71182 Federal Register / Vol. 65, No. 230 / Wednesday, November 29, 2000 / Notices

10 17 CFR 200.30–3(a)(12).

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

2Securities Exchange Act Release No. 43447

(October 16, 2000), 65 FR 63278 (October 23, 2000).

3Letters from Harold H. Morley, Chairman and

Chief Executive Officer, Morley Financial Services,

Inc., to Jonathan G. Katz, Secretary, Commission

(May 10, 2000); Joan K. Hall, Senior Vice President

and Director, Morley Financial Services, Inc., to

Jonathan G. Katz, Secretary, Commission (August

15, 2000). 4Addendum D of NSCC’s Rules and Procedures. 5 15 U.S.C. 78q–1(b)(3)(F).

For the Commission, by the Division

of Market Regulation, pursuant to

delegated authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30452 Filed 11–28–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43606; File No. SR–NSCC–

00–05]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Order Granting

Accelerated Approval of a Proposed

Rule Change Relating to Processing

Mutual Fund Services

November 21, 2000.

On April 7, 2000, the National

Securities Clearing Corporation

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

Exchange Commission (‘‘Commission’’)

a proposed rule change (File No. SR–

NSCC–00–05) pursuant to Section

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

of 1934 (‘‘Act’’) 1 and on April 19, 2000,

and May 8, 2000, amended the proposed

rule change to modify its rules to allow

additional types of investment products

to be processed through NSCC’s Mutual

Fund Services. Notice of the proposal

was published in the Federal Register

on October 23, 2000. 2 Two comment

letters were received from one

commenter. 3 For the reasons discussed

below, the Commission is granting

accelerated approval of the proposed

rule change.

I. Description

Several NSCC participants who utilize

NSCC’s Defined Contribution Clearance

and Settlement Service of NSCC’s

Mutual Fund Services have requested

that NSCC permit additional types of

investment products regulated under

state insurance laws or federal or state

banking laws to be eligible for

processing through NSCC’s Mutual

Fund Services. Examples of such

investment products include stable

value funds, separate account group

guaranteed investment contracts (which

are regulated as group annuities), and

bank collective investment trusts.

To accommodate their participants’

request, NSCC will create a new class of

securities defined as Investment Funds.

Pursuant to the rule filing NSCC will:

(1) Add Investment Funds as a class of

securities eligible for processing through

Mutual Fund Services; (2) make

corresponding changes to the rules

relating to the entities eligible to process

Investment Funds transactions through

the Mutual Fund Services; (3) establish

standards of financial responsibility and

operational capability for those

participants wishing to process

Investment Funds through NSCC’s

Mutual Fund Services; and (4) make

conforming changes to the existing rules

where necessary.

Investment Funds will be defined as

any fund or investment entity that is

subject to regulation under applicable

federal and state banking and/or

insurance laws. Investment Funds will

include such things as bank collective

investment trusts, separate account

guaranteed investment contracts, and

other similar pooled investment

vehicles. All Invested Fund products

will be subject to regulation under

federal or state banking laws or state

insurance laws. Only Investment Funds

that have been assigned a CUSIP

number would be eligible for processing

through NSCC’s Mutual Fund Services.

For the purpose of processing

transactions in Investment Funds, NSCC

also will expand the types of entities

that may qualify as a Fund Member

under Rule 51 of NSCC’s Rules so that

insurance companies, banks, and trust

companies as packagers and sponsors of

such funds may apply to become a Fund

Member. As with other entities seeking

to become Fund Members, any of these

new eligible entities seeking to process

Investment Fund transactions through

NSCC’s Mutual Fund Services will be

required to enter into an agreement with

NSCC that sets forth the entity’s rights

and obligations as a Fund Member,

including that it will limit its use of

NSCC’s services to use of Mutual Fund

Services (or Insurance Processing

Services, as the case may be), it will

comply with NSCC’s rules and

procedures, and will permit NSCC to

inspect its books and records. Moreover,

as with all other transactions in Mutual

Fund Services, transactions involving

Investment Funds will not be

guaranteed by NSCC. As currently

provided in NSCC’s Rules, if one side

fails to pay for a transaction, the contra

side will be required to return to NSCC

any funds received from NSCC. 4

Under the rule change, NSCC’s Rule

2 will be amended to permit an

insurance company to become a mutual

fund member or insurance services

member in order to transmit Investment

Fund Purchases, exchanges, and

redemption orders to a fund member

and to engage in other customer-related

transactions with a funds member. In

addition to the standards of financial

responsibility and operational capability

set forth in Addenda B and I of NSCC’s

Rules currently applicable to Mutual

Fund Service members, insurance

services members, and Fund Members,

entities seeking to process Investment

Fund transactions through Mutual Fund

Services will be required to meet the

rating and capital requirements set forth

in new Addendum V, Financial

Standards for Applicants and

participants Processing investment

Funds Transactions Through Mutual

Fund Services.

Since NSCC will make a new category

of securities eligible for Mutual Fund

Services processing, the rule change

will also make conforming changes to

certain existing rules in order to include

a reference to Investment Funds as

applicable.

NSCC believes the proposed rule

change is consistent with Section 17A of

the Act because it will make a new class

of products eligible for processing

through NSCC’s Mutual Fund Services

and thereby should facilitate the prompt

and accurate clearance and settlement of

these transactions in these products.

II. Discussion

Section 17A(b)(3)(F) 5 of the Act

requires that the rules of a clearing

agency be designed to promote the

prompt and accurate clearance and

settlement of securities transactions and

to assure the safeguarding of securities

and funds which are in the custody or

control of the clearing agency or for

which it is responsible. The primary

purpose of NSCC’s rule change is to

expand the types of products processed

by and the types of entities processing

through NSCC’s Mutual Fund Services

that should facilitate the prompt and

accurate clearance and settlement of

transactions in these instruments.

Investment products such as Investment

Funds are typically included in defined

contribution retirement plans and thus

their inclusion in Mutual Fund Services

should benefit third party administrator

(‘‘TPA’’) members and other

participants by standardizing the

processing of these Investment Funds in

the same manner as mutual funds are

now processed in NSCC’s Mutual Fund

Federal Register / Vol. 65, No. 230 / Wednesday, November 29, 2000 / Notices 71183

6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Letter from James E. Buck, Senior Vice

President and Secretary, NYSE, to Nancy J. Sanow,

Assistant Director, Division of Market Regulation,

Commission, dated November 16, 2000

(‘‘Amendment No. 1’’). In Amendment No. 1, the

NYSE amended its rule language to add ‘‘and

guests’’ to the first sentence under the heading

‘‘Female Personnel and Guests.’’

Services. Standardized processing

should permit defined contribution plan

administrators to provide Investment

Fund products to defined contribution

plan clients without the proprietary

systems or manual processing

infrastructure and related costs

necessitated by the current processing

methods.

In addition to the fact that

transactions in Mutual Fund Services

are not guaranteed, the rule change

establishes standards of financial

responsibility and operational

capabilities for entities processing

Investment Funds through NSCC’s

Mutual Fund Services. This should help

NSCC assure the safeguarding of funds

and securities which are in NSCC’s

control or for which it is responsible.

Accordingly, the Commission finds that

the rule change is consistent with

NSCC’s obligations under the Act.

NSCC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing. The

Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after

publication because accelerated

approval will permit NSCC to expand

the types of products processed by and

the types of entities processing through

NSCC’s Mutual Fund Services, thereby

extending the benefits of the Mutual

Fund Services as soon as practicable.

III. 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.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

NSCC–00–05) 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. 00–30373 Filed 11–28–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43596; File No. SR–NYSE–

00–43]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change and of

Amendment No. 1 to Proposed Rule

Change by the New York Stock

Exchange, Inc. Relating to Revisions to

the Floor Conduct and Safety

Guidelines

November 20, 2000.

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 October

16, 2000, the New York Stock Exchange,

Inc. (‘‘Exchange’’ or ‘‘NYSE’’) 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 the NYSE. On

November 17, 2000, the NYSE filed

Amendment No. 1 to the proposed rule

change.3 The Commission is publishing

this notice to solicit comments on the

proposed rule change and Amendment

No. 1 to 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 consists of

an amendment to the Exchange’s Floor

Conduct and Safety Guidelines (the

‘‘Guidelines’’) with respect to policies

and procedures pertaining to The Code

of Personal Appearance. The Guidelines

are a ‘‘stated policy, practice or

interpretation’’ concerned with the

administration of Exchange Rules 35

and 37. Below is the text of the

proposed rule change. Proposed new

language, as amended, is italicized and

proposed deletions are in brackets.

* * * * *

Floor Conduct and Safety Guidelines

Chapter Thirteen: Floor Conduct and

Safety Guidelines

1. Guidelines and Fines—The conduct

of individuals on the Trading Floor of

the New York Stock Exchange and on

other premises under Exchange control

can significantly affect the public

investor’s image of the quality, fairness

and professionalism of the Exchange

[M]marketplace. In addition, the

behavior of individuals can impact the

safety and welfare of others and affect

the efficient, undisrupted conduct of

business on the Floor, and on other

premises under Exchange control. For

these reasons, all persons, while on the

Floor of the Exchange and on other

premises under Exchange control shall

not:

• Engage in any act or practice which

may be detrimental to the interest or

welfare of the Exchange; or

• Engage in any act or practice which

may serve to disrupt or hinder the

ordinary and efficient conduct of

business; or

• Engage in any act or practice which

may serve to jeopardize the safety or

welfare of any other individual.

It is the responsibility of all members

and Floor clerical employees of

members or member organizations to be

familiar with the following guidelines

governing Floor conduct and safety

throughout Exchange premises, and to

be aware that the applicable penalties

will be imposed where violations of

these guidelines are found to have

occurred. In addition, where substantial

or continued violations of these

guidelines occur, that individual will be

subject to possible disciplinary action in

accordance with the procedures set

forth in the Exchange Constitution and

Rules.

* * * * *

Code of Personal Appearance—

Members and employees of members

and member organizations must

conform to the revised Trading Floor

Code of Personal Appearance. All

garments must be reasonably pressed

and not wrinkled.

Male Personnel

All male personnel are expected to

wear suitable attire as follows: A dress

shirt, buttoned at the collar, with a dress

tie knotted at the customary place, i.e.,

snug to the collar; full length dress

trousers or slacks; JEANS or OTHER

SPORT SLACKS ARE NOT

PERMITTED; a jacket with long sleeves

(An acceptable jacket shall include a

suit, sport coat, blazer or SOLID COLOR

office jacket. Any back or side panels or

mesh back must be of same color as

jacket or black.)

Male Guests

Suit, Sport Coat or Work Jacket must

be worn, but a tie is not required. A

dress, collared golf/polo shirt or

turtleneck is acceptable. T-Shirts, tank