Document ID: SEC-2012-0356-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Midwest Securities Trust Co.
Posted Date: 2012-03-02T05:00Z

[Federal Register Volume 77, Number 42 (Friday, March 2, 2012)]
[Notices]
[Page 12898]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-5057]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66461; File No. 600-7]

Self-Regulatory Organizations; Midwest Securities Trust Company; 
Order Cancelling Clearing Agency Registration

February 24, 2012.

I. Background

    On December 1, 1975, pursuant to Sections 17A(b) and 19(a)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 17Ab2-1 
thereunder,\2\ the Securities and Exchange Commission (``Commission'') 
approved on a temporary basis the application for registration as a 
clearing agency filed by the Midwest Securities Trust Company 
(``MSTC'').\3\ By subsequent orders, the Commission extended MSTC's 
temporary registration.\4\ On September 23, 1983, pursuant to Section 
17A and Rule 17Ab2-1 thereunder,\5\ the Commission approved on a 
permanent basis MSTC's registration as a clearing agency.\6\ MSTC was a 
subsidiary of The Chicago Stock Exchange, Incorporated (``CHX'') \7\ 
and operated as a securities depository and trust company providing 
trade recording, comparison, clearance, and settlement services.\8\
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    \1\ 15 U.S.C. 78q-1(b) and 78s(a)(1).
    \2\ 17 CFR 240.17Ab2-1.
    \3\ Release No. 34-11875 (Nov. 26, 1975), 40 FR 55910 (Dec. 2, 
1975).
    \4\ Release Nos. 34-13584, 42 FR 30066 (Jun. 10, 1977); 34-13911 
(Aug. 31, 1977), 1977 WL 190688; 34-14531, 43 FR 10288 (Mar. 10, 
1978); and 34-18584 (March 22, 1982), 47 FR 13266 (Mar. 29, 1982).
    \5\ 15 U.S.C. 78q-1 and 17 CFR 240.17Ab2-1.
    \6\ Release No. 34-20221, 48 FR 45167 (Oct. 3, 1983).
    \7\ Letter from James A. Blanda, Senior Vice President & 
Treasurer, to Jerry Carpenter, Division of Market Regulation (now 
the Division of Trading and Markets), Commission (April 24, 2003) 
(``April 2003 Letter'').
    \8\ Release No. 34-20221, supra note 6. See also Letter from 
David C. Whitcomb Jr., General Counsel, Chicago Stock Exchange, to 
David Karasik, Division of Trading and Markets, Commission (Oct. 28, 
2009) (``October 2009 Letter'').
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II. Cancellation of MSTC's Registration as a Clearing Agency

    In a letter dated April 24, 2003, CHX stated that MSTC was no 
longer in operation and therefore had ceased to do business in the 
capacity specified in MSTC's application for registration.\9\ Further, 
in a letter dated October 28, 2009, CHX indicated that MSTC had 
tendered its Certificate of Authority to the Illinois Office of Banks 
and Real Estate (``OBRE'') and referenced an agreement between CHX and 
OBRE regarding the transfer of long-abandoned property from MSTC to 
OBRE.\10\ As part of the subsequent wind down process, MSTC and CHX 
entered into an agreement with The Depository Trust Company (``DTC'') 
under which DTC assumed all rights, title, and interest to the name 
Kray & Co., the nominee partnership for MSTC (``Kray'').\11\ CHX stated 
that, given the length of time that has elapsed since MSTC ceased 
active operations, CHX did not anticipate any future claims against 
MSTC, OBRE, Kray, or CHX.\12\ CHX also stated that it would retain 
MSTC's records that were subject to Rule 17a-1 in accordance with CHX's 
document retention policies and that, as of October 28, 2009, most of 
the records required to be retained by Rule 17a-1 had exceeded the five 
year retention period required by Rule 17a-1(b).\13\
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    \9\ April 2003 Letter. MSTC was incorporated in Illinois on 
April 19, 1973, and was dissolved on December 17, 2009. LexisNexis, 
Public Records, Corporate Filings search (http://www.lexis.com) and 
Illinois Office of the Secretary of State (http://www.ilsos.gov/corporatellc/).
    \10\ October 2009 Letter. See also April 2003 Letter.
    \11\ October 2009 Letter.
    \12\ Id. In addition, CHX represented that as of August 16, 
2011, CHX has not, to the best of its knowledge, received any claims 
against, or document requests regarding, MSTC within the last two 
years. Email from James G. Ongeena, Vice President and Associate 
General Counsel, Chicago Stock Exchange, to David Karasik, Division 
of Trading and Markets, Commission (Aug. 16, 2011).
    \13\ Id. As noted above, CHX represented in April 2003 that MSTC 
was no longer in operation and had ceased to do business in the 
capacity specified in MSTC's application for clearing agency 
registration. April 2003 Letter.
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    Section 19(a)(3) of the Act \14\ provides that in the event any 
self-regulatory organization is no longer in existence or has ceased to 
do business in the capacity specified in its application for 
registration, ``the Commission, by order, shall cancel its 
registration.''
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    \14\ 15 U.S.C. 78s(a)(3).
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    Based upon the representations and undertakings made by CHX to the 
Commission with regard to MSTC's records and any potential future 
claims against MSTC and because MSTC is no longer in existence and has 
ceased to do business in the capacity specified in its registration 
application, the Commission is canceling MSTC's registration effective 
February 24, 2012.
    It is therefore ordered that:
    Effective February 24, 2012, based on the facts and representations 
noted above, MSTC's registration as a clearing agency under Section 17A 
of the Act and Rule 17Ab2-1 thereunder is cancelled.

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-5057 Filed 3-1-12; 8:45 am]
BILLING CODE 8011-01-P