[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: 94-31672]
[[Page Unknown]]
[Federal Register: December 27, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35117; File No. SR-MSTC-94-15]
Self-Regulatory Organizations; the Midwest Securities Trust
Company; Notice of Filing and Order Granting Accelerated Approval of
Proposed Rule Change Deferring Its Next Annual Meeting
December 19, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 4, 1994, the
Midwest Securities Trust Company (``MSTC'') filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change (File
No. SR-MSTC-94-15) as described in Items I and II below, which items
have been prepared primarily by MSTC. The Commission is publishing this
notice and order to solicit comments on the proposed rule change from
interested persons and to grant accelerated approval of the proposed
rule change.
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\1\15 U.S.C. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
MSTC proposes to defer its next annual meeting until the regularly
scheduled meeting in April 1995.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, MSTC 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. MSTC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such statements.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The Commission recently approved certain changes to MSTC's Rules
and By-laws relating to the election of MSTC's Board of Directors.\2\
MSTC's 1994 annual meeting was originally postponed because of the
pending rule filing. Pursuant to the Commission's order approving the
filing, the size of the MSTC Board was expanded to thirty-one, the same
size as the Board of its parent, the Chicago Stock Exchange (``CHX'').
The filing also amended MSTC's By-laws to make the members of the MSTC
Board and nominating committee the same as those of the CHX.
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\2\Securities Exchange Act Release No. 34608 (October 13, 1994),
59 FR 46074 [File No. SR-MSTC-94-09]. The Commission concluded at
that time that the new rules were consistent with the fair
representation requirements under the Act.
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The CHX/MSTC nominating committee imminently will be commencing
deliberations for its slate of candidate for the 1995 annual meetings,
of CHX, MCC, and MSTC to be held in April 1995. Because of this, MSTC
and its shareholder CHX do not believe that it is in the best interests
of MSTC to have a 1994 annual meeting in such close proximity to the
1995 annual meeting. To do so will not only make the nominating
committee's work extremely difficult (i.e., preparing for two meetings
at once) but also could confuse participants of MSTC. Thus the purpose
of the proposal is to avoid the confusion and burden of holding a 1994
annual meeting within a few months of the scheduled date of the 1995
annual meeting.
The proposed rule change is consistent with Section 17(A)(b)(3)(F)
of the Act in that it fosters cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions.
(B) Self-Regulatory Organization's Statements on Burden on Competition.
MSTC believes that no burden will be placed on competition as a
result of the proposed rule change.
(C) Self-Regulatory Organization's Statement Comments on the Proposed
Rule Change Received From Members, Participants or Others
MSTC neither solicited nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Section 17A(b)(3)(F) of the Act requires that the rules of the
clearing agency foster cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions.\3\
The proposal to not hold the 1994 annual meeting so close to the
regularly scheduled 1995 annual meeting should avoid confusion among
the participants arising from having to consider two director elections
within a few months. (I.e., directors elected in 1994 would only serve
for the few months prior to the 1995 election held during the 1995
Board meeting.) In addition, the limited term of a few months for a
Board elected at this time could create confusion for participants.
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\3\15 U.S.C. 78q-1(b)(3)(F) (1988).
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The proposal to not hold the 1994 annual meeting also should avoid
the financial burden of holding two annual meetings within such a short
period of time. The Commission agrees with MSTC that the burden and
costs of holding a 1994 annual meeting at this time would be greatly in
excess of its usefulness.
Section 17A(b)(3)(C) of the Act requires that the rules of the
clearing agency assure fair representation of its shareholders and
participant in the selection of its directors.\4\ Because the current
Board was elected pursuant to MSTC rules designed to assure such fair
representation, the Commission believes that retaining the current
Board for a few additional months until the successor Board can be
elected in an orderly fashion is consistent with the fair
representation requirements under the Act.
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\4\15 U.S.C. 78q-1(b)(3)(C) (1988).
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MSTC has requested that the Commission find good cause for
approving the proposed rule changes prior to the thirtieth day after
the date of publication of notice of the filing. The Commission finds
good cause for so approving the proposed rule because in order to hold
their 1995 annual meeting in April, MSTC must begin preparations now.
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, DC 20549.
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 at the
Commission's Public Reference Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such filings also will be available for
inspection and copying at the principal office of MSTC. All submissions
should refer to the File No. SR-MSTC-94-15 and should be submitted by
January 17, 1995.
It is therefore ordered, pursuant to Section 19(b)(2) that the
proposed rule change (File No. SR-MSTC-94-15) is hereby 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. 94-31672 Filed 12-23-94; 8:45 am]
BILLING CODE 8010-01-M
