[Federal Register Volume 60, Number 214 (Monday, November 6, 1995)]
[Notices]
[Pages 56082-56083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-27386]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 36435; File No. SR-GSCC-95-04]
Self-Regulatory Organizations; Government Securities Clearing
Corporation; Notice of Filing of a Proposed Rule Change Modifying
GSCC's By-laws to Provide Indemnification Protection for Members of
Committees
October 30, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 25, 1995,
Government Securities Clearing Corporation (``GSCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change (File No. SR-GSCC-95-04) 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 on the proposed rule
change from interested persons.
\1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The purpose of the proposed rule change is to amend GSCC's by-laws
to provide indemnification protection for members of committees
established by GSCC's Board of Directors who are not officers or
directors of GSCC.
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.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed filing seeks to amend GSCC's by-laws to provide
indemnification protection for members of committees established by
GSCC's Board of Directors who are not officers or directors of GSCC.
Article IV, Section 4.1, of GSCC's by-laws currently requires, among
other things, that GSCC indemnify to the full extent permitted by law a
present or past director or officer of GSCC who is made a party to any
action or proceeding, whether civil or criminal, by reason of the fact
that such person is or was a director or officer of GSCC.
The indemnification obligation does not extend to members of
committees established by GSCC's Board of Directors if the members of
the committees are not directors or officers of GSCC. Thus, for
example, the indemnification protection in GSCC's by-laws does not
cover most of the members of GSCC's Risk Management Committee who are
senior credit officers of GSCC member firms.
In order to ensure that GSCC can obtain the services of qualified
individuals on committees established by its Board of Directors and to
ensure that such individuals freely are able to provide guidance to
GSCC's Board of Directors and to GSCC management, GSCC believes it
appropriate to provide members of such Board-established committees
with indemnification protection comparable to the protection currently
given to GSCC's directors and officers. This indemnification will
facilitate GSCC's ability to obtain directors and officers liability
insurance that covers committee members who are not GSCC directors or
officers.
GSCC believes the proposed rule change is consistent with the
requirements of Section 17A of the Act and the rules and regulations
thereunder because the rule proposal will help ensure that GSCC obtains
the services of qualified individuals on its Board-established
committees.
(B) Self-Regulatory Organization's Statement on Burden on Competition
GSCC does not believe that the proposed rule will have an impact on
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
Comments on the proposed rule change have not yet been solicited.
GSCC members will be notified of the rule 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 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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street NW., Washington, D.C. 20549.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule
[[Page 56083]]
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. Sec. 552, will
be available for inspection and copying in the Commission's Public
Reference Section, 450 Fifth Street NW., Washington, D.C. 20549. Copies
of such filing also will be available for inspection and copying at the
principal office of GSCC. All submissions should refer to the file
number SR-GSCC-95-04 and should be submitted by November 27, 1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\3\
\3\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-27386 Filed 11-3-95; 8:45 am]
BILLING CODE 8010-01-M
