[Federal Register Volume 59, Number 247 (Tuesday, December 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31672]


[[Page Unknown]]

[Federal Register: December 27, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35117; File No. SR-MSTC-94-15]

 

Self-Regulatory Organizations; the Midwest Securities Trust 
Company; Notice of Filing and Order Granting Accelerated Approval of 
Proposed Rule Change Deferring Its Next Annual Meeting

December 19, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 4, 1994, the 
Midwest Securities Trust Company (``MSTC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change (File 
No. SR-MSTC-94-15) as described in Items I and II below, which items 
have been prepared primarily by MSTC. The Commission is publishing this 
notice and order to solicit comments on the proposed rule change 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) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    MSTC proposes to defer its next annual meeting until the regularly 
scheduled meeting in April 1995.

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 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. MSTC 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

    The Commission recently approved certain changes to MSTC's Rules 
and By-laws relating to the election of MSTC's Board of Directors.\2\ 
MSTC's 1994 annual meeting was originally postponed because of the 
pending rule filing. Pursuant to the Commission's order approving the 
filing, the size of the MSTC Board was expanded to thirty-one, the same 
size as the Board of its parent, the Chicago Stock Exchange (``CHX''). 
The filing also amended MSTC's By-laws to make the members of the MSTC 
Board and nominating committee the same as those of the CHX.
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    \2\Securities Exchange Act Release No. 34608 (October 13, 1994), 
59 FR 46074 [File No. SR-MSTC-94-09]. The Commission concluded at 
that time that the new rules were consistent with the fair 
representation requirements under the Act.
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    The CHX/MSTC nominating committee imminently will be commencing 
deliberations for its slate of candidate for the 1995 annual meetings, 
of CHX, MCC, and MSTC to be held in April 1995. Because of this, MSTC 
and its shareholder CHX do not believe that it is in the best interests 
of MSTC to have a 1994 annual meeting in such close proximity to the 
1995 annual meeting. To do so will not only make the nominating 
committee's work extremely difficult (i.e., preparing for two meetings 
at once) but also could confuse participants of MSTC. Thus the purpose 
of the proposal is to avoid the confusion and burden of holding a 1994 
annual meeting within a few months of the scheduled date of the 1995 
annual meeting.
    The proposed rule change is consistent with Section 17(A)(b)(3)(F) 
of the Act in that it fosters cooperation and coordination with persons 
engaged in the clearance and settlement of securities transactions.

(B) Self-Regulatory Organization's Statements on Burden on Competition.

    MSTC believes that no burden will be placed on competition as a 
result of the proposed rule change.

(C) Self-Regulatory Organization's Statement Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    MSTC neither solicited nor received written comments on the 
proposed rule change.

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

    Section 17A(b)(3)(F) of the Act requires that the rules of the 
clearing agency foster cooperation and coordination with persons 
engaged in the clearance and settlement of securities transactions.\3\ 
The proposal to not hold the 1994 annual meeting so close to the 
regularly scheduled 1995 annual meeting should avoid confusion among 
the participants arising from having to consider two director elections 
within a few months. (I.e., directors elected in 1994 would only serve 
for the few months prior to the 1995 election held during the 1995 
Board meeting.) In addition, the limited term of a few months for a 
Board elected at this time could create confusion for participants.
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    \3\15 U.S.C. 78q-1(b)(3)(F) (1988).
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    The proposal to not hold the 1994 annual meeting also should avoid 
the financial burden of holding two annual meetings within such a short 
period of time. The Commission agrees with MSTC that the burden and 
costs of holding a 1994 annual meeting at this time would be greatly in 
excess of its usefulness.
    Section 17A(b)(3)(C) of the Act requires that the rules of the 
clearing agency assure fair representation of its shareholders and 
participant in the selection of its directors.\4\ Because the current 
Board was elected pursuant to MSTC rules designed to assure such fair 
representation, the Commission believes that retaining the current 
Board for a few additional months until the successor Board can be 
elected in an orderly fashion is consistent with the fair 
representation requirements under the Act.
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    \4\15 U.S.C. 78q-1(b)(3)(C) (1988).
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    MSTC has requested that the Commission find good cause for 
approving the proposed rule changes prior to the thirtieth day after 
the date of publication of notice of the filing. The Commission finds 
good cause for so approving the proposed rule because in order to hold 
their 1995 annual meeting in April, MSTC must begin preparations now.

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 at the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filings also will be available for 
inspection and copying at the principal office of MSTC. All submissions 
should refer to the File No. SR-MSTC-94-15 and should be submitted by 
January 17, 1995.
    It is therefore ordered, pursuant to Section 19(b)(2) that the 
proposed rule change (File No. SR-MSTC-94-15) is hereby approved.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-31672 Filed 12-23-94; 8:45 am]
BILLING CODE 8010-01-M