[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1280]


[[Page Unknown]]

[Federal Register: January 20, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33462; File No. SR-PTC-93-05]

 

Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by Participants Trust Company Relating to Restrictions in the 
Intraday Payment of Principal and Interest

January 12, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 12, 1993, 
Participants Trust Company (``PTC'') 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 the self-regulatory organization. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\15 U.S.C. 78s(b)(1).
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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 amend PTC's rules to 
restrict intraday payments of principal and interest (``P&I'') from PTC 
to its participants and limited purpose participants, to the amount of 
funds from collected P&I payments available to PTC at such time.

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

    In its filing with the Commission, the self-regulatory organization 
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. The self-regulatory organization 
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

    The purpose of the proposed rule change is to amend PTC Rule 2, 
Article III to restrict intraday payments of P&I from PTC to its 
participants and limited purpose participants, to the amount of funds 
from collected P&I payments available to PTC at such time.
    PTC's Rules and Procedures formerly provided that PTC disburse P&I 
on securities deposited at PTC by means of a credit to the 
Participant's applicable account cash balance. As a result, a 
participant would receive available funds in the amount of the P&I, net 
of any account debits and/or credits, at the end of the day as part of 
the settlement payment process.
    PTC's rules were amended on November 2, 1993\2\ to eliminate the 
requirement that P&I be disbursed by means of a credit to a 
participant's cash balance, to permit PTC to make payment of P&I either 
by intraday Fedwire transfer of immediately available funds or by means 
of a credit to the applicable cash balance, as PTC deems advisable from 
time to time. In the order approving the proposed rule change on a 
temporary basis until April 30, 1994, the Commission required PTC to 
limit intraday disbursement of P&I to the amount of collected and 
available P&I payments, on the basis that funds available to PTC for 
P&I disbursement from other sources, such as PTC's own funds, the cash 
portion of the mandatory deposits to the participant's fund, borrowed 
funds secured by the P&I receipts or by the securities portion of the 
mandatory deposits to the participant's fund, and PTC capital, should 
be available if required to achieve end-of-day settlement. The purpose 
of this proposed rule change is to incorporate that restriction 
explicitly into PTC's Rules.
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    \2\Securities Exchange Act Release No. 33132 (November 2, 1993), 
58 FR 59501.
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    The proposed rule change is consistent with Section 17A of the Act 
and the rules and regulations thereunder because the orderly 
disbursement of P&I funds to participants and the preservation of 
alternate sources of funds to achieve settlement, facilitates the 
prompt and accurate clearance and settlement of securities 
transactions, and promotes the safeguarding of securities and funds in 
PTC's custody and control.

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

    PTC does not believe that the proposed rule change will have an 
impact on competition.

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

    PTC has not solicited, and does not intend to solicit, comments on 
this proposed rule change. PTC has not received any unsolicited 
comments from participants or other interested parties.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. 
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, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at the principal office of PTC. All submissions 
should refer to File Number SR-PTC-93-05 and should be submitted by 
February 10, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-1280 Filed 1-19-94; 8:45 am]
BILLING CODE 8010-01-M