[Federal Register Volume 61, Number 160 (Friday, August 16, 1996)]
[Notices]
[Pages 42669-42670]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20927]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37552; File No. SR-BSECC-96-02]
Self-Regulatory Organizations; Boston Stock Exchange Clearing
Corporation; Notice of Filing of Proposed Rule Change To Modify
Specialists' Clearing Fund Requirements
August 9, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on June 14, 1996, the Boston
Stock Exchange Clearing Corporation (``BSECC'') filed with the
Securities Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which items have
been prepared primarily by BSECC. On July 23, 1996, BSECC filed an
amendment to the proposed rule change.\2\ The Commission is publishing
this notice to solicit comments from interested persons.
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\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ Letter from Karen A. Aluise, Assistant Vice President,
BSECC, to Mark Steffensen, Division of Market Regulation, Commission
(July 19, 1996).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to permit specialists to
satisfy their clearing fund deposits through deposits required pursuant
to the rules of the Boston Stock Exchange, Inc. (``Exchange'').
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, BSECC 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. The self-regulatory organization 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 these summaries.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
BSECC proposes to amend its Rule II, Section 1 relating to the
maintenance and purpose of BSECC's clearing fund so that the BSECC
clearing fund requirements for specialists \4\ will be deemed satisfied
by such specialists' liquidating equity deposits that are required
pursuant to Exchange rules. Pursuant to Section 2(f), Chapter XXII of
the Exchange rules, specialists must maintain a liquidating equity
deposit with BSECC of $200,000 per specialist account. Currently,
Section 2 of BSECC Rule II requires that all members contribute $6,000
to the clearing fund.\5\
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\4\ A specialist is a BSECC member that acts as a specialist on
the floor of the Exchange and on whose behalf BSECC guarantees
settlement of all trades executed by such member on the floor of the
Exchange.
\5\ BSECC Rule II, Section 5 specifies the use and application
of clearing fund. Paragraph (d) of that section provides that
clearing fund may be used to discharge a member's liability to
BSECC, the Exchange, or Boston Stock Exchange Service Corporation.
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BSECC believes the additional $6,000 provides little added
protection for BSECC in the event of a specialist default. Therefore,
BSECC proposes to amend Rule II, Section 1 to provide that specialists
will be deemed to have met their clearing fund requirement through the
liquidating equity deposit and that the amount of the liquidating
equity deposit equal to the required clearing fund deposit shall be
deemed to be the clearing fund deposit. Contemporaneously with this
proposal, the Exchange has filed a proposed rule change (File No. SR-
BSE-96-06) to amend the language of Chapter XXII, Section 2(f) of the
Exchange rules to make it clear that each of the specialist's $200,000
minimum equity requirement on deposit with BSECC is deemed to be its
clearing fund deposit up to the amount required to be deposited
pursuant to BSECC's rules.
BSECC believes the proposed rule change is consistent with the
requirements of Section 17A of the Act \6\ and the rules and
regulations thereunder because it is designed to foster cooperation and
coordination with persons engaged in the clearance and settlement of
securities transactions and, in general, to protect investors and the
public interest.
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\6\ 15 U.S.C. 78q-1 (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
BSECC believes the proposed rule change will impose no burden on
competition.
[[Page 42670]]
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received from Members, Participants or Others
BSECC has neither solicited nor received comments on the proposed
rule change.
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 BSECC 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 submission
should file six copies thereof with the Secretary, Secretaries and
Exchange Commission, 450 Fifth Street, N.W., Washington D.C. 20549.
Copies of the submissions, 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 5th Street, N.W.,
Washington, D.C. 20549. Copies of such filings will also be available
for inspection and copying at the principal office of BSECC. All
submissions should refer to file number SR-BSECC-96-02 and should be
submitted by September 6, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-20927 Filed 8-15-96; 8:45 am]
BILLING CODE 8010-01-M
