[Federal Register: January 14, 2004 (Volume 69, Number 9)]
[Notices]
[Page 2167-2168]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ja04-107]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-49046; File No. SR-SCCP-2002-07]
Self-Regulatory Organizations; Stock Clearing Corporation of
Philadelphia; Notice of Filing of a Proposed Rule Change Relating to
Ex-Clearing Account Transactions
January 8, 2004.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 26, 2002, the
Stock Clearing Corporation of Philadelphia (``SCCP'') 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 SCCP. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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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
The proposed rule change would amend SCCP Rule 11 (Ex-Clearing
Accounts) to include a transaction in an ex-clearing account whereby
both sides have agreed not to transmit the transaction from SCCP to the
National Securities Clearing Corporation (``NSCC'') for clearance and
settlement.
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.\2\
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\2\ The Commission has modified parts of these statements.
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[[Page 2168]]
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 facilitate the
efficient clearance and settlement of securities transactions by SCCP
participants that have made their own arrangements to transmit such
transactions directly to NSCC. SCCP anticipates that certain members of
the Philadelphia Stock Exchange (``Phlx'') that participate in Phlx's
program to trade Nasdaq securities will make arrangements for the
clearing and settlement of their Nasdaq securities trading at Phlx
directly with NSCC. SCCP intends to offer such Phlx members the use of
an ex-clearing account for this purpose. Currently, SCCP uses ex-
clearing accounts in situations where both sides have agreed to settle
a transaction outside any registered clearing agency mechanism such as
NSCC. This is in addition to other accounts offered by SCCP, such as a
RIO account \3\ and a margin account.\4\
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\3\ RIO means regional interface organization, which is the
system through which SCCP transmits to and receives trade data from
NSCC. In a RIO account, SCCP records, confirms, and transmits
transactions to the RIO participant's NSCC account or its
correspondent account that ultimately settles directly with NSCC.
SCCP makes no trade guarantees respecting RIO account transactions.
SCCP is solely a trade recording, confirmation, and transmission
agent of RIO account participants' transaction activity.
\4\ Phlx specialists, alternate specialists, and other Phlx
floor members may be specifically approved by NSCC to effect trading
in a margin account. SCCP will provide margin accounts for margin
members that clear and settle their transactions through SCCP's
omnibus clearance and settlement account at NSCC.
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SCCP now proposes to amend SCCP Rule 11 to add transactions whereby
both sides have agreed not to transmit the transaction to NSCC for
clearing and settlement via SCCP. Accordingly, both sides could agree
to submit a transaction directly to NSCC instead of SCCP doing so. A
SCCP ex-clearing account would then be available for the following two
scenarios, where both sides have agreed to settle a transaction: (1)
Outside of NSCC and (2) at NSCC but without SCCP submitting the
transaction there.\5\
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\5\ The use of ex-clearing accounts as proposed in this proposed
rule change is not limited to trading in Nasdaq securities and may
be used in any situation that otherwise meets the criteria for the
use of ex-clearing accounts in this manner.
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SCCP believes that the proposed rule change is consistent with
Section 17A(b)(3)(F) of the Act \6\ which requires that the rules of a
clearing agency be designed to promote the prompt and accurate
settlement of securities transactions, to remove impediments to and
perfect the mechanism of a national system, and to protect SCCP, its
members, investors, and the public interest.
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\6\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Self-Regulatory Organization's Statement on Burden on Competition
SCCP does not believe that the proposed rule will impose any
inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
SCCP has not solicited or received written comments on the proposed
rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five 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 SCCP consents, the Commission will:
(a) By order approve the 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. 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-2002-07. This file number should be included on the
subject line if e-mail is used. To help the Commission process and
review your comments more efficiently, comments should be sent in
hardcopy or by e-mail but not by both methods. 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 SCCP's principal office and on SCCP's Website at http://www.phlx.com/
exchange/memos/SCCP/memindex--sccpproposals.html. All
submissions should refer to File No. SR-SCCP-2002-07 and should be
submitted by February 4, 2004.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
J. Lynn Taylor,
Assistant Secretary.
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\7\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 04-800 Filed 1-13-04; 8:45 am]
BILLING CODE 8010-01-P