Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding NSCC's Annuities Processing Service

[Federal Register Volume 64, Number 112 (Friday, June 11, 1999)]
[Notices]
[Pages 31666-31667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14870]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41477; File No. SR-NSCC-99-04]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Regarding NSCC's Annuities Processing Service

June 4, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 30, 1999, the 
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.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change amends NSCC's Annuities Processing Service 
(``APS'') to change the name of the service to ``Insurance Processing 
Service.'' In addition, the rule change makes corresponding name and 
clarification changes to reflect that NSCC's members may use the 
service to submit data, information, and settle payments for life 
insurance products as well as for annuity products.

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. 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\
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    \2\ The Commission has modified the text of the summaries 
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    On September 19, 1997, the Commission approved NSCC's rule filing 
to establish APS,\3\ which provides a centralized communication link 
connecting participating insurance carriers with their multiple 
distribution channels, including broker-dealers, banks, and the broker-
dealers' or banks' affiliated insurance agencies (``distributors'') 
where appropriate. Phase one of the APS system provided NSCC 
participants with the ability to send and receive daily information 
regarding annuity contract positions, the value of the contract's 
underlying assets, and the settlement of commission monies.
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    \3\ Securities Exchange Act Release No. 39096 (September 19, 
1997), 62 FR 50416, for a detailed description of APS.
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    The Commission approved phase two of APS on December 16, 1998,\4\ 
which provides distributors with the ability to transmit to insurance 
carriers information regarding annuity applications and subsequent 
premium payments and to settle initial and subsequent premiums. In 
addition, phase two enables insurance carriers to transmit to 
distributors information about transactions and events that have 
occurred with respect to existing annuity contracts.
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    \4\ Securities Exchange Act Release No. 40799 (December 16, 
1998), 63 FR 71175.
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    On October 8, 1998,\5\ the Commission approved a rule change to 
permit NSCC to transmit data and information and to settle payments 
regarding life insurance products as well as annuity products. At that 
time, no changes were made to the rules which referred only to 
annuities processing. Thus, the purpose of the proposed rule change is 
to change the name of the APS service and make corresponding name and 
clarification changes to the related provisions of NSCC's rules and 
procedures to reflect the nature of the insurance processing services 
available to NSCC's members.\6\
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    \5\ Securities Exchange Act Release No. 40634 (November 4, 
1998), 63 FR 63096.
    \6\ Under the rule change, NSCC is also deleting the provisions 
of Section I.B of Addendum Q which were originally included by 
mistake.
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    NSCC believes that the proposed rule change is consistent with 
Section 17A of the Act \7\ and the rules and regulations thereunder 
because it clarifies NSCC's rules and procedures to more accurately 
reflect the nature of its annuity and insurance processing system, 
which facilitates the prompt and accurate clearance and settlement of 
securities transactions by providing centralized communication between 
insurance carriers and broker-dealers, banks, and their affiliated 
insurance agencies.
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    \7\ 15 U.S.C. 78q-1
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC 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 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(i) of the Act \8\ and pursuant to Rule 19b-4(f)(1) \9\ 
promulgated thereunder because the proposal constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule. At any time within 
sixty days of the filing of such rule change, the Commission may 
summarily abrogate 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\ 15 U.S.C. 78s(b)(3)(A)(i).
    \9\ 17 CFR 240.19b-4(f)(1).
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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. 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

[[Page 31667]]

provisions of 5 U.S.C. Sec. 552, will be available for inspection and 
copying in the Commission's Public Reference Section, 450 Fifth Street, 
N.W., Washington, D.C. 20549.
    Copies of such filing also will be available for inspection and 
copying at the principal office of NSCC. All submissions should refer 
to File No. SR-NSCC-99-04 and should be submitted by July 2, 1999.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland
Deputy Secretary.
[FR Doc. 99-14870 Filed 6-10-99; 8:45 am]
BILLING CODE 8010-01-M