Federal Register / Vol. 74, No. 128 / Tuesday, July 7, 2009 / Notices 32199 

1FICC is the successor to MBS Clearing 

Corporation and Government Securities Clearing 

Corporation. 

2 15 U.S.C. 78q–1(b) and 78s(a). 

3 17 CFR 240.17Ab2–1. 

4Securities Exchange Act Release No. 24046 

(February 2, 1987), 52 FR 4218. 

5Securities Exchange Act Release Nos. 25957 

(August 2, 1988), 53 FR 29537; 27079 (July 31, 

1989), 54 FR 34212; 28492 (September 28, 1990), 55 

FR 41148; 29751 (September 27, 1991), 56 FR 

50602; 31750 (January 21, 1993), 58 FR 6424; 33348 

(December 15, 1993), 58 FR 68183; 35132 

(December 21, 1994), 59 FR 67743; 37372 (June 26, 

1996), 61 FR 35281; 38784 (June 27, 1997), 62 FR 

36587; 39776 (March 20, 1998), 63 FR 14740; 41211 

(March 24, 1999), 64 FR 15854; 42568 (March 23, 

2000), 65 FR 16980; 44089 (March 21, 2001), 66 FR 

16961; 44831 (September 21, 2001), 66 FR 49728; 

45607 (March 20, 2002), 67 FR 14755; 46136 (June 

27, 2002), 67 FR 44655. 

6Supra note 2. 

7Supra note 3. 

8Securities Exchange Act Release No. 25740 (May 

24, 1988), 53 FR 19839. 

9Securities Exchange Act Release Nos. 25740 

(May 24, 1988), 53 FR 19639; 29236 (May 24, 1991), 

56 FR 24852; 32385 (June 3, 1993), 58 FR 32405; 

35787 (May 31, 1995), 60 FR 30324; 36508 

(November 27, 1995), 60 FR 61719; 37983 

(November 25, 1996), 61 FR 64183; 38698 (May 30, 

1997), 62 FR 30911; 39696 (February 24, 1998), 63 

FR 10253; 41104 (February 24, 1999), 64 FR 10510; 

41805 (August 27, 1999), 64 FR 48682; 42335 

(January 12, 2000), 65 FR 3509; 43089 (July 28, 

2000), 65 FR 48032; 43900 (January 29, 2001), 66 

FR 8988; 44553 (July 13, 2001), 66 FR 37714; 45164 

(December 18, 2001), 66 FR 66957; 46135 (June 27, 

2002), 67 FR 44655. 

10Securities Exchange Act Release No. 47015 

(December 17, 2002), 67 FR 78531 (December 24, 

2002) [File Nos. SR–GSCC–2002–07 and SR– 

MBSCC–2002–01]. 

11Securities Exchange Act Release Nos. 48116 

(July 1, 2003), 68 FR 41031; 49940 (June 29, 2004), 

69 FR 40695; 51911 (June 23, 2005), 70 FR 37878; 

54056 (June 28, 2006), 71 FR 38193; 55920 (June 18, 

2007), 72 FR 35270; and 57949 (June 11, 2008), 73 

FR 34808. 

12Letter from Nikki Poulos, Managing Director 

and General Counsel, FICC (May 7, 2009). 

13FICC White Paper: ‘‘A Central Counterparty For 

Mortgage-Backed Securities: Paving The Way’’ at 

http://www.dtcc.com/downloads/leadership/ 

whitepapers/ccp.pdf. 14 17 CFR 200.30–3(a)(16). 

temporary registration as a clearing 

agency through June 30, 2010.1

On February 2, 1987, pursuant to 

Sections 17A(b) and 19(a) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 17Ab2–1 

promulgated thereunder,3 the 

Commission granted the MBS Clearing 

Corporation (‘‘MBSCC’’) registration as a 

clearing agency on a temporary basis for 

a period of eighteen months.4 The 

Commission subsequently extended 

MBSCC’s registration through June 30, 

2003.5

On May 24, 1988, pursuant to 

Sections 17A(b) and 19(a) of the Act 6

and Rule 17Ab2–1 promulgated 

thereunder,7 the Commission granted 

the Government Securities Clearing 

Corporation (‘‘GSCC’’) registration as a 

clearing agency on a temporary basis for 

a period of three years.8 The 

Commission subsequently extended 

GSCC’s registration through June 30, 

2003.9

On January 1, 2003, MBSCC was 

merged into GSCC, and GSCC was 

renamed FICC.10 The Commission 

subsequently extended FICC’s 

temporary registration through June 30, 

2009.11

On May 7, 2009, FICC requested that 

the Commission grant FICC permanent 

registration as a clearing agency or in 

the alternative extend FICC’s temporary 

registration until such time as the 

Commission is prepared to grant FICC 

permanent registration.12

In April 2006, FICC announced its 

plan to have its Mortgage-Backed 

Securities Division (‘‘MBS Division’’) 

act as a central counterparty (‘‘CCP’’).13

As such, FICC would act as the CCP for 

MBS Division members and would 

become the new legal counterparty to all 

original parties for eligible mortgagebacked securities transactions. 

Currently, FICC acts as the CCP for its 

Government Securities Division 

members’ eligible U.S. Government 

securities transactions but does not act 

as the CCP for its MBS Division 

members’ eligible mortgage-backed 

securities transactions. 

Pursuant to this Notice and Order, the 

Commission is extending FICC’s 

temporary registration as a clearing 

agency in order that FICC may continue 

to operate as a registered clearing 

agency and may continue to provide 

uninterrupted clearing and settlement 

services its users. The Commission will 

consider permanent registration of FICC 

at a future date after the Commission 

and FICC have had the opportunity to 

evaluate how FICC is functioning with 

its MBS Division acting as a CCP, 

assuming the MBS Division CCP service 

is implemented. 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number 600–23 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number 600–23. This file number 

should be included on the subject line 

if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Section, 100 F Street, NE., Washington, 

DC 20549 on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of FICC and on 

FICC’s Web site at http://www.ficc.com. 

All comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number 600–23 and should be 

submitted on or before July 28, 2009. 

It is therefore ordered that FICC’s 

temporary registration as a clearing 

agency (File No. 600–23) be and hereby 

is extended through June 30, 2010. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–15902 Filed 7–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, July 9, 2009 at 1 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

32200 Federal Register / Vol. 74, No. 128 / Tuesday, July 7, 2009 / Notices 

1Public Law 106–554, 114 Stat. 2763 (2000). 

2A security future is defined in Section 

3(a)(55)(A) of the Securities Exchange Act of 1934 

(‘‘Exchange Act’’), 15 U.S.C. 78c(a)(55)(A), and 

Section 1a(31) of the Commodity Exchange Act 

(‘‘CEA’’), 7 U.S.C. 1a(31). 

3A security futures product is defined as a 

security future or any put, call, straddle, option, or 

privilege on any security future. See Section 

3(a)(56) of the Exchange Act, 15 U.S.C. 78c(a)(56), 

and Section 1a(32) of the CEA, 7 U.S.C. 1a(32). 

4Section 3(a)(10) of the Exchange Act, 15 U.S.C. 

78c(a)(10). 

5Section 2(a)(1) of the Securities Act of 1933 

(‘‘Securities Act’’), 15 U.S.C. 77b(a)(1). 

6Section 2(a)(36) of the Investment Company Act 

of 1940, 15 U.S.C. 80a–2(a)(36). 

7Section 202(a)(18) of the Investment Advisers 

Act of 1940, 15 U.S.C. 80b–2(a)(18). 

8Section 1a(31) of the CEA, 7 U.S.C. 1a(31). 

9See Section 1a(25) of the CEA, 7 U.S.C. 1a(25), 

and Section 3(a)(55)(B) and (C) of the Exchange Act, 

15 U.S.C. 78c(a)(55)(B) and (C). See also Rules 

3a55–1 and 3a55–2 under the Exchange Act, 17 CFR 

240.3a55–1 and 240.3a55–2; Rules 41.11, 41.12, and 

41.13 under the CEA, 17 CFR 41.11, 41.12, and 

41.13; and Securities Exchange Act Release No. 

44724 (August 20, 2001), 66 FR 44490 (August 23, 

2001). 

10See Rule 3a55–3 under the Exchange Act, 17 

CFR 240.3a55–3; Rule 41.13 under the CEA, 17 CFR 

41.13; and Securities Exchange Act Release No. 

44724, supra note 9. 

11 15 U.S.C. 78f(h)(1). 

12 15 U.S.C. 78o–3(a). The Exchange Act and the 

CEA also require that any security underlying a 

security future listed on a national securities 

exchange or national securities association, 

including each component security of a narrowbased security index, be registered under Section 12 

of the Exchange Act. See Section 6(h)(3)(A) of the 

Exchange Act, 15 U.S.C. 78f(h)(3)(A), and Section 

2(a)(1)(D)(i)(I) of the CEA, 7 U.S.C. 2(a)(1)(D)(i)(I). 

Accordingly, if the securities that compose foreign 

security indexes listed on or subject to the rules of 

a foreign board of trade are not registered under 

Section 12 of the Exchange Act, absent relief, a 

national securities exchange or national securities 

association would not be able to list and trade a 

security future based on such an index. The 

Exchange Act and CEA also require that securities 

underlying security futures be equity securities. 

Section 6(h)(3)(D) of the Exchange Act, 15 U.S.C. 

78f(h)(3)(D), and Section 2(a)(1)(D)(i)(III) of the 

CEA, 7 U.S.C. 2(a)(1)(D)(i)(III). The Commission and 

the CFTC have exercised their authority pursuant 

to Sections 1a(25)(B)(vi) and 2(a)(1)(D) of the CEA 

and Sections 3(a)(55)(C)(vi), 3(b), 6(h), 23(a), and 36 

of the Exchange Act, to adopt rules to allow security 

futures on debt securities and debt securities 

indexes under certain conditions. 7 U.S.C. 

1a(25)(B)(vi) and 2(a)(1)(D) and 15 U.S.C. 

78c(a)(55)(C)(vi), 78c(b), 78f(h), 78w(a), and 78mm. 

See Securities Exchange Act Release No. 54106 

(July 6, 2006), 71 FR 39534 (July 13, 2006). 

13Public Law 110–246, Sec. 13, 106, 122 Stat. 

1651, 2197 (2008), reprinted in Notes to 7 U.S.C.A. 

Sec. 2. 

14See Securities Exchange Act Release Nos. 

44288 (May 9, 2001), 66 FR 27560 (May 17, 2001), 

and 44724, supra note 9. 

15See e.g., Comment Letters from Barclay’s 

Global Investors, N.A., dated July 17, 2001; Futures 

Industry Association, dated July 18, 2001; General 

Motors Investment Management Corporation, dated 

June 11, 2001; The Goldman Sachs Group and its 

subsidiaries, dated July 18, 2001; and The Montreal 

Exchange, dated June 14, 2001 (cited in Securities 

Exchange Act Release No. 44724, supra note 9). 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), (8), 9(B) and 

(10) and 17 CFR 200.402(a)(3), (5), (7), 

(8), 9(ii) and (10), permit consideration 

of the scheduled matters at the Closed 

Meeting. 

Commissioner Casey, as duty officer, 

voted to consider the items listed for the 

Closed Meeting in a closed session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, July 9, 

2009 will be: 

institution and settlement of injunctive 

actions; institution and settlement of 

administrative proceedings; adjudicatory 

matters; regulatory matter regarding financial 

institutions; and other matters related to 

enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have 

been added, deleted or postponed, 

please contact: The Office of the 

Secretary at (202) 551–5400. 

Dated: July 2, 2009. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–16035 Filed 7–2–09; 11:15 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60194; International Series 

Release No. 1311] 

Order Under Section 36 of the 

Securities Exchange Act of 1934 

Granting an Exemption From 

Exchange Act Section 6(h)(1) for 

Certain Persons Effecting 

Transactions in Foreign Security 

Futures and Under Exchange Act 

Section 15(a)(2) and Section 36 

Granting Exemptions From Exchange 

Act Section 15(a)(1) and Certain Other 

Requirements 

June 30, 2009. 

I. Introduction and Background 

The Commodity Futures 

Modernization Act of 2000 (‘‘CFMA’’) 1

authorized the trading of futures on 

individual stocks and narrow-based 

stock indexes, i.e., security futures.2 The 

CFMA defined security futures 

products 3 as ‘‘securities’’ under the 

Exchange Act,4 the Securities Act of 

1933 (‘‘Securities Act’’),5 the Investment 

Company Act of 1940,6 and the 

Investment Advisers Act of 1940,7 and 

as contracts of sale for future delivery 

under the CEA.8 Accordingly, the 

regulatory framework established by the 

CFMA provides the Securities and 

Exchange Commission (‘‘Commission’’) 

and the Commodity Futures Trading 

Commission (‘‘CFTC’’) with joint 

jurisdiction over security futures 

products. Futures on broad-based 

security indexes (security indexes that 

are not narrow-based), and options on 

such futures, remain under the 

exclusive jurisdiction of the CFTC. To 

distinguish between futures on narrowbased security indexes and futures on 

broad-based security indexes, the CFMA 

also amended the CEA and the 

Exchange Act to add an objective 

definition of a narrow-based security 

index.9 This definition applies both to 

security indexes that underlie futures 

contracts listed and traded in the United 

States and those that underlie futures 

contracts traded on or subject to the 

rules of a foreign board of trade.10

The CFMA also added Section 6(h)(1) 

to the Exchange Act,11 which makes it 

unlawful for any person to effect 

transactions in security futures products 

that are not listed on a national 

securities exchange or a national 

securities association registered 

pursuant to Section 15A(a) of the 

Exchange Act.12 Because of this 

prohibition, U.S. persons are currently 

unable to enter into contracts for 

narrow-based index or single stock 

futures traded on or subject to the rules 

of a foreign board of trade. 

The Food, Conservation and Energy 

Act of 2008 requires the Commission, 

the CFTC, or both, as appropriate, to 

take action under their existing 

authorities to permit, by June 30, 2009, 

the trading of futures on certain security 

indexes by resolving issues related to 

foreign security indexes.13 The 

exemption the Commission is issuing 

today fulfills this statutory directive on 

the part of the Commission. 

The Commission understands that 

institutional investors could use futures 

on foreign securities and foreign 

security indexes for, among other 

things, risk management and asset 

allocation. In particular, in connection 

with the Commission’s rulemaking in 

2001 relating to the definition of 

narrow-based security index and 

exclusions from that definition,14

commenters expressed strong views that 

U.S. investors, particularly institutional 

investors, need to be able to trade in 

futures on foreign security indexes for 

risk management, asset allocation, and 

other purposes, and would suffer 

substantial adverse impact and 

competitive disadvantage with respect 

to non-U.S. investors if they could not 

trade such products.15