonathan Kallman, Assistant Secretary,
Commission, to Karen Saperstein, Associate General Counsel (March
12, 1990).
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ISCC's London link was originally implemented by ISCC to allow U.S.
broker-dealers to compare and to settle transactions in U.K. equity
securities with LSE members and other ISCC members. U.S. firms
participating in ISCC's London link were given access to the LSE's
TALISMAN (LSE's computerized settlement system) as well as the LSE's
Checking (comparison) and Institutional Net Settlement (redelivery)
systems.
The LSE is currently phasing out its TALISMAN system in order to
convert to the CREST system. This phase out will be complete on April
22, 1997. Accordingly, the services to which ISCC's London link
provides access will no longer exist. Thus, ISCC has filed requesting
Commission approval of the elimination of the London link.
(B) Self-Regulatory Organization's Statement on Burden on Competition
ISCC 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
No written comments relating to the proposed rule change have been
solicited or received. ISCC will notify the Commission of any written
comments received by ISCC.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Section 17A(b)(3)(F) of the Act requires that the rules of a
clearing agency must be designed to promote the prompt and accurate
clearance and settlement of securities transactions.\7\ By
discontinuing a service that does not provide a useful function, ISCC
will eliminate an unnecessary drain on its resources. Such resources
may be used towards other services that provide a more substantial
benefit to the clearance and settlement process. Thus, the Commission
believes that ISCC's proposal is consistent with Section 17A(b)(3)(F)
of the Act.
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\7\ 15 U.S.C. 78q-1(b)(3)(F).
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ISCC requests 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 approving the proposed rule change prior to the thirtieth day after
the date of publication of notice of the filing because LSE will
terminate TALISMAN as of April 22, 1997, and ISCC's continuance of the
link will serve no useful function or provide a benefit to its members.
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 provisions of 5
U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room in Washington, D.C. Copies of such
filing will also be available for inspection and copying at ISCC. All
submissions should refer to the File No. SR-ISCC-97-1 and should be
submitted by May 21, 1997.
V. 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-97-1) be and hereby is
approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-11091 Filed 4-29-97; 8:45 am]
BILLING CODE 8010-01-M
