Federal Register / Vol. 62, No. 35 / Friday, February 21, 1997 / Notices 8067

is less than one point. The NYSE notes that NYSE

rules would continue to govern when NYSE

specialists would be required to issue indications

of interest. See NYSE filing SR–NYSE–97–03.

Similarly, AMEX notes that in connection with a

reopening following a ‘‘circuit breaker’’ halt,

AMEX’s rules require dissemination of an

indication in the same circumstances as the NYSE.

AMEX notes that its proposed amendments are

intended to conform to the amendment to the ITS

Plan agreed to by the Participants. See AMEX filing

SR–AMEX–97–07.

7 15 U.S.C. 78f(b)(6); 15 U.S.C. 78o–3(b)(6).

8 15 U.S.C. 78k–1(a)(1)(D). 1 15 U.S.C. 78s(b)(1).

2The Commission has modified the text of the

summaries prepared by DTC.

2. Statutory Basis

These proposed amendments are

consistent with sections 6(b)(5) and

15A(b)(6) of the Act 7 in that it is

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

regulating, clearing, settling, processing

information with respect to, and

facilitating transactions in securities, to

remove impediments to and to perfect

the mechanism of a free and open

market and a national market system,

and, in general, to protect investors and

the public interest. The amendment is

also consistent with section 11A(a)(1)(D)

of the Act 8 which provides that the

linking of all markets for qualified

securities through communications and

date processing facilities will foster

efficiency, enhance competition,

increase the information available to

brokers, dealers, and investors, facilitate

the offsetting of investors’ orders, and

contribute to the best execution of such

orders. In particular, by enhancing the

linkage among all ITS Participant

Markets and promoting coordinated

openings and reopenings in ITS

Securities, the Participants believe the

proposed rule changes are consistent

with the Act.

B. Self-Regulatory Organizations’

Statement on Burden on Competition

The Participants do not believe that

the proposed rule change will impose

any inappropriate burden on

competition.

C. Self-Regulatory Organizations’

Statement on Comments on the

Proposed Rule Changes Received From

Members, Participants, or Others

No written comments were either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Changes and Timing for

Commission Action

Within 35 days of the publication of

this notice in the Federal Register or

within such longer period (i) as the

Commission may designate up to 90

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 the 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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549. 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 at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Participants.

All submissions should refer to File

Nos. SR–AMEX–97–07, SR–BSE–96–11,

SR–CHX–96–34, SR–CSE–97–03, SR–

NASD–97–09, SR–NYSE–97–03, and

SR–PSE–97–05 and should be submitted

by March 14, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4231 Filed 2–20–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38272; File No. SR–DTC–

96–24]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

a Proposed Rule Change Relating to

Revision of Fees

February 11, 1997.

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

Securities Exchange Act of 1934

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

December 31, 1996, The Depository

Trust Company (‘‘DTC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which items have been

prepared primarily by DTC. 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

The proposed rule change amends

DTC’s schedule of fees to establish a 3.5

percent surcharge on all service fees

DTC charges to participants, pledge

banks, limited participants, and other

DTC users (‘‘participants and users’’).

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

DTC 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. DTC has prepared

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

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

change is to establish a surcharge of 3.5

percent on all service fees DTC charges

to its participants and users beginning

on January 1, 1997. According to DTC,

the surcharge is necessary to recover the

costs of upgrading its systems to

recognize data fields containing dates

incorporating the year 2000 and the

years thereafter (‘‘Year 2000 Project’’).

DTC estimates that the total cost of its

compliance initiatives will range from

$25 million to $35 million over the

duration of the Year 2000 Projects.

These costs reflect new staff to be hired

for year 2000 conversion efforts, the cost

associated with diverting present DTC

staff from service-related development,

other staff related costs, and the cost of

consulting assistance. The cost of the

Year 2000 Project for 1996 has been

charged against DTC’s excess revenues

for the year.

DTC will list the surcharge as a

separate line item on its monthly bill to

its participants and users and will

continue the surcharge indefinitely until

all compliance costs have been
8068 Federal Register / Vol. 62, No. 35 / Friday, February 21, 1997 / Notices

3 15 U.S.C. 78q–1(b)(3)(D).

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

5 17 CFR 240.19b–4(e)(2).

6 17 CFR 200.30–3(a)(12).

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

2Letter from Karen Walraven, Vice President and

Associate Counsel, GSCC (November 26, 1996).

3The Commission has modified the text of the

summaries submitted by GSCC.

recovered. Pass-through charges to

participants, such as the cost of

Participant Terminal System terminals

and lines and transfer agent fees, will be

excluded from the surcharge. DTC

anticipates that the surcharge will raise

$11 million in 1997. DTC will evaluate

the surcharge at least annually and will

modify the rate if necessary.

DTC believes that the proposed rule

change is consistent with Section

17A(b)(3)(D) of the Act 3 and the rules

and regulations thereunder because it

provides for the equitable allocation of

reasonable dues, fees, and other charges

among DTC’s participants.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impose any

burden on competition not necessary or

appropriate in furtherance of the

purposes of the Act.

(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. DTC will notify

the Commission of any written

comments received by DTC.

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) of the Act 4 and pursuant

to Rule 19b–4(e)(2) 5 promulgated

thereunder because the proposal

changes a due, fee, or other charge

imposed by DTC. 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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respected 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, N.W.,

Washington, D.C. 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to File No. SR–DTC–96–24 and

should be submitted by March 14, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4236 Filed 2–20–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38287; File No. SR–GSCC–

96–12]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Notice of Filing of a

Proposed Rule Change Relating to

Interdealer Broker Repurchase

Agreement Transactions

February 13, 1997.

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

Securities Exchange Act of 1934

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

November 21, 1996, the Government

Securities Clearing Corporation

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

Exchange Commission (‘‘Commission’’)

the proposed rule change (File No. SR–

GSCC–96–12) as described in Items I, II,

and III below, which items have been

prepared primarily by GSCC. On

December 3, 1996, GSCC filed with the

Commission an amendment to the

proposed rule change.2 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

The purpose of the proposed rule

change is to amend GSCC rules to

authorize GSCC to assess the clearing

fund margin and mark-to-market

consequences of a brokered repurchase

agreement transaction (‘‘repro’’) that is

uncompared on one side as if it were

fully compared.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

GSCC included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments that it received on the

proposed rule change. The text of these

statements may be examined at the

places specified in Item IV below. GSCC

has prepared summaries, set forth in

sections (A), (B), and (C) below, of the

most significant aspects of such

statements.3

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

Occasionally, an interdealer broker

(‘‘IDB’’) and one of its non-IDB

counterparties to a repo transaction

submit to GSCC on a timely basis the

relevant data for a transaction, but the

other non-IDB counterparty fails to

submit in a timely or accurate fashion

data related to the transaction. When

this occurs, the IDB’s trade with the

non-submitting counterparty will not

compare and will not enter GSCC’s

netting system. The corresponding side

between the IDB and the submitting

counterparty will compare and will

enter the net assuming all comparison

requirements have been met. As a result,

the IDB will not have offsetting

compared and netted trades with its two

counterparties and will carry a net

settlement position. Thus, the IDB may

incur clearing fund and mark-to-market

(particularly forward margin)

assessments. Given the intermediary

role of IDBs in the marketplace and their

more limited financial resources, GSCC

believes that its risk management

process works best and most safely if

IDBs are netted out of their positions as

intermediaries in brokered repo

transactions.

To promote the overall risk

management process, GSCC believes

that the clearing fund and the fundsonly settlement consequences of any

trade that does not compare because of

a non-IDB’s failure to submit data

should fall on that non-IDB

counterparty and not on the IDB. Thus,

GSCC proposes to amend Rule 19,

which sets forth special provisions for

brokered repo transactions, by adding

Section 3 to: (1) reaffirm the obligation