[Federal Register Volume 62, Number 136 (Wednesday, July 16, 1997)]
[Notices]
[Pages 38178-38179]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18610]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38827; File No. SR-NSCC-97-06]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change To Increase the Size of the Board of 
Directors

July 9, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 15, 1997, the National 
Securities Clearing Corporation (``NSCC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II below, which items have been prepared 
primarily by NSCC. The Commission is publishing this notice and order 
to solicit comments from interested persons and to grant accelerated 
approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change will amend NSCC's shareholders agreement 
and by-laws to increase NSCC's board of directors by one member and to 
create a new category of director.

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

    In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to increase the size of 
NSCC's board from twenty to twenty-one directors and to create a new 
``Industry Director'' category. Article II, Section 2.1 of NSCC's by-
laws, ``Number and Classification of Directors,'' currently provides 
for a board of twenty directors. NSCC's shareholders agreement 
currently provides for three categories of directors. ``Shareholder 
Directors'' represent each of NSCC's three shareholders: the New York 
Stock Exchange, the American Stock Exchange, and the National 
Association of Securities Dealers. The ``Management Director,'' 
typically NSCC's President, represents management. ``Participant 
Directors'' represent and are selected from NSCC's participants.\3\
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    \3\ Currently, there are three Shareholder Directors, one 
Management Director, and sixteen Participant Directors. Securities 
Exchange Act Release No. 36570 (December 11, 1995), 60 FR 64466 
(order approving proposed rule change to amend by-laws to add an 
additional board member).
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    NSCC's board has determined that it would be in the beneficial 
interest of NSCC to create one new board seat to be filled by a senior 
level securities industry official designated by the board. Because 
such a seat would not necessarily fall within any of the existing 
director categories, NSCC proposes that its shareholders agreement and 
by-laws be amended to accommodate this new director category.\4\
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    \4\ As with all new director positions created after 1977, the 
Industry Director will be assigned to one of the board's three 
classes. Assignments are apportioned so that the classes are as 
nearly equal in number as possible.
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    NSCC believes the proposed rule change is consistent with the 
requirements of Section 17A(b)(3)(F) \5\ of the Act because it allows 
NSCC's board to benefit from the participation of an experienced 
securities industry official in the administration of NSCC's affairs.
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    \5\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change will impact 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

    No written comments have been solicited or received. NSCC will 
notify the Commission of any written comments received by NSCC.

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

    Section 17A(b)(3)(F) \6\ 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. The Commission understands that initially the new 
Industry Director category will be filled by an officer of DTC, which 
should result in NSCC and DTC being better able to coordinate their 
activities. Thus, the Commission believes that NSCC's proposal is 
consistent with Section 17A(b)(3)(F) of the Act.
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    \6\ Id.
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    NSCC 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 NSCC's board to appoint the new 
Industry Director at the next shareholder's meeting which is scheduled 
for July 15, 1997.

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

[[Page 38179]]

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 also will be available for inspection and copying 
at the principal office of NSCC. All submissions should refer to File 
No. SR-NSCC-97-06 and should be submitted by August 6, 1997.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-NSCC-97-06) be, and hereby 
is, approved.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-18610 Filed 7-15-97; 8:45 am]
BILLING CODE 8010-01-M