[Federal Register Volume 67, Number 51 (Friday, March 15, 2002)]
[Notices]
[Pages 11730-11731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6264]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45527; File No. SR-EMCC-2002-02]


Self-Regulatory Organizations; Emerging Markets Clearing 
Corporation; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change Relating to Conforming Rule Changes Resulting 
From the Integration With The Depository Trust and Clearing Corporation

March 8, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 1, 2002, the 
Emerging Markets Clearing Corporation (``EMCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I and II below, which Items have been 
prepared by EMCC. The Commission is publishing this notice and order to 
solicit comments on the proposed rule change from interested persons 
and to grant accelerated approval.
---------------------------------------------------------------------------

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

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change will amend EMCC's rules to conform the 
rules to recent changes EMCC made to its by-laws.

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 such statements.\2\
---------------------------------------------------------------------------

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

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

    On October 25, 2001, the Commission approved EMCC's integration 
with The Depository Trust and Clearing Corporation (``DTCC'') whereby 
EMCC became a subsidiary of DTCC (``Integration Filing'').\3\ As part 
of the integration, (i) EMCC's Class A shareholders were to be offered 
the right to exchange their EMCC shares for DTCC common shares, (ii) 
the EMCC shares held by EMCC's trade association shareholders were to 
be repurchased and cancelled, and (iii) EMCC's certificate of 
incorporation and by-laws were to be revised to provide for a corporate 
governance structure consistent with its integration into the DTCC 
organization. The integration, including the exchange offer, trade 
association share repurchases, and amendment of EMCC's governing 
documents, was completed as of January 1, 2002, and on that date EMCC 
became a subsidiary of DTCC.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 44987 (Oct. 25, 2001), 
66 FR 55218 (Nov. 1, 2001).
---------------------------------------------------------------------------

    When EMCC's by-laws were amended, the reference to ``participant 
directors'' was deleted because that term was no longer relevant in the 
new corporate governance structure. A conforming change should also 
have been made to EMCC's rules in the Integration Filing but was 
inadvertently omitted. Also, because EMCC users are now given the 
opportunity to buy shares of DTCC at periodic intervals under the new 
structure, the obligation to become an EMCC shareholder as part of an 
applicant's initial membership requirements should have been omitted 
from EMCC's by-laws.
    Accordingly, Rule 1 (``Definitions'') and Rule 31 (``Hearing 
Procedures'') are being amended to delete the definitions of 
``participant director.'' Rule 1 is also being amended to delete the 
definition of ``ISMA,'' which was a ``participant director.'' EMCC Rule 
2 (``Members'') is being amended to delete the requirement that 
applicants for membership become EMCC shareholders.
    EMCC believes that the proposed rule change is consistent with the 
requirements of the section 17A of the Act \4\ and the rules and 
regulations thereunder because it permits EMCC's rules to be consistent 
with its current corporate governance structure.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    EMCC does not believe that the proposed rule change will have an 
impact on or impose a burden on competition.

[[Page 11731]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments relating to the proposed rule change have 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

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder and particularly with the requirements of section 
17A(b)(3)(C)\5\ of the Act, which requires that the rules of a clearing 
agency assure a fair representation of its shareholders and 
participants in the selection of its directors and administration of 
its affairs. In approving the Integration Filing, the Commission found 
that the proposed rule change was consistent with section 17A(b)(3)(C). 
Because this proposed rule change merely makes changes to EMCC's rules 
to conform them to the changes made in the Integration Filing, the 
Commission also finds this proposed rule change to be consistent with 
section 17A(b)(3)(C).
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78q-1(b)(3)(C).
---------------------------------------------------------------------------

    EMCC has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after the 
date of publication of notice of filing. The Commission finds good 
cause for approving the proposed rule change prior to the thirtieth day 
after the date of publication of notice of filing because such approval 
will allow EMCC to immediately conform its rule to its current 
corporate governance structure which should help to avoid confusion 
among participants.

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 20549-6069. 
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 EMCC's 
principal office. All submissions should refer to File No. SR-EMCC-
2002-02 and should be submitted by April 5, 2002.
    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
that the proposed rule change (File No. SR-EMCC-2002-02) be, and hereby 
is, approved on an accelerated basis.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-6264 Filed 3-14-02; 8:45 am]
BILLING CODE 8010-01-U