Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Clarify Certain Sections of the Loss Allocation Rule of its Government Securities Division, 3410-3412 [E5-218]

Download as PDF 3410 Federal Register / Vol. 70, No. 14 / Monday, January 24, 2005 / Notices 3. Increases to delivery fees for money market instruments to recover the cost of recent modifications to the MMI system, 4. Increases to fees relating to various deposit service types to raise revenues for these services closer to full cost recovery, 5. Increases to voluntary offering instruction fees to increase cost recovery for this service in line with efforts to revise the overall fee structure for these types of corporate actions initiated last year, and 6. Increases to certain global tax services in line with a multiyear plan to revise the fee structure for this service to provide higher cost recovery. In addition, DTC’s Board approved certain disincentive fees to discourage behavior that keeps the industry from achieving peak efficiency in areas such as the use of physical securities certificates, manual adjustments, and hardcopy offering documents. The effective date for these fee adjustments is January 1, 2005. These proposed fee revisions are consistent with DTC’s overall pricing philosophy to align service fees with underlying costs, discourage manual and exception processing, and encourage immobilization and dematerialization of securities. DTC believes that the proposed rule change is consistent with the requirements of the Act, as amended, and the rules and regulations thereunder because it provides for a reasonable fee to cover costs. As such, it promotes the prompt and accurate clearance and settlement of securities transactions. (B) Self-Regulatory Organization’s Statement on Burden on Competition DTC does not believe the proposed rule change will have any impact or impose any burden on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. DTC will notify the Commission of any written comments received by DTC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change changes fees imposed by NSCC, it has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 4(f)(2) 4 promulgated thereunder. At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–DTC–2004–13 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549–0609. All submissions should refer to File Number SR–DTC–2004–13. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). 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 also will be available for inspection and copying at the principal office of DTC and on DTC’s Web site at https://www.dtc.org. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–DTC– 2004–13 and should be submitted on or before February 14, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.5 J. Lynn Taylor, Assistant Secretary. [FR Doc. E5–216 Filed 1–21–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51037; File No. SR-FICC– 2004–18] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Clarify Certain Sections of the Loss Allocation Rule of its Government Securities Division January 13, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on October 1, 2004, the Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) and on October 27, 2004, amended the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The purpose of this proposed rule change is to clarify certain sections of the loss allocation rule of the Government Securities Division (‘‘GSD’’) of FICC. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A), (B), 5 17 3 15 U.S.C. 78s(b)(3)(A)(ii). VerDate jul<14>2003 18:04 Jan 21, 2005 4 17 Jkt 205001 PO 00000 CFR 240.19b–4(f)(2). Frm 00056 Fmt 4703 Sfmt 4703 1 15 E:\FR\FM\24JAN1.SGM CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 24JAN1 Federal Register / Vol. 70, No. 14 / Monday, January 24, 2005 / Notices and (C) below, of the most significant aspects of these statements.2 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of this proposed rule change is to clarify certain sections of the loss allocation rule of the Government Securities Division (‘‘GSD’’) of FICC. If the GSD, upon liquidating a defaulting member’s positions, incurs a loss due to the failure of the defaulting member to fulfill its obligations to the GSD, the GSD looks to the margin collateral deposited by that defaulting member to satisfy the loss. If the defaulting member’s margin collateral is insufficient to cover the loss and if there are no other funds available from any applicable cross-margining and/or cross-guaranty arrangements, the GSD would have a ‘‘Remaining Loss’’ 3 and would institute its loss allocation process to cover such Remaining Loss. In doing so, the GSD would determine the types of transactions from which the Remaining Loss has arisen, such as direct transactions and member brokered transactions, and would allocate the Remaining Loss as set forth in Sections 8(d)(i) through (v) of Rule 4 of the GSD Rules. The allocations in Section 8(d)(ii) of Rule 4 to cover a Remaining Loss that is due to member brokered transactions distributes the loss between the affected broker, including repo brokers, and nonbroker members that dealt with the defaulting member, are limited as an initial matter. Specifically, a broker netting member will not be subject to an allocation of loss, for any single lossallocation event in an amount greater than $5 million, and a non-broker netting member will not be subject to an allocation of loss for any single lossallocation event in an amount greater than the lesser of $5 million or five percent of the overall loss amount allocated to non-broker netting members. If the Remaining Loss from member brokered transactions is not covered due to these limitations on allocations, the uncovered loss will be reallocated as set forth in Section 8(e) of Rule 4. This section calls for a pro rata allocation to the netting membership in general based on each netting member’s average daily required clearing fund deposit over the twelve-month period immediately prior to the insolvency. The proposed rule change makes clear that the amounts allocated pursuant to 2 The Commission has modified the text of the summaries prepared by FICC. 3 GSD Rules, Rule 4, Section 8(d). VerDate jul<14>2003 18:04 Jan 21, 2005 Jkt 205001 Section 8(e) will be assessed to a netting member in addition to any loss amount allocated pursuant to Section 8(d)(ii). Therefore, a netting member may be subject to an aggregate allocation of loss that may exceed the applicable limitation set forth in Section 8(d)(ii). Even with the allocation pursuant to Section 8(e) of Rule 4, a broker netting member would not be subject to an aggregate loss allocation for any single loss allocation event in an amount greater than $5 million. In addition, what has been intended, but is not clear in the current rules, is that a non-broker netting member can terminate its GSD membership and thus cap any additional loss allocation obligation due to the application of Section 8(e) at the amount of its required clearing fund deposit. Therefore, FICC is proposing to make its GSD rules clear that any allocations to members resulting from the application of Section 8(e) of Rule 4 or another firm’s failure to pay its assessed share are limited to the extent of a member’s required clearing fund deposit if such member chooses to terminate its GSD membership.4 In addition, FICC wishes to make clear that the ability to terminate and cap a loss allocation obligation at the amount of the clearing fund deposit is also applicable to a netting member (aside from the defaulting party) where an auction purchase is the reason for any Remaining Loss. In these instances, as in the instances described above, the netting member assessed a loss allocation obligation will have had no participation in the transaction which led to the Remaining Loss, and therefore will be allowed to cap its total losses at the amount of the clearing fund deposit. FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 5 and the rules and regulations thereunder applicable to FICC because the proposed rule change would clarify the GSD’s rules and procedures with regard to loss allocation assessments to netting members in the event of a default thereby providing enhanced protections to FICC and its members and promoting the prompt and accurate clearance and settlement of securities. (B) Self-Regulatory Organization’s Statement on Burden on Competition FICC does not believe that the proposed rule change will have any 4 If a member elects to terminate its membership in FICC, its liability for a loss allocation obligation is limited to the amount of its required clearing fund for the business day on which the notification of such loss allocation is provided to the member. 5 15 U.S.C. 78q–1. PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 3411 impact or impose any burden on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC. 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, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–FICC–2004–18 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549–0609. All submissions should refer to File Number SR-FICC–2004–18. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule E:\FR\FM\24JAN1.SGM 24JAN1 3412 Federal Register / Vol. 70, No. 14 / Monday, January 24, 2005 / Notices 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 also will be available for inspection and copying at the principal office of FICC and on FICC’s Web site at https://www.ficc.com. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FICC– 2004–18 and should be submitted on or before February 14, 2005. For the Commission by the Division of Market Regulation, pursuant to delegated authority.6 J. Lynn Taylor, Assistant Secretary. [FR Doc. E5–218 Filed 1–21–05; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51042; File No. SR–ISE– 2005–05] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change Relating to Position Limits and Exercise Limits for Options on Standard and Poor’s Depositary Receipts January 14, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 12, 2005, the International Securities Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’) 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 by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. In addition, the Commission is CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate jul<14>2003 18:04 Jan 21, 2005 Jkt 205001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to amend its rules to increase position limits and exercise limits for options on Standard & Poor’s Depositary Receipts (‘‘SPDRs’’). The text of the proposed rule change is available on the ISE’s Web site (https:// www.iseoptions.com), at the ISE’s Office of the Secretary, and at the Commission’s Public Reference Room. 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 Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it had received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The ISE 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 BILLING CODE 8010–01–P 6 17 granting accelerated approval of the proposed rule change. 1. Purpose The Exchange began trading options on SPDRs on January 10, 2005. Currently, under ISE Rule 412 and ISE Rule 414, position limits and exercise limits for options on SPDRs are 75,000 contracts on the same side of the market. The Exchange proposes to amend ISE Rule 412 and ISE Rule 414 to increase position limits and exercise limits for options on SPDRs to 300,000 contracts on the same side of the market. Given the expected institutional demand for options on SPDRs, the Exchange believes the current equity position limit of 75,000 contracts to be too low and a deterrent to the successful trading of the product. Options on SPDRs are 1/10th the size of options on the Standard and Poor’s 500 Index (SPX) that are traded on Chicago Board Options Exchange (‘‘CBOE’’). Thus, a position limit of 75,000 contracts in SPDR options is equivalent to a 7,500 contract position limit in SPX options. Traders who trade SPDR options to hedge positions in SPX options are likely to find a position limit of 75,000 contracts in SPDR options too restrictive, which may adversely affect PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 the Exchange’s ability to provide liquidity in this product. Comparable products, such as options on the Nasdaq-100 Index Tracking Stock (‘‘QQQQ’’) that are traded at all six option exchanges and the DIAMONDS Trust that are traded at CBOE, are subject to a 300,000 contract limit.3 The Exchange proposes that options on SPDRs similarly be subject to position limits and exercise limits of 300,000 contracts. The Exchange believes that increasing position limits and exercise limits for SPDR options would lead to a more liquid and competitive market environment for SPDR options that would benefit customers interested in this product. Consistent with the reporting requirement for QQQ options, the Exchange would require that each member that maintains a position on the same side of the market in excess of 10,000 contracts in the SPDR option class, for its own account or for the account of a customer, report certain information.4 This data would include the option position, whether such position is hedged, and, if so, documentation as to how the position is hedged. Exchange market makers would continue to be exempt from this reporting requirement, as market maker information can be accessed through the Exchange’s market surveillance systems. In addition, the general reporting requirement for customer accounts that maintain a position in excess of 200 contracts would remain at this level for SPDR options.5 2. Statutory Basis The Exchange believes the proposed rule change is consistent with and furthers the objectives of Section 6(b)(5) of the Act,6 in that it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The ISE does not believe that the proposed rule change will impose any burden on competition not necessary or 3 See Securities Exchange Act Release No. 45311 (January 18, 2002), 67 FR 3760 (January 25, 2002) (increase of position limits and exercise limits to 300,000 for QQQQ options); and Securities Exchange Act Release No. 47346 (February 11, 2003), 68 FR 8316 (February 20, 2003) (increase of position limits and exercise limits to 300,000 for DIA options). 4 See ISE Rule 415(b). 5 See ISE Rule 415(a). 6 15 U.S.C. 78f(b)(5). E:\FR\FM\24JAN1.SGM 24JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 14 (Monday, January 24, 2005)]
[Notices]
[Pages 3410-3412]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-218]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51037; File No. SR-FICC-2004-18]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing of Proposed Rule Change To Clarify Certain Sections of 
the Loss Allocation Rule of its Government Securities Division

January 13, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 1, 2004, the Fixed 
Income Clearing Corporation (``FICC'') filed with the Securities and 
Exchange Commission (``Commission'') and on October 27, 2004, amended 
the proposed rule change described in Items I, II, and III below, which 
items have been prepared primarily by FICC. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

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

    The purpose of this proposed rule change is to clarify certain 
sections of the loss allocation rule of the Government Securities 
Division (``GSD'') of FICC.

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

    In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A), 
(B),

[[Page 3411]]

and (C) below, of the most significant aspects of these statements.\2\
---------------------------------------------------------------------------

    \2\ The Commission has modified the text of the summaries 
prepared by FICC.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of this proposed rule change is to clarify certain 
sections of the loss allocation rule of the Government Securities 
Division (``GSD'') of FICC. If the GSD, upon liquidating a defaulting 
member's positions, incurs a loss due to the failure of the defaulting 
member to fulfill its obligations to the GSD, the GSD looks to the 
margin collateral deposited by that defaulting member to satisfy the 
loss. If the defaulting member's margin collateral is insufficient to 
cover the loss and if there are no other funds available from any 
applicable cross-margining and/or cross-guaranty arrangements, the GSD 
would have a ``Remaining Loss'' \3\ and would institute its loss 
allocation process to cover such Remaining Loss. In doing so, the GSD 
would determine the types of transactions from which the Remaining Loss 
has arisen, such as direct transactions and member brokered 
transactions, and would allocate the Remaining Loss as set forth in 
Sections 8(d)(i) through (v) of Rule 4 of the GSD Rules.
---------------------------------------------------------------------------

    \3\ GSD Rules, Rule 4, Section 8(d).
---------------------------------------------------------------------------

    The allocations in Section 8(d)(ii) of Rule 4 to cover a Remaining 
Loss that is due to member brokered transactions distributes the loss 
between the affected broker, including repo brokers, and non-broker 
members that dealt with the defaulting member, are limited as an 
initial matter. Specifically, a broker netting member will not be 
subject to an allocation of loss, for any single loss-allocation event 
in an amount greater than $5 million, and a non-broker netting member 
will not be subject to an allocation of loss for any single loss-
allocation event in an amount greater than the lesser of $5 million or 
five percent of the overall loss amount allocated to non-broker netting 
members. If the Remaining Loss from member brokered transactions is not 
covered due to these limitations on allocations, the uncovered loss 
will be reallocated as set forth in Section 8(e) of Rule 4. This 
section calls for a pro rata allocation to the netting membership in 
general based on each netting member's average daily required clearing 
fund deposit over the twelve-month period immediately prior to the 
insolvency. The proposed rule change makes clear that the amounts 
allocated pursuant to Section 8(e) will be assessed to a netting member 
in addition to any loss amount allocated pursuant to Section 8(d)(ii). 
Therefore, a netting member may be subject to an aggregate allocation 
of loss that may exceed the applicable limitation set forth in Section 
8(d)(ii).
    Even with the allocation pursuant to Section 8(e) of Rule 4, a 
broker netting member would not be subject to an aggregate loss 
allocation for any single loss allocation event in an amount greater 
than $5 million. In addition, what has been intended, but is not clear 
in the current rules, is that a non-broker netting member can terminate 
its GSD membership and thus cap any additional loss allocation 
obligation due to the application of Section 8(e) at the amount of its 
required clearing fund deposit. Therefore, FICC is proposing to make 
its GSD rules clear that any allocations to members resulting from the 
application of Section 8(e) of Rule 4 or another firm's failure to pay 
its assessed share are limited to the extent of a member's required 
clearing fund deposit if such member chooses to terminate its GSD 
membership.\4\
---------------------------------------------------------------------------

    \4\ If a member elects to terminate its membership in FICC, its 
liability for a loss allocation obligation is limited to the amount 
of its required clearing fund for the business day on which the 
notification of such loss allocation is provided to the member.
---------------------------------------------------------------------------

    In addition, FICC wishes to make clear that the ability to 
terminate and cap a loss allocation obligation at the amount of the 
clearing fund deposit is also applicable to a netting member (aside 
from the defaulting party) where an auction purchase is the reason for 
any Remaining Loss. In these instances, as in the instances described 
above, the netting member assessed a loss allocation obligation will 
have had no participation in the transaction which led to the Remaining 
Loss, and therefore will be allowed to cap its total losses at the 
amount of the clearing fund deposit.
    FICC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \5\ and the rules and 
regulations thereunder applicable to FICC because the proposed rule 
change would clarify the GSD's rules and procedures with regard to loss 
allocation assessments to netting members in the event of a default 
thereby providing enhanced protections to FICC and its members and 
promoting the prompt and accurate clearance and settlement of 
securities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

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

    FICC does not believe that the proposed rule change will have any 
impact or impose any burden on competition.

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

    Written comments relating to the proposed rule change have not yet 
been solicited or received. FICC will notify the Commission of any 
written comments received by FICC.

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, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-FICC-2004-18 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-FICC-2004-18. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule

[[Page 3412]]

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 also will be available for inspection and copying at the 
principal office of FICC and on FICC's Web site at https://www.ficc.com. 
All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-FICC-2004-18 
and should be submitted on or before February 14, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E5-218 Filed 1-21-05; 8:45 am]
BILLING CODE 8010-01-P

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