Self-Regulatory Organizations; Midwest Securities Trust Company; Notice of Filing and Order Granting Temporary Approval on an Accelerated Basis of a Proposed Rule Change Concerning the Institutional Participant Services Program

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33556; File No. SR-MSTC-94-01]

Self-Regulatory Organizations; Midwest Securities Trust Company;

Notice of Filing and Order Granting Temporary Approval on an

Accelerated Basis of a Proposed Rule Change Concerning the

Institutional Participant Services Program

January 31, 1994.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''),\1\ notice is hereby given that on January 6, 1994, the

Midwest Securities and Trust Company (``MSTC'') filed with the

Securities and Exchange Commission (``Commission'') the proposed rule

change as described in Items I and II below, which Items have been

prepared primarily by MSTC. The Commission is publishing this notice

and order to solicit comments from interested persons and to grant

accelerated approval of the proposed rule change on a temporary basis

through January 31, 1995.

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

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I. Self-Regulatory Organization's Statement of the Terms of Substance

of the Proposed Rule Change

The proposed rule change extends the temporary approval of (i) the

Institutional Participant Services Program (``Program'') and (ii) the

Institutional Participant (``Institutions'') category of participants.

II. Self-Regulatory Organization's Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, MSTC 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. MSTC 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 Commission has approved the Program on a temporary basis

through January 31, 1994.\2\ The rationale for initially approving the

rule change on a temporary basis was to provide MSTC with the

opportunity to formulate more definitive financial and operational

standards for Institutions that desire to participate in the Program.

On December 26, 1990, MSTC filed a proposed rule change\3\ which

proposed more definitive standards and which requested permanent

approval of the Program.\4\ In order to provide the Commission and MSTC

with the opportunity to continue their studies of these standards while

providing continuity of service to Institutions participating in the

Program, MSTC requests that the Commission grant temporary approval of

this proposed rule change on an accelerated basis under the terms of

the previous temporary approval orders through January 31, 1995. MSTC

believes that the proposed rule change is consistent with Section 17A

of the Act\5\ because it will promote the prompt and accurate clearance

and settlement of securities transactions and help perfect the national

system for the clearance and settlement of securities transactions.

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\2\Securities Exchange Act Release Nos. 27752 (March 1, 1990),

55 FR 8271 [File No. SR-MSTC-89-05]; 28844 (February 1, 1991), 56 FR

5035 [File No. SR-MSTC-91-01]; 29493 (July 26, 1991), 56 FR 36854

[File No. SR-MSTC-91-03]; 30326 (January 31, 1992), 57 FR 4783 [File

No. SR-MSTC-92-01]; 30981 (August 10, 1992), 57 FR 35616 [File No.

Sr-MSTC-92-06]; and 31798 (January 29, 1993), 58 FR 7276 [File No.

SR-MSTC-92-11] (collectively referred to as ``temporary approval

orders'').

\3\File No. SR-MSTC-90-10.

\4\For a complete description of the services offered and the

current standards of financial and operational capabilities for

Institutions, refer to the temporary approval orders.

\5\15 U.S.C. 78q-1 (1988).

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B. Self-Regulatory Organization's Statement on Burden on Competition

MSTC believes that no burdens will be placed on competition as a

result of the proposed rule change.

C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received From Members, Participants or Others

MSTC has not received any comments from participants on the

proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for

Commission Action

The Commission finds that the proposed rule change is consistent

with the requirements of the Act and, in particular, with the

requirements of section 17A(b)(3) (A) and (F) of the Act.\6\ Those

sections require that the rules and organizational structure of a

clearing agency be designed to promote the prompt and accurate

clearance and settlement of securities transactions and to remove

impediments to and perfect the mechanism for the national system for

the prompt and accurate clearance and settlement of securities

transactions. The Commission believes that MSTC's proposal will help

achieve these requirements by providing Institutions with the

opportunity to participate directly in the national market system

through MSTC's Program.

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\6\15 U.S.C. 78q-1(b)(3) (A) and (F) (1988).

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MSTC has requested that the Commission approve 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 such accelerated approval will permit

MSTC to offer continuity of service to Institutions that currently

participate in the Program while providing the Commission and MSTC with

additional time to analyze MSTC's proposed standards of participation

and of financial and operational capabilities for Institutions. The

Commission does not anticipate that it will receive any negative

comments on the proposed rule change in light of the fact that no

comments have been received on the proposals approved in the temporary

approval orders, which were identical in substance to this proposed

rule change. Furthermore, the Commission notes that the Program has

operated without incident during the previous temporary approval

periods.

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, 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 at the

principal office of MSTC. All submissions should refer to File No. SR-

MSTC-94-01 and should be submitted by February 28, 1994.

It is therefore ordered, Pursuant to Section 19(b)(2) of the

Act,\7\ that the proposed rule change (File No. SR-MSTC-94-01) be, and

hereby is, approved on an accelerated basis through January 31, 1995.

\7\15 U.S.C. 78s(b)(2) (1988).

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For the Commission by the Division of Market Regulation,

pursuant to delegated authority.\8\

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\8\17 CFR 200.30-3(a)(12) (1992).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-2722 Filed 2-4-94; 8:45 am]

BILLING CODE 8010-01-M