Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices 3687

8Because the account is limited to free

movements of securities, monetary obligations to

DTC should be limited to the payments of fees for

DTC services. Under the sponsored account

relationship, DTC will look to ISCC for any liability

related to activity in that account.

9Securities Exchange Act Release No. 26812 (May

12, 1989), 54 FR 21691.

10 15 U.S.C. 78q–1 (1988).

11 15 U.S.C. 78s(b)(2) (1988).

12 17 CFR 200.30–3(a)(12) (1994).

13 17 CFR 200.30–3(a)(12) (1994).

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

2Standard was established in 1862. Standard’s

Securities Services Division provides

comprehensive services to over three hundred

foreign banks, stockbrokers, and custodian

accounts. Standard also is positioned through their

subsidiary, Stanbic Bank, to provide clearance and

settlement services in other southern and central

African countries. Standard meets the requirements

under Rule 17f–5 under the Investment Company

Act of 1940 to be an eligible foreign custodian.

Standard currently manages in excess of 30 billion

in U.S. dollars.

3Westpac was established in 1944. Westpac

currently provides custodial and securities

settlement services to over 500 local and

international clients. Westpac is qualified as an

eligible foreign custodian under Rule 17f–5 under

the Investment Company Act of 1940. Westpac

manages over 50.2 billion in Australian dollars in

assets under custody.

settlement statement which will detail

the net amount due to ISCC from CVSA

or from ISCC to CVSA. Under the

service agreement, CVSA agrees to pay

to ISCC all fees and charges in

connection with ISCC’s provision of

services and any assessment that ISCC

must pay to DTC.8 The preliminary

settlement statement also will indicate

dividend and possibly interest

payments received by ISCC from DTC

with respect to shares on deposit.

ISCC will transmit a final settlement

statement by 10:00 a.m. of the business

day following the day the related

preliminary settlement statement was

sent. The final settlement statement will

indicate sums paid by CVSA. Dividend

and interest credited to the ISCC/CVSA

account at DTC will be reflected in the

final settlement statement. The final

settlement also will reflect a debit for

the total dividend and interest ISCC

pays to CVSA’s withholding bank.

CVSA has agreed to consult with

ISCC’s auditors with regard to CVSA’s

financial condition, and CVSA will

furnish its financial statements to ISCC.

Further, CVSA has agreed to appoint a

registered agent in the U.S. for service

of process and will provide ISCC of

proof of such appointment. CVSA will

be subject to jurisdiction in New York

for the resolution of disputes arising

from the link. CVSA will be assigned

one ISCC account number for use on

behalf of CVSA members.

II. Discussion

The Commission believes that the

proposed rule change is consistent with

Section 17A of the Act and therefore is

approving the proposal. Specifically, the

Commission believes the proposal is

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

the Act in that it promotes the prompt

and accurate clearance and settlement of

securities transactions. Without the

linkage, Argentine purchasers of U.S.

securities would be required to make

individual arrangements for the custody

of their stock.

ISCC’s provision of this service to

CVSA enables CVSA to settle

transactions in U.S. securities more

efficiently. Further, the link between

ISCC and CVSA should standardize the

processing of U.S. securities traded in

foreign countries in accordance with

U.S. practices and procedures. The

uniform standards should reduce record

keeping errors and thereby enhance the

accuracy of the settlement of securities

transactions. In addition, this

standardization should promote foreign

investment in U.S. securities.

In the initial order granting ISCC

temporary registration as a clearing

agency, the Commission stated that the

development of efficient and

comparable automated national and

international clearance, settlement, and

payment systems is one of the more

important international goals.9 In that

order, the Commission stressed the

importance of developing linkages

between existing clearance and

settlement systems in light of the

increase in foreign activity in U.S.

stocks. This linkage agreement will

increase the accessibility of the U.S.

securities market to foreign investors by

giving Argentine investors a more

efficient method of settling U.S.

securities.

III. Conclusion

For the reasons stated above, the

Commission finds that ISCC’s proposal

is consistent with Section 17A of the

Act.10

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,11 that the

proposed rule change (File No. SR–

ISCC–94–03) be, and hereby is,

approved.12

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–1195 Filed 1–17–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35212; International Series

Release No. 767; File No. SR–ISCC–94–06]

Self-Regulatory Organizations;

International Securities Clearing

Corporation; Notice of Filing of

Proposed Rule Change Relating to the

Global Clearance Networking Service

January 10, 1995.

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

Securities Exchange Act of 1934

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

December 17, 1994, the International

Securities Clearing Corporation

(‘‘ISCC’’) 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 ISCC.

The Commission is publishing this

notice to solicit comments from

interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The purpose of ISCC’s proposed rule

change is to add additional service

providers to ISCC’s Global Clearance

Networking (‘‘GCN’’) service and to

permit other international data formats

to be used.

II. Self-Regulatory Organization’s

Statement on the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

ISCC 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. ISCC 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

ISCC’s Rule 50 provides that ISCC

may establish a foreign clearing,

settlement, and custody service in

conjunction with banks and trust

companies. Presently, ISCC has

established a GCN relationship with

Citibank, N.A. The purpose of the

proposed rule change is to add two

additional GCN service providers:

Standard Bank of South Africa

(‘‘Standard’’) 2 and Westpac Custodian

Nominees Limited of Australia

(‘‘Westpac’’).3 Standard will offer to

ISCC members clearance, settlement,

and custody services in South Africa.

Westpac will offer to ISCC members
3688 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices

4The Society for Worldwide Interbank Financial

Telecommunication (‘‘S.W.I.F.T.’’) operates a secure

data communication and processing system which

enables thousands of financial institutions in more

than 100 countries to communicate with each other

24 hours a day and facilitates the sending in excess

of 500 million messages annually.

5The International Organization for

Standardization (‘‘ISO’’) was founded in 1949 to

promote standards worldwide. ISO 7775, the

standard for international securities messages, was

developed in close cooperation with S.W.I.F.T. It

was first published in 1984. S.W.I.F.T. has assumed

responsibility for maintenance of the standard.

6S.W.I.F.T. automatically verifies the identity of

the sending party.

7Additionally, S.W.I.F.T., instead of ISCC, will

verify the number of records transmitted.

8 17 CFR 200.30–3(a)(12) (1994).

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

clearance, settlement, and custody

services in Australia.

ISCC, along with a steering committee

of the GCN participants, decided to

expand the number of GCN service

providers in order to expand and

improve processing capabilities.

Requests for proposals were sent to

banks selected by the steering

committee. After a review of the

proposals received, the steering

committee selected Standard and

Westpac to become GCN service

providers. ISCC intends to continue to

add additional service providers as

often as necessary in order that

participant requirements are adequately

addressed.

Each of the additional service

providers has entered into an agreement

with ISCC pursuant to which they agree

to provide access to clearing, settlement,

and custody services to GCN

participants that qualify to be customers

of such bank. Each service provider has

agreed to provide the services at

reduced prices. ISCC has not provided

any volume guarantees to either of these

banks, and each of the banks will be

responsible to collect fees directly from

the participants. The agreements may be

terminated by mutual agreement of the

parties on ninety days prior notice.

The proposed rule change also will

modify the procedures for using the

GCN service contained in Addendum E

to ISCC’s rules. Initially, participants

could submit data to ISCC via their

office computer’s central processing

unit (‘‘CPU’’) or any personal computer

(‘‘PC’’) connection using an ISCC

universal trade record (‘‘UTR’’) format.

In addition to submission via CPU or

PC, the proposal will allow ISCC to

accept data submitted via S.W.I.F.T. 4 In

addition to the UTR format, the

proposal will allow ISCC to accept data

in ISO 7775 format. 5 Data submitted via

PC or CPU will be routed through

ISCC’s Datatrak system to validate the

sender’s identity against ISCC’s

masterfile prior to the validation and

edit process. Data submitted via

S.W.I.F.T. will go directly to the

validation and edit process.6 Currently,

participants receive a confirmation that

ISCC has received the data. The

proposal will eliminate the sending of

the confirmation. If the data is not

received in ISO 7775 format, ISCC will

convert the data into this format for

transmission to the service provider.

Information that does not pass the

validation or edit process will be

rejected, and the participant will be

required to resubmit the data.

Data will be routed to the service

provider using the method required by

the service provider. In general, ISCC

will receive confirmation that the data

has been received by the service

provider. If the data is sent using

S.W.I.F.T., ISCC only will receive

confirmation that the data was

transmitted.7 If the service provider is

unable to process the data, the service

provider will contact the participant

directly. Each day, the service provider

will provide reports on behalf of the

participants’ accounts to ISCC which

ISCC will retransmit to the participants.

The proposed rule change will

facilitate and centralize the processing

of international transactions at a

beneficial cost to members which

ultimately will be reflected in services

to the investing public. Accordingly,

these changes are consistent with the

requirements of the Act, specifically

Section 17A of the Act, and the rules

and regulations thereunder.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

ISCC does not believe a burden will

be placed on competition as a result of

the proposed rule change.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Changes Received From

Members, Participants, or Others

ISCC has not solicited or received any

comments.

III. Date of Effectiveness of the

Proposed Rule Changes 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 ISCC 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

submissions, 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, and at the

principal offices of ISCC. All

submissions should refer to File No.

SR–ISCC–94–06 and should be

submitted by February 8, 1995.

For the Commission by the Division of

Market Regulation, pursuant to delegate

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–1194 Filed 1–17–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35208; File No. SR–NASD–

94–66]

Self-Regulatory Organizations;

National Association of Securities

Dealers, Inc.; Notice of Filing and

Order Granting Accelerated Approval

of Proposed Rule Change Relating to

Amendments to the Examination

Specifications and Study Outline for

the General Securities Sales

Supervisor (Series 8) Examination

January 10, 1995.

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

Securities Exchange Act of 1934

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

December 1, 1994 the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’ or ‘‘SEC’’)

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the NASD. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.