[Federal Register Volume 74, Number 45 (Tuesday, March 10, 2009)]
[Notices]
[Pages 10321-10322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-5057]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59498; File No. SR-FICC-2009-01]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating To Modifying the Appendix of the GSD-CME Cross-Margining 
Agreement, Deletion of the GSD-TCC Cross-Margining Arrangement, and 
Technical Changes and Corrections

March 4, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 13, 2009, the 
Fixed Income Clearing Corporation (``FICC'') 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 FICC. FICC filed the proposed rule change pursuant to 
Section 19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) thereunder 
\3\ so that the proposal was effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will amend the appendix of the cross-
margining agreement between FICC and the Chicago Mercantile Exchange, 
Inc. (``CME'') (``FICC/CME Agreement''), and to make additional 
technical changes and corrections.

II. Self-Regulatory Organization's Statement of the Purpose of and 
Statutory Basis for the Proposed Rule Change

    In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of and 
Statutory Basis for the Proposed Rule Change

    FICC is proposing to amend its Divisions' rules as follows:
1. Revisions to Appendix A of the Cross-Margining Agreement With the 
Chicago Mercantile Exchange, Inc.
    Through its Government Securities Division (``GSD''), FICC 
currently participates in a cross-margining arrangement with the CME. 
The FICC/CME Agreement, which governs the arrangement, contains an 
Appendix A, which requires the parties to list other cross-margining or 
loss sharing arrangements to which they are parties and the order in 
which they will be considered when the parties calculate their 
available resources under the FICC/CME Agreement. The FICC/CME 
Agreement further provides that the parties may amend Appendix A 
without prior approval of the other party by giving notice to the other 
party.\4\
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    \4\ Recitals F and G of the FICC/CME Agreement.
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    FICC has notified CME that it has amended Appendix A of the 
Agreement to: (1) Remove references to the cross-margining agreement 
with The Clearing Corporation (``TCC'') as that agreement is no longer 
in effect, (2) remove a reference to a multilateral netting contract 
and limited cross-guaranty agreement with the now-defunct Emerging 
Markets Clearing Corporation, (3) change the priority of the 
multilateral cross-guaranty agreements that FICC participates, and (4) 
make reference to the upcoming portfolio margining between GSD and 
FICC's Mortgage-Backed Securities Division (``MBSD''). This rule change 
incorporates these changes into the FICC/CME Agreement, which is a part 
of the GSD's rules.
2. Correction to MBSD Rules
    FICC is also correcting a reference in MBSD's rules to reflect 
actual practice. While MBSD's fee schedule accurately labels a ``fee'' 
for non-compliance with MBSD trade input requirements, its rules 
incorrectly label this a ``fine.'' The proposed rule change corrects 
the fine reference.
3. Clarifications to GSD's Schedule of Time Frames
    FICC is updating its Schedule of Time Frames to correct the time 
during which FICC's comparison, netting, settlement, and margining 
output normally is made available to members and to make clear that the 
funds-only settlement process occurs through the Federal Reserve's 
National Settlement Service.
    FICC 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 it will make certain rule corrections 
and address the cross-margining agreements and therefore will support 
the prompt and accurate clearance and settlement of securities 
transactions.
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    \5\ 15 U.S.C. 78q-1.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FICC does not believe that the proposed rule change will have any 
impact or impose any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    FICC has not solicited or received written comments relating to the 
proposed rule change. FICC will notify the Commission of any written 
comments it receives.

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)(iii) of the Act \6\ and Rule 19b-4(f)(4) \7\ thereunder 
because it effects a change in an existing service of a registered 
clearing agency that does

[[Page 10322]]

not adversely affect the safeguarding of securities and funds in the 
custody or control of the clearing agency or for which it is 
responsible and does not significantly affect the respective rights or 
obligations of the clearing agency or persons using the service. At any 
time within 60 days of the filing of the 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(4).
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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. Comments may be submitted by any of 
the following methods:

Electronic Comments

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#f785829b92da94989a9a92998384b7849294d9909881"><span class="__cf_email__" data-cfemail="3240475e571f515d5f5f575c4641724157511c555d44">[email protected]</span></a>. Please include 
File No. SR-FICC-2009-01 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-FICC-2009-01. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at FICC's principal office and on FICC's Web 
site at http://ficc.com/gov/gov.docs.jsp?NS-query=#rf. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File No. SR-FICC-2009-01 and should be 
submitted on or before March 31, 2009.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-5057 Filed 3-9-09; 8:45 am]
BILLING CODE 8011-01-P


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