[Federal Register Volume 63, Number 67 (Wednesday, April 8, 1998)]
[Notices]
[Pages 17253-17254]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9126]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39826; File No. SR-PTC-98-01]


Self-Regulatory Organizations; Participants Trust Company; Notice 
of Filing and Order Granting Accelerated Approval of Proposed Rule 
Change Relating to a Decrease in the Number of Directors

April 1, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 17, 1998, the 
Participants Trust Company (``PTC'') 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 PTC. The Commission is publishing this notice and order to 
solicit comments from interested persons and to grant accelerated 
approval of the proposed rule change. The staff of the Board of 
Governors of the Federal Reserve System concurred with the Commission's 
granting of accelerated approval.\2\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Telephone conversation with John Rudolph, Supervisory Trust 
Analyst, Board of Governors of the Federal Reserve Board.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change involves an amendment to PTC's by-laws to 
reduce the number of directors on its board from fifteen to twelve.

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

    In its filing with the Commission, PTC 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. PTC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\3\
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    \3\ The Commission has modified the text of the summaries 
prepared by PTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The proposed rule change will amend Section 3.2 of Article 3 of 
PTC's by-laws. Under the proposed rule change, the number of directors 
on PTC's board will be reduced from fifteen to twelve. This amendment 
will also reduce the number of directors in each of the three classes 
from five to four.
    PTC believes that the decrease in the number of directors is 
desirable because of consolidations and shifts in the broker-dealer and 
banking industries and reductions in the number of PTC participants and 
institutions seeking representation on PTC's board. Additionally, PTC 
believes this rule change is desirable due to the difficulty in finding 
qualified individuals to serve a three-year term on the board. Because 
PTC's board currently has three vacancies, the decrease in director 
positions will neither eliminate any incumbent director nor shorten the 
term of any director.
    PTC believes that the proposed rule change provides for the fair 
representation of shareholders and participants in the selection of 
PTC's directors and the administration of PTC's affairs and therefore 
that it is consistent with Section 17A(c)(3)(C) of the Act and the 
rules and regulations thereunder applicable to PTC.\4\
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    \4\ 15 U.S.C. 78q-1(b)(3)(C).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    PTC does not believe that the proposed rule change will impose any 
burden on competition.

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

    PTC has not solicited and does not intend to solicit comments on 
this proposed rule change. PTC has not received any unsolicited written 
comments from participants or other interested parties.

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

    Section 17A(b)(3)(C) provides that the rules of a clearing agency 
must provide for the fair representation of its shareholders or members 
and participants in the selection of directors. The Commission believes 
that the board of a clearing agency should be representative of its 
members and that no single member should dominate the board. As a 
result of consolidations in the industry, there is a smaller pool of 
qualified individuals available and willing to fill the vacancies on 
PTC's board. The Commission believes that PTC's reduction of the size 
of its board is consistent with the Act's fair representation 
requirements because the resized board should allow the board to more 
accurately reflect PTC's membership.
    PTC has requested that 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 in order that this reduction be 
implemented with the election of directors held at PTC's 1998 annual 
stockholders meeting which is scheduled for April 9, 1998. The 
Commission finds good cause for approving the proposed rule change 
prior to the thirtieth day after publication of notice because such 
approval will give PTC adequate time to send out proxy statements to 
participants for its April 9, 1998, annual board meeting.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W.,

[[Page 17254]]

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. Sec. 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 PTC. All submissions should refer to File 
No. SR-PTC-98-01 and should be submitted by April 29, 1998.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\5\ that the proposed rule change (File No. SR-PTC-98-01) be and 
hereby is approved.

    \5\ 15 U.S.C. 78s(b)(2).
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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-9126 Filed 4-7-98; 8:45 am]
BILLING CODE 8010-01-M