Self-Regulatory Organization; National Securities Clearing Corporation; Notice of Filing of Proposed Rule Change Relating to Modifications to its Procedures to Allow the Processing of Voluntary Reorganizations With Protect Periods of Three Days or Greater

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-36097; File No. SR-NSCC-95-09]

Self-Regulatory Organization; National Securities Clearing

Corporation; Notice of Filing of Proposed Rule Change Relating to

Modifications to its Procedures to Allow the Processing of Voluntary

Reorganizations With Protect Periods of Three Days or Greater

August 11, 1995.

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

(``Act''),\1\ notice is hereby given that on July 27, 1995, National

Securities Clearing Corporation (``NSCC'') 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 NSCC. 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) (1988).

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

of the Proposed Rule Change

The text of the proposed rule change consists of modifications to

NSCC's Procedures to allow the processing of voluntary reorganizations

with protect periods of three days or greater.

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.\2\

\2\ These statements have been modified by the Commission.

[[Page 43630]]

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

Statutory Basis for, the Proposed Rule Change

NSCC recently modified its Rules and Procedures to accommodate

three-day (``T+3'') settlement of securities transactions. NSCC did not

modify its Procedures for voluntary reorganizations (i.e., tender or

exchange offers) which currently require a protect period \3\ of five

days or greater because the industry indicated to NSCC that five day

protect periods would prevail for a substantial period of time after

the implementation of T+3. However, with the implementation of T+3,

some voluntary reorganizations have had protect periods of three days

rather than five days. In response, NSCC has suspended references in

its Procedures to the five day protect period in order to accommodate

voluntary reorganizations with three day protect periods. Accordingly,

the purpose of the proposed rule change is to modify Section VII.H.4(b)

of NSCC's Procedures to allow the processing of voluntary

reorganizations with protect periods of three days or greater through

NSCC's Continuous Net Settlement System.

\3\ A protect period is generally understood to mean the amount

of time after the expiration of a tender or exchange offer that the

owner or record holder who has elected to participate in the offer

has to submit the shares to the tender agent to cover his or her

position.

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The proposed rule change is consistent with the requirements of

Section 17A of the Act and the rules and regulations thereunder because

it should facilitate 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 change will have an

impact on 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

No written comments relating to the proposed rule change have been

solicited or received. 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

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 NSCC 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. 552, will be available for inspection and copying in the

Commission's Public Reference Room in Washington, D.C. 20549. Copies of

such filing will also be available for inspection and copying at the

principal office of NSCC. All submissions should refer to the File No.

SR-NSCC-95-09 and should be submitted by September 12, 1995.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95-20694 Filed 8-21-95; 8:45 am]

BILLING CODE 8010-01-M