[Federal Register Volume 60, Number 78 (Monday, April 24, 1995)]
[Notices]
[Pages 20131-20132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9986]
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SECURITIES AND EXCHANGE COMMISSION
[Release 34-35618; File No. 600-23]
Self-Regulatory Organizations; Government Securities Clearing
Corporation; Notice of Filing of an Amended Application for Full
Clearing Agency Registration and a Request for Extension of Temporary
Registration as a Clearing Agency
April 17, 1995.
Notice is hereby given that on February 3, 1995, the Government
Securities Clearing Corporation (``GSCC'') filed with the Securities
and Exchange Commission (``Commission'') an application, pursuant to
Sections 17A and 19(a) of the Securities Exchange Act of 1934
(``Act''),\1\ requesting that the Commission grant GSCC full
registration as a clearing agency or, in the alternative, extend GSCC's
temporary registration as a clearing agency until such time as the
Commission is able to grant GSCC permanent registration.\2\ On March
13, 1995, GSCC filed with the Commission an amended CA-1. The
Commission is publishing this notice to solicit comments from
interested persons on the request for extension of registration.
\1\15 U.S.C. 78q-1, 78s(a) (1988).
\2\Letter from Charles A. Moran, President, GSCC, to Brandon
Becker, Director, Division of Market Regulation, Commission
(February 3, 1995) (``Registration Letter'').
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On May 24, 1988, the Commission approved, pursuant to Sections 17A
and 19(a) of the Act and Rule 17Ab2-1(c) thereunder,\3\ the application
of GSCC for registration as a clearing agency on a temporary basis for
a period of three years.\4\ The Commission subsequently extended GSCC's
registration until May 31, 1995.\5\
\3\17 CFR 240.17Ab2-1 (1994).
\4\Securities Exchange Act Release No. 25740 (May 24, 1988), 53
FR 19639.
\5\Securities Exchange Act Release Nos. 29067 (April 11, 1991),
56 FR 15652 and 32385 (June 3, 1993), 58 FR 32405.
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GSCC provides clearance and settlement services for its members'
transactions in government securities. GSCC offers its members services
for next-day settling trades, forward settling trades, auction takedown
activity, the multilateral netting of trades, the novation of netted
trades, and daily marking-to-the-market. In connection with GSCC's
clearance and settlement services, GSCC provides a centralized loss
allocation procedure and maintains margin to offset netting and
settlement risks.
At the time of GSCC's initial registration, the Commission granted
GSCC exemptions from compliance with the participation standards in
Sections 17A(b)(3)(B) and 17A(b)(4)(B) and the fair representation
requirements in Section 17A(b)(3)(C) of the Act.\6\ GSCC has requested
that the Commission remove GSCC's exemption from the participation
standards in Section 17A(b)(3)(B) and 17A(b)(4)(B) of the Act.\7\ The
Commission recently has approved two proposed rule changes that
increase the categories of those eligible for membership in GSCC's
netting system.\8\ In addition, GSCC has asserted that its current
selection process for its board of directors, which permits any GSCC
member to nominate candidates for election to the Board and to vote for
candidates so nominated, assures fair representation.\9\ GSCC further
states that it recognizes future membership growth may require GSCC to
adjust the selection process to ensure fair member representation on
the Board. The Commission is reviewing GSCC's request to remove the
exemptions.
\6\The Commission determined that GSCC's rules did not enumerate
the statutory categories of membership as required by Section
17A(b)(3)(B) and the financial standards for applicants and members
as contemplated by Section 17A(b)(4)(B) of the Act. 15 U.S.C. 78q-
1(b)(3)(B), 78q-1(b)(4)(B) (1988). In addition, the Commission
determined that while the composition of GSCC's Board of Directors
reasonably reflected GSCC's anticipated initial membership, it would
be appropriate to reevaluate whether GSCC's process for selecting
its Board of Directors complied with the fair representation
requirements in Section 17A(b)(3)(C) of the Act before granting full
registration as a clearing agency. 15 U.S.C. 78q-1(b)(3)(C) (1988).
\7\See Registration Letter, note 2 supra.
\8\Securities Exchange Act Release Nos. 34935 (November 3,
1994), 59 FR 56100 (order approving establishment of new categories
of netting system membership for futures commission merchants) and
32722 (August 5, 1993), 58 FR 42993 (order approving establishment
of new categories of netting system membership for dealer and
interdealer brokers, issuers of government securities, insurance
companies, registered clearing agencies, and registered insurance
companies).
\9\See Registration Letter, note 2 supra.
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Interested persons are invited to submit written data, views, and
arguments concerning the foregoing application by May 15, 1995. Such
written data, views, and arguments will be considered by the Commission
in granting registration or instituting proceedings to determine
whether registration should be denied in accordance with Section
19(a)(1) of the Act.\10\ Persons making written submissions should file
six copies thereof with the Secretary, Securities and Exchange
Commission, 450 Fifth Street, NW., Washington, DC 20549. Reference
should be made to File No. 600-23. Copies of the amended application
for registration and all written comments will be available for
inspection at the Commission's Public [[Page 20132]] Reference Room,
450 Fifth Street, NW., Washington, DC 20549.
\10\15 U.S.C. 78s(a)(1) (1988).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
\11\17 CFR 200.30-3(a)(16)(1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-9986 Filed 4-21-95; 8:45 am]
BILLING CODE 8010-01-M
