[Federal Register Volume 67, Number 10 (Tuesday, January 15, 2002)]
[Notices]
[Pages 2005-2006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-944]



[[Page 2005]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45248; File No. SR-GSCC-2001-13]


Self-Regulatory Organizations; Government Securities Clearing 
Corporation; Notice of Filing of a Proposed Rule Change Relating to a 
New Governance Structure

January 7, 2001.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 
1934(``Act''),\1\ notice is hereby given that on October 11, 2001, 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 by GSCC. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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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 amend GSCC's rules to reflect GSCC's 
new ownership and governance structure that will result from the 
integration of GSCC, MBS Clearing Corporation (``MBSCC''), and Emerging 
Markets Clearing Corporation (``EMCC'') with The Depository Trust & 
Clearing Corporation (``DTCC'') whereby GSCC, MBSCC, and EMCC will 
become operating subsidiaries of DTCC.\2\
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    \2\ For explanations of the mechanics of these integration 
plans, refer to Securities Exchange Act Release Nos. 44989 (Oct. 25, 
2001), 66 FR 55220 (Nov. 1, 2001); 44988 (Oct. 25, 2001), 66 FR 
55222 (Nov. 1, 2001); and 44987 (Oct. 25, 2001), 66 FR 55218 (Nov. 
1, 2001). The Depository Trust Company (``DTC'') and National 
Securities Clearing Corporation (``NSCC'') are currently operating 
subsidiaries of DTCC.
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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.\3\
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    \3\ 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 proposes to amend its rules to reflect its new ownership and 
governance structure that will result from the integration of GSCC, 
MBSCC, and EMCC with DTCC. In order for GSCC to maintain orderly and 
efficient operations, GSCC will implement a three-tiered governance 
structure. The first tier will be the Board of Directors of GSCC that 
will be identical in composition to the Board of Directors of MBSCC, 
EMCC, DTC, NSCC, and DTCC. GSCC's business will be managed under the 
direction of the GSCC Board, which will set the basic policy direction 
for GSCC. The second tier will consist of committees of or established 
by the DTCC Board, including a Fixed Income Operations and Planning 
Committee to be established by the DTCC Board, and committees of or 
established by the GSCC Board, including GSCC/MBSCC Membership and Risk 
Management Committee to be established by the GSCC Board and the MBSCC 
Board acting jointly. The third tier will be GSCC management, which 
will oversee the daily routine operations of GSCC.
    The proposed changes to GSCC's rules will reassign various 
management responsibilities to the GSCC Board, the new committees, or 
GSCC management in light of the revised management structure summarized 
above. GSCC believes that these proposed rule changes will permit the 
GSCC Board, the various DTCC or GSCC committees, or GSCC management to 
appropriately handle functions so that GSCC may continue to maintain 
orderly and efficient operations.
    GSCC believes that the proposed rule change is consistent with 
section 17A of the Act and the rules and regulations thereunder because 
it will ensure that GSCC's operations will continue to be conducted in 
an efficient and orderly manner once it is integrated into the DTCC 
organization.

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. GSCC notes that it, as well 
as each of the other operating subsidiaries, is a utility created to 
serve members of the securities industry by providing certain 
complementary services that are ancillary to the businesses in which 
industry members compete with one another.

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. GSCC 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 it receives.

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 the self-regulatory organization 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, U.S. Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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 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 Room in Washington, DC Copies of such 
filing will also be available for inspection and copying at GSCC's 
principal office. All submissions should refer to File No. SR-GSCC-
2001-13 and should be submitted by January 30, 2002.


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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\

    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-944 Filed 1-14-02; 8:45 am]
BILLING CODE 8010-01-M