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Self-Regulatory Organizations; Pacific Clearing Corporation; Order Cancelling Clearing Agency Registration

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February 24, 2012.

I. Background

On December 1, 1975, pursuant to Sections 17A(b) and 19(a)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 17Ab2-1 thereunder,[2] the Securities and Exchange Commission (“Commission”) approved on a temporary basis the application for registration as a clearing agency filed by the Pacific Clearing Corporation (“PCC”).[3] By subsequent orders, the Commission extended PCC's temporary registration.[4] On September 23, 1983, pursuant to Section 17A and Rule 17Ab2-1 thereunder,[5] the Commission approved on a permanent basis PCC's registration as a clearing agency.[6]

PCC was a subsidiary of PCX Equities, Inc. (“PCXE”) (now NYSE Arca Equities, Inc.), which was a wholly owned subsidiary of the Pacific Exchange, Inc. (“PCX”) [7] (now NYSE Arca, Inc. [“NYSE Arca”]).[8] Prior to the transaction described below, PCC offered various clearance and settlement services, such as trade recording for PCX-listed and over-the-counter securities transactions, trade comparison, continuous net settlement, and book-entry depository services.[9]

II. Cancellation of PCC's Registration as a Clearing Agency

In an April 2005 Letter, PCX stated that on or about April 15, 1987, it had “transferred substantially all of its principal settlement and clearance activities to the National Security [sic] Clearing Corporation (`NSCC').” [10] PCX further stated that on September 13, 2003, the PCX Board of Governors and PCXE Board of Directors voted to take all necessary steps to dissolve PCC.[11] Finally, PCX represented, among other things, that pursuant to Rule 17a-1,[12] PCX would retain at least one copy of all documents, including all correspondence, memoranda, papers, books, notices, accounts, and other such records of PCC in PCX's or PCXE's possession for at least 5 years from the date of dissolution of PCC.[13]

Section 19(a)(3) of the Act [14] provides that in the event any self-regulatory organization is no longer in existence or has ceased to do business in the capacity specified in its application for registration, “the Commission, by order, shall cancel its registration.”

Based upon the representations and undertakings made by PCX to the Commission and because PCC is no longer in existence and has ceased to do business in the capacity specified in its registration application, the Commission is canceling its registration effective February 24, 2012.

It is therefore ordered that:

Effective February 24, 2012, based on the facts and representations noted above, PCC's registration as a clearing agency under Section 17A of the Exchange Act and Rule 17Ab2-1 thereunder is cancelled.

By the Commission.

Kevin M. O'Neill,

Deputy Secretary.

Footnotes

1.  15 U.S.C. 78q-1(b) and 78s(a)(1).

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3.  Release No. 34-11875 (Nov. 26, 1975), 40 FR 55910 (Dec. 2, 1975).

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4.  Release Nos. 34-13584 (June 1, 1977), 42 FR 30066 (Jun. 10, 1977); 34-13911 (Aug. 31, 1977), 1977 WL 190688; 34-14531, 43 FR 10288 (Mar. 10, 1978); and 34-18584 (Mar. 22, 1982), 47 FR 13266 (Mar. 29, 1982).

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6.  Release No. 34-20221 (Sept. 23, 1983), 48 FR 45167 (Oct. 3, 1983).

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7.  Letter from Kathryn L. Beck, Senior Vice President, General Counsel and Corporate Secretary, Pacific Stock Exchange, to Jerry W. Carpenter, Assistant Director, Division of Market Regulation, Commission (April 11, 2005) (“April 2005 Letter”).

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8.  PCXE and PCC had previously been wholly owned subsidiaries of Archipelago Holdings, Inc. Following the merger on March 6, 2006, of New York Stock Exchange, Inc. with Archipelago Holdings, Inc., the PCX filed with the Securities and Exchange Commission a proposed rule change, which was effective upon filing, that amended its rules to reflect these name changes: From PCX to NYSE Arca; from PCX Equities, Inc. to NYSE Arca Equities, Inc.; from PCX Holdings, Inc., to NYSE Arca Holdings, Inc.; and from the Archipelago Exchange, L.L.C. to NYSE Arca, L.L.C. Release No. 34-53615, 71 FR 19226 (Apr. 13, 2006).

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9.  Release No. 34-20221, supra note 6.

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10.  Letter from Kathryn L. Beck, Senior Vice President, General Counsel and Corporate Secretary, Pacific Stock Exchange, to Jerry W. Carpenter, Assistant Director, Division of Market Regulation, Commission (April 11, 2005) (“April 2005 Letter”).

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11.  Id. PCC was incorporated in California on April 28, 1955, and was dissolved on August 7, 2007. LexisNexis, Public Records, Corporate Filings search, http://www.lexis.com.

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13.  April 2005 Letter. In addition, NYSE Euronext represented to the Commission that as of August 26, 2011, it had not received any requests over the last two years for documents relating to PCC and that no claims relating to the operations of PCC had been made. Email from Janet McGinness, Senior Vice President, Legal and Corporate Secretary, NYSE Euronext, to David Karasik, Division of Trading and Markets, Commission (Aug. 26, 2011).

As a result of the business combination of NYSE Group, Inc. and Euronext N.V., the businesses of NYSE Group, including that of the NYSE LLC and NYSE Arca, and Euronext are now held under a single, publicly traded holding company named NYSE Euronext. Release Nos. 34-55293 (Feb. 14, 2007), 72 FR 8033 (Feb. 22, 2007) and 34-55026 (Dec. 29, 2006), 72 FR 814 (Jan. 8, 2007).

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[FR Doc. 2012-5055 Filed 3-1-12; 8:45 am]

BILLING CODE 8011-01-P