[Federal Register Volume 63, Number 77 (Wednesday, April 22, 1998)]
[Notices]
[Pages 19991-19992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10605]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39872; File Nos. SR-MCC-98-01 and SR-MSTC-98-01]


Self-Regulatory Organizations; the Midwest Clearing Corporation; 
the Midwest Securities Trust Company; Notice of Filing of Proposed Rule 
Changes Relating to the Structure and Composition of the Board of 
Directors

April 14, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 9, 1998, the 
Midwest Clearing Corporation (``MCC'') and the Midwest Securities Trust 
Company (MSTC) filed with the Securities and Exchange Commission 
(``Commission'') and on February 25, 1998, amended the proposed rule 
changes, as described in Items I, II, and III below, which items have 
been prepared primarily by MCC and MSTC. The Commission is publishing 
this notice to solicit comments on the proposed rule changes from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Changes

    The proposed rule changes will amend MCC's and MSTC's by-laws 
relating to the structure and composition of their board of directors.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    In their filing with the Commission, MCC and MSTC included 
statements concerning the purpose of and basis for the proposed rule 
changes and discussed any comments they received on the proposed rule 
changes. The text of these statements may be examined at the places 
specified in Item IV below. MCC and MSTC have prepared summaries, set 
forth in sections (A), (B), and (C) below, of the most significant 
aspects of such statements.\2\
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    \2\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    The proposed rule changes will amend MCC's and MSTC's by-laws in 
order to reflect the cessation of their securities clearing and 
depository

[[Page 19992]]

services \3\ and to streamline the structure and composition of their 
board of directors in order to remain consistent with the changes 
recently made by the Chicago Stock Exchange, Incorporated (``CHX'').\4\
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    \3\ Securities Exchange Act Release No. 36684 (January 5, 1995), 
61 FR 1195 [File Nos. SR-MCC-95-04, SR-MSTC-95-10] (order approving 
proposed rule changes relating to the withdrawal of the Chicago 
Stock Exchange, Incorporated [``CHX''] from the clearance and 
settlement and securities depository businesses, conducted 
principally through its subsidiaries, MCC and MSTC).
    \4\ Securities Exchange Act Release No. 39603 (January 30, 
1998), 63 FR 5982 (order approving a proposed rule change relating 
to the structure and composition of CHX's board of governors). 
Historically, the MCC's and MSTC's board of directors have been the 
same as the CHX's board of governors.
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    The proposed rule changes will reduce the number of directors from 
27 to 24 and will realign the classes for both MCC and MSTC. The 
directors will still be divided into three classes, but the size and 
composition will be adjusted as follows. At the 1998 annual election, 
class I will be reduced by two directors. At the 1999 annual election, 
class II will be reduced by four directors. At the 2000 annual 
election, class III will be reduced by one director and class II will 
be increased by one director. The board of directors will also be 
increased by three additional nonindustry \5\ directors by the 1999 
annual election to serve for staggered terms so as to balance the 
classes as determined by the nominating committee.\6\ The result of the 
reduction of board members and the realignment of the classes will be 
fifty percent representation of nonindustry directors on MCC's and 
MSTC's board of directors.
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    \5\ In an amendment to the proposed rule changes, MCC and MSTC 
reference the definition of nonindustry as defined by the CHX's 
constitution. Id.
    \6\ Class I will consist of seven directors, class II will 
consist of seven directors, and class III will consist of eight 
directors.
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    MCC and MSTC believe that the proposed rule changes are consistent 
with Section 17A of the Act because the changes to the structure and 
composition of their board of directors should promote an enhanced 
governance structure and thereby will help protect investors and the 
public interest.\7\
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    \7\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    MCC and MSTC do not believe that the proposed rule changes will 
have an impact on or impose a burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Changes Received From Members, Participants, or Others

    No written comments relating to the proposed rule changes have been 
solicited or received.

III. Date of Effectiveness of the Proposed Rule Changes 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 MCC and MSTC consent, the Commission will:
    (A) By order approve such proposed rule changes or
    (B) Institute proceedings to determine whether the rule changes 
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 
changes are consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street N.W., Washington, D.C. 20549. 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the rule changes that are filed with the 
Commission, and all written communications relating to the rule changes 
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 in Washington, D.C. Copies of such filings will 
also be available for inspection and copying at the principal office of 
MCC and MSTC. All submissions should refer to the File Nos. SR-MCC-98-
01 and SR-MSTC-98-01 and should be submitted by May 13, 1998.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-10605 Filed 4-21-98; 8:45 am]
BILLING CODE 8010-01-M