

[Federal Register: November 1, 2005 (Volume 70, Number 210)]
[Notices]               
[Page 65956]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01no05-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52651; File No. SR-SCCP-2004-03]

 
Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Order Granting Approval of a Proposed Rule Change 
Relating to Anonymous Features on Trading Systems

October 21, 2005.

I. Introduction

    On August 5, 2004, the Stock Clearing Corporation of Philadelphia 
(``SCCP'') filed with the Securities and Exchange Commission 
(``Commission'') proposed rule change SR-SCCP-2004-03 pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'').\1\ 
On September 7, 2004, SCCP amended the proposed rule change. Notice of 
the proposal was published in the Federal Register on August 10, 
2005.\2\ No comment letters were received. For the reasons discussed 
below, the Commission is granting approval of the proposed rule change 
with the conditions set forth below.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities Exchange Act Release No. 52201 (August 3, 2005), 
70 FR 46565.
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II. Description

    The rule change allows SCCP to process trades executed on a trading 
system that provides for anonymous trading.\3\ Pursuant to the rule 
change, SCCP will be able in the future to receive locked-in trade data 
from a trading system that provides anonymity. In such a situation, 
SCCP would report such trades to its members using an anonymous acronym 
instead of naming or identifying the actual contraside.
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    \3\ SCCP's rule change is similar to a rule change approved by 
the Commission in 2003 that allowed the National Securities Clearing 
Corporation (``NSCC'') to accommodate the reporting of trades 
executed on a system that provides trading anonymity. Securities 
Exchange Act Release No. 48526 (September 23, 2003), 68 FR 56367 
(September 30, 2003) [File No. SR-NSCC-2003-14].
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    In the event that SCCP ceases to act for a member involved in 
anonymous trading, the operator of the trading system shall have the 
responsibility to identify to its users the trades, which are generally 
included in reports produced by SCCP, involving the affected member. 
SCCP would forward to the operator of the trading system the 
appropriate information to facilitate its notification of its users. In 
addition, should SCCP receive information from NSCC that NSCC had 
ceased to act for an NSCC member that was an unidentified contraside of 
any such trade, SCCP would also forward this information to the 
operator of the trading system.\4\
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    \4\ NSCC's anonymous trading procedure includes similar 
notification requirements.
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III. Discussion

    Section 17A(b)(3)(F) of the Act provides that the rules of a 
clearing agency should be designed to promote the prompt and accurate 
clearance and settlement of securities transactions.\5\ To benefit from 
the advantages of an anonymous trading system, parties to anonymous 
trades need to keep their identities anonymous in any reports provided 
to counterparties as part of the clearance and settlement of the 
trades. By allowing SCCP to use an acronym in place of the name or 
identity of contrasides of anonymous trades in the trade reports it 
provides to its members, the proposed rule change allows the parties to 
anonymous trades to preserve their anonymity and thus to preserve the 
benefits associated with executing anonymous trades. Accordingly, the 
proposed rule change is designed to promote the prompt and accurate 
clearance and settlement of securities transactions conducted on 
anonymous trading systems by allowing such trades to be cleared and 
settled through SCCP and therefore receive the benefits and 
efficiencies SCCP offers as a registered clearing agency.
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    \5\ 15 U.S.C. 78q-1(a)(A)(B).
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    As a condition of this approval, SCCP will notify the Commission in 
writing before it begins processing trades executed on each anonymous 
trading system. Such notification shall include such information as the 
name of the anonymous trading system, the operator and/or owner of the 
anonymous trading system, the proposed processing start date, and any 
other relevant information requested by the Commission.

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular Section 17A of the Act and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-SCCP-2004-03) be and hereby 
is approved.
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    \6\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-6016 Filed 10-31-05; 8:45 am]

BILLING CODE 8010-01-P
