Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Financial Responsibility, Operational Capability, Insolvency, and Ceasing To Act, 60591-60592 [E6-16950]
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Federal Register / Vol. 71, No. 198 / Friday, October 13, 2006 / Notices
employer liability for the specified time
periods:
From—
4/1/00 ........
4/1/01 ........
7/1/01 ........
1/1/02 ........
1/1/03 ........
10/1/03 ......
4/1/04 ........
7/1/04 ........
10/1/04 ......
4/1/05 ........
10/1/05 ......
7/1/06 ........
Through—
Interest rate
(percent)
3/31/01
6/30/01
12/31/01
12/31/02
9/30/03
3/31/04
6/30/04
9/30/04
3/31/05
9/30/05
6/30/06
12/31/06
9
8
7
6
5
4
5
4
5
6
7
8
Underpayments and Overpayments of
Multiemployer Withdrawal Liability
Section 4219.32(b) of the PBGC’s
regulation on Notice, Collection, and
Redetermination of Withdrawal
Liability (29 CFR part 4219) specifies
the rate at which a multiemployer plan
is to charge or credit interest on
underpayments and overpayments of
withdrawal liability under section 4219
of ERISA unless an applicable plan
provision provides otherwise. For
interest accruing during any calendar
quarter, the specified rate is the average
quoted prime rate on short-term
commercial loans for the fifteenth day
(or the next business day if the fifteenth
day is not a business day) of the month
preceding the beginning of the quarter,
as reported by the Board of Governors
of the Federal Reserve System in
Statistical Release H.15 (‘‘Selected
Interest Rates’’). The rate for the fourth
quarter (October through December) of
2006 (i.e., the rate reported for
September 15, 2006) is 8.25 percent.
The following table lists the
withdrawal liability underpayment and
overpayment interest rates for the
specified time periods:
ycherry on PROD1PC64 with NOTICES2
From
7/1/00 ........
4/1/01 ........
7/1/01 ........
10/1/01 ......
1/1/02 ........
1/1/03 ........
10/1/03 ......
10/1/04 ......
1/1/05 ........
4/1/05 ........
7/1/05 ........
10/1/05 ......
1/1/06 ........
4/1/06 ........
7/1/06 ........
10/1/06 ......
VerDate Aug<31>2005
Through
Interest rate
(percent)
3/31/01
6/30/01
9/30/01
12/31/01
12/31/02
9/30/03
9/30/04
12/31/04
3/31/05
6/30/05
9/30/05
12/31/05
3/31/06
6/30/06
9/30/06
12/31/06
15:21 Oct 12, 2006
9.50
8.50
7.00
6.50
4.75
4.25
4.00
4.50
5.25
5.50
6.00
6.50
7.25
7.50
8.00
8.25
Jkt 211001
60591
Multiemployer Plan Valuations
Following Mass Withdrawal
operational capability, and insolvency
and FICC ceasing to act for members.
The PBGC’s regulation on Duties of
Plan Sponsor Following Mass
Withdrawal (29 CFR part 4281)
prescribes the use of interest
assumptions under the PBGC’s
regulation on Allocation of Assets in
Single-Employer Plans (29 CFR part
4044). The interest assumptions
applicable to valuation dates in
November 2006 under part 4044 are
contained in an amendment to part 4044
published elsewhere in today’s Federal
Register. Tables showing the
assumptions applicable to prior periods
are codified in appendix B to 29 CFR
part 4044.
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
Issued in Washington, DC, on this 5th day
of October 2006.
James C. Gerber,
Acting Interim Director, Pension Benefit
Guaranty Corporation.
[FR Doc. E6–16957 Filed 10–12–06; 8:45 am]
BILLING CODE 7709–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54570); File No. SR–FICC–
2006–12]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing of a Proposed Rule Change
Relating to Financial Responsibility,
Operational Capability, Insolvency, and
Ceasing To Act
October 4, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
June 15, 2006, the Fixed Income
Clearing Corporation (‘‘FICC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) and on
September 22, 2006, 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
The proposed rule change would
amend FICC’s Government Securities
Division’s (‘‘GSD’’) and Mortgage
Backed Securities Division’s (‘‘MBSD’’)
rules relating to members’’ or
applicants’ financial responsibility,
1 15
PO 00000
U.S.C. 78s(b)(1).
Frm 00131
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Cease To Act and Insolvency Rules
In order to achieve greater legal and
administrative consistency and
efficiency, FICC proposes to harmonize
GSD’s rules governing when FICC will
cease to act for a member in a
noninsolvency situation 3 and in an
insolvency situation 4 with the rules of
FICC’s affiliate, the National Securities
Clearing Corporation (‘‘NSCC’’).5
Under the proposed rule change, GSD
Rule 21 would be renamed ‘‘Restriction
on Access to Services,’’ would address
noninsolvency situations, and would be
structured similar to NSCC Rule 46.
While new Rule 21 would be triggered
by essentially the same criteria that are
contained in the current GSD rule,6 the
new rule would expand the remedies
that FICC could exercise beyond only
‘‘ceasing to act’’ or ‘‘ceasing to accept
data’’ on behalf of the member.
Specifically, FICC, after notifying and
providing an opportunity to request a
hearing to the member, would be able to
suspend, prohibit, or limit a member’s
access to one or more of FICC’s services.
GSD Rule 22, which covers situations
when a member becomes insolvent,
would remain in its current form except
that its close-out provisions would be
amended and would be moved to a new
Rule 22A. Rule 22A would set forth the
procedures that FICC would follow
when it ceases to act for a member
2 The Commission has modified the text of the
summaries prepared by FICC.
3 GSD Rule 21.
4 GSD Rule 22.
5 The text of the proposed rules can be found on
FICC’s Web site at <https://ficc.com/gov/gov.
docs.jsp?NS-query=#rf>.
6 Such triggers include the member failing to
perform its obligations to FICC and FICC’s
determination that the member is in or is
approaching financial difficulty.
E:\FR\FM\13OCN1.SGM
13OCN1
60592
Federal Register / Vol. 71, No. 198 / Friday, October 13, 2006 / Notices
pursuant to Rules 21 and 22. Under new
Rule 22A, FICC would initiate the closeout process with respect to a member for
which it has ceased to act for any reason
permitted by its rules.7 In addition, the
term ‘‘Cut-Off Time’’ for noninsolvency
situations would be added to Rule 22A.
Although this term is similar to the
‘‘Time of Insolvency’’ term currently
used in Rule 22, a key difference
between the terms is that members will
be notified in advance of the ‘‘Cut-Off
Time.’’
The proposed rule change also makes
technical changes to conform existing
references to Rules 21 and 22
throughout FICC’s rules to the proposed
rule changes described above.8
2. General Continuance Standards
FICC proposes to add new Rule 3,
Section 5 to GSD’s rules and new
Article III, Rule 1, Section 18 to MBSD’s
rules, similar to NSCC Rule 15, that
would enable FICC, when it deems
necessary or advisable, to assure itself of
a member’s or an applicant’s financial
responsibility and operational
capability. To assure itself, FICC could,
but would not be limited to: Restricting
or modifying the member’s use of any or
all of FICC’s services; requiring
additional reporting by the member of
its financial or operational condition;
increasing the member’s clearing fund
collateral; altering the proportions of
cash, eligible netting securities, and
letters of credit contributing to the
member’s required clearing fund
deposits; and prohibiting the member
from withdrawing excess clearing fund
deposits.9
Because the proposed rule change
would give FICC the general authority to
require additional clearing fund
collateral when FICC is seeking
additional assurances from a member or
applicant, the provisions in GSD’s
current Rule 4 that require the posting
of additional collateral for specific
circumstances would be deleted.
ycherry on PROD1PC64 with NOTICES2
3. Technical Amendments
FICC proposes to make several
technical amendments to GSD’s and
MBSD’s rules. The terms ‘‘Board’’ and
‘‘Board of Directors’’ would be redefined
to include a committee of FICC’s Board
of Directors that is acting under
delegated authority of the Board.
Accordingly, references to specific
7 Currently, the close-out process applies only
when FICC deems a member insolvent.
8 See Rules 1, 3A, 4, 6A, 14 and pending Rule
22A.
9 These proposed actions are similar to those that
FICC has proposed to undertake with respect to a
member undergoing a wind-down in a rule filing
pending with the Commission. SR–FICC–2006–06.
VerDate Aug<31>2005
15:21 Oct 12, 2006
Jkt 211001
board committees throughout both
divisions’ rules would be replaced
simply by the term ‘‘Board,’’ which
would include any such board
committees.
FICC believes that the proposed rule
change is consistent with the
requirements of the Section 17A of the
Act 10 and the rules and regulations
thereunder because it would enhance
FICC’s rules governing cease-to-act and
insolvency situations and would
strengthen FICC’s ability to seek
additional assurances from its members
and as a result should help FICC
safeguard funds and securities in its
custody or control.
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 of any written
comments it receives.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within thirty-five days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
ninety days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve such proposed
rule change; or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–FICC–2006–12 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File No.
SR–FICC–2006–12. 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 FICC’s principal office and on FICC’s
Web site at <https://ficc.com/gov/
gov.docs.jsp?NS-query=#rf>. 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
submission should refer to File No. SR–
FICC–2006–12 and should be submitted
on or before November 3, 2006.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.11
Nancy M. Morris,
Secretary.
[FR Doc. E6–16950 Filed 10–12–06; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
10 15
PO 00000
U.S.C. 78q–1.
Frm 00132
Fmt 4703
11 17
Sfmt 4703
E:\FR\FM\13OCN1.SGM
CFR 200.30–3(a)(12).
13OCN1
]]>Agencies
[Federal Register Volume 71, Number 198 (Friday, October 13, 2006)]
[Notices]
[Pages 60591-60592]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16950]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54570); File No. SR-FICC-2006-12]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing of a Proposed Rule Change Relating to Financial
Responsibility, Operational Capability, Insolvency, and Ceasing To Act
October 4, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on June 15, 2006, the Fixed
Income Clearing Corporation (``FICC'') filed with the Securities and
Exchange Commission (``Commission'') and on September 22, 2006, 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.
---------------------------------------------------------------------------
\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 amend FICC's Government Securities
Division's (``GSD'') and Mortgage Backed Securities Division's
(``MBSD'') rules relating to members'' or applicants' financial
responsibility, operational capability, and insolvency and FICC ceasing
to act for members.
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\
---------------------------------------------------------------------------
\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. Cease To Act and Insolvency Rules
In order to achieve greater legal and administrative consistency
and efficiency, FICC proposes to harmonize GSD's rules governing when
FICC will cease to act for a member in a noninsolvency situation \3\
and in an insolvency situation \4\ with the rules of FICC's affiliate,
the National Securities Clearing Corporation (``NSCC'').\5\
---------------------------------------------------------------------------
\3\ GSD Rule 21.
\4\ GSD Rule 22.
\5\ The text of the proposed rules can be found on FICC's Web
site at <https://ficc.com/gov/gov.docs.jsp?NS-
query=#rf.
---------------------------------------------------------------------------
Under the proposed rule change, GSD Rule 21 would be renamed
``Restriction on Access to Services,'' would address noninsolvency
situations, and would be structured similar to NSCC Rule 46. While new
Rule 21 would be triggered by essentially the same criteria that are
contained in the current GSD rule,\6\ the new rule would expand the
remedies that FICC could exercise beyond only ``ceasing to act'' or
``ceasing to accept data'' on behalf of the member. Specifically, FICC,
after notifying and providing an opportunity to request a hearing to
the member, would be able to suspend, prohibit, or limit a member's
access to one or more of FICC's services.
---------------------------------------------------------------------------
\6\ Such triggers include the member failing to perform its
obligations to FICC and FICC's determination that the member is in
or is approaching financial difficulty.
---------------------------------------------------------------------------
GSD Rule 22, which covers situations when a member becomes
insolvent, would remain in its current form except that its close-out
provisions would be amended and would be moved to a new Rule 22A. Rule
22A would set forth the procedures that FICC would follow when it
ceases to act for a member
[[Page 60592]]
pursuant to Rules 21 and 22. Under new Rule 22A, FICC would initiate
the close-out process with respect to a member for which it has ceased
to act for any reason permitted by its rules.\7\ In addition, the term
``Cut-Off Time'' for noninsolvency situations would be added to Rule
22A. Although this term is similar to the ``Time of Insolvency'' term
currently used in Rule 22, a key difference between the terms is that
members will be notified in advance of the ``Cut-Off Time.''
---------------------------------------------------------------------------
\7\ Currently, the close-out process applies only when FICC
deems a member insolvent.
---------------------------------------------------------------------------
The proposed rule change also makes technical changes to conform
existing references to Rules 21 and 22 throughout FICC's rules to the
proposed rule changes described above.\8\
---------------------------------------------------------------------------
\8\ See Rules 1, 3A, 4, 6A, 14 and pending Rule 22A.
---------------------------------------------------------------------------
2. General Continuance Standards
FICC proposes to add new Rule 3, Section 5 to GSD's rules and new
Article III, Rule 1, Section 18 to MBSD's rules, similar to NSCC Rule
15, that would enable FICC, when it deems necessary or advisable, to
assure itself of a member's or an applicant's financial responsibility
and operational capability. To assure itself, FICC could, but would not
be limited to: Restricting or modifying the member's use of any or all
of FICC's services; requiring additional reporting by the member of its
financial or operational condition; increasing the member's clearing
fund collateral; altering the proportions of cash, eligible netting
securities, and letters of credit contributing to the member's required
clearing fund deposits; and prohibiting the member from withdrawing
excess clearing fund deposits.\9\
---------------------------------------------------------------------------
\9\ These proposed actions are similar to those that FICC has
proposed to undertake with respect to a member undergoing a wind-
down in a rule filing pending with the Commission. SR-FICC-2006-06.
---------------------------------------------------------------------------
Because the proposed rule change would give FICC the general
authority to require additional clearing fund collateral when FICC is
seeking additional assurances from a member or applicant, the
provisions in GSD's current Rule 4 that require the posting of
additional collateral for specific circumstances would be deleted.
3. Technical Amendments
FICC proposes to make several technical amendments to GSD's and
MBSD's rules. The terms ``Board'' and ``Board of Directors'' would be
redefined to include a committee of FICC's Board of Directors that is
acting under delegated authority of the Board. Accordingly, references
to specific board committees throughout both divisions' rules would be
replaced simply by the term ``Board,'' which would include any such
board committees.
FICC believes that the proposed rule change is consistent with the
requirements of the Section 17A of the Act \10\ and the rules and
regulations thereunder because it would enhance FICC's rules governing
cease-to-act and insolvency situations and would strengthen FICC's
ability to seek additional assurances from its members and as a result
should help FICC safeguard funds and securities in its custody or
control.
---------------------------------------------------------------------------
\10\ 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
FICC has not solicited or received written comments relating to the
proposed rule change. FICC will notify the Commission of any written
comments it receives.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period (i) as the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which the self-regulatory organization consents,
the Commission will:
(A) By order approve such proposed rule change; or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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 No. SR-FICC-2006-12 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-FICC-2006-12. 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 FICC's principal office and on FICC's Web
site at <https://ficc.com/gov/gov.docs.jsp?NS-query=#rf. 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
submission should refer to File No. SR-FICC-2006-12 and should be
submitted on or before November 3, 2006.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-16950 Filed 10-12-06; 8:45 am]
BILLING CODE 8011-01-P
