Self-Regulatory Organizations; Delta Government Options Corp.; Notice of Filing of Proposed Rule Change Relating to the Over-the- Counter Options Trading System Procedures for Emergency Contingencies and Disaster Recovery

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34939; File No. SR-DGOC-94-05]

Self-Regulatory Organizations; Delta Government Options Corp.;

Notice of Filing of Proposed Rule Change Relating to the Over-the-

Counter Options Trading System Procedures for Emergency Contingencies

and Disaster Recovery

November 3, 1994.

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

(``Act''),\1\ notice is hereby given that on September 9, 1994, the

Delta Government Options Corp. (``Delta'') 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

primarily prepared by the self-regulatory organization. On September

23, 1994, Delta filed an amendment to the proposed rule change.\2\ The

Commission is publishing this notice to solicit comments on the

proposed rule change from interested persons.

---------------------------------------------------------------------------

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

\2\The amendment modified certain sections of the proposed rule

change to correct typographical errors and to specify which members

of Delta's senior management will have authority under the proposed

rule change. Letter from Barry E. Silverman, President, Delta, to

Jerry W. Carpenter, Assistant Director, Securities Processing

Regulation, Division of Market Regulation, Commission (September 22,

1994).

---------------------------------------------------------------------------

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

of the Proposed Rule Change

The proposed rule change will modify Delta's Over-The-Counter

Options Trading System Procedures (``Procedures'') relating to

emergency contingencies and disaster recovery. In particular, Delta is

adopting provisions governing (1) the waiver or suspension of Delta's

procedures; (2) action by Delta's management on behalf of Delta; and

(3) interpretation of Delta's rules.

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

Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, Delta 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. Delta 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

(a) The proposed rule change will add a new Article XIX to Delta's

Procedures. Article XIX contains Section 1901, ``Waiver or Suspension

of Procedures,'' Section 1902, ``Action by Delta,'' and Section 1903,

``Interpretation of Rules.'' These new provisions codify Delta's

existing policies regarding emergency contingencies and disaster

recovery.

Section 1901 will permit Delta's Board of Directors, Chairman of

the Board, President, Vice President, Chief Financial Officer,

Secretary, or Controller (1) to extend the time fixed by any provision

of Delta's Procedures or any regulations issued by Delta for the doing

of any act or acts or (2) to waive or to suspend any provision of

Delta's Procedures or any regulations issued by Delta if they judge

such extension, waiver, or suspension to be necessary or expedient. The

extension, waiver, or suspension may remain in effect only for sixty

days unless approved by Delta's Board of Directors.

Section 1901 will require that a written report of the extension,

waiver, or suspension be filed with Delta and shall be available for

inspection by any participant. The written report will set forth the

pertinent facts, the identity of the person who authorized the

extension, waiver, or suspension, and the reason the extension, waiver,

or suspension was deemed necessary or expedient. No written report will

be required for extensions of time of less than eight hours.

Section 1902 will permit Delta's Board of Directors, Chairman of

the Board, President, Vice President, Chief Financial Officer,

Secretary, Controller, or other persons designated by Delta's Board of

Directors to act on behalf of Delta except where Delta's Procedures

require action by the Board of Directors. Section 1903 will authorize

Delta's Board of Directors, Chairman of the Board, President, any

committee of the Board of Directors, or any designee of the Board of

Directors to interpret Delta's Procedures.

(b) The proposed rule change will enable Delta to establish

contingency planning and disaster recovery procedures that can be used

in the event of an emergency, market disruption, or other unanticipated

event and will permit Delta to maintain continuous operations while

safeguarding the assets under its custodianship. Delta believes that

the proposed rule change is consistent with the requirements of Section

17A of the Act and the rules and regulations thereunder and in

particular with Section 17A(b)(3)(F) of the Act which requires that a

clearing agency be organized and its rules be designed to promote the

prompt and accurate clearance and settlement of securities transactions

and to remove impediments to and perfect the mechanism of a national

system for the prompt and accurate clearance and settlement of

securities transactions. Delta believes the proposed rule change will

greatly reduce the possibility of market disruption and insure the

prompt and accurate clearance and settlement of transactions in Delta's

system in the event of an emergency or other unanticipated event.

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

Delta does not believe that the proposed rule change will have an

impact 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

Comments have neither been solicited nor received.

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 the self-regulatory organization 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, N.W., 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 provisions of 5

U.S.C. Sec. 552, will be available for inspection and copying in the

Commission's Public Reference Section, 450 Fifth Street, Washington,

D.C. 20549. Copies of such filing will also be available for inspection

and copying at the principal office of the above-mentioned self-

regulatory organization. All submissions should refer to File No. SR-

DGOC-94-5 and should be submitted by December 1, 1994.

For the Commission by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-27810 Filed 11-9-94; 8:45 am]

BILLING CODE 8010-01-M