[Federal Register Volume 63, Number 81 (Tuesday, April 28, 1998)]
[Notices]
[Pages 23326-23327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11213]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39898; File No. SR-Philadep-98-01]
Self-Regulatory Organizations; Philadelphia Depository Trust
Company; Notice of Filing and Order Granting Accelerated Approval of
Proposed Rule Change Relating to an Increase in the Number of Directors
April 21, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 31, 1998, the
Philadelphia Depository Trust Company (``Philadep'') filed with the
Securities and Exchange Commission (``Commission''), as amended on
April 21, 1998, the proposed rule change as described in Items I and II
below, which items have been prepared primarily by Philadep. 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 involves an amendment to Philadep's by-
laws and articles of incorporation to increase the number of directors
on board from between 5 and 9 to between 5 and 23 and to include the
president of Philadep on its board.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Philadep 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. Philadep 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 Philadep.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed rule change will amend Philadep's by-laws and articles
of incorporation to increase the permitted size of the board from
between 5 and 9 directors to between 5 and 23 directors and to include
the president of Philadep on its board. According to Philadep, all
other provisions of the by-laws prescribing the composition of the
board will remain unchanged. According to Philadep, the rule change is
desirable due to the interest of the Board of Governors of the
Philadelphia Stock Exchange (``Phlx'') to more fully participate in the
operation and control of Philadep.
Philadep also believes that a larger board will provide greater
diversity and add policy making expertise to the process. In addition,
Philadep believes that a Philadep board comprised of members from Phlx
will allow greater coordination in scheduling meetings involving
members from both the boards.\3\
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\3\ Telephone conversation between Edith Hallahan, Counsel,
Philadep, and Greg Dumark, Attorney, Division of Market Regulation,
Commission (April 20, 1998).
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Philadep believes that the proposed rule change provides for the
fair representation of shareholders and participants in the selection
of Philadep's directors and in the administration of Philadep's affairs
and therefore that it is consistent with Section 17A(b)(3)(C) of the
Act and the rules and regulations thereunder applicable to Philadep.\4\
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\4\ 15 U.S.C. 78q-1(b)(3)(C).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
Philadep does not believe that the proposed rule change will impose
any burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
Philadep has not solicited and does not intend to solicit comments
on this proposed rule change. Philadep has not received any unsolicited
written comments from participants or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Section 17A(b)(3)(C) provides that the rules of a clearing agency
must provide for the fair representation of its shareholders or members
and participants in the selection of directors. The Commission believes
that the increase in the size of Philadep's board is consistent with
the Act's fair representation requirements because the resized board
should allow the board to more accurately reflect the controlling
interest of the Phlx and its Board of Governors while still providing
for fair representation of Philadep's participants.
Philadep has required 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 in order that this increase
be implemented at the meeting of Phlx's board of directors scheduled
for April 22, 1998. The Commission finds good cause for approving the
proposed rule change prior to the thirtieth day after publication of
notice because such approval will allow the Phlx to increase Philadep's
board size at its April 22, 1998, meeting.\5\
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\5\ John Rudolph, Supervisory Trust Analyst, Board of Governors
of the Federal Reserve Board, concurred with the Commission's
granting of accelerated approval per a telephone conversation on
April 21, 1998.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. 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 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 Philadep. All
submissions should refer to File No. SR-Philadep-98-01 and should be
submitted by May 19, 1998.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\6\ that the
[[Page 23327]]
proposed rule change (File No. SR-Philadep-98-01) be and hereby is
approved.
\6\ 15 U.S.C. 78s(b)(2).
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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. 98-11213 Filed 4-27-98; 8:45 am]
BILLING CODE 8010-01-M