[Federal Register Volume 59, Number 114 (Wednesday, June 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14530]


[[Page Unknown]]

[Federal Register: June 15, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34188; File No. SR-MSTC-93-13]

 

Self-Regulatory Organizations; Midwest Securities Trust Company; 
Order Approving Proposed Rule Change to Rescind Signature Distribution 
and Signature Guarantee Programs

June 9, 1994.
    On December 15, 1993, the Midwest Securities Trust Company 
(``MSTC'') filed a proposed rule change (File No. SR-MSTC-93-13) with 
the Securities and Exchange Commission (``Commission'') pursuant to 
Section 19(b) of the Securities Exchange Act of 1934 (``Act'').\1\ 
Notice of the proposal was published in the Federal Register on March 
3, 1994, to solicit comments from interested persons.\2\ No comments 
have been received by the Commission. This order approves the proposal.
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    \1\15 U.S.C. 78s(b) (1988).
    \2\Securities Exchange Act Release No. 33669 (February 23, 
1994), 59 FR 10189.
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I. Description of the Proposal

    On January 6, 1992, the Commission promulgated Securities Exchange 
Act Rule 17Ad-15.\3\ That rule permits transfer agents to reject 
signature guarantees from eligible guarantor institutions if the 
eligible guarantor institutions are not part of a signature guarantee 
program, as defined in Rule 17Ad-15. Additionally, the new rule renders 
obsolete the MSTC's existing Signature Guarantee Program (MSTC Rules, 
Article III, Rule 5, Section 1) and MSTC's existing Signature Guarantee 
Program (MSTC Rules, Article III, Rule 5, Section 2). Therefore, to 
avoid costs that produce no benefits, MSTC seeks to eliminate its 
Signature Distribution and Signature Guarantee Programs and to delete 
from its Rules Article III, Rule 5, Sections 1 and 2 which govern these 
programs.
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    \3\17 CFR 240.17Ad-15 (1993).
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II. Discussion

    The Commission believes that the proposal is consistent with the 
Act and particularly with Section 17A of the Act.\4\ Sections 
17A(b)(3)(A) and (F) of the Act\5\ require that a clearing agency be 
organized and its rules be designed to facilitate the prompt and 
accurate clearance and settlement of securities transactions. Moreover, 
Section 17A(a)(1) of the Act\6\ calls for the use of efficient, 
effective, and safe procedures in the clearance and settlement of 
securities transactions.
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    \4\15 U.S.C. 78q-1 (1988).
    \5\15 U.S.C. 78q-1(b)(3)(A) and (F) (1988).
    \6\15 U.S.C. 78q-1(a)(1) (1988).
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    The proposed rule change rescinds MSTC's Signature Distribution and 
Signature Guarantee Programs, two programs which have been rendered 
obsolete by the Commission's adoption of Rule 17Ad-15. The Commission 
agrees with MSTC that it would be wasteful and inefficient for a 
clearing agency to have to maintain such obsolete programs. The 
Commission believes that MSTC's rescission of the two programs and 
their related rules will facilitate prompt and accurate clearnace and 
settlement of securities transactions by making MSTC, its rules, and 
its procedures more efficient and effective.

III. Conclusion

    For the reasons discussed above, the Commission believes that the 
proposal is consistent with the requirements of the Act, particularly 
with those of Section 17A of the Act, and the rules and regulations 
thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the above-mentioned proposed rule change (File No. SR-
MSTC-93-13) be, and hereby is, approved.

    \7\15 U.S.C. 78s(b)(2) (1988).
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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-14530 Filed 6-14-94; 8:45 am]
BILLING CODE 8010-01-M