Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Modify the Hearing Procedures Afforded to Members and Applicants for Membership and Harmonize Them With Similar Rules of Its Affiliates, 68922-68924 [E7-23592]

Download as PDF 68922 Federal Register / Vol. 72, No. 234 / Thursday, December 6, 2007 / Notices 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 rulecomments@sec.gov. Please include File Number SR–DTC–2007–06 on the subject line. mstockstill on PROD1PC66 with NOTICES 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–DTC–2007–06. 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 on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings also will be available for inspection and copying at the principal office of DTC and on DTC’s Web site at http://www.dtcc.com/ downloads/legal/rule_filings/2007/dtc/ 2007–06.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–DTC– 2007–06 and should be submitted on or before December 21, 2007. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23591 Filed 12–5–07; 8:45 am] BILLING CODE 8011–01–P 8 17 18:57 Dec 05, 2007 and (C) below, of the most significant aspects of these statements.4 [Release No. 34–56864; File No. SR–FICC– 2007–06] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Modify the Hearing Procedures Afforded to Members and Applicants for Membership and Harmonize Them With Similar Rules of Its Affiliates November 29, 2007. 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 April 30, 2007, the Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) and on July 24, 2007, amended 3 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change seeks (1) to modify the rules of FICC’s Government Securities Division (‘‘GSD’’) and Mortgage-Backed Securities Division (‘‘MBSD’’) (GSD and MBSD are collectively referred to as the ‘‘Divisions’’), including the EPN rules of MBSD, regarding hearing procedures afforded to members and applicants for membership and (2) where practicable or beneficial, to harmonize them with similar rules of FICC’s affiliates, The Depository Trust Company (‘‘DTC’’) and the National Securities Clearing Corporation (‘‘NSCC’’). 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), 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The amendment corrected a typographical error in the proposed rule text. 2 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 SECURITIES AND EXCHANGE COMMISSION Jkt 214001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 1. Minor Rule Violation Plan In 1984, the Commission adopted amendments to Rule 19d–1(c) under the Act 5 that allow self-regulatory organizations to adopt with Commission approval plans for the disposition of minor violations of rules.6 Currently under each Division’s rules, a member or applicant subject to disciplinary action has a right to a hearing before a panel comprised of members of FICC’s Board of Directors regardless of the severity of the action for which the member or applicant is being disciplined.7 Because some rule violations are not sufficiently serious to merit Board review, FICC is proposing to adopt a Minor Rule Violation Plan within the meaning of Rule 19d–1(c)(2) of the Act for those rule violations FICC deems minor. Consistent with Rule 19d–1(c)(2) of the Act, FICC would designate those rule violations for which a fine may be assessed in an amount not to exceed $5,000 as minor rule violations. If a member were to dispute a fine imposed by FICC by filing a written request for hearing and a written statement, FICC management would have the authority to waive the fine. FICC management would notify the Board of Directors (or a Committee authorized by the Board of Directors) of its determination to waive the fine and would provide the reasons for the waiver. The Board or Committee could in its discretion decide to reinstate any fine waived by FICC management. If FICC management were not to waive the fine, the member could appeal the decision to a panel comprised of FICC officers (‘‘Minor Rule Violation Panel’’). 2. Hearings for All Other Violations and Minor Rule Violation Appeals For matters involving (i) an alleged violation of a GSD or MBSD rule for which a fine in an amount of over $5,000 is assessed, (ii) applicants for membership, or (iii) other disciplinary actions to which the Minor Rule Violation Plan would not apply or for appeals from a Minor Rule Violation 4 The Commission has modified the text of the summaries prepared by FICC. 5 17 CFR 240.19d–1(c). 6 Securities Exchange Act Release No. 21013 (June 1, 1984), 49 FR 23828 (June 8, 1984) File No. S7–983A]. 7 MBSD Article V, Rule 7 (‘‘Appeals’’); EPN Article X, Rule 7 (‘‘Appeals’’); and GSD Rule 37 (‘‘Hearing Procedures’’). E:\FR\FM\06DEN1.SGM 06DEN1 Federal Register / Vol. 72, No. 234 / Thursday, December 6, 2007 / Notices Panel decision adverse to a member or applicant, the member or applicant would be entitled to a hearing before a panel comprised of three individuals of the FICC Board of Directors (or their designees) appointed by the Chairman of the FICC Board. Decisions of the panel would be final; however, the full Board of Directors would retain the right to modify any sanction or reverse any decision of the Board panel that was adverse to the member or applicant. Currently with respect to hearings, a member or applicant is afforded the opportunity to be heard and may be represented by counsel if desired. A record is kept of the hearing, and at the discretion of the Board panel, the associated cost may be charged in whole or part to the member or applicant in the event that the decision is adverse to the member or applicant. The member or applicant is advised of the Board panel’s decision within ten business days after the conclusion of the hearing. These procedures would also apply with respect to the Minor Rule Violation Plan. mstockstill on PROD1PC66 with NOTICES 3. Administrative Changes: Uniformity of Time Frames The proposed rule changes seek to implement uniform time periods for the Divisions governing actions a member or applicant would be required to take in order to request a hearing. The deadlines a member or applicant must adhere to in order to request a hearing currently vary between the Divisions. Under the proposed rule change, a member or applicant would have five business days, or two business days in the case of a summary action taken against the member or applicant pursuant to Rule 21 or 22,8 from the date on which FICC first informs it of a sanction or a denial of membership in which to request a hearing. Within seven business days, or three business days in the case of a summary action taken against the member or applicant, after filing a request for a hearing with FICC, the member or applicant would be required to submit to FICC a clear and concise written statement setting forth the action or proposed action of FICC with respect to which the hearing is requested, the basis for objection to such action, whether the member or applicant intends to attend the hearing, and whether the member or applicant chooses to be represented by counsel at the hearing. These proposed time frames would be consistent with 8 Examples of a summary action are a suspension of a member or restriction of a member’s access to services as described in Rule 21, Section 1 (‘‘Restrictions on Access to Services’’). VerDate Aug<31>2005 18:57 Dec 05, 2007 Jkt 214001 time frames being proposed by DTC and NSCC. 4. Technical Changes MBSD Article V, Rule 3 (‘‘Fines and Other Sanctions’’) would be amended in accordance with the proposed changes to the hearing procedures of MBSD. In addition, minor technical changes would be made to the rules of both Divisions where necessary to implement the proposed changes set forth above. 5. Implementation of the Proposed Changes The proposed changes will be implemented upon approval of this proposed filing by the Commission. Members will be advised of the implementation through an FICC Important Notice. FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 9 and the rules and regulations thereunder because the adoption of a Minor Rule Violation Plan furthers the statutory objective of providing a fair procedure for disciplining members and will provide FICC with the ability to impose meaningful sanctions for those rule violations that do not necessarily rise to a level meriting a full disciplinary proceeding. Accordingly, the proposed rule change promotes the prompt and accurate clearance and settlement of securities transactions. 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 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 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: 9 15 PO 00000 U.S.C. 78q–1. Frm 00067 Fmt 4703 Sfmt 4703 68923 (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 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 rulecomments@sec.gov. Please include File Number SR–FICC–2007–06 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–2007–06. 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, on official business days between the hours of 10 a.m. and 3 p.m. 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 http://www.dtcc.com/ downloads/legal/rule_filings/2007/ficc/ 2007–06.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– E:\FR\FM\06DEN1.SGM 06DEN1 68924 Federal Register / Vol. 72, No. 234 / Thursday, December 6, 2007 / Notices 2007–06 and should be submitted on or before December 21, 2007. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23592 Filed 12–5–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56871; File No. SR–ISE– 2007–87] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to the Criteria for Securities That Underlie Options Traded on the Exchange November 30, 2007. 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 November 29, 2007, the International Securities Exchange, LLC (‘‘ISE’’ 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 substantially prepared by the Exchange. This order provides notice of the proposed rule change and approves the proposed rule change on an accelerated basis. mstockstill on PROD1PC66 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The ISE proposes to permit the initial and continued listing and trading on the Exchange of options on Index Multiple Exchange Traded Fund Shares (‘‘Index Multiple ETFs’’) and Index Inverse Exchange Traded Fund Shares (‘‘Index Inverse ETFs’’). The text of the proposed rule change is available at (http:// www.ise.com), at the Exchange, and at the Commission’s Public Reference Room. 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 and discussed any comments it received on the 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Aug<31>2005 18:57 Dec 05, 2007 Jkt 214001 proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend ISE Rules 502 and 503 to enable the listing and trading on the Exchange of options on Index Multiple ETFs and Index Inverse ETFs. Index Multiple ETFs seek to provide investment results, before fees and expenses, that correspond to a specified multiple of the percentage performance on a given day of a particular foreign or domestic stock index. Index Inverse ETFs seek to provide investment results, before fees and expenses, that correspond to the inverse (opposite) of the percentage performance on a given day of a particular foreign or domestic stock index by a specified multiple. Index Multiple ETFs and Index Inverse ETFs differ from traditional exchangetraded funds (‘‘ETFs’’) in that they do not merely correspond to the performance of a given index, but rather attempt to match a multiple or inverse of such underlying index performance. The ProShares Ultra Funds, which currently trades on the American Stock Exchange (‘‘Amex’’), is an example of an Index Multiple ETF. Amex also currently lists for trading Index Inverse ETFs, namely the Short Funds and the UltraShort Funds.3 In order to achieve investment results that provide either a positive multiple or inverse of the benchmark index, Index Multiple ETFs or Index Inverse ETFs may hold a combination of financial instruments, including, among 3 See Securities Exchange Act Release Nos. 52553 (October 3, 2005), 70 FR 59100 (October 11, 2005) (SR–Amex–2004–62) (approving the listing and trading of the Ultra Funds and Short Funds) and 54040 (June 23, 2006), 71 FR 37629 (June 30, 2006) (SR–Amex–2006–41) (approving the listing and trading of the UltraShort Funds). The Ultra Funds are expected to gain, on a percentage basis, approximately twice (200%) as much as the underlying benchmark index and should lose approximately twice (200%) as much as the underlying benchmark index when such prices decline. The Short Funds are expected to achieve investment results, before fees and expenses, that correspond to the inverse or opposite of the daily performance (¥100%) of an underlying benchmark index. Lastly, the UltraShort Funds are expected to achieve investment results, before fees and expenses, that correspond to twice the inverse or opposite of the daily performance (¥200%) of the underlying benchmark index. PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 other things, stock index futures contracts; options on futures; options on securities and indices; equity caps, collars and floors; swap agreements; forward contracts; repurchase agreements; and reverse repurchase agreements (the ‘‘Financial Instruments’’). The underlying portfolios of Index Multiple ETFs generally will hold at least 85% of their assets in the component securities of the underlying relevant benchmark index. The remainder of any assets is devoted to Financial Instruments that are intended to create the additional needed exposure to such underlying index necessary to pursue its investment objective. Normally, 100% of the value of the underlying portfolios of Index Inverse ETFs will be devoted to Financial Instruments and money market instruments, including U.S. government securities and repurchase agreements (the ‘‘Money Market Instruments’’). Currently, ISE Rule 502(h) provides securities deemed appropriate for options trading shall include shares or other securities (‘‘Fund Shares’’) 4 that (i) represent interests in registered investment companies (or series thereof) organized as open-end management investment companies, unit investment trusts or similar entities that are traded on a national securities exchange or through the facilities of a national securities association and are defined as an ‘‘NMS stock’’ under Rule 600 of Regulation NMS, and that hold portfolios of securities comprising or otherwise based on or representing investments in broad-based indexes or portfolios of securities (or that hold securities in one or more other registered investment companies that themselves hold such portfolios of securities); or (ii) represent interests in a trust that holds a specified non-U.S. currency deposited with the trust when aggregated in some specified minimum number may be surrendered to the trust by the beneficial owner to receive the specified non-U.S. currency and pays the beneficial owner interest and other distributions on the deposited non-U.S. currency, if any, declared and paid by the trust (‘‘Funds’’); or (iii) represent commodity pool interests principally engaged, directly or indirectly, in holding and/or managing portfolios or baskets of securities, commodity futures contracts, options on commodity futures contracts, swaps, forward contracts and/ 4 ISE also proposes to make technical conforming changes to its current ISE Rules 502(h) and 503(h) to those of the Amex. As a result, and in the context of this filing, the Exchange refers to Fund Shares as Exchange-Traded Fund Shares hereafter. E:\FR\FM\06DEN1.SGM 06DEN1

Agencies

[Federal Register Volume 72, Number 234 (Thursday, December 6, 2007)]
[Notices]
[Pages 68922-68924]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23592]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56864; File No. SR-FICC-2007-06]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing of Proposed Rule Change To Modify the Hearing 
Procedures Afforded to Members and Applicants for Membership and 
Harmonize Them With Similar Rules of Its Affiliates

November 29, 2007.
    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 April 30, 2007, the Fixed Income Clearing Corporation (``FICC'') 
filed with the Securities and Exchange Commission (``Commission'') and 
on July 24, 2007, amended \3\ 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).
    \2\ 17 CFR 240.19b-4.
    \3\ The amendment corrected a typographical error in the 
proposed rule text.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change seeks (1) to modify the rules of FICC's 
Government Securities Division (``GSD'') and Mortgage-Backed Securities 
Division (``MBSD'') (GSD and MBSD are collectively referred to as the 
``Divisions''), including the EPN rules of MBSD, regarding hearing 
procedures afforded to members and applicants for membership and (2) 
where practicable or beneficial, to harmonize them with similar rules 
of FICC's affiliates, The Depository Trust Company (``DTC'') and the 
National Securities Clearing Corporation (``NSCC'').

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.\4\
---------------------------------------------------------------------------

    \4\ 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. Minor Rule Violation Plan
    In 1984, the Commission adopted amendments to Rule 19d-1(c) under 
the Act \5\ that allow self-regulatory organizations to adopt with 
Commission approval plans for the disposition of minor violations of 
rules.\6\
---------------------------------------------------------------------------

    \5\ 17 CFR 240.19d-1(c).
    \6\ Securities Exchange Act Release No. 21013 (June 1, 1984), 49 
FR 23828 (June 8, 1984) File No. S7-983A].
---------------------------------------------------------------------------

    Currently under each Division's rules, a member or applicant 
subject to disciplinary action has a right to a hearing before a panel 
comprised of members of FICC's Board of Directors regardless of the 
severity of the action for which the member or applicant is being 
disciplined.\7\ Because some rule violations are not sufficiently 
serious to merit Board review, FICC is proposing to adopt a Minor Rule 
Violation Plan within the meaning of Rule 19d-1(c)(2) of the Act for 
those rule violations FICC deems minor. Consistent with Rule 19d-
1(c)(2) of the Act, FICC would designate those rule violations for 
which a fine may be assessed in an amount not to exceed $5,000 as minor 
rule violations. If a member were to dispute a fine imposed by FICC by 
filing a written request for hearing and a written statement, FICC 
management would have the authority to waive the fine. FICC management 
would notify the Board of Directors (or a Committee authorized by the 
Board of Directors) of its determination to waive the fine and would 
provide the reasons for the waiver. The Board or Committee could in its 
discretion decide to reinstate any fine waived by FICC management. If 
FICC management were not to waive the fine, the member could appeal the 
decision to a panel comprised of FICC officers (``Minor Rule Violation 
Panel'').
---------------------------------------------------------------------------

    \7\ MBSD Article V, Rule 7 (``Appeals''); EPN Article X, Rule 7 
(``Appeals''); and GSD Rule 37 (``Hearing Procedures'').
---------------------------------------------------------------------------

2. Hearings for All Other Violations and Minor Rule Violation Appeals
    For matters involving (i) an alleged violation of a GSD or MBSD 
rule for which a fine in an amount of over $5,000 is assessed, (ii) 
applicants for membership, or (iii) other disciplinary actions to which 
the Minor Rule Violation Plan would not apply or for appeals from a 
Minor Rule Violation

[[Page 68923]]

Panel decision adverse to a member or applicant, the member or 
applicant would be entitled to a hearing before a panel comprised of 
three individuals of the FICC Board of Directors (or their designees) 
appointed by the Chairman of the FICC Board. Decisions of the panel 
would be final; however, the full Board of Directors would retain the 
right to modify any sanction or reverse any decision of the Board panel 
that was adverse to the member or applicant.
    Currently with respect to hearings, a member or applicant is 
afforded the opportunity to be heard and may be represented by counsel 
if desired. A record is kept of the hearing, and at the discretion of 
the Board panel, the associated cost may be charged in whole or part to 
the member or applicant in the event that the decision is adverse to 
the member or applicant. The member or applicant is advised of the 
Board panel's decision within ten business days after the conclusion of 
the hearing. These procedures would also apply with respect to the 
Minor Rule Violation Plan.
3. Administrative Changes: Uniformity of Time Frames
    The proposed rule changes seek to implement uniform time periods 
for the Divisions governing actions a member or applicant would be 
required to take in order to request a hearing. The deadlines a member 
or applicant must adhere to in order to request a hearing currently 
vary between the Divisions. Under the proposed rule change, a member or 
applicant would have five business days, or two business days in the 
case of a summary action taken against the member or applicant pursuant 
to Rule 21 or 22,\8\ from the date on which FICC first informs it of a 
sanction or a denial of membership in which to request a hearing.
---------------------------------------------------------------------------

    \8\ Examples of a summary action are a suspension of a member or 
restriction of a member's access to services as described in Rule 
21, Section 1 (``Restrictions on Access to Services'').
---------------------------------------------------------------------------

    Within seven business days, or three business days in the case of a 
summary action taken against the member or applicant, after filing a 
request for a hearing with FICC, the member or applicant would be 
required to submit to FICC a clear and concise written statement 
setting forth the action or proposed action of FICC with respect to 
which the hearing is requested, the basis for objection to such action, 
whether the member or applicant intends to attend the hearing, and 
whether the member or applicant chooses to be represented by counsel at 
the hearing. These proposed time frames would be consistent with time 
frames being proposed by DTC and NSCC.
4. Technical Changes
    MBSD Article V, Rule 3 (``Fines and Other Sanctions'') would be 
amended in accordance with the proposed changes to the hearing 
procedures of MBSD.
    In addition, minor technical changes would be made to the rules of 
both Divisions where necessary to implement the proposed changes set 
forth above.
5. Implementation of the Proposed Changes
    The proposed changes will be implemented upon approval of this 
proposed filing by the Commission. Members will be advised of the 
implementation through an FICC Important Notice.
    FICC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \9\ and the rules and 
regulations thereunder because the adoption of a Minor Rule Violation 
Plan furthers the statutory objective of providing a fair procedure for 
disciplining members and will provide FICC with the ability to impose 
meaningful sanctions for those rule violations that do not necessarily 
rise to a level meriting a full disciplinary proceeding. Accordingly, 
the proposed rule change promotes the prompt and accurate clearance and 
settlement of securities transactions.
---------------------------------------------------------------------------

    \9\ 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 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

    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 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 Number SR-FICC-2007-06 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-2007-06. 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, on official business days between the hours 
of 10 a.m. and 3 p.m. 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 http://www.dtcc.com/downloads/legal/rule_filings/2007/
ficc/2007-06.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-

[[Page 68924]]

2007-06 and should be submitted on or before December 21, 2007.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-23592 Filed 12-5-07; 8:45 am]
BILLING CODE 8011-01-P