[Federal Register Volume 64, Number 24 (Friday, February 5, 1999)] [Notices] [Page 5846] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-2735] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-41004; File No. SR-MBSCC-93-03] Self-Regulatory Organizations; MBS Clearing Corporation; Order Granting Approval of a Proposed Rule Change Increasing the Number of Directors January 29, 1999. On November 5, 1998, MBS Clearing Corporation (``MBSCC'') filed with the Securities and Exchange (``Commission'') the proposed rule change (File No. SR-MBSCC-98-03) pursuant to Section 19(b)(1) of the Securities and Exchange Act of 1934 (``Act'').\1\ Notice of the proposal was published in the Federal Register on November 30, 1998.\2\ For the reasons discussed below, the Commission is approving the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ Securities and Exchange Act Release No. 34-40702 (November 23, 1998) 63 FR 65831. --------------------------------------------------------------------------- I. Description The rule change amends Article 3, Section 3.1 of MBSCC's By-laws to increase the number of directors on its board from thirteen to fifteen.\3\ Currently, MBSCC has thirteen directors divided into three classes. Classes I and II each consist of four directors, and Class III consists of five directors. Under the rule change, each class will now consist of five directors. --------------------------------------------------------------------------- \3\ Article 3, Section 3.1 governs the number, election, and term of office of directors. --------------------------------------------------------------------------- MBSCC's shareholders agreement provides that one director represents management, one director represents the National Securities Clearing Corporation, and the remaining directors represent MBSCC's participants. Under the rule change, the two additional directors will represent MBSCC's participants. II. Discussion Section 17A(b)(3)(C) \4\ 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 MBSCC's board is consistent with the Act's fair representation requirements because the addition of two directors will increase the opportunity for participants to be represented on MBSCC's board and should allow the board to more accurately reflect its membership. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78q-1(b)(3)(C). --------------------------------------------------------------------------- III. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular with Section 17A of the Act and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. MBSCC-98-03) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.\5\ --------------------------------------------------------------------------- \5\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-2735 Filed 2-4-99; 8:45 am] BILLING CODE 8010-01-M