Self-Regulatory Organizations; International Securities Clearing Corporation; Notice of Filing of a Proposed Rule Change To Permit ISCC To Charge and To Collect From Members Charges Imposed by Certain Third Parties

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-37000; International Release No. 955; File No. SR-ISCC-

96-02]

Self-Regulatory Organizations; International Securities Clearing

Corporation; Notice of Filing of a Proposed Rule Change To Permit ISCC

To Charge and To Collect From Members Charges Imposed by Certain Third

Parties

March 21, 1996.

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

(``Act''),\1\ notice is hereby given that on March 19, 1996, the

International Securities Clearing Corporation (``ISCC'') filed with the

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

change (File No. SR-

[[Page 13909]]

ISCC-96-02) as described in Items I, II, and III below, which items

have been prepared primarily 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) (1988).

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

of the Proposed Rule Change

The purpose of the proposed rule change is to expand ISCC's

authority to charge and to collect from members fees imposed by third

parties.

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

statements.\2\

\2\ The Commission has modified the text of the statements

prepared by ISCC.

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

Statutory Basis for, the Proposed Rule Change

ISCC proposes to expand its authority to charge and to collect from

its members fees imposed by certain third parties. ISCC's current rules

permit ISCC to charge members for fees imposed by banks and trust

companies in conjunction with the Global Clearance Network Service. The

proposed modifications to ISCC's rules will permit ISCC to include on

members' settlement statements charges imposed by entitles or

organizations with which ISCC has entered into agreements and which

provide services or equipment to ISCC members which are integral to the

services provided by ISCC.

From time to time, third parties which have entered into agreements

with ISCC and which provide ISCC members with certain services or

equipment which facilitate access to an ISCC service request that ISCC

directly bill its members for the services such third parties provide

to members.\3\ The proposed rule change will permit such third parties

to aggregate individual member charges in one invoice to ISCC and will

allow ISCC in turn to include the third parties' charges to individual

members on such ISCC members' settlement statements. The proposed rule

will thereby enable ISCC members to consolidate their payment

obligations. If a member does not consent to such charges or otherwise

disputes such charges, ISCC will not fine the member for not paying to

ISCC the third party's charges. In addition, ISCC will have no

liability to any third party vendors for such charges.

\3\ For example, ISCC members may want to obtain computer

hardware and/or software to access certain ISCC services. To

facilitate such access, ISCC would make arrangements with a third

party vendor to supply members with the appropriate hardware and/or

software. The third party vendor would send a detailed monthly

invoice directly to ISCC reflecting the individual member charge and

aggregate charges for the month. ISCC would then include the

appropriate charge on each member's monthly statement. ISCC would

remit to the vendor within the agreed upon time period the amount

that ISCC actually collected from members in connection with the

vendor's charges.

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ISCC believes the proposed rule change is consistent with the

requirements of Section 17A of the Act and the rules and regulations

thereunder because the rule proposal provides for the equitable

allocation of dues, fees, and other charges among ISCC's participants.

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

ISCC does not believe that the proposed rule change will 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

No written comments relating to the proposed rule change have been

solicited or received. ISCC 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 ISCC 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, 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 ISCC. All submissions should

refer to the file number SR-ISCC-96-02 and should be submitted by April

18, 1996.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\4\

\4\ 17 CFR 200.30-3(a)(12) (1994).

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Jonathan G. Katz,

Secretary.

[FR Doc. 96-7501 Filed 3-27-96; 8:45 am]

BILLING CODE 8010-01-M