[Federal Register: April 21, 2005 (Volume 70, Number 76)]
[Notices]
[Page 20781-20782]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21ap05-87]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51550; File No. SR-FICC-2005-07]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing of Proposed Rule Change To Establish a Firm Deadline
by Which Members of the Government Securities Division Must Satisfy
Clearing Fund Deficiencies
April 15, 2005.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 18, 2005, the Fixed
Income Clearing Corporation (``FICC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change 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 parties.
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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 purpose of this proposed rule change is to establish a firm
deadline by which members of FICC's Government Securities Division
(``GSD'') must satisfy clearing fund deficiencies.
II. Self-Regulatory 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 these
statements.\2\
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\2\ The Commission has modified the text of the summaries
prepared by FICC.
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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 establish a firm
deadline by which members of GSD must meet clearing fund deficiencies.
Currently, GSD's rules provide a deadline for a member's satisfaction
of a clearing fund deficiency of two hours after GSD has issued a
notice of deficiency to that
[[Page 20782]]
member. Under current practice, GSD issues its clearing fund deficiency
notices by telephone calls typically at 8:30 a.m. eastern time, and by
a facsimile containing (i) a cover letter summarizing the deficiency
status and (ii) a detailed report reflecting the firm's current
clearing fund requirement and collateral on deposit. Therefore,
deficiency calls typically must be satisfied by approximately 10:30
a.m. eastern time.
Notwithstanding GSD's issuance of clearing fund calls, each member
has the ability to access a report each day detailing its clearing fund
balances and any deficiency thereof generally by 12:30 a.m. eastern
time.
To further ensure the timely satisfaction of clearing fund
deficiency calls and taking into account members' ready access to
clearing fund deficiency information, the proposed rule change would
establish a firm deadline of 10:30 a.m. eastern time for such
satisfaction and eliminate current provisions which correlate the
timing of the deadline to the issuance of the notice by FICC.\3\ As a
result, it would be incumbent upon members to access directly the
appropriate report detailing their clearing fund deposit requirements
so they might satisfy any deficiencies.
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\3\ Under the proposed rule, FICC may extend this deadline if
operational or systems difficulties arise that reasonably prevent
members from satisfying the 10:30 a.m. eastern time deadline.
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FICC believes the proposed rule change is consistent with the
requirements of section 17A of the Act \4\ and the rules and
regulations thereunder applicable to FICC because it promotes timely
satisfaction of clearing fund deficiency calls and reduces the amount
of risk to FICC and its members. As such, FICC believes the proposed
rule assures the safeguarding of securities and funds that are in the
custody and control of FICC or for which it is responsible.
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\4\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory 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) Self-Regulatory 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 received by FICC.
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 the self-regulatory 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 e-mail to rule-comments@sec.gov. Please include
File Number SR-FICC-2005-07 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 20549-0609.
All submissions should refer to File Number SR-FICC-2005-07. 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, 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 filings also will be
available for inspection and copying at the principal office of FICC
and on FICC's Web site at http://www.ficc.com. 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-FICC-2005-07 and should be submitted on
or before May 12, 2005.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1877 Filed 4-20-05; 8:45 am]
BILLING CODE 8010-01-P