12794 Federal Register / Vol. 60, No. 45 / Wednesday, March 8, 1995 / Notices

2Securities Exchange Act Release No. 33023

(October 6, 1993), 58 FR 52891.

3Securities Exchange Act Release No. 34952

(November 9, 1994), 59 FR 59137.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, BSE

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. BSE 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

On October 6, 1993, the Commission

adopted Rule 15c6–1 under the Act

which establishes three business days

after the trade date (‘‘T+3’’) instead of

five business days (‘‘T+5’’) as the

standard settlement cycle for most

securities transactions.2 The rule will

become effective June 7, 1995.3

The proposed rule change will amend

BSE’s definitions of transactions

nominated as ‘‘Regular Way,’’ ‘‘Buyer’s

or Seller’s Option,’’ and ‘‘Next Day’’

contained in Chapter II, Section 6 of

BSE’s rules and will amend Chapter X,

Section 1 of BSE rules regarding the

settlement of ‘‘Cash and Ex-Dividend

Transactions.’’ Under the proposed rule

change, regular way settlement will

occur on the third business day after the

trade, and buyer’s or seller’s option

trades will settle between four business

days and 180 days following the

contract date except that BSE may

provide otherwise in specific issues or

classes of securities. Next day trades

will be able to settle on the first or

second business day following the date

of the contract. Securities will trade

without (i.e., ‘‘ex’’) any dividend, right,

or privilege on the second full business

day preceding the record date except

that when the record date is on a

holiday the securities will trade ‘‘ex’’ on

the third preceding full business day.

The proposed rule change also

amends Chapter XV, Section 14 of BSE

rules, ‘‘Claims and Reports against

Specialist.’’ This proposed change will

shorten the time periods in which

members can file claims of erroneous or

omitted transactions against specialists.

Claims regarding lack of a comparison

of a reported transaction will have to be

made within three days of the original

trade date of five days to comport with

the changes in the settlement cycle.

Claims regarding the omissions of

reports and erroneous trade

comparisons will have to be made

within five business days instead of ten

business days. The latter changes still

will exceed the settlement cycle;

however, they will exceed the

settlement cycle by only two days

instead of five thus reducing the risk

associated with such claims. Finally,

Chapter XXVIII, subparagraph (4)

requires that customers provide their

agent instructions within certain time

frames for delivery versus payment and

receipt versus payment transactions.

The time frames contained in

subparagraph (4)(i) and (ii) will be

shortened by two business days.

The BSE’s implementation of this

proposed rule change will be consistent

with the ‘‘T+3’’ conversion schedule

which the National Securities Clearing

Corporation has proposed for industry

use. The schedule is as follows:

Trade date

Settlement

cycle

Settlement date

June 2 Friday ... 5 day ... June 9 Friday.

June 5 Monday 4 day ... June 9 Friday.

June 6 Tuesday 4 day ... June 12 Monday.

June 7 Wednesday.3 day ... June 12 Monday.

If the Commission determines to alter

the exemptions currently provided in

Rule 15c6–1, BSE may need to

undertake additional rule amendments.

It is intended that the proposed rule

change will become effective on the

same date as Commission Rule 15c6–1.

The proposed rule change is

consistent with Section 6(b)(5) of the

Act in that it is designed to promote just

and equitable principles of trade, to

foster cooperation and coordination

with persons engaged in regulating,

clearing, processing information with

respect to, and facilitating transactions

in securities.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

BSE does not believe that the

proposed rule change will impose any

burden on competition that is 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 were either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

ninety 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 BSE consents, the

Commission will:

(A) By order approve such 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 in

the Commission’s Public Reference

Section, 450 Fifth Street NW.,

Washington, DC 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of BSE.

All submissions should refer to File

No. SR–BSE–95–05 and should be

submitted by March 29, 1995.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secrtary.

[FR Doc. 95–5585 Filed 3–7–95; 8:45 am]

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