Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving Proposed Rule Change To Enhance Automated Customer Account Transfer Service To Permit the Automated Notification of Changes to the Broker-Dealer of Record for Applicable Insurance Products, 32859-32860 [E5-2873]
Download as PDF
Federal Register / Vol. 70, No. 107 / Monday, June 6, 2005 / Notices
FICC–2005–07) be and hereby is
approved.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.6
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–2874 Filed 6–3–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51754; File No. SR-FICC–
2005–07]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Order
Approving Proposed Rule Change To
Establish a Firm Deadline by Which
Members of the Government Securities
Division Must Satisfy Clearing Fund
Deficiencies
May 27, 2005.
I. Introduction
On March 18, 2005, the Fixed Income
Clearing Corporation (‘‘FICC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) proposed
rule change SR–FICC–2005–07 pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’).1 Notice
of the proposal was published in the
Federal Register on April 21, 2005.2 No
comment letters were received. For the
reasons discussed below, the
Commission is approving the proposed
rule change.
II. Description
FICC is establishing a firm deadline
by which members of FICC’s
Government Securities Division
(‘‘GSD’’) must satisfy clearing fund
deficiencies. Currently, GSD’s rules
provide a deadline for a member’s
satisfaction of a clearing fund deficiency
of two hours after GSD has issued a
notice of deficiency to that member.
Under current practice, GSD issues its
clearing fund deficiency notices by
telephone calls typically at 8:30 a.m.
Eastern Time and by a facsimile
containing (i) a cover letter summarizing
the deficiency status and (ii) a detailed
report reflecting the firm’s current
clearing fund requirement and collateral
on deposit. Therefore, deficiency calls
typically must be satisfied by
approximately 10:30 a.m. Eastern Time.
Notwithstanding GSD’s issuance of
clearing fund calls, each member has
6 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 Securities Exchange Act Release No. 51550
(April 15, 2005), 70 FR 20781.
1 15
VerDate jul<14>2003
14:25 Jun 03, 2005
Jkt 205001
the ability to access a report each day
detailing its clearing fund balances and
any deficiency thereof generally by
12:30 a.m. Eastern Time.
Taking into account members’ ready
access to clearing fund deficiency
information, the rule change establishes
a firm deadline of 10:30 a.m. Eastern
Time to ensure the timely satisfaction of
clearing fund deficiency calls and to
eliminate current provisions which
correlate the timing of the deadline to
the issuance of the notice by FICC.3 As
a result, it will be incumbent upon
members to access directly the
appropriate report detailing their
clearing fund deposit requirements so
they might satisfy any deficiencies.
III. Discussion
Section 17A(b)(3)(F) of the Act
requires that the rules of a clearing
agency be designed to assure the
safeguarding of securities and funds
which are in the custody or control of
the clearing agency or for which it is
responsible.4 The Commission finds
that FICC’s proposed rule change is
consistent with this requirement
because it will promote timely
satisfaction of clearing fund deficiency
calls and will reduce the amount of risk
to FICC and its members.
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and in
particular Section 17A of the Act and
the rules and regulations thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,5 that the
proposed rule change (File No. SR–
FICC–2005–07) be and hereby is
approved.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.6
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–2875 Filed 6–3–05; 8:45 am]
BILLING CODE 8010–01–P
3 Under GSD’s rule, FICC may extend this
deadline if operational or systems difficulties arise
that reasonably prevent members from satisfying
the 10:30 a.m. Eastern Time deadline.
4 15 U.S.C. 78q-1(b)(3)(F).
5 15 U.S.C. 78s(b)(2).
6 17 CFR 200.30–3(a)(12).
PO 00000
Frm 00117
Fmt 4703
Sfmt 4703
32859
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51753; File No. SR–NSCC–
2005–02]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Order Approving
Proposed Rule Change To Enhance
Automated Customer Account
Transfer Service To Permit the
Automated Notification of Changes to
the Broker-Dealer of Record for
Applicable Insurance Products
May 27, 2005.
I. Introduction
On April 4, 2005, the National
Securities Clearing Corporation
(‘‘NSCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
and on April 12, 2005, amended
proposed rule change SR–NSCC–2005–
02 pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’).1 Notice of the proposal was
published in the Federal Register on
April 20, 2005.2 No comment letters
were received. For the reasons
discussed below, the Commission is
approving the proposed rule change.
II. Description
NSCC is enhancing its Automated
Customer Account Transfer Service
(‘‘ACAT Service’’) to permit the
automated notification of changes to the
broker-dealer of record for applicable
insurance products.
Information regarding the brokerdealer of record for an annuity or life
insurance product is maintained by the
insurance company that is the issuer of
the product. Currently there is no
mechanism within the ACAT Service
that can automate notification of
changes to the broker-dealer of record.
Annuity and life insurance products
have a manually-intensive processing
stream connected with account transfers
relative to the automated processing of
assets such as equity and debt securities
and mutual fund shares.
Under the proposed rule, the
delivering and receiving broker-dealers
for annuities or life insurance products
will be able to communicate
information regarding the change of
broker-dealer of record through the
ACAT Service. The ACAT Service will
communicate the information through a
link to a new product of NSCC’s
Insurance Processing Services (‘‘IPS’’)
called Inforce Transactions (‘‘IFT’’). IFT
1 15
U.S.C. 78s(b)(1).
Exchange Act Release No. 51541
(April 13, 2005), 70 FR 20609 (April 20, 2005).
2 Securities
E:\FR\FM\06JNN1.SGM
06JNN1
32860
Federal Register / Vol. 70, No. 107 / Monday, June 6, 2005 / Notices
will relay the information to the issuer
insurance company and will also
provide a means of communicating to
the ACAT Service whether the
insurance company has confirmed,
rejected, or requested a modification of
the change. NSCC will not debit or
credit a delivering or receiving brokerdealer for the value of any applicable
insurance product that is part of a
customer account transfer.
In order for the receiving and
delivering broker-dealers and the issuer
insurance company to be able to effect
an account change through the ACAT
Service, the insurance company must
participate in IPS, the receiving brokerdealer must participate in the ACAT
Service and IPS, and the delivering
broker-dealer must participate in the
ACAT Service.
NSCC is also making certain technical
changes to Rule 50, which governs the
ACAT Service. For purposes of bringing
efficiencies to the financial marketplace,
NSCC’s Rule 50 will cover all asset
types regardless of whether NSCC has
the operational capability to effect the
transfer of such assets. NSCC either will
undertake to cause the asset transfer or
asset reregistration to occur or will issue
a document evidencing each delivering
firm’s obligation and each receiving
firm’s entitlement that will result from
the transfer. Such instructions,
regardless of their form, are commonly
referred to as receive and deliver
instructions. NSCC is adding a
definition, ‘‘ACAT Receive and Deliver
Instruction,’’ 3 relating to these
instructions. NSCC also is making
certain technical changes to the ACATS
rule.
III. Discussion
Section 17A(b)(3)(F) of the Act
requires that the rules of a clearing
agency be designed to promote the
prompt and accurate clearance and
settlement of securities transactions.4
The Commission finds that NCCC’s
proposed rule change is consistent with
this requirement because by automating
and facilitating the change in brokerdealer of record for eligible insurance
products associated with account
transfers, the enhancements to the
ACAT Service and the new IFT product
should reduce processing errors and
3 As
defined in NSCC Rule 1:
The term ‘‘ACAT Receive and Deliver
Instruction’’ shall mean such document, form, file,
report or other information issued by the
Corporation [NSCC] to a Member or to a QSD (as
defined in Rule 50), on behalf of such QSD’s
participants, which identifies Automated Customer
Account Transfer receive and deliver obligations.
4 15 U.S.C. 78q–1(b)(3)(F).
VerDate jul<14>2003
14:25 Jun 03, 2005
Jkt 205001
delays that are typically associated with
manual processing.
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and in
particular Section 17A of the Act and
the rules and regulations thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule change (File No. SR–
NSCC–2005–02) be and hereby is
approved.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.5
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–2873 Filed 6–3–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51759; File No. SR–Phlx–
2004–91]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Order Approving Proposed Rule
Change and Notice of Filing and Order
Granting Accelerated Approval to
Amendment No. 1 Thereto To Establish
a Directed Order Process for Orders
Delivered to the Phlx Via AUTOM
May 27, 2005.
I. Introduction
On December 9, 2004, the
Philadelphia Stock Exchange, Inc.
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to
establish a directed order process for
orders delivered to the Exchange via the
Automated Options Market
(‘‘AUTOM’’). The proposed rule change
was published for comment in the
Federal Register on December 22,
2004.3 The Commission received three
comment letters on the proposal.4 On
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 50856
(December 14, 2004), 69 FR 76817.
4 See letter from Michael J. Simon, General
Counsel and Secretary, International Securities
Exchange, Inc. (‘‘ISE’’), to Jonathan G. Katz,
Secretary, Commission, dated January 13, 2005
(‘‘ISE Letter’’); letter from Philip D. DeFeo,
Chairman and Chief Executive Officer, Pacific
Exchange, Inc. (‘‘PCX’’), to Jonathan G. Katz,
Secretary, Commission, dated March 22, 2005
PO 00000
5 17
1 15
Frm 00118
Fmt 4703
Sfmt 4703
January 18, 2005, the Phlx sent a
response to the comment letters.5
On April 27, 2005, the Phlx filed
Amendment No. 1 to the proposed rule
change.6 This order approves the
proposed rule change and
simultaneously provides notice of filing
and grants accelerated approval of
Amendment No. 1.
II. Description of the Proposed Rule
Change
The Phlx proposes to establish, for a
one-year pilot period, rules that permit
Exchange specialists, Streaming Quote
Traders (‘‘SQTs’’), and Remote
Streaming Quote Traders (‘‘RSQTs’’)
assigned in options trading on the Phlx
XL system (‘‘Streaming Quote Options’’)
to receive directed orders. The Phlx
proposes to define the term ‘‘Directed
Order’’ to mean any customer order to
buy or sell that has been directed to a
particular specialist, SQT, or RSQT by
an Order Flow Provider (‘‘OFP’’).7 The
Phlx also proposes to establish a trade
algorithm for electronically executed
and allocated trades involving Directed
Orders, which would provide a
participation guarantee to the Directed
Specialist, SQT, or RSQT (collectively
‘‘Phlx directed participants’’).
To qualify as a Directed Order, an
order must be delivered to the Exchange
via AUTOM. AUTOM currently
functions to provide automatic
executions in Streaming Quote Options
only when the Exchange’s disseminated
bid or offer is the National Best Bid or
Offer (‘‘NBBO’’). Therefore, to
participate in automatic executions of
Directed Orders, Phlx directed
participants would be required to be
quoting the NBBO at the time the
Directed Order is received.
Currently, an SQT or RSQT must
quote continuous, two-sided markets in
not less than 60% of the series in each
Streaming Quote Option traded on Phlx
XL in which such SQT or RSQT is
assigned. A specialist must quote
(‘‘PCX Letter’’); and letter from Matthew Hinerfeld,
Managing Director and Deputy General Counsel,
Citadel Investment Group, L.L.C., on behalf of
Citadel Derivatives Group LLC (‘‘Citadel’’), to
Jonathan G. Katz, Secretary, Commission, dated
April 6, 2005 (‘‘Citadel Letter’’).
5 See letter from Richard S. Rudolph, Director and
Counsel, Phlx, to Jonathan G. Katz, Secretary,
Commission, dated January 18, 2005 (‘‘Phlx
Letter’’).
6 Amendment No. 1 added language to clarify the
application of the allocation algorithm and to note
that Phlx Rule 707, Just and Equitable Principles of
Trade, would prohibit coordinated actions between
a Phlx directed participant and an OFP involving
Directed Orders.
7 The term Order Flow Provider under proposed
Phlx Rule 1080(l)(i)(B) would mean any member or
member organization that submits, as agent,
customer orders to the Exchange.
E:\FR\FM\06JNN1.SGM
06JNN1
Agencies
[Federal Register Volume 70, Number 107 (Monday, June 6, 2005)]
[Notices]
[Pages 32859-32860]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2873]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51753; File No. SR-NSCC-2005-02]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Order Approving Proposed Rule Change To Enhance Automated
Customer Account Transfer Service To Permit the Automated Notification
of Changes to the Broker-Dealer of Record for Applicable Insurance
Products
May 27, 2005.
I. Introduction
On April 4, 2005, the National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') and on April 12, 2005, amended proposed rule change
SR-NSCC-2005-02 pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act'').\1\ Notice of the proposal was published in the
Federal Register on April 20, 2005.\2\ No comment letters were
received. For the reasons discussed below, the Commission is approving
the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ Securities Exchange Act Release No. 51541 (April 13, 2005),
70 FR 20609 (April 20, 2005).
---------------------------------------------------------------------------
II. Description
NSCC is enhancing its Automated Customer Account Transfer Service
(``ACAT Service'') to permit the automated notification of changes to
the broker-dealer of record for applicable insurance products.
Information regarding the broker-dealer of record for an annuity or
life insurance product is maintained by the insurance company that is
the issuer of the product. Currently there is no mechanism within the
ACAT Service that can automate notification of changes to the broker-
dealer of record. Annuity and life insurance products have a manually-
intensive processing stream connected with account transfers relative
to the automated processing of assets such as equity and debt
securities and mutual fund shares.
Under the proposed rule, the delivering and receiving broker-
dealers for annuities or life insurance products will be able to
communicate information regarding the change of broker-dealer of record
through the ACAT Service. The ACAT Service will communicate the
information through a link to a new product of NSCC's Insurance
Processing Services (``IPS'') called Inforce Transactions (``IFT'').
IFT
[[Page 32860]]
will relay the information to the issuer insurance company and will
also provide a means of communicating to the ACAT Service whether the
insurance company has confirmed, rejected, or requested a modification
of the change. NSCC will not debit or credit a delivering or receiving
broker-dealer for the value of any applicable insurance product that is
part of a customer account transfer.
In order for the receiving and delivering broker-dealers and the
issuer insurance company to be able to effect an account change through
the ACAT Service, the insurance company must participate in IPS, the
receiving broker-dealer must participate in the ACAT Service and IPS,
and the delivering broker-dealer must participate in the ACAT Service.
NSCC is also making certain technical changes to Rule 50, which
governs the ACAT Service. For purposes of bringing efficiencies to the
financial marketplace, NSCC's Rule 50 will cover all asset types
regardless of whether NSCC has the operational capability to effect the
transfer of such assets. NSCC either will undertake to cause the asset
transfer or asset reregistration to occur or will issue a document
evidencing each delivering firm's obligation and each receiving firm's
entitlement that will result from the transfer. Such instructions,
regardless of their form, are commonly referred to as receive and
deliver instructions. NSCC is adding a definition, ``ACAT Receive and
Deliver Instruction,'' \3\ relating to these instructions. NSCC also is
making certain technical changes to the ACATS rule.
---------------------------------------------------------------------------
\3\ As defined in NSCC Rule 1:
The term ``ACAT Receive and Deliver Instruction'' shall mean
such document, form, file, report or other information issued by the
Corporation [NSCC] to a Member or to a QSD (as defined in Rule 50),
on behalf of such QSD's participants, which identifies Automated
Customer Account Transfer receive and deliver obligations.
---------------------------------------------------------------------------
III. Discussion
Section 17A(b)(3)(F) of the Act requires that the rules of a
clearing agency be designed to promote the prompt and accurate
clearance and settlement of securities transactions.\4\ The Commission
finds that NCCC's proposed rule change is consistent with this
requirement because by automating and facilitating the change in
broker-dealer of record for eligible insurance products associated with
account transfers, the enhancements to the ACAT Service and the new IFT
product should reduce processing errors and delays that are typically
associated with manual processing.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular Section 17A of the Act and the rules and regulations
thereunder.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-NSCC-2005-02) be and hereby
is approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
---------------------------------------------------------------------------
\5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2873 Filed 6-3-05; 8:45 am]
BILLING CODE 8010-01-P