[Federal Register Volume 59, Number 118 (Tuesday, June 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15042]
[[Page Unknown]]
[Federal Register: June 21, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34210; File No. SR-SCCP-94-01]
Self-Regulatory Organizations; Stock Clearing Corporation of
Philadelphia; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Adding a Residual Credit Transfer Feature to the
Automated Customer Account Transfer Service
June 14, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 5, 1994, the Stock
Clearing Corporation of Philadelphia (``SCCP'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change (File No. SR-SCCP-94-01) as described in Items I, II, and III
below, which Items have been prepared primarily by SCCP. 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).
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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 offer SCCP clearing members the
ability to transfer through the Automated Customer Account Transfer
Service (``ACATS'') credit positions which accrue to an account after
the account has been transferred to another broker-dealer.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, SCCP 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. SCCP has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Residual credit processing is an enhancement to SCCP's ACATS
program which allows an ACATS delivering member to initiate through
ACATS the transfer of residual credit positions for both cash and
securities which have accrued to an account after the account has been
transferred to another broker-dealer. The current method for
identifying and transferring residual credits differs from firm to
firm. Some firms have systems which automatically review transferred
accounts for the presence of residual positions. Other firms either
review transferred accounts on a periodic basis or rely on customer
inquiries or claim letters from ACATS receiving firms. Currently, no
matter what method a firm uses to monitor transferred accounts, to
transfer residual positions the delivering firm will issue a check or
will transfer securities outside of ACATS.
Transferring residual positions outside of ACATS may result in lost
or improperly routed checks and securities and increases the processing
costs of transferring positions due to postage costs and other
processing inefficiencies. The ACATS residual credit processing will
help to eliminate lost or improperly routed checks and securities by
providing an efficient and standardized automated method for the
transfer of residual credits.
The procedures for transferring residual credits are the same as
the procedures for transferring customer accounts through ACATS with
the following exceptions: (1) Only the delivering member may transfer
residual credits through ACATS, (2) the transfer request must be
initiated in an automated form, and (3) the delivering member's input
constitutes both the request and the details of the residual credits.
Money settlement for residual credits will be processed along with
the clearing member's other ACATS money settlement obligations. In
addition, to the extent that the residual securities are eligible for
continuous net settlement, ACATS residual credits will be netted along
with a member's other CNS obligations. However, the ACATS receiving
member retains the ability to reject the residual credits or request
adjustments.
The proposed rule change is consistent with Section 17A(b)(3)(F)\2\
of the Act in that it promotes the prompt and accurate clearance and
settlement of securities transactions and fosters cooperation and
coordination with persons engaged in the clearance and settlement of
securities transactions by providing an efficient and standardized
automated method for the transfer of residual credits.
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\2\15 U.S.C. 78q-1(b)(3)(F) (1988).
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B. Self-Regulatory Organization's Statement on Burden on Competition
SCCP does not believe that the proposed change will impose any
inappropriate 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 have been solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective on filing pursuant
to Section 19(b)(3)(A)(iii)\3\ of the Act and pursuant to Rule 19b-
4(e)(4)\4\ promulgated thereunder because the proposed rule change
effects a change in an existing service that does not adversely affect
the safeguarding of securities or funds in the custody or control of
SCCP or for which SCCP is responsible and does not significantly affect
the respective rights or obligations of SCCP or the clearing members
using the service. At any time within sixty days of the filing of this
proposed rule change, the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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\3\15 U.S.C. 78s(b)(3)(A)(iii) (1988).
\4\17 CFR 240.19b-4(e)(4) (1993).
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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, NW., Washington, DC 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 Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of SCCP. All submissions
should refer to File No. SR-SCCP-94-01 and should be submitted by July
12, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\17 CFR 200.30-3(a)(12) (1992).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-15042 Filed 6-20-94; 8:45 am]
BILLING CODE 8010-01-M
