[Federal Register Volume 63, Number 189 (Wednesday, September 30, 1998)]
[Notices]
[Pages 52313-52314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26097]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40463; File No. SR-GSCC-98-03]
Self-Regulatory Organizations; Government Securities Clearing
Corporation; Notice of Filing of a Proposed Rule Change Regarding
Amendments to GSCC's By-Laws
September 23, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 31, 1998, the
Government Securities Clearing Corporation (``GSCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III below, which items have
been prepared primarily by GSCC. The Commission is publishing this
notice to solicit comments from interested persons on 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
Under the proposed rule change, GSCC will amend its by-laws to
allow GSCC's Board of Directors to determine which individuals shall
serve as GSCC's chief executive officer (``CEO'') and chief operating
officer (``COO'').
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, GSCC 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. GSCC 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 GSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
GSCC was formed by the National Securities Clearing Corporation
(``NSCC'') in 1986. Initially, GSCC was a wholly owned subsidiary of
NSCC. However, in December 1987 GSCC shares were issued in a private
placement, and now approximately seventy-five percent of GSCC's shares
are owned by its member firms. In August 1988, GSCC began providing
services to its members, and its first participant shareholder Board of
Directors was elected.
GSCC's shareholder agreement provides that NSCC has the right to
nominate two individuals for election to the GSCC Board and that GSCC
is to designate one of those individuals to the position of Vice-
Chairman. Since GSCC was incorporated in 1986, GSCC's by-laws provided
that the Vice-Chairman of GSCC's Board shall automatically be its CEO
and that GSCC's President shall automatically be the COO.
For ten years, GSCC has operated as the central clearing
corporation for the government securities marketplace. As a result,
GSCC now believes that in order to ensure its independence, GSCC's
Board of Directors should determine for itself which individuals shall
serve as the CEO and COO. Therefore, under the proposed rule change
GSCC will amend its by-laws to:
(1) Delete the provision that states that the Vice Chairman of the
Board shall be CEO of GSCC.
(2) Delete the provision that states that the President shall be
the COO of GSCC, and
(3) Make other conforming changes so as to appropriately reflect
the responsibilities of the CEO and COO.
GSCC intends to continue its close affiliation with NSCC and to
maintain the current synergies that GSCC shares with NSCC, such as the
ancillary accounting, administrative services, human resources, and
treasury services that NSCC provides for GSCC. In addition, GSCC will
seek out additional ways that NSCC and GSCC can work together.
GSCC believes that the proposed rule change is consistent with the
Act and the rules and regulations thereunder because the amendments to
GSCC's by-laws will allow GSCC's Board of Directors to determine for
itself which individuals shall serve as GSCC's CEO and COO.
(B) Self-Regulatory Organization's Statement on Burden on Competition
GSCC does not believe that the proposed rule change will have an
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
Written comments relating to the proposed rule change have not yet
been solicited or received. Members will be notified of the rule change
filing and comments will be solicited by an important notice. GSCC will
notify the Commission of any written comments received by GSCC.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period (i) as the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which GSCC consents, the Commission will:
(A) by order approve such proposed rule change or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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, NW., Washington, DC 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 Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such
[[Page 52314]]
ruling also will be available for inspection and copying at the
principal office of GSCC. All submissions should refer to File No. SR-
GSCC-98-03 and should be submitted by October 21, 1998.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\3\
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\3\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 98-26097 Filed 9-29-98; 8:45 am]
BILLING CODE 8010-01-M