[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]


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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.
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    \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).
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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.
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    \3\15 U.S.C. 78q-1(b)(3) (A) and (F) (1988).
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    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.
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    \4\15 U.S.C. 78q-1 (1988).
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    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).
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    For the Commission of the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-27441 Filed 11-4-94; 8:45 am]
BILLING CODE 8010-01-M