Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving a Proposed Rule Change Relating to Timely Notification of Significant Events That Effect a Change in Control of a Member or Could Have a Substantial Impact on a Member's Business or Financial Condition, 36679 [E5-3281]

Download as PDF Federal Register / Vol. 70, No. 121 / Friday, June 24, 2005 / Notices the proposed rule change is consistent with the requirements of Section 17A of the Act. 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– DTC–2005–03) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.4 Jill M. Peterson, Assistant Secretary. [FR Doc. E5–3283 Filed 6–23–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51875; File No. SR–FICC– 2005–01] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving a Proposed Rule Change Relating to Timely Notification of Significant Events That Effect a Change in Control of a Member or Could Have a Substantial Impact on a Member’s Business or Financial Condition June 17, 2005. On January 6, 2005, the Fixed Income Clearing Corporation (‘‘FICC’’) 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 on May 13, 2005, amended the proposed rule change.2 Notice of the proposal was published in the Federal Register on May 10, 2005.3 No comment letters were received. For the reasons discussed below, the Commission is approving the proposed rule change. I. Description The proposed rule change will require certain FICC members to notify FICC when they experience an event that 4 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 Republication of the notice is not required because the amendment to the proposed rule change merely renumbered certain proposed and existing sections of the rule text that were included in the original filing. 3 Securities Exchange Act Release No. 51643 (May 2, 2005); 70 FR 24665. VerDate jul<14>2003 19:06 Jun 23, 2005 Jkt 205001 would effect a change in control of such member or could have a substantial impact on such member’s business or financial condition. Under the rule change, GSD netting members and MBSD participants will be required to notify FICC upon experiencing a ‘‘reportable event.’’ The term ‘‘reportable event’’ is defined as an event that would effect a change in control of a GSD netting member or an MBSD participant or an event that could have a substantial impact on a netting member’s/participant’s business or financial condition including, but not limited to: (a) Material organizational changes including mergers, acquisitions, changes in corporate form, name changes, changes in the ownership of a netting member/participant or its affiliates, and material changes in management; (b) material changes in business lines, including new business lines undertaken; and (c) status as a defendant in litigation which could reasonably impact the netting member’s/participant’s financial condition or ability to conduct business.4 In order to provide FICC with enough time to analyze the implications of a ‘‘reportable event’’ and to determine an appropriate course of action, a netting member/participant must submit written notice to FICC at least 90 calendar days prior to the effective date of such ‘‘reportable event’’ unless the netting member/participant demonstrates that it could not have reasonably done so and also has provided oral and written notice to FICC as soon as possible. Failure to so notify FICC will result in a $5,000 fine. II. Discussion Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of a clearing be designed to assure the safeguarding of securities and funds which are in its custody or control.5 The proposed rule change is consistent with the requirements of Section 17A of the Act and the rules and regulations thereunder because it should enhance FICC’s ability to collect and evaluate in a timely manner the type of information that it needs in order to properly manage risks and thereby to better safeguard the securities and funds for which it is in control. III. Conclusion On the basis of the foregoing, the Commission finds that the proposal is 4 A similar requirement was added as Addendum T to the National Securities Clearing Corporation’s Rules in 1998. Securities Exchange Act Release No. 40582 (Oct. 20, 1998), 63 FR 57346 (Oct. 27, 1998). 5 15 U.S.C. 78q–1(b)(3)(F). PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 36679 consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 6 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– FICC–2005–01) be, and hereby is, approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.7 Jill M. Peterson, Assistant Secretary. [FR Doc. E5–3281 Filed 6–23–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51865; File No. SR–FICC– 2005–11] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change to Institute a Netting Process for Fail Deliver and Fail Receive Obligations for Netting Members in Its Government Securities Division June 17, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on May 19, 2005, the Fixed Income Clearing Corporation (‘‘FICC’’) 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 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 amend the rules of FICC’s Government Securities Division (‘‘GSD’’) to institute a process to net netting members’ fail deliver and fail receive obligations with their current settlement obligations on a daily basis. 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 6 15 U.S.C. 78q–1. CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 7 17 E:\FR\FM\24JNN1.SGM 24JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 121 (Friday, June 24, 2005)]
[Notices]
[Page 36679]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3281]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51875; File No. SR-FICC-2005-01]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Order Approving a Proposed Rule Change Relating to Timely Notification 
of Significant Events That Effect a Change in Control of a Member or 
Could Have a Substantial Impact on a Member's Business or Financial 
Condition

June 17, 2005.
    On January 6, 2005, the Fixed Income Clearing Corporation 
(``FICC'') 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 on May 13, 2005, 
amended the proposed rule change.\2\ Notice of the proposal was 
published in the Federal Register on May 10, 2005.\3\ 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\ Republication of the notice is not required because the 
amendment to the proposed rule change merely renumbered certain 
proposed and existing sections of the rule text that were included 
in the original filing.
    \3\ Securities Exchange Act Release No. 51643 (May 2, 2005); 70 
FR 24665.
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I. Description

    The proposed rule change will require certain FICC members to 
notify FICC when they experience an event that would effect a change in 
control of such member or could have a substantial impact on such 
member's business or financial condition. Under the rule change, GSD 
netting members and MBSD participants will be required to notify FICC 
upon experiencing a ``reportable event.'' The term ``reportable event'' 
is defined as an event that would effect a change in control of a GSD 
netting member or an MBSD participant or an event that could have a 
substantial impact on a netting member's/participant's business or 
financial condition including, but not limited to: (a) Material 
organizational changes including mergers, acquisitions, changes in 
corporate form, name changes, changes in the ownership of a netting 
member/participant or its affiliates, and material changes in 
management; (b) material changes in business lines, including new 
business lines undertaken; and (c) status as a defendant in litigation 
which could reasonably impact the netting member's/participant's 
financial condition or ability to conduct business.\4\
---------------------------------------------------------------------------

    \4\ A similar requirement was added as Addendum T to the 
National Securities Clearing Corporation's Rules in 1998. Securities 
Exchange Act Release No. 40582 (Oct. 20, 1998), 63 FR 57346 (Oct. 
27, 1998).
---------------------------------------------------------------------------

    In order to provide FICC with enough time to analyze the 
implications of a ``reportable event'' and to determine an appropriate 
course of action, a netting member/participant must submit written 
notice to FICC at least 90 calendar days prior to the effective date of 
such ``reportable event'' unless the netting member/participant 
demonstrates that it could not have reasonably done so and also has 
provided oral and written notice to FICC as soon as possible. Failure 
to so notify FICC will result in a $5,000 fine.

II. Discussion

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of a clearing be designed to assure the safeguarding of 
securities and funds which are in its custody or control.\5\ The 
proposed rule change is consistent with the requirements of Section 17A 
of the Act and the rules and regulations thereunder because it should 
enhance FICC's ability to collect and evaluate in a timely manner the 
type of information that it needs in order to properly manage risks and 
thereby to better safeguard the securities and funds for which it is in 
control.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act \6\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-FICC-2005-01) be, and hereby 
is, approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3281 Filed 6-23-05; 8:45 am]
BILLING CODE 8010-01-P

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