[Federal Register Volume 63, Number 10 (Thursday, January 15, 1998)]
[Notices]
[Pages 2435-2436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-978]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39526; File No. 600-23]


Self-Regulatory Organizations; Government Securities Clearing 
Corporation; Notice of Filing of an Application for Clearing Agency 
Registration

January 8, 1998.
    Notice is hereby given that on October 2, 1997, the Government 
Securities Clearing Corporation (``GSCC'') filed with the Securities 
and Exchange Commission (``Commission'') an application, pursuant to 
Sections 17A and 19(a) of the Securities Exchange Act of 1934 
(``Act''),\1\ requesting that the Commission grant GSCC full 
registration as a clearing agency or in the alternative extend GSCC's 
temporary registration as a clearing agency until such time as the 
Commission is able to grant GSCC permanent registration.\2\ The 
Commission is publishing this notice to solicit comments from 
interested persons.
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    \1\ 15 U.S.C. 78q-1, 78s(a).
    \2\ Letter from Sal Ricca, President and Chief Operating 
Officer, GSCC (September 25, 1997).
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    On May 24, 1988, the Commission approved pursuant to Sections 17A 
and 19(a) of the Act and Rule 17Ab2-1(c) promulgated thereunder \3\ the 
application of GSCC for registration as a clearing agency for a period 
of three years.\4\ The Commission subsequently has extended GSCC's 
registration until February 28, 1998.\5\
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    \3\ 17 CFR 240.17Ab2-1.
    \4\ Securities Exchange Act Release No. 25740 (May 24, 1988), 53 
FR 19639.
    \5\ Securities Exchange Act Release Nos. 29067 (April 11, 1991), 
56 FR 14542; 32385 (June 3, 1993), 58 FR 32405; 35787 (May 31, 
1995), 60 FR 30324; 36508 (November 27, 1995), 60 FR 61719; 37983 
(November 25, 1996), 61 FR 64183; and 39698 (May 30, 1997), 62 FR 
30911.
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    GSCC provides clearance and settlement services for its members' 
transactions in government securities. GSCC offers its members services 
for next-day settling trades, forward settling trades, auction takedown 
activity, and repurchase transactions. In connection with GSCC' 
clearance and settlement services, GSCC provides a centralized loss 
allocation procedure and maintains margin to offset netting and 
settlement risks.
    GSCC believes that it should obtain permanent registration and has 
implemented several changes in the past year to enhance its operations. 
The Commission has recently approved GSCC's proposed rule change that 
institutes new election procedures for

[[Page 2436]]

GSCC's board of directors.\6\ Finally, GSCC has received Commission 
approval for several enhancements to its risk management procedures.\7\
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    \6\ In the order initially granting GSCC temporary registration, 
the Commission granted GSCC several exemptions from certain 
provisions of the Act, including the fair representation standard in 
Section 17A(b)(3)(C) of the Act [15 U.S.C. 78q-1(b)(3)(C)]. The 
Commission's recent approval of GSCC's election procedures included 
a determination that such procedures are consistent with the fair 
representation standard in Section 17A(b)(3)(C). Securities Exchange 
Act Release No. 39372 (November 28, 1997), 62 FR 64415.
    \7\ Securities Exchange Act Release Nos. 38340 (November 21, 
1997), 62 FR 63405 (order approving proposed rule change regarding 
GSCC's loss allocation for blind brokered activity) and 39309 
(November 7, 1997), 62 FR 61158 (order approving proposed rule 
change to institute an auto debit service).
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    In the order initially granting GSCC temporary registration, the 
Commission discussed the need for GSCC to amend its standard of care to 
an ordinary negligence standard for all functions affecting settlement 
of government securities. GSCC is working with the Commission to 
develop the appropriate liability structure.
    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing application. Such written data, 
views, and arguments will be considered by the Commission in granting 
registration or instituting proceedings to determine whether 
registration should be denied in accordance with Section 19(a)(1) of 
the Act.\8\ Persons making written submissions should file six copies 
thereof with the Secretary, Securities and Exchange Commission, 450 
Fifth Street, N.W., Washington, DC 20549. Copies of the amended 
application for registration and all written comments will be available 
for inspection and copying in the Commission's Public Reference 
Section, 450 Fifth Street, N.W., Washington, DC 20549. All submissions 
should refer to File No. 600-23 and should be submitted by February 5, 
1998.

    \8\ 15 U.S.C. 78s(a)(1).
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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(16).
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Jonathan G. Katz,
Secretary.
[FR Doc. 98-978 Filed 1-14-98; 8:45 am]
BILLING CODE 8010-01-M