96-23347. Self-Regulatory Organizations; MBS Clearing Corporation; Order Approving Proposed Rule Change Relating to Eliminating the Monthly Audit Package Requirements.

[Federal Register Volume 61, Number 178 (Thursday, September 12, 1996)]
[Notices]
[Page 48193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23347]



[[Page 48193]]

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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37650 File No. SR-MBSCC-96-03]


Self-Regulatory Organizations; MBS Clearing Corporation; Order 
Approving Proposed Rule Change Relating to Eliminating the Monthly 
Audit Package Requirements.

September 5, 1996.
    On June 18, 1996, the MBS Clearing Corporation (``MBSCC'') filed 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change (File No. SR-MBSCC-96-03) pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'').\1\ Notice of the 
proposal was published on July 17, 1996, in the Federal Register to 
solicit comments on the proposed rule change.\2\ No comment letters 
were received. For the reasons discussed below, the Commission is 
approving the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \2\ Securities Exchange Act Release No. 37420 (July 11, 1996), 
61 FR 37307.
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I. Description

    MBSCC is modifying its rules and procedures to eliminate the 
requirement that it provide a monthly audit package to each participant 
and the requirement that such participant review and respond to the 
package. MBSCC currently provides each participant with the 
participant's Open Commitment Report on a daily basis pursuant to its 
rules. Participants have a duty under the rules to review each report 
for errors and discrepancies and to report any error or discrepancy to 
MBSCC. MBSCC's rules and source book also require MBSCC to send each 
participant a monthly audit package which consists of a copy of the 
participant's Open Commitment Report dated the last business day of the 
previous month and an Audit Exception Reporting Form which must be 
completed by the participant and returned to MBSCC whether or not any 
exceptions are found.
    In connection with this rule change, MBSCC will eliminate the late 
audit confirmation penalties from its schedule of penalty fees.

II. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder and particularly with the requirements of Section 
17A(b)(3)(F).\3\ Section 17A(b)(3)(F) requires that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions. The Commission 
believes that MBSCC's rule change meets this requirement because by 
eliminating the monthly audit package and the participants' requirement 
to review it, the administrative and economic burdens on participants' 
resources due to the duplicative nature of the requirements should be 
eliminated without any substantive effect. Such elimination should 
facilitate efficiencies in the administration of participant operations 
thereby promoting the prompt and accurate clearance and settlement of 
securities transactions.
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    \3\ 15 U.S.C. 78q-1(b)(3)(F) (1988).
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act, particularly 
with Section 17A(b)(3)(F) of the Act, and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-MBSCC-96-03) be, and hereby 
is, approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12) (1996).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-23347 Filed 9-11-96; 8:45 am]
BILLING CODE 8010-01-M