Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices 35291

14 17 CFR 200.30–3(a)(12) (1995).

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

2Securities Exchange Act Release No. 36781

(January 26, 1996), 61 FR 3958 [File Nos. SR–SCCP–

96–01 and SR–Philadep–96–01] (order granting

accelerated approval on a temporary basis of

proposed rule changes to provide for the

application of Article 8 of the New York UCC).

utilize the procedures without any

disruption when the current temporary

approval expires on June 28, 1996.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submission

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of the

submissions, all subsequent

amendments, all written statements

with respect to the proposed rule

changes that are filed with the

Commission, and all written

communications relating to the

proposed 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, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filings will also be available for

inspection and copying at the principal

offices of NSCC and SCCP. All

submissions should refer to file

numbers SR–NSCC–96–09 and SR–

SCCP–96–02 and should be submitted

by July 26, 1996.

It is therefore ordered, pursuant to

section 19(b)(2) of the Act, that the

proposed rule changes, as amended

(File Nos. SR–NSCC–96–09 and SR–

SCCP–96–02), be, and hereby are,

permanently approved on an

accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Jonathan G. Katz,

Secretary.

[FR Doc. 96–17146 Filed 7–3–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37382; File Nos. SR–

Philadep–96–08 and SR–SCCP–96–04]

Self-Regulatory Organizations;

Philadelphia Depository Trust

Company and Stock Clearing

Corporation of Philadelphia; Notice of

Filing and Order Granting Accelerated

Approval on a Temporary Basis of

Proposed Rule Changes Requesting

Permanent Approval of the Adoption of

Article 8 of the New York Uniform

Commercial Code To Govern Certain

Transactions

June 28, 1996.

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

Securities Exchange Act of 1934

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

May 30, 1996, the Philadelphia

Depository Trust Company (‘‘Philadep’’)

and the Stock Clearing Corporation of

Philadelphia (‘‘SCCP’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

changes (File Nos. SR–Philadep–96–08

and SR–SCCP–96–04) as described in

Items I and II below, which Items have

been prepared primarily by Philadep

and SCCP. The Commission is

publishing this notice to solicit

comments from interested persons and

to grant accelerated approval of the

proposed rule changes on a temporary

basis through December 31, 1996.

I. Self-Regulatory Organizations’

Statement of the Terms of Substance of

the Proposed Rule Changes

Philadep requests permanent

approval of the adoption of Rule 32 and

the amendment of Rule 1 of its rules,

and SCCP requests permanent approval

of the adoption of Rule 41 and the

amendment of Rule 1 of its rules

governing the choice of law to be

elected in certain transactions effecting

Philadep, SCCP, their participants, and

pledged. On January 26, 1996, the

Commission temporarily approved

through June 30, 1996, Philadep’s and

SCCP’s proposed rule changes adopting

Article 8 of the New York Uniform

Commercial Code (‘‘UCC’’) as their

choice of law governing certain

transactions.2

II. Self-Regulatory Organizations’

Statements of the Purpose of, and

Statutory Basis for, the Proposed Rule

Changes

In their filings with the Commission,

Philadep and SCCP included statements

concerning the purpose of and the basis

for the proposed rule changes and

discussed any comments received on

the proposed rule changes. The text of

these statements may be examined at

the places specified in Item IV below.

Philadep and SCCP have prepared

summaries, as set forth in sections A, B,

and C below, of the most significant

aspects of these statements.

A. Self-Regulatory Organization’s

Statements of the Purpose of, and the

Statutory Basis for, the Proposed Rule

Changes

Philadep and SCCP propose to

permanently adopt Rules 32 and Rule

41, respectively, and to permanently

amend Rule 1 of their rules to codify

their decision to elect certain New York

commercial code provisions to govern

certain transactions for the purpose of

providing a uniform, consistent, and

predictable body of law. Specifically,

Rule 32 and Rule 41 will assure that the

rights and obligations of Philadep and

SCCP, their participants, and their

pledgees with respect to transfers and

pledges of securities, to the extent

Article 8 of the UCC applies thereto,

will be governed by and construed in

accordance with Article 8 of the UCC of

New York in effect from time to time.

The definition of ‘‘security’’ under Rule

1 of both Philadep’s and SCCP’s rules

was amended to cite to New York UCC

Article 8 as opposed to Pennsylvania

UCC Article 8.

Philadep and SCCP note that

uncertainty exists whether New York

law or Pennsylvania law may apply to

any particular transfers and whether

some transfers within Philadep’s or

SCCP’s systems may be governed by

Pennsylvania’s UCC Article 8 while

other transaction within such systems

may be governed by New York’s UCC

Article 8. With so many of the

transactions for which Philadep and

SCCP provide depository, clearance,

and settlement services potentially

being affected (e.g., those transactions

effected through interface with brokerdealers, banks, and other institutions

which are participants in The

Depository Trust Company (‘‘DTC’’) and

National Securities Clearing Corporation

(‘‘NSCC’’) systems), it is problematic

that different rules of law under Article

8 of the UCC may govern the rights and

obligations of parties to such transfers.

Philadep and SCCP, therefore, have

chosen to elect the application of New

York’s UCC Article 8 rather than

Pennsylvania’s UCC Article 8. The

choice of New York law also assures

that DTC, NSCC, and their respective

participants and pledgees will find

harmonious commercial code
35292 Federal Register / Vol. 61, No. 130 / Friday, July 5, 1996 / Notices

3 15 U.S.C. § 78q–1(b)(3)(F) (1988).

4Telephone conversation between John Rudolph,

Board of Governors of the Federal Reserve System,

and Chris Concannon, Staff Attorney, Division of

Market Regulation, Commission (June 28, 1996).

5 17 CFR 200.30–3(a)(12) (1995).

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

provisions governing their extensive

dealings with Philadep and SCCP, their

participants, and pledgees in this area as

the former New York based groups

already are subject to New York law.

Philadep and SCCP believe the

proposed rule changes are consistent

with Section 17A of the Act and the

rules and regulations thereunder

because the rules are designed to

promote the prompt and accurate

clearance and settlement of securities

transactions, to assure the safeguarding

of securities and funds which are in the

custody or control of the clearing agency

or for which it is responsible, to foster

cooperation and coordination with

persons engaged in the clearance and

settlement of securities, to remove

impediments to and perfect the

mechanism of a national market system

for the prompt and accurate clearance

and settlement of securities

transactions, and, in general, to protect

investors and the public interest.

B. Self-Regulatory Organizations’

Statements on Burden on Competition

Philadep and SCCP do not believe

that the proposed rule changes will

impact or impose a burden on

competition.

C. Self-Regulatory Organizations’

Statements on Comments on the

Proposed Rule Changes Received From

Members, Participants or Others

No written comments have been

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Changes and Timing for

Commission Action

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

requires the rules of a clearing agency be

designed to foster cooperation and

coordination with persons engaged in

the clearance and settlement of

securities. The Commission believes the

proposed rule changes are consistent

with these requirements because

adoption of Article 8 of the New York

UCC should help provide certainty with

respect to the substantive rights and

obligations under UCC Article 8 that are

applicable to Philadep and SCCP and

their participants particularly with

respect to transactions with brokerdealers, banks, and other institutions

that are participants of other foreign or

domestic clearing entities.

Philadep and SCCP have requested

that the Commission find good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing. The

Commission finds good cause for so

approving the proposed rule change

because accelerated approval will

enable Philadep and SCCP to continue

to choose Article 8 of the New York

UCC as the governing law for certain

transactions, thus enabling Philadep

and SCCP to continue to settle without

any disruption securities transactions

between U.S. broker-dealers and

Canadian broker-dealers. Currently, the

West Canada Depository Trust Company

(‘‘WCDTC’’) and the West Canada

Clearing Corporation (‘‘WCCC’’) act as a

corresponding depository for and

conduct clearance and settlement with

Philadep and SCCP, respectively. With

WCDTC and WCCC as participants of

SCCP and Philadep, transactions in

certain Canadian and U.S. securities

between Canadian and American

brokers will continue to be cleared and

settled through the facilities of Philadep

and SCCP. The staff of the Board of

Governors of the Federal Reserve

System has concurred with the

Commission’s granting of accelerated

approval.4

The Commission is granting

temporary approval of the proposed rule

changes because the Commission

believes the adoption of Article 8 of the

New York UCC should continue to be

examined before the selection of such

governing law is permanently approved.

The Commission will continue to

analyze the developments and the

application of Article 8 of the New York

UCC including the effect of the choice

of law provisions upon third parties. For

these reasons, the Commission is

temporarily approving the proposed

rule changes through December 31,

1996.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making such submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, DC 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 in

the Commission’s Public Reference

Room, 450 Fifth Street, N.W.,

Washington, DC 20549. Copies of such

filings will also be available for

inspection and copying at the principal

offices of Philadep and SCCP. All

submissions should refer to File Nos.

SR–Philadep–96–08–SR–SCCP–96–04

and should be submitted by July 26,

1996.

It is therefore ordered, pursuant to

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

proposed rule changes (File Nos. SR–

Philadep–96–08 and SR–SCCP–96–04)

be, and hereby are, approved through

December 31, 1996.

For the Commission by the Division of

Market Regulation pursuant to delegated

authority.5

Jonathan G. Katz,

Secretary.

[FR Doc. 96–17147 Filed 7–3–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–37383; International Series

Release No. 998; File No. SR–Philadep–96–

09]

Self-Regulatory Organizations;

Philadelphia Depository Trust

Company; Notice of Filing and Order

Granting Accelerated Approval on a

Temporary Basis of a Proposed Rule

Change Seeking Permanent Approval

of the Designation of the West Canada

Depository Trust Company as a

Correspondent Depository

June 28, 1996.

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

Securities Exchange Act of 1934

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

May 30, 1996, the Philadelphia

Depository Trust Company (‘‘Philadep’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

Philadep–96–09) as described in Items I

and II below, which items have been

prepared primarily by Philadep. The

Commission is publishing this notice to

solicit comments from interested

persons and to grant accelerated

approval of the proposed rule change on

a temporary basis through December 31,

1996.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The purpose of the proposed rule

change is to seek permanent approval of

the designation of the West Canada

Depository Trust Company (‘‘WCDTC’’)

as Philadep’s nonexclusive agent and