[Federal Register: September 17, 2003 (Volume 68, Number 180)]
[Notices]
[Page 54512-54513]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17se03-148]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48465; File No. SR-EMCC-2003-01]
Self-Regulatory Organizations; Emerging Markets Clearing
Corporation; Order Granting Approval of a Proposed Rule Change Relating
to EMCC's Capital Requirements for Members
September 9, 2003.
I. Introduction
On April 8, 2003, Emerging Markets Clearing Corporation (``EMCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change SR-EMCC-2003-01 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 July 29, 2003.\2\ No
comment letters were received. For the reasons discussed below, the
Commission is granting approval of the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ Securities Exchange Act Release No. 48209 (July 22, 2003),
68 FR 44554.
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II. Description
EMCC's Rule 2 (``Members''), Section 6 (``Admission Criteria for
Members''), provides that if an applicant does not meet the minimum
capital requirements set forth in Section 6, EMCC's Board of Directors
may include for such purposes the capital of an affiliate of the
applicant if the affiliate delivers to EMCC a satisfactory guaranty.
The purpose of the proposed rule change is to permit any existing
member of EMCC that no longer meets the capital requirements set forth
in Section 6 to also have the capital of an affiliate be included in
calculating the member's continuance requirements provided that the
affiliate enters in a similar form of guaranty.
III. Discussion
Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of a clearing agency be designed to assure the safekeeping of
securities and funds which are in its possession or control or for
which it is responsible.\3\ The proposed rule change eliminates an
inconsistency in EMCC's rules that prevented an existing member who did
not use the guaranty of an affiliate as an applicant from using such a
guaranty, but an existing member who did use the guaranty of an
affiliate as an applicant could continue to include the affiliate's
capital for purposes of satisfying its capital requirement as a
continuing EMCC member. Allowing an existing member that was admitted
to EMCC membership without using an affiliate's capital to include the
capital of an affiliate to satisfy its EMCC capital requirement with an
appropriate guaranty, similarly as can other members, should not
adversely affect EMCC's ability to safeguard securities and funds. As
such the Commission finds the proposed rule change is consistent with
EMCC's requirements under Section 17A(b)(3)(F) of the Act.
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\3\ 15 U.S.C. 78q-1(b)(3)(F).
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IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the
[[Page 54513]]
requirements of the Act and in particular with the requirements of
Section 17A of the Act and the rules and regulations thereunder
applicable.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-EMCC-2003-01) 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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-23656 Filed 9-16-03; 8:45 am]
BILLING CODE 8010-01-P