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Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating To Balance Order Transaction Data Reporting and Other Technical Corrections

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Information about this document as published in the Federal Register.

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Start Preamble May 28, 2003.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on April 10, 2003, National Securities Clearing Corporation (“NSCC”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as 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.

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 modify NSCC Procedure V to allow NSCC to report Balance Order transaction data on the Consolidated Trade Summary delivered to participants. The proposed rule change will also correct errors in NSCC Procedure VII.

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.[2]

(A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

As part of NSCC's straight through processing development efforts, NSCC is revising its Continuous Net Settlement and Balance Order processing. As part of this initiative, NSCC has decided to modify the manner in which it reports Balance Order transaction data to participants in order to make such information more readily available in a more efficient and cost effective manner. Starting on July 25, 2003, Balance Order information will be reported on the Consolidated Trade Summary.

The proposed modification to Procedure V, “Balance Order Accounting Operation,” implements this change. In addition, the proposed rule change clarifies that the Consolidated Trade Summary is issued on each day that is a settlement day. The proposed rule change further corrects erroneous cross references and a typographical error in Procedure VII, section E, subsections 4(a) and (b), respectively.

The proposed rule change is consistent with Section 17A(b)(3)(F) of the Act [3] and the rules and regulations thereunder because it will enable NSCC to report Balance Order transaction data to its participants in an easier, more cost efficient manner thereby facilitating the prompt and accurate clearance and settlement of securities transactions.

(B) Self-Regulatory Organization's Statement on Burden on Competition

NSCC does not believe that the proposed rule change will 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 consulted with the Securities Industry Association's Straight Through Processing Subcommittee in developing the reporting modifications. NSCC advised participants of the proposed modifications in Important Notice A 5482, P&S 5052 (September 25, 2002). 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 will take effect on July 25, 2003, pursuant to Section 19(b)(3)(A)(iii) of the Act [4] and Rule 19b-4(f)(4)[5] thereunder because the proposed rule effects a change in an existing service of NSCC which neither (1) adversely affects the safeguarding of securities or funds in NSCC's custody or control or for which NSCC is responsible nor (2) significantly affects the rights or obligations of NSCC 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. 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: All comment letters should refer to File No. SR-NSCC-2003-07. 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 20549-0609. Copies of Start Printed Page 33555such filing also will be available for inspection and copying at the principal office of NSCC. All submissions should refer to File No. SR-NSCC-2003-07 and should be submitted by June 25, 2003.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[6]

Jill M. Peterson,

Assistant Secretary.

End Signature End Preamble


2.  The Commission has modified the text of the summaries prepared by NSCC.

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4.  15 U.S.C. 78s(b)(3)(A)(iii).

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[FR Doc. 03-13943 Filed 6-3-03; 8:45 am]