Federal Register / Vol. 66, No. 88 / Monday, May 7, 2001 / Notices 23055

1Specifically, the Commission determined that

the Investments were retainable under section

9(c)(3) of the Act, because the interests were

acquired to generate tax credits under the Code and

they were being converted into passive investments,

which would wind down as the credits expired.

2An intervening order dated July 10, 1999 (HCAR

No. 27198) authorized the Applicants to reacquire

the limited partnership interest in a fund holding

seventeen LIHTC properties, which the Commission

determined to be retainable under the 1998 Order.

Nine of the LIHTC properties held in that fund were

located outside of the Alliant Energy service

territory.

3LIHTCs are available in the form of equal annual

tax credits that are earned over a ten-year period in

the first eleven years of the project, with the first

and last years prorated. However, in order for the

tax credits to vest, the term of the investment must

be for at least fifteen years. Once the credits are

vested, an investments is fully recovered; that is,

the Applicants’ economic return is not dependent

upon cash flow from the project or any residual

value of the asset.

4See Exelon Corp., (HCAR No. 27256; October 19,

2000) (The Commission allowed a registered public

utility holding company to retain limited

partnership interests in nine different LIHTC funds

holding properties in housing projects located

throughout the United States. The Commission

concluded that these investments were retainable

under the standards of section 11(b)(1) of the Act,

because they were passive in nature, made solely

for the purpose of obtaining tax credits and would

self-liquidate when the terms of the tax credit

expired).

5See NiSource, Inc., (HCAR No. 27263; October

30, 2000) (The Commission allowed a registered

public utility holding company to retain passive

investments in LIHTC ventures organized as LLCs).

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

May 25, 2001, to the Secretary,

Securities and Exchange Commission,

Washington, D.C. 20549–0609, and

serve a copy on the relevant applicant(s)

and/or declarant(s) at the address(es)

specified below. Proof of service (by

affidavit or, in the case of an attorney at

law, by certificate) should be filed with

the request. Any request for hearing

should identify specifically the issues of

facts or law that are disputed. A person

who so requests will be notified of any

hearing, if ordered, and will receive a

copy of any notice or order issued in the

matter. After May 25, 2001, the

application(s) and/or declaration(s), as

filed or as amended, may be granted

and/or permitted to become effective.

Alliant Energy Corporation, et al. (70–

9323)

Alliant Energy Corporation (‘‘Alliant

Energy’’), a registered holding company,

and its subsidiary nonutility holding

company, Alliant Energy Corporation

(‘‘AER’’), both located at 222 West

Washington Avenue, Madison,

Wisconsin 53703, and AER’s indirect

nonutility subsidiary, Heartland

Properties, Inc. (‘‘Heartland’’) (together,

‘‘Applicants’’), 122 West Washington

Avenue, 6th Floor, Madison, Wisconsin

53703 have filed a post-effective

amendment to their application under

section 9(c)(3) of the Act and rule 54

under the Act.

By Commission order dated April 14,

1998 (HCAR No. 26856) (‘‘1998 Order’’),

the Applicants, through Heartland, were

authorized to retain passive, limited

partnership interest (‘‘Investments’’) in

84 in low-income, multi-family housing

projects that were located primarily in

Alliant Energy’s service territory and

qualified for Low Income Housing Tax

Credits (‘‘LIHCT’’) under section 42 of

the Internal Revenue Code (‘‘Code’’).1

By subsequent order dated August 13,

1999 (HCAR No. 27060) (‘‘1999 Order’’),

the Applicants were authorized to make

additional Investments in LIHTC

properties in the Alliant Energy service

territory in an aggregate amount of up to

$50 million from time to time, through

August 13, 2004.2 The 1999 Order

provided that the Applicant’s

Investments in LIHTC properties would

be undertaken for the sole purpose of

obtaining the related tax credits and that

all Investments would be selfliquidating as the LIHTCs expired.3 As

of December 31, 2000, Heartland had

invested approximately $15.5 million of

the amount authorized in the 1999

Order.

The Applicants now request that the

Commission modify the authority

granted in the 1999 Order. In particular,

Applicants request that the Commission

eliminate the restriction in the 1999

Order limiting new LIHTC investments

to properties located in Alliant Energy’s

service territory,4 and permit the

Applicants to acquire membership units

in limited liability companies (‘‘LLCs’’)

formed to invest in LIHTC properties.5

The Applicants state that each LLC will

be managed by an unaffiliated manager

and that the rights of an Applicant as a

member of the LLC will be equivalent to

those of a limited partner in a limited

partnership. The Applicants are not

requesting any other modifications to

the authority granted in, or the

limitations imposed by, the 1999 Order.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–11335 Filed 5–4–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Sunshine Act Meeting

Notice is hereby given, pursuant to

the provisions of the Government in the

Sunshine Act, Pub. L. 94–409, that the

Securities and Exchange Commission

will hold the following meeting during

the week of May 7, 2001.

A closed meeting will be held on

Thursday, May 10, 2001, at 11 a.m.

Commissioners, Counsel to the

Commissioners, the Secretary to the

Commission, and recording secretaries

will attend the closed meeting. Certain

staff members who have an interest in

the matters may also be present.

The General Counsel of the

Commission, or his designee, has

certified that, in his opinion, one or

more of the exemptions set forth in 5

U.S.C. 552b(c)(3), (5), (7), (9)(A), (9)(B),

and (10) and 17 CFR 200.402(a)(3), (5),

(7), (9)(i), (9)(ii) and (10), permit

consideration of the scheduled matters

at the closed meeting.

The subject matters of the closed

meeting scheduled for Thursday, May

10, 2001 will be:

institution and settlement of injunctive

actions; and

institution and settlement of

administrative proceedings of an

enforcement nature.

At times, changes in Commission

priorities require alterations in the

scheduling of meeting items. For further

information and to ascertain what, if

any, matters have been added, deleted

or postponed, please contact:

The Office of the Secretary at (202)

942–7070.

Dated: May 3, 2001.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–11516 Filed 5–3–01; 12:05 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44236; File No. SR–CBOE–

00–22]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc., Relating to Automatic Execution

of Certain Orders on the Electronic

Limit Order Book

April 30, 2001.

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

Securities Exchange Act of 1934

23056 Federal Register / Vol. 66, No. 88 / Monday, May 7, 2001 / Notices

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

2 17 CFR 240.19b–4.

3 In Amendment No. 1, the CBOE modified the

proposed rule change to provide that the

appropriate Floor Procedure Committee would

determine its application to a particular option

class. In Amendment No. 2, the CBOE modified the

proposed rule change to reflect recent changes

relating to the recent re-organization and renumbering of certain provisions of CBOE Rule 6.8

See letters from Jaime Galvin, Attorney, CBOE, to

Andrew Shipe, Attorney, Division of Market

Regulation, SEC, dated February 22 and April 10,

2001.

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 1,

2000, the Chicago Board Options

Exchange, Inc. (‘‘CBOE’’ or

‘‘Exchange’’), filed with the Securities

and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items, I, II,

and III below, which Items have been

prepared by the CBOE. On February 23,

2001, the Exchange filed Amendment

No. 1 to the proposed rule change. On

April 10, 2001, the Exchange filed

Amendment No. 2 to the proposed rule

change.3 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

The Exchange hereby proposes to

amend its rules to provide for the

automatic execution of certain orders

resting in the Exchange’s electronic

limit order book when they become

marketable. Below is the text of the

proposed rule change. Proposed new

language is italicized. Proposed

deletions are in [brackets].

* * * * *

Chicago Board Options Exchange, Inc.,

Rules

* * * * *

Chapter VI—Doing Business on the

Exchange Floor, Section A: General,

RAES Operations

* * * * *

Rule 6.8.

(a)–(c) No change.

(d) Execution on RAES.

(i) When RAES receives an order, the

system automatically will attach to the

order its execution price, determined by

the prevailing market quote at the time

of the order’s entry to the system, except

as otherwise provided in this Rule 6.8

and the Interpretations to this Rule. A

buy order will pay the offer, a sell order

will sell at the bid. Marketable limit

orders will not be executed to sell for

less or buy for more than the specified

price, but the order can be executed to

sell for a higher price or buy for a lower

price. However, if the order’s limit price

is under $3, RAES will execute the

order only if the necessary bid or offer

is 1⁄2 point or less from the limit price.

If the order’s limit price is $3 or more,

RAES will execute the order only if the

necessary bid or offer is one dollar or

less from the limit price.

(ii) A Market-Maker logged on to

participate in RAES (a ‘‘Participating

Market-Maker’’) will be designated as

contra-broker on the trade.

(iii) A trade executed on RAES at an

erroneous quote should be treated as a

trade reported at an erroneous price and

adjusted to reflect the accurate market

after receiving a Floor Official’s

approval.

(iv) When the best bid or offer on the

Exchange’s book constitutes the best bid

or offer on the Exchange and is for a size

less than the RAES order eligibility size

for that class, such fact shall be denoted

in the Exchange’s disseminated quote by

a ‘‘Book Indicator’’. It is possible that

the best bid or offer on the Exchange’s

book constitutes the prevailing market

bid or offer. In those instances, a RAES

order will be executed against the order

in the book. In the event, the order in

the book is for a smaller number of

contracts than the RAES order, the

balance of the RAES order will be

assigned to participating market-makers

at the same price at which the initial

portion of the order was executed up to

an amount prescribed by the

appropriate Floor Procedure Committee

on a class-by-class basis (the ‘‘Book

Price Commitment Quantity’’). Any

remaining balance thereafter shall be (i)

routed to the crowd PAR terminal if

Autoquote is not in effect for that series;

(ii) assigned to participating marketmakers at the Autoquote price if

Autoquote constitutes the new

prevailing market bid or offer; or (iii)

executed against any order in the book

that constitutes the new prevailing

market bid or offer with the balance of

the RAES order being assigned to

participating market-makers at that

price up to the Book Price Commitment

Quantity. Any additional remaining

balance of a RAES order shall be

handled in accordance with (ii) or (iii)

of this paragraph.

(v) Notwithstanding sub-paragraph

(d)(iv), [for a six month pilot program

ending August 21, 2001,] for classes of

options as determined by the

appropriate Floor Procedure Committee,

for any series of options where the bid

or offer generated by the Exchange’s

Autoquote system (or any Exchange

approved proprietary quote generation

system used in lieu of the Exchange’s

Autoquote system) is equal to or crosses

[or locks] the Exchange’s best bid or

offer as established by an order in the

Exchange’s [customer] limit order book,

orders in the book for options of that

series will be automatically executed

against participants on RAES up to the

number of contracts equal to the

applicable maximum size of RAESeligible orders for that series of options

(‘‘Trigger’’). In the event the order in the

book is for a larger number of contracts

than the applicable RAES contract limit,

the balance of the book order will be

executed manually by the trading

crowd. In the limited circumstance

where contracts remain in the book after

an automatic execution of a book order

up to the applicable RAES contract

limit, and the disseminated quote

remains crossed or locked with the

Autoquote bid or offer, or for any series

where Trigger has not yet been

implemented by the appropriate Floor

Procedure Committee, orders in RAES

for options of that series will not be

automatically executed but instead will

be rerouted on ORS to the crowd PAR

terminal or to another location in the

event of system problems or contrary

firm routing instructions.

(e)–(g) No change.

. . . Interpretations and Policies:

.01–.08 No change.

* * * * *

Chapter VII—Order Book Officials and

Board Brokers, Section A: General

RULE 7.4 (a)–(g) No change.

. . . Interpretations and Policies

.01–.06 No change.

.07 Electronic execution of certain

orders on the Exchange’s electronic

limit order book is provided for under

sub-paragraphs (d) (iv) and (v) of Rule

6.8.

* * * * *

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

CBOE 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 CBOE has

prepared summaries, set forth in

sections A, B, and C below, of the most

significant aspects of such statements.

Federal Register / Vol. 66, No. 88 / Monday, May 7, 2001 / Notices 23057

4 It is expected that the implementation of Trigger

will also eliminate the vast majority of orders

‘‘kicked-out’’ of RAES in the situation where firms

seeking out pricing anomalies detect the skewed

quote and submit a RAES eligible order(s) to trade

at the book price.

5 If the DPM determines that the trade is not valid,

such as if the trade was based on an erroneous print

in the underlying, the order will be re-booked and

the last sale will be canceled. 6 15 U.S.C. 78f(b)(5).

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The Exchange is developing a system

enhancement to its electronic limit

order book (‘‘EBook’’), called AutoQuote

Triggered EBook Execution (‘‘Trigger’’),

that will allow certain orders resting in

the book to be automatically executed in

the limited situation where the bid or

offer for a series of options generated by

the Exchange’s Autoquote system (or

any Exchange approved proprietary

quote generation system used in lieu of

the Exchange’s AutoQuote system) is

equal to or crosses the Exchange’s best

bid or offer for that series as established

by a booked order.

The Trigger enhancement to EBook

will provide for more timely and

efficient execution of book orders.

Currently, when the AutoQuote bid or

offer crosses a booked order, the

disseminated quote is changed to reflect

the order in the book, due to book

priority, and will not change unless the

booked order is traded. A ticket is

printed which alerts the book staff and

the crowd that one or more orders in the

book are inverted with the quote and

that a trade should take place to take the

order out of the book. This situation can

occur for several series within the same

class and can continue undetected for

some time, particularly since many

classes are on call-up displays which

can make it difficult for the Designated

Primary Market Maker (‘‘DPM’’) staff to

identify such situations. By providing

for the automatic execution of book

orders in this situation, Trigger will

significantly reduce the burden on

DPMs to execute book orders,

particularly in fast markets.4

Only series in which AutoQuote (or

any Exchange approved quote

generation system) is employed are

eligible for Trigger. If Trigger has been

activated for a particular class of

options, as Autoquote changes and the

quote either touches or crosses an order

in the book, the Trigger process will be

initiated and the book order(s) will be

automatically traded up to the RAES

contract limit applicable for that

particular class of options. The booked

order will be immediately taken out of

the book and a last sale will be

disseminated. A ticket will be printed

on the book printer notifying the book

clerk that a trade has been executed and

an endorsement is required. After the

book clerk verifies with the DPM that

the trade is valid based on movements

in the underlying security, the trade will

be endorsed by the book clerk.5 In most

instances, the trade will be endorsed to

the RAES ‘‘wheel’’ up to the applicable

RAES contract limit, however, the

Trigger system will have the

functionality to allow the trade to be

endorsed manually (as is done today)

when appropriate.

The Trigger will execute, at most, a

quantity equal to the applicable RAES

contract limit. If a number of contracts

greater than the applicable RAES

contract limit exist in the book, the

crowd will manually execute the

remaining contracts in the book. In the

limited circumstance where contracts

remain in the book after a Trigger

execution and the out-of-line

disseminated quote has not changed,

orders in RAES for options of that series

will be ‘‘kicked-out’’ of RAES and will

be immediately and automatically

routed to a broker’s PAR terminal in the

trading crowd (absent contrary

instructions of the firm), where they

will be represented by the broker and,

if executable, will ordinarily be

executed in seconds. Because these

orders remain RAES eligible, they will

be entitled to receive firm quote

treatment when they are represented in

the crowd.

The following examples illustrate the

operation of the Trigger process.

Assume that there is a 10 contract buy

order in the book for $5. Assume that

the disseminated quote for the

particular series is 5–51⁄8 and the RAES

limit is 50 contracts. When the

underlying moves, the Exchange’s

AutoQuote system will also update the

quotes for the options overlying that

stock. Now assume that the underlying

stock ticks down, causing AutoQuote to

go down to 47⁄8–5. In this instance, the

Trigger process will initiate and the

following sequence of events will occur.

The CBOE’s disseminated quote will

remain 5–51⁄8 because of the order in the

book. Trigger will be activated and the

book order will be automatically

executed for 10 contracts. The quote

will change to 47⁄8–5, if that is still the

current quote from AutoQuote.

Normally, the Trigger process will

involve the execution of small orders,

such as in the above example. If in the

above example, the order in the book is

100 contracts instead of 10 contracts,

the following sequence of events will

occur. Trigger will automatically

execute the book order up to 50

contracts, the RAES contract limit.

CBOE’s disseminated quote will still be

5–51⁄8, because of the remaining 50

contracts in the book. A ticket will be

printed on the book printer notifying the

clerk that 50 contracts were executed at

$5 and that 50 contracts remain in the

book. The remaining 50 contracts will

be handled manually by the crowd.

Once the remaining 50 contracts are

executed, the quote will change to 47⁄8–

5, if that is still the current quote from

AutoQuote. If prior to execution of the

remaining contracts, the AutoQuote

subsequently ticks back to 5–51⁄8, the

Trigger will be re-set and the remaining

50 contracts will be automatically

executed if the AutoQuote returns to

47⁄8–5. If prior to the execution of the

remaining contracts, orders are entered

into RAES for the particular series of

options, and AutoQuote remains

unchanged at 47⁄8–5 (i.e., AutoQuote

remains out-of-line with CBOE’s

disseminated quote), the RAES orders

will be kicked-out of RAES and

automatically routed to the trading

crowd.

The Exchange believes that by

providing for orders resting in the book

to be automatically executed in the

limited situation where the AutoQuote

bid or offer touches or crosses the bid

or offer of a booked order, customer

orders in the book will be executed in

a more timely manner. Eliminating

manual execution of these orders will

also significantly reduce the burden on

DPMs to execute book orders,

particularly in fast moving markets. The

number of book trade-throughs should

also be reduced. It should be noted that

the Exchange expects that Trigger will

eliminate the vast majority of RAES

kick-outs currently provided for in

paragraph (c) of Exchange Rule 6.8. To

protect the integrity of the Trigger

system, the Exchange will gradually roll

out the Trigger enhancement to all

options classes throughout the floor.

The Exchange also proposes to add an

interpretation .08 to Exchange Rule 7.4,

that references the electronic execution

of certain orders on the electronic limit

order book that is provided for by

paragraphs (b) and (c) of Exchange Rule

6.8.

2. Statutory Basis

The proposed rule change is

consistent with and furthers the

objectives of Section 6(b)(5) of the Act,6

in that it is designed to remove

impediments to a free and open market

23058 Federal Register / Vol. 66, No. 88 / Monday, May 7, 2001 / Notices

7 17 CFR 200.30-3(a)(12).

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

2The Commission has modified the text of the

summaries prepared by GSCC.

3Securities Exchange Act Release No. 33984 (May

2, 1994), 59 FR 24491 (order authorizing GSCC to

include in its comparison and netting services U.S.

Treasury securities purchases at auction).

4 Id.

5 In 2000, GSCC processed 88 percent more

agency security transactions than in 1999, and, in

2000, the par value of agency security transactions

and to protect investors and the public

interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The CBOE does not believe that the

proposed rule change will impose any

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 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

90 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 self-regulatory

organization 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,

including whether the proposal is

consistent with the Act. Persons making

written submissions should file six

copies thereof with the Secretary,

Securities and Exchange Commission,

450 Fifth Street, NW., Washington, DC

20549–0609. Copies of the submission,

all subsequent amendments, all written

statements with respect to the proposed

rule change that are filed with the

Commission, and all written

communications relating to the

proposed rule change 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. Copies of such filing will also be

available for inspection and copying at

the principal office of CBOE. All

submissions should refer to File No.

CBOE–00–22 and should be submitted

by May 29, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–11336 Filed 5–4–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44226; File No. SR–GSCC–

2001–02]

Self-Regulatory Organizations; The

Government Securities Clearing

Corporation; Notice of Filing and

Immediate Effectiveness of Proposed

Rule Change Relating to the Inclusion

of Netting-Eligible Federal Home Loan

Mortgage Corporation Securities in

Auction Takedown Service

April 26, 2001.

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

Securities Exchange Act of 1934

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

February 5, 2001, the Government

Securities Clearing Corporation

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

Exchange Commission (‘‘Commission’’)

and on March 12, 2001, amended 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

parties.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change would

allow GSCC to expand its auction

takedown service to include nettingeligible Federal Home Loan Mortgage

Corporation (‘‘Freedie Mac’’) securities.

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 these statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

GSCC introduced its auction

takedown service in 1994.3 The service

enables GSCC to accept data on a

locked-in basis with respect to

proprietary purchases of Treasury notes,

bills, and bonds made at auction by

members of GSCC’s netting system; to

net the purchases with when-issued

trades of such members in these

securities; and to deliver the purchased

securities through GSCC’s settlement

mechanism. In its approval of GSCC’s

rule filing, the Commission noted, ‘‘By

including auction securities in GSCC’s

netting system, the level of potential

netting is increased and the number of

required movements of securities are

reduced. Netting of auction securities

also may have the effect of increasing a

member’s liquidity. Previously, a GSCC

member with a short position would

have its required margin payments

calculated based on its short position,

even if it had an offsetting long position

in auction purchases. Once the

positions are netted, the member’s

margin payments will be calculated

based on the position after taking into

account the auction purchases, perhaps

creating a lower margin payment. the

additional liquidity may assist in the

prompt and accurate clearance and

settlement of securities transactions. In

this manner, the proposal removes

impediments to the national system for

the prompt and accurate clearance and

settlement of securities transactions,

and fosters cooperation and

coordination with persons engaged in

clearance and settlement of securities

transactions.’’ 4 The auction takedown

service also reduces the counterparty

risk to the Department of the Treasury

and makes the information that GSCC

maintains on the net settlement position

of its members more complete for risk

management purposes.

GSCC has recently been approached

by Freddie Mac to extend GSCC’s

comparison and netting services to

include netting-eligible Freddie Mac

securities purchased at auction

commencing in February 2001. Agency

securities are steadily constituting an

increasing portion of GSCC’s processing

activity.5 Including Freddie Mac