[Federal Register Volume 60, Number 5 (Monday, January 9, 1995)]
[Notices]
[Pages 2416-2417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-380]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 35182; File No. SR-PTC-94-07]
Self-Regulatory Organizations; Participants Trust Company; Notice
of Filing of Proposed Rule Change Establishing a Daily Penalty Fee
Applicable to Late Funding of Shortfalls in Participants Mandatory
Deposits to the Participants Fund
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 14, 1994, the
Participants Trust Company (``PTC``) filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change (File No.
SR-PTC-94-070 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
purposed rule change from interested persons.
\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 establish a daily penalty fee
applicable to a participant's failure to fund on a timely basis a
shortfall in its mandatory deposit to the participants fund.
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 the
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to establish a daily
penalty fee applicable to a participant's failure to fund on a timely
basis a shortfall in its mandatory deposit to the participants fund.
Pursuant to Rule 2 of Article V of PTC's rules, PTC maintains a
participants fund to secure obligations of participants and limited
purpose participants to PTC and to provide PTC with an additional
source of cash collateral to meet its temporary financing needs. Each
participant is required to maintain a mandatory deposit in the
participants fund which is calculated as a percentage of its average
gross debits over the previous month's three major settlement days,
subjects to a minimum of $1 million and a maximum of $10 million. A
limited purpose participant is required to maintain a lower mandatory
deposit because of the limited nature of its activity in the
depository. At least $150 thousand of the mandatory deposit must be
made in cash. The remainder may be made in cash or United States
Treasury obligations with a remaining maturity of one year or less.
The adequacy of each participant's mandatory deposit is evaluated
monthly based on the prior month's activity. Participants are notified
of any shortfall and required to fund the deficiency within five
business days. The securities portion of the mandatory deposit is
marked-to-market weekly, and participants are required to fund any
deficiency in this portion within two business days.
The proposed rule change establishes a daily penalty fee for a
participant's failure to fund a shortfall in its mandatory deposit to
the participants fund by the required date in the amount of the greater
of (i) $200 or (ii) an amount, calculated at an annual rate, equal to
the daily average Fed Funds rate plus 250 basis points (2.5%) on the
outstanding balance of the shortfall in the mandatory deposit to the
participants fund.
PTC believes that because the proposed rule change provides for the
equitable allocation of reasonable dues, fees, and other charges among
participants, it is consistent with Section 17A of the Act and the
rules and regulations thereunder applicable to PTC. [[Page 2417]]
B. Self-Regulatory Organization's Statement on Burden on Competition
PTC does not believe that the proposed rule change will impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
PTC has neither solicited nor received comments on the proposed
rule change.
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 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, N.W., Washington, D.C. 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 maybe 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, N.W.,
Washington, D.C. 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-94-07 and should be
submitted by January 30, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-380 Filed 1-6-95; 8:45 am]
BILLING CODE 8010-01-M