Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by International Securities Clearing Corporation Relating to an Amendment to the Linkage Agreement With Japan Securities Clearning Corporation

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34163; International Series Release No. 670; File No.

SR-ISCC-94-2]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by International Securities Clearing Corporation Relating to an

Amendment to the Linkage Agreement With Japan Securities Clearning

Corporation

June 6, 1994.

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

(``Act''),\1\ notice is hereby given that on May 26, 1994,

International Securities Clearing Corporation (``ISCC'') 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 by ISCC. The Commission is publishing this notice to

solicit comments on the proposed rule change from interested persons.

---------------------------------------------------------------------------

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

---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of

Substance of the Proposed Rule Change

ISCC is filing the proposed rule change to amend its linkage

agreement with the Japan Securities Clearing Corporation (``JSCC'') to

allow ISCC to provide JSCC access, through ISCC, to the National

Securities Clearing Corporation (``NSCC'') New York Window (``NYW'')

services.

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

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, ISCC 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. ISCC has prepared summaries, set forth in sections A, B,

an C below, of the most significant aspects of such statements.

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

Statutory Basis For, the Proposed Rule Change

(a) ISCC is a wholly owned subsidiary of NSCC and is a member of

NSCC for the purposes of obtaining access to NSCC services on behalf of

foreign financial institutions with whom ISCC enters into linkage

agreements. JSCC is a wholly owned subsidiary of the Tokyo Stock

Exchange and provides clearing services for securities listed on stock

exchanges in Japan. JSCC acts as the central depository for foreign

shares, including U.S. shares, listed on stock exchanges in Japan for

the benefit of the beneficial owners thereof. It appoints local

custodians with respect to non-Japanese securities. In 1988, ISCC and

JSCC entered into a linkage agreement which permitted JSCC to obtain

access through ISCC to certain services of the Depository Trust Company

(``DTC'') for U.S. shares listed on stock exchanges in Japan and

included in JSCC's central depository clearing system for foreign

shares. ISCC and JSCC are entering into an amendment to the linkage

agreement which will permit JSCC to obtain access through ICC to NSCC's

NYW services for initial public offerings of U.S. securities listed on

exchanges in Japan until such time as such securities are eligible for

deposit at DTC. The services provided through the NYW will be similar

to that which JSCC obtains through ISCC from DTC for DTC eligible

securities. Deliveries and receives of these securities would be free

of payment and would be initiated based on instructions received from

JSCC. The securities held by NSCC would be used as the basis for the

bookkeeping entries at JSCC. At such time as these securities become

eligible at DTC they would be deposited at DTC for credit to the

account of JSCC. At that time, the services that ISCC. At that time,

the services that ISCC provides to JSCC for these issues will be the

services covered under the terms of the original linkage agreement.

(b) The proposed rule changes fosters cooperation and coordination

with persons engaged in the clearance and settlement of securities

transactions and as such is therefore consistent with Section 17A of

the Act.

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

ISCC does not believe that the proposed rule change imposes any

burden on competition.

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

Rule Change Received From Members, Participants, or Others

ISCC has received no written comments. ICC will notify the

Commission of any written comments received by ISCC.

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

for Commission Action.

Within thirty-five 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 ninety 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 consent,

the Commission will:

A. By order approve the 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 also will be available for

inspection and copying at the principal office of the above-mentioned

self-regulatory organization.

All submissions should refer to File No. SR-ISCC-94-2 and should be

submitted by July 1, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 94-14126 Filed 6-9-94; 8:45 am]

BILLING CODE 8010-01-M