[Federal Register Volume 59, Number 214 (Monday, November 7, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-27441] [[Page Unknown]] [Federal Register: November 7, 1994] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-34921; File No. SR-MCC-94-12] Self-Regulatory Organization; the Midwest Clearing Corporation; Order Granting Accelerated Approval of Proposed Rule Change Enabling Midwest Clearing Corporation To Enter Into Contracts With Participants To Provide Custodial, Transactional, and Related Services on Behalf of Participants October 31, 1994. On October 11, 1994, The Midwest Clearing Corporation (``MCC'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change (File No. SR-MCC-94-12) pursuant to Section 19(b) of the Securities Exchange Act of 1934 (``Act'').\1\ Notice of the proposal appeared in the Federal Register on October 19, 1994.\2\ No comment letters were received. For the reasons discussed below, the Commission is approving the proposed rule change on an accelerated basis. --------------------------------------------------------------------------- \1\15 U.S.C. 78s(b) (1988). \2\Securities Exchange Act Release No. 34834 (October 13, 1994), 59 FR 52851 [File No. SR-MCC-94-12] (notice of proposed rule change). --------------------------------------------------------------------------- I. Description of the Proposal The purpose of the proposed rule change is to permit MCC to enter into contracts with any of its participants whereby MCC will provide transactional processing and data-entry services for a participant with respect to the participant's certificated securities which are not depository eligible. MCC will not be obligated to enter into such contracts with any participant, and if it chooses to enter into such a contract, it will not be obligated to do so on similar terms available to any other participant. II. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder and particularly with the requirements of Sections 17A(b)(3) (A) and (F).\3\ Sections 17A(b)(3) (A) and (F) require that the rules of a clearing agency be designed to assure the safeguarding of funds and securities in the custody and control of the clearing agency or for which it is responsible. The Commission believes that MCC's service is consistent with this obligation. --------------------------------------------------------------------------- \3\15 U.S.C. 78q-1(b)(3) (A) and (F) (1988). --------------------------------------------------------------------------- The service provides custodian, transaction processing, and related data-entry services with respect to certificated securities not eligible for book-entry processing. Participants have been experiencing a continual decline in their activity associated with the processing of physical securities primarily due to the increase in book-entry eligibility of securities at the clearing agency level. These participants no longer find it desirable to maintain their own custodial operations and have requested MCC provide such custodial and processing services as part of MCC's operations. The Commission believes that MCC's proposed rule change should help to minimize inefficient procedures employed by individual participants by concentrating these operations in one centralized facility. As a result, the individual participants will be able to eliminate their own operations and the high fixed costs associated with them while maintaining the required safeguarding of these securities. MCC has requested that the Commission find good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice of the filing. The Commission finds good cause for so approving the proposed rule change because accelerated approval will allow MCC to implement the service more expediently and thereby should provide saving and efficiency to those participants that enter into such service contracts with MCC. III. Conclusion For the reasons stated above, the Commission finds that MCC's proposal is consistent with the Act,\4\ and the rules and regulations thereunder. --------------------------------------------------------------------------- \4\15 U.S.C. 78q-1 (1988). --------------------------------------------------------------------------- It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\5\ that the proposed rule change (File No. SR-MCC-94-12) be, and hereby is, approved on an accelerated basis. \5\15 U.S.C. 78s(b)(2) (1988). --------------------------------------------------------------------------- For the Commission of the Division of Market Regulation, pursuant to delegated authority.\6\ --------------------------------------------------------------------------- \6\17 CFR 200.30-3(a)(12) (1994). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 94-27441 Filed 11-4-94; 8:45 am] BILLING CODE 8010-01-M