Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Order Granting Accelerated Approval on a Temporary Basis of a Proposed Rule Change Regarding an Expansion of the Limited Money Settlement Service for a New York Window Participant

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34476; File No. SR-NSCC-94-14]

Self-Regulatory Organizations; National Securities Clearing

Corporation; Notice of Filing and Order Granting Accelerated Approval

on a Temporary Basis of a Proposed Rule Change Regarding an Expansion

of the Limited Money Settlement Service for a New York Window

Participant

August 1, 1994.

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

(``Act''),\1\ notice is hereby given that on August 1, 1994, the

National Securities Clearing Corporation (``NSCC'') filed with the

Securities and Exchange Commission (``Commission'') the proposed rule

change as described in Items I, and II, below, which Items have been

prepared primarily by NSCC. The Commission is publishing this notice

and order to solicit comment from interested persons and to grant

accelerated approval of the proposed rule change on a temporary basis

until January 31, 1995.

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\1\15 U.S.C. 78s(b)(i) (1988).

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

Substance of the Proposed Rule Change

The proposed rule change will allow NSCC to offer the limited money

settlement service to an additional participant in the New York Window

pilot program.

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

Statutory Basis for, the Proposed Rule Change

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 such statements.

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

Statutory Basis for, the Proposed Rule Change

NSCC currently operates a pilot program for the New York Window

service.\2\ In January 1994, the pilot program was expanded to include

a limited money settlement service for two New York Window

participants.\3\ The current proposed rule change will expand the pilot

program to provide limited money settlement services to an additional

New York Window participant.\4\

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\2\For a complete description of the New York Window program,

refer to Securities Exchange Act Release No. 32221 (April 26, 1993),

58 FR 26570 [File No. SR-NSCC-93-03] (order approving pilot program

on a temporary basis until April 30, 1994).

\3\For a complete description of limited money settlement

service, refer to Securities Exchange Act Release No. 33558 (January

31, 1994), 59 FR 5807 [File No. SR-NSCC-93-14] (order approving

pilot program on a temporary basis until January 31, 1995, and

expanding the pilot program to offer limited money settlement

services to two participants).

\4\This filing covers the period of the temporary approval.

Currently, NSCC is seeking permanent approval of the New York Window

services, which includes the money settlement service. Securities

Exchange Act Release No. 34470 (August 1, 1994) [File No. SR-NSCC-

94-12] (notice of filing seeking permanent approval of New York

Window service).

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NSCC has stated that the proposed rule change will be implemented

consistent with NSCC's statutory obligation under Section 17A of the

Act to safeguard securities and funds in NSCC's custody or control and

to promote the prompt and accurate clearance and settlement of

securities transactions.

(B) Self-Regulatory Organization's Statement on Burden on Competition

NSCC does not believe that the proposed rule will have an impact or

impose a burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the

Proposed Rule Change Received From Members, Participants, or Others

NSCC has not solicited or received any comments. NSCC will notify

the Commission of any written comments received by NSCC.

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

for Commission Action

Section 17(A)(a)(1)(B) of the Act sets forth Congress findings that

inefficient procedures for clearance and settlement of securities

transactions impose unnecessary costs on investors and persons

facilitating transactions by and acting on behalf of investors.\5\ The

Commission reasserts its belief, as stated in the previous New York

Window approval orders, that NSCC's pilot program should help minimize

inefficient procedures employed by individual New York City

participants by concentrating these operations in one centralized

facility.\6\ The Commission believes that expanding the limited money

settlement service to include an additional New York Window participant

should provide a more efficient mechanism by which the participant can

settle its debits and credits generated by the New York Window

processing. Furthermore, it will give NSCC an expanded field in its

study of its limited money settlement service during the pilot program.

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\5\15 U.S.C. 78q-1(a)(1)(B).

\6\Supra notes 2 and 3.

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Section 17A(b)(3)(F) of the Act requires that the rules of a

clearing agency be designed to assure the safeguarding of securities

and funds which are in its custody or control or for which it is

responsible.\7\ The Commission believes that the safety procedures

established for the limited money settlement service and approved in

the previous New York Window approval order\8\ will continue to enable

NSCC to meet its obligations under Section 17A of the Act with an

additional participant using the limited money settlement service. For

example, NSCC will continue to not make any payment on behalf of or to

the limited money settlement services participants until NSCC has

received funds sufficient to cover the amount of NSCC's payment.

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\7\15 U.S.C. 79Q-1 (b) (3) (F).

\8\Supra Note 3.

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NSCC has requested that the Commission find good cause for

approving the proposed rule change prior to the thirtieth day after the

date of publication of notice of the filing. The Commission finds good

cause for so approving the proposed rule change because the Commission

has previously published notice of and has approved the limited money

settlement service. NSCC's previous proposed rule change did not

generate any comment letters, and none are expected on this proposal.

In addition, accelerated approval will allow the additional participant

to begin utilizing the limited money settlement service immediately and

to begin benefiting from the efficient and centralized payment

procedures provided by NSCC. During the temporary approval period, NSCC

will continue to evaluate the limited money settlement service.

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 and the principal offices of NSCC. All submissions

should refer to File No. SR-NSCC-94-14 and should be submitted by

August 30, 1994.

V. Conclusion

It is therefore ordered, pursuant to section 19(b)(2) of the

Act,\9\ that the proposed rule change (File No. SR-NSCC-94-14) be, and

hereby is, approved until January 31, 1995.

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\9\15 U.S.C. 78s(b)(2) (1988).

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\10\

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\10\17 CFR 200.30-3(a)(12) (1993).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-19377 Filed 8-8-94; 8:45 am]

BILLING CODE 8010-01-M