Federal Register: December 29, 2004 (Volume 69, Number 249)

DOCID: FR Doc E4-3866

SECURITIES AND EXCHANGE COMMISSION

Securities and Exchange Commission

DOCUMENT ID: [Release No. 34-50888; File No. SR-FICC-2004-19]

NOTICE: NOTICES

ACTION: Self-regulatory organizations; proposed rule changes:

SUBJECT CATEGORY:

Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Changes to Eliminate or Amend Rules that are Inconsistent With Current Practice, Have Expired, Are Outdated, Are Unnecessary, or Require Technical Correction

DOCUMENT SUMMARY:

December 20, 2004.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ notice is hereby given that on October 7, 2004, the Fixed Income Clearing Corporation (``FICC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The proposed rule change would eliminate or amend FICC's Government Securities Division (``GSD'') and MortgageBacked Securities Division (``MBSD'') rules that are inconsistent with current practice, have expired, are outdated, are unnecessary, or require technical correction.
II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.\2\ \2\ The Commission has modified the text of the summaries prepared by FICC.
[[Page 78074]]
A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Delete Provisions In GSD's Rules Regarding The Automated Customer Account Transfer Service (``ACATS'')

The ACATS provisions were added to GSC's rules in 1998, when the National Securities Clearing Corporation requested that the Government Securities Clearing Corpoartion (``GSCC''), the GSD's predecessor, establish with it an interface that would enable account transfers involving nettingeligible government securities to be processed using GSCC's existing netting and settlement processes. This service was not implemented and as such its continued reference in the rules is inconsistent with current practice.
2. Delete Provisions From GSD's Rules That Designate Participation In The Repo Comparison And Netting Processes

GSD's rules currently refer to FICC as designating a member to be eligible to participate in the repo comparison and repo netting processes. When these repo services commenced in 1995, GSCC required testing prior to participation and subsequently designated members as eligible to participate in the services. Participation in these services has now become commonplace and special testing and designation for participation in the repo services is no longer necessary. As such, the provisions in question are outdated.

3. Make Technical Corrections To GSD Rules

FICC proposes to make the following technical corrections to GSD's rules:

i. Change the definitions of ``Interest Adjustment Payment'' and ``Interest Rate Mark Adjustment Payment'' in GSD Rule 1 (Definitions) to correct an erroneous reference in both definitions to the ``Federal Funds Rate'' and replacing them with references to a newly defined term, ``Overnight Investment Rate;''

ii. change the term in Rule 1 ``Multilateral Clearing Organization'' to ``Multilateral Clearing Agency;''

iii. change the language of the definition in Rule 1 of ``Member'' to reflect the fact that certain members (i.e., comparisononly members) are approved for membership by senior management and not by the Membership and Risk Management Committee;

iv. correct Section 1(d) of Rule 2, where GSD is erroneously referred to as its predecessors name, GSCC;

v. delete subsection (b) of Rule 11B, which has expired;

vi. change an incorrect reference to ``Rule 7'' to ``Rule 6C'' in Rule 17, Section 4; and

vii. change a reference to the ``Membership and Standards Committee'' to the ``Membership and Risk Management Committee'' in Rule 48, Section 2.

4. Technical Corrections In The MBSD Rules

FICC proposes to renumber MBSD Rule 15 (Notices) of Article X to Rule 16 as it is in fact the 16th rule in that article.

FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act \3\ and the rules and regulations thereunder because it will eliminate unnecessary and/or outdated provisions and makes necessary technical changes.
\3\ 15 U.S.C. 78q1.
B. SelfRegulatory Organization's Statement on Burden on Competition

FICC does not believe that the proposed rule change will have any impact or impose any burden on competition.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others.

Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments it receives.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission ActionWithin thirtyfive 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 the selfregulatory organization 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, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

Electronic Comments:

  • Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml. ); or
  • Send an email to rulecomments@sec.gov. Please include File Number SRFICC200419 on the subject line.

    Paper Comments:

  • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 205490609.

    All submissions should refer to File Number SRFICC200419. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml ). 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 also will be available for inspection and copying at the principal office of FICC and on FICC's Web site at < http://ficc.com/gov/gov. docs.jsp?NS query=>. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR FICC200419 and should be submitted on or before January 19, 2005.

    For the Commission by the Division of Market Regulation, pursuant to delegated authority.\4\
    \4\ 17 CFR 200.303(a)(12).
    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. E43866 Filed 122804; 8:45 am]
    BILLING CODE 801001P

    SUMMARY:

    Fixed Income Clearing Corp.,

    DOCUMENT BODY 2:

    December 20, 2004.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ notice is hereby given that on October 7, 2004, the Fixed Income Clearing Corporation (``FICC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
    I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    The proposed rule change would eliminate or amend FICC's Government Securities Division (``GSD'') and MortgageBacked Securities Division (``MBSD'') rules that are inconsistent with current practice, have expired, are outdated, are unnecessary, or require technical correction.
    II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.\2\ \2\ The Commission has modified the text of the summaries prepared by FICC.
    [[Page 78074]]
    A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
    1. Delete Provisions In GSD's Rules Regarding The Automated Customer Account Transfer Service (``ACATS'')

    The ACATS provisions were added to GSC's rules in 1998, when the National Securities Clearing Corporation requested that the Government Securities Clearing Corpoartion (``GSCC''), the GSD's predecessor, establish with it an interface that would enable account transfers involving nettingeligible government securities to be processed using GSCC's existing netting and settlement processes. This service was not implemented and as such its continued reference in the rules is inconsistent with current practice.
    2. Delete Provisions From GSD's Rules That Designate Participation In The Repo Comparison And Netting Processes

    GSD's rules currently refer to FICC as designating a member to be eligible to participate in the repo comparison and repo netting processes. When these repo services commenced in 1995, GSCC required testing prior to participation and subsequently designated members as eligible to participate in the services. Participation in these services has now become commonplace and special testing and designation for participation in the repo services is no longer necessary. As such, the provisions in question are outdated.

    3. Make Technical Corrections To GSD Rules

    FICC proposes to make the following technical corrections to GSD's rules:

    i. Change the definitions of ``Interest Adjustment Payment'' and ``Interest Rate Mark Adjustment Payment'' in GSD Rule 1 (Definitions) to correct an erroneous reference in both definitions to the ``Federal Funds Rate'' and replacing them with references to a newly defined term, ``Overnight Investment Rate;''

    ii. change the term in Rule 1 ``Multilateral Clearing Organization'' to ``Multilateral Clearing Agency;''

    iii. change the language of the definition in Rule 1 of ``Member'' to reflect the fact that certain members (i.e., comparisononly members) are approved for membership by senior management and not by the Membership and Risk Management Committee;

    iv. correct Section 1(d) of Rule 2, where GSD is erroneously referred to as its predecessors name, GSCC;

    v. delete subsection (b) of Rule 11B, which has expired;

    vi. change an incorrect reference to ``Rule 7'' to ``Rule 6C'' in Rule 17, Section 4; and

    vii. change a reference to the ``Membership and Standards Committee'' to the ``Membership and Risk Management Committee'' in Rule 48, Section 2.

    4. Technical Corrections In The MBSD Rules

    FICC proposes to renumber MBSD Rule 15 (Notices) of Article X to Rule 16 as it is in fact the 16th rule in that article.

    FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act \3\ and the rules and regulations thereunder because it will eliminate unnecessary and/or outdated provisions and makes necessary technical changes.
    \3\ 15 U.S.C. 78q1.
    B. SelfRegulatory Organization's Statement on Burden on Competition

    FICC does not believe that the proposed rule change will have any impact or impose any burden on competition.
    C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others.

    Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments it receives.
    III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission ActionWithin thirtyfive 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 the selfregulatory organization 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, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:

    Electronic Comments:

  • Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml. ); or
  • Send an email to rulecomments@sec.gov. Please include File Number SRFICC200419 on the subject line.

    Paper Comments:

  • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 205490609.

    All submissions should refer to File Number SRFICC200419. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml ). 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 also will be available for inspection and copying at the principal office of FICC and on FICC's Web site at < http://ficc.com/gov/gov. docs.jsp?NS query=>. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR FICC200419 and should be submitted on or before January 19, 2005.

    For the Commission by the Division of Market Regulation, pursuant to delegated authority.\4\
    \4\ 17 CFR 200.303(a)(12).
    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. E43866 Filed 122804; 8:45 am]
    BILLING CODE 801001P