[Federal Register Volume 79, Number 111 (Tuesday, June 10, 2014)]
[Notices]
[Pages 33250-33252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-13452]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72307; File No. SR-NSCC-2014-06]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Modify Its Fee Schedule
June 4, 2014.
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 May 28, 2014, the 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. NSCC
filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) \3\
of the Act and Rule 19b-4(f)(2) \4\ thereunder. The proposed rule
change was effective upon filing with the Commission. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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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 amendments to the Rules &
Procedures (``Rules'') of NSCC to modify its fee schedule, as more
fully described below.
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 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
(i) Purpose
The purpose of the proposed rule changes is to revise NSCC's fee
schedule (as listed in Addendum A of the Rules) in order to update the
fees related to processing voluntary reorganizations, and to update the
fees related to reporting certain Index Receipt Portfolio Composition
Files.
NSCC has recently enhanced the system that applies corporate
actions to Members' open failed positions within its Continuous Net
Settlement (``CNS'') system (``CAD Enhancement'').\5\ In
[[Page 33251]]
connection with these enhancements, NSCC is proposing to charge a US
$500.00 fee each time a Member submits instructions to place a
``protect'' on an open fail position in CNS in order to participate in
an upcoming corporate action, or to add shares to a voluntary corporate
action either on ``protect'' expiration date or, when there is no
``protect'' for that corporate action, on the expiration date of the
corporate action (``Late Protect''). This fee will cover the costs
incurred by NSCC to enhance its corporate action system to process Late
Protects, and is intended to encourage Members to submit a ``protect''
by the earlier submission date. Under the Rules a lower fee of US
$15.00 is charged if Members submit a ``protect'' instruction either on
or prior to the business day prior to ``protect'' expiration date or,
when there is no ``protect'' for that corporate action, on the business
day prior to the expiration date of the corporate action.
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\5\ See Release No. 34-71725; File No. SR-NSCC-2014-03 (March
14, 2014), 79 FR 15780 (March 21, 2014).
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NSCC is also proposing to update the fees for the enhanced
Portfolio Composition File reports which contain information on the
Index Receipt portfolios that the subscribing Member requests
(``Subscription-Based Portfolio Composition File reports''). These
reports are available as a machine readable output (``MRO'') file, as
well as through a web-based interface from which Members may download
and print reports. The existing fees for these reports are charged in
relation to the number of portfolios received by the Member on an
average daily basis per month.\6\ Since NSCC introduced the
Subscription-Based Portfolio Composition File reports it has been able
to recover the costs of developing these reports earlier than it had
expected. As a result, NSCC is proposing to reduce the fees for the
Subscription-Based Portfolio Composition File reports, as reflected on
Exhibit 5, to more accurately reflect the costs of delivering this
service to subscribing Members. NSCC will also introduce a maximum and
minimum monthly fee related to this service. The minimum monthly fee
will cover the costs to NSCC of providing this service to Members on an
on-going basis; however, as the number of units being reported
increases over time with the growth of the market, NSCC will realize an
economies of scale, which it will pass on to its Members by capping the
monthly fees.
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\6\ See Release No. 34-69596; File No. SR-NSCC-2013-06 (May 16,
2013), 78 FR 30362 (May 22, 2013).
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Implementation Timeframe
The implementation date of the fee change with respect to the Late
Protect will coincide with the implementation date of the CAD
Enhancement, and will be announced by an NSCC Important Notice. The fee
change with respect to Subscription-Based Portfolio Composition File
reports will be effective on June 2, 2014.
Proposed Rule Changes
NSCC proposes to amend Addendum A as marked on Exhibit 5 hereto. No
other changes to the Rules are contemplated by this proposed rule
change.
(ii) Statutory Basis
The proposed rule changes will be applied equitably to the NSCC
Members that submit a Late Protect or that subscribe for the
Subscription-Based Portfolio Composition File reports, respectively.
The proposed fee for Late Protects is reasonable as it will cover the
costs incurred by NSCC to enhance its corporate action system to
process Late Protects, and is intended to encourage Members to submit a
``protect'' by the earlier submission date. Furthermore, the maximum
and minimum monthly fees related to the Subscription-Based Portfolio
Composition File reports will ensure that NSCC is able to charge fees
that reflect the costs of providing this service, and will pass on to
NSCC Members any economies of scale. Therefore, the proposed rule
changes are each consistent with the requirements of the Securities
Exchange Act of 1934, as amended (``Act'') and the rules and
regulations thereunder applicable to NSCC, in particular Section
17A(b)(3)(D) of the Act, which requires that NSCC's Rules provide for
the equitable allocation of reasonable dues, fees, and other charges
among its participants.
(B) Self-Regulatory Organization's Statement on Burden on Competition
NSCC does not believe that the proposed rule changes will have any
impact, or impose any burden, on competition. As stated above, the
proposed changes will be applied equitably to NSCC Members that use the
respective services, and will not disproportionally impact any NSCC
Members.
(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 changes 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 forgoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \7\ and Rule 19b-4(f)(2) \8\ 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.
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\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 17 CFR 240.19b-4(f)(2).
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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 No. SR-NSCC-2014-06 on the subject line.
Paper Comments
Send in triplicate to Secretary, Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File No. SR-NSCC-2014-06. 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
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business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of NSCC and on its Web site (http://www.dtcc.com).
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-2014-06 and
should be submitted on or before July 1, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13452 Filed 6-9-14; 8:45 am]
BILLING CODE 8011-01-P