Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by Participants Trust Company Relating to Restrictions in the Intraday Payment of Principal and Interest

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33462; File No. SR-PTC-93-05]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by Participants Trust Company Relating to Restrictions in the

Intraday Payment of Principal and Interest

January 12, 1994.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''),\1\ notice is hereby given that on November 12, 1993,

Participants Trust Company (``PTC'') 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 the self-regulatory organization. The Commission is

publishing this notice to solicit comments on the proposed rule change

from interested persons.

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\1\15 U.S.C. 78s(b)(1).

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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 amend PTC's rules to

restrict intraday payments of principal and interest (``P&I'') from PTC

to its participants and limited purpose participants, to the amount of

funds from collected P&I payments available to PTC at such time.

II. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the self-regulatory organization

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. The self-regulatory organization

has prepared summaries, set forth in sections A, B, and C below, of the

most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

The purpose of the proposed rule change is to amend PTC Rule 2,

Article III to restrict intraday payments of P&I from PTC to its

participants and limited purpose participants, to the amount of funds

from collected P&I payments available to PTC at such time.

PTC's Rules and Procedures formerly provided that PTC disburse P&I

on securities deposited at PTC by means of a credit to the

Participant's applicable account cash balance. As a result, a

participant would receive available funds in the amount of the P&I, net

of any account debits and/or credits, at the end of the day as part of

the settlement payment process.

PTC's rules were amended on November 2, 1993\2\ to eliminate the

requirement that P&I be disbursed by means of a credit to a

participant's cash balance, to permit PTC to make payment of P&I either

by intraday Fedwire transfer of immediately available funds or by means

of a credit to the applicable cash balance, as PTC deems advisable from

time to time. In the order approving the proposed rule change on a

temporary basis until April 30, 1994, the Commission required PTC to

limit intraday disbursement of P&I to the amount of collected and

available P&I payments, on the basis that funds available to PTC for

P&I disbursement from other sources, such as PTC's own funds, the cash

portion of the mandatory deposits to the participant's fund, borrowed

funds secured by the P&I receipts or by the securities portion of the

mandatory deposits to the participant's fund, and PTC capital, should

be available if required to achieve end-of-day settlement. The purpose

of this proposed rule change is to incorporate that restriction

explicitly into PTC's Rules.

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\2\Securities Exchange Act Release No. 33132 (November 2, 1993),

58 FR 59501.

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The proposed rule change is consistent with Section 17A of the Act

and the rules and regulations thereunder because the orderly

disbursement of P&I funds to participants and the preservation of

alternate sources of funds to achieve settlement, facilitates the

prompt and accurate clearance and settlement of securities

transactions, and promotes the safeguarding of securities and funds in

PTC's custody and control.

B. Self-Regulatory Organization's Statement of Burden on Competition

PTC does not believe that the proposed rule change will have an

impact on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received From Members, Participants, or Others

PTC has not solicited, and does not intend to solicit, comments on

this proposed rule change. PTC has not received any unsolicited

comments from participants or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing

for Commission Action

Within 35 days of the date of publication of this notice in the

Federal Register or within such longer period (i) as the Commission may

designate up to 90 days of such date if it finds such longer period to

be appropriate and publishes its reasons for so finding or (ii) as to

which the self-regulatory organization consents, the Commission will:

(A) By order approve such proposed rule change, or

(B) Institute proceedings to determine whether the proposed rule

change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and

arguments concerning the foregoing. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

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 PTC. All submissions

should refer to File Number SR-PTC-93-05 and should be submitted by

February 10, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-1280 Filed 1-19-94; 8:45 am]

BILLING CODE 8010-01-M