Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add Debt Securities That Are Issued Under the Debt Guarantee Program Component of the Federal Deposit Insurance Corporation's Temporary Liquidity Guarantee Program to the GCF Repo Service, 11385-11386 [E9-5687]
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Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59558; File No. SR–FICC–
2009–04]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Add Debt
Securities That Are Issued Under the
Debt Guarantee Program Component
of the Federal Deposit Insurance
Corporation’s Temporary Liquidity
Guarantee Program to the GCF Repo
Service
March 11, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
February 25, 2009, 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. 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 purpose of the proposed rule
change is to add debt securities that are
issued under the Debt Guarantee
Program component of the Federal
Deposit Insurance Corporation’s
(‘‘FDIC’s’’) Temporary Liquidity
Guarantee Program (‘‘TLGP’’) to FICC’s
GCF Repo service.2
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
dwashington3 on PROD1PC60 with NOTICES
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.3
U.S.C. 78s(b)(1).
filing pertains only to the GCF Repo service
and does not propose to add the FDIC-guaranteed
securities to the GSD’s Delivery Versus Payment
(‘‘DVP’’) service.
3 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
The GCF Repo service allows
Government Securities Division
(‘‘GSD’’) dealer members to trade
general collateral repurchase agreements
(‘‘repos’’) throughout the day without
requiring intraday, trade-for-trade
settlement on a DVP basis. The service
allows the dealers to trade such general
collateral repos, based on rate and term,
throughout the day with interdealer
broker netting members on a blind basis.
Standardized, generic CUSIP numbers
have been established exclusively for
GCF Repo processing and are used to
specify the acceptable type of
underlying eligible collateral.
FICC is proposing to add an
additional collateral type to the GCF
Repo service. Specifically, FICC
proposes to add debt securities that are
issued under the Debt Guarantee
Program component of FDIC’s TLGP to
the GCF Repo service. These securities
are DTC-eligible securities.4
The TLGP, one of the steps taken by
the U.S. Government to stabilize the
credit markets and to stimulate lending,
was designed to allow banks to issue
FDIC-insured debt to ensure that the
banks would be able to roll over any
debt coming due in the coming months.
The guarantee consists of timely
payment of principal and interest. The
expiration of the FDIC’s guarantee is the
earlier of either the maturity date of the
issued debt or June 2012.
The Financial Industry Regulatory
Authority (‘‘FINRA’’) has recently
advised the Securities Industry and
Financial Markets Association
(‘‘SIFMA’’) on the capital charge
treatment that FINRA plans to employ
with respect to the guaranteed debt
securities that are issued by an affiliate
of a broker-dealer and that are held in
inventory by the broker-dealer.
Specifically, FINRA has stated that
broker-dealers that may be allocated the
FDIC-guaranteed debt securities issued
by affiliated entities as part of the GCF
Repo service will not need to take a 100
percent capital charge on the reverse
repo contract because they have no
control over the collateral allocated by
FICC and because the allocated
collateral is returned the next morning.
Given this favorable treatment, members
of SIFMA that are active in the GCF
1 15
2 This
VerDate Nov<24>2008
13:44 Mar 16, 2009
Jkt 217001
4 The present rule filing applies only to these
specific FDIC-insured securities. In the future, if
FICC determines to add additional DTC-eligible
securities to the GCF Repo service, FICC would
submit a proposed rule change filing to the
Commission for this purpose.
PO 00000
Frm 00041
Fmt 4703
Sfmt 4703
11385
Repo service have requested that FICC
add the FDIC-guaranteed debt securities
to the service.
All current GCF Repo processing will
remain unchanged. The fact that the
product is a DTC-eligible security will
not affect GCF Repo processing.5 FICC
has determined that with respect to its
risk management processes, the FDICinsured securities will be treated the
same as all other GCF Repo-eligible
collateral.
FICC believes that the proposed rule
change is consistent with the
requirements of Section 17A of the Act 6
and the rules and regulations
thereunder applicable to FICC because
the proposed rule change enables FICC
to expand an important service that
provides members with a continuing
ability to engage in general collateral
trading activity in a safe and efficient
manner. As such, the proposed rule
filing facilitates 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 on 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
No written comments relating to the
proposed rule change have 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 rule change has become
effective upon filing pursuant to Section
19(b)(3)(A)(iii) of the Act 7 and Rule
19b–4(f)(4) 8 thereunder because the
proposed rule change effects a change in
an existing service of FICC that (i) does
not adversely affect the safeguarding of
securities or funds in the custody or
control of FICC or for which it is
responsible and (ii) does not
5 Specifically, if a GCF Repo participant engages
in a trade using the new GCF Repo CUSIP, the
participant will need to pledge the security free of
payment to its clearing bank using the mechanism
available at DTC. Once the security is pledged to
the dealer’s clearing bank, it is available for tri-party
or GCF Repo processing. No additional processing
is being introduced to the GCF Repo service by this
rule filing. The present filing does not require a
change to the text of the rules of GSD.
6 15 U.S.C. 78q–1.
7 15 U.S.C. 78s(b)(3)(A)(iii).
8 17 CFR 240.19b–4(f)(4).
E:\FR\FM\17MRN1.SGM
17MRN1
11386
Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices
significantly affect the respective rights
of the clearing agency or persons using
the service. 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:
dwashington3 on PROD1PC60 with NOTICES
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–2009–04 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–FICC–2009–04. 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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
changes 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 https://www.dtcc.com/
legal/rule_filings/ficc/2009.php. All
comments received will be posted
without change; the Commission does
VerDate Nov<24>2008
13:44 Mar 16, 2009
Jkt 217001
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–2009–04 and should
be submitted on or before April 7, 2009.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–5687 Filed 3–16–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59547; File No. SR–
NASDAQ–2009–014]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Establish
New Rules Applicable to the Nasdaq
Market Center and Nasdaq Options
Market That Explicitly Require
Members To Input Accurate
Information Into Nasdaq Systems
March 10, 2009.
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 February
23, 2009, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by Nasdaq. Nasdaq filed the proposed
rule change as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission. 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
Nasdaq proposes to establish new
rules applicable to the Nasdaq Market
Center and Nasdaq Options Market that
explicitly require members to input
accurate information into Nasdaq
systems. The text of the proposed rule
change is available from Nasdaq’s Web
9 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).
1 15
PO 00000
Frm 00042
Fmt 4703
Sfmt 4703
site at https://nasdaq.cchwallstreet.com,
at Nasdaq’s principal office, 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,
Nasdaq included statements concerning
the purpose of, and basis for, the
proposed rule change. The text of these
statements may be examined at the
places specified in Item III below, and
is set forth in Sections A, B, and C
below.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to adopt new rules
that make clear Nasdaq members’
responsibility to input accurate
quotation and order information into the
Nasdaq Market Center and Nasdaq
Options Market (collectively the
‘‘Nasdaq Markets’’). The Nasdaq
Markets require entry of certain
information to post a quote or to enter
an order. Such information, among
other things, identifies the member, the
size and price of the order or quote, and
the member’s capacity in placing an
order. Accurate trade and quote
information is fundamental to the
operation of an efficient and fair market.
Moreover, the information input by
members when posting a quote or
placing an order is used for purposes of
policing the Nasdaq Markets. For
example, the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
conducts trade abuse surveillances of
the Nasdaq Markets on Nasdaq’s behalf.
The trade abuse surveillances use
capacity information input by members.
A member’s capacity in a trade concerns
whether the member is acting as an
agent, principal, or ‘‘riskless’’ principal
in the transaction. Accordingly, accurate
input of capacity information is of
fundamental regulatory importance.
Nasdaq does not have a rule that
makes an explicit statement regarding a
member’s obligation to input accurate
information into the Nasdaq Markets.
Notwithstanding, Nasdaq believes that
disciplinary cases against members
entering inaccurate or incomplete
information may be brought
appropriately under Nasdaq Rule 2110,
which requires members to observe high
standards of commercial honor and just
and equitable principles of trade. Rule
2110 protects the investing public and
the securities industry from dishonest
E:\FR\FM\17MRN1.SGM
17MRN1
]]>Agencies
[Federal Register Volume 74, Number 50 (Tuesday, March 17, 2009)]
[Notices]
[Pages 11385-11386]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-5687]
[[Page 11385]]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59558; File No. SR-FICC-2009-04]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Add Debt Securities That Are Issued Under the Debt Guarantee Program
Component of the Federal Deposit Insurance Corporation's Temporary
Liquidity Guarantee Program to the GCF Repo Service
March 11, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 25, 2009, 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. 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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to add debt securities
that are issued under the Debt Guarantee Program component of the
Federal Deposit Insurance Corporation's (``FDIC's'') Temporary
Liquidity Guarantee Program (``TLGP'') to FICC's GCF Repo service.\2\
---------------------------------------------------------------------------
\2\ This filing pertains only to the GCF Repo service and does
not propose to add the FDIC-guaranteed securities to the GSD's
Delivery Versus Payment (``DVP'') service.
---------------------------------------------------------------------------
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.\3\
---------------------------------------------------------------------------
\3\ 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
The GCF Repo service allows Government Securities Division
(``GSD'') dealer members to trade general collateral repurchase
agreements (``repos'') throughout the day without requiring intraday,
trade-for-trade settlement on a DVP basis. The service allows the
dealers to trade such general collateral repos, based on rate and term,
throughout the day with interdealer broker netting members on a blind
basis. Standardized, generic CUSIP numbers have been established
exclusively for GCF Repo processing and are used to specify the
acceptable type of underlying eligible collateral.
FICC is proposing to add an additional collateral type to the GCF
Repo service. Specifically, FICC proposes to add debt securities that
are issued under the Debt Guarantee Program component of FDIC's TLGP to
the GCF Repo service. These securities are DTC-eligible securities.\4\
---------------------------------------------------------------------------
\4\ The present rule filing applies only to these specific FDIC-
insured securities. In the future, if FICC determines to add
additional DTC-eligible securities to the GCF Repo service, FICC
would submit a proposed rule change filing to the Commission for
this purpose.
---------------------------------------------------------------------------
The TLGP, one of the steps taken by the U.S. Government to
stabilize the credit markets and to stimulate lending, was designed to
allow banks to issue FDIC-insured debt to ensure that the banks would
be able to roll over any debt coming due in the coming months. The
guarantee consists of timely payment of principal and interest. The
expiration of the FDIC's guarantee is the earlier of either the
maturity date of the issued debt or June 2012.
The Financial Industry Regulatory Authority (``FINRA'') has
recently advised the Securities Industry and Financial Markets
Association (``SIFMA'') on the capital charge treatment that FINRA
plans to employ with respect to the guaranteed debt securities that are
issued by an affiliate of a broker-dealer and that are held in
inventory by the broker-dealer. Specifically, FINRA has stated that
broker-dealers that may be allocated the FDIC-guaranteed debt
securities issued by affiliated entities as part of the GCF Repo
service will not need to take a 100 percent capital charge on the
reverse repo contract because they have no control over the collateral
allocated by FICC and because the allocated collateral is returned the
next morning. Given this favorable treatment, members of SIFMA that are
active in the GCF Repo service have requested that FICC add the FDIC-
guaranteed debt securities to the service.
All current GCF Repo processing will remain unchanged. The fact
that the product is a DTC-eligible security will not affect GCF Repo
processing.\5\ FICC has determined that with respect to its risk
management processes, the FDIC-insured securities will be treated the
same as all other GCF Repo-eligible collateral.
---------------------------------------------------------------------------
\5\ Specifically, if a GCF Repo participant engages in a trade
using the new GCF Repo CUSIP, the participant will need to pledge
the security free of payment to its clearing bank using the
mechanism available at DTC. Once the security is pledged to the
dealer's clearing bank, it is available for tri-party or GCF Repo
processing. No additional processing is being introduced to the GCF
Repo service by this rule filing. The present filing does not
require a change to the text of the rules of GSD.
---------------------------------------------------------------------------
FICC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \6\ and the rules and
regulations thereunder applicable to FICC because the proposed rule
change enables FICC to expand an important service that provides
members with a continuing ability to engage in general collateral
trading activity in a safe and efficient manner. As such, the proposed
rule filing facilitates the prompt and accurate clearance and
settlement of securities transactions.
---------------------------------------------------------------------------
\6\ 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 on 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
No written comments relating to the proposed rule change have 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 rule change has become effective upon filing pursuant
to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(4) \8\
thereunder because the proposed rule change effects a change in an
existing service of FICC that (i) does not adversely affect the
safeguarding of securities or funds in the custody or control of FICC
or for which it is responsible and (ii) does not
[[Page 11386]]
significantly affect the respective rights of the clearing agency or
persons using the service. 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------
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-2009-04 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-FICC-2009-04. 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 (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule changes 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 https://www.dtcc.com/legal/rule_filings/ficc/2009.php. 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-2009-04 and should be
submitted on or before April 7, 2009.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-5687 Filed 3-16-09; 8:45 am]
BILLING CODE 8011-01-P
