[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14784]


[[Page Unknown]]

[Federal Register: June 17, 1994]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34200; File No. SR-MSTC-94-08]

 

Self-Regulatory Organizations; Midwest Securities Trust Company; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Reorganization Processing

June 10, 1994.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 5, 1994, the Midwest 
Securities Trust Company (``MSTC'') filed with the Securities and 
Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by MSTC. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\15 U.S.C. section 78s (b)(1) (1988).
---------------------------------------------------------------------------

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

    The proposed rule change adds to Article IV of MSTC's rules an 
interpretation which describes the Reorganization Processing System.

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

    In its filing with the Commission, MSTC included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. MSTC has prepared summaries, set forth in sections A, B, 
and C below, or 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

    The purpose of the rule filing is to set forth in MSTC's rules the 
fact that MSTC may provide reorganization notices by computer facility. 
The computer facility that MSTC developed for the purpose of providing 
reorganization notices is a user-friendly, real-time computer system 
that allows participants, through the use of intuitive, data-driven 
displays, to view offer information on-line. It will allow MSTC 
participants to inquire as to various offer criteria, including offer 
type(s), target CUSIP(s), MSTC offer status, and offer date(s). 
Participants will be able to tailor their inquiries to only those 
offers in which they have a depository position. They may also view the 
location of a position within their MSTC account(s) for a chosen CUSIP. 
In addition, participants will be able to inquire as to a CUSIP's 
reorganization history.
    Rule 4 of Article IV of MSTC's rules describes MSTC's activities 
with respect to reorganizations, and sections 3 and 4 of Rule 2 of 
Article IV describe MSTC's responsibilities with respect to 
reorganization information disseminated by MSTC. Pursuant to these 
rules, MSTC currently provides daily notification of newly announced 
and updated corporate reorganization offers to its participants through 
manually produced, hard-copy notices. MSTC produces these notices, 
which include pertinent offer information, for a variety of offer types 
including, but not limited to, mergers, reverse splits, tenders and 
exchanges, expiring rights and warrants, put options on corporate and 
municipal bonds, and expiring convertible securities.
    Each current notice includes a disclaimer to the effect that MSTC 
does not guarantee the correctness or completeness of the information 
provided. This liability standard has been used for over twenty years 
and was part of MSTC's written procedures when MSTC applied for and 
received permanent registration as a clearing agency. The proposed 
interpretation sets forth language that limits MSTC's liability with 
respect to the information provided by computer. The liability standard 
is substantially the same as the standard for the hard copy notices.
    The proposed rule change is consistent with section 17A of the Act 
in that it will facilitate the prompt and accurate clearance and 
settlement of securities transactions.

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

    MSTC 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

    Written comments were not and are not intended to be solicited with 
respect to the proposed rule change, and none have been received.

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

    MSTC requests that the proposed rule change become effective upon 
filing pursuant to 19(b)(3)(A)(iii)\2\ of the Act and subparagraph 
(e)(4) of rule 19b-4\3\ thereunder. The foregoing rule change effects a 
change in an existing service that does not adversely affect the 
safeguarding of securities or funds in the custody or control of MSTC 
or for which MSTC is responsible and does not significantly affect the 
respective rights or obligations of MSTC or persons using the service. 
At any time within sixty days of the filing of such rule change, the 
Commission may summarily abrogate such rule change if it appears to the 
Commission that such action is necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act.
---------------------------------------------------------------------------

    \2\15 U.S.C. section 78s(b)(3)(A)(iii) (1988).
    \3\17 CFR Sec. 240.19b-4(e)(4) (1993).
---------------------------------------------------------------------------

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. section 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 the above-referenced 
self-regulatory organization.
    All submissions should refer to File No. SR-MSTC-94-08 and should 
be submitted by July 8, 1994.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

    \4\17 CFR Sec. 200.30-3(a)(12) (1993).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-14784 Filed 6-16-94; 8:45 am]
BILLING CODE 8010-01-M