Federal Register / Vol. 74, No. 151 / Friday, August 7, 2009 / Notices 39723 

11 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2The Commission has modified the text of the 

summaries prepared by FICC. 

3Securities Exchange Act Release No. 60368 (July 

22, 2009), 74 FR 37275. 

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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of FINRA. 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–FINRA–2009–051 and 

should be submitted on or before 

August 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18976 Filed 8–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60421; File No. SR–FICC– 

2009–07] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

Haircuts Applied to Eligible Clearing 

Fund Securities and Eligible 

Participant Fund Securities 

August 3, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

July 13, 2009, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The purpose of the proposed rule 

change is to modify the haircuts applied 

to Eligible Clearing Fund Securities and 

Eligible Participant Fund Securities. 

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

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

Under the Rules of the Government 

Securities Division (‘‘GSD’’) and the 

Mortgage-Backed Securities Division 

(‘‘MBSD’’) (‘‘Rules’’), GSD Members and 

MBSD Participants are required to 

deposit to the GSD Clearing Fund and 

MBSD Participants Fund, respectively, 

the amount of each Member’s or 

Participant’s required deposit, which is 

established by FICC in accordance with 

formulas specified in the Rules 

(‘‘Required Deposit’’). 

A Member or Participant may satisfy 

its Required Deposit with cash, and 

FICC may permit a portion of the 

Member’s or Participant’s deposit to be 

evidenced by an open account 

indebtedness secured by Eligible 

Clearing Fund Securities for the GSD 

and Eligible Participants Fund 

Securities for the MBSD. Eligible 

Clearing Fund Securities and Eligible 

Participants Fund Securities consist of 

certain Treasury, agency, and mortgagebacked securities. 

For reasons set forth in a companion 

rule filing, FICC’s affiliate, National 

Securities Clearing Corporation 

(‘‘NSCC’’), has increased haircuts on 

Clearing Fund collateral.3 Given that the 

haircuts are applied by FICC and NSCC 

systemically and on a harmonized basis, 

these changes are also being applied by 

FICC. 

Therefore, FICC proposes to modify 

the GSD’s Schedule of Haircuts for 

Eligible Clearing Fund Securities and 

the MBSD’s Schedule of Haircuts for 

Eligible Participants Fund Securities to 

update the correlating range of haircuts 

applied to the types of Eligible Clearing 

Fund Securities and Eligible 

Participants Fund Securities. 

Specifically, FICC proposes to increase 

the haircut on: (i) Interest bearing 

Treasuries with terms greater than 10 

years but less than 15 years from the 

current 5 percent to 6 percent and (ii) 

zero coupon obligations of U.S. 

Treasury and Agency Securities from 

the current 2 to 10 percent based on 

term to 5 to 12 percent based on term. 

A complete listing of the haircut 

schedule, showing modifications, is as 

follows (deletions are in brackets and 

additions are italicized): 

GSD SCHEDULE OF HAIRCUTS FOR ELIGIBLE CLEARING FUND SECURITIES

Security type Remaining maturity Haircut 

1. Treasury 

Bills, Notes, Bonds, TIPS ........................... Zero to 1 year ................................................... 2.0% 

1 year to 2 years .............................................. 2.0% 

2 years to 5 years ............................................ 3.0% 

5 years to 10 years .......................................... 4.0% 

10 years to 15 years ........................................ [5.0%] 6.0% 

15 years or greater ........................................... 6.0% 

Zero Coupon .............................................. Zero to 1 year ................................................... [2.0%] 5.0% 


pwalker on DSK8KYBLC1PROD with NOTICES
39724 Federal Register / Vol. 74, No. 151 / Friday, August 7, 2009 / Notices 

4 15 U.S.C. 78q–1. 

GSD SCHEDULE OF HAIRCUTS FOR ELIGIBLE CLEARING FUND SECURITIES—Continued 

Security type Remaining maturity Haircut 

1 year to 2 years .............................................. [2.0%] 5.0% 

2 years to 5 years ............................................ [4.0%] 5.0% 

5 years to 10 years .......................................... [6.0%] 12.0% 

10 years to 15 years ........................................ [7.0%] 12.0% 

15 years or greater ........................................... [9.0%] 12.0% 

2. Agency 

Notes, Bonds .............................................. Zero to 1 year ................................................... 2.0%

1 year to 2 years .............................................. 3.0% 

2 years to 5 years ............................................ 4.0% 

5 years to 10 years .......................................... 5.0% 

10 years to 15 years ........................................ 6.0% 

15 years or greater ........................................... 7.0% 

Zero Coupon .............................................. Zero to 1 year ................................................... [2.0%] 5.0% 

1 year to 2 years .............................................. [3.0%] 5.0% 

2 years to 5 years ............................................ 5.0% 

5 years to 10 years .......................................... [7.0%] 12.0% 

10 years to 15 years ........................................ [8.0%] 12.0% 

15 years or greater ........................................... [10.0%] 12.0% 

3. MBS Pass-throughs ...................................... Ginnie Mae ....................................................... 6.0%

Fannie Mae/Freddie Mac ................................. 7.0% 

4. Self-issued MBS ............................................ ........................................................................... 14% (or 21% if 25% concentration limit is exceeded). 

MBSD SCHEDULE OF HAIRCUTS FOR ELIGIBLE PARTICIPANTS FUND SECURITIES

Security type Remaining maturity Haircut 

1. Treasury 

Bills, Notes, Bonds, TIPS ........................... Zero to 1 year ................................................... 2.0% 

1 year to 2 years .............................................. 2.0% 

2 years to 5 years ............................................ 3.0% 

5 years to 10 years .......................................... 4.0% 

10 years to 15 years ........................................ [5.0%] 6.0% 

15 years or greater ........................................... 6.0% 

Zero Coupon .............................................. Zero to 1 year ................................................... [2.0%] 5.0% 

1 year to 2 years .............................................. [2.0%] 5.0% 

2 years to 5 years ............................................ [4.0%] 5.0% 

5 years to 10 years .......................................... [6.0%] 12.0% 

10 years to 15 years ........................................ [7.0%] 12.0% 

15 years or greater ........................................... [9.0%] 12.0% 

2. Agency 

Notes, Bonds .............................................. Zero to 1 year ................................................... 2.0%

1 year to 2 years .............................................. 3.0% 

2 years to 5 years ............................................ 4.0% 

5 years to 10 years .......................................... 5.0% 

10 years to 15 years ........................................ 6.0% 

15 years or greater ........................................... 7.0% 

Zero Coupon .............................................. Zero to 1 year ................................................... [2.0%] 5.0% 

1 year to 2 years .............................................. [3.0%] 5.0% 

2 years to 5 years ............................................ 5.0% 

5 years to 10 years .......................................... [7.0%] 12.0% 

10 years to 15 years ........................................ [8.0%] 12.0% 

15 years or greater ........................................... [10.0%] 12.0% 

3. MBS Pass-Throughs ..................................... Ginnie Mae ....................................................... 6.0% 

Fannie Mae/Freddie Mac ................................. 7.0% 

4. Self-issued MBS ............................................ ........................................................................... 14% (or 21% if 25% concentration limit is exceeded). 

These changes will become effective 

as of August 3, 2009. 

FICC believes that 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 

the proposed rule change should 

facilitate the prompt and accurate 

clearance and settlement of securities 

transactions by adjusting FICC’s haircut 

levels on Eligible Clearing Fund 

Securities and Eligible Participant Fund 

Securities and facilitating FICC’s ability 

to ensure adequate collateral levels are 

maintained to facilitate settlement in the 

event of a Member or Participant 

default. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC does not believe that the 

proposed rule change will have any 

impact on or impose any burden on 

competition. 


pwalker on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 74, No. 151 / Friday, August 7, 2009 / Notices 39725 

5 15 U.S.C. 78s(b)(3)(A)(iii). 

6 17 CFR 240.19b–4(f)(4). 

7 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The current FINRA rulebook consists of (1) 

FINRA Rules; (2) NASD Rules; and (3) rules 

incorporated from NYSE (‘‘Incorporated NYSE 

Rules’’) (together, the NASD Rules and Incorporated 

NYSE Rules are referred to as the ‘‘Transitional 

Rulebook’’). While the NASD Rules generally apply 

to all FINRA members, the Incorporated NYSE 

Rules apply only to those members of FINRA that 

are also members of the NYSE (‘‘Dual Members’’). 

The FINRA Rules apply to all FINRA members, 

unless such rules have a more limited application 

by their terms. For more information about the 

rulebook consolidation process, see FINRA 

Information Notice, March 12, 2008 (Rulebook 

Consolidation Process). 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments relating to the 

proposed rule change have 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 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A)(iii) of the Act 5 and Rule 

19b–4(f)(4) 6 thereunder because the 

proposed rule change effects a change in 

an existing service of FICC that (i) does 

not adversely affect the safeguarding of 

securities or funds in the custody or 

control of FICC or for which it is 

responsible and (ii) does not 

significantly affect the respective rights 

of the clearing agency or persons using 

the service. At any time within sixty 

days of the filing of such rule change, 

the Commission may summarily 

abrogate such rule change if it appears 

to the Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

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 rulecomments@sec.gov. Please include File 

Number SR–FICC–2009–07 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–FICC–2009–07. 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

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.dtcc.com/ 

legal/rule_filings/FICC/2009.php. 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–2009–07 and should 

be submitted on or before August 28, 

2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18977 Filed 8–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60422; File No. SR–FINRA– 

2009–048] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change to Adopt 

FINRA Rule 5230 (Payments Involving 

Publications that Influence the Market 

Price of a Security) in the Consolidated 

FINRA Rulebook 

August 3, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 21, 

2009, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to adopt NASD 

Rule 3330 (Payment Designed to 

Influence Market Prices, Other than 

Paid Advertising) as FINRA Rule 5230 

in the consolidated FINRA rulebook, 

with several changes to clarify the scope 

of the rule. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA 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. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

As part of the process of developing 

a new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),3

FINRA is proposing to adopt NASD 

Rule 3330 into the Consolidated FINRA 

Rulebook as FINRA Rule 5230 with 


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