[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Notices]
[Pages 27085-27086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12884]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38602; File No. SR-DTC-97-04]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Order Granting Accelerated Approval of a Proposed
Rule Change to Increase the Size of the Board of Directors
May 9, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on April 29, 1997, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change (File No.
SR-DTC-97-04) as described in Items I and II below, which items have
been prepared primarily by DTC. The Commission is publishing this
notice and order to solicit comments on the proposed rule change from
interested persons and to grant accelerated approval of the proposal.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change will amend DTC's organization certificate
and by-laws to increase the maximum number of directors on DTC's board
from fifteen to twenty and to increase the current membership of DTC's
board from fifteen to seventeen directors.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, DTC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments that it received on the proposed rule change.
The text of these statements may be examined at the places specified in
Item IV below. DTC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such
statements.\2\
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\2\ The Commission has modified the text of the summaries
submitted by DTC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Currently, DTC's organization certificate and by-laws provide that
DTC's board may consist of from five to fifteen directors. At its March
meeting, DTC's board decided that National Securities Clearing
Corporation (``NSCC'') President David M. Kelly should join DTC's board
and that William F. Jaenike, DTC's Chairman and Chief Executive
Officer, should join NSCC's board and sit on that board's executive
committee. In order to accommodate the addition of Mr. Kelly and to
allow for possible limited future expansion of the board, at DTC's
April 1, 1997, board meeting, the board approved an increase in the
maximum number of directors from fifteen to twenty and an increase in
the current membership of the board from fifteen to seventeen. The
seventeenth director is expected to be a banker in order to maintain
the balance of DTC board membership between representatives of banks
and broker-dealers that has been in existence for many years. DTC has
filed a letter application with the New York State Banking Department
(``NYSBD'') seeking approval for DTC to amend its organization
certificate to allow for a maximum of twenty directors on DTC's board.
In addition to filing an application with the NYSBD, DTC will be asking
its shareholders to vote to approve the amendments to the organization
certificate and the by-laws, to elect individuals to fill the newly
created seats on DTC's board, and to approve the certificate of
amendment.
DTC believes the proposed rule change is consistent with the
requirements of Section 17A(b)(3)(F) \3\ of the Act and the rules and
regulations thereunder in that the proposal should
[[Page 27086]]
foster cooperation and coordination with persons engaged in the
clearance and settlement of securities transactions.
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\3\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments from DTC participants have not been solicited or
received on the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Section 17A(B)(3)(F) of the Act requires that the rules of a
clearing agency must be designed to foster cooperation and coordination
with persons engaged in the clearance and settlement of securities
transactions.\4\ By enabling a representative of NSCC to serve on DTC's
board, NSCC and DTC will be better able to coordinate their activities.
Such coordination may assist both entities in fulfilling their
statutory mandates in a more efficient manner. Thus, the Commission
believes that DTC's proposal in consistent with Section 17A(B)(3)(F) of
the Act.
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\4\ Id.
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DTC requests the Commission find good cause for approving the
proposed rule change prior to the thirtieth day after the date of
publication of notice of the filing. The Commission finds good cause
exists for approving the proposed rule change prior to the thirtieth
day after the date of publication of notice of the filing because
accelerated approval will permit the new directors to be elected at a
shareholder's meeting scheduled for the middle of May.
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, N.W., Washington, D.C. 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 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 DTC. All submissions should
refer to the file number SR-DTC-97-04 and should be submitted by June
6, 1997.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-DTC-97-04) 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. 97-12884 Filed 5-15-97; 8:45 am]
BILLING CODE 8010-01-M
