Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of a Proposed Rule Change To Establish a Confirmation and Matching Service for Over-The-Counter U.S. Equity Options Transactions, 24666-24668 [E5-2238]

Download as PDF 24666 Federal Register / Vol. 70, No. 89 / Tuesday, May 10, 2005 / Notices 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. submissions should refer to File Number SR–FICC–2005–01 and should be submitted on or before May 31, 2005. 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: BILLING CODE 8010–01–P 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–2005–01 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–2005–01. 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 FICC and on FICC’s Web site at https://ficc.com/gov/gov. docs.jsp?NSquery=. 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 VerDate jul<14>2003 16:17 May 09, 2005 Jkt 205001 For the Commission by the Division of Market Regulation, pursuant to delegated authority.5 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–2240 Filed 5–9–05; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51649; File No. SR–NSCC– 2005–04] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of a Proposed Rule Change To Establish a Confirmation and Matching Service for Over-The-Counter U.S. Equity Options Transactions May 3, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on April 29, 2005, the National Securities Clearing Corporation (‘‘NSCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change 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 parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NSCC is seeking permanent approval to add Addendum M to its Rules and Procedures to establish a confirmation and matching service for over-thecounter (‘‘OTC’’) U.S. equity options transactions (‘‘NSCC Equity Options Service’’).2 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 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 The Commission approved NSCC’s Equity Options Service on a temporary basis through May 31, 2005, so that NSCC could evaluate the operations of the service and report its findings to the Commission. Securities Exchange Act Release No. 50652 (November 17, 2004), 69 FR 67377. PO 00000 5 17 Frm 00169 Fmt 4703 Sfmt 4703 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.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Currently, confirmation of trade details among dealers and the dealers’ buy-side customers in the OTC equity options industry is supported largely by faxes and telephone communication. It is widely acknowledged by the industry that this current operational infrastructure, which depends upon nonstandard and manual processing, results in excessive processing costs, delays, and errors. The industry is seeking to reduce the attendant operational risks associated with OTC equity options processing by automating the trade confirmation process for OTC equity options. In response to similar conditions prevailing in the credit default swaps industry, The Depository Trust & Clearing Corporation (‘‘DTCC’’), the corporate parent of NSCC, created a subsidiary, DTCC Deriv/SERV LLC (‘‘Deriv/SERV’’), in 2003. Deriv/SERV currently offers a confirmation and matching service for OTC credit default swaps transactions and their associated cash flows. This service is now used by approximately 75 entities including all of the largest OTC credit default swaps dealers. Deriv/SERV has developed a confirmation and matching service for OTC equity options transactions and their associated cash flows (‘‘Deriv/ SERV Equity Options Service’’). The Deriv/SERV Equity Options Service provides for confirmation and matching either between two OTC equity options dealers or between an OTC equity options dealer and its buy-side customer. Where either the buyer or the seller of an equity option is a U.S. person and the equity option is issued by a U.S. issuer (‘‘U.S. Equity Option Transaction’’), NSCC provides confirmation and matching services (‘‘NSCC Equity Options Service’’) to Deriv/SERV pursuant to the NSCC/ DTCC Deriv/SERV Service Agreement (‘‘Service Agreement’’).4 In connection 3 The Commission has modified the text of the summaries prepared by NSCC. 4 DTC has represented that the continued processing of Deriv/SERV’s transactions will not be a strain on the capacity of DTC’s systems. The host computer and other automated facilities associated with the NSCC Equity Options Service are provided by DTC pursuant to service agreements between NSCC and DTCC and between DTCC and DTC. E:\FR\FM\10MYN1.SGM 10MYN1 Federal Register / Vol. 70, No. 89 / Tuesday, May 10, 2005 / Notices with the NSCC Equity Options Service, Deriv/SERV has become a Data Services Only Member of NSCC.5 The Deriv/SERV Equity Options Service is operated pursuant to the operating procedures of Deriv/SERV (‘‘Deriv/SERV Operating Procedures’’). U.S. Equity Option Transactions are also subject to NSCC’s proposed Addendum M. Therefore, each user of the Deriv/ SERV Equity Options Service enters into an agreement with Deriv/SERV obligating the user to abide by the terms of the Deriv/SERV Operating Procedures and obligating them to abide by Addendum M for any U.S. Equity Option Transactions. Pursuant to the Service Agreements between NSCC/ DTCC and Deriv/SERV, NSCC has the right to require Deriv/SERV to cause Deriv/SERV’s users to abide by the terms of Addendum M. In addition, pursuant to the Service Agreement, NSCC and Deriv/SERV have agreed that should the Commission request that NSCC provide to the Commission any information relating to the NSCC Equity Options Service, Deriv/SERV will provide any such information in its possession to NSCC so that NSCC may provide such information to the Commission. NSCC is neither responsible for the content of the messages transmitted through the NSCC Equity Options Service nor is it responsible for any errors, omissions, or delays that may occur relating to the NSCC Equity Options Service in the absence of gross negligence on NSCC’s part. Both the Service Agreement and the Deriv/SERV Operating Procedures provide that NSCC has no liability in connection with the NSCC Equity Options Service in the absence of gross negligence on NSCC’s part. Because the NSCC Equity Options Service does not involve money settlement, securities clearance, or netting through the facilities of NSCC, it is a nonguaranteed service of NSCC.6 5 NSCC Rules and Procedures, Rule 31. 6 NSCC offers certain ‘‘guaranteed’’ services through its CNS system in which NSCC acts as a central counterparty and provides settlementrelated guarantees regarding certain trades cleared and netted at NSCC. NSCC also offers ‘‘nonguaranteed’’ services, such as NSCC’s Mutual Fund and Insurance Processing Services, in which members do not receive the protections of the NSCC guarantee. Some of NSCC’s nonguaranteed services entail settlement of funds through NSCC on a nonguaranteed basis (i.e., NSCC’s FundSERV service). Other nonguaranteed services involve the communication of information only without settlement of transactions or funds through the facilities of NSCC (i.e., NSCC’s Profile service). The NSCC Equity Options Service is a nonguaranteed service limited to the matching and communication of information and does not involve settlement of securities transactions or funds through the facilities of NSCC. In its Matching Release, the Commission concluded that matching constitutes a VerDate jul<14>2003 16:17 May 09, 2005 Jkt 205001 Deriv/SERV will charge its users fees in connection with the Deriv/SERV Equity Options Service and pursuant to the Service Agreement will make payments to NSCC for the services that NSCC provides. NSCC will file proposed rule changes under Section 19(b) of the Act for fees that NSCC charges to Deriv/SERV for the NSCC Equity Options Service and for any changes made by NSCC to the Equity Options Service. NSCC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 7 and the rules and regulations thereunder because the implementation of the proposal should provide for the prompt and accurate clearance and settlement of U.S. OTC equity option transactions processed through the NSCC Equity Options Service by facilitating the transmission of standardized information on a centralized communications platform. This should reduce processing errors, delays, and risks that are typically associated with manual processes. (B) Self-Regulatory Organization’s Statement on Burden on Competition NSCC does not believe that the proposed rule change will impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Act. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others NSCC has not solicited or received any written comments on this proposal. NSCC will notify the Commission of any written comments it receives. 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 clearing agency function, specifically the ‘‘comparison of data respecting the terms of settlement of securities transactions,’’ within the meaning of Section 3(a)(23)(A) of the Exchange Act. Securities Exchange Act Release No. 39829 (April 6, 1998), 63 FR 17943 [File No. S7–10–98]. 7 15 U.S.C. 78q–1. PO 00000 Frm 00170 Fmt 4703 Sfmt 4703 24667 (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–NSCC–2005–04 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–NSCC–2005–04. 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 NSCC and on NSCC’s Web site at https://www.nscc.com/legal. 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–NSCC–2005–04 and should be submitted on or before May 25, 2005. 8 17 E:\FR\FM\10MYN1.SGM CFR 200.30–3(a)(12). 10MYN1 24668 Federal Register / Vol. 70, No. 89 / Tuesday, May 10, 2005 / Notices For the Commission by the Division of Market Regulation, pursuant to delegated authority.8 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–2238 Filed 5–9–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; Notice of Application of Equitable Resources, Inc. To Withdraw Its Common Stock, No Par Value, From Listing and Registration on the Philadelphia Stock Exchange, Inc. File No. 1–03551 May 4, 2005. On April 4, 2005, Equitable Resources, Inc., a Pennsylvania corporation (‘‘Issuer’’), filed an application with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 12(d) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 12d2–2(d) thereunder,2 to withdraw its common stock, no par value (‘‘Security’’), from listing and registration on the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’). The Board of Directors (‘‘Board’’) of the Issuer adopted resolutions on December 1, 2004 to withdraw the Security from listing on the Exchange. The Board stated that it is in the best interest of the Issuer to withdraw the Security from listing on Phlx for the following reasons: (i) The New York Stock Exchange, Inc. (‘‘NYSE’’) has effected 91% of the Issuer’s total average trading volume since January 1, 2003 and is the Issuer’s primary exchange; (ii) Phlx, which is primarily an options trading exchange, effects an insignificant number and amount of trades in the Security each day; (iii) Phlx does not list Issuer options and the Issuer is not included in Phlx’s utility index; (iv) since the Sarbanes-Oxley Act of 2002, each exchange has adopted new, more stringent corporate governance rules, and NYSE recently adopted amendments to its 2003 corporate governance rules; (v) while Phlx patterned its corporate governance rules after NYSE, certain differences existed and with the NYSE amendment, additional differences now exist; (vi) the Issuer is committed to strong governance practices, but compliance with multiple standards has become time consuming and costly; and (vii) after due consideration, the Issuer has not identified any economic, investor relations, or legal benefit to being listed on Phlx. The Issuer stated in its application that it has met the requirements of Phlx Rule 809 governing an issuer’s voluntary withdrawal of a security from listing and registration by submitting the necessary documents to withdraw the Security from listing on Phlx. The Issuer’s application relates solely to the withdrawal of the Security from listing on Phlx and from registration under Section 12(b) of the Act 3 and shall not affect its obligation to be registered under Section 12(g) of the Act.4 Any interested person may, on or before May 31, 2005, comment on the facts bearing upon whether the application has been made in accordance with the rules of Phlx, and what terms, if any, should be imposed by the Commission for the protection of investors. All comment letters may be submitted by either of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/delist.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include the File Number 1–03551 or; 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 1–03551. This file number should be included on the subject line if e-mail is used. To help us 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/delist.shtml). Comments are also available for public inspection and copying in the Commission’s Public Reference Room. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. The Commission, based on the information submitted to it, will issue an order granting the application after the date mentioned above, unless the Commission determines to order a hearing on the matter. 3 15 U.S.C. 78l(b). U.S.C. 78l(g). 5 17 CFR 200.30–3(a)(1). 1 15 U.S.C. 78l(d). 2 17 CFR 240.12d2–2(d). VerDate jul<14>2003 16:17 May 09, 2005 4 15 Jkt 205001 PO 00000 Frm 00171 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.5 Jonathan G. Katz, Secretary. [FR Doc. E5–2266 Filed 5–9–05; 8:45 am] BILLING CODE 8010–01–P SOCIAL SECURITY ADMINISTRATION The Ticket to Work and Work Incentives Advisory Panel Meeting AGENCY: Social Security Administration (SSA). Notice of quarterly and strategic planning meeting ACTION: DATES: Monday, May 23, 2005—1 p.m. to 6:30 p.m. Tuesday, May 24, 2005—9 a.m. to 6 p.m. Wednesday, May 25, 2005—9 a.m. to 5 p.m. Thursday, May 26, 2005—9 a.m. to 12 p.m. ADDRESSES: Sheraton National Hotel, 900 S. Orme Street, Arlington, VA 22202. SUPPLEMENTARY INFORMATION: Type of meeting: On May 23–26, 2005, the Ticket to Work and Work Incentives Advisory Panel (the ‘‘Panel’’) will hold a quarterly and strategic planning meeting open to the public. Purpose: In accordance with section 10(a)(2) of the Federal Advisory Committee Act, the Social Security Administration (SSA) announces a meeting of the Ticket to Work and Work Incentives Advisory Panel. Section 101(f) of Pub. L. 106–170 establishes the Panel to advise the President, the Congress, and the Commissioner of SSA on issues related to work incentive programs, planning, and assistance for individuals with disabilities as provided under section 101(f)(2)(A) of the Act. The Panel is also to advise the Commissioner on matters specified in section 101(f)(2)(B) of that Act, including certain issues related to the Ticket to Work and Self-Sufficiency Program established under section 101(a). Interested parties are invited to attend the meeting. The Panel will use the meeting time to receive briefings and presentations on matters of interest, conduct full Panel deliberations on the implementation of the Act and receive public testimony. The Panel will meet in person commencing on Monday, May 23, 2005, from 1 p.m. until 6:30 p.m. The quarterly meeting will continue on E:\FR\FM\10MYN1.SGM 10MYN1

Agencies

[Federal Register Volume 70, Number 89 (Tuesday, May 10, 2005)]
[Notices]
[Pages 24666-24668]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2238]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51649; File No. SR-NSCC-2005-04]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of a Proposed Rule Change To Establish a 
Confirmation and Matching Service for Over-The-Counter U.S. Equity 
Options Transactions

May 3, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 29, 2005, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change 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 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

    NSCC is seeking permanent approval to add Addendum M to its Rules 
and Procedures to establish a confirmation and matching service for 
over-the-counter (``OTC'') U.S. equity options transactions (``NSCC 
Equity Options Service'').\2\
---------------------------------------------------------------------------

    \2\ The Commission approved NSCC's Equity Options Service on a 
temporary basis through May 31, 2005, so that NSCC could evaluate 
the operations of the service and report its findings to the 
Commission. Securities Exchange Act Release No. 50652 (November 17, 
2004), 69 FR 67377.
---------------------------------------------------------------------------

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.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified the text of the summaries 
prepared by NSCC.
---------------------------------------------------------------------------

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

    Currently, confirmation of trade details among dealers and the 
dealers' buy-side customers in the OTC equity options industry is 
supported largely by faxes and telephone communication. It is widely 
acknowledged by the industry that this current operational 
infrastructure, which depends upon nonstandard and manual processing, 
results in excessive processing costs, delays, and errors. The industry 
is seeking to reduce the attendant operational risks associated with 
OTC equity options processing by automating the trade confirmation 
process for OTC equity options.
    In response to similar conditions prevailing in the credit default 
swaps industry, The Depository Trust & Clearing Corporation (``DTCC''), 
the corporate parent of NSCC, created a subsidiary, DTCC Deriv/SERV LLC 
(``Deriv/SERV''), in 2003. Deriv/SERV currently offers a confirmation 
and matching service for OTC credit default swaps transactions and 
their associated cash flows. This service is now used by approximately 
75 entities including all of the largest OTC credit default swaps 
dealers.
    Deriv/SERV has developed a confirmation and matching service for 
OTC equity options transactions and their associated cash flows 
(``Deriv/SERV Equity Options Service''). The Deriv/SERV Equity Options 
Service provides for confirmation and matching either between two OTC 
equity options dealers or between an OTC equity options dealer and its 
buy-side customer. Where either the buyer or the seller of an equity 
option is a U.S. person and the equity option is issued by a U.S. 
issuer (``U.S. Equity Option Transaction''), NSCC provides confirmation 
and matching services (``NSCC Equity Options Service'') to Deriv/SERV 
pursuant to the NSCC/DTCC Deriv/SERV Service Agreement (``Service 
Agreement'').\4\ In connection

[[Page 24667]]

with the NSCC Equity Options Service, Deriv/SERV has become a Data 
Services Only Member of NSCC.\5\
---------------------------------------------------------------------------

    \4\ DTC has represented that the continued processing of Deriv/
SERV's transactions will not be a strain on the capacity of DTC's 
systems. The host computer and other automated facilities associated 
with the NSCC Equity Options Service are provided by DTC pursuant to 
service agreements between NSCC and DTCC and between DTCC and DTC.
    \5\ NSCC Rules and Procedures, Rule 31.
---------------------------------------------------------------------------

    The Deriv/SERV Equity Options Service is operated pursuant to the 
operating procedures of Deriv/SERV (``Deriv/SERV Operating 
Procedures''). U.S. Equity Option Transactions are also subject to 
NSCC's proposed Addendum M. Therefore, each user of the Deriv/SERV 
Equity Options Service enters into an agreement with Deriv/SERV 
obligating the user to abide by the terms of the Deriv/SERV Operating 
Procedures and obligating them to abide by Addendum M for any U.S. 
Equity Option Transactions. Pursuant to the Service Agreements between 
NSCC/DTCC and Deriv/SERV, NSCC has the right to require Deriv/SERV to 
cause Deriv/SERV's users to abide by the terms of Addendum M. In 
addition, pursuant to the Service Agreement, NSCC and Deriv/SERV have 
agreed that should the Commission request that NSCC provide to the 
Commission any information relating to the NSCC Equity Options Service, 
Deriv/SERV will provide any such information in its possession to NSCC 
so that NSCC may provide such information to the Commission.
    NSCC is neither responsible for the content of the messages 
transmitted through the NSCC Equity Options Service nor is it 
responsible for any errors, omissions, or delays that may occur 
relating to the NSCC Equity Options Service in the absence of gross 
negligence on NSCC's part. Both the Service Agreement and the Deriv/
SERV Operating Procedures provide that NSCC has no liability in 
connection with the NSCC Equity Options Service in the absence of gross 
negligence on NSCC's part. Because the NSCC Equity Options Service does 
not involve money settlement, securities clearance, or netting through 
the facilities of NSCC, it is a nonguaranteed service of NSCC.\6\
---------------------------------------------------------------------------

    \6\ NSCC offers certain ``guaranteed'' services through its CNS 
system in which NSCC acts as a central counterparty and provides 
settlement-related guarantees regarding certain trades cleared and 
netted at NSCC. NSCC also offers ``nonguaranteed'' services, such as 
NSCC's Mutual Fund and Insurance Processing Services, in which 
members do not receive the protections of the NSCC guarantee. Some 
of NSCC's nonguaranteed services entail settlement of funds through 
NSCC on a nonguaranteed basis (i.e., NSCC's FundSERV[reg] service). 
Other nonguaranteed services involve the communication of 
information only without settlement of transactions or funds through 
the facilities of NSCC (i.e., NSCC's Profile service). The NSCC 
Equity Options Service is a nonguaranteed service limited to the 
matching and communication of information and does not involve 
settlement of securities transactions or funds through the 
facilities of NSCC. In its Matching Release, the Commission 
concluded that matching constitutes a clearing agency function, 
specifically the ``comparison of data respecting the terms of 
settlement of securities transactions,'' within the meaning of 
Section 3(a)(23)(A) of the Exchange Act. Securities Exchange Act 
Release No. 39829 (April 6, 1998), 63 FR 17943 [File No. S7-10-98].
---------------------------------------------------------------------------

    Deriv/SERV will charge its users fees in connection with the Deriv/
SERV Equity Options Service and pursuant to the Service Agreement will 
make payments to NSCC for the services that NSCC provides. NSCC will 
file proposed rule changes under Section 19(b) of the Act for fees that 
NSCC charges to Deriv/SERV for the NSCC Equity Options Service and for 
any changes made by NSCC to the Equity Options Service.
    NSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \7\ and the rules and 
regulations thereunder because the implementation of the proposal 
should provide for the prompt and accurate clearance and settlement of 
U.S. OTC equity option transactions processed through the NSCC Equity 
Options Service by facilitating the transmission of standardized 
information on a centralized communications platform. This should 
reduce processing errors, delays, and risks that are typically 
associated with manual processes.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

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

    NSCC does not believe that the proposed rule change will impose a 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act.

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

    NSCC has not solicited or received any written comments on this 
proposal. NSCC will notify the Commission of any written comments it 
receives.

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-NSCC-2005-04 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-NSCC-2005-04. 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 NSCC 
and on NSCC's Web site at https://www.nscc.com/legal. 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-NSCC-2005-04 and 
should be submitted on or before May 25, 2005.
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).


[[Page 24668]]


---------------------------------------------------------------------------

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2238 Filed 5-9-05; 8:45 am]
BILLING CODE 8010-01-P
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