[Federal Register Volume 61, Number 116 (Friday, June 14, 1996)]
[Notices]
[Pages 30268-30269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15180]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37294; File No. SR-MBSCC-96-01]


Self-Regulatory Organizations; MBS Clearing Corporation; Notice 
of Filing of a Proposed Rule Change To Modify Participants Fund Deposit 
Requirements

June 10, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 8, 1996, MBS 
Clearing

[[Page 30269]]

Corporation (``MBSCC'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change (File No. SR-
MBSCC-96-01) and amended such filing on March 25, and May 30, 1996,\2\ 
as described in Items I, II, and III below, which items have been 
prepared primarily by MBSCC. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \2\ Letters from Anthony H. Davidson, MBSCC, to Christine 
Sibille, Division of Market Regulation (``Division''), Commission 
(March 18, 1996) and to Mark Steffensen, Division, Commission (May 
30, 1996).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will revise MBSCC's rules to modify MBSCC 
participants' deposit requirements to the participants fund.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In Its filing with the Commission, MBSCC included statements 
concerning the purpose of and basic 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. MBSCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by MBSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The MBSCC participant fund is composed of a basic deposit, a 
minimum market margin deposit, and a daily margin requirement.\4\ The 
basic deposit component is intended to ensure that a participant's 
obligations to MBSCC for services will be satisfied if the participant 
is unable to meet such obligations.\5\ Currently, the basic deposit 
component is $10,000, which must be in cash for each account maintained 
by a participant. The proposed rule change will require a minimum 
deposit of $1,000 for each participant regardless of the number of 
accounts maintained.\6\ If a participant's average monthly services 
bill, as determined by MBSCC on a semiannual basis, exceeds $1,000, the 
participant's minimum deposit amount will be the amount of such average 
monthly services bill up to a maximum amount of $10,000 per account 
maintained by such participant. MBSCC believes that as a result of the 
proposed rule change, participants fund deposits will reflect more 
accurately each participant's actual services billing.
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    \4\ The purpose of the daily margin requirement (``MMD'') is to 
ensure that a participant's open obligations to MBSCC will be 
satisfied in the event the participant is unable to meet such 
obligations. MMD is derived from a formula which assesses various 
factors including the type of position held and marked-to-market 
value fluctuations. The purpose of the minimum market margin deposit 
(``3MD'') is to provide additional assurances that each 
participant's fund contributions will be adequate to satisfy all 
open commitments recorded with MBSCC. Currently, the deposit 
required to satisfy this component of the participant fund is 
$250,000 per participant. The proposed rule change will not affect 
the requirements of MBSCC participants with regard to the MMD and 
3MD components of the participant's fund.
    \5\ Notwithstanding the purposes of the basic deposit, MMD, and 
3MD components of the participants fund, MBSCC is not limited in its 
application of participant fund proceeds. Rather, MBSCC can utilize 
the total participants fund to satisfy a participant's obligations 
irrespective of the type of default.
    \6\ MBSCC determined that its participants on average maintain 
two accounts at MBSCC. Presently, the monthly maintenance fee per 
account is $350 or $700 for two accounts. MBSCC based the minimum 
deposit amount of $1,000 upon these averages and other participant 
usage data.
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    MBSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \7\ and the rules and 
regulations thereunder because it provides for the equitable allocation 
of dues, fees, and other charges among MBSCC's participants.
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    \7\ 15 U.S.C. Sec. 78q-1 (1988).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    MBSCC 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 
solicited or received. MBSCC will notify the Commission of any written 
comments received by MBSCC.

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 MBSCC 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 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, N.W., Washington, 
D.C. 20549. Copies of such filing will also be available for inspection 
and copying at the principal office of MBSCC. All submissions should 
refer to the file number SR-MBSCC-96-01 and should be submitted by July 
5, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12) (1995)
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-15180 Filed 6-13-96; 8:45 am]
BILLING CODE 8010-01-M