The Supreme Court of the United States is sometimes referred to by the initialization – SCOTUS – as in the well regarded SCOTUSblog.  Scotus is also a name attached to one of the most famous scholars of the High Middle Ages – John Duns Scotus.   Humanist philosophers, however, later derided Scotus’ scholasticism and made his name a byword for someone who could not learn, i.e., a dunce.  Scotus wasn’t actually the scholar’s surname.  He was called Scotus because he was from Scotland.  Scotus is the late Latin for a person from Scotland.

The SEC’s proposed definition of “securities settlement system” is both unclear and unneeded

Late last month, the Securities and Exchange Commission proposed various amendments to Rule 17Ad-22, including to add the following definition:

Securities settlement system means a clearing agency that enables securities to be transferred and settled by book entry according to a set of predetermined multilateral rules.

The proposed definition is cumbersome at best.  As an initial matter, transactions or trades, not securities, are settled.  The reference to “multilateral rules” is unclear.  It seems to me that “multilateral” refers to the basis on which transactions are netted, i.e., among multiple parties, and not the netting rules themselves.

Fundamentally, I question the need for the definition.  As proposed to be amended, Rule 17Ad-22 would use the term “securities settlement system” only once – as part of the definition of “covered clearing agency”.  Further, the term “securities settlement system” does not appear in the Securities Exchange Act of 1934 or the SEC’s existing rules.