36204 Federal Register / Vol. 65, No. 110 / Wednesday, June 7, 2000 / Notices

4 15 U.S.C. 78s(b)(3)(A)(ii)

5 17 CFR 240.19b–4(f)(2).

6 17 CFR 200.30–3(a)(12).

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

2 In its amendment, NSCC withdrew any

proposed changes to Addendum O to NSCC Rules

and requested that the Commission extend the

temporary approval of Addendum O in its current

form. Letter from Richard Paley, Associate Counsel,

NSCC (May 11, 2000).

3The Commission has modified the text of the

summaries prepared by NSCC.

4For a complete discussion of NSCC’s Class A

Surveillance procedures and collateralization

requirements, refer to Securities Exchange Act

Release Nos. 37202 (May 10, 1996), 61 FR 24993

[File No. SR–NSCC–95–17]; 38622 (May 19, 1997),

62 FR 27285 [File No. SR–NSCC–97–04]; 40034

will not impose test fees on participants

participating with NSCC in pilot test

programs to develop service

enhancements or additional IPS

products. Thus a participant in a pilot

test program will not be charged for the

transmission of pilot test files for the

period of time from the date the

participant commences participation in

the pilot program through the date that

is the last business day of the calendar

month immediately following the

month during which the pilot

enhancement or new IPS product is first

released by NSCC into production. Any

current IPS participants participating in

a prior pilot development program will

not be charged for their applicable test

files through April 30, 2000. Thereafter,

they will be charged in accordance with

NSCC’s revised fee schedule.

The proposed rule change is

consistent with the requirements of the

Act, as amended, and the rules and

regulations thereunder since it provides

for the equitable allocation of dues, fees,

and other charges among NSCC’s

participants.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

NSCC does not believe that the

proposed rule change will have an

impact on or impose a burden on

competition.

(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. NSCC will notify

the Commission of any written

comments received by NSCC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) 4 of the Act and Rule 19b–

4(f)(2) 5 promulgated thereunder

because the proposal establishes or

changes a due, fee, or other charge

imposed by NSCC. At any time within

sixty days of the filing of such proposed

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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. 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 the principal

office of NSCC. All submissions should

refer to File No. SR–NSCC–00–04 and

should be submitted by June 28, 2000.

For the Commission by the Division

of Market Regulation, pursuant to

delegated authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–14249 Filed 6–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42864; File No. SR–NSCC–

99–09]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing and Order

Granting Accelerated Approval of a

Proposed Rule Change Relating to

Additional Procedures for Class A

Surveillance of Certain Settling

Members and to the Collection of

Clearing Fund and Other Collateral

Deposits From These Settling

Members

Pursuant to section 19(b)(i) of the

Securities Exchange Act of 1934

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

July 16, 1999, the National Securities

Clearing Corporation (‘‘NSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) and on

May 12, 2000, amended the proposed

rule change as described in Items I and

II below, which items have been

prepared primarily by NSCC.2 The

Commission is publishing this notice

and order to solicit comments from

interested persons and to grant

accelerated approval of the proposed

rule change through May 31, 2001.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change extends the

temporary approval of additional

procedures that govern the placement of

NSCC members on Class A surveillance

and the clearing fund deposit and other

collateral requirements for such

members.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NSCC 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. NSCC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of these statements.3

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

NSCC seeks to extend the temporary

approval of Addendum O, which

governs the application of Class A

surveillance procedures to and the

additional collateralization

requirements for settling members that

engage in certain over-the-counter

(‘‘OTC’’) market making activities.

Addendum O is designed to decrease

the risks associated with OTC market

makers by use of Class A surveillance

and special collateralization procedures.

The Commission originally granted

temporary approval on May 10, 1996,

and has subsequently extended its

approval through May 31, 2000.4

Federal Register / Vol. 65, No. 110 / Wednesday, June 7, 2000 / Notices 36205

(May 27, 1998), 63 FR 30277 [File No. SR–NSCC–

98–03]; (June 4, 1999), 64 FR 31664 [File No. SR–

NSCC–99–06].

5 15 U.S.C. 78q–1.

6Supra note 4.

7As noted in each of the previous approval

orders, prior to filing a proposed rule change

seeking permanent approval of the procedures set

forth in this temporary approval order, NSCC shall

present to the Commission a more detailed report

of its findings regarding the adequacy of the

controls and discussing any changes to be made to

the procedures.

8 17 CFR 200.30–3(a)(12).

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

NSCC believes that the proposed rule

change is consistent with the

requirements of section 17A of the Act 5

and the rules and regulations

thereunder because the surveillance and

additional collateralization procedures

will facilitate the safeguarding of

securities and funds which are in its

custody or control or for which it is

responsible, and in general will protect

investors and the public interest.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

NSCC does not believe that the

proposed rule change will have an

impact on or impose a burden on

competition.

(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. NSCC will notify

the Commission of any written

comments received by NSCC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(F) of the Act

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds

which are in the custody or control of

the clearing agency and generally to

protect investors and the public interest.

As the Commission previously stated, it

finds that NSCC’s proposed rule change

is consistent with these obligations

under the Act because it should help

NSCC protect itself, its members, and

investors from members that pose an

increased risk because of their

involvement in OTC market making.6

Under the proposal, NSCC will

continue to have the authority with

respect to members which participate in

OTC market making activities or clear

for correspondents that engage in such

activity (1) to place such members on

Class A surveillance, (2) to require such

members to post additional collateral

with NSCC, and (3) to calculate an

alternative clearing fund requirement

for such members when additional risk

factors are present. Collectively, the

higher level of surveillance, the

additional level of collateralization, and

the alternative clearing fund

requirements should help ameliorate

NSCC’s exposure, which in turn should

assist NSCC in fulfilling its obligations

under the Act to safeguard securities

and funds for which it has control of or

is responsible for and to protect

investors and the public interest.7

NSCC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after

publication of the notice of filing

because accelerated approval will allow

NSCC to continue to utilize its Class A

surveillance procedures, the interim

collateralization policy, and the

alternative clearing fund formula

without interruption until it makes a

filing requesting permanent approval of

the rule change. The Commission finds

good cause for granting approval prior

to the thirtieth day after the date of

publication of the notice because this

should allow NSCC to continue to

protect itself and its participants from

the potential risks of OTC market

making activities without interruption

when the current approval of

Addendum O expires on May 31, 2000.

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. 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 the principal

office of NSCC. All submissions should

refer to File No. SR–NSCC–99–09 and

should be submitted by June 28, 2000.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule change (File No. SR–

NSCC–99–09) be, and hereby is

approved on an accelerated basis

through May 31, 2001.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–14253 Filed 6–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42873; File No. SR–NSCC–

00–07]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing and Order

Granting Accelerated Approval of a

Proposed Rule Change Related to

Certain Mini-Tender Offers

May 31, 2000.

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

Securities Exchange Act of 1934

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

May 26, 2000, the National Securities

Clearing Corporation (‘‘NSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I and II below, which items have

been prepared primarily by NSCC. The

Commission is publishing this notice

and order to solicit comments from

interested persons and to grant

accelerated approval of the proposal.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change permits

NSCC to process certain securities

which are subject to mini-tender offers

through NSCC’s continuous net

settlement (‘‘CNS’’) system.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NSCC 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. NSCC has prepared

summaries, set forth in sections (A), (B),