Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Notices 17257

6 IEEE Std 308–1980.

the spent fuel pool cooling system,

initially designed to be a non-seismic

system, has been upgraded to Seismic

Category I requirements. Those portions

of the system that do not meet seismic

requirements can be isolated from the

spent fuel pool cooling system if a

seismic event renders them inoperable.

It should be made clear that the NRC

staff does not require Class 1E

qualification for spent fuel pool cooling

equipment and instrumentation. Class

1E is the safety classification of electric

equipment and systems that are

essential to emergency reactor

shutdown, containment isolation,

reactor core cooling, and containment

and reactor heat removal, or are

otherwise essential in preventing

significant release of radioactive

material to the environment.6 The spent

fuel pool cooling system and monitoring

instrumentation are not required for

such functions.

In his letter of April 10, 1995, the

Director informed Petitioners that they

have not presented, nor was the staff

aware of, any evidence that the spent

fuel pool cooling system fails to comply

with its design basis, or that the licensee

failed to qualify these components to

the degree Petitioners describe such that

it would alter his decision as it pertains

to the safety significance of these issues.

Therefore, further review of the

qualification of spent fuel cooling

system components at OCNGS is not

warranted. Additionally, Petitioners

were informed that the staff would

continue its generic review of spent fuel

storage pool safety and would take

appropriate action based on the

conclusions of that review. Based on the

results of the generic review of spent

fuel storage pool safety thus far, the staff

has concluded that no additional

actions are warranted for the spent fuel

pool cooling system components at

OCNGS.

The Petitioners’ request to identify

redundant qualified Class 1E systems

was granted as described above.

IV. Conclusion

Although the staff has not initiated

formal enforcement proceedings in

response to the Petition, the staff has

taken a number of actions that address

the concerns raised in the Petition. For

example, during the course of its

review, the NRC staff has issued generic

communications responsive to

Petitioners’ request (4) of September 19,

1994. In addition, the NRC staff

reviewed the compliance of NRC

licensed facilities in the area of spent

fuel pool design responsive to

Petitioners’ request (3) of September 19,

1994. To this extent, the Petition is

granted in part. Finally, Petitioners’

supplemental petition requests (2), (3),

and (4) are granted as explained above.

A copy of this Final Director’s

Decision will be filled with the

Secretary of the Commission for review

in accordance with 10 CFR 2.206(c).

This Decision will become the final

action of the Commission 25 days after

its issuance unless the Commission, on

its own motion, institutes review of the

Decision within that time.

For the Nuclear Regulatory Commission.

Dated at Rockville, Maryland, this 2nd day

of April 1997.

Samuel J. Collins,

Director, Office of Nuclear Reactor

Regulation.

[FR Doc. 97–8915 Filed 4–8–97; 8:45 am]

BILLING CODE 7590–01–M

OFFICE OF PERSONNEL

MANAGEMENT

Federal Prevailing Rate Advisory

Committee; Open Committee Meeting

According to the provisions of section

10 of the Federal Advisory Committee

Act (Pub. L. 92–463), notice is hereby

given that meetings of the Federal

Prevailing Rate Advisory Committee

will be held on—

Thursday, April 10, 1997

Thursday, April 24, 1997

Thursday, May 15, 1997

Thursday, May 22, 1997

The meeting will start at 10 a.m. and

will be held in Room 5A06A, Office of

Personnel Management Building, 1900 E

Street, N.W., Washington, D.C.

The Federal Prevailing Rate Advisory

Committee is composed of a Chair, five

representatives from labor unions

holding exclusive bargaining rights for

Federal blue-collar employees, and five

representatives from Federal agencies.

Entitlement to membership on the

Committee is provided for in 5 U.S.C.

5347.

The Committee’s primary

responsibility is to review the Prevailing

Rate System and other matters pertinent

to establishing prevailing rates under

subchapter IV, chapter 53, 5 U.S.C., as

amended, and from time to time advise

the Office of Personnel Management.

These scheduled meetings will start

in open session with both labor and

management representatives attending.

During the meeting either the labor

members or the management members

may caucus separately with the Chair to

devise strategy and formulate positions.

Premature disclosure of the matters

discussed in these caucuses would

unacceptably impair the ability of the

Committee to reach a consensus on the

matters being considered and would

disrupt substantially the disposition of

its business. Therefore, these caucuses

will be closed to the public because of

a determination made by the Director of

the Office of Personnel Management

under the provisions of section 10(d) of

the Federal Advisory Committee Act

(Pub. L. 92–463) and 5 U.S.C.

552b(c)(9)(B). These caucuses may,

depending on the issues involved,

constitute a substantial portion of the

meeting.

The meeting on April 10 may contain

discussion of confidential private sector

survey data for the Newburgh, New

York, appropriated fund wage area. If

so, that portion of the meeting will be

closed to the public under the

provisions of section 10(d) of the

Federal Advisory Committee Act (Pub.

L. 92–463) and 5 U.S.C. 552b(c)(4).

Annually, the Chair compiles a report

of pay issues discussed and concluded

recommendations. These reports are

available to the public, upon written

request to the Committee’s Secretary.

The public is invited to submit

material in writing to the Chair on

Federal Wage System pay matters felt to

be deserving of the Committee’s

attention. Additional information on

these meetings may be obtained by

contacting the Committee’s Secretary,

Office of Personnel Management,

Federal Prevailing Rate Advisory

Committee, Room 5559, 1900 E Street,

NW., Washington, DC 20415 (202) 606–

1500.

Dated: April 3, 1997.

Phyllis G. Foley,

Chair, Federal Prevailing Rate Advisory

Committee.

[FR Doc. 97–9050 Filed 4–8–97; 8:45 am]

BILLING CODE 6325–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38471; File No. SR–DCC–

96–12]

Self-Regulatory Organizations; Delta

Clearing Corp.; Order Approving on a

Temporary Basis a Proposed Rule

Change Relating to Monitoring and

Limiting Exposure from Repurchase

Agreements

April 2, 1997.

On November 26, 1996, the Delta

Clearing Corp. (‘‘DCC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) a proposed rule change

(File No. SR–DCC–96–12) pursuant to
17258 Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Notices

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

2Letter from Howard Meyerson, Esq., Morgan,

Lewis, and Bockius (January 10, 1997).

3Securities Exchange Act Release No. 38198

(January 23, 1997), 62 FR 4559.

4Letter from Howard Meyerson, Esq., Morgan,

Lewis, and Bockius (March 11, 1997). The revisions

contained in this amendment were nonsubstantive

and therefore do not require republication of notice.

5Overnight repos are repo agreements whose offdate is the immediately succeeding business day

following the on-date for such transactions. Term

repos are repos agreements whose off-date is two or

more business days following the on-date for such

transactions.

6 DCC will obtain the end-of-day prices from a

vendor, which evaluates information received from

traders, brokers, and various electronic sources.

7 If 40 instances during the eight week period are

not available, DCC will calculate an average based

upon the number of actual observations. 8 15 U.S.C. 78q–1(b)(3)(F).

Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Act’’).1 On

January 10, 1997, DCC filed an

amendment.2 Notice of the proposal was

published in the Federal Register on

January 30, 1997.3 On March 11, 1997,

DCC filed a second amendment.4 No

comment letters were received. For the

reasons discussed below, the

Commission is approving the proposed

rule change through September 30,

1997.

I. Description

The proposed rule change amends

DCC’s procedures for calculating the

amount of margin to collect relating to

the clearance and settlement of its

participants’ overnight repurchase and

reverse repurchase agreements

(‘‘repos’’).5 Currently, DCC’s rules

provide for collection of core margin

and performance margin based on an

estimate of the net shortfall from

liquidation of a participant’s repo and

reverse repo positions at the close of the

next succeeding business day. The

proposed rule change institutes a new

method of collecting margin for

overnight repos by implementing the

following changes.

First, the proposed rule change adds

Section 2602.2 to DCC’s rules to allow

DCC to collect an intraday mark-tomarket for overnight repos. At

approximately 2:30 p.m. during each

business day, the mark-to-market

margin requirements will be calculated

for each participant with respect to all

overnight repo transactions effected by

the participant and submitted to DCC

for clearance that business day. DCC

will calculate overnight repo exposures

by comparing the value of each

transaction at the time the transaction

was executed with the value of the

transaction using the most recent

intraday price from an information

vendor. DCC will net positive values

against negative values in order to

derive a net mark-to-market valuation.

In the event that the net mark-to-market

valuation exceeds 65 percent of the sum

of the participant’s core margin

(discussed below) and unreturned

margin on deposit, DCC will require the

participant to deposit additional margin

in the amount of such excess.

DCC will provide each participant

with a supplemental daily margin report

by 3:00 p.m. of each business day. The

supplemental daily margin report will

indicate (i) the participant’s overnight

repo positions established during that

business day, (ii) the net mark-to-market

valuations for the participant’s

overnight repo positions, (iii) the core

margin and excess unreturned margin

on deposit (including margin originally

deposited for term repos), and (iv) the

amount of additional margin that the

participant must deposit with DCC’s

clearing bank. The additional margin

must be deposited with DCC no later

than 5:00 p.m. of that business day.

Failure to deposit the amount of any

margin deficit shown on the

supplemental daily margin report

including mark-to-market and core

margin will be grounds for suspension

and sanctions pursuant to Section 2608

of DCC’s rules.

Second, the proposed rule change

establishes DCC’s participants’ core

margin requirement as either $1 million

dollars par amount of U.S. Treasury

securities or a greater amount based

upon exposures arising out of such

participant’s overnight repo agreements.

To calculate each participant’s core

margin requirement, each week DCC

will review the overnight repo activity

of each participant for the most recent

eight weeks (forty observations) of

overnight repo transactions. This data

will be used to calculate the mark-tomarket exposure for each of these forty

instances. Mark-to-market exposure will

be calculated as the difference between

the contract value of an overnight repo

and the end-of-day pricing for the

collateral underlying such overnight

repos.6 A negative number would

represent an exposure for DCC, while a

positive number would represent an

overcollateralization. Instances of

overcollateralization will be eliminated.

The remaining instances will be used to

calculate an average mark-to-market

exposure.7 DCC will then calculate two

standard deviations. A participant’s core

margin requirement will be the sum of

the average and two standard

deviations.

By 3:00 p.m. on each business day on

which the core margin requirement has

been calculated, each participant will be

notified of its new core margin

requirement. If the requirement is

greater than the prevailing core

requirement, the participant must post

the difference the following business

day. If the new core requirement is

below the then prevailing core

requirement, the deposited excess will

be returned to the participant by 11:00

a.m. the following business day.

Third, the proposed rule change

amends DCC’s rules to eliminate the

collection of performance margin for

overnight repos. The daily margin report

will reflect only the performance margin

required on the participant’s term repo

positions.

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

the clearing agency or for which it is

responsible. The Commission believes

that DCC’s proposed rule change is

consistent with DCC’s obligations under

the Act because the proposal

establishes: (1) a minimum core margin

requirement to reflect DCC’s exposure to

each participant’s overnight repo

activity and (2) an intraday margin

requirement that is triggered if a

participant’s mark-to-market exposure is

valued at more than 65 percent of the

core requirement. Therefore, the

Commission believes that the proposal

should provide to DCC margin in an

amount that will assist DCC in meeting

its obligation to safeguard securities and

funds.

While the Commission believes that

DCC’s required overnight repo

margining system should provide

sufficient risk protection, the

Commission recognizes that the

margining system is novel both in

concept and to DCC. Therefore, the

Commission believes that it is

appropriate to grant temporary approval

of the proposal in order that the

Commission and DCC will have the

opportunity to monitor the effectiveness

of the new system in practice.

Accordingly, the Commission is

temporarily approving the proposed

rule change through September 30,

1997.

In this regard, DCC has agreed that

during the temporary approval period it

will submit on a monthly basis reports

detailing its analysis of its overnight

repo margining system. The first report

should be submitted by June 15, 1997,

with each subsequent monthly report

being submitted by the fifteenth of the

succeeding month.
Federal Register / Vol. 62, No. 68 / Wednesday, April 9, 1997 / Notices 17259

9 17 CFR 200.30–3(a)(12).

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

2The Commission has modified the text of the

summaries submitted by GSCC.

3 GSCC has filed a proposed rule change (File No.

SR–GSCC–97–01) that will add a definition of ‘‘offthe-market’’ transactions to its rules. Essentially, an

off-the-market transaction is a trade that has a price

that differs significantly from the prevailing market

price.

III. Discussion

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–

DCC–96–12) be, and hereby is, approved

through September 30, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–8996 Filed 4–8–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–38472; File No. SR–GSCC–

97–02]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Notice of Filing of A

Proposed Rule Change Relating To

Comparison of Transactions Between

Insolvent And Solvent Members

April 2, 1997.

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

Securities Exchange Act of 1934

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

March 11, 1997, 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

persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

GSCC is proposing that it have the

authority to issue a comparison of a

transaction based solely on data

submitted by one netting member when

the counterparty to the trade becomes

insolvent.

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 such statements.2

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

(i) Under the ordinary application of

its rules, a transaction is not eligible for

netting and guaranteed settlement by

GSCC until and unless it is compared.

Except for purchases made through the

U.S. government’s auction of Treasury

securities, GSCC’s rules provide that a

comparison can only be generated upon

the matching of data provided by two

members. GSCC believes that this poses

a potential problem from a risk

management perspective in a situation

where a netting member becomes

insolvent and does not submit trades it

or an executing firm for which it acts

entered into prior to its insolvency.

Absent the taking by GSCC of

extraordinary action to compare the

trade, such trades will not be netted and

guaranteed. In such situations, GSCC

believes it necessary and appropriate for

it to have the clear authority under its

rules to deem a transaction compared

based solely on the data submitted by

the insolvent member’s counterparty.

However, this needs to be done in a

manner that does not expose GSCC to

liability to a netting member for

fraudulent or collusive activity.

In order to accomplish these goals,

GSCC is proposing that it have the

authority to issue a comparison of a

transaction basedon data submitted by a

solvent netting member, which may be

an interdealer broker, under the

following circumstances: (1) The data

submitted by the solvent member

indicates that the counterparty to the

transaction is either an insolvent

member or an executing firm that uses

the insolvent member as its submitting

member; (2) the solvent member has

submitted in a timely manner all of its

activity with the insolvent member or

executing firm; (3) if GSCC had

announced to its members that it would

cease to act for the insolvent member as

of a specified date and time (and, thus,

not accept any further trades submitted

against such member), the transaction

was executed before such specified date

and time; (4) the transaction is not an

‘‘off-the-market’’ transaction as defined

in GSCC’s rules,3 and (5) GSCC has

made a determination that the

transaction was entered into by the

solvent member or an executing firm

that uses the solvent member as its

submitting member in good faith and

not primarily in order to take advantage

of the insolvent member’s financial

condition.

(ii) The proposed rule change is

consistent with the requirements of

Section 17A the Act and the rules and

regulations thereunder because they

will make clear GSCC’s authority to take

action to compare trades in an

insolvency situation without exposing

GSCC to liability to a netting member

for fraudulent or collusive activity.

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 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 the GSCC 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