[Federal Register Volume 60, Number 13 (Friday, January 20, 1995)]
[Notices]
[Page 4210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1496]



[[Page 4210]]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35229; File No. SR-MSTC-94-20]


Self-Regulatory Organizations; Midwest Securities Trust Company; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Adopting Procedures for Payment of Interest to Participants

January 13, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 28, 1994, the 
Midwest Securities Trust Company (``MSTC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change (File 
No. SR-MSTC-94-20) as described in Items I, II, and III below, which 
Items have been prepared primarily by the self-regulatory organization. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

    \1\15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change modifies MSTC's procedures with respect to 
the payment of interest on bond issues of Orange County, California, 
related agencies and instrumentalities, and any entity participating in 
the Orange County Investment Pools (collectively referred to as 
``Orange County Bond Issues'').

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

    MSTC's rules permit MSTC to adopt procedures with respect to the 
payment of interest to participants.\2\ In light of Orange County, 
California's recent bankruptcy filing, MSTC is changing its procedures 
with respect to cash payments of interest on any Orange County Bond 
issue. Specifically, as a result of the bankruptcy filing and the 
uncertainty as to the effects of this action on Orange County Bond 
Issues, MSTC will allocate interest payments on these issues as funds 
are received from the paying agents. Additionally, MSTC will refund to 
participants any investment earnings on delayed payments received on 
Orange County Bond Issues in accordance with its established 
procedures.

    \2\MSTC Rules, Article IV, Rule 1, Section 3, ``Shareholder 
Services, Dividends and Interest Payments.''
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    MSTC will continue to actively monitor information being released 
pertaining to events in Orange County, California. However, since it is 
too early to assess the full impact that the Orange County bankruptcy 
filing may have on the Orange County Bond Issues, it may become 
necessary for MSTC to reverse allocated income and principal 
payments.\3\ MSTC will advise participants of specific CUSIP numbers if 
this action becomes necessary.

    \3\See MSTC Rules, Article III, Rule 1, Section 2(ii), 
``Depository Services, Payment, Right to Reverse Credits.''
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    MSTC believes that the proposed rule change is consistent with 
Section 17A(b)(3)(F) of the Act\4\ and the rules and regulations 
thereunder in that it is designed to assure the safeguarding of 
securities and funds which are in MSTC's possession or control or for 
which MSTC is responsible.

    \4\15 U.S.C. 78q-1(b)(3)(F) (1988).
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(B) Self-Regulatory Organization's Statements on Burden on Competition

    MSTC does not believe that the proposed rule change will impose any 
burden on competition 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

    MSTC has not solicited comments 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(i) of the Act\5\ and subparagraph (e)(1) of Rule 19b-4\6\ 
thereunder because the proposed rule change constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule of MSTC. 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.

    \5\15 U.S.C. 78s(b)(3)(A)(i) (1988).
    \6\17 CFR 240.19b-4(e)(1) (1994).
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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, N.W., Washington, D.C. 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, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of MSTC. All 
submissions should refer to File No. SR-MSTC-94-20 and should be 
submitted by February 10, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\

    \7\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-1496 Filed 1-19-95; 8:45 am]
BILLING CODE 8010-01-M