65466 Federal Register / Vol. 62, No. 239 / Friday, December 12, 1997 / Notices

eligible for execution under the Exchange’s BEST

Rule and certain other orders. see Exchange Rule

37(b).

8Exchange Rule 37(a) states that the BEST System

is available to exchange member firms and members

of participating exchanges.

9 15 U.S.C. 78s(b)(2).

10 17 CFR 200.30–3(a)(12).

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

2Securities Exchange Act Release No. 39103

(September 22, 1997), 62 FR 50646.

3According to MBSCC’s rules, the term

‘‘account’’ generally means any account maintained

by MBSCC on behalf of a participant for the

comparison, margining, and clearing trades.

4According to MBSCC’s rules, the term

‘‘participant fund’’ means the fund for which

provision is made in Article IV to which

participants are required to make basic deposits,

minimum market margin differential deposits, and

market margin differential deposits.

5 15 U.S.C. 78q–1(b)(3)(F).

6 17 CFR 200.30–3(a)(12).

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

2The text of the proposed amendments was

submitted with Philadep’s rule filing and is

available for inspection and copying at the

Commission’s Public Reference Room and through

the principal office of Philadep.

3Securities Exchange Act Release No. 38918

(August 11, 1997) (order instituting proceedings

pursuant to Section 19(h) and 21C of the Act,

making findings, and imposing remedial sanctions)

[Administrative Proceeding File No. 3–9360]

(‘‘Order’’).

market order through the MAX System

is qualified by Exchange Rule 37(b)(11),

Article XX, which states that

‘‘notwithstanding anything in this Rule

to the contrary, no market order or limit

order that is marketable when entered

into the MAX System will be

automatically executed if the size

associated with the ITS BBO or NBBO,

as the case may be, is of a size less than

such market order or limit order.’’

The Commission believes that the

proposed rule change will bring about

certainty in the application of the

Exchange’s BEST System guarantee.

Although the Exchange currently

interprets the scope of the BEST System

guarantee as being restricted by the

price and size parameters, the absence

of such criteria in the text of the BEST

Rule may cause confusion among those

entitled to use the BEST System.8

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,9 that the

proposed rule change (SR–CHX–97–20)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Jonathan G. Katz,

Secretary.

[FR Doc. 97–32483 Filed 12–11–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39405; File No. SR–

MBSCC–97–5]

Self-Regulatory Organizations; MBS

Clearing Corporation; Order Approving

a Proposed Rule Change Regarding

Participant Liability for Transactions

Submitted on Behalf of

Nonparticipants

December 5, 1997.

On August 1, 1997, MBS Clearing

Corporation (‘‘MBSCC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) a proposed rule change

(File No. SR–MBSCC–97–5) pursuant to

Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Act’’).1 Notice

of the proposal was published in the

Federal Register on September 26,

1997.2 No comment letters were

received. For the reasons discussed

below, the Commission is approving the

proposed rule change.

I. Description

Pursuant to MBSCC’s current rules,

participants that process any contracts

or other transactions through MBSCC

for other participants are liable as

principal for such contracts or

transactions. The proposed rule change

clarifies that participants also are liable

as principal for any contracts or other

transactions submitted to MBSCC on

behalf of entities that are not

participants (‘‘nonparticipants’’) and

that nonparticipants are not deemed to

possess any rights or benefits of

participants.

As a result, MBSCC will treat all of a

participant’s accounts 3 and obligations

as belonging to such participant

regardless of the identity of the

underlying party. Thus, a participant’s

participant fund 4 deposits will be

available for all of the participant’s

transactions regardless of the source.

II Discussion

Section 17A(b)(3)(F) of the Act 5

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds

which are in its custody or control or for

which it is responsible. The

Commission believes that the proposed

rule change adds certainty as to the

treatment of the positions submitted on

behalf of nonparticipants upon default

of a participant. Thus, the proposal

should enhance MBSCC’s ability to

protect itself and its participants against

loss. Therefore, the Commission

believes that MBSCC’s proposal is

consistent with its obligations to assure

the safeguarding of securities and funds

which are in its custody or control or for

which it is responsible.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of the

Act and in particular with the

requirements of Section 17A of the Act

and the rules and regulations

thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule change (File No. SR–

MBSCC–97–5) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Jonathan G. Katz,

Secretary.

[FR Doc. 97–32485 Filed 12–11–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39408; File No. SR–

Philadep–97–05]

Self-Regulatory Organizations;

Philadelphia Depository Trust

Company; Notice of Filing and Order

Granting Accelerated Approval of

Proposed Rule Change Relating to

Unclaimed Dividends and Distributions

December 5, 1997.

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

Securities Exchange Act of 1934

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

September 25, 1997, Philadelphia

Depository Trust Company (‘‘Philadep’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I and II below, which items have

been prepared primarily by Philadep.

The Commission is publishing this

notice and order to solicit comments on

the proposed rule change from

interested parties and to grant

accelerated approval.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

Under the proposed rule change,

Philadep will amend its rules governing

unclaimed dividends and distributions.2

The amendments reflect undertakings

recently agreed to by Philadep in

connection with settling an

administrative proceeding with the

Commission.3