Self-Regulatory Organizations; Notice of Proposed Rule Change by Midwest Clearing Corporation Relating to the Definition of Settlement Price

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33685; File No. SR-MCC-93-09]

Self-Regulatory Organizations; Notice of Proposed Rule Change by

Midwest Clearing Corporation Relating to the Definition of Settlement

Price

February 25, 1994.

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

(``Act''),\1\ notice is hereby given that on December 23, 1993, the

Midwest Clearing Corporation (``MCC'') 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

mainly by MCC, a self-regulatory organization (``SRO''). The Commission

is publishing this notice to solicit comments on the proposed rule

change from interested persons.

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\1\15 USC 78s(b)(1) (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 amend MCC's definition of the term

``settlement price,'' which is set forth in Article I, Rule 1 of MCC's

Rules. For text of rule change, see Exhibit A.

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

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, MCC 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. MCC has prepared summaries, set forth in section (A),

(B), and (C) below, of the most significant aspects of such statements.

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

Statutory Basis for, the Proposed Rule Change

The purpose of the proposed rule filing is to amend the definition

of the term settlement price, which is set forth in Article I, Rule 1

of MCC's Rules. The term settlement price, as used in MCC's Rules, is

used to determine daily mark-to-market credits or payments, as well as

to value settling trades. The definition of settlement price must be

uniform among clearing corporations in order for the interfaces between

them to function smoothly in the settlement of transactions. This

proposed change, in conjunction with a recently proposed change to the

rules of the National Securities Clearing Corporation (``NSCC''), will

conform MCC's definition of settlement price to actual practice and to

NSCC's definition.

MCC believes that the proposed rule change is consistent with

Section 17A of the Act in that it will facilitate the prompt and

accurate clearance and settlement of securities transactions.\2\

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\2\15 U.S.C. 78q-1 (1988).

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

MCC believes that no burden will be placed on competition as a

result of the proposed rule change.

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

Proposed Rule Change Received From Members, Participants or Others

MCC has neither solicited nor received any comments on this rule

proposal.

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 consents,

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 submissions, 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 and at the principal office of

MCC. All submissions should refer to File No. SR-MCC-93-09 and should

be submitted by March 28, 1994.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\3\

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

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Margaret H. McFarland,

Deputy Secretary.

Exhibit A

Additions Are Italicized; Deletions Are [Bracketed]

Article I. Definitions and General Provisions

Rule 1. Definitions

The term ``Settlement Price,'' as used on any Business Day in

respect of any Security, means the closing price (rounded to the

nearest one hundredth (1/100) of a dollar) of such Security on the

principal stock exchange on which such Security is listed on the last

previous day on which there were trades on such exchange in such

Security; or, if such Security is not listed on any exchange, a price

determined in such manner as the Corporation may from time to time

prescribe, based on [reported trades in or quotations for] the last

sale price for such Security in such market as the Corporation shall

deem appropriate, for trades on the business day prior to the day such

price is used. If no closing price or last sale price is available for

the business day prior to the day such price is used, then such price

shall be such price as the Corporation shall deem appropriate [on the

over-the-counter market on the last previous day with respect to which

such trade or quotations, as the case may be, were reported].

Notwithstanding the foregoing, the Corporation may fix the ``settlement

price'' of a Security at such amount (including zero) as it deems

necessary and appropriate in the circumstances to protect the

respective interests of the Participants and the Corporation (a)

whenever trading in such Security has been suspended by order of the

Securities and Exchange Commission or by any securities exchange on

which such Security is listed or by any other authority having power to

suspend trading in such Security, (b) to reflect a dividend or other

distribution on such Security, or (c) in other appropriate

circumstances.

[FR Doc. 94-5068 Filed 3-4-94; 8:45 am]

BILLING CODE 8010-01-M