Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Procedure for Fine Waivers and To Make Other Technical and Administrative Amendments, 43476-43478 [E5-3987]
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Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices
replace it with a requirement that
specialists use reasonable diligence to
ascertain the best available price for the
security so that the resultant execution
price is as favorable to the order sender
as possible under prevailing market
conditions. The new rule sets out factors
that will be considered by the CHX in
determining whether the specialist used
reasonable diligence. On December 14,
2004, the CHX filed Amendment No. 1
to its original submission. The proposed
rule change, as amended, was published
for comment in the Federal Register on
December 22, 2004.3 The Commission
received no comment letters with
respect to the proposal.
After careful review, the Commission
finds that the proposed rule change, as
amended, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange.4 In
particular, the Commission believes that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,5 which
requires, among other things, that an
exchange’s rules be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, and, in general, to
protect investors and the public interest.
Specialists who execute market and
marketable limit orders must, among
other things, satisfy their duty of best
execution by executing customer trades
at the most favorable terms reasonably
available under the circumstances. As
amended, Article XX, Rule 37 will
require specialists to use reasonable
diligence to find the best available price
for the security so that the resultant
execution price is as favorable to the
order sender as possible under
prevailing market conditions.
Furthermore, although CHX specialists
no longer would be explicitly required
to execute eligible orders at the NBBO,
if the amended standard results in
specialists effecting orders at a prices
worse than the NBBO, this information
would be reflected in the statistics that
the CHX must produce pursuant to Rule
11Ac1–5.6 Broker-dealers that route
orders to the CHX would have to
consider this information in connection
with their duty to obtain best execution
on behalf of their customers.
In addition, the Commission notes
that the Exchange has committed to
continue surveillance over order
3 See Securities Exchange Act Release No. 50865
(December 16, 2004), 69 FR 76804.
4 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
5 15 U.S.C. 78f(b)(5).
6 17 CFR 240.11Ac1–5.
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19:40 Jul 26, 2005
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executions to ensure that specialists are
using reasonable diligence to find the
best available price for their customers.
The Commission expects that such
surveillance will be proactive and that
meaningful disciplinary action will be
taken against specialists found to have
violated the rule.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to a national
securities exchange, and, in particular,
Section 6(b)(5) of the Act.7
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,8 that the
proposed rule change (SR–CHX–2004–
03) be, and hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Jonathan G. Katz,
Secretary.
[FR Doc. E5–3980 Filed 7–26–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52085; File No. SR–FICC–
2005–13]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Procedure for Fine Waivers and To
Make Other Technical and
Administrative Amendments
July 20, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
July 15, 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 the proposed rule
change is to amend the: (1) Government
Securities Division (‘‘GSD’’) and
Mortgage-Backed Securities Division
(‘‘MBSD’’) rules to allow the
PO 00000
7 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
9 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
Membership and Risk Management
Committee (‘‘Committee’’) to delegate
fine waiver decisions to management
while retaining the ability to override
management’s decision; (2) GSD and
MBSD rules to eliminate the automatic
placement on the Watch List of FICC
members who fail to notify FICC within
two business days of first learning of
their non-compliance with FICC’s
membership standards; (3) MBSD rules
to broaden the reference to ‘‘net worth;’’
(4) MBSD rules by adding a
confidentiality clause; and (5) GSD rules
to make a technical change by moving
an incorrectly placed ‘‘and.’’
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),
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
1. Management Waiver of Fines
Currently, pursuant to GSD Rule 37
(‘‘Hearing Procedures’’), Section 1
(‘‘General’’) and MBSD Article V
(‘‘Miscellaneous’’), Rule 3 (‘‘Fines and
Other Sanctions’’), each time a member
requests that an assessed fine be waived,
FICC management makes a
determination to accept or reject the
waiver request based on a review of the
circumstances leading to the disputed
fine. FICC management then presents its
determination to the Committee for
ratification at its next regularly
scheduled meeting. Final
determinations by the Committee may
be appealed according to the GSD and
MBSD rules.
The need for Committee approval of
management decisions with respect to
fine assessments delays final decisions
for members because the Committee
only meets approximately every two
months. The Committee has routinely
agreed with management’s decisions
regarding fine waivers. For these
reasons, the Committee at this time feels
comfortable delegating decisions on fine
waiver requests to management.
8 15
Frm 00087
Fmt 4703
Sfmt 4703
2 The Commission has modified the text of the
summaries prepared by FICC.
E:\FR\FM\27JYN1.SGM
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Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices
Management will continue to inform the
Committee at each regularly scheduled
meeting of those waivers approved or
denied by management. The Committee
will retain the ability to override
management’s decision on any waiver
granted. Each member will continue to
have the opportunity to avail
themselves of the formal hearing
process contained in the GSD and
MBSD rules.
2. Failure To Notify of Non-Compliance
With Membership Standards
Members that have fallen out of
compliance with a stated membership
standard are required to notify FICC
within two business days of first
learning of their non-compliance
pursuant to GSD Rule 3 (‘‘Financial
Responsibility, Operational Capability,
and Other Membership Standards of
Comparison-Only Members and Netting
Members’’), Section 5 (‘‘General
Continuance Standards’’) and MBSD
Article III (‘‘Participants’’), Rule 1
(‘‘Requirements Applicable to
Participants and Limited Purpose
Participants’’), Section 17 (‘‘Additional
Assurances’’). Failure to timely notify
FICC results in a $1,000 fine and in the
member firm being placed on FICC’s
internal Watch List.
FICC’s Watch List was created to
isolate firms that may present an
increased credit risk to FICC. FICC
believes it is unnecessary to
automatically put all non-compliant
firms that fail to timely notify FICC on
the Watch List because many of these
firms are highly creditworthy and do
not warrant monitoring from a credit
risk perspective. However, FICC will
continue to assess a fine against those
members that fail to timely notify FICC
of their non-compliance with
membership standards.
3. MBSD Minimum Financial
Requirements
MBSD Article III (‘‘Participants’’),
Rule 1 (‘‘Requirements Applicable to
Participants and Limited Purpose
Participants’’), Section 2 states that FICC
may use various financial indicia to
determine if clearing members meet
minimum financial requirements.
However, the rules also state that for all
members other than brokers, the
minimum financial requirement is $10
million in ‘‘net worth.’’ The reference to
‘‘net worth’’ needs to be broadened
because the ‘‘net worth’’ criterion is not
always applicable to the various types of
MBSD applicants and members. For
example, FICC looks at net asset value
for mutual fund members. FICC
proposes to modify the MBSD rules to
take into account these different criteria.
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20:48 Jul 26, 2005
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In addition FICC is making a technical
change to Article III, Rule 1, Section 2.
The rule states that financial indicia
considered by FICC would include but
is not limited to both ‘‘net capital’’ and
‘‘regulatory net capital.’’ Because these
terms refer to the same criterion,
references to ‘‘net capital’’ will be
changed to ‘‘liquid capital.’’ The
reference to ‘‘regulatory net capital’’ will
be retained.
4. MBSD Confidentiality Provision
The MBSD is adding a confidentiality
provision, new Section 8
(‘‘Confidentiality’’), to Article VIII
(‘‘EPN Users’’), Rule 1 (‘‘Requirements
Applicable to EPN Users’’) of the EPN
rules. While the MBSD has always kept
EPN user information confidential, FICC
believes it is appropriate to amend the
rules to reflect current practice. Both the
GSD and the MBSD have a
confidentiality provision in their
respective rules, and FICC will mirror
these provisions for purposes of the EPN
rules.
5. Technical Change to GSD Rules
GSD is making a technical change to
Rule 11 (‘‘Netting System’’), Section 2
(‘‘Eligibility for Netting’’) to correct a
grammatical error caused by an
incorrectly placed ‘‘and.’’
The proposed rule change is
consistent with the requirements of
Section 17A of the Act 3 and the rules
and regulations thereunder applicable to
FICC because it assures the safeguarding
of securities and funds in its custody or
control or for which it is responsible by
clarifying rules for applicants and
members. As a result, FICC’s ability to
maintain a financially and operationally
sound participant base should be
enhanced.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
FICC does not believe that the
proposed rule change will have any
impact on 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
No written comments relating to the
proposed rule change have been
solicited or received. FICC will notify
the Commission of any written
comments received by FICC.
PO 00000
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective upon filing pursuant to Section
19(b)(3)(A)(iii) of the Act 4 and Rule
19b–4(f)(4) 5 thereunder because the
proposed rule change effects a change in
an existing service of FICC that (i) does
not adversely affect the safeguarding of
securities or funds in the custody or
control of FICC or for which it is
responsible and (ii) does not
significantly affect the respective rights
of the clearing agency or persons using
the service. At any time within sixty
days of the filing of such 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–FICC–2005–13 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–FICC–2005–13. 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
4 15
3 15
U.S.C. 78q–1.
Frm 00088
Fmt 4703
5 17
Sfmt 4703
43477
E:\FR\FM\27JYN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(4).
27JYN1
43478
Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices
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, 100 F Street, NE., 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–2005–13 and should
be submitted on or before August 17,
2005.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.6
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–3987 Filed 7–26–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52065; File No. SR–FICC–
2005–12]
Self Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
an Interpretation of a Rule Change
Submission and Making Certain
Technical Changes
July 20, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
May 20, 2005, the Fixed Income
Clearing Corporation (‘‘FICC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change and on July 13,
2005, amended the proposed rule
change as 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 persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FICC proposes to clarify the meaning
of the narrative of a prior FICC rule
change submission and to make
6 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
VerDate jul<14>2003
19:40 Jul 26, 2005
Jkt 205001
technical rule changes to the rules of its
Government Securities Division
(‘‘GSD’’) and the Mortgage-Backed
Securities Division (‘‘MBSD’’).
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
and C below, of the most significant
aspects of such statements.2
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
On March 16, 2005, the Commission
approved an FICC rule filing that,
among other things, established new
minimum financial requirements for
netting and clearing members in both
Divisions.3 Specifically, members that
use U.S. generally accepted accounting
principles (‘‘GAAP’’) to prepare their
financial statements continue to be
required to meet the minimum financial
requirements that were in the rules prior
to the rule change. Members that use a
different kind of GAAP must meet
minimum financial requirements that
are 11⁄2, 5, or 7 times greater than the
financial requirements for users of U.S.
GAAP, depending on the type of GAAP
used by the member.
FICC is concerned that the narrative
of FICC’s rule filing submission was
phrased in a way that might be
confusing. For example, the rule filing
narrative stated that a member that uses
UK GAAP would have to meet a
minimum financial requirement of ‘‘a
premium of 11⁄2 times the existing
requirement.’’ FICC is concerned that
the use of the term ‘‘premium’’ could be
misinterpreted to mean that the
minimum financial requirement of such
a member would be the total of the
requirement for a user of U.S. GAAP
plus 11⁄2 times that requirement. FICC
wishes to clarify that the new financial
requirement for such members is 11⁄2
times the U.S. GAAP requirement, as
was correctly and accurately worded in
the text of each Division’s rules and the
2 The Commission has modified the text of the
summaries prepared by FICC.
3 Securities Exchange Act Release No. 51385, 70
FR 14736 (Mar. 23, 2005) [File No. SR–FICC–2004–
14].
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
narrative of the Commission’s order
approving the rule change.
In addition, FICC believes that the
fine schedule for failure to timely
provide required information to FICC
does not adequately reflect the fact that
members will be fined by FICC for not
meeting the information requirements
contained in GSD Rule 2, Sections 5 and
6 and MBSD Rule 1, Article II, Sections
10 and 12. While the fine schedule
refers to the correct rule sections, it only
refers to financial and regulatory
reports, whereas those sections contain
requirements to submit other types of
information such as certain
notifications, legal opinions, and
updates to legal opinions. Members
have been notified both in the relevant
rule filings and in important notices that
they will be fined if they do not timely
submit this other type of required
information as well. FICC proposes to
change the fine schedule of each
division to clearly reflect this.
FICC is also deleting provisions in
GSD’s rules relating to DK functionality
for bilateral comparison because this
functionality was never implemented.
Lastly, FICC is correcting certain alphanumerical references within GSD’s
rules.
FICC believes that the proposed rule
change is consistent with the
requirements of the Act and the rules
and regulations thereunder because it
clarifies FICC’s rules and makes
necessary technical corrections.
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
FICC has not solicited or received
written comments relating to the
proposed rule change. FICC will notify
the Commission if it receives any
written comments.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(i) of the Act 4 and Rule 19b–
4(f)(1) 5 thereunder because it
constitutes a stated policy, practice, or
interpretation with respect to the
meaning, administration, or
4 15
5 17
E:\FR\FM\27JYN1.SGM
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
27JYN1
]]>Agencies
[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Notices]
[Pages 43476-43478]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3987]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52085; File No. SR-FICC-2005-13]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Procedure for Fine Waivers and To Make Other Technical and
Administrative Amendments
July 20, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on July 15, 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.
---------------------------------------------------------------------------
\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 the proposed rule change is to amend the: (1)
Government Securities Division (``GSD'') and Mortgage-Backed Securities
Division (``MBSD'') rules to allow the Membership and Risk Management
Committee (``Committee'') to delegate fine waiver decisions to
management while retaining the ability to override management's
decision; (2) GSD and MBSD rules to eliminate the automatic placement
on the Watch List of FICC members who fail to notify FICC within two
business days of first learning of their non-compliance with FICC's
membership standards; (3) MBSD rules to broaden the reference to ``net
worth;'' (4) MBSD rules by adding a confidentiality clause; and (5) GSD
rules to make a technical change by moving an incorrectly placed
``and.''
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), 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
1. Management Waiver of Fines
Currently, pursuant to GSD Rule 37 (``Hearing Procedures''),
Section 1 (``General'') and MBSD Article V (``Miscellaneous''), Rule 3
(``Fines and Other Sanctions''), each time a member requests that an
assessed fine be waived, FICC management makes a determination to
accept or reject the waiver request based on a review of the
circumstances leading to the disputed fine. FICC management then
presents its determination to the Committee for ratification at its
next regularly scheduled meeting. Final determinations by the Committee
may be appealed according to the GSD and MBSD rules.
The need for Committee approval of management decisions with
respect to fine assessments delays final decisions for members because
the Committee only meets approximately every two months. The Committee
has routinely agreed with management's decisions regarding fine
waivers. For these reasons, the Committee at this time feels
comfortable delegating decisions on fine waiver requests to management.
[[Page 43477]]
Management will continue to inform the Committee at each regularly
scheduled meeting of those waivers approved or denied by management.
The Committee will retain the ability to override management's decision
on any waiver granted. Each member will continue to have the
opportunity to avail themselves of the formal hearing process contained
in the GSD and MBSD rules.
2. Failure To Notify of Non-Compliance With Membership Standards
Members that have fallen out of compliance with a stated membership
standard are required to notify FICC within two business days of first
learning of their non-compliance pursuant to GSD Rule 3 (``Financial
Responsibility, Operational Capability, and Other Membership Standards
of Comparison-Only Members and Netting Members''), Section 5 (``General
Continuance Standards'') and MBSD Article III (``Participants''), Rule
1 (``Requirements Applicable to Participants and Limited Purpose
Participants''), Section 17 (``Additional Assurances''). Failure to
timely notify FICC results in a $1,000 fine and in the member firm
being placed on FICC's internal Watch List.
FICC's Watch List was created to isolate firms that may present an
increased credit risk to FICC. FICC believes it is unnecessary to
automatically put all non-compliant firms that fail to timely notify
FICC on the Watch List because many of these firms are highly
creditworthy and do not warrant monitoring from a credit risk
perspective. However, FICC will continue to assess a fine against those
members that fail to timely notify FICC of their non-compliance with
membership standards.
3. MBSD Minimum Financial Requirements
MBSD Article III (``Participants''), Rule 1 (``Requirements
Applicable to Participants and Limited Purpose Participants''), Section
2 states that FICC may use various financial indicia to determine if
clearing members meet minimum financial requirements. However, the
rules also state that for all members other than brokers, the minimum
financial requirement is $10 million in ``net worth.'' The reference to
``net worth'' needs to be broadened because the ``net worth'' criterion
is not always applicable to the various types of MBSD applicants and
members. For example, FICC looks at net asset value for mutual fund
members. FICC proposes to modify the MBSD rules to take into account
these different criteria.
In addition FICC is making a technical change to Article III, Rule
1, Section 2. The rule states that financial indicia considered by FICC
would include but is not limited to both ``net capital'' and
``regulatory net capital.'' Because these terms refer to the same
criterion, references to ``net capital'' will be changed to ``liquid
capital.'' The reference to ``regulatory net capital'' will be
retained.
4. MBSD Confidentiality Provision
The MBSD is adding a confidentiality provision, new Section 8
(``Confidentiality''), to Article VIII (``EPN Users''), Rule 1
(``Requirements Applicable to EPN Users'') of the EPN rules. While the
MBSD has always kept EPN user information confidential, FICC believes
it is appropriate to amend the rules to reflect current practice. Both
the GSD and the MBSD have a confidentiality provision in their
respective rules, and FICC will mirror these provisions for purposes of
the EPN rules.
5. Technical Change to GSD Rules
GSD is making a technical change to Rule 11 (``Netting System''),
Section 2 (``Eligibility for Netting'') to correct a grammatical error
caused by an incorrectly placed ``and.''
The proposed rule change is consistent with the requirements of
Section 17A of the Act \3\ and the rules and regulations thereunder
applicable to FICC because it assures the safeguarding of securities
and funds in its custody or control or for which it is responsible by
clarifying rules for applicants and members. As a result, FICC's
ability to maintain a financially and operationally sound participant
base should be enhanced.
---------------------------------------------------------------------------
\3\ 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 on 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
No written comments relating to the proposed rule change have 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
The foregoing rule change has become effective upon filing pursuant
to Section 19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(4) \5\
thereunder because the proposed rule change effects a change in an
existing service of FICC that (i) does not adversely affect the
safeguarding of securities or funds in the custody or control of FICC
or for which it is responsible and (ii) does not significantly affect
the respective rights of the clearing agency or persons using the
service. At any time within sixty days of the filing of such 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.
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\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(f)(4).
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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-2005-13 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-FICC-2005-13. 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
[[Page 43478]]
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, 100 F Street, NE., 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-2005-13
and should be submitted on or before August 17, 2005.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3987 Filed 7-26-05; 8:45 am]
BILLING CODE 8010-01-P
