[Federal Register Volume 60, Number 65 (Wednesday, April 5, 1995)]
[Notices]
[Page 17378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8339]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35549; File No. SR-PCC-94-01]
Self-Regulatory Organizations; Pacific Clearing Corporation;
Order Approving a Proposed Rule Change Making Corrections and
Clarifications to Certain Provisions of the PCC's Rules, Participant
Agreement, and Clearing Fund Agreement
March 30, 1995.
On November 28, 1994, the Pacific Clearing Corporation (``PCC'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change under Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act'') to correct certain typographical errors in PCC's
rules and to clarify certain provisions regarding specialist post
capital in PCC's participant agreement and clearing fund agreement.\1\
Notice of the proposal was published in the Federal Register on
February 7, 1995.\2\ For the reasons discussed below, the Commission is
approving the proposed rule change.
\1\15 U.S.C. 78s(b)(1) (1988).
\2\Securities Exchange Act Release No. 35313 (February 1, 1994),
59 FR 5644 [File No. SR-PCC-94-01].
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I. Description
The proposed rule change will correct typographical errors in
certain provisions of PCC's rules and will clarify certain provisions
of PCC's standard participant agreement and clearing fund agreement
relating to specialist post capital. Specifically, PCC corrects
typographical errors to the Table of Contents; PCC Rule 1.2(f),
defining the term ``long position''; PCC Rules 2.1(c) and 2.1(d),
addressing membership qualifications and approval; and PCC Rule
9.3(c)(iii) addressing specialist post termination procedures. In
addition, PCC is amending PCC Rule 5.2 to clarify that any reductions
to excess post capital or a member's clearing fund deposit cannot be
made for amounts that would reduce the member's post capital or
clearing fund deposit below the minimum requirement.
The proposal also amends certain paragraphs of PCC's participant
agreement that relate to post capital. Paragraph 3.1(e)(iii) is amended
to clarify that it refers to the monitoring of post capital rather than
net capital. Paragraph 4.5 of the participant agreement is amended to
distinguish post capital from net capital. Net capital, which is
specified by PSE Rule 2.1 and Rule 15c3-1 of the Act, remains constant
for a firm regardless of the number of specialist posts it operates. In
contrast, post capital varies because it represents the amount of
capital required to be maintained by a firm based on the number of
specialist posts it operates. Paragraph 4.9 of the participant
agreement is modified to clarify that reductions to excess post capital
and to the clearing fund deposit cannot be made in amounts that would
reduce these sums below their respective minimum requirements.
Paragraph 4.9 of the participant agreement also is amended to clarify
that losses on a trial balance are due on the fifteenth day of the
month following the month for which the trial balance was issued.
Similarly, the clearing fund agreement is clarified such that the
minimum contribution, as defined in paragraph 5 of the clearing fund
agreement, made by a member firm backing a specialist post will be
applied towards meeting the post capital requirement. Prior to this
clarification, the clearing fund agreement stated that contributions
were to be credited towards the net capital requirement.
II. Discussion
The Commission believes that the PCC's proposed rule change is
consistent with the requirements of Section 17A of the Act\3\ and in
particular with Sections 17A(b)(3) (A) and (F) of the Act.\4\ Sections
17A(b)(3) (A) and (F) require, among other things, that the rules of a
clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions and to assure the
safeguarding of securities and funds within its possession or control
or for which it is responsible. The clarifications regarding specialist
post capital and net capital will assist PCC in safeguarding the
securities and funds which are in PCC's custody or control or for which
PCC is responsible. Furthermore, the technical corrections to PCC's
rules will clarify these rules and thereby advance the prompt and
accurate clearance and settlement of securities transactions.
\3\15 U.S.C. 78q-1 (1988).
\4\15 U.S.C. 78q-1(b)(3) (A) and (F) (1988).
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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 with the requirements of Section 17A of the Act and the
rules and regulations thereunder.
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\5\ that the proposed rule change (File No. SR-PCC-94-01), be, and
hereby is, approved.
\5\15 U.S.C. 78s(b)(2) (1988).
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
\6\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-8339 Filed 4-4-95; 8:45 am]
BILLING CODE 8010-01-M
