[Federal Register Volume 64, Number 42 (Thursday, March 4, 1999)] [Notices] [Pages 10510-10511] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-5367] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release 34-41104; File No. 600-23] Self-Regulatory Organizations; Government Securities Clearing Corporation; Notice of Filing and Order Approving a Request for Extension of Temporary Registration as a Clearing Agency February 24, 1999. Notice is hereby given that on November 27, 1998, the Government Securities Clearing Corporation (``GSCC'') filed with the Securities and Exchange Commission (``Commission'') an application pursuant to Section 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 and order to solicit comments from interested persons and to extend GSCC's temporary registration as a clearing agency until August 31, 1999. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(a). \2\ Letter from Sal Ricca, President and Chief Operating Officer, GSCC (November 23, 1998). --------------------------------------------------------------------------- On May 24, 1988, pursuant to Sections 17A(b) and 19(a) of the Act \3\ and Rule 17Ab2-1 promulgated thereunder,\4\ the Commission granted GSCC registration as a clearing agency on a temporary basis for a period of three years.\5\ The Commission subsequently has extended GSCC's registration through February 28, 1999.\6\ --------------------------------------------------------------------------- \3\ 15 U.S.C. 78q-1(b) and 78s(a). \4\ 17 CFR 240.17Ab2-1. \5\ Securities Exchange Act Release No. 25740 (May 24, 1988), 53 FR 19639. \6\ Securities Exchange Act Release Nos. 29067 (April 11, 1991), 56 FR 15652; 32385 (June 3, 1993), 58 FR 32405; 35787 (May 31, 1995); 60 FR 30324; 36508 (November 27, 1995), 60 FR 61719; and 37983 (November 25, 1996), 61 FR 64183. --------------------------------------------------------------------------- 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, repurchase transactions, the multilateral netting of trades, the novation of netted trades, and the daily marking-to-the-market. In connection with GSCC's clearance and settlement services, GSCC provides a centralized loss allocation procedure and maintains margin to offset netting and settlement risks. At the time of GSCC's initial registration, the Commission granted GSCC exemptions from the financial responsibility and operational capability standards of Sections 17A(b)(3)(B) and 17A(b)(4)(B) of the Act and from the fair representation requirements of Section 17A(b)(3)(C) of the Act.\7\ The Commission has since determined that GSCC is in compliance with these sections and has eliminated the exemptions.\8\ In the Order initially granting GSCC's temporary registration, the Commission also discussed the need for GSCC to amend its standard of care with respect to functions affecting the settlement of government securities. The Commission believes that the issues regarding the appropriate standard(s) of liability of a clearing agency to its members have been resolved. Accordingly, the Commission plans to issue a notice seeking comment on GSCC's permanent registration as a [[Page 10511]] clearing agency in the near future.\9\ As a result of the foregoing, the Commission believes that it is appropriate to temporarily approve GSCC's registration as a clearing agency until August 31, 1999. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78q-1(b)(3)(B), 78q-1(b)(4)(B), and 78q- 1(b)(3)(C). \8\ Securities Exchange Act Release Nos. 46508 (November 27, 1995), 60 FR 61719 and 39372 (November 28, 1997), 62 FR 64415. \9\ A detailed discussion of the appropriate standard(s) of liability of a clearing agency to its members will be set forth in that future notice. --------------------------------------------------------------------------- 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.\10\ 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 amended application for registration and all written comments will be available for inspection at the Commission's Public Reference Room, 450 Fifth Street, NW, Washington, DC 20549. All submissions should refer to File No. 600-23 and should be submitted by March 25, 1999. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(a)(1). --------------------------------------------------------------------------- It is therefore ordered pursuant to Section 19(a) of the Act, that GSCC's registration as a clearing agency (File No. 600-23) be and hereby is temporarily approved through August 31, 1999. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(16). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-5367 Filed 3-3-99; 8:45 am] BILLING CODE 8010-01-M