[Federal Register Volume 62, Number 68 (Wednesday, April 9, 1997)]
[Notices]
[Pages 17274-17275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9005]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38453; File No. SR-NSCC-97-3]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change Regarding
Exemption Processing
March 28, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''), notice is hereby given that on March 7, 1997, the
National Securities Clearing Corporation (``NSCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which items have
been prepared primarily by NSCC. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change consists of modifications to NSCC's
procedures regarding exemption processing in NSCC's Continuous Net
Settlement (``CNS'') system.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such
statements.\1\
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\1\ The Commission has modified the text of the summaries
submitted by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
(1) The purpose of the proposed rule change is to modify the
methods of submitting exemptions under NSCC's procedures. As a part of
the NSCC's CNS Accounting Operation, members may control the delivery
of their securities to NSCC through the use of exemptions. CNS is an
on-going accounting system that nets a member's securities obligations
on a daily basis to produce a new short or long position in each issue.
A short position in CNS represents the quantity owed to NSCC by the
member. To satisfy short positions for purposes of settlement,
securities are delivered from the member's account at The Depository
Trust Company (``DTC'') to NSCC's account at DTC. These deliveries are
subject to exemption limitations imposed by the member, which may elect
to deliver to NSCC all, part, or none of any short position.
Exemptions assist members in complying with the segregation
provisions of Rule 15c3-3 of the Act and in meeting other delivery
needs. NSCC presently requires members to input exemption instructions
on a daily basis. Currently, NSCC also permits but does not require
members to input standing instructions.
In addition to submitting exemption instructions to NSCC, members
may also manage their segregation and delivery needs through the use of
DTC's ``Memo Segregation'' facility. Since a member may either use
NSCC's or DTC's systems to control delivery requirements, the proposed
rule change will no longer mandate that exemption instructions be
submitted to NSCC every day.
If a daily instruction is not submitted, not received, or is
received but cannot be processed by NSCC, the member's standing
exemption instructions will be used. As a result, members will now be
required to submit standing exemption instructions to NSCC since they
will serve as the member's default instructions under the proposed
procedures.
(2) The proposed rule change is consistent with Section 17A of the
Act and the rules and regulations thereunder since it will facilitate
the prompt and accurate clearance and settlement of securities
transactions and in general protect investors and the public interest.
[[Page 17275]]
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC 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. NSCC will notify the Commission of any written
comments received by NSCC.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period (i) as the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which the self-regulatory organization consents,
the Commission will:
(A) By order approve such proposed rule change; or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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 the 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 the
principal office of NSCC. All submissions should refer to File No. SR-
NSCC-97-03 and should be submitted by April 30, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-9005 Filed 4-8-97; 8:45 am]
BILLING CODE 8010-01-M
