[Federal Register Volume 61, Number 116 (Friday, June 14, 1996)]
[Notices]
[Pages 30268-30269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15180]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37294; File No. SR-MBSCC-96-01]
Self-Regulatory Organizations; MBS Clearing Corporation; Notice
of Filing of a Proposed Rule Change To Modify Participants Fund Deposit
Requirements
June 10, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 8, 1996, MBS
Clearing
[[Page 30269]]
Corporation (``MBSCC'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change (File No. SR-
MBSCC-96-01) and amended such filing on March 25, and May 30, 1996,\2\
as described in Items I, II, and III below, which items have been
prepared primarily by MBSCC. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ Letters from Anthony H. Davidson, MBSCC, to Christine
Sibille, Division of Market Regulation (``Division''), Commission
(March 18, 1996) and to Mark Steffensen, Division, Commission (May
30, 1996).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change will revise MBSCC's rules to modify MBSCC
participants' deposit requirements to the participants fund.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In Its filing with the Commission, MBSCC included statements
concerning the purpose of and basic 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. MBSCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such
statements.\3\
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\3\ The Commission has modified the text of the summaries
prepared by MBSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The MBSCC participant fund is composed of a basic deposit, a
minimum market margin deposit, and a daily margin requirement.\4\ The
basic deposit component is intended to ensure that a participant's
obligations to MBSCC for services will be satisfied if the participant
is unable to meet such obligations.\5\ Currently, the basic deposit
component is $10,000, which must be in cash for each account maintained
by a participant. The proposed rule change will require a minimum
deposit of $1,000 for each participant regardless of the number of
accounts maintained.\6\ If a participant's average monthly services
bill, as determined by MBSCC on a semiannual basis, exceeds $1,000, the
participant's minimum deposit amount will be the amount of such average
monthly services bill up to a maximum amount of $10,000 per account
maintained by such participant. MBSCC believes that as a result of the
proposed rule change, participants fund deposits will reflect more
accurately each participant's actual services billing.
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\4\ The purpose of the daily margin requirement (``MMD'') is to
ensure that a participant's open obligations to MBSCC will be
satisfied in the event the participant is unable to meet such
obligations. MMD is derived from a formula which assesses various
factors including the type of position held and marked-to-market
value fluctuations. The purpose of the minimum market margin deposit
(``3MD'') is to provide additional assurances that each
participant's fund contributions will be adequate to satisfy all
open commitments recorded with MBSCC. Currently, the deposit
required to satisfy this component of the participant fund is
$250,000 per participant. The proposed rule change will not affect
the requirements of MBSCC participants with regard to the MMD and
3MD components of the participant's fund.
\5\ Notwithstanding the purposes of the basic deposit, MMD, and
3MD components of the participants fund, MBSCC is not limited in its
application of participant fund proceeds. Rather, MBSCC can utilize
the total participants fund to satisfy a participant's obligations
irrespective of the type of default.
\6\ MBSCC determined that its participants on average maintain
two accounts at MBSCC. Presently, the monthly maintenance fee per
account is $350 or $700 for two accounts. MBSCC based the minimum
deposit amount of $1,000 upon these averages and other participant
usage data.
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MBSCC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \7\ and the rules and
regulations thereunder because it provides for the equitable allocation
of dues, fees, and other charges among MBSCC's participants.
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\7\ 15 U.S.C. Sec. 78q-1 (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
MBSCC 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
solicited or received. MBSCC will notify the Commission of any written
comments received by MBSCC.
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 MBSCC 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 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, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies of such filing will also be available for inspection
and copying at the principal office of MBSCC. All submissions should
refer to the file number SR-MBSCC-96-01 and should be submitted by July
5, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12) (1995)
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-15180 Filed 6-13-96; 8:45 am]
BILLING CODE 8010-01-M
