[Federal Register Volume 59, Number 247 (Tuesday, December 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31659]
[[Page Unknown]]
[Federal Register: December 27, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35118; File No. SR-PHILADEP-94-01, and SR-SCCP-94-03]
Self-Regulatory Organizations; Philadelphia Depository Trust
Company and Stock Clearing Corporation of Philadelphia; Order Approving
Proposed Rule Changes to Amend By-Laws Regarding the Composition of the
Respective Boards of Directors and Nominating Committees
December 19, 1994.
On July 12, 1994, the Philadelphia Depository Trust Company
(``PHILADEP'') and the Stock Clearing Corporation of Philadelphia
(``SCCP'') filed with the Securities and Exchange Commission
(``Commission'') proposed rule changes (File Nos. SR-PHILADEP-94-01 and
SR-SCCP-94-03) under Section 19(b)(1) of the Securities Exchange Act of
1934 (``Act'')\1\ to amend their By-Laws governing the composition of
their boards of directors and their nominating committees. On July 14,
1994, PHILADEP and SCCP amended their respective rule filings.\2\
Notice of the proposals was published in the Federal Register on August
4, 1994.\3\ No comment letters were received regarding the proposed
rule changes. For the reasons discussed below, the Commission is
approving the proposed rule changes.
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\1\15 U.S.C. 78s(b)(1) (1988).
\2\Letter from J. Keith Kessel, Compliance Officer, PHILADEP and
SCCP, to Jerry W. Carpenter, Branch Chief, Division of Market
Regulation, Commission (July 8, 1994).
\3\Securities Exchange Act Release No. 34446 (July 27, 1994), 59
FR 39801.
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I. Description
PHILADEP and SCCP are amending Article IV, Section 2 of their
respective By-Laws to remove the requirement that the two vice chairmen
of the board of governors of the Philadelphia Stock Exchange, Inc.
(``PHLX'') serve as ex-officio members of their boards of directors.
The amendments install the chief operating officer of the PHLX both as
an ex-officio member of both of the boards of directors and also as the
vice chairman of the boards. The amendments reduce the requisite number
of PHLX governors who must serve on the PHILADEP and SCCP boards of
directors from a majority of the fifteen to seventeen directors to six
of the directors. The amendments also change the term of office for the
boards of directors to synchronize the term of office for the chairman
of the PHLX's board of governors with his terms of office on the
PHILADEP and SCCP boards.
PHILADEP and SCCP also are amending Article III, Section 4(a) of
their By-Laws which currently require that each nominating committee
consist of five ex-officio members of the board of directors and two
other persons appointed by the chairman of the board. Under the amended
rules, each nominating committee will consist of four ex-officio
members of the board of directors and three other persons appointed by
the chairman of the boards.
The PHILADEP and SCCP Boards of Directors will continue to provide
the PHLX, as the sole shareholder of both PHILADEP and SCCP, with
adequate representation. The PHLX will be represented by both senior
exchange staff personnel and by members of the PHLX board of governors,
who typically also represent PHILADEP and SCCP participant firms. In
accordance with PHILADEP's and SCCP's amendment processes delineated in
By-Law Article XI, the Chairman of the PHLX board of governors, as
agent for the sole shareholder and parent corporation, has signed a
unanimous consent in lieu of a special meeting to effectuate the
foregoing changes.
II. Discussion
The Commission believes that the proposed rule changes are
consistent with Section 17A of the Act and specifically with Section
17A(b)(3)(C).\4\ Section 17A(b)(3)(C) requires that a clearing agency
assure fair representation of its shareholders or members and
participants in the selection of its directors and administration of
its affairs. As stated above, the proposed rule changes provide the
PHLX with continued fair and adequate representation in its capacity as
the sole shareholder of both PHILADEP and SCCP. The proposed rule
changes also afford fair representation to the participants by
continuing to require their representation on the boards of directors
and nominating committees of both PHILADEP and SCCP.
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\4\15 U.S.C. 78q(b)(3)(C)(1988).
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III. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule changes are consistent with the requirements of the Act,
and in particular with the requirements of Section 17A of the Act, and
the rules and regulations thereunder.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule changes (File Nos. SR-PHILADEP-94-01 and SCCP-
94-03) be, and hereby are, approved.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-31659 Filed 12-23-94; 8:45 am]
BILLING CODE 8010-01-M
