NSCC Proposed Rule Change: File No. SR-NSCC-01-01

File No. SR-NSCC-01-01

Securities and Exchange Commission

Washington, D.C. 20549

______________________________

Form 19b-4

Proposed Rule Change

NATIONAL SECURITIES CLEARING CORPORATION

Pursuant to Rule 19b-4 under the

Securities Exchange Act of 1934

1. Text of Proposed Rule Change.

(a) The proposed rule change provides Fund Members with a partial discount of their year 2000 service fees.

(b) Not applicable.

2. Procedures of the Self-Regulatory Organization.

(a) The proposed rule change has been approved pursuant to delegated authority.

(b) Contact regarding questions and comments:

Richard J. Paley (212) 855-3205

3. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change.

(a) The purpose of the proposed rule filing is to provide a one time discount to NSCC Fund Members for Fund/Serv fees.

The Board of Directors of NSCC has determined to provide Rule 51 Fund Members with a one-time partial discount of their year 2000 Fund/Serv transaction fee, which is $.25 per side per order or transfer request.¹ This decision was made because of an increase in year 2000 gross margins due to a rise in Fund/Serv transaction volumes and a determination not to fund certain Fund/Serv development work at this time.

NSCC intends to give Fund Members the benefit of this discount for the twelve months ending December 31, 2000. Based upon individual transaction volumes, each Fund Member will receive a proportional share of an amount equivalent to 50% of the net excess revenues generated by the Fund/Serv service during the year 2000 period. The necessary adjustments to accommodate the refund will be reflected in billing statements transmitted to Fund Members in February 2001.

(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, since it provides for the equitable allocation of fees and other charges among NSCC participants.

4. 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.

5. Self-Regulatory Organizations 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.

6 Extension of Time Period for Commission Action.

Not applicable.

7. Basis for Summary Effectiveness Pursuant to Section 19(b)(3) or for Accelerated Effectiveness Pursuant to Section 19(b)(2).

(a) The proposed rule change is to take effect pursuant to paragraph (A) of Section 19(b)(3) of the Act.

(b) The proposed rule change effects a change in an existing service of a registered clearing agency that (A) does not adversely effect the safeguarding of securities or funds in the custody or control of the clearing agency for which it is responsible and (B) does not significantly affect the respective rights or obligations of the clearing agency or persons using the service.

(d) Not applicable.

8. Proposed Rule Change Based on Rules of Another Self-Regulatory Organization or of the Commission.

The proposed rule change is not based on a rule either of another self-regulatory organization or of the Commission.

9. Exhibits.

Exhibit A - Notice of proposed rule change for publication in the Federal Register.

SIGNATURES

Pursuant to the requirements of the Act, the self-regulatory organization has duly caused this filing to be signed on its behalf by the undersigned thereunto duly authorized.

NATIONAL SECURITIES CLEARING CORPORATION

By:_____________________________________

Karen L. Saperstein

Managing Director

Exhibit A

SECURITIES AND EXCHANGE COMMISSION

(Release No. 34- ; File No. SR-NSCC-01-01)

Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of a Proposed Rule Change In Respect of NSCC Rules.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the "Act"), 15 U.S.C. §78s(b)(1), notice is hereby given that on , 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 by NSCC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change.

The proposed rule change is in respect of NSCC's 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, NSCC 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. Set forth in sections (A), (B) and (C) below, are 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.

(a) The purpose of the proposed rule filing is to provide a one time discount to NSCC Fund Members for Fund/Serv fees.

(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, since it provides for the equitable allocation of dues, fees and other charges among NSCC's participants.

(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) of the Act and subparagraph (e) of Securities Exchange Act rule 19b-4. 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.

IV. Solicitation of Comments.

Interested persons are invited to submit written data, views and arguments concerning the foregoing. 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 that are filed with 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 provisions of 5 U.S.C. §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 will also be available for inspection and copying at the principal office of the NSCC. All submissions should refer to the file number in the caption above and should be submitted within days after the date of this publication.

For the Commission by the Division of Market Regulation, pursuant to delegated authority.

Jonathan G. Katz

Secretary

Dated: