Document ID: SEC-2007-0161-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Fixed Income Clearing Corporation
Posted Date: 2007-02-01T05:00Z

[Federal Register: February 1, 2007 (Volume 72, Number 21)]
[Notices]               
[Page 4751-4752]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01fe07-99]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55164; File No. SR FICC-2006-20]

 
Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Modify the EPN Rules of its Mortgage-Backed Securities Division to 
Implement New Messaging Capabilities and Establish a Fee Structure

January 24, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 28, 2006, the 
Fixed Income Clearing Corporation (``FICC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change 
described in Items I, II, and III below, which items have been prepared 
primarily by FICC. FICC filed the proposed rule change pursuant to 
Section 19(b)(3)(A)(ii) and (iii) of the Act \2\ and Rules 19b-4(f)(2) 
and 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 parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(ii) and (iii).
    \3\ 17 CFR 240.19b-4(f)(2) and 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the proposed rule change is to modify the Electronic 
Pool Notification (``EPN'') rules of FICC's Mortgage-Backed Securities 
Division (``MBSD'') to implement new messaging capabilities for 
participants using the EPN service and to establish a fee structure for 
the new messaging capabilities.\4\
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    \4\ The text of the proposed rule change is available at the 
FICC, at http://www.ficc.com/commondocs/rule.filings/rule.filing.06-20.pdf
, and at the Commission's Public Reference Room.

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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, 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),

[[Page 4752]]

and (C) below, of the most significant aspects of these statements.\5\
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    \5\ The Commission has modified the text of the summaries 
prepared by FICC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule filing is to modify the EPN Rules 
of the MBSD to implement new messaging capabilities for participants 
using the EPN service and to establish a fee structure for the new 
messaging capabilities. Currently, MBSD participants who wish to effect 
a pool substitution through the EPN service must submit two separate 
messages to the MBSD to effect the substitution--one to cancel the 
originally allocated pool and one to submit the substituted pool. In 
the alternative, participants may manually cancel the originally 
allocated pool and specify the substituted pool to a contra-party 
through phone or fax messages. Either process is cumbersome and 
inefficient for members.
    To remedy this, the MBSD has created a new EPN message type called 
the ``Cancel/Correct Pool Substitution'' (``Cancel/Correct'') to 
support the simultaneous cancellation of previously allocated pools and 
notification of substituted pools. By introducing the Cancel/Correct 
message, FICC will provide MBSD participants with an efficient method 
of transmitting pool substitutions to their allocation 
counterparties.\6\
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    \6\ Existing EPN messages and processes will continue to be 
supported without change.
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    FICC will amend the EPN fee schedule to incorporate related charges 
for the new Cancel/Correct message types. The proposed billing 
structure takes into account the Securities Industry and Financial 
Markets Association's cut-off times for delivering substitution and 
replacement pool information.
    The proposed rule change is consistent with the requirements of 
Section 17A of the Act and the rules and regulations thereunder because 
it will enable FICC to improve messaging capabilities in the EPN 
system, leading to an increase in efficiencies for FICC and its 
members. This will enable FICC to better ensure the accurate reporting, 
clearance, and settlement of securities transactions.

(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

    Written comments relating to the proposed rule change have not yet 
been solicited or received. FICC will notify the Commission of any 
written comments received by FICC.

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

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(4) \8\ 
thereunder because the proposed rule change effects a change in an 
existing service of FICC that (i) does not adversely affect the 
safeguarding of securities or funds in the custody or control of FICC 
and (ii) does not significantly affect the respective rights or 
obligations of FICC or those members using the service. The foregoing 
rule change has also become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-4(f)(2) \10\ thereunder 
because the proposed rule establishes or changes a due, fee, or other 
charge applicable only to participants. At any time within sixty days 
of the filing of such 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(4).
    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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 Number SR-FICC-2006-20 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

    All submissions should refer to File Number SR-FICC-2006-20. 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. The text of the proposed rule change is 
available at FICC, the Commission's Public Reference Room, and http://www.ficc.com/commondocs/rule.filings/rule.filing.06-20.pdf.
 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 SR-FICC-2006-20 and should be 
submitted on or before February 22, 2007.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-1616 Filed 1-31-07; 8:45 am]

BILLING CODE 8011-01-P