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only one method. The Commission will NSCC filed the proposal pursuant to whether to participate in the stock
post all comments on the Commission’s Section 19(b)(3)(A)(iii) of the Act 2 and borrow program and whether to
Internet Web site (http://www.sec.gov/ Rule 19b–4(f)(4) 3 thereunder so that the participate in one or both cycles.
rules/sro.shtml). Copies of the proposal was effective upon filing with After NSCC processes regular
submission, all subsequent the Commission. The Commission is deliveries, shares needed to satisfy CNS
amendments, all written statements publishing this notice to solicit deliveries typically are borrowed from
with respect to the proposed rule comments on the rule change from members who have made their
change that are filed with the interested parties. securities available through the stock
Commission, and all written borrow program with the lending
I. Self-Regulatory Organization’s member’s DTC position being debited
communications relating to the
Statement of the Terms of Substance of for the number of shares loaned in the
proposed rule change between the
the Proposed Rule Change stock borrow program. Borrowed shares
Commission and any person, other than
those that may be withheld from the The purpose of the rule change is to are recorded as a long position in the
public in accordance with the modify Addendum C of NSCC’s rules lending member’s CNS subaccount until
provisions of 5 U.S.C. 552, will be with respect to the formula used in shares are delivered back to the lender.
available for inspection and copying in NSCC’s stock borrow program to Prior to this rule change, NSCC had
the Commission’s Public Reference determine the order of priority among used a formula to determine the order
Room, 100 F Street, NE., Washington, members from whom NSCC will borrow of priority among members from which
DC 20549, on official business days securities made available by those NSCC would borrow shares. First, NSCC
between the hours of 10 a.m. and 3 p.m. members. assigned each member a random
Copies of such filing also will be allocation number for each security the
II. Self-Regulatory Organization’s
available for inspection and copying at member made available for borrowing.
Statement of the Purpose of, and
the principal office of FINRA. All Then a factor was developed for each
Statutory Basis for, the Proposed Rule
comments received will be posted member by dividing the percentage of
Change
without change; the Commission does the member’s average loans as they
not edit personal identifying In its filing with the Commission, related to total NSCC borrowings by the
information from submissions. You NSCC included statements concerning percentage of the member’s average fees
should submit only information that the purpose of and basis for the paid for trade comparison, trade
you wish to make available publicly. proposed rule change and discussed any recording, and clearance as they related
All submissions should refer to File comments it received on the proposed to the total of these fees for all members.
Number SR–FINRA–2008–012 and rule change. The text of these statements Each member’s random allocation
should be submitted on or before May may be examined at the places specified number was multiplied by the factor to
2, 2008. in Item IV below. NSCC has prepared produce an adjusted random number
For the Commission, by the Division of
summaries, set forth in sections (A), (B), per security for each member. Each
Trading and Markets, pursuant to delegated and (C) below, of the most significant potential borrow was then sequenced
authority.13 aspects of these statements.4 using the adjusted random number with
Florence E. Harmon, the lowest adjusted random number
A. Self-Regulatory Organization’s
Deputy Secretary. having the first priority for borrowing.
Statement of the Purpose of, and NSCC is proposing to simplify the
[FR Doc. E8–7655 Filed 4–10–08; 8:45 am] Statutory Basis for, the Proposed Rule process by eliminating the formula and
BILLING CODE 8011–01–P Change using a random allocation algorithm to
In the course of daily operations, determine the order of priority among
NSCC’s Continuous Net Settlement members from which NSCC will borrow
SECURITIES AND EXCHANGE
System (‘‘CNS’’) may need more shares shares.6 Using a random allocation
COMMISSION
of a security than shares made available algorithm to determine the order of
[Release No. 34–57609; File No. SR–NSCC– by member deliveries. In order to priority in which NSCC will borrow
2008–01] improve the efficiency of the clearing securities made available by members
system in dealing with these situations, within the stock borrow program would
Self-Regulatory Organizations; NSCC implemented automated stock make processing more consistent with
National Securities Clearing borrow procedures to satisfy the need other current processing routines
Corporation; Notice of Filing and for shares that are not filled through already utilized by NSCC.
Immediate Effectiveness of Proposed normal deliveries from members. NSCC proposes to implement the
Rule To Amend the Rules With Regard NSCC members that wish to changes set forth in this filing on March
to the Formula Used Within the Stock participate in the stock borrow program 28, 2008. Members will be advised of
Borrow Program notify NSCC each day of the securities the implementation date through
April 3, 2008. those members have on deposit at The issuance of NSCC Important Notices.
Pursuant to Section 19(b)(1) of the Depository Trust Company (‘‘DTC’’) that The proposed rule change is
Securities Exchange Act of 1934 they intend to make available to NSCC consistent with Section 17A of the Act,7
(‘‘Act’’),1 notice is hereby given that on through the stock borrow program. The as amended, because it removes
March 18, 2008, the National Securities stock borrow program has two separate
cycles: the daytime cycle and the borrowed during the daytime processing cycle and
Clearing Corporation (‘‘NSCC’’) filed vice versa.
with the Securities and Exchange nighttime cycle.5 Members choose 6 This random allocation algorithm is already
Commission (‘‘Commission’’) the used by NSCC to determine other priorities. NSCC
mstockstill on PROD1PC66 with NOTICES
2 15U.S.C. 78s(b)(3)(A)(iii).
proposed rule change described in Items 3 17
uses random allocation algorithms routinely. For
CFR 240.19b–4(f)(4). example, CNS uses a random allocation
I, II, and III below, which items have 4 The Commission has modified the text of the methodology whereby, after securities are received
been prepared primarily by NSCC. summaries prepared by NSCC. by NSCC from members making deliveries to CNS,
5 The daytime and nighttime cycles are separate they are then allocated to other members that are
13 17 CFR 200.30–3(a)(12). expecting receipt of those securities.
processes. Securities made available to be borrowed
1 15 U.S.C. 78s(b)(1). during the nighttime processing cycle are not 7 15 U.S.C. 78q–1.
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Federal Register / Vol. 73, No. 71 / Friday, April 11, 2008 / Notices 19919
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