[Federal Register Volume 59, Number 121 (Friday, June 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15428]
[[Page Unknown]]
[Federal Register: June 24, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34221; File No. SR-NSCC-94-07]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change Modifying NSCC's
Trade Comparison Service
June 16, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on June 3, 1994, the National
Securities Clearing Corporation (``NSCC'') filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change (File
No. SR-NSCC-94-07) as described in Items I, II, and III below, which
Items have been prepared primarily by NSCC. The Commission is
publishing this notice to solicit comments on the proposed rule changes
from interested persons.
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\1\15 U.S.C. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change will modify NSCC's Rules and Procedures
relating to trade comparison.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSCC 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. NSCC 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 support the New York
Stock Exchange, Inc. (``NYSE'') and the American Stock Exchange, Inc.
(``Amex'') in their efforts to implement trade-date comparison
systems.\2\ To achieve trade-date comparison, the NYSE and Amex will
require their member organizations to submit trade-comparison data to
their respective exchanges rather than to NSCC for comparison
processing.
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\2\For information on NYSE's trade-date comparison proposal,
refer to Securities Exchange Act Release No. 34153 (June 3, 1994),
59 FR 30071 [File No. SR-NYSE-94-08] (order approving proposed rule
change).
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Currently, NSCC receives locked-in trade data from the NYSE and
Amex and initial two-sided, compared trade data from its member
organizations. The uncompared trades data from its members are matched
by NSCC and are reported back to the members on contract lists. The
locked-in trade data, which is compared at the point of execution by
the exchanges, bypass NSCC's comparison process but for record purposes
is reported back to the member organizations on contract lists.
Under the proposed system, the NYSE and Amex will process the
initial two-sided, uncompared trade data in their trade-date comparison
systems. Some of these trades may not compare, and the NYSE and Amex
will report such unmatched trades (known as ``questioned trades'' or
``QTs'' at the NYSE and ``don't knows'' or ``DKs'' at the Amex) to NSCC
along with the matched, two-sided trades and the locked-in trades. The
compared trades (including the locked-trades and the matched, two-sided
trades) will bypass NSCC comparison processing, but the unmatched
trades will be included in NSCC's comparison process and in NSCC's
trade correction process if necessary.
NSCC states that the proposed rule change will permit the NYSE and
Amex, on behalf of NSCC members, to submit uncompared trade data
relating to trades for regular way, when-issued, cash, next day, and
sellers-option settlement in equity securities executed on such
exchanges directly to NSCC for inclusion in NSCC's comparison process.
Even though NSCC's revised Rules and Procedures will require NSCC's
members to submit their trade data to the exchanges, the revisions
still will permit members to submit such data directly to NSCC in order
to have the data included in that day's processing. This authority is
necessary because a member may miss the exchanges' submission
timeframes. NSCC notes that the NYSE and Amex have concurred in this
procedure.
As member organizations become accustomed to the trade-date
comparison systems, NSCC expects that the NYSE and Amex will no longer
permit members to submit data directly to NSCC. At that time, NSCC,
upon the request of the NYSE and Amex, will file a rule change
eliminating the ability of members to submit such data directly to NSCC
other than on an exception basis.
Because the proposed rule change will support efforts by the NYSE
and Amex to implement trade-date comparison systems, NSCC believes that
the proposed rule change is consistent with the requirements of Section
17A of the Act and the rules thereunder in that it will facilitate the
prompt and accurate clearance and settlement of securities
transactions.
B. Self-Regulatory Organization's Statement on Burden on Competition
NSCC believes that the proposed rule changes will not have any
impact or impose a burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
NSCC has neither solicited nor received any written comments.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five 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 ninety days of such date if it finds
such longer period to be appropriate and publishes its reason 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 approved.
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 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 NSCC. All submissions
should refer to File No. SR-NSCC-94-07 and should be submitted by July
15, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\3\
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\3\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-15428 Filed 6-23-94; 8:45 am]
BILLING CODE 8010-01-M