[Federal Register Volume 62, Number 26 (Friday, February 7, 1997)]
[Notices]
[Pages 5869-5870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3065]
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SECURITIES AND EXCHANGE COMMISSION
[Release 34-38224; File No. 600-24]
Self-Regulatory Organizations; Delta Clearing Corp.; Notice of
Filing and Order Approving Application for Extension of Temporary
Registration as a Clearing Agency
January 31, 1997.
On January 17, 1997, Delta Clearing Corp. (``DCC'') \1\ filed with
the Securities and Exchange Commission (``Commission'') a request
pursuant to Section 19(a) of the Securities Exchange Act of 1934
(``Act'') \2\ for extension of its registration as a clearing agency
under Section 17A of the Act \3\ for a period of six months or for such
longer period as the Commission deems appropriate.\4\ The Commission is
publishing the notice and order to solicit comments from interested
persons and to grant DCC's request for an extension of its temporary
registration as a clearing agency through July 31, 1997.
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\1\ Formerly Delta Government Options Corp.
\2\ 15 U.S.C. 78s(a).
\3\ 15 U.S.C. 78q-1.
\4\ Letter from Robert C. Mendelson, Esq., Morgan, Lewis and
Bockius, to Jerry W. Carpenter, Assistant Director, Division of
Market Regulations, Commission (January 16, 1997).
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On January 12, 1990, the Commission granted DCC's application for
registration as a clearing agency pursuant to Sections 17A(b)(2) and
19(a) of the Act \5\ on a temporary basis for a period of thirty-six
months.\6\ Since that time, the Commission has extended DCC's temporary
registration as a clearing agency through January 31, 1997.\7\ DCC now
requests that the Commission grant an extension of its original order
granting DCC temporary registration as a clearing agency subject to the
same terms and conditions for a period of six months or for such longer
period as the Commission deems appropriate.
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\5\ 15 U.S.C. 78q-1(b)(2) and 78s(a).
\6\ Securities Exchange Act Release No. 27611 (January 12,
1990), 55 FR 1890.
\7\ Securities Exchange Act Release Nos. 31856 (February 11,
1993), 58 FR 9005 (extension until January 12, 1995) and 35198
(January 6, 1995), 60 FR 3286 (extension until January 31, 1997).
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As discussed in detail in the order granting DCC's initial
temporary registration as a clearing agency,\8\ one of the primary
reasons for DCC's registration is to enable it to provide for the safe
and efficient clearance and settlement of transactions involving the
over-the-counter trading of options on U.S. Treasury securities. Since
the time, the Commission has approved DCC's request to begin clearance
and settlement of repurchase agreement transactions involving U.S.
Treasury securities as the underlying instrument.\9\ Currently,
repurchase agreement transactions constitute the majority of the
transactions cleared by DCC.
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\8\ Supra note 6.
\9\ Securities Exchange Act Release No. 36367 (October 13,
1995), 60 FR 54095.
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In light of DCC's past performance, the Commission believes that
DCC has the capacity to comply with the statutory obligations set forth
under Section 17A(b)(3) of the Act,\10\ which sets forth the
prerequisites for registration as a clearing agency. However, the
Commission believes that DCC should continue to be registered on a
temporary basis. Currently, DCC has an exemption from the fair
representation requirements of Section 17A(b)(3)(C) of the Act.\11\ The
Commission believes that this should be resolved prior to DCC's
registration becoming permanent. Further, DCC has only recently begun
providing clearance services for repurchase agreement transactions,
which constitutes the vast majority of its operations.\12\ The
Commission would like the opportunity of observing DCC's performance in
this area prior to a grant of permanent registration as a clearing
agency. Comments received during DCC's temporary registration will be
considered in determining whether DCC should receive permanent
registration as a clearing agency under Section 17A(b) of the Act.\13\
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\10\ 15 U.S.C. 78q-1(b)(3).
\11\ 15 U.S.C. 78q-1(b)(3)(C).
\12\ DCC also has recently or is in the process of making
several major changes to its operational structure. For example, DCC
was recently sold by its original owner, Cawsl Corp., to three
purchasers led by Intercapital Group Ltd. In addition, DCC is in the
process of selecting a new facilities manager and in automating
several of its processes.
\13\ 15 U.S.C. 78q-1(b).
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Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submission
should file six copies thereof with the
[[Page 5870]]
Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington D.C. 20549. Copies of the submissions, all subsequent
amendments, all written statements with respect to the request for
extension of temporary registration as a clearing agency that are filed
with the Commission, and all written communications relating to the
requested extension between the Commission and any person, other than
those that may be withheld form 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 Room, 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such filing will also be
available for inspection and copying at the principal office of DCC.
All submissions should refer to the File No. 600-24 and should be
submitted by February 28, 1997.
Conclusion
On the basis of the foregoing, the Commission finds that DCC's
request for extension of temporary registration as a clearing agency is
consistent with the Act and in particular with Section 17A of the Act.
It is therefore ordered, that DCC's temporary registration as a
clearing agency (File No. 600-24) be, and hereby is extended through
July 31, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(50)(i).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-3065 Filed 2-6-97; 8:45 am]
BILLING CODE 8010-01-M
