Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The proposed rule change will modify NSCC's rules to allow Fund Members and Mutual Fund Processors to submit extended (post settlement) corrections in NSCC's Fund/Serv.
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.
Pursuant to NSCC's Rule 52A, Section 12, only a Settling Member or TPA Member may currently submit extended (post settlement) correction instructions. These types of instructions are submitted when a Settling Member or TPA Member determines that data previously transmitted to a Fund Member or Mutual Fund Processor with respect to a settled order is in need of correction.
Under the proposed rule change, Section 12 will be amended to also permit Fund Members and Mutual Fund Processors to submit extended (post settlement) corrections to Settling Members or TPA Members. No action will be required by a Settling Member or TPA Member if it determines to accept the extended correction of a Fund Member or Mutual Fund Processor. A Settling Member or TPA Member will be able to reject the extended correction instruction within the time frame established by NSCC.
The rule change also proposes to make two additional changes to Rule 52A. Sections 4 and 8 of Rule 52A will be amended to allow NSCC to delete certain orders, corrections, and extended corrections that have not been confirmed or rejected, respectively, within a time frame established by NSCC. Section 21 will permit NSCC to reduce the maximum time frame within which a Delivering Fund Member must confirm the value of Fund/Serv eligible mutual fund shares, investment funds, or UIT units from sixty days to ten days.
NSCC intends to implement these changes, subject to SEC approval, on November 20, 2000.
NSCC believes the proposed rule change is consistent with Section 17A(b)(3)(F) of the Act and the rules thereunder because it will facilitate the prompt and accurate clearance and settlement of securities transactions.
NSCC does not believe that the proposed rule change will have an impact or impose a burden on competition.
The Investment Company Institute's Enhancement Subcommittee of its Broker/Dealer Committee was advised of and concurs in the modifications to NSCC's rules. 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.
Within thirty-five days of the date of publication of this notice in the
(A) by order approve such proposed rule change or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
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. 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 also will be available for inspection and copying at the principal office of NSCC. All submissions should refer to File No. SR–NSCC–00–12 and should be submitted by November 14, 2000.
For the Commission by the Division of Market Regulation, pursuant to delegated authority.