[Federal Register Volume 64, Number 165 (Thursday, August 26, 1999)]
[Notices]
[Pages 46742-46743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22117]
[[Page 46742]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41768; File No. SR-NSCC-99-11]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Order Granting Accelerated Approval
of a Proposed Rule Change Regarding Year 2000 Policies
August 19, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 19, 1999, the
National Securities Clearing Corporation (``NSCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I and II below, which items have been
prepared primarily by NSCC. The Commission is publishing this notice
and order to solicit comments from interested persons and to grant
accelerated approval of the proposal.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Under the proposed rule change, NSCC will not activate any new or
additional participant accounts or provide new services to participants
after September 15, 1999, and until reasonably practicable in January
2000.
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.\2\
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\2\ The Commission has modified the text of the summaries
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed rule change provides that, NSCC will not activate any
new or additional participant accounts or provide new services to
participants after September 15, 1999, and until reasonably practicable
in January, 2000. Among other things, NSCC announced in its July 19,
1999, Important Notice that after September 15, 1999, and for the
remainder of the calendar year, NSCC will not: (1) Permit new
participants to utilize NSCC's services; (2) allow current participants
to utilize new NSCC services; and (3) assign additional participant
numbers to current participants.
NSCC's Rule 2 provides in part that:
The Corporation may deny an application to become a Member or to
use one or more additional services of the Corporation upon a
determination by the Corporation that the Corporation does not have
adequate personnel, space, data processing capacity or other
operational capability at such time to perform its services for the
applicant or Member without impairing the ability of the Corporation
to provide services for its existing Settling Members, to assure the
prompt, accurate and orderly processing and settlement of securities
transactions or to otherwise carry out its functions; provided,
however, that any such applications which are denied pursuant to
this paragraph shall be approved as promptly as the capabilities of
the Corporation permit.
NSCC believes that continuing to activate numerous new or
additional participant accounts or to provide new services to
participants after September 15th could potentially be disruptive to
the rest of its Year 2000 efforts. Specifically, NSCC will be devoting
a great deal of resources to confirming the Year 2000 readiness of its
systems and applications in October and November of 1999. Additionally,
NSCC would like to ensure that it has enough time to deal with any
unanticipated issues that arise before the end of the calendar year.
NSCC believes that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder. In
particular, the proposed rule change is consistent with Section
17A(b)(3)(F) of the Act \3\ which requires that the rules of a clearing
agency be designed to promote the prompt and accurate clearance and
settlement of securities transactions and, in general, to protect
investors and the public interest.
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\3\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not believe that the proposed rule change will impact 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
NSCC advised members of the Year 2000 policy modifications in an
Important Notice, dated July 19, 1999. No written comments relating to
the Important Notice or 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
Section 17A(b)(3)(F) of the Act \4\ requires that the rules of a
clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions. The Commission
finds that the proposed rule change is consistent with this obligation
because the proposed modifications to NSCC's Year 2000 policies will
permit NSCC sufficient time before year end to complete its Year 2000
preparations. As a result, NSCC should be able to continue to provide
prompt and accurate clearance and settlement of securities transactions
before, on, and after Year 2000 without interruption.
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\4\ 15 U.S.C. 78q-1(b)(3)(F).
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NSCC requested that the Commission find good cause for approving
the proposed rule change prior to the thirtieth day after the
publication of notice of the filing. The Commission finds good cause
for approving the proposed rule change prior to the thirtieth day after
the publication of notice of the filing because such approval will
allow NSCC to better prepare for a smooth Year 2000 transition.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
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, 450 Fifth Street, NW., Washington,
DC 20549. Copies of such filing will also be available for inspection
and copying at the principal
[[Page 46743]]
office of NSCC. All submissions should refer to the File No. SR-NSCC-
99-11 and should be submitted by September 16, 1999.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\5\ that the proposed rule change (File No. SR-NSCC-99-11) be and
hereby is approved.
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\5\ 15 U.S.C. 78s(b)(2).
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-22117 Filed 8-25-99; 8:45 am]
BILLING CODE 8010-01-M
