[Federal Register Volume 62, Number 136 (Wednesday, July 16, 1997)]
[Notices]
[Pages 38178-38179]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18610]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38827; File No. SR-NSCC-97-06]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Order Granting Accelerated Approval
of a Proposed Rule Change To Increase the Size of the Board of
Directors
July 9, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 15, 1997, the National
Securities Clearing Corporation (``NSCC'') filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II below, which items have been prepared
primarily by NSCC. The Commission is publishing this notice and order
to solicit comments from interested persons and to grant accelerated
approval of the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The proposed rule change will amend NSCC's shareholders agreement
and by-laws to increase NSCC's board of directors by one member and to
create a new category of director.
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. NSCC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such
statements.\2\
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\2\ The Commission has modified the text of the summaries
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to increase the size of
NSCC's board from twenty to twenty-one directors and to create a new
``Industry Director'' category. Article II, Section 2.1 of NSCC's by-
laws, ``Number and Classification of Directors,'' currently provides
for a board of twenty directors. NSCC's shareholders agreement
currently provides for three categories of directors. ``Shareholder
Directors'' represent each of NSCC's three shareholders: the New York
Stock Exchange, the American Stock Exchange, and the National
Association of Securities Dealers. The ``Management Director,''
typically NSCC's President, represents management. ``Participant
Directors'' represent and are selected from NSCC's participants.\3\
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\3\ Currently, there are three Shareholder Directors, one
Management Director, and sixteen Participant Directors. Securities
Exchange Act Release No. 36570 (December 11, 1995), 60 FR 64466
(order approving proposed rule change to amend by-laws to add an
additional board member).
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NSCC's board has determined that it would be in the beneficial
interest of NSCC to create one new board seat to be filled by a senior
level securities industry official designated by the board. Because
such a seat would not necessarily fall within any of the existing
director categories, NSCC proposes that its shareholders agreement and
by-laws be amended to accommodate this new director category.\4\
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\4\ As with all new director positions created after 1977, the
Industry Director will be assigned to one of the board's three
classes. Assignments are apportioned so that the classes are as
nearly equal in number as possible.
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NSCC believes the proposed rule change is consistent with the
requirements of Section 17A(b)(3)(F) \5\ of the Act because it allows
NSCC's board to benefit from the participation of an experienced
securities industry official in the administration of NSCC's affairs.
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\5\ 15 U.S.C. 78q-1(b)(3)(F).
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(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
Section 17A(b)(3)(F) \6\ of the Act requires that the rules of a
clearing agency must be designed to foster cooperation and coordination
with persons engaged in the clearance and settlement of securities
transactions. The Commission understands that initially the new
Industry Director category will be filled by an officer of DTC, which
should result in NSCC and DTC being better able to coordinate their
activities. Thus, the Commission believes that NSCC's proposal is
consistent with Section 17A(b)(3)(F) of the Act.
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\6\ Id.
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NSCC requests 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
exists for approving the proposed rule change prior to the thirtieth
day after the date of publication of notice of the filing because
accelerated approval will permit NSCC's board to appoint the new
Industry Director at the next shareholder's meeting which is scheduled
for July 15, 1997.
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 between the
[[Page 38179]]
Commission and any person, other than those that may be withheld from
the public in accordance with the 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 also will be available for inspection and copying
at the principal office of NSCC. All submissions should refer to File
No. SR-NSCC-97-06 and should be submitted by August 6, 1997.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-NSCC-97-06) be, and hereby
is, approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-18610 Filed 7-15-97; 8:45 am]
BILLING CODE 8010-01-M