[Federal Register Volume 59, Number 116 (Friday, June 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14784]
[[Page Unknown]]
[Federal Register: June 17, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34200; File No. SR-MSTC-94-08]
Self-Regulatory Organizations; Midwest Securities Trust Company;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Reorganization Processing
June 10, 1994.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 5, 1994, the Midwest
Securities Trust Company (``MSTC'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
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. section 78s (b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change adds to Article IV of MSTC's rules an
interpretation which describes the Reorganization Processing System.
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, or 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 rule filing is to set forth in MSTC's rules the
fact that MSTC may provide reorganization notices by computer facility.
The computer facility that MSTC developed for the purpose of providing
reorganization notices is a user-friendly, real-time computer system
that allows participants, through the use of intuitive, data-driven
displays, to view offer information on-line. It will allow MSTC
participants to inquire as to various offer criteria, including offer
type(s), target CUSIP(s), MSTC offer status, and offer date(s).
Participants will be able to tailor their inquiries to only those
offers in which they have a depository position. They may also view the
location of a position within their MSTC account(s) for a chosen CUSIP.
In addition, participants will be able to inquire as to a CUSIP's
reorganization history.
Rule 4 of Article IV of MSTC's rules describes MSTC's activities
with respect to reorganizations, and sections 3 and 4 of Rule 2 of
Article IV describe MSTC's responsibilities with respect to
reorganization information disseminated by MSTC. Pursuant to these
rules, MSTC currently provides daily notification of newly announced
and updated corporate reorganization offers to its participants through
manually produced, hard-copy notices. MSTC produces these notices,
which include pertinent offer information, for a variety of offer types
including, but not limited to, mergers, reverse splits, tenders and
exchanges, expiring rights and warrants, put options on corporate and
municipal bonds, and expiring convertible securities.
Each current notice includes a disclaimer to the effect that MSTC
does not guarantee the correctness or completeness of the information
provided. This liability standard has been used for over twenty years
and was part of MSTC's written procedures when MSTC applied for and
received permanent registration as a clearing agency. The proposed
interpretation sets forth language that limits MSTC's liability with
respect to the information provided by computer. The liability standard
is substantially the same as the standard for the hard copy notices.
The proposed rule change is consistent with section 17A 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 does not believe that the proposed rule change will impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
Written comments were not and are not intended to be solicited with
respect to the proposed rule change, and none have been received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
MSTC requests that the proposed rule change become effective upon
filing pursuant to 19(b)(3)(A)(iii)\2\ of the Act and subparagraph
(e)(4) of rule 19b-4\3\ thereunder. The foregoing rule change effects a
change in an existing service that does not adversely affect the
safeguarding of securities or funds in the custody or control of MSTC
or for which MSTC is responsible and does not significantly affect the
respective rights or obligations of MSTC or persons using the service.
At any time within sixty days of the filing of such rule change, the
Commission may summarily abrogate such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
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\2\15 U.S.C. section 78s(b)(3)(A)(iii) (1988).
\3\17 CFR Sec. 240.19b-4(e)(4) (1993).
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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. section 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-94-08 and should
be submitted by July 8, 1994.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\17 CFR Sec. 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-14784 Filed 6-16-94; 8:45 am]
BILLING CODE 8010-01-M
