Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving Proposed Rule Change to Modify Its Rules and Procedures Related to the Collection of Commission Payments, 29699 [E6-7798]

Download as PDF Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53811; File No. SR–NSCC– 2005–17] Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving Proposed Rule Change to Modify Its Rules and Procedures Related to the Collection of Commission Payments May 16, 2006. I. Introduction On December 29, 2005, the National Securities Clearing Corporation (‘‘NSCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) and on February 3, 2006, amended proposed rule change SR–NSCC–2005– 17 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 March 13, 2006.2 No comment letters were received. For the reasons discussed below, the Commission is approving the proposed rule change. rmajette on PROD1PC67 with NOTICES II. Description As part of ongoing efforts to increase processing efficiencies, NSCC is modifying its Rule 16, ‘‘Settlement of Commissions,’’ to further standardize and automate the processing of commission bill payments. In 2001, NSCC modified Rule 16 to implement the use of Automated Clearing House (‘‘ACH’’) wire transfers when making payments to non-clearing members utilizing NSCC’s Commission Bill Service. As a part of NSCC’s move to payment of credits by ACH wire transfer, all non-clearing members were required to execute appropriate ACH documentation in order to receive their credit payments.3 While NSCC automated the payment of funds from NSCC to non-clearing members, the collection of monies owed to NSCC by non-clearing members was not automated. Non-clearing members continued to pay commission bill settlement funds to NSCC by checks. NSCC is now further modifying Rule 16 to require the use of ACH preauthorized payments in the collection of funds from those nonclearing members that are indebted to NSCC as a result of their utilization of the Commission Bill Service. Accordingly, at the time as determined U.S.C. 78s(b)(1). Exchange Act Release No. 53424 (March 6, 2006), 71 FR 12759. 3 Securities Exchange Act Release No. 44550 (July 12, 2001), 66 FR 37509 (July 18, 2001) [File No. SR– NSCC–2001–08]. and announced to users of the Commission Bill Service by NSCC, NSCC will debit the bank account designated by each non-clearing member an amount equal to the amount owed by the non-clearing member to NSCC.4 All non-clearing members will be required to execute appropriate ACH documentation. In addition to the above change, NSCC is also making a technical correction to Rule 16(3) to conform the Rule to practice. NSCC will eliminate text that provides that non-clearing members must deliver information to NSCC on the 10th day of each month. NSCC is eliminating this text because this practice has been discontinued. Implementation NSCC will work with New York Stock Exchange (‘‘NYSE’’) and American Stock Exchange (‘‘AMEX’’) staff to obtain new ACH documentation from all non-clearing members that currently utilize the Commission Bill Service. Within two weeks of approval by the SEC of this rule filing, NSCC will begin implementing the ACH debit process on a rolling-basis. NSCC anticipates that collection of funds by check from nonclearing members to NSCC will be discontinued in its entirety by the end of the second quarter of 2006. III. Discussion Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of a clearing agency be designed to remove impediments to and perfect the mechanism of a national system for prompt and accurate clearance and settlement of securities transactions.5 By requiring electronic payment of funds from non-clearing members utilizing its Commission Bill Service, NSCC should reduce processing errors and delays that are typically associated with the manual processing of checks. As such, the proposed rule change is consistent with NSCC’s statutory obligation to remove impediments to and perfect the mechanism of a national system for prompt and accurate clearance and settlement of securities transactions. 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. 1 15 2 Securities VerDate Aug<31>2005 15:14 May 22, 2006 Jkt 208001 4 Currently, commission bill settlement takes place on the 15th day of each month or on the next preceding business day if the 15th is not a business day. 5 15 U.S.C. 78q–1(b)(3)(F). PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 29699 It is therefore ordered, pursuant to section 19(b)(2) of the Act,6 that the proposed rule change (File No. SR– NSCC–2005–17) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.7 Nancy M. Morris, Secretary. [FR Doc. E6–7798 Filed 5–22–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53812; No. SR-OCC–2006– 03] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Effect Certain Fee Changes to Ancillary Services Program May 16, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on April 13, 2006, The Options Clearing Corporation (‘‘OCC’’) 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 OCC. OCC filed the proposed rule change pursuant to section 19(b)(3)(A)(ii) of the Act 2 and Rule 19b–4(f)(2) 3 thereunder so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the rule change from interested parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The principal purpose of the rule change is to effect certain fee changes to OCC’s ancillary services program. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, OCC 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 6 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78s(b)(3)(A)(ii). 3 17 CFR 240.19b–4(f)(2). 7 17 E:\FR\FM\23MYN1.SGM 23MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 99 (Tuesday, May 23, 2006)]
[Notices]
[Page 29699]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7798]



[[Page 29699]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53811; File No. SR-NSCC-2005-17]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Approving Proposed Rule Change to Modify Its Rules 
and Procedures Related to the Collection of Commission Payments

May 16, 2006.

I. Introduction

    On December 29, 2005, the National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') and on February 3, 2006, amended proposed rule change 
SR-NSCC-2005-17 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 March 13, 2006.\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. 53424 (March 6, 2006), 
71 FR 12759.
---------------------------------------------------------------------------

II. Description

    As part of ongoing efforts to increase processing efficiencies, 
NSCC is modifying its Rule 16, ``Settlement of Commissions,'' to 
further standardize and automate the processing of commission bill 
payments.
    In 2001, NSCC modified Rule 16 to implement the use of Automated 
Clearing House (``ACH'') wire transfers when making payments to non-
clearing members utilizing NSCC's Commission Bill Service. As a part of 
NSCC's move to payment of credits by ACH wire transfer, all non-
clearing members were required to execute appropriate ACH documentation 
in order to receive their credit payments.\3\ While NSCC automated the 
payment of funds from NSCC to non-clearing members, the collection of 
monies owed to NSCC by non-clearing members was not automated. Non-
clearing members continued to pay commission bill settlement funds to 
NSCC by checks.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 44550 (July 12, 2001), 
66 FR 37509 (July 18, 2001) [File No. SR-NSCC-2001-08].
---------------------------------------------------------------------------

    NSCC is now further modifying Rule 16 to require the use of ACH 
preauthorized payments in the collection of funds from those non-
clearing members that are indebted to NSCC as a result of their 
utilization of the Commission Bill Service. Accordingly, at the time as 
determined and announced to users of the Commission Bill Service by 
NSCC, NSCC will debit the bank account designated by each non-clearing 
member an amount equal to the amount owed by the non-clearing member to 
NSCC.\4\ All non-clearing members will be required to execute 
appropriate ACH documentation.
---------------------------------------------------------------------------

    \4\ Currently, commission bill settlement takes place on the 
15th day of each month or on the next preceding business day if the 
15th is not a business day.
---------------------------------------------------------------------------

    In addition to the above change, NSCC is also making a technical 
correction to Rule 16(3) to conform the Rule to practice. NSCC will 
eliminate text that provides that non-clearing members must deliver 
information to NSCC on the 10th day of each month. NSCC is eliminating 
this text because this practice has been discontinued.

Implementation

    NSCC will work with New York Stock Exchange (``NYSE'') and American 
Stock Exchange (``AMEX'') staff to obtain new ACH documentation from 
all non-clearing members that currently utilize the Commission Bill 
Service. Within two weeks of approval by the SEC of this rule filing, 
NSCC will begin implementing the ACH debit process on a rolling-basis. 
NSCC anticipates that collection of funds by check from non-clearing 
members to NSCC will be discontinued in its entirety by the end of the 
second quarter of 2006.

III. Discussion

    Section 17A(b)(3)(F) of the Act requires, among other things, that 
the rules of a clearing agency be designed to remove impediments to and 
perfect the mechanism of a national system for prompt and accurate 
clearance and settlement of securities transactions.\5\ By requiring 
electronic payment of funds from non-clearing members utilizing its 
Commission Bill Service, NSCC should reduce processing errors and 
delays that are typically associated with the manual processing of 
checks. As such, the proposed rule change is consistent with NSCC's 
statutory obligation to remove impediments to and perfect the mechanism 
of a national system for prompt and accurate clearance and settlement 
of securities transactions.
---------------------------------------------------------------------------

    \5\ 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,\6\ that the proposed rule change (File No. SR-NSCC-2005-17) be and 
hereby is approved.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2).
    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
Nancy M. Morris,
Secretary.
[FR Doc. E6-7798 Filed 5-22-06; 8:45 am]
BILLING CODE 8010-01-P

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