[Federal Register Volume 62, Number 26 (Friday, February 7, 1997)]
[Notices]
[Pages 5869-5870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3065]


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SECURITIES AND EXCHANGE COMMISSION
[Release 34-38224; File No. 600-24]


Self-Regulatory Organizations; Delta Clearing Corp.; Notice of 
Filing and Order Approving Application for Extension of Temporary 
Registration as a Clearing Agency

January 31, 1997.
    On January 17, 1997, Delta Clearing Corp. (``DCC'') \1\ filed with 
the Securities and Exchange Commission (``Commission'') a request 
pursuant to Section 19(a) of the Securities Exchange Act of 1934 
(``Act'') \2\ for extension of its registration as a clearing agency 
under Section 17A of the Act \3\ for a period of six months or for such 
longer period as the Commission deems appropriate.\4\ The Commission is 
publishing the notice and order to solicit comments from interested 
persons and to grant DCC's request for an extension of its temporary 
registration as a clearing agency through July 31, 1997.
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    \1\ Formerly Delta Government Options Corp.
    \2\ 15 U.S.C. 78s(a).
    \3\ 15 U.S.C. 78q-1.
    \4\ Letter from Robert C. Mendelson, Esq., Morgan, Lewis and 
Bockius, to Jerry W. Carpenter, Assistant Director, Division of 
Market Regulations, Commission (January 16, 1997).
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    On January 12, 1990, the Commission granted DCC's application for 
registration as a clearing agency pursuant to Sections 17A(b)(2) and 
19(a) of the Act \5\ on a temporary basis for a period of thirty-six 
months.\6\ Since that time, the Commission has extended DCC's temporary 
registration as a clearing agency through January 31, 1997.\7\ DCC now 
requests that the Commission grant an extension of its original order 
granting DCC temporary registration as a clearing agency subject to the 
same terms and conditions for a period of six months or for such longer 
period as the Commission deems appropriate.
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    \5\ 15 U.S.C. 78q-1(b)(2) and 78s(a).
    \6\ Securities Exchange Act Release No. 27611 (January 12, 
1990), 55 FR 1890.
    \7\ Securities Exchange Act Release Nos. 31856 (February 11, 
1993), 58 FR 9005 (extension until January 12, 1995) and 35198 
(January 6, 1995), 60 FR 3286 (extension until January 31, 1997).
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    As discussed in detail in the order granting DCC's initial 
temporary registration as a clearing agency,\8\ one of the primary 
reasons for DCC's registration is to enable it to provide for the safe 
and efficient clearance and settlement of transactions involving the 
over-the-counter trading of options on U.S. Treasury securities. Since 
the time, the Commission has approved DCC's request to begin clearance 
and settlement of repurchase agreement transactions involving U.S. 
Treasury securities as the underlying instrument.\9\ Currently, 
repurchase agreement transactions constitute the majority of the 
transactions cleared by DCC.
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    \8\ Supra note 6.
    \9\ Securities Exchange Act Release No. 36367 (October 13, 
1995), 60 FR 54095.
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    In light of DCC's past performance, the Commission believes that 
DCC has the capacity to comply with the statutory obligations set forth 
under Section 17A(b)(3) of the Act,\10\ which sets forth the 
prerequisites for registration as a clearing agency. However, the 
Commission believes that DCC should continue to be registered on a 
temporary basis. Currently, DCC has an exemption from the fair 
representation requirements of Section 17A(b)(3)(C) of the Act.\11\ The 
Commission believes that this should be resolved prior to DCC's 
registration becoming permanent. Further, DCC has only recently begun 
providing clearance services for repurchase agreement transactions, 
which constitutes the vast majority of its operations.\12\ The 
Commission would like the opportunity of observing DCC's performance in 
this area prior to a grant of permanent registration as a clearing 
agency. Comments received during DCC's temporary registration will be 
considered in determining whether DCC should receive permanent 
registration as a clearing agency under Section 17A(b) of the Act.\13\
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    \10\ 15 U.S.C. 78q-1(b)(3).
    \11\ 15 U.S.C. 78q-1(b)(3)(C).
    \12\ DCC also has recently or is in the process of making 
several major changes to its operational structure. For example, DCC 
was recently sold by its original owner, Cawsl Corp., to three 
purchasers led by Intercapital Group Ltd. In addition, DCC is in the 
process of selecting a new facilities manager and in automating 
several of its processes.
    \13\ 15 U.S.C. 78q-1(b).
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Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submission 
should file six copies thereof with the

[[Page 5870]]

Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., 
Washington D.C. 20549. Copies of the submissions, all subsequent 
amendments, all written statements with respect to the request for 
extension of temporary registration as a clearing agency that are filed 
with the Commission, and all written communications relating to the 
requested extension between the Commission and any person, other than 
those that may be withheld form 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 Room, 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 DCC. 
All submissions should refer to the File No. 600-24 and should be 
submitted by February 28, 1997.

Conclusion

    On the basis of the foregoing, the Commission finds that DCC's 
request for extension of temporary registration as a clearing agency is 
consistent with the Act and in particular with Section 17A of the Act.
    It is therefore ordered, that DCC's temporary registration as a 
clearing agency (File No. 600-24) be, and hereby is extended through 
July 31, 1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(50)(i).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-3065 Filed 2-6-97; 8:45 am]
BILLING CODE 8010-01-M