70370 Federal Register / Vol. 65, No. 226 / Wednesday, November 22, 2000 / Notices

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

2Securities Exchange Act Release No. 42997,

(June 30, 2000), 65 FR 42739.

3 GSCC Rule 12, section 8.

4 GSCC’s rules also provide that if the GSCC

Board determines in its sole discretion that a

netting member has on a frequent basis and without

good cause caused GSCC to incur such financing

costs, the member can become obligated to pay for

or to reimburse GSCC for the entire amount of the

financing costs.

5 GCF inter-dealer broker netting member that

GSCC has: (1) determined to be eligible to

participate in GSCC’s netting system services for

repo transactions pursuant to GSCC Rule 18 and (2)

designated as eligible to submit to GSCC data on

GCF repo transactions on a locked-in basis.

6 GSCC already has the authority to enter into

repurchase agreements in connection with clearing

fund deposits and proprietary funds.

7 GSCC may also reimburse certain dealer netting

members in a similar situation. This additional

possibility for reimbursement would apply to a

division or other separate operating unit within a

dealer netting member that GSCC has determined:

(a) operates in the same manner as a broker and (b)

has agreed to and does participate in the repo

netting service pursuant to the same requirements

imposed under GSCC’s rules on inter-dealer broker

netting members that participate in that service.

8 15 U.S.C. 78q–1(b)(3)(F).

obtain appropriate accommodation. Any

member of the public wishing further

information about the meeting or

wishing to submit oral or written

comments should contact the

Designated Federal Official through the

information shown below. Requests for

oral comments must be in writing and

received no later than 5:00 p.m. Eastern

Daylight Savings Time on Monday,

December 4, 2000. Each individual or

group making an oral presentation will

be limited in time based on the agenda

and the number of people requesting to

speak. Remarks may be submitted for

the record. Written comments (30

copies) which are received in enough

time will be shared with the Committee

prior to the meeting. Comments

received close to the meeting date will

be shared with the Committee at the

meeting.

Matters To Be Considered: Executive

Order 13111, Using Technology to

Improve Training Opportunities for

Federal Government Employees, was

issued by the President on January 12,

1999, and established the Presidential

Advisory Committee on Expanding

Training Opportunities. At its third

meeting, the Committee will discuss a

variety of topics related to their tasks:

work group progress; structured

interview results; chronicle report

review and discussion; and transition

issues. The Committee will also discuss

their overall approach, timeline, and

plans to accomplish their tasks.

Committee functions include (1)

providing an independent assessment of

(a) progress made by the Federal

Government in its use and integration of

technology in training programs; (b)

how Federal Government programs,

initiatives, and policies can encourage

or accelerate training technology to

provide more accessible, timely, and

cost-effective training opportunities for

all Americans; (c) mechanisms for the

Federal Government to encourage

private sector investment in the

development of high quality

instructional software and wider

deployment and use of technologymediated instruction so that all

Americans may take advantage of the

opportunities provided by learning

technology; and (d) the appropriate

Federal Government role in research

and development for learning

technologies and their applications in

order to develop high quality training

and education opportunities for all

Americans and (2) an analysis of

options for helping adult Americans

finance the training and post-secondary

education needed to upgrade skills and

gain new knowledge.

FOR FURTHER INFORMATION: Please

contact Barbara Swanson, Designated

Federal Officer for the Presidential

Advisory Committee on Expanding

Training Opportunities, at U.S. Office of

Personnel Management, 1900 E Street

NW., Washington, DC 20415; at

telephone (202) 606–2721; or fax (202)

606–5231.

Office of Personnel Management

Janice R. Lachance,

Director.

[FR Doc. 00–29819 Filed 11–21–00; 8:45 am]

BILLING CODE 6325–01–U

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43566; File No. SR–GSCC–

00–01]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Order Granting Approval

of a Proposed Rule Change Relating to

Financing Necessary for the Provision

of Securities Settlement Services

November 15, 2000.

On March 7, 2000, the Government

Securities Clearing Corporation

(‘‘GSCC’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

a proposed rule change (File No. SR–

GSCC–00–01) 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 July 11, 2000.2 No comment letters

were received. For the reasons

discussed below, the Commission is

granting approval of the proposed rule

change.

I. Description

According to GSCC, it occasionally is

required to obtain financing in

connection with its securities settlement

process. For example, a member with a

net short position may deliver securities

so near the close of the securities

Fedwire that GSCC is unable to

redeliver the securities to member(s)

with the net long position(s). Currently,

GSCC’s rules provide for GSCC to obtain

financing under these circumstances in

the form of loans because the rules

expressly permit GSCC to grant security

interests in the securities in question.3

The costs or expenses that GSCC incurs

in obtaining such financing are

generally allocated pro rata among all

netting members based upon usage of

GSCC’s services.4

Another situation where GSCC might

need to obtain financing is when a GCF

inter-dealer broker 5 has a GCF net

settlement position as the result of a

data submission error. As a result, GSCC

is required to finance the settlement of

the other-side of the transaction. Again,

GSCC’s rules currently contemplate that

GSCC will obtain the requisite cash or

securities through loans or securities

borrowing/lending transactions. The

rule change gives GSCC the option to

obtain the requisite financing in the

situations such as the ones described

above by entering into repurchase

transactions with GSCC netting

members and clearing agent bank

members.6

The rule change also addresses the

situation where an inter-dealer broker

netting member obtains financing of a

net settlement position. For example, an

inter-dealer broker may have a net

settlement position as the result of an

uncompared trade. Under the proposed

rule change, if the inter-dealer brokernetting member obtains financing of a

net settlement position, it must obtain

such financing by entering into

overnight repurchase transactions only

with GSCC netting members or clearing

agent bank members. GSCC may

reimburse the inter-dealer broker for the

costs of such financing if the net

settlement position was incurred

through no fault of the inter-dealer

broker.7

II. Discussion

Section 17A(b)(3)(F) 8 of the Act

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds

which are in the custody or control of

Federal Register / Vol. 65, No. 226 / Wednesday, November 22, 2000 / Notices 70371

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3The Board submitted a new Form 19b–4, which

replaces the original filing (‘‘Amendment No. 1’’).

Specifically, Amendment No. 1 amends MSRB

Rules G–38 and G–8 to clarify that the name of the

consultant is obtained from the consultant

agreement. Amendment No. 1 also revises the filing

to include the statutory basis for the proposed rule

change. 4Rule G–38(d) states that each dealer shall send

to the Board reports on Form G–37/G–38 of all

consultants used by the dealer during each calendar

quarter. These reports currently must include,

among other things, for each consultant, the

consultant’s name, company, role and

compensation arrangement.

5The Instructions for Completing and Filing

Form G–37/G–38 are printed in the MSRB Rule

Book (January 1, 2000) at 201–203 and the

Instructions are posted on the Board’s web site

(www.msrb.org) under the links for Rules G–37 and

G–38.

6Rule G–38(b) currently requires each dealer that

uses a consultant to evidence the consulting

arrangement by writing (the ‘‘Consultant

Agreement’’) that sets forth, at a minimum, the

name, company, role and compensation

arrangement of each such consultant.

7See Question and Answer Notice: Rule G–38

dated May 20, 1998, MSRB Rule Book (January 1,

2000) at 210. In this notice, concerning bank

affiliates and the definition of payment, the Board

stated that ‘‘each dealer (bank or securities firm)

should determine whether the affiliate or individual

employee(s) of the affiliate is its consultant(s), and

must then ensure compliance with Rule G–38,

including the contractual arrangements and

disclosures required by the rule.’’

8See Securities Exchange Act Release No. 42205

(December 7, 1999), 64 FR 69808 (December 14,

1999).

the clearing agency or for which it is

responsible. For the reasons set forth

below, the Commission believes that

GSCC’s proposed rule change is

consistent with GSCC’s obligations

under the Act.

By allowing GSCC to enter into

repurchase transactions with its highly

creditworthy netting members and

clearing agent bank members, GSCC

should be able to obtain more favorable

financing terms that should result in

lower financing costs being allocated to

members. As repurchase transactions

are safe, widely accepted financing

mechanisms, there should be no

reduction in GSCC’s ability to safeguard

securities and funds which are in the

custody or control of GSCC or for which

it is responsible.

Accordingly, the Commission finds

that the ability to enter into repurchase

transactions with GSCC netting

members and/or clearing agent bank

members satisfies GSCC’s obligations to

assure the safeguarding of securities and

funds which are in the custody or

control of GSCC or for which it is

responsible.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposed

rule change is consistent with the

requirements of the Act and in

particular 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–

GSCC–00–01) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority. 9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–29887 Filed 11–21–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43568; File No. SR–MSRB–

00–02]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Municipal Securities Rulemaking

Board Relating to Rules G–8 and G–38

and Form G–37/G–38

November 15, 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 January

27, 2000, the Municipal Securities

Rulemaking Board (‘‘Board’’ or

‘‘MSRB’’) filed with the Securities and

Exchange Commission (‘‘Commission’’

or ‘‘SEC’’) a proposed rule change as

described in Items I, II, and III below,

which Items have been prepared by the

Board. The Board filed Amendment No.

1 to the proposed rule change on

November 15, 2000.3 The Commission

is publishing this notice to solicit

comments on the proposed rule change,

as amended, from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Board proposes to amend Rule G–

38, on consultants, Rule G–8, on books

and records, and revise Section IV of

Form G–37/G–38 and the attachment

page to the form. The text of the

proposed rule change is available at the

MSRB and at the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

Board 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. The Exchange has

prepared summaries, set forth in

sections A, B, and C below, of 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

1. Purpose

The Board has received inquiries from

dealers that have indicated that there is

confusion about certain information

required to be reported in Section IV of

Form G–37/G–38 as well as the

attachment page to the form.4 One area

of confusion concerns whether an

individual’s name must be disclosed on

Form G–37/G–38 in each instance in

which the dealer lists a consultant. Part

of this confusion is due to the format of

Section IV of the form as well as the

attachment page. Dealers list their

consultants in Section IV of Form G–37/

G–38 and they must provide additional

information about each consultant on

separate attachment pages. Under

Section IV, there is one column labeled

‘‘Name of Consultant’’ and another

column labeled ‘‘Consultant Company

Name.’’ On the attachment page to the

form, the first line indicates that a

dealer is to report the ‘‘Name of

Consultant’’ and the next line indicates

the reporting of the ‘‘Consultant

Company Name.’’ The Instructions for

Completing and Filing Form G–37/G–

38 5 state that a dealer should list the

name of each consultant along with the

consultant company name under

Section IV and on the attachment page

a dealer should list the name of the

consultant as well as the consultant

company name.

A dealer must determine whether its

consultant is an individual or a

company based upon its Consultant

Agreement 6 with the consultant.7 If the

Consultant Agreement is with an

individual, then only the individual’s

name should be reported on the form

and not a company name. Conversely, if

the Consultant Agreement is with a

company, only the company’s name

should be reported and not an

individual’s name.

The identification of a dealer’s

consultants has become even more

significant with the recent amendments

to Rules G–38, G–8, and G–37 that

became effective on April 1, 2000.8

Pursuant to those amendments, if an

individual is a consultant, the