[Federal Register Volume 62, Number 45 (Friday, March 7, 1997)]
[Notices]
[Pages 10601-10602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5671]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38350; File No. SR-NSCC-96-20]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of Proposed Rule Change To Revise Rules

February 27, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\, notice is hereby given that on November 14, 1996, the 
National Securities Clearing Corporation (``NSCC'') 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 NSCC. The Commission is publishing this 
notice to solicit comments from interested persons on the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).

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[[Page 10602]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change revises NSCC's rules to modify the 
definition of ``Clearing Agency Cross-Guaranty Agreement''.

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.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In 1993, the Commission approved a proposed rule change filed by 
NSCC to establish a Netting Contract and Limited Cross-Guaranty 
Agreement between it and The Depository Trust Company (``DTC'').\3\ In 
connection with the implementation of the NSCC-DTC Agreement, a 
definition of a ``Clearing Agency Cross-Guaranty Agreement'' was added 
to NSCC's rules. The definition was limited to registered clearing 
agencies because NSCC and DTC believed that only registered clearing 
agencies would enter into such arrangements.
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    \3\ Securities Exchange Act Release No. 33145 (November 3, 
1993), 58 FR 59766 [File No. SR-NSCC-93-07] (order approving 
proposed rule change relating to a netting contract and limited 
cross guaranty agreement (``NSCC-DTC Agreement'')).
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    In 1995, the Commission approved a proposed rule change filed by 
NSCC to establish the Collateral Management Service (``CMS'').\4\ In 
order to provide their participants with a more accurate and broader 
picture of the aggregate amount of their clearing fund deposits and 
collateral, NSCC and other participating clearing entities recognized 
that other types of clearing entities should be included in the CMS. 
This broad category of participating entities is reflected in Rule 53 
(CMS Rule) of NSCC's rules which includes clearing organizations 
affiliated with or designated by contract markets trading specific 
futures products under the oversight of the Commodity Futures Trading 
Commission. NSCC believes the rationale of providing a broad range of 
clearing entities in the scope of the CMS should be similarly applied 
to NSCC's ability to enter into limited cross-guaranty agreements.\5\ 
Therefore, the purpose of the proposed rule change is to modify the 
definition of ``Clearing Agency Cross-Guaranty Agreement'' to permit 
NSCC to enter into limited cross guaranty agreements with the same 
broad category of clearing entities as provided in the CMS.
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    \4\ Securities Exchange Act Release No. 35809 (June 5, 1995), 60 
FR 30912 [File No. SR-NSCC-93-06] (order approving proposed rule 
change establishing CMS).
    \5\ The rules of the International Securities Clearing 
Corporation (Rule 1--Definition of ``Limited Cross-Guaranty 
Agreement''), the MBS Clearing Corporation (Rule 1--Definition of 
``Limited Cross-Guaranty Agreement''), and the Government Securities 
Clearing Corporation (Rule 1--Definition of ``Limited Cross-Guaranty 
Agreement'') permit entering into cross-guaranty agreements with 
futures clearing entities.
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    NSCC believes the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules and regulations 
thereunder because it makes technical modifications to rules so that 
they coincide with intended practice.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change will 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

    No written comments have been solicited or received. NSCC will 
notify the Commission of any written comments received by NSCC.

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 DTC 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. 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 also will be available 
for inspection and copying at the principal office of NSCC. All 
submissions should refer to File No. SR-NSCC-96-20 and should be 
submitted by March 28, 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. 97-5671 Filed 3-6-97; 8:45 am]
BILLING CODE 8010-01-M