[Federal Register: December 24, 2002 (Volume 67, Number 247)]
[Notices]
[Page 78556-78557]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24de02-147]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47016; File No. SR-SCCP-2001-12]
Self-Regulatory Organizations; Stock Clearing Corporation of
Philadelphia; Notice of Filing and Order Granting Accelerated Approval
on a Temporary Basis of a Proposed Rule Change Extending Approval of
Restructured and Limited Clearing Services
December 17, 2002.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 17, 2001, the
Stock Clearing Corporation of Philadelphia (``SCCP'') filed with the
Securities and Exchange Commission (``Commission'') and on November 26,
2002, amended the proposed rule change as described in items I and II
below, which items have been prepared primarily by SCCP. The Commission
is publishing this notice and order to solicit comments from interested
persons and to grant accelerated approval of the proposal through
December 31, 2002.
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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
SCCP proposes to extend for a one year period ending December 31,
2003, the Commission's approval of its providing limited clearance and
settlement services. Specifically, SCCP seeks to continue to provide
trade confirmation and recording services for members of the
Philadelphia Stock Exchange, Inc. (``Phlx'') effecting transactions
through Regional Interface Operations (``RIO'') and ex-clearing
accounts. SCCP will also continue to provide margin accounts to certain
participants whose transactions are cleared through an account
established by SCCP at the National Securities Clearing Corporation
(``NSCC'').\2\
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\2\ See SCCP rule 1.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, SCCP 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. SCCP 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 the text of the summaries
prepared by SCCP.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to obtain Commission
approval of SCCP's restructured and limited clearance and settlement
business for an additional one year period ending December 31, 2003. In
an agreement dated as of June 18, 1997, (``Agreement'') by and among
the SCCP, Phlx, Philadelphia Depository Trust Company (``Philadep''),
NSCC and The Depository Trust Company (``DTC''), SCCP and Philadep
agreed to certain provisions, including that: (i) Philadep would cease
providing securities depository services; (ii) SCCP would make
available to its participants access to the facilities of one or more
other organizations providing depository services; (iii) SCCP would
make available to SCCP participants access to the facilities of one or
more other organizations providing securities clearing services; and
(iv) SCCP would transfer to the books of such other organizations the
CNS system open positions of SCCP participants on the books of SCCP.
In December 1997, the Commission approved proposed rule changes
which gave effect to this Agreement and which reflected Philadep's
withdrawal from the depository business and SCCP's restructured and
limited clearance and settlement business.\4\ In that approval order,
the Commission stated, ``However, because a part of SCCP's proposed
rule change concerns the restructuring of SCCP's operations to enable
SCCP to offer limited clearing and settlement services to certain Phlx
members, the Commission finds that it is appropriate to grant only
temporary approval to the portion of SCCP's proposed rule change that
amends SCCP's By-Laws, Rules, or Procedures. This will allow the
Commission and SCCP to see how well SCCP's restructured operations are
functioning under actual working conditions and to determine whether
any adjustments are necessary. Thus, the Commission is approving the
portion of SCCP's proposal that amends its By-Laws, Rules, and
Procedures through December 31, 1998.'' Subsequent to that approval,
one-year extensions of such approval have been granted by the
Commission to continue SCCP's restructured and limited clearance and
settlement services.\5\
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\4\ Securities Exchange Act Release No. 39444 (December 11,
1997), 62 FR 66703 (December 19, 1997) (SR-SCCP-97-04).
\5\ Securities Exchange Act Release Nos. 40872 (December 31,
1998), 64 FR 1264 (January 8, 1999) (SR-SCCP-98-05); 42320 (January
6, 2000), 65 FR 2218 (January 13, 2000) (SR-SCCP-99-04); 43781
(December 28, 2000), 66 FR 1167 (January 5, 2001) (SR-SCCP-00-05),
and 45227 (January 3, 2002), 67 FR 1259 (January 9, 2002) (SR-SCCP-
2001-11).
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SCCP is hereby requesting an additional one year extension of such
approval noting that such extension is appropriate in order that SCCP
may continue to provide services to its participants. SCCP believes
that its restructured operations have functioned consistent with the
original proposed rule change, and SCCP will continue to evaluate
whether any adjustments are necessary.
In the original proposed rule change and order temporarily
approving SCCP's restructured business, many SCCP rules were amended
and discussed at length. No new rule changes are proposed at this time.
Thus, the purpose of the proposed rule change is to extend the
effectiveness of SCCP's restructured business.
SCCP believes that the extension of the Commission's temporary
approval to permit SCCP's continued operation of its restructured and
limited clearance and settlement services is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to SCCP and in particular with section 17A(b)(3)(F) which
requires that a clearing agency be organized and its rules be designed,
among other things, to promote the prompt and accurate clearance and
settlement of securities transactions. SCCP believes that the extension
of SCCP's restructured business should promote the prompt and accurate
clearance and settlement of securities transactions by integrating and
consolidating clearing services available to the industry.
[[Page 78557]]
(B) Self-Regulatory Organization's Statement on Burden on Competition
SCCP does not believe that this extension should impose any burden
on competition not necessary or appropriate in furtherance of the
purposes of the Act.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received with respect
to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Section 17A(b)(3)(F) of the Act \6\ requires that the rules of a
clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions. Based on the
information the Commission has to date, the Commission believes that
SCCP's restructured operations have functioned satisfactorily to
provide prompt and accurate clearance and settlement. During the
upcoming temporary approval period, the Commission expects to review
with SCCP in detail the functioning of SCCP's restructured operations
in order to determine whether permanent approval of SCCP's restructured
business is warranted.
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\6\ 15 U.S.C. 78q-1(b)(3)(F).
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SCCP has requested that the Commission approve the proposed rule
change prior to the 30th day after publication of the notice of the
filing. The Commission finds good cause for approving the rule change
prior to the 30th day after publication because such approval will
allow SCCP to continue to offer its restructured clearing operations
for another year without interruption.
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.
Comments may also be submitted electronically at the following e-mail
address: rule-comments@sec.gov. All comment letters should refer to
File No. SR-SCCP-2001-12. This file number should be included on the
subject line if e-mail is used. 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 office of SCCP. All submissions should refer to File No. SR-
SCCP-2001-12 and should be submitted by January 14, 2003.
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\7\ that the proposed rule change (File No. SR-SCCP-2001-12) be and
hereby is approved on an accelerated basis through December 31, 2003.
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\7\ 15 U.S.C. 78s(b)(2).
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32319 Filed 12-23-02; 8:45 am]
BILLING CODE 8010-01-P