[Federal Register Volume 78, Number 111 (Monday, June 10, 2013)]
[Notices]
[Pages 34695-34697]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-13665]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69694; File No. SR-NSCC-2013-07]
Self-Regulatory Organizations; The National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change That Consists of Technical Corrections To Reflect the
Availability of Certain Functionality in the Obligation Warehouse
Service
June 4, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 22, 2013, the National
Securities Clearing Corporation (``NSCC'') filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change
described in Items I, II and III below, which Items have been prepared
primarily by NSCC. NSCC filed the proposal pursuant to Section
19(b)(3)(A)(i) \2\ of the Act and Rule 19b-4(f)(4)(i) \3\ thereunder so
that the proposal was effective upon filing with the Commission. The
Commission is publishing this notice to solicit comments on the rule
change from interested parties.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78s(b)(3)(A)(i).
\3\ 17 CFR 240.19b-4(f)(4)(i).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change consists of technical corrections to
reflect the availability of certain functionality in the Obligation
Warehouse (``OW'') service.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSCC 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. NSCC has prepared
[[Page 34696]]
summaries, set forth in sections (A), (B), and (C) below, of the most
significant aspects of these statements.\4\
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\4\ The Commission has modified the text of the summaries
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
(a) Proposal Overview
The purpose of this filing is to make technical corrections to
Procedure IIA (Obligation Warehouse) to reflect that certain
functionalities that are described in that procedure have become
available through the OW service. On December 29, 2010, the Commission
approved proposed rule change filing SR-NSCC-2010-11,\5\ which modified
NSCC's Reconfirmation and Pricing Service (``RECAPS'') through the
creation of the OW service.
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\5\ Securities Exchange Act Release No. 34-63588 (December 21,
2010), 75 FR 82112 (December 29, 2010).
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Since implementation of the OW, NSCC has continued to enhance the
service through the addition of new functionalities. For example, all
transactions in OW (or ``OW Obligations'') that are also eligible for
NSCC's Continuous Net Settlement (``CNS'') system and that have reached
the status of settlement date minus one (``SD-1'') or that have reached
or passed their scheduled settlement date are now entered into the CNS
Accounting Operation on a regular basis, unless otherwise excluded from
CNS by an NSCC member (``Member'') that is party to that transaction.
Additionally, NSCC now may automatically adjust any OW Obligations for
certain mandatory reorganization events, including adjustments for
forward splits, name changes, mergers (both cash and stock), and full
calls with respect to bonds. However, following the implementation of
the OW, it was determined that OW Obligations would not be
automatically adjusted for redemptions.
Further, information regarding the settlement of transactions that
settle through NSCC's Envelope Settlement Service and that include an
OW Control Number on the input screens and envelope credit slip of that
service will automatically be forwarded to the OW upon completion of
the delivery. If verified, that OW Obligation will be systemically
closed in the OW. Finally, the indicators that allow Members to exclude
OW Obligations from CNS and RECAPS have been de-coupled and now will
work independently from one another. Procedure IIA will also be updated
to make clear that certain securities, in addition to the securities
currently listed in Procedure IIA, may not be netted and allotted in
RECAPS processing.
More information regarding each of these enhancements has been
provided to Members through Important Notices, which are made available
on NSCC's Web site at www.dtcc.com.
Proposed Rule Changes
In order to make clear in NSCC's Rules that these enhancements have
now been implemented into production, NSCC proposes to amend Procedure
IIA by removing certain footnotes that state these functionalities will
be available at a later date, as announced by Important Notice, and to
remove a sentence from Section D.2.(a) to make clear that the CNS and
RECAPS indicators operate independently of each other. Section D.2.(b)
will also be updated to clarify that certain securities, in addition to
the securities mentioned in the current Procedure IIA, may not be
netted and allotted in the RECAPS processing. The proposed rule changes
will also remove reference to redemptions from Section C.2 of Procedure
IIA. Finally the proposed rule changes will correct typographical
errors in Procedure IIA. These proposed rule changes are marked on
Exhibit 5 to this proposed rule change.
(b) Statutory Basis
NSCC believes the proposed rule changes are consistent with the
requirements of Section 17A(b)(3)(vi) of the Act, and the rules and
regulations thereunder, because they facilitate the prompt and accurate
clearance and settlement of securities transactions by providing for
greater efficiency and transparency with respect to obligations
processed through the OW.
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not believe that the proposed rule change will have any
impact or impose any burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments relating to the proposed rule change have not been
solicited or received. NSCC will notify the Commission of any written
comments received by NSCC.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective upon filing
pursuant to Section 19(b)(3)(A)(i) \6\ of the Act and Rule 19b-
4(f)(4)(i).\7\ At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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\6\ 15 U.S.C. 78s(b)(3)(A)(i).
\7\ 17 CFR 240.19b-4(f)(4)(i).
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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. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml ); or
Send an email to [email protected]. Please include
File Number SR-NSCC-2013-07 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NSCC-2013-07. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official
[[Page 34697]]
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
such filings also will be available for inspection and copying at the
principal office of NSCC and on NSCC's Web site at http://www.dtcc.com/downloads/legal/rule_filings/2013/nscc/SR-NSCC-2013-07.pdf
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NSCC-2013-07
and should be submitted on or before July 1, 2013.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-13665 Filed 6-7-13; 8:45 am]
BILLING CODE 8011-01-P