[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31883]


[Federal Register: December 28, 1994]


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

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35129; File No. SR-DGOC-94-05]


Self-Regulatory Organizations; Delta Government Options Corp.; 
Order Approving Proposed Rule Change Relating to Procedures for 
Emergency Contingencies and Disaster Recovery

December 20, 1994.
    On September 9, 1994, pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ the Delta Government 
Options Corp. (``Delta'') filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change to establish 
procedures for emergency contingencies and disaster recovery. On 
September 23, 1994, Delta filed an amendment to the proposed rule 
change.\2\ On November 10, 1994, the Commission published notice of the 
proposed rule change in the Federal Register to solicit comments from 
interested persons.\3\ No comments were received. This order approves 
the proposal.
---------------------------------------------------------------------------

    \1\15 U.S.C. Sec. 78s(b)(1) (1988).
    \2\Letter from Barry E. Silverman, President, Delta, to Jerry W. 
Carpenter, Assistant Director, Securities Processing Regulation, 
Division of Market Regulation, Commission (September 22, 1994).
    \3\Securities Exchange Act Release No. 34939 (November 3, 1994), 
59 FR 56099.
---------------------------------------------------------------------------

I. Description

    The proposed rule change modifies Delta's Over-The-Counter Options 
Trading System Procedures (``Procedures'') to establish emergency 
contingencies and disaster recovery procedures. In particular, the 
proposal adopts a new Article XIX to Delta's Procedures. Article XIX 
contains provisions governing (1) the waiver or suspension of Delta's 
procedures (Section 1901); (2) action on behalf of Delta by Delta's 
management (Section 1902); and (3) interpretation by Delta's management 
of Delta's rules (Section 1903).
    Section 1901 permits Delta's Board of Directors, Chairman of the 
Board, President, Vice President, Chief Financial Officer, Secretary, 
or Controller (1) to extend the time fixed by any provision of Delta's 
Procedures or any regulations issued by Delta for the doing of any act 
or acts or (2) to waive or to suspend any provision of Delta's 
Procedures or any regulations issued by Delta if they judge such 
extensions, waiver, or suspension to be necessary or expedient. The 
extension, waiver, or suspension may remain in effect only for sixty 
days unless approved by Delta's Board of Directors.
    Section 1901 requires that a written report of the extension, 
waiver, or suspension be filed with Delta and be available for 
inspection by any participant. The written report must set forth the 
pertinent facts, the identity of the person who authorized the 
extension, waiver, or suspension, and the reason the extension, waiver, 
or suspension was deemed necessary or expedient. No written report will 
be required for extensions of time of less than eight hours.
    Section 1902 permits Delta's Board of Directors, Chairman of the 
Board, President, Vice President, Chief Financial Officer, Secretary, 
Controller, or other persons designated by Delta's Board of Directors 
to act on behalf of Delta except where Delta's Procedures require 
action by the Board of Directors. Section 1903 authorizes Delta's Board 
of Directors, Chairman of the Board, President, any committee of the 
Board of Directors, or any designee of the Board of Directors to 
interpret Delta's Procedures.

II. Discussion

    Section 17A(b)(3)(F) of the Act provides that the rules of a 
clearing agency must promote the prompt and accurate clearance and 
settlement of securities transactions and must assure the safeguarding 
of securities and funds which are in the custody or control of the 
clearing agency or for which it is responsible.\4\ The proposed rule 
change establishes contingency planning and disaster recovery 
procedures that can be used in the event of an emergency, market 
disruption, or other unanticipated event in order to permit Delta to 
maintain continuous operations while safeguarding the assets under its 
custodianship. The Commission believes that the proposed rule change 
strikes an appropriate balance between permitting management to respond 
quickly to emergencies without giving upper management unwarranted 
discretion.
---------------------------------------------------------------------------

    \4\15 U.S.C. Sec. 78q-1(b)(3)(F) (1988).
---------------------------------------------------------------------------

III. Conclusion

    For the reasons stated above, the Commission finds that the 
proposed rule change is consistent with Section 17A of the Act.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DGOC-94-05) be, and hereby 
is, approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-31883 Filed 12-27-94; 8:45 am]
BILLING CODE 8010-01-M