[Federal Register Volume 59, Number 80 (Tuesday, April 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10007]


[[Page Unknown]]

[Federal Register: April 26, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33928; File No. SR-PSE-94-8]

 

Self-Regulatory Organizations; Filing of Proposed Rule Change by 
the Pacific Stock Exchange, Inc. Relating to Amendments to its Listing 
Fee Schedule for Listed Companies

April 19, 1994.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on March 8, 
1994, the Pacific Stock Exchange, Inc. (``PSE'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I and II below, which 
Items have been prepared by the self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PSE is proposing to make certain changes to its Listing Fee 
Schedule for listed companies. The Fee Schedule is proposed to be 
amended as follows:\1\
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    \1\With respect to the following schedule, italicizing indicates 
new material and brackets indicate material to be deleted. 

Original Listings:                                                      
  Common Stock, Dual Listing....................   $10,000.00           
  Common Stock, Exclusive Listing...............    20,000.00           
Processing Fee:                                                         
  Per Original Listing Application..............    \1\500.00   [250.00]
Annual Maintenance Fee:                                                 
  For one issue, Dual listing...................     1,000.00           
  For one issue, Exclusive listing..............     2,000.00           
                                                                        
\1\This is a fixed charge for the review of potential listings and is   
  not refundable. Issues approved by the Equity Listing Committee may   
  have this charge credited towards the original listing fee.           

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the fee increase and discussed 
any comments it received on the fee increase. The text of these 
statements may be examined at the places specified in Item IV below. 
The Exchange has prepared summaries, set forth in Sections A, B, and C 
below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    The exchange is proposing to amend its fees for listed companies. 
Specifically, the Exchange is proposing, first, to increase its 
original listing fee for the common stock of exclusively listed 
companies from $10,000 to $20,000. Second, the Exchange is proposing to 
increase its initial processing fee, applicable to all original listing 
applications, from $250 to $500. Third, the Exchange is proposing to 
increase its annual maintenance fee for exclusively listed companies 
from $1,000 to $2,000.
    The Exchange is proposing these changes in order to offset rising 
costs associated with maintaining listing services and related overhead 
expenses.
(2) Statutory Basis
    The Exchange believes that the proposed fee increases are 
consistent with Section 6(b) of the Act in general and furthers the 
objectives of Section 6(b)(4) in particular in that they are intended 
to assure the equitable allocation of reasonable dues, fees, and other 
charges among members, issuers, and other persons using the Exchange's 
facilities.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants or others.

    No written comments were solicited or received with respect to the 
fee increase.

III. Date of Effectiveness of the Proposed rule Change and Timing for 
Commission Action

    Within 35 days of the publication of this notice in the Federal 
Register or within such other period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33927; File No. SR-PTC-94-01]

Self-Regulatory Organizations; Participants Trust Company; Filing 
of Proposed Rule Change Relating to the Eligibility of Certain 
Securities Guaranteed by the Government National Mortgage 
Association

April 19, 1994.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 4, 1994, the 
Participants Trust Company (``PTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change (File No. 
SR-PTC-94-01) as described in Items I, II, and III below, which Items 
have been prepared primarily by the self-regulatory organization. On 
April 15, 1994, PTC filed Amendment No. 1 to the proposed rule 
change.\2\ The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\Letter from Carol Jamison, Assistant Vice President and 
Associate Counsel, PTC, to Ari Burstein, Attorney, Division of 
Market Regulation, Commission (April 15, 1994).
    The amendment changes the date on which principal and interest 
on the GNMA REMIC will be payable from the fifteenth calendar day of 
the month as was originally proposed, to the sixteenth calendar day 
of the month. In addition, issuers of REMIC-eligible MBS will not be 
required to pay or report principal and interest electronically, as 
was originally proposed.
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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 allow PTC to designate certain 
securities guaranteed by the Government National Mortgage Association 
(``GNMA'') as ``eligible securities'' as permitted by Article I, Rule 2 
of PTC's Rules (``GNMA Securities'').

II. Self-Regulatory Organization's Statement of the Purpose of and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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. The self-regulatory organization 
has prepared summaries, set forth in sections A, B, and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to allow PTC to 
designate certain securities guaranteed by GNMA as eligible securities 
as permitted by Article I, Rule 2 of PTC's Rules. PTC currently acts as 
depository for single-class GNMA I and GNMA II mortgage-backed 
securities (``MBS'') and REMIC securities\3\ guaranteed by the 
Department of Veterans Affairs (``VA'').\4\
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    \3\REMIC is an acronym for ``real estate mortgage investment 
conduit,'' a pass-through vehicle invented pursuant to the Tax 
Reform Act of 1986 to issue multiclass mortgage-backed securities. 
Interests in REMICs may be regular (debt) or residual (equity 
interests). Downes, John and Goodman, Kordan Elliot, Dictionary of 
Finance and Investment Terms (Barron's 1987).
    \4\As of December 31, 1993, PTC had approximately 260,000 pools 
of GNMA single-class securities on deposit, representing $850 
billion in par value (95% of total GNMA single-class securities par 
value outstanding), and 71 tranches of VA REMIC securities, 
representing $4.6 billion in par value, from a total of 5 REMIC 
transactions (100% of all VA REMIC par value outstanding).
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1. Current GNMA Programs
    GNMA is a wholly-owned corporate instrumentality of the United 
States within the Department of Housing and Urban Development 
(``HUD''). Through its single-class CNMA I and GNMA II MBS programs, 
GNMA guarantees the timely payment of principal and interest on 
securities issued by private institutions and backed by pools of 
federally insured or guaranteed mortgage loans. The GNMA guarantee is 
backed by the full faith and credit of the United States.
    Each issue of GNMA I and GNMA II MBS has a single class of 
securities with one coupon rate and scheduled maturity. Annual volume 
of new GNMA guaranteed single-class MBS over the past four years has 
been approximately $65 billion in fiscal 1990, $63 billion in fiscal 
1991, $72 billion in fiscal 1992, and $143 billion in fiscal 1993. Over 
97% of this volume represents pools of single-family mortgage loans 
and, of this, over 86% are GNMA I MBS.\5\
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    \5\Approximately 95% (approximately $850 billion in par value 
and $450 million of remaining principal balance) of all GNMA I and 
GNMA II MBS are held on deposit at PTC as of December 31, 1993.
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2. Proposed GNMA REMIC Program
    GNMA is now establishing a GNMA REMIC program under which GNMA will 
guarantee multi-class securities issued by REMIC trusts. The GNMA REMIC 
securities will be issued through single-purpose trusts created by 
GNMA-approved sponsors which will assemble GNMA-guaranteed single-class 
mortgage-backed securities to constitute the corpus of the REMIC trust. 
The sponsors will be private-sector entities such as investment 
bankers.
    The Federal National Mortgage Association (``FNMA'') and the 
Federal Home Loan Mortgage Corporation (``FHLMC'') currently issue 
REMIC securities that are backed by GNMA MBS, in addition to a 
substantial volume of REMIC issues backed by their own collateral. Upon 
issuance, the General Counsel of HUD will render an opinion that GNMA's 
obligations under the GNMA guarantee of its REMIC securities will 
constitute absolute and unconditional general obligations of the United 
States, for which the full faith and credit of the United States is 
pledged.
    The authorizing Federal statute\6\ provides that the GNMA REMIC 
program be implemented by GNMA's publication of a notice in the Federal 
Register, and that GNMA subsequently publish regulations within twelve 
months of the publication of the initial notice, based upon the 
comments received and the experience of GNMA in carrying out the 
program.
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    \6\Section 306(g) of the National Housing Act, 12 USC 1721(g), 
as amended by Sec. 3004 of the Omnibus Budget Reconciliation Act of 
1993, 107 Stat. 339.
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    GNMA will implement its REMIC program in two stages. During the 
initial stage, GNMA will restrict participation in the REMIC program to 
a small number of participants (consisting of sponsors, co-sponsors, 
trustees, trust counsel, and accounting firms) and a limited number of 
REMIC issuances. The initial stage will commence upon the closing of 
the first transaction, after publication of the notice in the Federal 
Register, and is expected to last several months, during which time 
GNMA will establish standard documentation, and guidelines and 
procedures applicable to the full implementation of the REMIC 
program.\7\
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    \7\GNMA has not yet announced the date on which the initial 
stage of the REMIC program will commence, but anticipates that it 
will occur in the spring of 1994.
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    GNMA has retained Kenneth Leventhal & Company as its financial 
advisor and Hunton & Williams as its legal advisor in implementing the 
REMIC program, and is currently engaged in approving the initial 
program participants. After the initial stage, GNMA anticipates that it 
will publish a REMIC Guide containing program requirements and 
standardized documents as it does for its MBS programs.
    While GNMA has not yet determined the characteristics of the GNMA 
REMIC tranches, for processing purposes it is assumed that the GNMA 
REMIC classes will have the same basic processing requirements as the 
VA REMICs, which PTC has had on deposit for approximately the last two 
years. It is assumed that, as in the case with the VA REMIC securities, 
all classes of the GNMA REMIC securities except the residual class will 
be established and maintained in book-entry form through the facilities 
of PTC, although holders will have the right to request certificated 
securities.
    REMIC issuances will be limited during the initial stage of the 
program. Once the REMIC program is fully established, however, GNMA 
anticipates that a substantial percentage of its annual production of 
GNMA single-class securities will be securitized by GNMA REMICs, 
resulting in perhaps 100 or more REMIC transactions per year.
3. PTC as GNMA REMIC Depository
    GNMA has requested that PTC serve as custodian of the new GNMA 
REMIC security and is designating PTC as depository for the GNMA REMIC 
securities. PTC currently acts as depository for the GNMA I and GNMA II 
securities and for VA REMIC securities.
    It is anticipated that each class of the GNMA REMIC securities will 
be issued initially in the form of one or more physical certificates 
registered in the name of the Mortgage Backed Securities Clearing 
Corporation, nominee for PTC, and held in physical form by PTC's 
custodian, with participants receiving and delivering REMIC securities 
by book-entry on PTC's books. REMIC securities may be held subsequent 
to original issuance in either certificated form, outside of PTC, or on 
PTC's book-entry system, as is currently the case with the GNMA I and 
GNMA II single-class MBS and the VA REMIC securities on deposit at PTC. 
PTC's current custody agreement with its custodian, Chemical Bank, 
accommodates the deposit of GNMA REMIC securities with the custodian.
    The REMIC securities will be supported entirely by the cash flows 
on the underlying GNMA-guaranteed GNMA I MBS. REMIC trustees will be 
required to pay principal and interest (``P&I'') on the REMIC 
securities in same day funds on the 16th day of the month, or the first 
business day thereafter if the 16th is not a business day. REMIC P&I 
will therefore be paid to REMIC holders on the same day that the P&I on 
the underlying MBS is paid to MBS holders. PTC will pass through the 
REMIC payment on the same day as received.
    Not later than the 14th day of each month, the trustee will deliver 
to PTC and Chemical Bank the factor information for payment on the 
REMIC securities. PTC will follow the instructions from the trustee for 
the disbursement of funds received on the GNMA MBS collateralizing the 
REMIC trust.
    The volume of the GNMA REMIC securities initially deposited at PTC 
will be modest compared to the total face amount GNMA securities now on 
deposit at PTC (approximately $880 billion) and is expected to have a 
comparably small impact on PTC's overall transaction volume. GNMA I's 
that constitute the corpus of a GNMA REMIC trust will remain 
immobilized at PTC and, therefore, will be removed from PTC's 
transactions volume after the creation of the REMIC. In addition, CMO/
REMIC tranches historically have been less actively traded than single-
class mortgage-backed securities.
    It is expected that PTC will utilize pricing sources and the 
methodology employed for the VA REMIC pricing at PTC for the GNMA REMIC 
product. As an eligible security, functionally and legally comparable 
to GNMA single-class and VA REMIC securities, PTC's Rules and 
Procedures are currently consistent with, and govern PTC's and its 
participants' rights and obligations with respect to, the GNMA REMIC 
securities. PTC end-of-day borrowing agreements also currently apply to 
GNMA REMIC securities without change. Finally, PTC anticipates that the 
fees imposed by PTC for providing depository services for GNMA REMIC 
securities will be the same as those in effect for GNMA MBS.
    PTC believes that since the proposed rule change provides for the 
prompt and accurate clearance and settlement of securities transactions 
it is consistent with section 17A of the Act and the rules and 
regulations thereunder applicable to PTC.

B. Self-Regulatory Organization's Statement on Burden on Competition

    PTC 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

    PTC has neither solicited nor received comments on this proposed 
rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change or,
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 NW., Washington, DC 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 NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at the principal office of PTC. All submissions 
should refer to file number SR-PTC-94-01 and should be submitted by May 
17, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-10007 Filed 4-25-94; 8:45 am]
BILLING CODE 8010-01-M