37586 Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Notices

1 15 U.S.C. 78s(b)(1).

2The Commission has modified the text of the

summaries prepared by GSCC.

DTC and to the industry. DTC will

eliminate the shipping cost, insurance

cost, and risk associated with shipping

these certificates via commercial

couriers from DTC to the redemption

agent. In addition, DTC’s destruction of

the matured BEO certificates will

provide the industry with economies of

scale for destruction and recordkeeping

related to matured BEO certificates.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A(b)(3)(A) of

the Act and the rules and regulations

thereunder applicable to DTC in that it

promotes the safeguarding of securities

and funds in DTC’s custody or control

or for which it is responsible.

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, in the public

interest, and for the protection of

investors.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

DTC has discussed this rule change

proposal in its current form orally with

various DTC participants and transfer

agents. A number of those consulted

have expressed interest in the proposed

service.

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 DTC consents, the

Commission will:

(a) By order approve such 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,

including whether the proposed rule

change is consistent with the Act.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW,

Washington, DC 20549–0609. 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, NW,

Washington, DC. Copies of such filing

will also be available for inspection and

copying at the principal office of the

above-mentioned self-regulatory

organization. All submissions should

refer to the File No. SR–DTC–99–6 and

should be submitted by July 6, 2000.

For the Commission, by the Division of

Market Regulation pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–15126 Filed 6–14–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42911; File No. SR–GSCC–

00–06]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Notice of Filing and

Immediate Effectiveness of Proposed

Rule Change Relating to Suspension

of the Discount in Fee Structure

June 8, 2000.

Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

June 5, 2000, the Government Securities

Clearing Corporation (‘‘GSCC’’) 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 GSCC.

The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

parties.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule filing suspends

GSCC’s discount for comparison and

netting fees for buy-sell transactions.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for the Proposed Rule

Change

In its filing with the Commission,

GSCC included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments it received on the proposed

rule change. The text of these statements

may be examined at the places specified

in Item IV below. GSCC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of these statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

Recently, GSCC’s Board and

Management reviewed the results of a

study of GSCC’s fee structure, the

fundamental part of which has

remained unchanged since the

inception of netting in 1989. In response

to this review, GSCC has determined it

appropriate to temporarily suspend its

discount for comparison and netting

fees for buy-sell transactions, effective

as of July 3, 2000.

The current discount was

implemented in 1995 and resulted in a

10 percent reduction in the fees charged

to members for comparison and netting

of their buy-sell transactions. At that

time, GSCC was focusing its

management and technological

resources on the imminent introduction

of comparison and netting services for

repo transactions. Because those

services are income-earning and selffunding, GSCC was in a position to

effectively return to its members the

surplus generated by its core services for

buy-sell transactions. The Board of

Directors had approved the discount in

1995 based on GSCC’s financial strength

and continued projections for

profitability with the intent that the

discount appropriateness be monitored

and reassessed periodically.

Since 1995, GSCC has continued to

steadily expand both the variety and

scope of the services it provides to

members. This trend will accelerate in

2000 and beyond as GSCC gradually

moves to a real-time messaging, risk

management, and settlement

environment and achieves other

important initiatives such as

establishing cross-margining

arrangements with multiple clearing

organizations.

The determination to temporarily

suspend the discount allows GSCC to

Federal Register / Vol. 65, No. 116 / Thursday, June 15, 2000 / Notices 37587

3 15 U.S.C. 78s(b)(3)(A)(ii).

4 17 CFR 240.19b–4(f)(2). 5 17 CFR 200.30–39A)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3 17 CFR 240.10a–1.

position itself to ensure continued

service enhancements and the

achievement of various business

initiatives without deterioration of its

capital base. GSCC’s costs to develop,

implement, and support these new

services will be considerable. For

example, real-time messaging will

involve extensive systems development

as well as the costs associated with

maintaining multiple imput

environments. Moreover, many of these

services, such as the shift to real-time

comparison and risk management, will,

in and of themselves, not generate any

additional revenues for GSCC.

Assuming that current net income

levels are sustained, it is GSCC’s

intention to reinstate a discount

methodology as a business incentive for

members to move to real-time

messaging. The reinstated discount

would be applied to both buy-sell and

repo transactions; currently, the

discount lowers fees only for buy-sell

transactions, which creates inequities in

the manner in which it applies to

members.

GSCC believes that the proposed rule

change is consistent with the

requirements of the Act and the rules

and regulations thereunder applicable to

GSCC and in particular with Section

17A(b)(3)(F) of the Act because it will

permit GSCC to cover the high costs

involved in providing its members with

new and important services.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

GSCC does not believe that the

proposed rule change will have an

impact or impose a burden on

competition.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments relating to the

proposed rule change have not yet been

solicited or received. Members will be

notified of the rule change filing, and

comments will be solicited, by an

Important Notice. GSCC will notify the

Commission of any written comments

received by GSCC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Act

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) 3 of the Act and Rule 19b–

4(f)(2) 4 promulgated thereunder

because the proposal establishes or

changes a due, fee, or other charge

imposed by GSCC. At any time within

sixty days of the filing of such proposed

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.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change is consistent with the Act.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW,

Washington, DC 20549–0609. 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 also will be available for

inspection and copying at the principal

office of GSCC. All submission should

refer to File No. SR–GSCC–00–06 and

should be submitted by July 6, 2000.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–15088 Filed 6–14–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42913; File No. SR–NYSE–

00–18]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the New York Stock Exchange, Inc.

Relating to NYSe Direct+, the

Exchange’s Automatic Execution

Facility for Certain Limit Orders of

1099 Shares or Less

June 8, 2000.

Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on May 1,

2000, the New York Stock Exchange,

Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the Exchange.

The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change consists of

new Exchange Rules 1000 through 1005

governing trading through NYSe

Direct+ TM, a new Exchange facility to

provide automatic execution of limit

orders of a specified size. The proposed

rule change also amends Exchange Rule

13 to define an ‘‘auto ex’’ order and

Exchange Rule 476A to include

proposed Rules 1000 through 1005 in

the list of rules subject to summary fine

procedures. The Exchange is also

submitting for Commission approval

interpretations of Exchange Rules 104,

123A.40, and 91, and it will request

separately that the Commission issue

the appropriate relief from Commission

Rule 10a–1.3 The text of the proposed

rule change is set forth below. All

language is being added.

Rule 1000: Automatic Execution of

Limit Orders Against Orders Reflected

in NYSE Published Quotation

Only straight limit orders without tick

restrictions are eligible for entry as auto

ex orders. Auto ex orders to buy shall

be priced at or above the price of the

published NYSE offer. Auto ex orders to

sell shall be priced at or below the price

of the NYSE bid. An auto ex order shall

receive an immediate, automatic

execution against orders reflected in the

Exchange’s published quotation and

shall be immediately reported as NYSE

transactions, unless:

(i) The NYSE’s published quotation is

in the non-firm quote mode;

(ii) The NYSE’s published quotation

has been gapped for a brief period

because of an influx of orders on one

side of the market, and the NYSE’s

published quotation size is one hundred

shares at the bid and/or offer;

(iii) With respect to a single-sided

auto ex order, a better price exists in

another ITS participating market center;