[Federal Register Volume 60, Number 214 (Monday, November 6, 1995)]
[Notices]
[Pages 56082-56083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27386]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 36435; File No. SR-GSCC-95-04]


Self-Regulatory Organizations; Government Securities Clearing 
Corporation; Notice of Filing of a Proposed Rule Change Modifying 
GSCC's By-laws to Provide Indemnification Protection for Members of 
Committees

October 30, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 25, 1995, 
Government Securities Clearing Corporation (``GSCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change (File No. SR-GSCC-95-04) as described in Items I, II, and III 
below, which items have been prepared primarily by GSCC. 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 purpose of the proposed rule change is to amend GSCC's by-laws 
to provide indemnification protection for members of committees 
established by GSCC's Board of Directors who are not officers or 
directors of GSCC.

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

    In its filing with the Commission, GSCC 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. GSCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\2\

    \2\ The Commission has modified the text of the summaries 
prepared by GSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The proposed filing seeks to amend GSCC's by-laws to provide 
indemnification protection for members of committees established by 
GSCC's Board of Directors who are not officers or directors of GSCC. 
Article IV, Section 4.1, of GSCC's by-laws currently requires, among 
other things, that GSCC indemnify to the full extent permitted by law a 
present or past director or officer of GSCC who is made a party to any 
action or proceeding, whether civil or criminal, by reason of the fact 
that such person is or was a director or officer of GSCC.
    The indemnification obligation does not extend to members of 
committees established by GSCC's Board of Directors if the members of 
the committees are not directors or officers of GSCC. Thus, for 
example, the indemnification protection in GSCC's by-laws does not 
cover most of the members of GSCC's Risk Management Committee who are 
senior credit officers of GSCC member firms.
    In order to ensure that GSCC can obtain the services of qualified 
individuals on committees established by its Board of Directors and to 
ensure that such individuals freely are able to provide guidance to 
GSCC's Board of Directors and to GSCC management, GSCC believes it 
appropriate to provide members of such Board-established committees 
with indemnification protection comparable to the protection currently 
given to GSCC's directors and officers. This indemnification will 
facilitate GSCC's ability to obtain directors and officers liability 
insurance that covers committee members who are not GSCC directors or 
officers.
    GSCC believes the proposed rule change is consistent with the 
requirements of Section 17A of the Act and the rules and regulations 
thereunder because the rule proposal will help ensure that GSCC obtains 
the services of qualified individuals on its Board-established 
committees.

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

    GSCC does not believe that the proposed rule will have an impact on 
or impose a burden on competition.

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

    Comments on the proposed rule change have not yet been solicited. 
GSCC members will be notified of the rule filing and comments will be 
solicited by an important notice. GSCC will notify the Commission of 
any written comments received by GSCC.

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

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (a) By order approve such proposed rule change or;
    (b) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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, D.C. 20549. 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule 

[[Page 56083]]
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. Sec. 552, will 
be available for inspection and copying in the Commission's Public 
Reference Section, 450 Fifth Street NW., Washington, D.C. 20549. Copies 
of such filing also will be available for inspection and copying at the 
principal office of GSCC. All submissions should refer to the file 
number SR-GSCC-95-04 and should be submitted by November 27, 1995.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\

    \3\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-27386 Filed 11-3-95; 8:45 am]
BILLING CODE 8010-01-M