Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 62899 

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

2Securities Exchange Act Release No. 62767 

(August 26, 2010), 75 FR 53368. 

3The specific language of the proposed provision 

is available at http://www.dtcc.com/downloads/ 

legal/rule_filings/2010/ficc/2010–04.pdf. 

4 15 U.S.C. 78q–1. 

5 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

6 15 U.S.C. 78q–1(b)(3)(F). 

7 15 U.S.C. 78q–1. 

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

9 17 CFR 200.30–3(a)(12). 

Extension: 

Rule 425; OMB Control No. 3235–0521; 

SEC File No. 270–462. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget the 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 425 (17 CFR 230.425) under the 

Securities Act of 1933 (15 U.S.C. 77a et 

seq.) requires the filing of certain 

prospectuses and communications 

under Rule 135 (17 CFR 230.135) and 

Rule 165 (17 CFR 230.165) in 

connection with business combination 

transactions. The purpose of the rule is 

to permit more oral and written 

communications with shareholders 

about tender offers, mergers and other 

business combination transactions on a 

more timely basis, so long as the written 

communications are filed on the date of 

first use. The information provided 

under Rule 425 is made available to the 

public upon request. Also, the 

information provided under Rule 425 is 

mandatory. Approximately 1,680 issuers 

file communications under Rule 425 at 

an estimated 0.25 hours per response for 

a total of 420 annual burden hours. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

Written comments regarding the 

above information should be directed to 

the following persons: (i) Desk Officer 

for the Securities and Exchange 

Commission, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, Room 10102, 

New Executive Office Building, 

Washington, DC 20503 or send an email to: Shagufta_Ahmed@omb.eop.gov; 

and (ii) Jeffrey Heslop, Acting Director/ 

CIO, Office of Information Technology, 

Securities and Exchange Commission, 

C/O Remi Pavlik-Simon, 6432 General 

Green Way, Alexandria, Virginia 22312; 

or send e-mail to: 

PRA_Mailbox@sec.gov. Comments must 

be submitted to OMB within 30 days of 

this notice. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25738 Filed 10–12–10; 8:45 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63038; File No. SR–FICC– 

2010–04] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Approving Proposed Rule Change to 

Provide Clarity With Respect to the 

Close Out Netting of the Government 

Securities Division in the Event of the 

Fixed Income Clearing Corporation’s 

Default or Insolvency 

October 5, 2010. 

I. Introduction 

On August 12, 2010, the Fixed Income 

Clearing Corporation (‘‘FICC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–FICC–2010– 

04 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’).1 The proposed rule change was 

published for comment in the Federal 

Register on August 31, 2010.2 No 

comment letters were received on the 

proposal. This order approves the 

proposal. 

II. Description 

FICC is proposing to add a provision 

to the rules of the Government 

Securities Division (‘‘GSD’’) to make 

explicit the close out netting that would 

be applied to obligations between FICC 

and its members in the event that FICC 

becomes insolvent or defaults in its 

obligations to its members.3

FICC has been asked by some of its 

dealer members to add a provision to 

the rules of GSD to make explicit the 

close out netting of obligations between 

FICC and its members in the event that 

FICC becomes insolvent or defaults in 

its obligations to its members. Such 

members have stated that such a 

provision would provide clarity in their 

application of balance sheet netting to 

their transactions at FICC under U.S. 

GAAP in accordance with the criteria 

specified in the Financial Accounting 

Standards Board’s Interpretation No. 39, 

Offsetting of Amounts Related to 

Certain Contracts (FIN 39). The 

members have stated further that a close 

out provision would allow them to 

comply with Basel Accord Standards 

relating to netting. Specifically, firms 

are able to calculate their capital 

requirements on the basis of their net 

credit exposure where they have legally 

enforceable netting arrangements with 

their counterparties, which includes a 

close out netting provision in the event 

of the default of a counterparty (in this 

case, the division of FICC acting as a 

CCP). 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act 4 and the 

rules and regulations thereunder 

applicable to FICC.5 In particular, the 

Commission believes that by adding a 

close out provision to its rules, FICC is 

providing its members with clarity with 

respect to close out netting that would 

be applied to obligations of FICC and its 

members in the event of an FICC 

insolvency or default and in the 

calculation of their capital requirements 

with respect to their net credit exposure 

where members have legally enforceable 

netting arrangements with their 

counterparties. The proposal is therefore 

consistent with the requirements of 

Section 17A(b)(3)(F),6 which requires, 

among other things, that the rules of a 

clearing agency are designed to remove 

impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 

settlement of securities transactions. 

IV. 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 7

and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

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

proposed rule change (File No. SR– 

FICC–2010–04) be, and hereby is, 

approved. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25620 Filed 10–12–10; 8:45 am] 

BILLING CODE 8011–01–P 

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