Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule To Interpret Rule 5 Section 6 of the Government Securities Division Rules, 10277-10278 [E7-3932]
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Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices
designated time limit of Chapter VI,
Section 6(b)(ii)–(iii); and in Section 2(i)
for Inter-Market Linkage trade-through
violations of Chapter XII, Section 3(a).
The sanctions imposed would include
the application of a fine for each
violation and an increased fine amount
for repeat violations. In the instance of
a trade-through violation, the rule
proposal would also allow BOX
Regulation to require the Options
Participant 3 to disgorge any gains from
transactions in violation of the tradethrough rules.
The Exchange believes that the
proposed rule changes would strengthen
its ability to carry out its oversight
responsibilities as a self-regulatory
organization and reinforce its
surveillance and enforcement functions.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,4 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,5 in particular, in that it
would promote just and equitable
principles of trade, facilitate
transactions in securities, remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system, and
protect investors and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received from
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
sroberts on PROD1PC70 with NOTICES
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
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:
3 See BOX Rule Chapter I, Section 1(a)(40) for
definition of ‘‘Options Participants.’’
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
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18:25 Mar 06, 2007
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10277
(A) By order approve such proposed
rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.6
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4041 Filed 3–6–07; 8:45 am]
IV. Solicitation of Comments
BILLING CODE 8010–01–P
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 e-mail to
rule-comments@sec.gov. Please include
File Number SR–BSE–2006–11 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55370; File No. SR–FICC–
2007–01]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
Proposed Rule To Interpret Rule 5
Section 6 of the Government Securities
Division Rules
February 28, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
Paper Comments
January 22, 2007, the Fixed Income
Clearing Corporation (‘‘FICC’’) filed
• Send paper comments in triplicate
with the Securities and Exchange
to Nancy M. Morris, Secretary,
Commission (‘‘Commission’’) the
Securities and Exchange Commission,
proposed rule change described in Items
10 F Street, NE., Washington, DC
I, II, and III below, which items have
20549–1090.
been prepared primarily by FICC. FICC
All submissions should refer to File
filed the proposal pursuant to Section
Number SR–BSE–2006–11. This file
19(b)(3)(A)(i) of the Act 2 and Rule 19b–
number should be included on the
4(f)(1) 3 thereunder so that the proposal
subject line if e-mail is used. To help the was effective upon filing with the
Commission process and review your
Commission. The Commission is
comments more efficiently, please use
publishing this notice to solicit
only one method. The Commission will comments on the rule change from
post all comments on the Commission’s interested parties.
Internet Web site (https://www.sec.gov/
I. Self-Regulatory Organization’s
rules/sro.shtml). Copies of the
Statement of the Terms of Substance of
submission, all subsequent
the Proposed Rule Change
amendments, all written statements
The purpose of the rule change is to
with respect to the proposed rule
interpret Rule 5, Section 6 of the
change that are filed with the
Government Securities Division
Commission, and all written
(‘‘GSD’’) rules.4
communications relating to the
proposed rule change between the
II. Self-Regulatory Organization’s
Commission and any person, other than Statement of the Purpose of, and
those that may be withheld from the
Statutory Basis for, the Proposed Rule
public in accordance with the
Change
provisions of 5 U.S.C. 552, will be
In its filing with the Commission,
available for inspection and copying in
FICC included statements concerning
the Commission’s Public Reference
Room. Copies of such filing also will be the purpose of and basis for the
proposed rule change and discussed any
available for inspection and copying at
comments it received on the proposed
the principal office of the BSE. All
rule change. The text of these statements
comments received will be posted
may be examined at the places specified
without change; the Commission does
not edit personal identifying
6 17 CFR 200.30–3(a)(12).
information from submissions. You
1 15 U.S.C. 78s(b)(1).
should submit only information that
2 15 U.S.C. 78s(b)(3)(A)(i).
you wish to make available publicly.
3 17 CFR 240.19b–4(f)(1).
4 Rule 5, Section 6 of the GSD rules states in
All submissions should refer to File
pertinent part, ‘‘Each Comparison generated by the
Number SR–BSE–2006–11 and should
Corporation * * * shall evidence a valid, binding,
be submitted on or before March 28,
and enforceable contract in respect of such
2007.
Compared Trade.’’
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10278
Federal Register / Vol. 72, No. 44 / Wednesday, March 7, 2007 / Notices
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.5
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
sroberts on PROD1PC70 with NOTICES
Rule 5, Section 6 of the GSD rules
states in pertinent part that each
comparison generated by GSD evidences
a valid, binding, and enforceable
contract with respect to such compared
trade. This provision confirms the terms
and conditions of the trade and the
parties’ agreement thereto and
authorizes FICC to take further action
with respect to the compared trade if
required.
GSD members are always subject to
all of the rights and obligations that
arise under GSD’s rules with respect to
trades they submit to GSD. For example,
if a trade is submitted for comparisononly processing, the submitting
members, whether or not they executed
the trade, are subject to the obligation to
pay applicable fees and to other
obligations that arise under the rules.6 If
a trade is submitted for netting, the
submitting members, whether or not
they executed the trade, are subject to
the obligation to pay applicable fees, to
post clearing fund collateral, and to
satisfy funds-only, securities settlement,
and other obligations that arise under
the rules. The submitting members, and
not the entity for which they are
submitting trades, also have all the
rights against FICC for novated
settlement obligations. However, GSD’s
rules do not alter rights and obligations
between a member and its customer
outside of the clearing process.
For example, a hedge fund that is not
a member of GSD executes a trade with
a dealer (‘‘Dealer A’’) that is a GSD
netting member. The hedge fund then
notifies its prime broker (‘‘Prime
Broker’’) that is also a GSD netting
member about the trade that the Prime
Broker is to settle on the hedge fund’s
behalf. Both Dealer A and the Prime
Broker submit the trade to GSD. While
Dealer A and Prime Broker are subject
to all of the rights and obligations that
arise under GSD’s rules with respect to
that trade, GSD’s rules do not eliminate
any rights and obligations that arise
between Prime Broker and the hedge
5 The
Commission has modified the text of the
summaries prepared by FICC.
6 Members that submit trades for comparison-only
processing are not subject to clearing fund, fundsonly settlement, and securities settlement
obligations under FICC’s rules with respect to such
comparison-only trades.
VerDate Aug<31>2005
18:25 Mar 06, 2007
Jkt 211001
fund or Dealer A and the hedge fund
outside of the clearing process.
The proposed rule change is
consistent with Section 17A of the Act,7
as amended, because it constitutes an
interpretation with respect to the
meaning of an existing rule.
(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
propos ed 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 proposed rule change
has become effective upon filing
pursuant to Section 19(b)(3)(A)(i) of the
Act 8 and Rule 19b–4(f)(1) 9 thereunder
because the rule constitutes an
interpretation with respect to the
meaning of an existing rule. 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:
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–FICC–2007–01. 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 filings 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/commondocs/rule.filings/
rule.filing.07-01.pdf. 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–
2007–01 and should be submitted on or
before March 28, 2007.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3932 Filed 3–6–07; 8:45 am]
BILLING CODE 8010–01–P
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–2007–01 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
7 15
U.S.C. 78q–1.
U.S.C. 78s(b)(3)(A)(i).
9 17 CFR 240.19b–4(f)(1).
8 15
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CFR 200.30–3(a)(12).
07MRN1
]]>Agencies
[Federal Register Volume 72, Number 44 (Wednesday, March 7, 2007)]
[Notices]
[Pages 10277-10278]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3932]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55370; File No. SR-FICC-2007-01]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule To
Interpret Rule 5 Section 6 of the Government Securities Division Rules
February 28, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on January 22, 2007, 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. FICC filed the proposal pursuant to Section
19(b)(3)(A)(i) of the Act \2\ and Rule 19b-4(f)(1) \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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78s(b)(3)(A)(i).
\3\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the rule change is to interpret Rule 5, Section 6 of
the Government Securities Division (``GSD'') rules.\4\
---------------------------------------------------------------------------
\4\ Rule 5, Section 6 of the GSD rules states in pertinent part,
``Each Comparison generated by the Corporation * * * shall evidence
a valid, binding, and enforceable contract in respect of such
Compared Trade.''
---------------------------------------------------------------------------
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
[[Page 10278]]
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.\5\
---------------------------------------------------------------------------
\5\ 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
Rule 5, Section 6 of the GSD rules states in pertinent part that
each comparison generated by GSD evidences a valid, binding, and
enforceable contract with respect to such compared trade. This
provision confirms the terms and conditions of the trade and the
parties' agreement thereto and authorizes FICC to take further action
with respect to the compared trade if required.
GSD members are always subject to all of the rights and obligations
that arise under GSD's rules with respect to trades they submit to GSD.
For example, if a trade is submitted for comparison-only processing,
the submitting members, whether or not they executed the trade, are
subject to the obligation to pay applicable fees and to other
obligations that arise under the rules.\6\ If a trade is submitted for
netting, the submitting members, whether or not they executed the
trade, are subject to the obligation to pay applicable fees, to post
clearing fund collateral, and to satisfy funds-only, securities
settlement, and other obligations that arise under the rules. The
submitting members, and not the entity for which they are submitting
trades, also have all the rights against FICC for novated settlement
obligations. However, GSD's rules do not alter rights and obligations
between a member and its customer outside of the clearing process.
---------------------------------------------------------------------------
\6\ Members that submit trades for comparison-only processing
are not subject to clearing fund, funds-only settlement, and
securities settlement obligations under FICC's rules with respect to
such comparison-only trades.
---------------------------------------------------------------------------
For example, a hedge fund that is not a member of GSD executes a
trade with a dealer (``Dealer A'') that is a GSD netting member. The
hedge fund then notifies its prime broker (``Prime Broker'') that is
also a GSD netting member about the trade that the Prime Broker is to
settle on the hedge fund's behalf. Both Dealer A and the Prime Broker
submit the trade to GSD. While Dealer A and Prime Broker are subject to
all of the rights and obligations that arise under GSD's rules with
respect to that trade, GSD's rules do not eliminate any rights and
obligations that arise between Prime Broker and the hedge fund or
Dealer A and the hedge fund outside of the clearing process.
The proposed rule change is consistent with Section 17A of the
Act,\7\ as amended, because it constitutes an interpretation with
respect to the meaning of an existing rule.
---------------------------------------------------------------------------
\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 propos ed 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 proposed rule change has become effective upon filing
pursuant to Section 19(b)(3)(A)(i) of the Act \8\ and Rule 19b-4(f)(1)
\9\ thereunder because the rule constitutes an interpretation with
respect to the meaning of an existing rule. 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)(i).
\9\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
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-2007-01 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 Number SR-FICC-2007-01. 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 filings 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/commondocs/rule.filings/
rule.filing.07-01.pdf. 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-2007-01 and should be submitted on or before March 28, 2007.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3932 Filed 3-6-07; 8:45 am]
BILLING CODE 8010-01-P
