Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Charges for Communications Fees To Continue Operating Legacy Communication Networks, 62154-62155 [E5-5971]

Download as PDF 62154 Federal Register / Vol. 70, No. 208 / Friday, October 28, 2005 / Notices 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 Room. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. 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-CHX–2005–01 and should be submitted on or before November 18, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Jonathan G. Katz, Secretary. [FR Doc. E5–5976 Filed 10–27–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52655; File No. SR–FICC– 2005–15] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Charges for Communications Fees To Continue Operating Legacy Communication Networks October 24, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on September 9, 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. 12 17 1 15 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). VerDate Aug<31>2005 18:15 Oct 27, 2005 Jkt 208001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change would revise the fees charged to members that fail to migrate their communications systems from legacy networks to The Depository Trust & Clearing Corporation’s (‘‘DTCC’s’’) Securely Managed and Reliable Technology (‘‘SMART’’) system 2 or to the Securities Industry Automation Corporation’s (‘‘SIAC’s’’) Secure Financial Transaction Infrastructure (‘‘SFTI’’) networks. 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.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Beginning in 2003, FICC has periodically informed members of the need to migrate their telecommunications connectivity from SIAC’s legacy based Broker and Access networks to DTCC’s SMART system or SIAC’s SFTI.4 While several advantages exist in having all members successfully migrate, FICC’s main objective in insourcing these services into its own data processing operations is to provide consistent business continuity planning capabilities across all FICC services. In the event of a large-scale regional disruption, any member accessing FICC through a legacy network will not have the benefits provided by the other communications vehicles which could create exposure to these members and their counterparties.5 2 SMART is DTCC’s centralized, end-to-end managed communications infrastructure that provides connectivity support for all post-trade clearance and settlement processing. Most of the services offered by DTCC’s subsidiaries, The Depository Trust Company, the National Securities Clearing Corporation, and FICC are accessible through SMART. SMART is interoperable with SFTI. 3 The Commission has modified the text of the summaries prepared by FICC. 4 DTCC Important Notices Z#0008, Z#0009, and Z#0010. 5 SMART is designed to withstand catastrophic disaster scenarios and is set up to operate in DTCC’s PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 While most FICC members have complied with stated migration requirements, several members continue to access FICC through legacy networks, which is imposing significant unnecessary costs on FICC for continued support of these systems. In order to encourage these members to migrate and in order to equitably allocate costs among its members, FICC intends to allocate its costs for continued support of legacy networks among the members using such systems on a pro rata basis. FICC plans to soon issue an important notice to members specifying the date such fees will become effective.6 In order to avoid bearing these costs, members currently using legacy systems are required to take the following actions: (i) As soon as possible, ensure adequate communications connectivity through SMART and/or SFTI, (ii) successfully complete testing through the newly-established pathways, (iii) complete full conversion of all input/ output for applicable FICC applications directly to/from FICC through SMART and/or SFTI, and (iv) cancel the legacy network connections. The proposed change is consistent with Section 17A of the Act 7 and the rules and regulations thereunder applicable to FICC because it will enable FICC to equitably allocate costs among its members. (B) Self-Regulatory Organization’s Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective upon filing pursuant to Section multiple remote sites to ensure its operability in the event of disruption. Legacy network connections are not automatically configured to ‘‘fail over’’ to DTCC’s remote processing sites and therefore do not provide members using these networks with the resilience that would be needed in the event of a large-scale regional disruption. 6 FICC expects that the migration deadline will be set for the end of 2005. 7 15 U.S.C. 78q–1. E:\FR\FM\28OCN1.SGM 28OCN1 Federal Register / Vol. 70, No. 208 / Friday, October 28, 2005 / Notices 19(b)(3)(A)(ii) of the Act 8 and Rule 19b– 4(f)(2) 9 thereunder because the proposed rule establishes or changes a due, fee, or other charge. At any time within sixty days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml) or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–FICC–2005–15 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–2005–15. 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, 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. 8 15 9 17 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). VerDate Aug<31>2005 18:15 Oct 27, 2005 Jkt 208001 62155 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–2005–15 and should be submitted on or before November 18, 2005. moratorium on the qualification and registration of new Competitive Traders (‘‘CTs’’) and Registered Competitive Market Makers (‘‘RCMMs’’) covered in Rules 110 and 107A, respectively. The text of the proposed rule change is available on the NYSE’s Web site (https://www.nyse.com), at the NYSE’s Office of the Secretary, and at the Commission’s Public Reference Room. For the Commission by the Division of Market Regulation, pursuant to delegated authority.10 Jonathan G. Katz, Secretary. [FR Doc. E5–5971 Filed 10–27–05; 8:45 am] II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52648; File No. SR–NYSE– 2005–63] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exchange’s Proposal To Place an Immediate Moratorium on the Qualification and Registration of New Competitive Traders and Registered Competitive Market Makers October 21, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 22, 2005, the New York Stock Exchange, Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under Section 19(b)(3)(A)(iii) of the Act,3 and paragraph (f)(6) of Rule 19b-4 under the Act,4 which renders the proposal effective upon receipt of this filing by the Commission. 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 The proposed rule change is an Information Memo announcing a 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b-4(f)(6). PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange has decided to study the future viability of CTs and RCMMs in light of the new Hybrid Market environment. While the Exchange conducts this study, it considers it appropriate to place a moratorium on the qualification and registration of new CTs and RCMMs. CTs and RCMMs were first authorized by the Commission in 1964 5 and 1978,6 respectively, to generate competition to specialists, add depth and liquidity to the market and create supplemental market making traders on the Exchange. NYSE Rules 110 and 111 govern CTs, and NYSE Rule 107A governs RCMMs. CTs and RCMMs can both conduct proprietary trading under the market maker exemption found in paragraph (1)(A) of Section 11(a) of the Act.7 CTs’ trading must be at least 75% stabilizing, and RCMMs must be ready to enter the market with one round lot if called upon by a floor official or broker to narrow the quotation spread or add liquidity to the market. The Exchange’s rules require that members must be registered by the Exchange before they are able to conduct business as a CT or RCMM, and in order to be registered must, besides 5 NYSE Rule 110 (amended May 21, 1964 and July 16, 1964, effective August 3, 1964). 6 Securities and Exchange Act Release No. 14718 (May 1, 1978), 43 FR 19738 (May 8, 1978) (SR– NYSE–78–24). 7 15 U.S.C. 78k(a)(1)(A). E:\FR\FM\28OCN1.SGM 28OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 208 (Friday, October 28, 2005)]
[Notices]
[Pages 62154-62155]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5971]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52655; File No. SR-FICC-2005-15]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Charges for Communications Fees To Continue Operating 
Legacy Communication Networks

October 24, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 9, 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 proposed rule change would revise the fees charged to members 
that fail to migrate their communications systems from legacy networks 
to The Depository Trust & Clearing Corporation's (``DTCC's'') Securely 
Managed and Reliable Technology (``SMART'') system \2\ or to the 
Securities Industry Automation Corporation's (``SIAC's'') Secure 
Financial Transaction Infrastructure (``SFTI'') networks.
---------------------------------------------------------------------------

    \2\ SMART is DTCC's centralized, end-to-end managed 
communications infrastructure that provides connectivity support for 
all post-trade clearance and settlement processing. Most of the 
services offered by DTCC's subsidiaries, The Depository Trust 
Company, the National Securities Clearing Corporation, and FICC are 
accessible through SMART. SMART is interoperable with SFTI.
---------------------------------------------------------------------------

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

    \3\ 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

    Beginning in 2003, FICC has periodically informed members of the 
need to migrate their telecommunications connectivity from SIAC's 
legacy based Broker and Access networks to DTCC's SMART system or 
SIAC's SFTI.\4\ While several advantages exist in having all members 
successfully migrate, FICC's main objective in insourcing these 
services into its own data processing operations is to provide 
consistent business continuity planning capabilities across all FICC 
services. In the event of a large-scale regional disruption, any member 
accessing FICC through a legacy network will not have the benefits 
provided by the other communications vehicles which could create 
exposure to these members and their counterparties.\5\
---------------------------------------------------------------------------

    \4\ DTCC Important Notices Z0008, Z0009, and 
Z0010.
    \5\ SMART is designed to withstand catastrophic disaster 
scenarios and is set up to operate in DTCC's multiple remote sites 
to ensure its operability in the event of disruption. Legacy network 
connections are not automatically configured to ``fail over'' to 
DTCC's remote processing sites and therefore do not provide members 
using these networks with the resilience that would be needed in the 
event of a large-scale regional disruption.
---------------------------------------------------------------------------

    While most FICC members have complied with stated migration 
requirements, several members continue to access FICC through legacy 
networks, which is imposing significant unnecessary costs on FICC for 
continued support of these systems. In order to encourage these members 
to migrate and in order to equitably allocate costs among its members, 
FICC intends to allocate its costs for continued support of legacy 
networks among the members using such systems on a pro rata basis. FICC 
plans to soon issue an important notice to members specifying the date 
such fees will become effective.\6\
---------------------------------------------------------------------------

    \6\ FICC expects that the migration deadline will be set for the 
end of 2005.
---------------------------------------------------------------------------

    In order to avoid bearing these costs, members currently using 
legacy systems are required to take the following actions: (i) As soon 
as possible, ensure adequate communications connectivity through SMART 
and/or SFTI, (ii) successfully complete testing through the newly-
established pathways, (iii) complete full conversion of all input/
output for applicable FICC applications directly to/from FICC through 
SMART and/or SFTI, and (iv) cancel the legacy network connections.
    The proposed change is consistent with Section 17A of the Act \7\ 
and the rules and regulations thereunder applicable to FICC because it 
will enable FICC to equitably allocate costs among its members.
---------------------------------------------------------------------------

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

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

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

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

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

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to Section

[[Page 62155]]

19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-4(f)(2) \9\ thereunder 
because the proposed rule establishes or changes a due, fee, or other 
charge. At any time within sixty days of the filing of the proposed 
rule change, the Commission may summarily abrogate such rule change if 
it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2005-15 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-2005-15. 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, 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-2005-15 and should be submitted on 
or before November 18, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
[FR Doc. E5-5971 Filed 10-27-05; 8:45 am]
BILLING CODE 8010-01-P

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