15614 Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Notices

3See Article XX, Rule 37(a) of the CHX’s Rules.

4 15 U.S.C. 78s(b)(3)(A) (1988).

5Rule 19b–4(e), 17 CFR 240.19b–4(e), provides

that a proposed rule change may take effect upon

filing with the Commission pursuant to Section

19(b)(3)(A) of the Act if, among other things, it

effects a change in an existing order entry or trading

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

2For a complete discussion of the issues

regarding DTC’s expanded MMI program, refer to

Securities Exchange Act Release No. 33958 (April

22, 1994), 59 FR 22878 [File No. SR–DTC–93–12]

(order temporarily approving proposed rule

change).

3Supra note 2.

4 DTC’s SDFC system currently includes the

following issue types: corporate commercial paper,

municipal notes and bonds, municipal variable-rate

demand obligations, zero coupon bonds backed by

U.S. Government securities, continuously offered

medium-term corporate notes, short-term bank

notes, auction-rate and tender-rate preferred stocks

and notes, collateralized mortgage obligations and

other asset-backed securities, Government trust

certificates and Government agency securities not

eligible for the Fed’s book-entry system, retail

certificates of deposit, corporate and municipal

variable mode obligations, corporate bonds,

discount notes, and unit trusts. For a detailed

description and discussion of DTC’s SDFC system,

including the implementation of the commercial

paper program, refer to Securities Exchange Act

Release Nos. 26051 (August 31, 1988), 53 FR 34853

[File No. SR–DTC–88–06] (order permanently

approving DTC’s SDFS system) and 30986 (July 31,

1992), 57 FR 35856 [File No. SR–DTC–92–01] (order

approving implementation of commercial paper

program).

order sending firms to receive automatic

executions of professional market orders

based on the CHX’s BEST Rule.3 Limit

orders sent with the ‘‘Z’’ designator will

be represented on the specialist’s book

as professional orders. The ‘‘Z’’

designator can only be used by a firm

after it negotiates with the specialist,

and the specialist agrees to accept the

firm’s professional orders for automatic

execution on MAX.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b)(5) of the

Act in that it is designated to promote

just and equitable principles of trade, to

remove impediments to and to perfect

the mechanism of a free and open

market and a national market system,

and, in general, to protect investors and

the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose a

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.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change constitutes

a stated policy, practice or

interpretation with respect to the

meaning, administration or enforcement

of an existing rule of the Exchange and

therefore has become effective pursuant

to Section 19(b)(3)(A) of the Act 4 and

subparagraph (e) of Commission Rule

19b–4.5 At any time within 60 days of

the filing of such proposed rule change,

the Commission may summarily

abrogate such rule change if it appears

to the Commission that such action is

necessary of appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the forgoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street NW.,

Washington, D.C. 20549. 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 at

the Commission’s Public Reference

Section, 450 Fifth Street NW.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the CHX. All submissions

should refer to File No. SR–CHX–95–09

and should be submitted by April 14,

1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–7237 Filed 3–23–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35513; File No. SR–DTC–

95–05]

Self-Regulatory Organizations; the

Depository Trust Company; Notice of

Filing of a Proposed Rule Change

Seeking Permanent Approval of Money

Market Instrument Program

March 17, 1995.

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

Securities Exchange Act of 1934

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

March 7, 1995, The Depository Trust

Company (‘‘DTC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change (File No. SR–DTC–95–05) as

described in Items I, II, and III below,

which items have been prepared

primarily by DTC. 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 proposed rule change seeks

permanent approval of DTC’s expanded

money market instrument (‘‘MMI’’)

programs to which the Commission

previously granted temporary approval

through April 30, 1995.2

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

DTC included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments that it received on the

proposed rule change. The text of these

statements may be examined at the

places specified in Item IV below. DTC

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

The proposed rule change seeks

permanent approval of DTC’s settlement

services for transactions in additional

types of MMIs, including institutional

certificates of deposit, municipal

commercial paper, and bankers’

acceptances. The proposed rule change

also seeks to permanently expand and to

improve DTC’s existing MMI programs

for corporate commercial paper (‘‘CP’’),

medium-term notes, preferred stock in a

CP-like mode, short-term bank notes,

and discount notes. The Commission

previously granted DTC’s expanded

MMI program temporary approval

through April 30, 1995.3

The new MMI programs, along with

the existing MMI programs, are an

extension of DTC’s Same-Day Funds

Settlement (‘‘SDFS’’) system.4 The
Federal Register / Vol. 60, No. 57 / Friday, March 24, 1995 / Notices 15615

5Uncertificated MMIs are not evidenced by any

certificate whatsoever. Bills, notes, bonds, and other

securities have been issued in uncertificated form

by U.S. government and federal agencies for many

years.

6 15 U.S.C. 78q–1(b)(3)(A) (1988). 7 17 CFR 200.30–3(a)(12) (1994).

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

2Securities Exchange Act Release No. 35256

(January 20, 1995), 60 FR 5444.

3 17 CFR 240.15c6–1.

4Securities Exchange Act Release Nos. 33023

(October 6, 1993), 58 FR 52891 (adoption of Rule

15c6–1) and 34952 (November 9, 1994), 59 FR

59137 (changing effective date from June 1, 1995,

to June 7, 1995).

automated operating procedures for

MMIs are virtually the same as those

followed by SDFS participants and by

Institutional Delivery system users for

basic depository services in other

eligible SDFS securities. The MMI

issues being made SDFS-eligible will be

distributed in book-entry-only form by

the issuer’s issuing agent that, as in the

commercial paper and medium-term

note MMI programs, will send MMI

issuance instructions to DTC

electronically. Settlement of an issue

will be on the same day as the issuance

or on a specified future day. The issuer’s

paying agent, that will also serve as

DTC’s custodian, will hold a master or

balance MMI certificate for DTC unless

the issuer and its issuing and paying

agent bank choose to distribute

uncertificated MMIs through DTC.5

Because SDFS-eligible MMIs will be

book-entry only, participant operating

procedures for deposits and

withdrawals will not apply to MMIs.

DTC believes the proposed rule

change is consistent with the

requirements of the Act, specifically

Section 17A(b)(3)(A) 6 of the Act, and

the rules and regulations thereunder

because the rule proposal will facilitate

the prompt and accurate clearance and

settlement of securities transactions in

MMIs.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impact or

impose a burden on competition that is

not necessary or appropriate in

furtherance of the purposes of the Act.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

DTC has not solicited comments on

the proposed rule change. Discussions

with DTC participants, including those

on the Task Force established by the

Public Securities Association’s Money

Market Committee to advise DTC on the

operation of its MMI programs, indicate

wide support for the proposed

permanent expansion of the MMI

program.

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 DTC 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

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street NW.,

Washington, D.C. 20549. 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 than 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, 450 Fifth Street NW.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to the file number SR–DTC–95–05

and should be submitted by April 14,

1995.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–7239 Filed 3–23–95; 8:45 am]

BILLING CODE 8010–01–M

Self-Regulatory Organizations;

Midwest Clearing Corporation; Order

Approving Proposed Rule Change

Relating to Implementation of a ThreeDay Settlement Standard

[Release No. 34–35514; File No. SR–MCC–

94–16]

March 17, 1995.

On December 28, 1994, the Midwest

Clearing Corporation (‘‘MCC’’) filed a

proposed rule change (File No. SR–

MCC–94–16) with the Securities and

Exchange Commission (‘‘Commission’’)

pursuant to section 19(b) of the

Securities Exchange Act of 1934

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

published in the Federal Register on

January 27, 1995, to solicit comments

from interested persons.2 As discussed

below, this order approves the proposed

rule change.

I. Description

In October 1993, the Commission

adopted Rule 15c6–1 under the Act 3

which establishes three business days

after the trade date (‘‘T+3’’), instead of

five business days (‘‘T+5’’), as the

standard settlement cycle for most

securities transactions. The rule will

become effective June 7, 1995.4 Several

of MCC’s rules are interrelated with

settlement time frames. The purpose of

the proposed rule change is to amend

MCC’s rules to be consistent with a T+3

settlement standard for securities

transactions.

The proposed rule change amends

Interpretations and Policies .01 of

Article II, Rule 2 of MCC’s rules to

shorten the time frame in which

contract data or comparison data must

be submitted to MCC to ensure that

MCC has sufficient time to review such

contracts and receive the necessary

protection to guarantee the performance

of such contract to the contra-broker in

a T+3 environment. Under such

interpretations, MCC reserves the right

to cause such contract to be settled

under the trade-by-trade system or to

reverse the trade in the continuous net

settlement system (1) if a regular way

contract is not recorded by MCC in a

participant’s account until T+2, (2) if a

regular way contract is not submitted by

another clearing corporation for

recordation in a participant’s account

until T+2, or (3) if the contract is to be

settled through the participant’s account

at another clearing corporation and the

contract is not recorded until T+1.

The proposed rule change also is

amending Article III, Rule 2, Section 9

to state that a participant will be

deemed to have requested delivery of a

security if the participant has entered

into contracts to be settled by MCC

which will result in net settling sales of

such security by the participant during

the next two business days. The

proposed rule change also amends the

definition of ‘‘as-of contract’’ in Article

I, Rule 1 to include contracts for which