Document ID: SEC-2006-1553-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Fixed Income Clearing Corp.
Posted Date: 2006-11-29T05:00Z

[Federal Register: November 29, 2006 (Volume 71, Number 229)]
[Notices]               
[Page 69153-69154]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29no06-87]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54794; File No. SR-FICC-2006-18]

 
Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Certain Administrative Provisions of the Rules of the Government 
Securities Division and the Mortgage-Backed Securities Division

November 20, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 12, 2006, the 
Fixed Income Clearing Corporation (``FICC'') filed with the Securities 
and Exchange Commission (``Commission'') and on October 17, 2006, 
amended\2\ 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)(iii) of the Act 
\3\ and Rule 19b-4(f)(3) \4\ thereunder so that the proposal was 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the rule change from interested 
parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ The amendment deleted a proposal that would have enabled 
FICC to rely on signatures transmitted, recorded, or stored by any 
electronic, optical, or similar means because a substantively 
similar rule already exists.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the rule change is to amend certain administrative 
provisions of the rules of FICC's Government Securities Division 
(``GSD'') and Mortgage-Backed Securities Division (``MBSD'') to create 
more uniformity between FICC's rules and the rules of FICC's affiliate, 
the National Securities Clearing Corporation (``NSCC''). FICC is also 
making technical amendments to the administrative rules of FICC.

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 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

    FICC believes that amending certain administrative provisions of 
the rules of GSD and MBSD to create more uniformity between the rules 
of FICC and NSCC will provide more clarity to the members of FICC and 
NSCC.
(i) Proposed GSD Rule Changes
Rule 28--Forms
    Currently, GSD Rule 28 states that the delivery of forms of lists, 
notices, and other documents may be delivered by the use of any media, 
including magnetic tape, discs, or cards. FICC proposes to remove 
language referring to ``magnetic tapes, discs, or cards'' since these 
modes of delivery are outdated.
Rule 29--Release of Clearing Data
    FICC proposes to amend GSD Rule 29 so that it is structured in a 
way that is similar to the analogous NSCC rule. Therefore, FICC 
proposes to delete numbered section subheadings and identify provisions 
going forward with the letters (a) through (g). FICC proposes to delete 
Section 7 of Rule 29 since FICC no longer follows this procedure.
Rule 30--Lists To Be Maintained
    FICC proposes to amend GSD Rule 30 so that it includes Sponsored 
Members as a category of members for which FICC will maintain a list.
Rule 31--Distribution Facilities
    Since FICC does not currently maintain distribution facilities, 
FICC proposes to amend GSD Rule 31 by including language indicating 
that ``if deemed necessary'' FICC will ``establish'' distribution 
facilities. FICC does not propose to alter the guidelines listed in the 
rule.
(ii) Proposed MBSD Rule Changes
Clearing Rule 8 and EPN Rule 8--Arbitration of Disputes
    FICC proposes to delete MBSD Clearing Rule 8 of Article V and MBSD 
EPN Rule 8 of Article X since the provisions are outdated and have 
never been invoked by MBSD.
Clearing Rule 10 and EPN Rule 10--Amendment of Rules
    FICC proposes to revise MBSD Clearing Rule 10 of Article V and MBSD 
EPN Rule 10 of Article X with language similar to that of the GSD and 
NSCC rules.\6\ The rule will continue to provide for prompt 
notification to all participants, limited purpose participants, EPN 
users, and registered clearing agencies of proposals made to change, 
revise, add, or repeal any MBSD Rule. Participants may submit comments 
to FICC upon receipt of the notification.
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    \6\ GSD Rule 33 and NSCC Rule 33.
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Clearing Rule 12 and EPN Rule 12--Waivers, Etc.
    FICC proposes to modify MBSD Clearing Rule 12 of Article V and MBSD 
EPN Rule 12 of Article X with language similar to that of the GSD and 
NSCC rules.\7\ Pursuant to the proposed rule, the Board of Directors or 
any FICC officer having a rank of Vice President or higher may waive or 
suspend times fixed by the rules or regulations issued by FICC whenever 
waiver or suspension is deemed necessary or expedient in his or her 
judgment. The waiver or suspension shall not continue in effect for 
more than sixty calendar-days unless approved by the Board of Directors 
within the sixty calendar-day period.
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    \7\ GSD Rule 22 and NSCC Rule 42.
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(iii) MBSD Administrative Rule Additions
    FICC proposes to add certain provisions to MBSD Clearing Rules and 
MBSD EPN Rules that are currently contained in the rules of the GSD. 
FICC believes the additions will provide guidance to MBSD members on 
administrative matters.
Clearing Rule 19 and EPN Rule 19--Forms
    FICC proposes to add a rule identical to GSD Rule 28 to MBSD 
Clearing Rules Article V and MBSD EPN Rules Article X allowing FICC to 
use forms of lists, notices, or other documents in connection with any 
transactions. Information required to be delivered to FICC may be 
delivered by the use of any media, to be prescribed by FICC from time 
to time.

[[Page 69154]]

EPN Rule 18--Release of Processing Data
    FICC proposes to add a rule similar to GSD Rule 29 to MBSD EPN 
Rules Article X governing the release of EPN processing data upon 
written request or pursuant to a written agreement between an EPN user 
and FICC.
Clearing Rule 20 and EPN Rule 19--Lists to be Maintained
    FICC proposes to add a rule similar to GSD Rule 30 to MBSD Clearing 
Rules Article V and MBSD EPN Rules Article X providing that MBSD will 
maintain lists of all participants, limited purpose participants, and 
EPN users to be made available upon request.
Clearing Rule 9 and EPN Rule 9--Captions
    FICC proposes to add a rule regarding captions to MBSD Clearing 
Rules Article V and MSBD EPN Rules Article X to clarify that captions 
to rules are for information and guidance only and should not be 
considered by participants as substantive language.
Clearing Rule 21 and EPN Rule 20--Distribution Facilities
    FICC proposes to add a rule similar to GSD Rule 31 to MBSD Clearing 
Rules Article V and MBSD EPN Rules Article X regarding distribution 
facilities. Though MBSD does not currently maintain a distribution 
facility, the rule will provide guidance if a facility is established 
in the future.
    FICC believes the proposed rule change is consistent with Section 
17A of the Act,\8\ as amended because it is concerned solely with the 
administration of FICC and as such does not affect the safeguarding of 
securities or funds in the custody or control of FICC or for which it 
is responsible.
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    \8\ 15 U.S.C. 78q-1.
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(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 proposed rule change has become effective upon filing 
pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-
4(f)(3)\10\ thereunder because the rule effects a change in an existing 
service of FICC that does not adversely affect the safeguarding of 
securities or funds in the custody or control of FICC or for which it 
is responsible. At any time within sixty days of the filing of the 
proposed rule change,\11\ 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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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(3).
    \11\ For purposes of calculating the sixty-day period within 
which the Commission may summarily abrogate the proposed rule change 
under Section 19(b)(3)(C) of the Act, the Commission considers the 
period to commence on the date on which the last amendment to the 
proposed rule change was filed with the Commission. 15 U.S.C. 
78s(b)(3)(C).
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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-2006-18 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-2006-18. 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. Copies of such filings 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/commondocs/rule.filings/rule.filing.06-18.amendment1.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-2006-18 and should be submitted on or before 
December 20, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E6-20210 Filed 11-28-06; 8:45 am]

BILLING CODE 8011-01-P