[Federal Register Volume 78, Number 124 (Thursday, June 27, 2013)]
[Notices]
[Pages 38743-38745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15349]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69824; File No. SR-NSCC-2013-08]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change, as Modified by Amendment No. 1, To Expand the Analytic
Reporting Service To Permit Increased Source Data
June 21, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 7, 2013, National Securities Clearing Corporation (``NSCC'')
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 NSCC. On June 20, 2013, NSCC
filed Amendment No. 1 to the proposed rule change.\3\ NSCC filed the
proposed rule change pursuant to Section 19(b)(3)(A)(iii) \4\ of the
Act and Rule 19b-4(f)(4) \5\ thereunder, so that the proposed rule
change, as modified by Amendment No. 1, was effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change, as modified by Amendment No. 1,
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 modified Sections 12(d) and (e) of Exhibit 5
to the original proposed rule change filing to (i) reflect the
application of those sections to both NSCC Members and Limited
Members, and (ii) correct a grammatical error.
\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(f)(4).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change consists of amendments to Rule 57 of the
Rules & Procedures (``Rules'') of NSCC with respect to enhancements to
the Analytic Reporting Service of the Insurance and Retirement
Processing Services (``I&RS'').
II. Clearing Agency'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 summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Background
On December 10, 2010, NSCC filed with the Commission proposed rule
change SR-NSCC-2010-18 \6\ to add a new I&RS service called the
Analytic Reporting Service (``Service''). In that filing, NSCC
described how the Service aggregates transaction data to produce
monthly reports relating to the insurance industry markets (such
reports, collectively, ``Analytics Data''). To create Analytics Data, a
data feed from I&RS's Financial Activity Reporting (``FAR'') service is
transmitted to the Service on a periodic basis. FAR is an NSCC I&RS
service that provides I&RS members the ability to transmit insurance
transaction data and information between themselves. I&RS members
submitting transaction data through FAR can only do so where the
counterparty to such transaction is also an I&RS member. By accessing
and applying the FAR data feed, the Service uses as its source data
actual transaction information, rather than survey results, which gives
subscribers of the Service a more efficient, cost effective, and timely
benchmarking and other relevant information mechanism, than other
similar aggregating services.
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\6\ Release No. 34-63604 (Dec. 23, 2010), 75 FR 82115 (Dec. 29,
2010).
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However, because the Service's source data is currently limited
solely to transaction data transmitted through FAR, the benefits of the
Service cannot be applied to other data sources. Subscribers of the
Service, and prospective subscribers, have requested that NSCC enhance
the Service to allow for submission of additional source data in order
that the Service may provide a more complete view of subscribers' own
business and of the insurance industry generally.
2. The Proposed Rule Change
The proposed rule change will expand the Service to permit for
increased source data. Under the proposed rule change, I&RS members may
submit their transaction data to NSCC, even where the counterparty to a
transaction is not an existing I&RS member, and the proposed rule
change will also permit for submission of transaction data by parties
that are not existing members of NSCC. Under the proposed rule change,
in addition to
[[Page 38744]]
transactions submitted through FAR, the Service will contain a
``storage data'' functionality that will permit I&RS members, and
parties that are not existing members of NSCC, to submit transaction
data directly to the Service.
In connection with the proposed storage data functionality, the
proposed rule change will specify that the Service is a service
offering of NSCC to members on their behalf and that NSCC will not use
or disclose the storage data received by NSCC other than for purposes
of providing Analytics Data and other purposes permitted under
applicable law. In addition, the proposed rule change will expand the
data, to include all source data, which I&RS members may preclude from
disclosure and attribution in connection with earnings reporting laws
compliance. Similarly, the proposed rule change will permit I&RS
members to prevent the attribution to them of all of their source data
under the Service's existing ``Opting-Out'' provision.
The proposed rule change will contain the following representations
to be made by each I&RS member that submits storage data to NSCC:
That the submitter of the storage data has the right to
submit such storage data to NSCC;
That either:
[cir] no third party consents are required in connection with
submission to NSCC of any storage data, or
[cir] if any third party consents are required in connection with
submission to NSCC of any storage data, the submitter has obtained all
such third party consents;
That the submitter has the right to allow NSCC to use such
storage data in the creation of the Analytics Data that shall be
reported to third parties; and
That either:
[cir] the submitter has made the notices, and offered the rights,
to individuals with regard to the submitter's submission of such
storage data to NSCC for use in preparing the Analytics Data that is
reported to third parties, as required by applicable privacy
regulations under the Gramm-Leach-Bliley Act; or
[cir] if the submitter is not the appropriate party, the submitter
has ensured that the appropriate party has made the notices, and
offered the rights, to individuals with regard to such submitter's
submission of such storage data to NSCC for use in preparing the
Analytics Data that is reported to third parties, as required by
applicable privacy regulations under Gramm-Leach-Bliley Act.
The proposed rule change will also contain an indemnification
provision to protect NSCC from any losses it may sustain in reliance
upon the above representations. The proposed rule change will specify
that because the Analytics Data is based solely upon source data
provided to NSCC, NSCC makes no representation or warranty that any of
the Analytics Data accurately reflects past, present or future market
performance, nor does NSCC guarantee the adequacy, accuracy, timeliness
or completeness of any Analytics Data or its fitness for any purpose,
and that NSCC will not be subject to any damages or liabilities
whatsoever with respect to any errors, omissions or delays in any
Analytics Data nor for any party's use of or reliance upon any
Analytics Data.
As a result of these proposed rule changes, the Service will
provide more complete information to subscribers about their own
businesses and business relationships, and benchmarking information
about the overall market.
3. Statutory Basis
NSCC believes that the proposed rule change is consistent with the
requirements of the Act, as amended, specifically Section
17A(b)(3)(F),\7\ and the rules and regulations thereunder applicable to
NSCC, because the change will permit I&RS members of NSCC to enhance
their monitoring and analysis of their businesses, and accordingly,
fosters [sic] cooperation and coordination with persons engaged in the
clearance and settlement of securities transactions.
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\7\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Clearing Agency's Statement on Burden on Competition
NSCC does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change will
result in more robust insurance market data, delivering a better
understanding of performance relative to user peer groups and providing
business decision support, which NSCC believes will enhance competition
to the benefit of investors and beneficiaries.
(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others
Written comments relating to the proposed rule changes [sic] have
not yet 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 rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 thereunder. 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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as modified, 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 No. SR-NSCC-2013-08 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 No. SR-NSCC-2013-08. 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 business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filings will also be available
for
[[Page 38745]]
inspection and copying at the principal office of NSCC and on NSCC's
Web site at http://dtcc.com/legal/rule_filings/nscc/2013.php.
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 No. SR-NSCC-2013-08 and
should be submitted on or before July 18, 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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2013-15349 Filed 6-26-13; 8:45 am]
BILLING CODE 8011-01-P