[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Notices]
[Pages 27085-27086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12884]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38602; File No. SR-DTC-97-04]


Self-Regulatory Organizations; The Depository Trust Company; 
Notice of Filing and Order Granting Accelerated Approval of a Proposed 
Rule Change to Increase the Size of the Board of Directors

May 9, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 29, 1997, The 
Depository Trust Company (``DTC'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change (File No. 
SR-DTC-97-04) as described in Items I and II below, which items have 
been prepared primarily by DTC. 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 proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will amend DTC's organization certificate 
and by-laws to increase the maximum number of directors on DTC's board 
from fifteen to twenty and to increase the current membership of DTC's 
board from fifteen to seventeen directors.

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

    In its filing with the Commission, DTC included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments that it received on the proposed rule change. 
The text of these statements may be examined at the places specified in 
Item IV below. DTC 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 
submitted by DTC.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Currently, DTC's organization certificate and by-laws provide that 
DTC's board may consist of from five to fifteen directors. At its March 
meeting, DTC's board decided that National Securities Clearing 
Corporation (``NSCC'') President David M. Kelly should join DTC's board 
and that William F. Jaenike, DTC's Chairman and Chief Executive 
Officer, should join NSCC's board and sit on that board's executive 
committee. In order to accommodate the addition of Mr. Kelly and to 
allow for possible limited future expansion of the board, at DTC's 
April 1, 1997, board meeting, the board approved an increase in the 
maximum number of directors from fifteen to twenty and an increase in 
the current membership of the board from fifteen to seventeen. The 
seventeenth director is expected to be a banker in order to maintain 
the balance of DTC board membership between representatives of banks 
and broker-dealers that has been in existence for many years. DTC has 
filed a letter application with the New York State Banking Department 
(``NYSBD'') seeking approval for DTC to amend its organization 
certificate to allow for a maximum of twenty directors on DTC's board. 
In addition to filing an application with the NYSBD, DTC will be asking 
its shareholders to vote to approve the amendments to the organization 
certificate and the by-laws, to elect individuals to fill the newly 
created seats on DTC's board, and to approve the certificate of 
amendment.
    DTC believes the proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(F) \3\ of the Act and the rules and 
regulations thereunder in that the proposal should

[[Page 27086]]

foster cooperation and coordination with persons engaged in the 
clearance and settlement of securities transactions.
---------------------------------------------------------------------------

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

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

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

    Written comments from DTC participants have not been solicited or 
received 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 a 
clearing agency must be designed to foster cooperation and coordination 
with persons engaged in the clearance and settlement of securities 
transactions.\4\ By enabling a representative of NSCC to serve on DTC's 
board, NSCC and DTC will be better able to coordinate their activities. 
Such coordination may assist both entities in fulfilling their 
statutory mandates in a more efficient manner. Thus, the Commission 
believes that DTC's proposal in consistent with Section 17A(B)(3)(F) of 
the Act.
---------------------------------------------------------------------------

    \4\ Id.
---------------------------------------------------------------------------

    DTC requests the Commission find good cause for approving the 
proposed rule change prior to the thirtieth day after the date of 
publication of notice of the filing. The Commission finds good cause 
exists for approving the proposed rule change prior to the thirtieth 
day after the date of publication of notice of the filing because 
accelerated approval will permit the new directors to be elected at a 
shareholder's meeting scheduled for the middle of May.

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 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 DTC. All submissions should 
refer to the file number SR-DTC-97-04 and should be submitted by June 
6, 1997.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-DTC-97-04) be, and hereby 
is, approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-12884 Filed 5-15-97; 8:45 am]
BILLING CODE 8010-01-M