Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices 11385 

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

2This filing pertains only to the GCF Repo service 

and does not propose to add the FDIC-guaranteed 

securities to the GSD’s Delivery Versus Payment 

(‘‘DVP’’) service. 

3The Commission has modified the text of the 

summaries prepared by FICC. 

4The present rule filing applies only to these 

specific FDIC-insured securities. In the future, if 

FICC determines to add additional DTC-eligible 

securities to the GCF Repo service, FICC would 

submit a proposed rule change filing to the 

Commission for this purpose. 

5Specifically, if a GCF Repo participant engages 

in a trade using the new GCF Repo CUSIP, the 

participant will need to pledge the security free of 

payment to its clearing bank using the mechanism 

available at DTC. Once the security is pledged to 

the dealer’s clearing bank, it is available for tri-party 

or GCF Repo processing. No additional processing 

is being introduced to the GCF Repo service by this 

rule filing. The present filing does not require a 

change to the text of the rules of GSD. 

6 15 U.S.C. 78q–1. 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 17 CFR 240.19b–4(f)(4). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59558; File No. SR–FICC– 

2009–04] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Add Debt 

Securities That Are Issued Under the 

Debt Guarantee Program Component 

of the Federal Deposit Insurance 

Corporation’s Temporary Liquidity 

Guarantee Program to the GCF Repo 

Service 

March 11, 2009. 

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

Securities Exchange Act of 1934 

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

February 25, 2009, the Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change described in Items 

I, II, and III below, which items have 

been prepared primarily by FICC. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested parties. 

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 add debt securities that are 

issued under the Debt Guarantee 

Program component of the Federal 

Deposit Insurance Corporation’s 

(‘‘FDIC’s’’) Temporary Liquidity 

Guarantee Program (‘‘TLGP’’) to FICC’s 

GCF Repo service.2

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 these statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The GCF Repo service allows 

Government Securities Division 

(‘‘GSD’’) dealer members to trade 

general collateral repurchase agreements 

(‘‘repos’’) throughout the day without 

requiring intraday, trade-for-trade 

settlement on a DVP basis. The service 

allows the dealers to trade such general 

collateral repos, based on rate and term, 

throughout the day with interdealer 

broker netting members on a blind basis. 

Standardized, generic CUSIP numbers 

have been established exclusively for 

GCF Repo processing and are used to 

specify the acceptable type of 

underlying eligible collateral. 

FICC is proposing to add an 

additional collateral type to the GCF 

Repo service. Specifically, FICC 

proposes to add debt securities that are 

issued under the Debt Guarantee 

Program component of FDIC’s TLGP to 

the GCF Repo service. These securities 

are DTC-eligible securities.4

The TLGP, one of the steps taken by 

the U.S. Government to stabilize the 

credit markets and to stimulate lending, 

was designed to allow banks to issue 

FDIC-insured debt to ensure that the 

banks would be able to roll over any 

debt coming due in the coming months. 

The guarantee consists of timely 

payment of principal and interest. The 

expiration of the FDIC’s guarantee is the 

earlier of either the maturity date of the 

issued debt or June 2012. 

The Financial Industry Regulatory 

Authority (‘‘FINRA’’) has recently 

advised the Securities Industry and 

Financial Markets Association 

(‘‘SIFMA’’) on the capital charge 

treatment that FINRA plans to employ 

with respect to the guaranteed debt 

securities that are issued by an affiliate 

of a broker-dealer and that are held in 

inventory by the broker-dealer. 

Specifically, FINRA has stated that 

broker-dealers that may be allocated the 

FDIC-guaranteed debt securities issued 

by affiliated entities as part of the GCF 

Repo service will not need to take a 100 

percent capital charge on the reverse 

repo contract because they have no 

control over the collateral allocated by 

FICC and because the allocated 

collateral is returned the next morning. 

Given this favorable treatment, members 

of SIFMA that are active in the GCF 

Repo service have requested that FICC 

add the FDIC-guaranteed debt securities 

to the service. 

All current GCF Repo processing will 

remain unchanged. The fact that the 

product is a DTC-eligible security will 

not affect GCF Repo processing.5 FICC 

has determined that with respect to its 

risk management processes, the FDICinsured securities will be treated the 

same as all other GCF Repo-eligible 

collateral. 

FICC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 6

and the rules and regulations 

thereunder applicable to FICC because 

the proposed rule change enables FICC 

to expand an important service that 

provides members with a continuing 

ability to engage in general collateral 

trading activity in a safe and efficient 

manner. As such, the proposed rule 

filing facilitates the prompt and accurate 

clearance and settlement of securities 

transactions. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC does not believe that the 

proposed rule change will have any 

impact on 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 

No written comments relating to the 

proposed rule change have been 

solicited or received. FICC will notify 

the Commission of any written 

comments received by FICC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A)(iii) of the Act 7 and Rule 

19b–4(f)(4) 8 thereunder because the 

proposed rule change effects a change in 

an existing service of FICC that (i) does 

not adversely affect the safeguarding of 

securities or funds in the custody or 

control of FICC or for which it is 

responsible and (ii) does not 


dwashington3 on PROD1PC60 with NOTICES
11386 Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

significantly affect the respective rights 

of the clearing agency or persons using 

the service. 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, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml) or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–FICC–2009–04 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–FICC–2009–04. 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 

changes 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filings also will be 

available for inspection and copying at 

the principal office of FICC and on 

FICC’s Web site at http://www.dtcc.com/ 

legal/rule_filings/ficc/2009.php. 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 

Number SR–FICC–2009–04 and should 

be submitted on or before April 7, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5687 Filed 3–16–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59547; File No. SR– 

NASDAQ–2009–014] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Establish 

New Rules Applicable to the Nasdaq 

Market Center and Nasdaq Options 

Market That Explicitly Require 

Members To Input Accurate 

Information Into Nasdaq Systems 

March 10, 2009. 

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 February 

23, 2009, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) 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 

by Nasdaq. Nasdaq filed the proposed 

rule change as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(6) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. 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 

Nasdaq proposes to establish new 

rules applicable to the Nasdaq Market 

Center and Nasdaq Options Market that 

explicitly require members to input 

accurate information into Nasdaq 

systems. The text of the proposed rule 

change is available from Nasdaq’s Web 

site at http://nasdaq.cchwallstreet.com, 

at Nasdaq’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq included statements concerning 

the purpose of, and basis for, the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item III below, and 

is set forth in Sections A, B, and C 

below. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Nasdaq proposes to adopt new rules 

that make clear Nasdaq members’ 

responsibility to input accurate 

quotation and order information into the 

Nasdaq Market Center and Nasdaq 

Options Market (collectively the 

‘‘Nasdaq Markets’’). The Nasdaq 

Markets require entry of certain 

information to post a quote or to enter 

an order. Such information, among 

other things, identifies the member, the 

size and price of the order or quote, and 

the member’s capacity in placing an 

order. Accurate trade and quote 

information is fundamental to the 

operation of an efficient and fair market. 

Moreover, the information input by 

members when posting a quote or 

placing an order is used for purposes of 

policing the Nasdaq Markets. For 

example, the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

conducts trade abuse surveillances of 

the Nasdaq Markets on Nasdaq’s behalf. 

The trade abuse surveillances use 

capacity information input by members. 

A member’s capacity in a trade concerns 

whether the member is acting as an 

agent, principal, or ‘‘riskless’’ principal 

in the transaction. Accordingly, accurate 

input of capacity information is of 

fundamental regulatory importance. 

Nasdaq does not have a rule that 

makes an explicit statement regarding a 

member’s obligation to input accurate 

information into the Nasdaq Markets. 

Notwithstanding, Nasdaq believes that 

disciplinary cases against members 

entering inaccurate or incomplete 

information may be brought 

appropriately under Nasdaq Rule 2110, 

which requires members to observe high 

standards of commercial honor and just 

and equitable principles of trade. Rule 

2110 protects the investing public and 

the securities industry from dishonest 


dwashington3 on PROD1PC60 with NOTICES