4/2 new FTD rule changes
nscc.com
follows:-On Tuesday, the first day of the processing cycle, Members submit CUSIP files
for municipal securities designated for processing through the service. The data on these
files is used to obtain current prices for the designated municipal bonds.
-On Friday, Members submit eligible aged fails to NSCC up until a designated
cut-off time.
-On Saturday, NSCC distributes RECAPS contract sheets, RECAPS CNS and
Non-CNS Compared Trade Summaries, Balance Orders (for matched transactions in
Balance Order securities), and a CNS RECAPS Projection Report and an Advisory
Listing.
-On Monday, Members take action on unmatched items, and
-On Tuesday, the last day of the RECAPS cycle, all matched fails are scheduled
to settle.
The process enhancements eliminate the need for early submission of municipal
securities CUSIP files, as current price information can be obtained on Friday when
Members submit their aged fails for reconfirmation and pricing. In addition, the process
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enhancements enable the distribution of reports at an earlier time on Saturday, and fails
will settle on the next Settlement Day after they match (i.e. fails that are matched on
Friday will settle on Monday (as opposed to Tuesday in the current schedule), and those
that match on Monday will settle on Tuesday).
The CNS RECAPS Projection report is being eliminated because the relevant
information will be provided on the existing CNS Projection Report. Similarly, to
conform with current trade processing practices where NSCC has eliminated print image
Balance Order and Receive and Deliver tickets--such information instead being shown on
the Consolidated Trade Summaries1, RECAPS Balance orders and RECAPS Trade-for-
Trade Receive and Deliver Orders will now be evidenced by the information contained
on the RECAPS Non-CNS Compared Trade Summary.
Finally, the RECAPS Procedure is being revised to clarify that reconfirmed fails
in securities where the original fail price was less than one penny per share will settle on
a trade-for-trade basis as a “Special Trade” with the RECAPS value being the original
comparison value (as opposed to the system-generated price of one cent per share).
Clarifying language is also being added to distinguish between information that appears
on the RECAPS CNS Compared Trade Summary and information on the RECAPS Non-
CNS Compared Trade Summary.
As the RECAPS Procedures provides for the Corporation to determine not only
when and how often RECAPS is run, but also the processing schedule for each such
RECAPS cycle, NSCC advises its participants of the RECAPS calendar and the
processing schedule via Important Notices. Participants have been advised of the
proposed scheduling changes outlined above, as well as the other enhancements
described in this filing, in Important Notice A#6323 P&S#5893 dated October 26, 2006.
(b) The proposed rule change is consistent with the requirements of the
Securities Exchange Act of 1934, as amended (the "Act"), and the rules and regulations
thereunder, because updating the procedures to reflect operational enhancements will
further facilitate the accurate clearance and settlement of securities transactions, in
particular, the settlement of aged fails. |
