3686 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices

8Because the account is limited to free

movements of securities, monetary obligations to

DTC should be limited to the payments of fees for

DTC services. Under the sponsored account

relationship, DTC will look to ISCC for any liability

related to activity in that account.

9Securities Exchange Act Release No. 26812 (May

12, 1989), 54 FR 21691.

10 15 U.S.C. 78g–1 (1988).

11 15 U.S.C. 78s(b)(2) (1988).

12 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b) (1988).

2Securities Exchange Act Release No. 34678

(September 15, 1994), 59 FR 48651.

3CVSA is an Argentine corporation organized to

provide settlement and depository services for

securities.

4Under the service agreement, ISCC upon

instructions received from CVSA will: (1) Accept

receives of securities by book-entry through DTC;

(2) initiate book-entry delivery of securities on

deposit at DTC; (3) initiate reclamations of

securities received at DTC; (4) make delivery of due

bill checks or payments received by ISCC with

respect to securities; (5) initiate messages to other

DTC participants through the broadcast function of

DTC; (6) process securities on deposit at DTC and

securities subject to a reorganization, takeover, or

similar action provided that requisite funds, if

applicable, have been received in advance; (7)

withdraw rights exited from DTC and deliver such

rights to the agent designated by CVSA along with

instructions received with respect to such rights; (8)

at the discretion of ISCC, facilitate withdrawal-bytransfer of securities on deposit at DTC; and (9)

order proxy materials for securities on deposit at

DTC and complete such proxy material as

instructed.

5The related money settlements for the securities

movements will take place between the parties

outside of ISCC.

6As reflected on the DTC records, securities

deposits will form the basis for the bookkeeping

entries at CVSA on behalf of CVSA’s participants.

7The amount of the deposit shall be the average

of the three highest one-month fees over the prior

twelve months plus the amount ISCC is required to

deposit with DTC with respect to the sponsored

account. However, the amount of CVSA’s cash

deposit with ISCC cannot be less than $50,000.

fees and charges in connection with

ISCC’s provision of services and any

assessment that ISCC must pay to DTC.8

The preliminary settlement statement

also will indicate dividend and possibly

interest payments received by ISCC

from DTC with respect to shares on

deposit.

ISCC will transmit a final settlement

statement by 10:00 a.m. of the business

day following the day the related

preliminary settlement statement were

sent. The final settlement statement will

indicate sums paid by MT. Dividend

and interest credited to the ISSC/MT

account at DTC will be reflected in the

final settlement statement. The final

settlement statement also will reflect a

debit for the total dividend and interest

ISSC pays to MT’s withholding bank.

MT has agreed to consult with ISCC’s

auditors with regard to MT’s financial

condition, and MT will furnish its

financial statements to ISCC. Further,

MT has agreed to appoint a registered

agent in the U.S. for service of process

and will provide ISCC of proof of such

appointment. MT will be subject to

jurisdiction in New York for the

resolution of disputes arising from the

link. MT will be assigned one ISCC

account number for use on behalf of MT

members.

II. Discussion

The Commission believes that the

proposed rule change is consistent with

Section 17A of the Act and therefore is

approving the proposal. Specifically, the

Commission believes the proposal is

consistent with Section 17A(b)(3)(F) of

the Act in that it promotes the prompt

and accurate clearance and settlement of

securities transactions. Without the

linkage, purchasers of U.S. securities on

the Italian stock exchange would be

required to make individual

arrangements for the custody of their

stock.

ISSC’s provision of this service to MT

enables MT to settle transactions in U.S.

securities more efficiently. Further, the

link between ISCC and MT should

standardize the processing of U.S.

securities traded on a foreign exchange

in accordance with U.S. practices and

procedures. The uniform standards

should reduce record keeping errors and

thereby enhance the accuracy of the

settlement of securities transactions. In

addition, this standardization should

promote foreign investment in U.S.

securities which trade on foreign

exchanges.

In the initial order granting ISCC

temporary registration as a clearing

agency, the Commission stated that the

development of efficient and

comparable automated national and

international clearance, settlement, and

payment systems is one of the more

important international goals.9 In that

order, the Commission stressed the

importance of developing linkages

between existing clearance and

settlement systems in light of the

increase in foreign activity in U.S.

stocks. This linkage agreement will

increase the accessibility of the U.S.

securities market to foreign investors by

giving Italian investors a more efficient

method of settling U.S. securities.

III. Conclusion

For the reasons stated above, the

Commission finds that ISCC’s proposal

is consistent with Section 17A of the

Act.10

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,11 that the

proposed rule change (File No. SR–

ISCC–94–4) be and hereby is, approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–1196 Filed 1–17–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35218; International Series

Release No. 769; File No. SR–ISCC–94–03]

Self-Regulatory Organization;

International Securities Clearing

Corporation; Order Approving a Data

Transmission Link With Caja de

Valores, S.A.

January 11, 1995.

On August 9, 1994, the International

Securities Clearing Corporation

(‘‘ISCC’’) submitted a proposed rule

change (File No. SR–ISCC–94–03) to the

Securities and Exchange Commission

(‘‘Commission’’) pursuant to Section

19(b) of the Securities Exchange Act of

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

appeared in the Federal Register on

September 22, 1994.2 No comments

were received. This order approves the

proposal.

I. Description of the Proposal

ISCC has entered into a contract to

establish a data transmission link with

Caja de Valores (‘‘CVSA’’).3 The link

will permit CVSA to hold U.S. securities

in The Depository Trust Company

(‘‘DTC’’) through ISCC. The service

agreement, dated December 2, 1993,

between ISCC and CVSA provides that

ISCC will sponsor an account for CVSA

at DTC which will provide CVSA access

to certain DTC services.4

ISCC on behalf of CVSA will initiate

book-entry deliveries for no value and

will accept receives of securities by

book-entry for no value.5 Both the

receive and deliver functions will be

pursuant to instructions received from

CVSA, and such instructions will

identify the CVSA member for whom

the receipt or delivery is being effected.6

In special circumstances and at ISCC’s

discretion, DTC’s withdrawal-bytransfer services also may be utilized. In

such case, the securities will be

delivered as directed by CVSA. CVSA

will deposit with ISCC collateral to

cover CVSA’s obligations to ISCC.7 To

the extent that any money settlement is

required, ISCC will receive payment in

the form of an official bank check or a

wire transfer through the CVSA

designated correspondent bank.

On each business day at about 4:00

p.m., ISCC will transmit a preliminary
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Notices 3687

8Because the account is limited to free

movements of securities, monetary obligations to

DTC should be limited to the payments of fees for

DTC services. Under the sponsored account

relationship, DTC will look to ISCC for any liability

related to activity in that account.

9Securities Exchange Act Release No. 26812 (May

12, 1989), 54 FR 21691.

10 15 U.S.C. 78q–1 (1988).

11 15 U.S.C. 78s(b)(2) (1988).

12 17 CFR 200.30–3(a)(12) (1994).

13 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b)(1) (1988).

2Standard was established in 1862. Standard’s

Securities Services Division provides

comprehensive services to over three hundred

foreign banks, stockbrokers, and custodian

accounts. Standard also is positioned through their

subsidiary, Stanbic Bank, to provide clearance and

settlement services in other southern and central

African countries. Standard meets the requirements

under Rule 17f–5 under the Investment Company

Act of 1940 to be an eligible foreign custodian.

Standard currently manages in excess of 30 billion

in U.S. dollars.

3Westpac was established in 1944. Westpac

currently provides custodial and securities

settlement services to over 500 local and

international clients. Westpac is qualified as an

eligible foreign custodian under Rule 17f–5 under

the Investment Company Act of 1940. Westpac

manages over 50.2 billion in Australian dollars in

assets under custody.

settlement statement which will detail

the net amount due to ISCC from CVSA

or from ISCC to CVSA. Under the

service agreement, CVSA agrees to pay

to ISCC all fees and charges in

connection with ISCC’s provision of

services and any assessment that ISCC

must pay to DTC.8 The preliminary

settlement statement also will indicate

dividend and possibly interest

payments received by ISCC from DTC

with respect to shares on deposit.

ISCC will transmit a final settlement

statement by 10:00 a.m. of the business

day following the day the related

preliminary settlement statement was

sent. The final settlement statement will

indicate sums paid by CVSA. Dividend

and interest credited to the ISCC/CVSA

account at DTC will be reflected in the

final settlement statement. The final

settlement also will reflect a debit for

the total dividend and interest ISCC

pays to CVSA’s withholding bank.

CVSA has agreed to consult with

ISCC’s auditors with regard to CVSA’s

financial condition, and CVSA will

furnish its financial statements to ISCC.

Further, CVSA has agreed to appoint a

registered agent in the U.S. for service

of process and will provide ISCC of

proof of such appointment. CVSA will

be subject to jurisdiction in New York

for the resolution of disputes arising

from the link. CVSA will be assigned

one ISCC account number for use on

behalf of CVSA members.

II. Discussion

The Commission believes that the

proposed rule change is consistent with

Section 17A of the Act and therefore is

approving the proposal. Specifically, the

Commission believes the proposal is

consistent with Section 17A(b)(3)(F) of

the Act in that it promotes the prompt

and accurate clearance and settlement of

securities transactions. Without the

linkage, Argentine purchasers of U.S.

securities would be required to make

individual arrangements for the custody

of their stock.

ISCC’s provision of this service to

CVSA enables CVSA to settle

transactions in U.S. securities more

efficiently. Further, the link between

ISCC and CVSA should standardize the

processing of U.S. securities traded in

foreign countries in accordance with

U.S. practices and procedures. The

uniform standards should reduce record

keeping errors and thereby enhance the

accuracy of the settlement of securities

transactions. In addition, this

standardization should promote foreign

investment in U.S. securities.

In the initial order granting ISCC

temporary registration as a clearing

agency, the Commission stated that the

development of efficient and

comparable automated national and

international clearance, settlement, and

payment systems is one of the more

important international goals.9 In that

order, the Commission stressed the

importance of developing linkages

between existing clearance and

settlement systems in light of the

increase in foreign activity in U.S.

stocks. This linkage agreement will

increase the accessibility of the U.S.

securities market to foreign investors by

giving Argentine investors a more

efficient method of settling U.S.

securities.

III. Conclusion

For the reasons stated above, the

Commission finds that ISCC’s proposal

is consistent with Section 17A of the

Act.10

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,11 that the

proposed rule change (File No. SR–

ISCC–94–03) be, and hereby is,

approved.12

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–1195 Filed 1–17–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35212; International Series

Release No. 767; File No. SR–ISCC–94–06]

Self-Regulatory Organizations;

International Securities Clearing

Corporation; Notice of Filing of

Proposed Rule Change Relating to the

Global Clearance Networking Service

January 10, 1995.

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

Securities Exchange Act of 1934

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

December 17, 1994, the International

Securities Clearing Corporation

(‘‘ISCC’’) 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 ISCC.

The Commission is publishing this

notice to solicit comments from

interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The purpose of ISCC’s proposed rule

change is to add additional service

providers to ISCC’s Global Clearance

Networking (‘‘GCN’’) service and to

permit other international data formats

to be used.

II. Self-Regulatory Organization’s

Statement on the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

ISCC 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. ISCC 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

ISCC’s Rule 50 provides that ISCC

may establish a foreign clearing,

settlement, and custody service in

conjunction with banks and trust

companies. Presently, ISCC has

established a GCN relationship with

Citibank, N.A. The purpose of the

proposed rule change is to add two

additional GCN service providers:

Standard Bank of South Africa

(‘‘Standard’’) 2 and Westpac Custodian

Nominees Limited of Australia

(‘‘Westpac’’).3 Standard will offer to

ISCC members clearance, settlement,

and custody services in South Africa.

Westpac will offer to ISCC members