[Federal Register Volume 59, Number 63 (Friday, April 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7765]
[[Page Unknown]]
[Federal Register: April 1, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33820; File No. SR-MSTC-94-04]
Self-Regulatory Organizations; the Midwest Securities Trust
Company; Filing of a Proposed Rule Change Establishing a Limited
Purpose Participant Program
March 25, 1994.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 3, 1994, the
Midwest Securities Trust Company (``MSTC'') filed with the Securities
and Exchange Commission (`'Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
primarily by MSTC. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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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 submits the following proposed rule change to establish a new
class of participant with limited access to MSTC's services (``limited
purpose participant'').
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. 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 purpose of the proposed rule filing is to establish a Limited
Purpose Participant Program. Recently, the Commodity Futures Trading
Commission (``CFTC'') issued an order approving the Chicago Mercantile
Exchange's (``CME'') proposal to revise its program for accepting stock
as clearing house performance bond margin. As a condition of the CFTC
order, the CME agreed that all stock pledged pursuant to that program
would be maintained at MSTC. In order to carry out the CME program, the
CME has become a pledgee participant at MSTC. As a result, clearing
members of the CME that are also participants at MSTC have been able to
take advantage of this program by utilizing MSTC's existing Automated
Pledge Loan Program. Typically, these are firms that are registered
both as broker-dealers and as futures commission merchants (``FCMS'').
It has become readily apparent that clearing members of the CME that
are not members of MSTC are at a disadvantage because they are not able
to participate in the CME program. Therefore, MSTC is proposing to
establsh a Limited Purpose Participant Program to accommodate those
clearing members of the CME that do not meet MSTC's existing
qualifications to be participants because of their registration solely
as FCMs.
Limited purpose participants will be limited to FCMs that are
clearing members of a futures exchange. The activities at MSTC for
which a limited purpose participant will be eligible will be limited to
making or receiving free depository delivery instructions (``DDIs''),
maintaining ``segregated positions'' for the purpose of effecting a
free pledge of securities to a specified pledgee participant (i.e., the
futures exchange of which the limited purpose participant is a clearing
member), receiving a return of the securities from that pledgee
participant, and receiving a credit from MSTC for any cash dividends
received on those securities. Limited purpose participants will not be
able to make physical deposits or physical withdrawals of securities.
Limited purpose participants will not be eligible for any other service
offered by MSTC.
The proposed rule change is consistent with section 17(A) of the
Act in that it will facilitate the prompt and accurate clearance and
settlement of securities transactions.
B. Self-Regulatory Organization's Statement on Burden on Competition
MSTC perceives no impact on competition by reason of the proposed
rule change.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments from MSTC participants or others have not been
solicited or received on the text of the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five days of the date of publication of this notice
in the Federal Register or within such longer period (i) as the
Commission may designate up to ninety days of such date if it finds
such longer period to be appropriate and publishes its reasons for so
finding or (ii) as to which the self-regulatory organization consents,
the Commission will:
(A) By order approve the proposed rule change or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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 in the
Commission's Public Reference Section, 450 Fifth Street NW.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of the above-referenced
self-regulatory organization.
All submissions should refer to File No. SR-MSTC-94-04 and should
be submitted by April 22, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-7765 Filed 3-31-94; 8:45 am]
BILLING CODE 8010-01-M
