[Federal Register Volume 75, Number 219 (Monday, November 15, 2010)]
[Notices]
[Pages 69730-69732]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28663]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63268; File No. SR-SCCP-2010-03]
Self-Regulatory Organizations; Stock Clearing Corporation of
Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to the Suspension of Certain Provisions Due to
Inactivity
November 8, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 27, 2010, Stock Clearing Corporation of Philadelphia
(``SCCP'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared primarily by SCCP. SCCP filed
the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the
Act \3\ and
[[Page 69731]]
Rule 19b-4(f)(3) \4\ so that the proposal was effective upon filing
with the Commission. 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. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
SCCP proposes to amend its By-Laws to: (1) Suspend certain
maintenance and reporting requirements during the period of inactivity
of SCCP; (2) remove all references to the Philadelphia Depository Trust
Company; (3) remove the requirement to furnish an annual statement of
SCCP's business and affairs; (4) remove references to certain standing
committees of NASDAQ OMX PHLX (``PHLX''); (5) reflect the change of the
name of The Philadelphia Stock Exchange to NASDAQ OMX PHLX LLC; and (6)
make conforming changes to the rules.
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
SCCP is a wholly owned subsidiary of PHLX and is registered with
the Commission as a clearing agency pursuant to Section 17A of the
Act.\5\ On July 24, 2008, The NASDAQ OMX Group, Inc. completed an
acquisition of The Philadelphia Stock Exchange and renamed it NASDAQ
OMX PHLX. Thereafter, a decision was made to cease SCCP operations and
on December 31, 2008, SCCP ceased all business operations with the
exception of the return of the clearing fund deposits that were
provided to SCCP by its members for the purpose of offsetting SCCP's
financial risk while operating a clearing agency for the member. SCCP
returned all clearing fund deposits by September 30, 2009; therefore,
as of that date SCCP no longer maintains clearing members or any other
clearing operations. However, SCCP desires to maintain its registration
as a clearing agency for possible active operations in the future.
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\5\ 15 U.S.C. 78q-1.
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Currently, SCCP only conducts the administrative operations that
are required to maintain its registration, which generally consist of
tax and record maintenance obligations, as well as the various
maintenance and reporting requirements of a clearing agency. Since SCCP
no longer maintains members or conducts clearing business operations,
SCCP is requesting that it may suspend certain maintenance and
reporting requirements where it makes sense to do so. SCCP believes
that it is appropriate under the circumstances of SCCP's inactivity to
suspend the following portions of its By-Laws or Rules during any
period in which SCCP has suspended its operations and is in an inactive
status:
(1) SCCP Article IV Section 2(c) and (d): SCCP proposes to suspend
the requirement that the Board of Directors contain at least one
participant, and to amend the requirement that at least one of SCCP's
directors must be a governor of the Exchange;
(2) SCCP Article IV, Section 8: SCCP proposes to suspend the
requirement to maintain Standing Committees;
(3) SCCP Rule 4, Section 1: SCCP proposes to eliminate the need for
a Participant Fund and furthermore defines the term ``inactive''.
(4) SCCP Rule 11, Reserve Fund: SCCP proposes to suspend the
requirement for the reserve fund;
(5) SCCP Rule 28: SCCP proposes to suspend the requirement of: (a)
furnishing annual unconsolidated audited comparative financial
statements prepared in accordance with generally accepted accounting
principles; (b) accompanied by a report prepared by an independent
public accountant; furnishing unaudited quarterly financial statements;
and (c) furnishing an annual review of internal control prepared by
independent public accountants.
During the time SCCP was active, SCCP's Audit Committee and Finance
Committee were also the comparable committees of SCCP's parent, The
Philadelphia Stock Exchange. However, PHLX has since eliminated its own
Audit Committee and Finance Committee and allows the function of those
committees to be performed by other board committees within its
corporate structure. Accordingly, SCCP will amend its rules to provide
that, in the event SCCP resumes active operations, it will have its own
Audit Committee and Finance Committee.
SCCP also proposes to remove SCCP By-Law Article X regarding the
presentation of an annual statement of the corporation at each annual
meeting. SCCP believes Article X is not legally required and therefore
proposes to remove this language permanently.
SCCP also proposes to make certain administrative changes. Certain
SCCP By-Laws and rules reference the Philadelphia Depository Trust
Company (``Philadep''), a trust company that was deregistered as a
national clearing agency as of December 31, 2002, and dissolved as a
trust company in the Commonwealth of Pennsylvania on August 7, 2004. At
this time, SCCP proposes to eliminate all references to Philadep. In
addition, SCCP proposes to eliminate Rule 4, Section 1, paragraph four,
section (ii). This section is duplicative of section (i). Furthermore,
SCCP proposes to make clerical changes that are necessary due to the
changes contained within this proposed rule change. Finally, SCCP
proposes to amend the By-Laws and the Rules to reflect the change of
the name of The Philadelphia Stock Exchange to NASDAQ OMX PHLX LLC.
SCCP states that that its proposal is consistent with Section 17A
of the Act \6\ in general and furthers the objectives of Section
17A(b)(3)(F) of the Act \7\ in particular in that it is designed to
remove impediments to and perfect the mechanism of national market
system, and, in general does not impose any burden on competition not
necessary or appropriate. SCCP further states that the proposal seeks
to suspend maintenance and reporting requirements and make other
administrative changes during the time when SCCP has suspended its
business operations. None of these changes affect the investing public
but rather are concerned solely with the administration of SCCP.
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\6\ 15 U.S.C. 78q-1.
\7\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Self-Regulatory Organization's Statement on Burden on Competition
SCCP does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
SCCP has not solicited or received written comments relating to the
proposed rule change. SCCP will notify the Commission of any written
comments it receives.
[[Page 69732]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(3) \9\ because it is
concerned solely with the administration of SCCP. At any time within 60
days of the filing of the proposed rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
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\8\ Supra note 2.
\9\ Supra note 3.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-SCCP-2010-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-SCCP-2010-03. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at SCCP's principal office and on SCCP's Web
site at http://nasdaqtrader.com/micro.aspx?id=PHLX Rulefilings. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-SCCP-2010-03 and should be
submitted on or before December 6, 2010.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28663 Filed 11-12-10; 8:45 am]
BILLING CODE 8011-01-P