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),

36206 Federal Register / Vol. 65, No. 110 / Wednesday, June 7, 2000 / Notices

2The Commission has modified the text of the

summaries prepared by NSCC.

3 15 U.S.C. 78q–1(b)(3)(F).

4 15 U.S.C. 78q–1(b)(3)(F).

5 15 U.S.C. 78s(b)(2).

6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 41867

(September 13, 1999), 64 FR 51171.

4The substantive modifications of Amendment

No. 1 are incorporated in the description of the

proposal in Section II below, and are further

discussed in Section III below.

and (C) below, of the most significant

aspects of such statements. 2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed rule

filing is to permit NSCC to keep

McDonalds Corp., USX-Maraton GR.,

and Blackrock Inc., securities, which are

subject to mini-tender offers, in the CNS

system. Under normal circumstances

because these mini-tender offers have

no protect period, NSCC would exit

these securities from CNS. However,

because of the high trading volume in

these securities and the operational

impact exiting this security from CNS

would have on NSCC’s participants,

NSCC has filed this rule change to allow

NSCC to continue to process these

securities in CNS. If NSCC receives a

request from a long participant, NSCC

will exit the relevant position and will

issue a receive and deliver instruction

naming short participants selected by an

allocation procedure using the oldest

short position first. Participants who

wish to participate in any of the tender

offers must contact NSCC Operations no

later than 1:00 PM on Tuesday, May 30,

2000, so arrangements can be made to

remove the relevant positions from CNS.

NSCC believes that the proposed rule

change is consistent with the

requirements of the Act and the rules

and regulations thereunder. In

particular, the proposed rule change is

consistent with section 17A(b)(3)(F) of

the Act 3 which requires that the rules

of a clearing agency be designed to

promote the prompt and accurate

clearance and settlement of securities

transactions.

(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 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 Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder and

particularly with the requirements of

section 17A(b)(3)(F).4 Section

17A(b)(3)(F) requires that the rules of a

clearing agency be designed to promote

the prompt and accurate clearance and

settlement of securities transactions.

Allowing these securities which are

subject to mini-tender offers to continue

to be processed in the CNS system

should help ensure the securities will be

promptly and accurately cleared and

settled.

NSCC has requested that the

Commission approve the proposed rule

change prior to the thirtieth day after

publication of the notice of the filing.

The Commission finds good cause for

approving the rule change prior to the

thirtieth day after publication because

such approval will allow NSCC to

continue to process these securities in

the CNS system.

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

Room, 450 Fifth Street, NW,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of NSCC. All submissions should

refer to File No. SR–NSCC–00–07 and

should be submitted by June 28, 2000.

It is therefore ordered, pursuant to

section 19(b)(2) of the Act,5 that the

proposed rule change (File No. SR–

NSCC–00–07) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–14258 Filed 6–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42848; File No. SR–PCX–

99–18]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

No. 1 to the Proposed Rule Change by

the Pacific Exchange, Inc., Relating to

Facilitation Crosses

May 26, 2000.

I. Introduction

On June 4, 1999, the Pacific Exchange,

Inc. (‘‘PCX’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’), pursuant

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule

19b–4 thereunder,2 a proposed rule

change to give member firms a

participation right in trades proposed as

facilitation crosses in certain

circumstances; and to allow facilitation

crosses for broker-dealer orders. Notice

of the proposed rule change was

published for comment in the Federal

Register on September 21, 1999.3 On

May 26, 2000, the PCX filed

Amendment No. 1 to the proposal. 4 No

comments were received on the

proposal. This order approves the

proposed rule change, as amended,

accelerates approval of Amendment No.

1, and solicits comments from interested

persons on that amendment.

II. Description of the Proposal

PCX Rule 6.47(b) sets forth the

procedures by which a floor broker

representing the order of a member

firm’s public customer may cross it with

a contra side order provided by the firm

from its own proprietary account. In

these circumstances, the firm is said to

be ‘‘facilitating’’ the customer order, and