[Federal Register: November 30, 1998 (Volume 63, Number 229)] [Notices] [Page 65831-65832] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr30no98-140] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-40702; File No. SR-MBSCC-98-03] Self-Regulatory Organizations, MBS Clearing Corporation; Notice of Filing of Proposed Rule Change Relating to an Increase in the Number of Directors November 23, 1998. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ notice is hereby given that on November 5, 1998, MBS Clearing Corporation (``MBSCC'') 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 MBSCC. The Commission is publishing this notice to solicit comments from interested persons on the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change involves an amendment to MBSCC's by-laws to [[Page 65832]] increase the number of directors on its board from thirteen to fifteen. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, MBSCC 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. MBSCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.\2\ --------------------------------------------------------------------------- \2\ The Commission has modified the text of the summaries prepared by MBSCC. --------------------------------------------------------------------------- (A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The proposed rule change will amend Article 3, Section 3.1 of MBSCC's by-laws to increase the number of directors from thirteen to fifteen.\3\ Currently MBSCC has thirteen directors divided into three classes. Classes I and II each consist of four directors, and Class III consists of five directors. Under the proposed rule change, each class will consist of five directors. --------------------------------------------------------------------------- \3\ Article 3, Section 3.1 governs the number, election, and term of office of directors. --------------------------------------------------------------------------- MBSCC's shareholders agreement provides that one director represents management, one director represents National Securities Clearing Corporation, and the remaining directors represent MBSCC's participants. Under the proposed rule change, the two additional directors will represent MBSCC's participants. Accordingly, MBSCC believes that the proposed rule change will increase the opportunity for participants to be represented on MBSCC's board of directors. MBSCC believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder. In particular, MBSCC believes the proposed rule change is consistent with Section 17A(b)(3)(C) of the Act,\4\ which requires that the rules of a clearing agency be designed to assure the fair representation of shareholders (or members) and participants in the selection of its directors and administration of its affairs. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78q-1(b)(3)(C). --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition MBSCC does not believe that the proposed rule change will have an impact on or 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 relating to the proposed rule change have been solicited or received. MBSCC will notify the Commission of any written comments received by MBSCC. 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 MBSCC comments, 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 proposed rule change 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. 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 Section, 450 Fifth Street, NW, Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of MBSCC. All submissions should refer to File No. SR-MBSCC-98-03 and should be submitted by December 21, 1998. For the Commission by the Division of Market Regulation, pursuant to delegated authority.\5\ --------------------------------------------------------------------------- \5\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 98-31816 Filed 11-27-98; 8:45 am] BILLING CODE 8010-01-M