Document ID: SEC-2010-1738-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Stock Clearing Corporation of Philadelphia
Posted Date: 2010-11-15T05:00Z

[Federal Register Volume 75, Number 219 (Monday, November 15, 2010)]
[Notices]
[Pages 69730-69732]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-28663]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63268; File No. SR-SCCP-2010-03]

Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to the Suspension of Certain Provisions Due to 
Inactivity

November 8, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 27, 2010, Stock Clearing Corporation of Philadelphia 
(``SCCP'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared primarily by SCCP. SCCP filed 
the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the 
Act \3\ and

[[Page 69731]]

Rule 19b-4(f)(3) \4\ 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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(3).
---------------------------------------------------------------------------

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

    SCCP proposes to amend its By-Laws to: (1) Suspend certain 
maintenance and reporting requirements during the period of inactivity 
of SCCP; (2) remove all references to the Philadelphia Depository Trust 
Company; (3) remove the requirement to furnish an annual statement of 
SCCP's business and affairs; (4) remove references to certain standing 
committees of NASDAQ OMX PHLX (``PHLX''); (5) reflect the change of the 
name of The Philadelphia Stock Exchange to NASDAQ OMX PHLX LLC; and (6) 
make conforming changes to the rules.

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

    In its filing with the Commission, SCCP 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. SCCP 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

    SCCP is a wholly owned subsidiary of PHLX and is registered with 
the Commission as a clearing agency pursuant to Section 17A of the 
Act.\5\ On July 24, 2008, The NASDAQ OMX Group, Inc. completed an 
acquisition of The Philadelphia Stock Exchange and renamed it NASDAQ 
OMX PHLX. Thereafter, a decision was made to cease SCCP operations and 
on December 31, 2008, SCCP ceased all business operations with the 
exception of the return of the clearing fund deposits that were 
provided to SCCP by its members for the purpose of offsetting SCCP's 
financial risk while operating a clearing agency for the member. SCCP 
returned all clearing fund deposits by September 30, 2009; therefore, 
as of that date SCCP no longer maintains clearing members or any other 
clearing operations. However, SCCP desires to maintain its registration 
as a clearing agency for possible active operations in the future.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    Currently, SCCP only conducts the administrative operations that 
are required to maintain its registration, which generally consist of 
tax and record maintenance obligations, as well as the various 
maintenance and reporting requirements of a clearing agency. Since SCCP 
no longer maintains members or conducts clearing business operations, 
SCCP is requesting that it may suspend certain maintenance and 
reporting requirements where it makes sense to do so. SCCP believes 
that it is appropriate under the circumstances of SCCP's inactivity to 
suspend the following portions of its By-Laws or Rules during any 
period in which SCCP has suspended its operations and is in an inactive 
status:
    (1) SCCP Article IV Section 2(c) and (d): SCCP proposes to suspend 
the requirement that the Board of Directors contain at least one 
participant, and to amend the requirement that at least one of SCCP's 
directors must be a governor of the Exchange;
    (2) SCCP Article IV, Section 8: SCCP proposes to suspend the 
requirement to maintain Standing Committees;
    (3) SCCP Rule 4, Section 1: SCCP proposes to eliminate the need for 
a Participant Fund and furthermore defines the term ``inactive''.
    (4) SCCP Rule 11, Reserve Fund: SCCP proposes to suspend the 
requirement for the reserve fund;
    (5) SCCP Rule 28: SCCP proposes to suspend the requirement of: (a) 
furnishing annual unconsolidated audited comparative financial 
statements prepared in accordance with generally accepted accounting 
principles; (b) accompanied by a report prepared by an independent 
public accountant; furnishing unaudited quarterly financial statements; 
and (c) furnishing an annual review of internal control prepared by 
independent public accountants.
    During the time SCCP was active, SCCP's Audit Committee and Finance 
Committee were also the comparable committees of SCCP's parent, The 
Philadelphia Stock Exchange. However, PHLX has since eliminated its own 
Audit Committee and Finance Committee and allows the function of those 
committees to be performed by other board committees within its 
corporate structure. Accordingly, SCCP will amend its rules to provide 
that, in the event SCCP resumes active operations, it will have its own 
Audit Committee and Finance Committee.
    SCCP also proposes to remove SCCP By-Law Article X regarding the 
presentation of an annual statement of the corporation at each annual 
meeting. SCCP believes Article X is not legally required and therefore 
proposes to remove this language permanently.
    SCCP also proposes to make certain administrative changes. Certain 
SCCP By-Laws and rules reference the Philadelphia Depository Trust 
Company (``Philadep''), a trust company that was deregistered as a 
national clearing agency as of December 31, 2002, and dissolved as a 
trust company in the Commonwealth of Pennsylvania on August 7, 2004. At 
this time, SCCP proposes to eliminate all references to Philadep. In 
addition, SCCP proposes to eliminate Rule 4, Section 1, paragraph four, 
section (ii). This section is duplicative of section (i). Furthermore, 
SCCP proposes to make clerical changes that are necessary due to the 
changes contained within this proposed rule change. Finally, SCCP 
proposes to amend the By-Laws and the Rules to reflect the change of 
the name of The Philadelphia Stock Exchange to NASDAQ OMX PHLX LLC.
    SCCP states that that its proposal is consistent with Section 17A 
of the Act \6\ in general and furthers the objectives of Section 
17A(b)(3)(F) of the Act \7\ in particular in that it is designed to 
remove impediments to and perfect the mechanism of national market 
system, and, in general does not impose any burden on competition not 
necessary or appropriate. SCCP further states that the proposal seeks 
to suspend maintenance and reporting requirements and make other 
administrative changes during the time when SCCP has suspended its 
business operations. None of these changes affect the investing public 
but rather are concerned solely with the administration of SCCP.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

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

    SCCP does not believe that the proposed rule change will impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act.

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

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

[[Page 69732]]

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 \8\ and Rule 19b-4(f)(3) \9\ because it is 
concerned solely with the administration of SCCP. At any time within 60 
days of the filing of the proposed rule change, the Commission 
summarily may temporarily suspend 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.
---------------------------------------------------------------------------

    \8\ Supra note 2.
    \9\ 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 Number SR-SCCP-2010-03 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 SR-SCCP-2010-03. 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 Web site viewing and 
printing in the Commission's Public Reference Room, 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 SCCP's principal office and on SCCP's Web 
site at http://nasdaqtrader.com/micro.aspx?id=PHLX Rulefilings. 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-SCCP-2010-03 and should be 
submitted on or before December 6, 2010.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28663 Filed 11-12-10; 8:45 am]
BILLING CODE 8011-01-P