[Federal Register Volume 60, Number 65 (Wednesday, April 5, 1995)]
[Notices]
[Page 17378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8339]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35549; File No. SR-PCC-94-01]


Self-Regulatory Organizations; Pacific Clearing Corporation; 
Order Approving a Proposed Rule Change Making Corrections and 
Clarifications to Certain Provisions of the PCC's Rules, Participant 
Agreement, and Clearing Fund Agreement

March 30, 1995.
    On November 28, 1994, the Pacific Clearing Corporation (``PCC'') 
filed with the Securities and Exchange Commission (``Commission'') a 
proposed rule change under Section 19(b)(1) of the Securities Exchange 
Act of 1934 (``Act'') to correct certain typographical errors in PCC's 
rules and to clarify certain provisions regarding specialist post 
capital in PCC's participant agreement and clearing fund agreement.\1\ 
Notice of the proposal was published in the Federal Register on 
February 7, 1995.\2\ For the reasons discussed below, the Commission is 
approving the proposed rule change.

    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\Securities Exchange Act Release No. 35313 (February 1, 1994), 
59 FR 5644 [File No. SR-PCC-94-01].
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I. Description

    The proposed rule change will correct typographical errors in 
certain provisions of PCC's rules and will clarify certain provisions 
of PCC's standard participant agreement and clearing fund agreement 
relating to specialist post capital. Specifically, PCC corrects 
typographical errors to the Table of Contents; PCC Rule 1.2(f), 
defining the term ``long position''; PCC Rules 2.1(c) and 2.1(d), 
addressing membership qualifications and approval; and PCC Rule 
9.3(c)(iii) addressing specialist post termination procedures. In 
addition, PCC is amending PCC Rule 5.2 to clarify that any reductions 
to excess post capital or a member's clearing fund deposit cannot be 
made for amounts that would reduce the member's post capital or 
clearing fund deposit below the minimum requirement.
    The proposal also amends certain paragraphs of PCC's participant 
agreement that relate to post capital. Paragraph 3.1(e)(iii) is amended 
to clarify that it refers to the monitoring of post capital rather than 
net capital. Paragraph 4.5 of the participant agreement is amended to 
distinguish post capital from net capital. Net capital, which is 
specified by PSE Rule 2.1 and Rule 15c3-1 of the Act, remains constant 
for a firm regardless of the number of specialist posts it operates. In 
contrast, post capital varies because it represents the amount of 
capital required to be maintained by a firm based on the number of 
specialist posts it operates. Paragraph 4.9 of the participant 
agreement is modified to clarify that reductions to excess post capital 
and to the clearing fund deposit cannot be made in amounts that would 
reduce these sums below their respective minimum requirements. 
Paragraph 4.9 of the participant agreement also is amended to clarify 
that losses on a trial balance are due on the fifteenth day of the 
month following the month for which the trial balance was issued.
    Similarly, the clearing fund agreement is clarified such that the 
minimum contribution, as defined in paragraph 5 of the clearing fund 
agreement, made by a member firm backing a specialist post will be 
applied towards meeting the post capital requirement. Prior to this 
clarification, the clearing fund agreement stated that contributions 
were to be credited towards the net capital requirement.

II. Discussion

    The Commission believes that the PCC's proposed rule change is 
consistent with the requirements of Section 17A of the Act\3\ and in 
particular with Sections 17A(b)(3) (A) and (F) of the Act.\4\ Sections 
17A(b)(3) (A) and (F) require, among other things, that the rules of a 
clearing agency be designed to promote the prompt and accurate 
clearance and settlement of securities transactions and to assure the 
safeguarding of securities and funds within its possession or control 
or for which it is responsible. The clarifications regarding specialist 
post capital and net capital will assist PCC in safeguarding the 
securities and funds which are in PCC's custody or control or for which 
PCC is responsible. Furthermore, the technical corrections to PCC's 
rules will clarify these rules and thereby advance the prompt and 
accurate clearance and settlement of securities transactions.

    \3\15 U.S.C. 78q-1 (1988).
    \4\15 U.S.C. 78q-1(b)(3) (A) and (F) (1988).
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change 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,\5\ that the proposed rule change (File No. SR-PCC-94-01), be, and 
hereby is, approved.

    \5\15 U.S.C. 78s(b)(2) (1988).

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

    \6\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-8339 Filed 4-4-95; 8:45 am]
BILLING CODE 8010-01-M