53848 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

6 17 CFR 200.30–3(a)(12).

the payment system risks associated

with the DTC-PHILADEP interface.

In addition, the proposed

arrangements should result in

substantial savings for DTC participants

and the securities industry. In

connection with this proposal, former

sole PHILADEP participants may

become DTC participants if they qualify

under DTC’s participant standards. An

increase in the number of DTC

participants will result in higher DTC

transaction volumes there by reducing

the per unit service costs that must be

recovered through DTC participant

service fees.

Moreover, interdepository interfaces

involve the maintenance of substantial

facilities, communications networks and

account and inventory reconciliation

mechanisms. As a result of the proposal,

the substantial costs incurred by both

DTC and PHILADEP in operating an

interface will be eliminated.

DTC believes the proposed rule

change is consistent with the

requirements of Section 17A of the Act

and the rules and regulations

promulgated thereunder because the

rule proposal will help reduce the risk

associated with having interfaces,

provide for more efficient and less

expensive clearing and depository

services, and thereby facilitate the

prompt and accurate clearance and

settlement of such transactions. In

addition, the proposal will provide

qualified sole PHILADEP participants

with access to DTC’s facilities and will

be implemented consistently with the

safeguarding of securities and funds in

DTC’s custody and control.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed arrangements will have an

impact on or impose a burden on

competition. Securities depositories

registered under Section 17A of the Act

are utilities created to serve members of

the securities industry for the purpose

of providing certain services that are

ancillary to the businesses in which

industry members compete with one

another. Operating a securities

depository requires a substantial and

continuing investment in infrastructure,

including securities vaults,

telecommunications links with users,

data centers, and disaster recovery

facilities, in order to meet the increasing

needs of participants and respond to

regulatory requirements.

After consummation of the proposed

arrangements, securities industry

members will continue to have access to

high quality, low cost depository

services provided under the mandate of

the Act. The overall cost to the industry

of having such services available should

be reduced thereby permitting a more

efficient and productive allocation of

industry resources. Furthermore,

because most of a depository’s interface

costs must be mutualized, thereby

requiring some participants to subsidize

costs incurred by others, PHLX’s

withdrawal from maintaining

depository facilities should reduce costs

to DTC participants and thereby remove

impediments to competition. Finally,

PHLX’s ability to focus its resources on

the operations of its exchange should

help enhance competition among

securities markets.

Despite the dominant market position

that DTC will acquire, DTC believes that

the current regulatory scheme and the

very nature of the clearing and

depository industries provide

appropriate checks on the operations of

DTC. DTC is owned by its members that

utilize its services and its board of

directors is comprised of its members.

DTC must assure a fair representation of

its members in the selection of its

directors and administrators. DTC’s

service fees are reviewed by its board

and subject to public notice and

comment. Lastly, the existence of

independent depositories for special

securities and the potential for new

clearing agency registrants offer

significant checks on DTC’s power.

(C) Self-Regulatory Organization’s

Statement on Comments on the

proposed Rule Change Received From

Members, Participants, or Others

Written comments on the proposal

from DTC participants or others have

not been solicited or received. However,

the proposed arrangements are

consistent with recommendations made

to the boards of DTC and NSCC by the

Vision 2000 Committee (‘‘Committee’’),

a committee on industry representatives

of the two boards. The Committee’s

Report dated September 1994 states:

The industry currently owns a number of

utilities that provide services related to the

comparison, clearing, settlement and

safekeeping of U.S. (and to a lesser degree,

international) securities. These utilities

overlap in two ways. * * * We believe that

the industry’s and, as important, the

investors’, overall costs can be reduced and

safety and soundness can be enhanced by

eliminating these overlaps where there is no

clear advantage to having specialization or

competing development.

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.

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

Room, 450 Fifth Street, NW.,

Washington, DC. 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

No. SR–DTC–97–16 and should be

submitted by November 6, 1997.

For the Commission, by the Division of

Market Regulation pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27321 Filed 10–15–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39220; File No. SR–NSCC–

97–08]

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing of a

Proposed Rule Change Relating to a

Decision by the Philadelphia Stock

Exchange, Incorporated To Withdraw

From the Clearance and Settlement

and Securities Depository Businesses

October 8, 1997.

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

Securities Exchange Act of 1934 (the
Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices 53849

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

2These parties have entered into an agreement

dated as of June 18, 1997.

3A more detailed description of these proposed

arrangements is contained in Exhibit 2 to the filing.

A copy of the filing and all exhibits are available

for copying and inspection in the Commission’s

Public Reference Room.

4The Commission has modified the text of the

summaries prepared by NSCC.

5The term ‘‘same-day funds’’ refers to payment in

funds that are immediately available and generally

are transferred by electronic means.

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

August 6, 1997, the National Securities

Clearing Corporation (‘‘NSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) and on

August 28, 1997, amended the proposed

rule change (File No. SR–NSCC–97–08)

as described in Items I, II, and III below,

which items have been prepared

primarily by NSCC. 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 involves

proposed arrangements relating to a

decision by the Philadelphia Stock

Exchange, Incorporated (‘‘PHLX’’) to

withdraw from the securities clearance

and settlement and securities depository

businesses. Parties to the proposed

arrangements are The Depository Trust

Company (‘‘DTC’’) PHLX, Philadep

Depository Trust Company

(‘‘PHILADEP’’), NSCC, and Stock

Clearing Corporation of Philadelphia

(‘‘SCCP’’).2

The proposed arrangements as they

relate to NSCC will provide for the

following:

(1) NSCC will offer sole SCCP

participants an opportunity to become

NSCC participants if they meet NSCC’s

qualifications;

(2) NSCC and SCCP will cooperate to

assure the orderly transfer of continuous

net settlement securities positions of

sole SCCP participants and dual NSCC/

SCCP participants which authorize such

transfer;

(3) NSCC will make certain payments

to PHLX and SCCP;

(4) In general, for a period of five

years PHLX, SCCP, and PHILADEP will

not engage in the securities clearance

and securities depository businesses.

However, this prohibition will not apply

to PHLX’s equity ownership interest in

The Options Clearing Corporation; and

(5) SCCP will become a participant of

NSCC and will provide limited clearing

and margin services to PHLX equity

specialists and certain other PHLX

members.3

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NSCC 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. NSCC has prepared

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

and (C) below, of the most significant

aspects of such statements.4

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

PHLX has announced that it is

withdrawing from the clearance and

settlement and securities depository

businesses in order to focus its

resources on the operations of the

exchange. The proposed arrangements

will assist in achieving these objectives

while affording qualified sole SCCP

participants an opportunity to become

NSCC participants and to transfer their

continuous net settlement positions to

NSCC. NSCC believes that the proposed

arrangements will result in substantial

risk reduction and increased savings for

NSCC participants and the securities

industry as a whole.

Where there are interfaces among the

securities clearing agencies, same-day

funds settlement 5 exposes each clearing

agency to certain risks, such as the

failure of another clearing agency to

settle its net payment obligation because

of a failure by one of the participants of

such other clearing agency to settle with

it or because such other clearing agency

is experiencing a major systems

problem. These risks cannot be entirely

avoided with existing and available risk

management controls. PHLX’s

withdrawal from the securities clearing

business will eliminate the exposure of

NSCC and its participants to the

payment system risks associated with

the NSCC–SCCP interface.

In addition, the proposed

arrangements should result in

substantial savings for NSCC

participants and the securities industry.

In connection with this proposal, former

sole SCCP participants may become

NSCC participants if they qualify under

NSCC’s participant standards. An

increase in the number of NSCC

participants will result in higher NSCC

transaction volumes thereby reducing

the per unit service costs that must be

recovered through participant service

fees. Moreover, interclearing

corporation interfaces involve the

maintenance of substantial facilities,

communications networks, and account

and inventory reconciliation

mechanisms. As a result of the proposal,

the substantial costs incurred by both

NSCC and SCCP in operating an

interface will be eliminated.

NSCC believes the proposed rule

change is consistent with the

requirements of Section 17A of the Act

and the rules and regulations

promulgated thereunder because the

rule proposal will facilitate the

industry’s conversion to same-day funds

settlement for virtually all securities

transactions and thereby facilitate the

prompt and accurate clearance and

settlement of such transactions. In

addition, the proposal will provide

qualified sole SCCP participants with

access to NSCC’s facilities and will be

implemented consistently with the

safeguarding of securities and funds in

NSCC’s custody and control.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

NSCC does not believe that the

proposed arrangements will have an

impact on or impose a burden on

competition. Securities clearing

agencies registered under Section 17A

of the Act are utilities created to serve

members of the securities industry for

the purpose of providing certain

services that are ancillary to the

businesses in which industry members

compete with one another. Operating a

securities clearing agency requires a

substantial and continuing investment

in infrastructure, including

telecommunications links with users,

data centers, and disaster recovery

facilities, in order to meet the increasing

needs of participants and to respond to

regulatory requirements.

After consummation of the proposed

arrangements, securities industry

members will continue to have access to

high quality, low cost clearance services

provided under the mandate of the Act.

The overall cost to the industry of

having such services available should be

reduced thereby permitting a more

efficient and productive allocation of

industry resources. Furthermore,

because most interface costs must be

mutualized, thereby requiring some

participants to subsidize costs incurred

by others, PHLX’s withdrawal from

maintaining clearing services should

reduce costs to NSCC participants and

thereby remove impediments to
53850 Federal Register / Vol. 62, No. 200 / Thursday, October 16, 1997 / Notices

6 17 CFR 200.30–3(a)(12).

competition. Finally, PHLX’s ability to

focus its resources on the operations of

its exchange should help enhance

competition among securities markets.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments have been

solicited or received. NSCC will notify

the Commission of any written

comments received. However, the

proposed arrangements are consistent

with recommendations made to the

boards of DTC and NSCC by the Vision

2000 Committee (‘‘Committee’’), a

committee on industry representatives

of the two boards. The Committee’s

Report dated September 1994 states:

The industry currently owns a number of

utilities that provide services related to the

comparison, clearing, settlement and

safekeeping of U.S. (and to a lesser degree,

international) securities. These utilities

overlap in two ways * * *. We believe that

the industry’s and, as important, the

investors’, overall costs can be reduced and

safety and soundness can be enhanced by

eliminating these overlaps where there is no

clear advantage to having specialization or

competing development.

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 reason for so finding,

or (ii) as to which NSCC 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.

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 NSCC. All submissions should

refer to the File No. SR–NSCC–97–08

and should be submitted by November

6, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27320 Filed 10–15–97; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Data Collection Available for Public

Comments and Recommendations

ACTION: Notice and request for

comments.

SUMMARY: In accordance with the

Paperwork Reduction Act of 1995, this

notice announces the Small Business

Administration’s intentions to request

approval on a new, and/or currently

approved information collection.

DATES: Comments should be submitted

on or before December 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Curtis B. Rich, Management Analyst,

Small Business Administration, 409 3rd

Street, SW., Suite 5000, Washington, DC

20416. Phone Number: 202–205–6629.

SUPPLEMENTARY INFORMATION:

Title: ‘‘Use of Proceeds, 504 Program’’.

Type of Request: Extension of a

Currently Approved Collection.

Form No: 1429.

Description of Respondents: Certified

Development Companies.

Annual Responses: 2,000.

Annual Burden: 1,000.

Title: ‘‘Application for Loan Pool’’.

Type of Request: Extension of a

Currently Approved Collection.

Form No: 1454.

Description of Respondents: SBA

Loan Poll Assemblers.

Annual Responses: 450.

Annual Burden: 1,350.

Comments: Send all comments

regarding these information collections

to Keith Lucas, Program Assistant,

Office of Financial Assistance, Small

Business Administration, 409 3rd Street,

SW., Suite 8300, Washington, DC 20416.

Phone No: 202–205–6570. Send

comments regarding whether these

information collections are necessary for

the proper performance of the function

of the agency, accuracy of burden

estimate, in addition to ways to

minimize these estimates, and ways to

enhance the quality.

Title: ‘‘Client’s Report of 7(J) Task

Order Assistance Received’’.

Type of Request: Extension of a

Currently Approved Collection.

Form No: 1540.

Description of Respondents: Client’s

that require the completion of the 7(J)

Task order.

Annual Responses: 1,000.

Annual Burden: 100.

Title: ‘‘8 (A) Capability Statement’’.

Type of Request: Extension of a

Currently Approved Collection.

Form No: 1815.

Description of Respondents: 8 (A)

Program Participants.

Annual Responses: 8,000.

Annual Burden: 4,000.

Comments: Send all comments

regarding these information collection

to Barbara Boone, Program Assistant,

Minority Enterprise Development, Small

Business Administration, 409 3rd Street,

SW. Suite 8000, Washington, DC 20416.

Phone 202–205–6412. Send comments

regarding whether these information

collections are necessary for the proper

performance of the function of the

agency, accuracy of burden estimate, in

addition to ways to minimize these

estimates, and ways to enhance the

quality.

Jacqueline White,

Chief, Administrative Information Branch.

[FR Doc. 97–27325 Filed 10–15–97; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

[License No. 04/04–0270]

CF Investment Company; Notice of

Issuance of a Small Business

Investment Company License

On March 15, 1995, an application

was filed by CF Investment Company, at

102 South Main Street, Greenville,

South Carolina 29601, with the Small

Business Administration (SBA)

pursuant to section 107.300 of the

Regulations governing small business

investment companies (13 CFR 107.300

(1996)) for a license to operate as a small

business investment company.

Notice is hereby given that, pursuant

to section 301(c) of the Small Business

Investment Act of 1958, as amended,

after having considered the application

and all other pertinent information, SBA

issued License No. 04/04–0270 on