99-2735. Self-Regulatory Organizations; MBS Clearing Corporation; Order Granting Approval of a Proposed Rule Change Increasing the Number of Directors

[Federal Register Volume 64, Number 24 (Friday, February 5, 1999)]
[Notices]
[Page 5846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2735]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41004; File No. SR-MBSCC-93-03]


Self-Regulatory Organizations; MBS Clearing Corporation; Order 
Granting Approval of a Proposed Rule Change Increasing the Number of 
Directors

January 29, 1999.
    On November 5, 1998, MBS Clearing Corporation (``MBSCC'') filed 
with the Securities and Exchange (``Commission'') the proposed rule 
change (File No. SR-MBSCC-98-03) pursuant to Section 19(b)(1) of the 
Securities and Exchange Act of 1934 (``Act'').\1\ Notice of the 
proposal was published in the Federal Register on November 30, 1998.\2\ 
For the reasons discussed below, the Commission is approving the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ Securities and Exchange Act Release No. 34-40702 (November 
23, 1998) 63 FR 65831.
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I. Description

    The rule change amends Article 3, Section 3.1 of MBSCC's By-laws to 
increase the number of directors on its board from thirteen to 
fifteen.\3\ Currently, MBSCC has thirteen directors divided into three 
classes. Classes I and II each consist of four directors, and Class III 
consists of five directors. Under the rule change, each class will now 
consist of five directors.
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    \3\ Article 3, Section 3.1 governs the number, election, and 
term of office of directors.
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    MBSCC's shareholders agreement provides that one director 
represents management, one director represents the National Securities 
Clearing Corporation, and the remaining directors represent MBSCC's 
participants. Under the rule change, the two additional directors will 
represent MBSCC's participants.

II. Discussion

    Section 17A(b)(3)(C) \4\ provides that the rules of a clearing 
agency must provide for the fair representation of its shareholders or 
members and participants in the selection of directors. The Commission 
believes that the increase in the size of MBSCC's board is consistent 
with the Act's fair representation requirements because the addition of 
two directors will increase the opportunity for participants to be 
represented on MBSCC's board and should allow the board to more 
accurately reflect its membership.
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    \4\ 15 U.S.C. 78q-1(b)(3)(C).
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
in particular with 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 change (File No. MBSCC-98-03) be and hereby is 
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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-2735 Filed 2-4-99; 8:45 am]
BILLING CODE 8010-01-M