Self-Regulatory Organizations; The National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Use of NSCC's Mutual Fund Service by Investment Managers in Managed Account Programs, 40902-40903 [E8-16229]

Download as PDF 40902 Federal Register / Vol. 73, No. 137 / Wednesday, July 16, 2008 / Notices 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: For the Commission, by the Division of Trading & Markets, pursuant to delegated authority.20 Florence E. Harmon, Acting Secretary. [FR Doc. E8–16233 Filed 7–15–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–58126; File No. SR–NSCC– 2008–04] • 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–NASDAQ–2008–061 on the subject line. Self-Regulatory Organizations; The National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Use of NSCC’s Mutual Fund Service by Investment Managers in Managed Account Programs Paper Comments July 9, 2008. mstockstill on PROD1PC66 with NOTICES • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on June 24, 2008, the National Securities Clearing Corporation (‘‘NSCC’’) filed All submissions should refer to File with the Securities and Exchange Number SR–NASDAQ–2008–061. This Commission (‘‘Commission’’) the file number should be included on the proposed rule change described in Items subject line if e-mail is used. To help the I, II, and III below, which items have been prepared primarily by NSCC. The Commission process and review your Commission is publishing this notice to comments more efficiently, please use only one method. The Commission will solicit comments on the proposed rule post all comments on the Commission’s change from interested parties. Internet Web site (http://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 NSCC proposes to amend its rule in with respect to the proposed rule order to allow an investment manager in change that are filed with the a managed account program to access Commission, and all written NSCC’s mutual fund services without communications relating to the money settlement obligations.2 proposed rule change between the Commission and any person, other than II. Self-Regulatory Organization’s 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 NSCC included statements concerning the Commission’s Public Reference Room on official business days between the purpose of and basis for the proposed rule change and discussed any the hours of 10 a.m. and 3 p.m. Copies comments it received on the proposed of such filing also will be available for rule change. The text of these statements inspection and copying at the principal may be examined at the places specified office of the NASDAQ. All comments received will be posted without change; in Item IV below. NSCC has prepared summaries, set forth in sections (A), (B), the Commission does not edit personal and (C) below, of the most significant identifying information from aspects of these statements.3 submissions. You should submit only information that you wish to make 20 17 CFR 200.30–3(a)(12). available publicly. All submissions 1 15 U.S.C. 78s(b)(1). 2 Changes are to the rule text that appears in the should refer to File Number SR– electronic manual of NSCC found at http:// NASDAQ–2008–061 and should be www.nscc.com/legal/. submitted on or before August 6, 2008. 3 The Commission has modified the text of the summaries prepared by the NSCC. VerDate Aug<31>2005 17:00 Jul 15, 2008 Jkt 214001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Currently, there is no centralized and automated communication process that supports mutual fund transactions in managed account programs. Generally, the investment manager must input the transaction into one or more sponsor or service provider managed account systems. The transaction must then be moved to the sponsor’s broker/dealer system for communication to the mutual fund via NSCC’s Fund/SERV or directly to the fund outside of Fund/SERV. After the transaction is processed through Fund/SERV or processed directly with the fund, the sponsor(s) or service provider’s managed account system must then be updated to reflect the mutual fund transaction and to communicate that information to the investment manager. Consequently, the inclusion of mutual funds in managed accounts imposes operational and technological restraints, requires additional processing, incurs added costs, and is more susceptible to error. The purpose of the proposed rule change will amend the rules of NSCC regarding membership and use of NSCC’s mutual fund services to allow an investment manager in a managed account program to access NSCC’s mutual fund services without money settlement. The proposed rule change will allow an investment manager for a managed account program or a service provider to the investment manager to access NSCC’s mutual fund services in respect of mutual fund transactions for which the managed account program sponsor will settle. The investment manager or the service provider that maintains the investment manager’s platform will become a non-settling member, called an Investment Manager/ Agent Member (‘‘IMA Member’’), and will have access to Fund/SERV and NSCC’s other mutual fund services for transactions in managed account programs. An NSCC settling member (generally the sponsor for the managed account program) will contractually agree with NSCC to settle the IMA Member’s transactions at NSCC. The settling member will receive a report showing all the transactions of the IMA Member and can cancel any transaction intraday. The settling member must be an NSCC Member or Mutual Fund/IPS Member, and therefore subject to NSCC’s standards of membership as apply were it to be settling its own transactions in mutual fund services at NSCC. E:\FR\FM\16JYN1.SGM 16JYN1 Federal Register / Vol. 73, No. 137 / Wednesday, July 16, 2008 / Notices NSCC expects that the proposed rule change will remove the operational obstacles to adding mutual funds to managed account offerings, allow investment managers one entry point for mutual fund transactions, and automate the reconciliation of managed account platforms direct to Fund/SERV. The type of arrangement proposed by this rule change is analogous to that of a Third Party Administration (‘‘TPA’’) Member under NSCC’s Defined Contribution Clearance & Settlement (DCC&S) mutual fund services. 2. Statutory Basis NSCC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 4 and the rules and regulations thereunder applicable to NSCC because the proposed rule change should promote processing efficiencies between investment managers in a managed account program, the sponsors of the program, and the fund companies in which the program assets are invested, thereby facilitating the prompt and accurate processing of securities transactions. B. Self-Regulatory Organization’s Statement on Burden on Competition NSCC does not believe that the proposed rule change will impose any burden on competition that is 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 No written comments relating to the proposed rule change have been solicited or received. NSCC will notify the Commission of any written comments received by NSCC. mstockstill on PROD1PC66 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 5 and Rule 19b–4(f)(6) 6 thereunder in that it (1) does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; (iii) by its terms, does not become operative for 30 days after the date from which it was filed (June 24, 2008), or such shorter time as the Commission may designate if consistent with the 4 15 U.S.C. 78q–1. U.S.C. 78s(b)(3)(A)(iii). 6 17 CFR 240.19b–4(f)(6). 5 15 VerDate Aug<31>2005 17:00 Jul 15, 2008 Jkt 214001 protection of investors and the public interest. At any time within sixty days of the filing of such 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: 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–NSCC–2008–04 on the subject line. 40903 you wish to make available publicly. All submissions should refer to File Number SR–NSCC–2008–04 and should be submitted on or before August 6, 2008. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Acting Secretary. [FR Doc. E8–16229 Filed 7–15–08; 8:45 am] BILLING CODE 8010–01–P SMALL BUSINESS ADMINISTRATION Notice of Action Subject to Intergovernmental Review Under Executive Order 12372 U.S. Small Business Administration. ACTION: Notice of Action Subject to Intergovernmental Review. AGENCY: SUMMARY: The Small Business Administration (SBA) is notifying the public that it intends to grant the pending applications of 39 existing Paper Comments Small Business Development Centers • Send paper comments in triplicate (SBDCs) for refunding on January 1, to Secretary, Securities and Exchange 2009, subject to the availability of funds. Commission, 100 F Street, NE., Nineteen states do not participate in the Washington, DC 20549–1090. EO 12372 process therefore, their All submissions should refer to File addresses are not included. A short Number SR–NSCC–2008–04. This file description of the SBDC program number should be included on the subject line if e-mail is used. To help the follows in the SUPPLEMENTARY INFORMATION below. Commission process and review your The SBA is publishing this notice at comments more efficiently, please use only one method. The Commission will least 90 days before the expected post all comments on the Commission’s refunding date. The SBDCs and their mailing addresses are listed below in Internet Web site (http://www.sec.gov/ the ADDRESSES section. A copy of this rules/sro.shtml). Copies of the notice also is being furnished to the submission, all subsequent respective State single points of contact amendments, all written statements designated under the Executive Order. with respect to the proposed rule Each SBDC application must be change that are filed with the consistent with any area-wide small Commission, and all written business assistance plan adopted by a communications relating to the State-authorized agency. proposed rule change between the Commission and any person, other than DATES: A State single point of contact and other interested State or local those that may be withheld from the entities may submit written comments public in accordance with the regarding an SBDC refunding within 30 provisions of 5 U.S.C. 552, will be days from the date of publication of this available for inspection and copying in notice to the SBDC. the Commission’s Public Reference Room, 100 F Street, NE., Washington, ADDRESSES: DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Addresses of Relevant SBDC State Directors Copies of such filings also will be available for inspection and copying at Mr. Greg Panichello, State Director, Salt the principal office of NSCC and on Lake Community College, 9750 South NSCC’s Web site, http://www.nscc.com/ 300 West, Sandy, UT 84070, (801) legal/. All comments received will be 957–3493; posted without change; the Commission Mr. Herbert Thweatt, Director, does not edit personal identifying American Samoa Community College, information from submissions. You 7 17 CFR 200.30–3(a)(12). should submit only information that PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\16JYN1.SGM 16JYN1

Agencies

[Federal Register Volume 73, Number 137 (Wednesday, July 16, 2008)]
[Notices]
[Pages 40902-40903]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16229]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58126; File No. SR-NSCC-2008-04]


Self-Regulatory Organizations; The National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to the Use of NSCC's Mutual Fund Service by 
Investment Managers in Managed Account Programs

July 9, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 24, 2008, the 
National Securities Clearing Corporation (``NSCC'') 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 NSCC. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NSCC proposes to amend its rule in order to allow an investment 
manager in a managed account program to access NSCC's mutual fund 
services without money settlement obligations.\2\
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    \2\ Changes are to the rule text that appears in the electronic 
manual of NSCC found at http://www.nscc.com/legal/.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by the NSCC.
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A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Currently, there is no centralized and automated communication 
process that supports mutual fund transactions in managed account 
programs. Generally, the investment manager must input the transaction 
into one or more sponsor or service provider managed account systems. 
The transaction must then be moved to the sponsor's broker/dealer 
system for communication to the mutual fund via NSCC's Fund/SERV or 
directly to the fund outside of Fund/SERV. After the transaction is 
processed through Fund/SERV or processed directly with the fund, the 
sponsor(s) or service provider's managed account system must then be 
updated to reflect the mutual fund transaction and to communicate that 
information to the investment manager. Consequently, the inclusion of 
mutual funds in managed accounts imposes operational and technological 
restraints, requires additional processing, incurs added costs, and is 
more susceptible to error.
    The purpose of the proposed rule change will amend the rules of 
NSCC regarding membership and use of NSCC's mutual fund services to 
allow an investment manager in a managed account program to access 
NSCC's mutual fund services without money settlement. The proposed rule 
change will allow an investment manager for a managed account program 
or a service provider to the investment manager to access NSCC's mutual 
fund services in respect of mutual fund transactions for which the 
managed account program sponsor will settle. The investment manager or 
the service provider that maintains the investment manager's platform 
will become a non-settling member, called an Investment Manager/Agent 
Member (``IMA Member''), and will have access to Fund/SERV and NSCC's 
other mutual fund services for transactions in managed account 
programs.
    An NSCC settling member (generally the sponsor for the managed 
account program) will contractually agree with NSCC to settle the IMA 
Member's transactions at NSCC. The settling member will receive a 
report showing all the transactions of the IMA Member and can cancel 
any transaction intraday. The settling member must be an NSCC Member or 
Mutual Fund/IPS Member, and therefore subject to NSCC's standards of 
membership as apply were it to be settling its own transactions in 
mutual fund services at NSCC.

[[Page 40903]]

    NSCC expects that the proposed rule change will remove the 
operational obstacles to adding mutual funds to managed account 
offerings, allow investment managers one entry point for mutual fund 
transactions, and automate the reconciliation of managed account 
platforms direct to Fund/SERV. The type of arrangement proposed by this 
rule change is analogous to that of a Third Party Administration 
(``TPA'') Member under NSCC's Defined Contribution Clearance & 
Settlement (DCC&S) mutual fund services.
2. Statutory Basis
    NSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \4\ and the rules and 
regulations thereunder applicable to NSCC because the proposed rule 
change should promote processing efficiencies between investment 
managers in a managed account program, the sponsors of the program, and 
the fund companies in which the program assets are invested, thereby 
facilitating the prompt and accurate processing of securities 
transactions.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q-1.
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 B. Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change will impose any 
burden on competition that is 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

    No written comments relating to the proposed rule change have been 
solicited or received. NSCC will notify the Commission of any written 
comments received by NSCC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(iii) of the Act \5\ and Rule 19b-4(f)(6) \6\ 
thereunder in that it (1) does not significantly affect the protection 
of investors or the public interest; (ii) does not impose any 
significant burden on competition; (iii) by its terms, does not become 
operative for 30 days after the date from which it was filed (June 24, 
2008), or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest. At 
any time within sixty days of the filing of such 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.
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    \5\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \6\ 17 CFR 240.19b-4(f)(6).
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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-NSCC-2008-04 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NSCC-2008-04. 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 Room, 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 NSCC and on NSCC's Web site, http://
www.nscc.com/legal/. 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-NSCC-2008-04 and should be submitted on or before August 6, 2008.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16229 Filed 7-15-08; 8:45 am]
BILLING CODE 8010-01-P