[Federal Register Volume 62, Number 38 (Wednesday, February 26, 1997)]
[Notices]
[Pages 8809-8810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4671]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38314; File No. SR-MBSCC-96-08]
Self-Regulatory Organizations; MBS Clearing Corporation; Notice
of Filing of a Proposed Rule Change Relating to Liens on Participants'
Property
February 19, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 20, 1996, the MBS
Clearing Corporation (``MBSCC'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change (File No. SR-
MRSCC-96-08) as described in Items I, II, and III below, which items
have been prepared primarily by MBSCC. On January 3, 1997, and January
14, 1997, MBSCC filed amendments to the proposed rule change.\2\ 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).
\2\ Letters from Julie Beyers, Associate Counsel, MBSCC (January
3, 1997, and January 14, 1997).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The proposed rule change modifies MBSCC's rules to explicitly state
that MBSCC has a lien on all property placed in MBSCC's possession by
its participants.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, MBSCC 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. MBSCC has prepared summaries, set forth in
sections (A), (B), and (C) below, of the most significant aspects of
such statements.\3\
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\3\ The Commission has modified the text of the summaries
prepared by MBSCC.
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[[Page 8810]]
(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 modify MBSCC's rules
to explicitly state that MBSCC has a lien on all property placed in its
possession by its participants. Unlike other clearing organizations,
MBSCC's rules do not contain specific language stating that MBSCC has
such a lien.\4\ However, according to MBSCC, MBSCC always intended to
have a lien on all property placed in its possession by its
participants. Therefore, in order to clarify this issue, the proposed
rule change adds language providing MBSCC with assurances that, in the
event one of its participants fails to discharge its liabilities, MBSCC
will have first priority with respect to the participant's property in
MBSCC's possession. The proposed rule change also revises MBSCC's rules
to clarify that any cash received with respect to any deposits to
MBSCC's participants fund and not yet distributed to a participant is
available to MBSCC for satisfaction of participant liabilities.
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\4\ For example, the rules of the National Securities Clearing
Corporation (``NSCC'') and the International Securities Clearing
Corporation (``ISCC'') provide NSCC and ISCC with liens on property
placed in their possession by their participants. The language
contained in the present proposed rule change is substantially
similar to the language contained in NSCC's and ISCC's respective
rules. NSCC Rule 18, Section 2(f) and ISCC Rule 18, Section 3.
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MBSCC believes that the proposed rule change is consistent with the
requirements of Section 17A(b)(3)(F) of the Act \5\ and the rules and
regulations thereunder because it will facilitate the prompt and
accurate clearance and settlement of securities transactions.
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\5\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
MBSCC does not believe that the proposed rule change will have an
impact on 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
No written comments relating to the proposed rule change have been
solicited or received. MBSCC will notify the Commission of any written
comments received by MBSCC.
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 MBSCC 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 may be withheld from the public in accordance with the provisions
of 5 U.S.C. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Room, 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 MBSCC. All
submissions should refer to the file number SR-MBSCC-96-08 and should
be submitted by March 19, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-4671 Filed 2-25-97; 8:45 am]
BILLING CODE 8010-01-M