[Federal Register Volume 64, Number 204 (Friday, October 22, 1999)]
[Notices]
[Pages 57169-57170]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27605]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42016; File No. SR-EMCC-99-10]


Self-Regulatory Organizations; Emerging Markets Clearing 
Corporation; Notice of Filing of Proposed Rule Change Relating to the 
Requirements for a Class I, II, or III Director

October 15, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 24, 1999, the 
Emerging Markets Clearing Corporation (``EMCC'') 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 EMCC. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
parties.
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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

    The proposed rule change will delay the implementation of certain 
requirements for Class I, II, and III directors.

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

    In its filing with the Commission, EMCC 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. EMCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.\2\
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    \2\ The Commission has modified the text of the summaries 
prepared by EMCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    EMCC's by-laws currently provide that from and after the 1999 
annual meeting of shareholders, individuals elected to Class I, II, or 
III directorships must be an officer or partner of a shareholder or of 
an affiliate or subsidiary of a shareholder.\3\ Similarly, EMCC's 
amended and restated shareholder agreement provides that from and after 
the 1999 annual meeting, directors elected to these classes must be an 
officer or partner of a ``participant shareholder'' (i.e., a 
shareholder that is also an EMCC participant) or of an affiliate of a 
participant shareholder.\4\
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    \3\ Article II, Section 2.2 of the by-laws.
    \4\ Section 1(A) of the amended and restated shareholder 
agreement.
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    The purpose of the proposed rule change is to amend the by-laws and 
the amended and restated shareholder agreement to postpone the 
effectiveness of these requirements until the 2000 annual meeting of 
shareholders. According to EMCC, its membership is not yet as large as 
its management had anticipated, and there are a number of shareholders 
and other industry participants who have not yet completed either 
applying for membership or acquiring EMCC shares. EMCC believes it is 
important to continue its developmental momentum and at the same time 
to maintain the continuing broad-based representation of industry 
participants on the EMCC Board.
    In addition, when EMCC was originally organized, it was expected 
that an entity that became a shareholder would also be the participant. 
As EMCC's business has developed while the financial services industry 
continues to consolidate, participants have indicated that they may 
prefer that the shareholder and the participant be

[[Page 57170]]

affiliated but different entities. This flexibility would not adversely 
impact EMCC's operations, and it should not impact the participant's 
ability to be represented on the EMCC Board. Thus, the proposed rule 
change will amend the definition of participant shareholder to mean a 
shareholder that holds one or more Class A subject shares and is also a 
participant or an affiliate of a participant.
    EMCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \5\ and the rules and 
regulations thereunder applicable to EMCC because it permits EMCC's 
Board of Directors to continue to maintain broad representation of both 
EMCC's participants and the emerging market debt industry and thus 
allows EMCC to assure fair representation of its shareholders and 
participants.
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    \5\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement of Burden on Competition

    EMCC does not believe that the proposed rule change will have any 
impact or impose any 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. EMCC will notify the Commission of any 
written comments it receives.

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

    Within 35 days of the publication of this notice in the Federal 
Register or within such longer period (i) as the Commission may 
designate up to 90 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 the self-regulatory organization consents, the Commission will:
    (A) by order approve such 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, N.W., Washington, D.C. 20549-
0609. 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 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, N.W., 
Washington, D.C. 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of EMCC. All 
submissions should refer to File No. SR-EMCC-99-10 and should be 
submitted by November 12, 1999.

    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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Jonathan G. Katz,
Secretary.
[FR Doc. 99-27605 Filed 10-21-99; 8:45 am]
BILLING CODE 8010-01-M