[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Notices]
[Pages 208-209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-00019]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36624; File No. SR-PTC-95-08]


Self-Regulatory Organizations; Participants Trust Company; Notice 
of Filing of Proposed Rule Change Modifying the Opening of Processing 
Activity for Security Transactions on a Permanent Basis

December 21, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 19, 1995, the 
Participants Trust Company (``PTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change (File No. 
SR-PTC-95-08) as described in Items I, II, and III below, which Items 
have been prepared primarily by PTC. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.

    \1\ 15 U.S.C. Sec. 78s(b)(1) (1998).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change modifies and makes permanent a ninety day 
pilot program that commenced on October 23, 1995, that established the 
opening of security processing activity at 8:30 a.m. instead of the 
previous time of 7:00 a.m. For purposes of participant log-ons, 
intraparticipant movements of securities, and the return of securities 
collateral to participant positions using PTC's Collateral Loan 
Facility (``CLF'') mechanism, PTC will retain the 7:00 a.m. opening 
time.\2\

    \2\ Securities Exchange Act Release No. 36405 (October 20, 
1995), 60 FR 55629 [File No. SR-PTC-95-07] (notice of filing and 
order granting accelerated approval of proposed rule change).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, PTC 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. PTC has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.\3\

    \3\ The Commission has modified the text of the summaries 
prepared by PTC.
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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 modify and make 
permanent the ninety day pilot program that commenced on October 23, 
1995, that established the opening of security processing activity at 
8:30 a.m. instead of the previous time of 7:00 a.m. The current end-of-
day cut-off times will remain unchanged. Consistent with the pilot 
program, PTC's processing system will retain the 7:00 a.m. opening time 
for purposes of participant log-ons and intraparticipant movements of 
securities into or out of segregated accounts. In addition, the pilot 
program will be modified to permit the return of securities collateral 
to participant positions using the CLF mechanism beginning at 7:00 a.m.
    The proposed rule change will conform the opening of processing 
activity at PTC to the opening time of the Federal Reserve System's 
fedwire. This will eliminate the hour and a half window during which 
time transactions failing PTC's credit checks cannot be processed 
because participants are unable to move funds to PTC (``prefunding'') 
until the 8:30 fedwire opening. The incidence of transactions that may 
require prefunding in order to pass credit checks during this period is 
expected to increase after the implementation of PTC/SPEED processing 
Release 5.6, which will eliminate the posting of securities to a 
participant's abeyance account while awaiting match by the receiving 
participant. Under SPEED Release 5.6, the abeyance account will be 
eliminated, and transactions will be immediately posted to the 
deliverer's and receiver's account.\4\

    \4\ For further information on SPEED Release 5.6 and changes to 
PTC's processing system, refer to Securities Exchange Act Release 
No. 36377 (October 16, 1995), 60 FR 54741 [File No. SR-PTC-95-06] 
(notice of filing of proposed rule change.

[[Page 209]]

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    Based on its experience during the pilot program, PTC anticipates 
that the later opening of processing activity will have no impact on 
the settlement process. PTC will continue to monitor any effects of the 
change.
    PTC believes that the proposed rule change is consistent with 
Section 17A(b)(3)(F) of the Act \5\ and the rules and regulations 
thereunder because it facilitates the prompt and accurate clearance and 
settlement of securities transactions and provides for the safeguarding 
of securities and funds in PTC's custody or control or for which PTC is 
responsible.

    \5\ 15 U.S.C. Sec. 78q-1(b)(3)(F) (1988).
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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 not received written comments on the proposed rule change. 
The pilot program and the proposed permanent opening of security 
processing activity at 8:30 a.m. was discussed on December 7, 1995, at 
a meeting of the PTC Operations Committee, which consists of 
participant representatives. It was the consensus of the Committee 
members that the 8:30 a.m. opening time should be made permanent and 
that in addition to the intraparticipant activities that retained the 
7:00 a.m. opening time under the pilot program the return of collateral 
using the CLF mechanism should also open at 7:00 a.m.

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 may be withheld from the public in accordance with the provisions 
of 5 U.S.C. Sec. 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 will also be available for 
inspection and copying at the principal office of PTC. All submissions 
should refer to file number SR-PTC-95-08 and should be submitted by 
January 24, 1996.

    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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Jonathan G. Katz,
Secretary.
[FR Doc. 96-00019 Filed 1-2-96; 8:45 am]
BILLING CODE 8010-01-M