Document ID: SEC-2006-1689-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Fixed Income Clearing Corp.
Posted Date: 2006-12-27T05:00Z

[Federal Register: December 27, 2006 (Volume 71, Number 248)]
[Notices]               
[Page 77839]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de06-114]                         

[[Page 77839]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54957; File No. SR-FICC-2006-07]

 
Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Order Approving a Proposed Rule Change Relating To Providing Certain 
Reports to Its Members

December 18, 2006.
    On April 21, 2006, the Fixed Income Clearing Corporation (``FICC'') 
filed with the Securities and Exchange Commission (``Commission'') a 
proposed rule change pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'').\1\ Notice of the proposal was published 
in the Federal Register on October 4, 2006.\2\ No comment letters were 
received. For the reasons discussed below, the Commission is approving 
the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 54570 (Oct. 4, 2006), 71 
FR 60591.
---------------------------------------------------------------------------

I. Description

    The proposed rule change clarifies the frequency of certain reports 
that FICC will provide to its members. FICC conforms the rules of both 
its divisions, the Government Securities Division and the Mortgage 
Backed Securities Division (``MBSD''), regarding FICC's providing 
financial reports to members to the equivalent rule of FICC's 
affiliated clearing agency, The Depository Trust Company (``DTC'').\3\ 
FICC's revised rules will state that quarterly unaudited financial 
statements will only be provided to members/participants for the first 
three quarters of the calendar year.\4\ In addition, in conformity to 
DTC's rules, FICC is deleting the time frames from its rules for 
providing the financial reports to its members/participants. 
Nevertheless, FICC will attempt to continue to make its annual audited 
financial statements available to its members within 60 days of the 
fiscal year end and will attempt to continue to make its quarterly 
unaudited financial statements available within 30 days of the quarter 
end.
---------------------------------------------------------------------------

    \3\ DTC Rule 15.
    \4\ An annual audited financial statement is provided to members 
after the last calendar quarter of each year.
---------------------------------------------------------------------------

    FICC is also changing the time frame in Article V, Rule 5, Section 
3 of MBSD's Clearing Rulebook and EPN Rulebook regarding providing its 
participants with the independent auditors' annual study and evaluation 
of MBSD's internal accounting controls. While FICC will delete these 
rule provisions in their entirety, FICC will make this study and 
evaluation available to its members within a reasonable time after it 
receives it from its independent accountants, which is DTC's practice.

II. Discussion

    Section 17A(b)(3)(F) of the Act \5\ requires that the rules of a 
clearing agency to remove impediments to and perfect the mechanism of a 
national system for the prompt and accurate clearance and settlement of 
securities transactions. The Commission finds that the proposed rule 
change is consistent with this obligation because the proposed rule 
change conforms FICC's rules regarding providing unaudited quarterly 
financial statements and the independent auditor's annual study of 
internal controls with those of DTC and as such should promote the 
national clearance and settlement system.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

III. 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 \6\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-FICC-2006-07) be, and hereby 
is, approved.\7\
---------------------------------------------------------------------------

    \7\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E6-22091 Filed 12-26-06; 8:45 am]

BILLING CODE 8011-01-P