Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices 38447

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

2Securities Exchange Act Release No. 39693

(February 23, 1998), 63 FR 10058.

3Letter from William C. Alsover, President,

Centennial Securities Company, to David F. Hoyt,

NSCC (November 7, 1997).

4Rule 15 of NSCC’s Rules and Procedures.

5NSCC has taken note of the findings set forth in

the April 15, 1997, memorandum entitled, ‘‘The

Joint Regulatory Sales Practice Sweep; Heightened

Supervisory Procedures,’’ which was the product of

an initiative involving the National Association of

Securities Dealers, Inc., the New York Stock

Exchange, Inc., the Securities and Exchange

Commission, and the North American Securities

Administrators Association, Inc.

6 15 U.S.C. 78q–1(b)(3)(F).

7 15 U.S.C. 78q–1(b)(3)(H). 8 17 CFR 200.30–3(a)(12)..

of 1934 (‘‘Act’’).1 Notice of the proposal

was published in the Federal Register

on February 27, 1998.2 One comment

letter was received.3 For the reasons

discussed below, the Commission is

approving the proposed rule change.

I. Description

Currently, NSCC’s rules provide that

it will establish, as deemed necessary or

appropriate, standards of financial

responsibility, operational capability,

experience, and competence for

membership, as well as guidelines for

the application of membership

standards. 4 The purpose of the rule

change is to establish specific standards

under which NSCC may deny an

applicant membership or to cease to act

for a participant.5

The revised rule will allow NSCC to

deny membership to any applicant or to

cease to act for any participant if a

person who has either significant

managerial responsibility or significant

ability to influence the policies and

actions of the applicant or participant

(through ownership interest, contract, or

otherwise), whether or not the person

currently acts as a principal or

registered representative, has a record

that reflects any adverse history as

enumerated in the rule. The types of

adverse history enumerated in the rule

include felony and misdemeanor

proceedings and convictions; certain

disciplinary, regulatory, or

administrative proceedings and actions;

arbitration or civil actions; multiple

customer complaints; termination or

permitted resignation after investigation

or allegation of sales practice problems,

violation of rules, regulation, laws, or

standards of conduct; or being subject to

heightened supervision.

Any action, complaint, or proceeding

referred to in the rule that is not taken

against a person will nonetheless be

deemed to be taken against that person

if his or her activities are cited in whole

or in part as being a contributing cause.

However, no person will be deemed to

have an adverse regulatory history due

to being named in customer complaints

or adverse civil proceedings merely

because of the persons’s management or

ownership position in the applicant or

participant unless the number of

complaints or proceedings are

disproportionate to the size of the firm.

The rule change will also allow NSCC

to deny membership to an applicant or

to cease to act for a participant if a

correspondent of the applicant or

participant or any entity for which the

applicant or participant is financially

responsible would fail to meet the above

membership standards. However this

provision of the rule will apply only if

the size of the business of the

correspondent or other entity is

significant relative to the capital of the

applicant or participant. NSCC has

informed the Commission that it intends

to construe the new rule in a manner

which will not limit its authority under

its rules to deny membership to, to

cease to act for, or to obtain further

assurances from any applicant or

participant when the circumstances

warrant even if the circumstances

include or consist solely of items that

are not specific grounds for such action

under the rule change.

II. Comment Letters

The Commission received one

comment letter in response to the

proposed rule change (supra note 3).

The commenter supported the rule

change but believed an applicant or

participant should be able to appeal a

decision to deny membership.

III. Discussion

Section 17A(b)(3)(F) of the Act 6

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds in

the custody or control of the clearing

agency or for which it is responsible.

The Commission believes that the

proposed rule change is consistent with

NSCC’s obligations under Section

17A(b)(3)(F) because it should enable

NSCC to better manage its risk exposure

by specifically authorizing NSCC to

consider applicant’s and participants’

regulatory history. An adverse

regulatory history can indicate that an

applicant would or a participant does

present an unacceptably high risk to

NSCC and its participants.

Section 17A(b)(3)(H) of the Act 7 also

requires that the rules of the clearing

agency provide a fair procedure with

respect to the denial of participation

and the prohibition or limitation by the

clearing agency of any person with

respect to access to services offered by

the clearing agency. The Commission

believes that the proposed rule change

is consistent with NSCC’s obligations

under Section 17A(b)(3)(H) because it

defines the specific bases upon which

NSCC may deny membership or cease to

act for a participant.

In response to the issue of whether an

applicant can appeal a denial of its

membership application, the

Commission notes that Rule 2 of NSCC’s

Rules and Procedures currently

provides a hearing process for any

applicant that is deemed to not meet

membership requirements before the

applicant is denied membership.

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–

NSCC–97–13) be and hereby is

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–18907 Filed 7–15–98; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Small Business Investment Company

of Connecticut (License #02–0052),

Notice of License Surrender

Notice is hereby given that the Small

Business Investment Company of

Connecticut (SBIC/CT), Bridgeport,

Connecticut, has surrendered its license

to operate as a small business

investment company under the Small

Business Investment Act of 1958, as

amended (‘‘the Act’’). SBIC/CT was

licensed by the Small Business

Administration on January 31, 1961.

Under the authority vested by the Act

and pursuant to the regulations

promulgated thereunder, the surrender

of the license was accepted on June 29,

1998, and accordingly, all rights,

privileges, and franchises derived

therefrom have been terminated.

(Catalog of Federal Domestic Assistance

Program No. 59.011, Small Business

Investment Companies)
38448 Federal Register / Vol. 63, No. 136 /Thursday, July 16, 1998 / Notices

Dated: July 7, 1998.

Don A. Christensen,

Associate Administrator for Investment.

[FR Doc. 98–18985 Filed 7–15–98; 8:45 am]

BILLING CODE 8025–01–P

DEPARTMENT OF TRANSPORTATION

Notice of Applications for Certificates

of Public Convenience and Necessity

and Foreign Air Carrier Permits Filed

Under Subpart Q During the Week

Ending July 3, 1998

The following Applications for

Certificates of Public Convenience and

Necessity and Foreign Air Carrier

Permits were filed under Subpart Q of

the Department of Transportation’s

Procedural Regulations (See 14 CFR

302.1701 et. seq.). The due date for

Answers, Conforming Applications, or

Motions to Modify Scope are set forth

below for each application. Following

the Answer period DOT may process the

application by expedited procedures.

Such procedures may consist of the

adoption of a show-cause order, a

tentative order, or in appropriate cases

a final order without further

proceedings:

Docket Number: OST–98–3997.

Date Filed: June 26, 1998.

Due Date for Answers, Conforming

Applications, or Motions to Modify

Scope: July 24, 1998.

Description: Application of Passaredo

Transportes Aereos S.A. pursuant to

Section 402 of the Act and Subpart Q,

applies for an air carrier permit

authorizing the carriage of passengers

on a charter basis between a point or

points in Brazil and a point or points in

the United States.

Docket Number: OST–98–4009.

Date Filed: June 29, 1998.

Due Date for Answers, Conforming

Applications, or Motions to Modify

Scope: July 27, 1998.

Description: Application of Tower

Air, Inc. pursuant to 49 U.S.C. Section

41108 and Subpart Q, applies for the

issuance of a new Certificate of Public

Convenience and Necessity or

Amendment of its existing Certificate

for Route 401, to engage in foreign air

transportation of persons, property and

mail between any points in the United

States, directly and via intermediate

points, and any points in France, and

beyond France to points in third

countries, as limited by applicable

bilateral agreements.

Docket Number: OST–98–4010.

Date Filed: June 29, 1998.

Due Date for Answers, Conforming

Applications, or Motions to Modify

Scope: July 27, 1998.

Description: Application of Federal

Express Corporation pursuant to 49

U.S.C. Section 41102 and Subpart Q,

applies for issuance of a new Certificate

of Public Convenience and necessity

authorizing Federal Express to provide

scheduled foreign air transportation of

property and mail between points in the

United States, on the one hand, and

points in the forty-eight (48) foreign

countries listed, on the other hand.

Dorothy W. Walker,

Federal Register Liaison.

[FR Doc. 98–18951 Filed 7–15–98; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF TRANSPORTATION

Aviation Proceedings, Agreements

Filed During the Week Ending July 3,

1998

The following Agreements were filed

with the Department of Transportation

under the provisions of 49 U.S.C.

Sections 412 and 414. Answers may be

filed within 21 days of date of filing.

Docket Number: OST–98–4015

Date Filed: July 1, 1998

Parties: Members of the International

Air Transport Association

Subject:

PTC12 Telex Mail Vote 946–r1–4

USA-Austria/Belgium/Germany/Neth/

Scand/Switz fares

r1–002m, r2–054vv, r3–044v, r4–

064vv

Intended effective date: August 1,

1998

Docket Number: OST–98–4016

Date Filed: July 2, 1998

Parties: Members of the International

Air Transport Association

Subject:

PTC2 ME 0045 dated June 26, 1998

Within Middle East Expedited Resos

r–1–002j, r–2–070ba, r–3–071ea, r–4–

072c, r–5–079b, r–6–085dd, r–7–

002o

Intended effective date: August 1/

October 1, 1998

Docket Number: OST–98–4017

Date Filed: July 2, 1998

Parties: Members of the International

Air Transport Association

Subject:

COMP Telex Mail Vote 948

Standard Condition Resolution for

Special Fares

Intended effective date: August 1,

1998

Docket Number: OST–98–4020

Date Filed: July 2, 1998

Parties: Members of the International

Air Transport Association

Subject:

PTC2 EUR–ME 0056 dated June 30,

1998

Europe-Middle East Expedited Resos

002a

Intended Effective Date: August 1,

1998.

Dorothy W. Walker,

Federal Register Liaison.

[FR Doc. 98–18952 Filed 7–15–98; 8:45 am]

BILLING CODE 4910–62–P

DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

Railroad Rehabilitation and

Improvement Financing

July 9, 1998.

ACTION: Notice.

SUMMARY: The Transportation Equity

Act for the 21st Century (‘‘TEA–21’’),

Pub. L. No. 105–178, 112 Stat. 107

(1998), established the Railroad

Rehabilitation and Improvement

Financing program (‘‘RRIF’’). To assist

in its implementation, the Federal

Railroad Administration (‘‘FRA’’) is

requesting information on (1) types of

projects which might benefit from

financial assistance available under

RRIF, and (2) potential applicants for

such financial assistance.

ADDRESSES: Responses should be sent to

James T. McQueen, Associate

Administrator, Office of Railroad

Development, Federal Railroad

Administration, 400 7th Street, S.W.,

Washington, D.C. 20590.

FOR FURTHER INFORMATION CONTACT:

James T. McQueen or JoAnne M.

McGowan, Chief, Freight Programs,

(202) 632–3290.

SUPPLEMENTARY INFORMATION: TEA–21

amended Title V of the Railroad

Revitalization and Regulatory Reform

Act of 1976, as amended, 45 U.S.C. 821

et seq., by establishing RRIF, which will

make financial assistance, in the form of

direct loans and loan guarantees,

available for eligible railroad projects.

The aggregate unpaid principal balance

of all financial assistance outstanding

may not exceed $3.5 billion, of which

not less than $1 billion shall be

available solely for other than Class I

railroads.

Applicants for assistance include

State or local governments, government

sponsored authorities and corporations,

shippers, railroads, and joint ventures,

but each application must include at

least one railroad. Funds can be used to

(1) acquire, improve or rehabilitate

intermodal or rail equipment or

facilities, including track, components

of track, bridges, yards, buildings and