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Notice

Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Deleting the Government Securities Division's Late Trade Data Submission Fine and Amending the Government Securities Division's Clearing Fund Rule

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Start Preamble March 4, 2004.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on February 19, 2004, 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 (i) delete the Late Trade Data Submission Fine from the rules of the Government Securities Division (“GSD”) and (ii) amend GSD's clearing fund rule.

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.[2]

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

Late Trade Data Submission Fine Deletion

On November 14, 2001, the Government Securities Clearing Corporation (“GSCC”), FICC's predecessor, received Commission approval to fine members for submitting trade data after GSCC's 8:00 p.m. (New York time) trade data submission deadline.[3] The fine schedule was originally drafted and approved when many members were still submitting trade data in single batches at the end of the business day. GSCC did not implement the fine schedule because at the time of approval a majority of its members had begun submitting trade data in real-time. The fine schedule is no longer necessary, and FICC desires to delete it from GSD's rules.

Clearing Fund Rule Amendment

On July 21, 2003, FICC received Commission approval to reduce the permitted use of letters of credit from 70 percent to 25 percent of a GSD member's required clearing fund deposit.[4] The reference to “70” percent in Rule 4, Section 4 was amended in the approved filing, and FICC is seeking to amend the other reference to “70” percent in Rule 4, Section 10 that was inadvertently overlooked.

(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 yet 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 relating to the deleted fine has become effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act [5] and Rule 19b-4(f)(2) [6] thereunder because the proposed rule establishes or changes a due, fee, or other charge. The foregoing rule change relating to the amended clearing fund rule 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 significantly affect the respective rights or obligations of FICC or its members 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: rule-comments@sec.gov. All comment letters should refer to File No. SR-FICC-2004-03. 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, comments should be sent in either 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 Start Printed Page 11687public 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 such filing also will be available for inspection and copying at the principal office of FICC and on FICC's Web site at http://www.ficc.com/​gov/​gov.docs.jsp?​NS-query=​. All submissions should refer to File No. SR-FICC-2004-03 and should be submitted by April 1, 2004.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

J. Lynn Taylor,

Assistant Secretary.

End Signature End Preamble

Footnotes

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

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3.  Securities Exchange Act Release No. 45053 (November 14, 2001), 66 FR 58771 [File No. SR-GSCC-00-09].

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4.  Securities Exchange Act Release No. 48200 (July 21, 2003), 68 FR 44130 [File No. SR-GSCC-2002-11].

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5.  15 U.S.C. 78s(b)(3)(A)(ii).

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7.  15 U.S.C. 78s(b)(3)(A)(iii).

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[FR Doc. 04-5552 Filed 3-10-04; 8:45 am]

BILLING CODE 8010-01-P