Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating To Returning Excess Clearing Fund Collateral, 68664-68665 [E6-19984]

Download as PDF 68664 Federal Register / Vol. 71, No. 227 / Monday, November 27, 2006 / Notices 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 DTC and on DTC’s Web site at http://www.dtc.org. 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-DTC–2006–14 and should be submitted on or before December 18, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority.9 Nancy M. Morris, Secretary. [FR Doc. E6–19961 Filed 11–24–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54787; File No. SR– FICC–2006–14] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating To Returning Excess Clearing Fund Collateral November 20, 2006. sroberts on PROD1PC70 with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on September 22, 2006, the Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) 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 purpose of this rule filing is to amend FICC’s Government Securities 9 17 1 15 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). VerDate Aug<31>2005 16:58 Nov 24, 2006 Jkt 211001 Division’s (‘‘GSD’’) rules to permit GSD members to request the return of their excess clearing fund collateral held on deposit with FICC on a more frequent basis than is currently allowed under GSD’s rules. 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 Currently, GSD members generally are permitted to request the return of excess clearing fund collateral once per month.3 In addition, on any business day, if a GSD member has an excess clearing fund deposit in the amount of $5 million or more, the member may request the return of the excess deposit provided, among other requirements, that the member retain on deposit with GSD the greater of at least 110 percent of its calculated required clearing fund deposit or $1 million more than its calculated required clearing fund deposit. In an effort to harmonize GSD’s process with respect to the return of excess collateral with the processes of other Depository Trust & Clearing Corporation (‘‘DTCC’’) subsidiary clearing agencies, FICC proposes to change GSD’s rules to give GSD the discretion to return excess clearing fund more frequently whether or not the excess reaches 110 percent of the required clearing fund deposit or $5 million.4 Under the proposal, GSD members would be able to request the 2 The Commission has modified the text of the summaries prepared by FICC. 3 Excess clearing fund is the amount of collateral held on deposit at GSD that is greater than a member’s required clearing fund deposit as set forth in GSD Rule 4 (Clearing Fund, Watch List and Loss Allocation). 4 The rules of the National Securities Clearing Corporation (‘‘NSCC’’) and FICC’s Mortgage Backed Securities Division (‘‘MBSD’’) permit their respective members to request (under normal circumstances) the return of their excess clearing fund more frequently than once per month. Currently, NSCC’s and MBSD’s procedures allow members to request the return of excess collateral on a daily basis. PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 return of excess clearing fund on a daily basis. GSD would retain the right, however, to deny the return of some or all of a member’s excess collateral in the following instances: (i) If, the member has an outstanding payment obligation to FICC; (ii) if a member’s funds-only settlement amounts or net settlement positions over the upcoming 90 days may reasonably be expected to be materially different than those of the preceding 90 days; (iii) if the member is on the watch list; or (iv) when the return of excess clearing fund will cause the member to be in violation of another GSD rule. In addition, excess clearing fund would not be returned to a member if doing so would reduce a member’s cross-guaranty repayment deposit or cross-margining repayment deposit to the clearing fund below the required amount.5 FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act and the rules thereunder because by enabling FICC members to request and receive an earlier return of excess clearing fund collateral held on deposit at FICC while maintaining the GSD’s ability to deny the return of excess collateral in order to protect FICC from undue risk, the proposed rule change should not adversely affect FICC’s ability to safeguard securities and funds in its possession or control or for which it is responsible and at the same time should enhance member liquidity. 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 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 35 days of the date of publication of this notice in the Federal 5 Under GSD’s rules, a ‘‘cross-guaranty repayment deposit’’ is a deposit to the clearing fund required to be made by a cross-guaranty beneficiary member pursuant to Rule 41, Section 4 of GSD’s rules. A ‘‘cross-margining repayment deposit’’ is a deposit to the clearing fund required to be made by a crossmargining beneficiary participant pursuant to Rule 43, Section 6 of GSD’s rules. E:\FR\FM\27NON1.SGM 27NON1 Federal Register / Vol. 71, No. 227 / Monday, November 27, 2006 / Notices Register or within such longer period (i) as the Commission may designate up to 90 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: sroberts on PROD1PC70 with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–FICC–2006–14 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–2006–14. 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 (http://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 <http://ficc.com/gov/ gov.docs.jsp?NS-query=#rf>. All comments received will be posted without change; the Commission does VerDate Aug<31>2005 16:58 Nov 24, 2006 Jkt 211001 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–2006–14 and should be submitted on or before December 18, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority.6 Nancy M. Morris, Secretary. [FR Doc. E6–19984 Filed 11–24–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54773; File No. SR–NASD– 2006–120] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Extend the Hours of Operation of the NASD/Nasdaq TRF, the OTC Reporting Facility and the Trade Reporting of Non-Nasdaq Exchange-Listed Securities Under the NASD Rule 6400 Series November 17, 2006. 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 October 27, 2006, the National Association of Securities Dealers, Inc. (‘‘NASD’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by NASD. On November 3, 2006, NASD filed Amendment No. 1. NASD filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder, 4 which renders it effective upon filing with the Commission. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 5 For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on November 3, 2006, the date NASD filed Amendment No. 1. 1 15 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 68665 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASD proposes to extend the hours of operation of (1) the Trade Reporting Facility established by NASD and the Nasdaq Stock Market, Inc. (‘‘NASD/ Nasdaq TRF’’); 6 (2) the trade reporting of non-Nasdaq exchange-listed securities under the NASD Rule 6400 Series; and (3) the trade reporting of OTC Equity Securities to the OTC Reporting Facility (‘‘ORF’’) 7 under the NASD Rule 6600 Series, until 8 p.m. Eastern Time (‘‘ET’’). The text of the proposed rule change is available at NASD, on the NASD Web site at http://www.nasd.com, and at the Commission’s Public Reference Room. 8 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD included statements concerning the purpose of, and basis for, the proposed rule change and discussed any 6 During the initial transitional period, the NASD/ Nasdaq TRF is used to report transactions executed otherwise than on an exchange in all Nasdaq Global Market, Nasdaq Capital Market securities and convertible bonds listed on Nasdaq. See NASD Rule 4000 Series and 6100 Series. NASD filed a separate proposed rule change to expand the scope of the NASD/Nasdaq TRF rules to include trade reporting in non-Nasdaq exchange-listed securities. See Securities Exchange Act Release No. 54451 (September 15, 2006), 71 FR 55243 (September 21, 2006) (SR–NASD–2006–104). 7 For purposes of the NASD Rule 6600 Series, the ORF is the service provided by NASD that accommodates reporting and dissemination of last sale reports in OTC Equity Securities. Regarding those OTC Equity Securities that are not eligible for clearance and settlement through the facilities of the National Securities Clearing Corporation, the ORF comparison function is not available. However, the ORF supports the entry and dissemination of last sale data on such securities. See NASD Rule 6610(k). 8 NASD has proposed changes to NASD Rule 4623(e), among other NASD rules, in SR–NASD– 2006–104, which is currently pending at the Commission. See Securities Exchange Act Release No. 54451 (September 15, 2006), 71 FR 55243 (September 21, 2006). Those proposed changes include the insertion of ‘‘NASD/Nasdaq’’ before each reference to the Trade Reporting Facility in NASD Rule 4632, which also is reflected in the proposed rule text. Further, the Commission has approved changes to NASD Rules 4632(e), 6420(e) and 6620(e) in SR–NASD–2006–055, which becomes effective on December 1, 2006. See Securities Exchange Act Release No. 53977 (June 12, 2006), 71 FR 34976 (June 16, 2006) (SR– NASD–2006–055) (approval order). Lastly, the Commission also has approved changes to NASD Rule 6420, among others, in SR–NASD–2006–091, which is scheduled to become effective on February 5, 2007. See Securities Exchange Act Release No. 54537 (September 28, 2006), 71 FR 59173 (October 6, 2006). Upon the implementation of SR–NASD– 2006–091, the requirements in NASD Rule 6420, among others, will no longer be necessary as they will be incorporated directly into NASD’s Alternative Display Facility rules. E:\FR\FM\27NON1.SGM 27NON1

Agencies

[Federal Register Volume 71, Number 227 (Monday, November 27, 2006)]
[Notices]
[Pages 68664-68665]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19984]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54787; File No. SR-FICC-2006-14]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing of a Proposed Rule Change Relating To Returning Excess 
Clearing Fund Collateral

 November 20, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 22, 2006, the 
Fixed Income Clearing Corporation (``FICC'') filed with the Securities 
and Exchange Commission (``Commission'') 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 purpose of this rule filing is to amend FICC's Government 
Securities Division's (``GSD'') rules to permit GSD members to request 
the return of their excess clearing fund collateral held on deposit 
with FICC on a more frequent basis than is currently allowed under 
GSD's rules.

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.
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A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Currently, GSD members generally are permitted to request the 
return of excess clearing fund collateral once per month.\3\ In 
addition, on any business day, if a GSD member has an excess clearing 
fund deposit in the amount of $5 million or more, the member may 
request the return of the excess deposit provided, among other 
requirements, that the member retain on deposit with GSD the greater of 
at least 110 percent of its calculated required clearing fund deposit 
or $1 million more than its calculated required clearing fund deposit.
---------------------------------------------------------------------------

    \3\ Excess clearing fund is the amount of collateral held on 
deposit at GSD that is greater than a member's required clearing 
fund deposit as set forth in GSD Rule 4 (Clearing Fund, Watch List 
and Loss Allocation).
---------------------------------------------------------------------------

    In an effort to harmonize GSD's process with respect to the return 
of excess collateral with the processes of other Depository Trust & 
Clearing Corporation (``DTCC'') subsidiary clearing agencies, FICC 
proposes to change GSD's rules to give GSD the discretion to return 
excess clearing fund more frequently whether or not the excess reaches 
110 percent of the required clearing fund deposit or $5 million.\4\ 
Under the proposal, GSD members would be able to request the return of 
excess clearing fund on a daily basis. GSD would retain the right, 
however, to deny the return of some or all of a member's excess 
collateral in the following instances: (i) If, the member has an 
outstanding payment obligation to FICC; (ii) if a member's funds-only 
settlement amounts or net settlement positions over the upcoming 90 
days may reasonably be expected to be materially different than those 
of the preceding 90 days; (iii) if the member is on the watch list; or 
(iv) when the return of excess clearing fund will cause the member to 
be in violation of another GSD rule. In addition, excess clearing fund 
would not be returned to a member if doing so would reduce a member's 
cross-guaranty repayment deposit or cross-margining repayment deposit 
to the clearing fund below the required amount.\5\
---------------------------------------------------------------------------

    \4\ The rules of the National Securities Clearing Corporation 
(``NSCC'') and FICC's Mortgage Backed Securities Division (``MBSD'') 
permit their respective members to request (under normal 
circumstances) the return of their excess clearing fund more 
frequently than once per month. Currently, NSCC's and MBSD's 
procedures allow members to request the return of excess collateral 
on a daily basis.
    \5\ Under GSD's rules, a ``cross-guaranty repayment deposit'' is 
a deposit to the clearing fund required to be made by a cross-
guaranty beneficiary member pursuant to Rule 41, Section 4 of GSD's 
rules. A ``cross-margining repayment deposit'' is a deposit to the 
clearing fund required to be made by a cross-margining beneficiary 
participant pursuant to Rule 43, Section 6 of GSD's rules.
---------------------------------------------------------------------------

    FICC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules thereunder because 
by enabling FICC members to request and receive an earlier return of 
excess clearing fund collateral held on deposit at FICC while 
maintaining the GSD's ability to deny the return of excess collateral 
in order to protect FICC from undue risk, the proposed rule change 
should not adversely affect FICC's ability to safeguard securities and 
funds in its possession or control or for which it is responsible and 
at the same time should enhance member liquidity.

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 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 35 days of the date of publication of this notice in the 
Federal

[[Page 68665]]

Register or within such longer period (i) as the Commission may 
designate up to 90 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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-FICC-2006-14 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-2006-14. 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 (http://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 <http://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-2006-14 and should be 
submitted on or before December 18, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E6-19984 Filed 11-24-06; 8:45 am]
BILLING CODE 8011-01-P