Federal Register / Vol. 66, No. 94 / Tuesday, May 15, 2001 / Notices 26897

6The April 27, 2001 amendment to the rule filing

added the language ‘‘in conjunction with or’’ to the

filing.

7NSCC will keep effective all rules affected by

this filing until all members are subject to the

revised rules.

8 15 U.S.C. 78q–1. 9 17 CFR 200.30–3(a)(12).

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

2 In NSCC–2001–04, which is subject to

Commission approval, NSCC proposes to apply its

current clearing fund requirements for settling

members on surveillance (Addendum O) to all

NSCC members and to incorporate those

requirements as well as all the clearing fund

formulae and requirements currently found in

Addendum B into NSCC’s Procedure XV. The phase

in of the new procedures under SR–NSCC–2001–04

will begin June 15, 2001, and will end no later than

December 31, 2002. See Securities Exchange Act

Release No. 44276 (May 8, 2001) [File No. NSCC–

2001–04] (notice of filing of proposed rule change

to modify and consolidate clearing fund rules).

immediately subject to these rule

changes on June 15, 2001. Members who

have a position which will subject them

to a deposit requirement based on the

market domination calculations will

also be subject to these rule changes on

June 15, 2001. NSCC will place every

remaining member into deciles and will

apply the revised clearing fund

methodologies pursuant to a step-bystep, decile-by-decile plan based upon

the volatility classification of each such

member’s unsettled portfolio.

Accordingly, members with the most

volatile portfolios will be subject to

these rule changes first, on or shortly

after June 15, 2001, provided, however,

that to the extent any such member has

significant CNS obligations resulting

from options exercises and assignments

or is a municipal securities brokers’

broker, it will be subject to these rule

changes in conjunction with or 6 after all

other members but in no event later

than December 31, 2002.7

NSCC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act 8

and the rules and regulations

thereunder applicable to NSCC because

it will permit NSCC to assure the

safeguarding of funds and securities for

which it is responsible by allowing

NSCC to more appropriately collect

collateral to cover members’ exposures.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

NSCC does not believe that the

proposed rule change will have an

impact on or impose a burden on

competition.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments relating to the

proposed rule change have not yet been

solicited or received. NSCC will notify

the Commission of any written

comments received by NSCC.

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,

including whether the proposed rule

change is consistent with the Act.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. 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 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 NSCC. All submissions should

refer to File No. SR–NSCC–2001–04 and

should be submitted by June 5, 2001.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–12136 Filed 5–14–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44277; File No. SR–NSCC–

2001–05]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing and Order

Granting Accelerated Approval of a

Proposed Rule Change Related to

Additional Procedures for Class A

Surveillance of Certain Settling

Members and to the Collection of

Clearing Fund and Other Collateral

Deposits from These Settling Members

May 8, 2001.

Pursuant to Section 10(b)(1) of the

Securities Exchange Act of 1934

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

April 24, 2001, the National Securities

Clearing Corporation (‘‘NSCC’’) 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 primarily by NSCC. The

Commission is publishing this notice

and order to solicit comments from

interested persons and to grant

accelerated approval of the proposed

rule change through December 31, 2002.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change extends the

temporary approval of additional

procedures that govern the placement of

NSCC members of Class A surveillance

and the clearing fund deposit and other

collateral requirements for such

members until NSCC’s proposed rule

change, SR–NSCC–2001–04, is phased

in. 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,

NSCC 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

26898 Federal Register / Vol. 66, No. 94 / Tuesday, May 15, 2001 / Notices

3The Commission has modified the text of the

summaries prepared by NSCC.

4For a complete discussion of NSCC’s Class A

surveillance procedures and collateralization

requirements refer to Securities Exchange Act

Release Nos. 37202 (May 10, 1996), 61 FR 24993

[File No. SR–NSCC–95–17]; 38622 (May 19, 1997),

62 FR 27285 [File No. SR–NSCC–97–04]; 40034

(May 27, 1998), 63 FR 30277 [File No. SR–NSCC–

98–03]; 41478 (June 4, 1999), 64 FR 31664 [File No.

SR–NSCC–99–06]; and 42864 (May 30, 2000), 65 FR

36204 [File No. SR–NSCC–99–09] (Commission

approval date corrected in Federal Register, 65 FR

42065).

5 15 U.S.C. 78q–1.

6 15 U.S.C. 78q–1(b)(3)(F). 7Supra note 4.

8 15 U.S.C. 78s(b)(2).

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

may be examined at the places specified

in Item IV below. NSCC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements. 3

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

NSCC seeks to extend the temporary

approval of Addendum O, which

governs the application of Class A

surveillance procedures and the

additional collateralization

requirements for settling members that

engage in certain over-the-counter

(‘‘OTC’’) market making activities.

Addendum O is designed to decrease

the risks associated with OTC market

makers by use of Class A surveillance

and special collateralization procedures.

The Commission originally granted

temporary approval on May 10, 1996,

and has subsequently extended its

approval through May 31, 2001. 4

NSCC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act 5

and the rules and regulations

thereunder because the surveillance and

additional collateralization procedures

will facilitate the safeguarding of

securities and funds which are in its

custody or control or for which it is

responsible and in general will protect

investors and the public interest.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

NSCC does not believe that the

proposed rule change will have an

impact on or impose a 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. NSCC will notify

the Commission of any written

comments received by NSCC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

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

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds

which are in the custody or control of

the clearing agency and generally to

protect investors and the public

interest.6 As the Commission previously

stated, it finds that NSCC’s proposed

rule change is consistent with these

obligations under the Act because it

should help NSCC protect itself, its

members, and investors from members

that pose an increased risk because of

their involvement in OTC market

making.7

Under the proposal, NSCC will

continue to have the authority with

respect to members which participate in

OTC market making activities or clear

for correspondents that engage in such

activity to (1) place such members on

Class A surveillance, (2) requires such

members to post additional collateral

with NSCC, and (3) calculate an

alternative clearing fund requirement

for such members when additional risk

factors are present. Collectively, the

higher level of surveillance, the

additional level of collateralization, and

the alternative clearing fund

requirements should help ameliorate

NSCC’s exposure, which in turn should

assist NSCC in fulfilling its obligations

under the Act to safeguard securities

and funds for which it has control or is

responsible and to protect investors and

the public interest.

NSCC has requested that the

Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after

publication of the notice of filing. The

Commission finds good cause because

accelerated approval will allow NSCC to

continue to utilize its Class A

surveillance procedures, the interim

collateralization policy, and the

alternative clearing fund formula

without interruption when the previous

temporary approval expires on June 1,

2001, and until NSCC’s proposed rule

change, SR–NSCC–2001–04, is

completely phased in.

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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. Copies of

the submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with 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

Room, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of NSCC. All submissions should

refer to the File No. SR–NSCC–2001–05

and should be submitted by June 5,

2001.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,8 that the

proposed rule change (File No. SR–

NSCC–2001–05) be and hereby is

approved through December 31, 2002.

For the Commission by the Division

of Market Regulation, pursuant to

delegated authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–12138 Filed 5–14–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34-44272; File No. SR–NYSE–

2001–07]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of a Proposed

Rule Change and Amendment No. 1

Thereto by the New York Stock

Exchange, Inc. To Provide for an

Allocation Policy for Exchange-Traded

Funds Trading on an Unlisted Trading

Privileges Basis

May 7, 2001.

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 April 25,

2001, the New York Stock Exchange,

Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

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

the proposed rule change as described

in Items I and II below, which Items

have been prepared by the Exchange.

On May 7, 2001, the NYSE field