Federal Register: October 28, 2003 (Volume 68, Number 208)
DOCID: FR Doc 03-27136
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-48678; File No. SR-GSCC-2002-04]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY:
Self-Regulatory Organizations; Government Securities Clearing Corporation; Order Approving Proposed Rule Change to Institute Informal Hearing Procedures for Fine Disputes
DOCUMENT SUMMARY:
October 22, 2003.
I. Introduction
On June 28, 2002, the Government Securities Clearing Corporation
(``GSCC'') filed with the Securities and Exchange Commission
(``Commission'') and on August 19, 2003, amended proposed rule change
SRGSCC200204 pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act'').\1\ Notice of the proposal was published in the
Federal Register on September 2, 2003.\2\ For the reasons discussed
below, the Commission is approving the proposed rule change. \1\ 15 U.S.C. 78s(b)(1).
\2\ Securities Exchange Act Release No. 48411 (August 26, 2003), 68 FR 52256.
II. Description
Since 1998, GSCC has had the authority to impose fines in order to
promote greater compliance with its funds settlement debit and clearing
fund deposit deficiency call deadlines.\3\ GSCC Rule 37 contains
procedures whereby a member can dispute any fine assessment through a
formal hearing process. Rule 37 also permits GSCC to establish
procedures for a hearing not otherwise provided for in the rules.\4\
GSCC seeks authority to specifically incorporate into its rules
informal hearing procedures with respect to disputed fines.
\3\ Securities Exchange Act Release No. 39746 (March 12, 1998), 63 FR 13439 (March 19, 1998) [File No. SRGSCC9704].
\4\ Government Securities Clearing Corporation Rule 37, Section 7.
Pursuant to GSCC's new procedures, if a member disputes a fine and asks for a formal hearing in the manner already specified in the rules, GSCC's management will automatically conduct a review of the disputed fine. Based on the documentation already required in the rules and/or a meeting arranged with the member, management may determine that the fine should be waived. If management determines that the fine should be waived, it must inform the Membership and Risk Management Committee of its determination and the reasons for that determination. The Committee has the ability to accept or reject management's determination. If the Committee accepts management's determination, the fine will be waived. However, if the Committee chooses not to accept management's determination or if management had not determined in its review that the fine should be waived, the member has the right to the formal hearing already provided for in Rule 37.
In addition, GSCC's rules are being amended to require that if a fine is assessed, the member must pay the fine within 30 calendar days (currently 90 days) after it receives the fine imposition letter. If the member requests a hearing in accordance with GSCC's rules to dispute the fine, the fine will not be owing while the hearing is pending.
III. Discussion
Section 17A(b)(3)(F) of the Act requires that the rules of a
clearing agency be designed to perfect the mechanism of a national system for the
[[Page 61508]]
prompt and accurate clearance and settlement of securities
transactions.\5\ The Commission finds that GSCC's proposed rule change
is consistent with this requirement because it clearly sets forth in
GSCC's rules its procedures for management's review and possible waiver
of fines and should provide members with a more efficient and less
burdensome method for the possible resolution of disputed fines before
a full hearing takes place. This added efficiency should contribute to
the perfection of the national system for clearance and settlement. \5\ 15 U.S.C. 78q1(b)(3)(F).
IV. Conclusion
On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular Section 17A 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. SRGSCC200204) be and hereby is approved.
For the Commission by the Division of Market Regulation, pursuant to delegated authority.\6\
\6\ 17 CFR 200.303(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 0327136 Filed 102703; 8:45 am]
BILLING CODE 801001P
SUMMARY:
Government Securities Clearing Corp.,
DOCUMENT BODY 2:
October 22, 2003.
I. Introduction
On June 28, 2002, the Government Securities Clearing Corporation
(``GSCC'') filed with the Securities and Exchange Commission
(``Commission'') and on August 19, 2003, amended proposed rule change
SRGSCC200204 pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act'').\1\ Notice of the proposal was published in the
Federal Register on September 2, 2003.\2\ For the reasons discussed
below, the Commission is approving the proposed rule change. \1\ 15 U.S.C. 78s(b)(1).
\2\ Securities Exchange Act Release No. 48411 (August 26, 2003), 68 FR 52256.
II. Description
Since 1998, GSCC has had the authority to impose fines in order to
promote greater compliance with its funds settlement debit and clearing
fund deposit deficiency call deadlines.\3\ GSCC Rule 37 contains
procedures whereby a member can dispute any fine assessment through a
formal hearing process. Rule 37 also permits GSCC to establish
procedures for a hearing not otherwise provided for in the rules.\4\
GSCC seeks authority to specifically incorporate into its rules
informal hearing procedures with respect to disputed fines.
\3\ Securities Exchange Act Release No. 39746 (March 12, 1998), 63 FR 13439 (March 19, 1998) [File No. SRGSCC9704].
\4\ Government Securities Clearing Corporation Rule 37, Section 7.
Pursuant to GSCC's new procedures, if a member disputes a fine and asks for a formal hearing in the manner already specified in the rules, GSCC's management will automatically conduct a review of the disputed fine. Based on the documentation already required in the rules and/or a meeting arranged with the member, management may determine that the fine should be waived. If management determines that the fine should be waived, it must inform the Membership and Risk Management Committee of its determination and the reasons for that determination. The Committee has the ability to accept or reject management's determination. If the Committee accepts management's determination, the fine will be waived. However, if the Committee chooses not to accept management's determination or if management had not determined in its review that the fine should be waived, the member has the right to the formal hearing already provided for in Rule 37.
In addition, GSCC's rules are being amended to require that if a fine is assessed, the member must pay the fine within 30 calendar days (currently 90 days) after it receives the fine imposition letter. If the member requests a hearing in accordance with GSCC's rules to dispute the fine, the fine will not be owing while the hearing is pending.
III. Discussion
Section 17A(b)(3)(F) of the Act requires that the rules of a
clearing agency be designed to perfect the mechanism of a national system for the
[[Page 61508]]
prompt and accurate clearance and settlement of securities
transactions.\5\ The Commission finds that GSCC's proposed rule change
is consistent with this requirement because it clearly sets forth in
GSCC's rules its procedures for management's review and possible waiver
of fines and should provide members with a more efficient and less
burdensome method for the possible resolution of disputed fines before
a full hearing takes place. This added efficiency should contribute to
the perfection of the national system for clearance and settlement. \5\ 15 U.S.C. 78q1(b)(3)(F).
IV. Conclusion
On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular Section 17A 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. SRGSCC200204) be and hereby is approved.
For the Commission by the Division of Market Regulation, pursuant to delegated authority.\6\
\6\ 17 CFR 200.303(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 0327136 Filed 102703; 8:45 am]
BILLING CODE 801001P