[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]


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

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.
---------------------------------------------------------------------------

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

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\
---------------------------------------------------------------------------

    \2\ The Commission has modified the text of the summaries 
prepared by GSCC.
---------------------------------------------------------------------------

(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\
---------------------------------------------------------------------------

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

Jonathan G. Katz,
Secretary.
[FR Doc. 98-26097 Filed 9-29-98; 8:45 am]
BILLING CODE 8010-01-M