10580 Federal Register / Vol. 72, No. 45 / Thursday, March 8, 2007 / Notices 

4 15 U.S.C. 78q–1(b)(3)(F). 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

7 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Act Release No. 54929, 

(December 13, 2006), 71 FR 76398. 

3Similar proposed rule changes have been filed 

by The Depository Trust Company [File No. SR–

DTC–2006–07] and the National Securities Clearing 

Corporation [File No. SR–NSCC–2006–05]. 4 15 U.S.C. 78q–1(b)(3)(F). 

presented by an entity in crisis that 

remains a participant of DTC. This is 

particularly important to preserve 

orderly settlement in the marketplace 

and to minimize the risk of loss to DTC 

and its participants. The rule sets forth 

in a single rule DTC’s rights and the 

actions it may take in such a situation. 

Currently, these rights and actions are 

either permitted elsewhere in DTC’s 

rules or are permitted pursuant to DTC’s 

emergency authority. By placing DTC’s 

rights in a single rule, however, the 

proposed rule change should provide 

clarity and a clear legal basis for DTC’s 

rights or actions taken with respect to a 

wind-down participant. DTC also 

believes that the rule is designed to 

minimize the need for rule waivers. 

III. Discussion 

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

provides that the rules of a clearing 

agency should be designed to safeguard 

securities and funds which are in the 

custody or control of the clearing agency 

or for which it is responsible.4 The 

sudden or unanticipated financial or 

operational difficulties of a participant 

or the termination of its trading 

activities may create uncertainty among 

industry participants about DTC’s 

ability to meet its settlement obligations 

on time and concern about the risk to 

the assets of the clearing agency or of its 

participants. The proposed rule change 

clarifies that DTC has discretionary 

power in a wind-down situation to take 

certain actions to assure the ongoing 

operations of itself and to protect the 

securities and funds of DTC and of its 

participants. By making clear in a single 

rule the authority DTC has under its 

rules to facilitate the orderly wind down 

of a participant’s activities, the 

proposed rule change is designed to 

assure the safeguarding of securities or 

funds which are in DTC’s control or for 

which it is responsible.5

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and in 

particular Section 17A of the Act and 

the rules and regulations thereunder.6

It is therefore ordered, pursuant to 

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

proposed rule change (File No. SR–

DTC–2006–07), as modified by 

Amendment No. 1, be, and hereby is 

approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4056 Filed 3–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55364; File No. SR–FICC–

2006–05] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Granting Approval of a Proposed Rule 

Change Relating to the Wind-Down of 

a Participant 

February 27, 2007. 

I. Introduction 

On March 28, 2006, Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) and on 

September 28, 2006 and October 13, 

2006, amended proposed rule change 

SR–FICC–2006–15 pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’).1 Notice of the proposal 

was published in the Federal Register 

on December 20, 2006.2 No comment 

letters were received. For the reasons 

discussed below, the Commission is 

granting approval of the proposed rule 

change as modified by Amendment Nos. 

1 and 2. 

II. Description 

The rule change adds new Rule 21A, 

Wind-Down of a Netting Member, to the 

Rules of FICC’s Government Securities 

Division (‘‘GSD’’) and new Rule 2A, 

Wind-Down of a Participant, to the 

Rules of FICC’s Mortgage-Backed 

Securities Division (‘‘MBSD’’) to address 

a situation where a member or 

participant notifies FICC that it intends 

to wind down its activities, and FICC 

determines, in its discretion, that it 

must take special action in order to 

protect itself and its members and 

participants.3

The new rules allow FICC to 

determine that a participant is a winddown member or wind-down 

participant and sets forth the conditions 

FICC using its discretion may place on 

a wind-down member or participant and 

the actions FICC using its discretion 

may take with respect to a wind-down 

member or participant to protect itself 

and its members or participants. Such 

actions may include restricting or 

modifying the wind-down member or 

participant’s use of any or all of FICC’s 

services and may include requiring the 

wind-down member or participant to 

post increased clearing fund deposits. 

FICC will retain all of its other rights set 

forth in its rules and membership and 

participant agreements, including the 

right to declare the wind-down member 

or participant insolvent, if applicable, 

and to cease to act for it. 

The rules are designed to ensure that 

FICC has the needed flexibility to 

appropriately manage the risks 

presented by an entity in crisis that 

remains a participant of FICC. This is 

particularly important to preserve 

orderly settlement in the marketplace 

and to minimize the risk of loss to FICC 

and its members and participants. Each 

rule sets forth in a single rule FICC’s 

rights and the actions it may take in 

such a situation. Currently, these rights 

and actions are either permitted 

elsewhere in FICC’s rules or are 

permitted pursuant to FICC’s emergency 

authority. By placing FICC’s rights in a 

single rule for each division, however, 

the rule change should provide clarity 

and a clear legal basis for FICC’s rights 

or actions taken with respect to a winddown member or participant. FICC also 

believes that the rules are designed to 

minimize the need for rule waivers. 

III. Discussion 

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

provides that the rules of a clearing 

agency should be designed to safeguard 

securities and funds which are in the 

custody or control of the clearing agency 

or for which it is responsible.4 The 

sudden or unanticipated financial or 

operational difficulties of a clearing 

member or participant or the 

termination of its trading activities may 

create uncertainty among industry 

participants about FICC’s ability to meet 

its settlement obligations on time and 

concern about the risk to the assets of 

the clearing agency or of its members or 

participants. The proposed rule change 

clarifies that FICC has discretionary 

power in a wind-down situation to take 

certain actions to assure the ongoing 

operations of itself and to protect the 

securities and funds of FICC and of its 

members and participants. By making 

clear in a single rule of each of its 

divisions the authority FICC has under 

its rules to facilitate the orderly wind 

down of a member or participant’s 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 72, No. 45 / Thursday, March 8, 2007 / Notices 10581 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

7 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Act Release No. 54928 

(December 13, 2006), 71 FR 76414. 

3Similar proposed rule changes have been filed 

by The Depository Trust Company [File No. SR–

DTC–2006–07] and the Fixed Income Clearing 

Corporation [File No. SR–FICC–2006–05]. 

4 15 U.S.C. 78q–1(b)(3)(F). 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

7 17 CFR 200.30–3(a)(12). 

activities, the proposed rule change is 

designed to assure the safeguarding of 

securities or funds which are in FICC’s 

control or for which it is responsible.5

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and in 

particular Section 17A of the Act and 

the rules and regulations thereunder.6

It is therefore ordered, pursuant to 

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

proposed rule change (File No. SR–

FICC–2006–05), as modified by 

Amendment Nos. 1 and 2, be, and 

hereby is approved. 

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4055 Filed 3–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55366; File No. SR–NSCC–

2006–05] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Order Granting Approval 

of a Proposed Rule Change Relating to 

the Wind-Down of a Member 

February 27, 2007. 

I. Introduction 

On March 28, 2006, National 

Securities Clearing Corporation 

(‘‘NSCC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

and on September 28, 2006, amended 

proposed rule change SR–NSCC–2006–

05 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’).1 Notice of the proposal was 

published in the Federal Register on 

December 20, 2006.2 No comment 

letters were received. For the reasons 

discussed below, the Commission is 

granting approval of the proposed rule 

change as modified by Amendment No. 

1. 

II. Description 

The rule change adds a new Rule 42, 

Wind-Down of a Member, Fund 

Member, or Insurance Carrier Member, 

to NSCC’s Rules to address a situation 

where a member notifies NSCC that it 

intends to wind down its activities, and 

NSCC determines in its discretion that 

it must take special action in order to 

protect itself and its participants.3

The rule allows NSCC to determine 

that a member is a wind-down member 

and sets forth the conditions NSCC 

using its discretion may place on a 

wind-down member and the actions 

NSCC using its discretion may take with 

respect to a wind-down member to 

protect itself and its members. Such 

actions may include restricting or 

modifying the wind-down member’s use 

of any or all of NSCC’s services and 

requiring the wind-down member to 

post increased clearing fund deposits. 

NSCC will retain all of its other rights 

set forth in its rules and membership 

agreements, including the right to 

declare the wind-down member 

insolvent, if applicable, and to cease to 

act for the member. 

The rule is designed to ensure that 

NSCC has the needed flexibility to 

appropriately manage the risks 

presented by an entity in crisis that 

remains a member of NSCC. This is 

particularly important to preserve 

orderly settlement in the marketplace 

and to minimize the risk of loss to NSCC 

and its members. The rule sets forth in 

a single rule NSCC’s rights and the 

actions it may take in such a situation. 

Currently, these rights and actions are 

either permitted elsewhere in NSCC’s 

rules or are permitted pursuant to 

NSCC’s emergency authority. By placing 

NSCC’s rights in a single rule, however, 

the rule change should provide clarity 

and a clear legal basis for NSCC’s rights 

or actions taken with respect to a winddown member. NSCC also believes that 

the proposed rule is designed to 

minimize the need for rule waivers. 

III. Discussion 

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

provides that the rules of a clearing 

agency should be designed to safeguard 

securities and funds which are in the 

custody or control of the clearing agency 

or for which it is responsible.4 The 

sudden or unanticipated financial or 

operational difficulties of a clearing 

member or the termination of its trading 

activities may create uncertainty among 

industry participants about NSCC’s 

ability to meet its settlement obligations 

on time and concern about the risk to 

the assets of the clearing agency or of its 

members. The proposed rule change 

clarifies that NSCC has discretionary 

power in a wind-down situation to take 

certain actions to assure the ongoing 

operations of itself and to protect the 

securities and funds of NSCC and of its 

members. By making clear in a single 

rule the authority NSCC has under its 

rules to facilitate the orderly wind down 

of a member’s activities, the proposed 

rule change is designed to assure the 

safeguarding of securities or funds 

which are in NSCC’s control or for 

which it is responsible.5

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and in 

particular Section 17A of the Act and 

the rules and regulations thereunder.6

It is therefore ordered, pursuant to 

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

proposed rule change (File No. SR–

NSCC–2006–05), as modified by 

Amendment No. 1, be, and hereby is 

approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4054 Filed 3–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

SMALL BUSINESS ADMINISTRATION 

Administrator’s Line of Succession 

Designation, No. 1–A, Revision 28 

This document replaces and 

supersedes ‘‘Line of Succession 

Designation No. 1–A, Revision 27.’’

Line of Succession Designation, No. 1–

A, Revision 28: 

Effective immediately, the 

Administrator’s Line of Succession 

Designation is as follows: 

(a) In the event of my inability to 

perform the functions and duties of my 

position, or my absence from the office, 

the Deputy Administrator will assume 

all functions and duties of the 

Administrator. In the event the Deputy 

Administrator and I are both unable to 

perform the functions and duties of the 


sroberts on PROD1PC70 with NOTICES