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###### Securities and Exchange Commission

          - [Release No. 34-44217; File No. SR-EMCC-00-04]

                    On July 3, 2000, the Emerging Markets Clearing Corporation (“EMCC”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change (File No. SR-EMCC-00-04) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”).[1]                                          Notice of the proposal was published in the                     **Federal Register**                     on December 13, 2000.[2]                                          No comment letters were received. For the reasons discussed below, the Commission is approving the proposed rule change.                

## I. Description

                    The rule change establishes admission criteria for brokers or dealers who are regulated by the Securities and Futures Authority Limited (“SFA”) [3]                                          and act as inter-dealer brokers (“IDBs”). EMCC's membership criteria for IDBs that are registered by the SFA will mirror the requirements of U.S. registered broker-dealers acting as IDBs [4]                                          except SFA regulated IDBs will be required to maintain “excess financial resources” of $10,000,000 US as opposed to excess net capital of $10,000,000.                

## II. Discussion

                    Section 17A(b)(3)(F) of the Act requires that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions.[5]                                          Since the Commission's approval of EMCC Rule 2, EMCC has been informed that brokers or dealers who are regulated by the SFA also act as IDBs and, in fact, that there are broker-dealers who are regulated by the SFA who would like to be IDB members of EMCC. The Commission believes it is prudent for EMCC to establish criteria for broker-dealers that act as IDBs and that are regulated by the SFA because it will encourage IDBs regulated by the SFA to become participants in EMCC and therefore should facilitate the prompt and accurate clearance and settlement of emerging market securities transactions.                

## III. Conclusion

On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A 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-EMCC-00-04) be and hereby is approved.                

                    For the Commission by the Division of Market Regulation, pursuant to delegated authority.[6] 

Margaret H. McFarland,

Deputy Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
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2.                             Securities Exchange Act Release No. 43680 (December 6, 2000), 65 FR 77947.                    
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3.                             SFA is the United Kingdom financial services regulator.                    
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4.                             EMCC's Rules define an IDB as “a broker-dealer that conducts securities trading which matches buyers and sellers who are banks or dealers, and who is designated as such by the Corporation.” EMCC's membership criteria for broker-dealers acting as IDBs require an applicant to demonstrate to the EMCC Board or Membership and Risk Committee that: (1) The applicant has the operational capacity to perform its membership functions in a satisfactory manner; (2) the applicant has an established business history of at least three years or personnel with sufficient operational background and experience to ensure the ability of the applicant to conduct its business; (3) the applicant has the financial ability to make all anticipated payments required by EMCC; (4) the applicant is in compliance with the capital requirements imposed by its appropriate regulatory authority; and (5) no adverse conditions exist which might prohibit applicant's membership in EMCC.                    
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5.                             15 U.S.C. 78q-1(b)(3)(F).                    
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6.                             17 CFR 200.30-3(a)(12).                    
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[FR Doc. 01-10748  Filed 4-30-01; 8:45 am]

BILLING CODE 8010-01-M