Self-Regulatory Organizations; Stock Clearing Corporation of Philadelphia; Notice of Filing of Proposed Rule Change Modifying SCCP Rule 2, Section 1 to Require Execution of a Participant's Agreement by Participants

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34886; File No. SR-SCCP-94-05]

Self-Regulatory Organizations; Stock Clearing Corporation of

Philadelphia; Notice of Filing of Proposed Rule Change Modifying SCCP

Rule 2, Section 1 to Require Execution of a Participant's Agreement by

Participants

October 24, 1994.

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

(``Act'')\1\ notice is hereby given that on October 3, 1994, the Stock

Clearing Corporation of Philadelphia (``SCCP'') 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 SCCP. 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. Sec. 78s(b)(1) (1988).

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

of the Proposed Rule Change

SCCP proposes to modify SCCP Rule 2, Section 1 to require each

participant to sign a Participant's Agreement.

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

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, SCCP 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. SCCP 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 proposed rule change will amend SCCP Rule 2, Section 1 with

respect to participants' obligations to SCCP. The proposed rule change

will add language requiring each participant to execute a Participant's

Agreement and language stating that SCCP's by-laws, rules, and

procedures shall supersede any conflicting provision of the

Participant's Agreement. The proposed rule change also will delete

language requiring participants to execute and deliver a written

instrument specifying their adherence to certain obligations set forth

in SCCP Rule 2. This second written agreement will be unnecessary

because once a participant signs a Participant's Agreement, the

participant has agreed to abide by all of the rules and obligations of

SCCP, including those set forth in SCCP Rule 2. Accordingly, all

provisions of Rule 2 will be directly enforceable against participants.

The proposed rule change will codify SCCP's existing but unwritten

policy and practice of requiring all participants to execute a

Participant's Agreement. The proposed rule change is consistent with

Section 17A of the Act and particularly with Section 17A(b)(3) (A) and

(F) in that the proposed rule change is designed to assure the

safeguarding of securities and funds which are in the custody or

control of the clearing agency.

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

SCCP does not believe that the proposed rule change will impose an

inappropriate burden on competition.

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

Rule Change Received From Members, Participants or Others

Written comments were neither solicited nor received with respect

to the proposed rule change.

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 SCCP 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, N.W., Washington, D.C. 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. Sec. 552, will be available for inspection and copying in

the Commission's Public Reference Section, 450 Fifth Street N.W.,

Washington, D.C. 20549. Copies of such filing will also be available

for inspection and copying at the principal office of SCCP. All

submissions should refer to File No. SR-SCCP-94-05 and should be

submitted by November 22, 1994.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\2\

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\2\17 CFR 200.30-3(a)(12) (1994).

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Jonathan G. Katz,

Secretary.

[FR Doc. 94-27039 Filed 10-31-94; 8:45 am]

BILLING CODE 8010-01-M