Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), notice is hereby given that on March 14, 2003, National Securities Clearing Corporation (“NSCC”) 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 primarily by NSCC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and to grant accelerated approval.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The proposed rule change consists of an enhancement to NSCC's Insurance Processing Service (“IPS”) that will provide information about insurance products to distributors of those products. The enhancement will allow Insurance Carrier Members and Data Services Only Members of NSCC to populate a series of databases maintained by NSCC (known collectively as the “Product Repository”) with information related to insurance products.
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 such statements.Start Printed Page 17851
(A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule filing is to create an enhancement to IPS that will provide information about insurance products to distributors of those products. Insurance Carrier Members and Data Services Only Members of NSCC will populate the Product Repository databases with information related to insurance products, and Members and Data Services Only Members may access the Product Repository to obtain information about insurance products.
The Product Repository will be a series of databases maintained by IPS that will contain information relating to insurance products. Initially, the product repository will contain information relating to annuities and thereafter to life insurance and other long term care products. With respect to each contract of a particular Insurance Carrier Member or Data Services Only Member, the Product Repository databases will be populated only by that Insurance Carrier Member or Data Services Only Member.
The Insurance Carrier Member or Data Services Only Member that populates the relevant database for a particular contract will be responsible for the contents and for any necessary updates. Such Insurance Carrier Member or Data Services Only Member will specify any limitation with respect to access to such data. As with other IPS services, NSCC will not be responsible for the completeness or accuracy of any of the information contained in the databases, or for any errors, omissions, or delays which may occur relating to the databases in the absence of gross negligence on NSCC's part.
There will be no money settlement associated with the Product Repository.
NSCC believes that the proposed rule change is consistent with the provisions of the Act and the rules and regulations thereunder because it will provide information that may facilitate the prompt and accurate processing of transactions.
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not believe that the proposed rule change would have an impact on or impose a 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. 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 Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder and particularly with the requirements of section 17A(b)(3)(F). Section 17A(b)(3)(F) requires that the rules of a clearing agency be designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible. The Commission believes that the proposed rule change is consistent with this requirement because while providing a useful service to its Insurance Processing Service, NSCC is not responsible for the completeness or accurateness of the information of the database or in the absence of NSCC's gross negligence for any errors, omissions, or delays relating to the database. As a result, NSCC's ability to safeguard securities and funds which are in its custody or control or for which it is responsible will not be affected by the offering of the Product Repository databases.
NSCC has requested that the Commission approve this rule change prior to the thirtieth day after the date of publication of notice of the filing because the Product Repository will be available to NSCC's members beginning on April 7, 2003. The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after publication of notice because by so approving NSCC will be able to implement the enhancements in accordance with its systems implementation schedule.
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. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street NW., Washington, DC 20549-0609. Comments may also be submitted electronically at the following e-mail address: email@example.com. All comment letters should refer to File No. SR-NSCC-2003-04. This file number should be included on the subject line if e-mail is used. To help us process and review comments more efficiently, comments should be sent in hardcopy or by e-mail but not by both methods. 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, 450 Fifth Street NW., Washington, DC 20549. Copies of such filing will also be available for inspection and copying at the principal office of NSCC. All submissions should refer to the File No. SR-NSCC-2003-04 and should be submitted by May 2, 2003.
On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act and the rules and regulations thereunder applicable.
It is therefore ordered, pursuant to section 19(b)(2) of the Act, that the proposed rule change (File No. SR-NSCC-2003-04) be, and hereby is, approved.Start Signature
For the Commission by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland,
2. The Commission has modified parts of these statements.Back to Citation
[FR Doc. 03-8920 Filed 4-10-03; 8:45 am]
BILLING CODE 8010-01-P