[Federal Register Volume 60, Number 53 (Monday, March 20, 1995)]
[Notices]
[Pages 14806-14807]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6698]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35482; File No. 600-25]
Self-Regulatory Organizations; Participants Trust Company; Notice
of Filing of Request and Order Approving Application for Extension of
Temporary Registration as a Clearing Agency
March 13, 1995.
On February 28, 1995, the Participants Trust Company (``PTC'')
files with the Securities and Exchange Commission (``Commission'') a
request pursuant to section 19(a)\1\ of the Securities Exchange Act of
1934 (``Act'') for extension of its registration as a clearing agency
under Section 17A\2\ of the Act for a period of one year.\3\ The
Commission is publishing this notice of filing of request and order to
solicit comments from interested persons and to grant PTC's request for
an extension of its temporary registration as a clearing agency through
March 31, 1996.
\1\15 U.S.C. 78s(a)(1) (1988).
\2\15 U.S.C. 78q-1 (1988).
\3\Letter from John J. Sceppa, President and Chief Executive
Officer, PTC, to Jerry Carpenter, Assistant Director, Division of
Market Regulation, Commission (February 28, 1995).
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On March 28, 1989, the Commission granted PTC's application for
registration as a clearing agency pursuant to Sections 17A(b)(2) and
19(a)\4\ of the Act on a temporary basis for a period of one year.\5\
Subsequently, the Commission issued orders that extended PTC's
temporary registration as a clearing agency, the last of which extended
PTC's registration until March 31, 1995.\6\
\4\15 U.S.C. 78q-1(b)(2) and 78s(a) (1988).
\5\Securities Exchange Act Release No. 26671 (March 28, 1989),
54 FR 13266.
\6\Securities Exchange Act Release Nos. 27858 (March 28, 1990),
55 FR 12614; 29024 (March 28, 1991), 56 FR 13848; 30537 (April 9,
1992), 57 FR 12351; 32040 (March 23, 1993), 58 FR 16902; and 33734
(March 8, 1994), 59 FR 11815.
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As discussed in detail in the initial order granting PTC's
temporary registration,\7\ one of the primary reasons for PTC's
registration was to develop depository facilities for mortgage-backed
securities, particularly securities guaranteed by the Government
National Mortgage Association (``GNMA''). PTC services include
certificate safekeeping, book entry deliveries, an automated facility
for the pledge or segregation of securities, and other services related
to the immobilization of securities certificates.
\7\Supra note 5.
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PTC continues to make significant progress in the areas of
financial performance, regulatory commitments, and operational
capabilities. For example, the par value of GNMA securities on deposit
at PTC has grown from $850 billion on December 31, 1993, to $967
billion on December 31, 1994, with average monthly GNMA I principal and
interest distributions processed by PTC increasing from $13.5 billion
in 1993 to $103.9 billion in 1994. The par value of VA REMICs on
deposit at PTC has grown from $4.634 billion on December 31, 1993, to
$7.256 billion on December 31, 1994. The average monthly transaction
volume processed by PTC has grown from 309,000 in 1993 to 353,225 in
1994.\8\ PTC also has expanded its product base with the designation of
GNMA REMICs,\9\ GNMA Platinum securities,\10\ and certain Freddie Mac
REMICs backed by GNMA securities\11\ as depository eligible securities.
In addition, PTC declared a dividend of $1.00 per share to stockholders
of record on December 31, 1994.\12\
\8\Supra note 3.
\9\Securities Exchange Act Release No. 34154 (June 3, 1994), 59
FR 30073.
\10\Securities Exchange Act Release No. 35044 (December 2,
1994), 59 FR 63847.
\11\Securities Exchange Act Release No. 34472 (August 1, 1994),
59 FR 40397.
\12\Securities Exchange Act Release No. 35205 (January 9, 1995),
60 FR 3444.
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PTC also continued its efforts over the past year to implement
operational and procedural changes in connection with PTC's temporary
registration.\13\ For [[Page 14807]] example, PTC eliminated the
Deliverer's Security Interest from its rules in response to its
commitment made to the Commission and the Federal Reserve Bank of New
York.\14\
\13\In connection with PTC's original temporary registration,
PTC committed to the Commission and to the Federal Reserve Bank of
New York to make a number of operational and procedural changes
which include:
(1) Eliminating trade reversals from PTC's procedures to cover a
participant default;
(2) Phasing out the aggregate excess net debit limitation for
extensions under the net debit monitoring level procedures;
(3) Making principal and interest advances, now mandatory,
optional;
(4) Allowing participants to retrieve securities in the abeyance
account and not allowing participants to reverse transfers because
customers may not be able to fulfill financial obligations to the
participants;
(5) Eliminating the deliverer's security interest and replacing
it with a substitute;
(6) Reexamining PTC's account structure rules to make them
consistent with PTC's lien procedures;
(7) Expanding and diversifying PTC's lines of credit;
(8) Assuring operational integrity by developing and
constructing a back-up facility; and
(9) Reviewing PTC rules and procedures for consistency with
current operations.
\14\Securities Exchange Act Release No. 34701 (September 22,
1994), 59 FR 49730.
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PTC has functioned effectively as a registered clearing agency for
the past six years. In light of PTC's past performance, the Commission
believes that PTC has the capacity to comply with the statutory
obligations set forth under Section 17A(b)(3) of the Act\15\ as the
prerequisites for registration as a clearing agency. Comments received
during PTC's temporary registration will be considered in determining
whether PTC should receive permanent registration as a clearing agency
under Section 17A(b) of the Act.\16\
\15\15 U.S.C. 78q-1(b)(3) (1988).
\16\15 U.S.C. 78q-1(b) (1988).
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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, N.W., Washington, D.C. 20549.
Copies of the submission, 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 from the public in accordance with provisions of 5 U.S.C. 552,
will be available for inspection and copying in the Commission's Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of such filing also will be available for inspection and copying
at the principal office of PTC. All submissions should refer to File
No. 600-25.
Conclusion
On the basis of the foregoing, the Commission finds that PTC'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 PTC's temporary registration as a
clearing agency (File No. 600-25) be, and hereby is, extended through
March 31, 1996.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\17\
\17\17 CFR 200.30-3(a)(50)(i) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-6698 Filed 3-17-95; 8:45 am]
BILLING CODE 8010-01-M
