2416 Federal Register / Vol. 60, No. 5 / Monday, January 9, 1995 / Notices

4 15 U.S.C. 78q–1(b)(3)(F) (1988).

5 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b)(1) (1988).

to the proposed rule change, and none

have been received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Section 17A(b)(3)(F)4 of the Act

requires the rules of a clearing agency be

designed to foster cooperation and

coordination with persons engaged in

the clearance and settlement of

securities transactions. The Commission

believes that OCC’s proposed change is

consistent with Section 17A(b)(3)(F) of

the Act because it works in conjunction

with the PHLX rule change to better

coordinate and to promote cooperation

in the issuance, clearance, and

settlement of these options.

OCC 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 so

approving the proposed rule change

because accelerated approval will allow

OCC to coordinate its holiday expiration

dates for cash-settled foreign currency

options with the holiday expiration

dates for cash-settled foreign currency

options with the holiday expiration

dates set by the PHLX.

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 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, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of OCC. All submissions should

refer to the file No. SR–OCC–94–12 and

should be submitted within January 30,

1995.

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of the

Act, particularly with Section

17A(b)(3)(F) 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–

OCC–94–12) be, and hereby is,

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–382 Filed 1–6–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35182; File No. SR–PTC–94–

07]

Self-Regulatory Organizations;

Participants Trust Company; Notice of

Filing of Proposed Rule Change

Establishing a Daily Penalty Fee

Applicable to Late Funding of

Shortfalls in Participants Mandatory

Deposits to the Participants Fund

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

Securities Exchange Act of 1934

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

December 14, 1994, the Participants

Trust Company (‘‘PTC‘‘) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change (File No. SR–PTC–94–070 as

described in Items I, II, and III below,

which Items have been prepared

primarily by the self-regulatory

organization. The Commission is

publishing this notice to solicit

comments on the purposed 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 will

establish a daily penalty fee applicable

to a participant’s failure to fund on a

timely basis a shortfall in its mandatory

deposit to the participants fund.

II. Self-Regulatory Organization’s

Statement of the Purpose of and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization 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.

The self-regulatory organization 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 the

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed rule

change is to establish a daily penalty fee

applicable to a participant’s failure to

fund on a timely basis a shortfall in its

mandatory deposit to the participants

fund. Pursuant to Rule 2 of Article V of

PTC’s rules, PTC maintains a

participants fund to secure obligations

of participants and limited purpose

participants to PTC and to provide PTC

with an additional source of cash

collateral to meet its temporary

financing needs. Each participant is

required to maintain a mandatory

deposit in the participants fund which

is calculated as a percentage of its

average gross debits over the previous

month’s three major settlement days,

subjects to a minimum of $1 million and

a maximum of $10 million. A limited

purpose participant is required to

maintain a lower mandatory deposit

because of the limited nature of its

activity in the depository. At least $150

thousand of the mandatory deposit must

be made in cash. The remainder may be

made in cash or United States Treasury

obligations with a remaining maturity of

one year or less.

The adequacy of each participant’s

mandatory deposit is evaluated monthly

based on the prior month’s activity.

Participants are notified of any shortfall

and required to fund the deficiency

within five business days. The securities

portion of the mandatory deposit is

marked-to-market weekly, and

participants are required to fund any

deficiency in this portion within two

business days.

The proposed rule change establishes

a daily penalty fee for a participant’s

failure to fund a shortfall in its

mandatory deposit to the participants

fund by the required date in the amount

of the greater of (i) $200 or (ii) an

amount, calculated at an annual rate,

equal to the daily average Fed Funds

rate plus 250 basis points (2.5%) on the

outstanding balance of the shortfall in

the mandatory deposit to the

participants fund.

PTC believes that because the

proposed rule change provides for the

equitable allocation of reasonable dues,

fees, and other charges among

participants, it is consistent with

Section 17A of the Act and the rules and

regulations thereunder applicable to

PTC.
Federal Register / Vol. 60, No. 5 / Monday, January 9, 1995 / Notices 2417

1 15 U.S.C. 78s(b)(1) (1988).

2Securities Exchange Act Release Nos. 33023

(October 6, 1993), 58 FR 52891 [order adopting Rule

15c6–1] and 34952 (November 9, 1994), 59 FR

59137 [order changing the effective date of Rule

15c6–1].

3As proposed, the rule will include in a T+3

environment transaction in securities exempted

under Rule 15c6–1(b)(2). Specifically, under the

proposal, securities sold pursuant to a firm

commitment offering registered under the Securities

Act of 1933 must settle within three business days.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

PTC does not believe that the

proposed rule change will impose any

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

PTC has neither solicited nor received

comments on the proposed rule change.

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 the self-regulatory

organization 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, N.W.,

Washington, D.C. 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 maybe 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 will also be available for

inspection and copying at the principal

office of PTC. All submissions should

refer to file number SR–PTC–94–07 and

should be submitted by January 30,

1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94–380 Filed 1–6–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35176; File No. SR–Phlx–

94–55]

Self-Regulatory Organizations;

Philadelphia Stock Exchange, Inc.;

Notice of Filing of a Proposed Rule

Change Relating to Implementation of

a Three-Day Settlement Standard

December 29, 1994.

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

Securities Exchange Act of 1934

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

November 14, 1994, the Philadelphia

Stock Exchange, Inc. (‘‘PHLX’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) a

proposed rule change as described in

Items I, II, and III below, which items

have been prepared primarily by the

PHLX. 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 this proposed rule

change is to amend PHLX’s rules to

accommodate a three business day

settlement standard for securities

transactions.

II. Self-Regulatory Organization’s

Statements Regarding the Proposed

Rule Change

In its filing with the Commission, the

PHLX 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. The PHLX 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

In October 1993 the Commission

adopted Rule 15c6–1 under the Act. The

rule which will become effective June 7,

1995.2 Rule 15c6–1 will establish three

business days following the trade date

(‘‘T+3’’) as the standard settlement time

frame for most broker-dealer

transactions. In the release adopting

Rule 15c6–1, the Commission

concluded that a T+3 settlement cycle,

as compared to the current five-day

settlement cycle (‘‘T+5’’), will reduce

credit and liquidity risks and increase

efficiency in broker-dealer and clearing

agency operations.

The PHLX has identified those rules

which require amendment to provide

for operations by members within a T+3

settlement cycle. The rules are

described below.

Rule 113(b) defines ‘‘regular way’’

dealings in stock as requiring delivery

on the fifth business day following the

day of the contract.3 ‘‘Fifth’’ will be

changed to ‘‘third.’’ Similarly, the

language in Rule 113(c) defining a

seller’s option dealing will be changed

from requiring delivery in not less than

six days to in not less than four days.

Rule 114(b) defines ‘‘regular way’’

dealings in bonds (except convertible

bonds and United States government

securities) as requiring delivery on the

fifth business day following the day of

the contract. ‘‘Fifth’’ will be changed to

‘‘third.’’ Rule 114 also provides that for

bonds sold for delayed delivery,

delivery is due on the seventh day

following contract day. ‘‘Seventh’’ will

be changed to ‘‘fifth.’’ Similarly, the

language in Rule 114(c) defining a

seller’s option dealing will be changed

from requiring delivery in not less than

eight days to in not less than four days.

Rule 115(b) defines ‘‘regular way’’ to

require dealings in convertible bonds to

require delivery on the fifth business

day following the day of the contract.

‘‘Fifth’’ will be changed to ‘‘third.’’

Similarly, the language in Rule 115(b)

defining seller’s option dealing will be

changed from requiring delivery in not

less than six days to in not less than four

days.

Rule 117 (a) and (b) require notice of

early delivery of securities sold

pursuant to seller’s option or regular

way delayed delivery to be submitted

before 4:00 p.m. at least one day prior

to delivery and may not be given until

the fifth business day after the date of