95-29689. Self-Regulatory Organizations; International Securities Clearing Corporation; Order Approving Extension of Temporary Registration as a Clearing Agency Through November 30, 1996  

  • [Federal Register Volume 60, Number 234 (Wednesday, December 6, 1995)]
    [Notices]
    [Page 62511]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-29689]
    
    
    
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    SECURITIES AND EXCHANGE COMMISSION
    [Release No. 34-36529; International Series Release No. 892; File No. 
    600-20]
    
    
    Self-Regulatory Organizations; International Securities Clearing 
    Corporation; Order Approving Extension of Temporary Registration as a 
    Clearing Agency Through November 30, 1996
    
    November 29, 1995.
        Pursuant to Section 19(a) of the Securities Exchange Act of 1934 
    (``Act''),\1\ on October 23, 1995, the International Securities 
    Clearing Corporation (``ISCC'') filed with the Securities and Exchange 
    Commission (``Commission'') a request that the Commission extend ISCC's 
    temporary registration as a clearing agency until November 30, 1997.\2\ 
    Notice of ISCC's request for extension of temporary registration 
    appeared in the Federal Register on October 31, 1995.\3\ No comments 
    were received. This order approves ISCC's amendment by extending ISCC's 
    registration as a clearing agency through November 30, 1996.
    
        \1\15 U.S.C. Sec. 78q-1 (1988).
        \2\Letter from Julie Beyers, Associate Counsel, ISCC, to 
    Christine Sibille, Division of Market Regulation, Commission 
    (October 20, 1995).
        \3\Securities Exchange Act Release No. 36411 (October 20, 1995), 
    60 FR 55399.
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        On May 12, 1989, the Commission granted the application of ISCC for 
    registration as a clearing agency pursuant to Sections 17A and 19(a) of 
    the Act\4\ and Rule 17Ab2-1(c)\5\ thereunder for a period of eighteen 
    months.\6\ At that time, the Commission granted ISCC an exemption from 
    compliance with Section 17A(b)(3)(C) of the Act.\7\ Section 
    17A(b)(3)(C) of the Act requires that ISCC's rules assure fair 
    representation of its shareholders (or members) and participants in the 
    selection of its directors and administration of its affairs. The 
    Commission subsequently extended ISCC's temporary registration as a 
    clearing agency and temporary exemption from Section 17A(b)(3)(C) of 
    the Act until November 30, 1995.\8\
    
        \4\15 U.S.C. Secs. 78q-1 and 78s(a) (1988).
        \5\17 CFR 240.17Ab2-1(c).
        \6\Securities Exchange Act Release No. 26812 (May 12, 1989), 54 
    FR 21691.
        \7\15 U.S.C. Sec. 78q-1(b)(3)(C) (1988).
        \8\Securities Exchange Act Releases Nos. 28606 (November 16, 
    1990), 55 FR 47976; 30005 (November 27, 1991), 56 FR 63747; and 
    33233 (November 22, 1993), 58 FR 63195.
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        As discussed in the order first granting ISCC's temporary 
    registration as a clearing agency, one of the primary reasons for 
    ISCC's registration was to enable it to provide for the safe and 
    efficient clearance and settlement of international securities 
    transactions by providing links to centralized, efficient processing 
    systems in the United States and to foreign financial institutions. 
    ISCC continues to develop its capacity to offer these services.\9\
    
        \9\ISCC has added three service providers, Standard Bank of 
    South Africa, Westpac Custodian Nominees Limited of Australia, and 
    Westpac Nominees-NZ-Limited, to its Global Clearance Network Service 
    to provide settlement and custody services in South Africa, 
    Australia, and New Zealand, respectively. Securities Exchange Act 
    Release Nos. 35392 (February 16, 1995), 60 FR 10415 and 36339 
    (October 5, 1995), 60 FR 53447. ISCC also has established links with 
    Monte Titoli, S.p.A., an Italian settlement and depository service, 
    and Caja de Valores, S.A., an Argentine settlement and depository 
    service. Securities Exchange Act Release Nos. 35219 (January 11, 
    1995), 60 FR 3685 and 35218 (January 11, 1995), 60 FR 3686.
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        As stated above, ISCC has an exemption from the fair representation 
    requirements of Section 17A(b)(3)(C) of the Act. Pursuant to this 
    exemption, ISCC's sole shareholder, the National Securities Clearing 
    Corporation (``NSCC'') elects ISCC's Board of Directors. ISCC's rules 
    for election of directors are not operatives.\10\ At the time of ISCC's 
    initial registration, ISCC requested that the exemption from the fair 
    representation requirement of the Act remain in place until the earlier 
    of (1) the time ISCC has twenty-five active members or (2) 1992. 
    Although both these benchmarks have been surpassed, ISCC continues to 
    believe that it does not have a meaningful participant base with only 
    thirty-seven of its forty-four members currently using ISCC services. 
    ISCC states that if its participants have the ability to participate in 
    the selection of the board of directors these participants will have an 
    inordinate and unintended control of the nomination and voting 
    processes.\11\
    
        \10\ISCC's rules provide for ISCC's Board of Directors to 
    consist of a maximum of twenty-two members. ISCC's rules further 
    provide that (1) twelve of those directors are to be selected from 
    the general partners or officers of participants by ISCC's 
    nominating committee, (2) two directors are to be officers of ISCC, 
    and (3) eight directors are to be nominees of NSCC. Participants may 
    submit names to ISCC's Nominating committee by submitting a petition 
    to ISCC's Secretary signed by the lesser of 5% of the participants 
    or fifteen participants. If a participant nominates a candidate for 
    participant director, ballots would be sent out to all participants 
    to vote in accordance with their usage of ISCC's system. NSCC would 
    vote its shares to elect the participant directors selected by the 
    participants.
        \11\Supra note 6.
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        The Commission believes that ISCC should diligently work towards 
    compliance with the requirements of Section 17A(b)(3)(C) and expects 
    that ISCC will no longer require an exemption from the fair 
    representation requirements no later than the end of this extension of 
    its registration as a clearing agency.
        It is therefore ordered, that ISCC's registration as a clearing 
    agency be, and hereby is, approved until November 30, 1996.
        For the Commission by the Division of Market Regulation, pursuant 
    to delegated authority.\12\
    
        \12\17 C.F.R. Sec. 240.30-3(a)(50) (1994).
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    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. 95-29689 Filed 12-5-95; 8:45 am]
    BILLING CODE 8010-01-M
    
    

Document Information

Published:
12/06/1995
Department:
Securities and Exchange Commission
Entry Type:
Notice
Document Number:
95-29689
Pages:
62511-62511 (1 pages)
Docket Numbers:
Release No. 34-36529, International Series Release No. 892, File No. 600-20
PDF File:
95-29689.pdf