Document ID: SEC-2009-0425-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Fixed Income Clearing Corp.
Posted Date: 2009-03-30T04:00Z

[Federal Register: March 30, 2009 (Volume 74, Number 59)]
[Notices]               
[Page 14175-14176]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30mr09-107]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59622; File No. SR-FICC-2009-05]

 
Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Technical Modifications

March 23, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 27, 2009, the 
Fixed Income Clearing Corporation (``FICC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
primarily by FICC. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons. FICC 
filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of 
the Act \2\ and Rule 19b-4(f)(4) thereunder \3\ so that the proposal 
was effective upon filing with the Commission. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FICC proposes to amend the rules of its Government Securities 
Division (``GSD'') and Mortgage-Backed Securities Division (``MBSD'') 
in order to make them consistent with the rules of the National 
Securities Clearing Corporation (``NSCC''), an affiliated clearing 
agency.

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

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

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

1. Payment of Fines
    Prior to this rule change, GSD Rule 37, Section 8, provided that a 
member must pay a fine assessed by FICC within 30 calendar days of 
notification that the fine has been assessed. There was no 
corresponding provision in MBSD's or NSCC's rules.
    Consistent with FICC's project to harmonize its rules with those of 
affiliated clearing agencies that have common members, FICC proposes to 
delete GSD Rule 37, Section 8, and to adopt the language used in NSCC 
Rule 17 by stating that fines shall be payable at such time and in such 
manner as determined by FICC. Initially, such fines will be collected 
through the GSD monthly billing process after notification to the 
member, which is consistent with the manner and timing

[[Page 14176]]

that MBSD and NSCC collect such fines. GSD members will continue to be 
entitled to contest fines pursuant to GSD Rule 37.
2. Member Response to FICC Reports
    Prior to this rule change, GSD and MBSD members are required to 
report promptly to FICC any information contained in a FICC report that 
the member believes to be an error or discrepancy. However, GSD Rule 
11, Section 12, and Rule 5, Section 5, place an additional requirement 
for members using GSD's netting or comparison services to report the 
discrepancy no later than 10 calendar days after receipt of the report. 
A similar requirement is made with respect to MBSD members under MBSD 
Article V, Rule 4, Section 3, which requires that the discrepancy be 
reported no later than 10 calendar days. NSCC's rules require that 
discrepancies be reported by NSCC members promptly but do not reference 
a specific member of days. The proposed rule change conforms the GSD 
and MBSD rules to those of NSCC by deleting the specific reference to a 
10-day requirement in favor of the general requirement that the member 
report the discrepancy promptly.
    In addition, FICC proposes to change the terminology regarding the 
definitions of ``Foreign Affiliate,'' ``Foreign Affiliate Trade,'' 
``Foreign Netting Member,'' and ``Foreign Person'' in GSD Rule 1 to 
incorporate the defined terms used in NSCC's and The Depository Trust 
Company's (also a FICC-affliliate) rules, by refering to ``Non-U.S.'' 
or ``Non-domestic'' in place of ``Foreign.''
    FICC believes that the proposed rule change is consistent with 
Section 17A of the Act \4\ and the rules promulgated thereunder because 
it makes technical changes to clearing agency rules that conform with 
the obligations required of a common member.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    FICC does not believe that the proposed rule change will have any 
impact or impose any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    FICC has not solicited or received written comments relating to the 
proposed rule change. FICC will notify the Commission of any comments 
it receives.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) of the Act \5\ and Rule 19b-4(f)(4) thereunder.\6\ At 
any time within 60 days of the filing of the proposed rule change, the 
Commission may summarily abrogate such rule change if it appears to the 
Commission that such action is necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act.
---------------------------------------------------------------------------

    \5\ Supra note 2.
    \6\ Supra note 3.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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 rule-comments@sec.gov. Please include 
File No. SR-FICC-2009-05 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC, 20549-1090.

All submissions should refer to File No. SR-FICC-2009-05. 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 Room, 100 F Street, NE., 
Washington DC 20549, on official business days between the hours of 10 
am and 3 pm. Copies of such filing also will be available for 
inspection and copying at FICC's principal office and on FICC's Web 
site at http://ficc.com/gov/gov.docs.jsp?NS-query=#rf. 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 
submission should refer to File No. SR-FICC-2009-05 and should be 
submitted on or before April 20, 2009.

    For the Commission by the Division of Trading and Markets 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-6963 Filed 3-27-09; 8:45 am]

BILLING CODE 8011-01-P