[Federal Register Volume 79, Number 239 (Friday, December 12, 2014)]
[Notices]
[Pages 73938-73940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29105]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73779; File No. SR-NSCC-2014-12]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change to Amend NSCC's
Rules and Procedures in Connection with the Discontinuance of the
Analytic Reporting Service
December 8, 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 November 25, 2014, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Item I, II
and III below, which Items have been prepared by NSCC. 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.
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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
(Insurance and Retirement Processing Services) and Addendum A (Fee
Structure) of NSCC's Rules & Procedures in connection with the
discontinuance of the Analytic Reporting Service, as more fully
described below. The text of the proposed rule change is available on
NSCC's Web site at http://www.dtcc.com/legal/sec-rule-filings.aspx, at
the principal office of NSCC, and at the Commission's Public Reference
Room.
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.
[[Page 73939]]
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Statement of Purpose
Background. In 2011, NSCC launched the Analytic Reporting Service
(``Service'') as part of NSCC's suite of insurance and retirement
services.\3\ The Service gives subscribing NSCC members access to
aggregated insurance products information, including benchmarking
information and league tables (such aggregated information,
collectively, ``Analytics Data''). The Analytics Data produced by the
Service is primarily sourced from data and information transmitted to
NSCC by its members in connection with NSCC's other insurance and
retirement service (``IPS Data''). In 2013, at members' requests, NSCC
enhanced the Service to among other things include, as source data for
the Service, insurance transaction data processed outside of NSCC but
submitted to NSCC for inclusion in the Service by its members and other
third parties (``Storage Data'').\4\
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\3\ Securities Exchange Act Release No. 63604 (December 23,
2010), 75 FR 82115 (December 29, 2010) (SR-NSCC-2010-18).
\4\ Securities Exchange Act Release No. 69824 (June 21, 2013),
78 FR 38743 (June 27, 2013) (SR-NSCC-2013-08).
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Prior to implementation of the Service, the suite of insurance and
retirement services consisted of transmission and receipt of IPS Data
from one member to another, with NSCC merely serving as a conduit for
such exchanges of information. With the implementation of the Service,
NSCC began maintaining and storing IPS Data for purposes of creating
Analytics Data.
Proposed Rule Change. Since its launch, subscribers to the Service
have been few, and presently, there are only 12 members subscribing. As
a result, NSCC is not recovering the costs of maintaining the Service.
For this reason, NSCC proposes to amend Rule 57, Section 12 to
eliminate the Service. All 12 members have been notified of NSCC's
intention to discontinue the Service, and though some of the members
have expressed disappointment that the Service is being discontinued,
none have objected. Accordingly, NSCC will discontinue the Service
effective the close of business on December 31, 2014, or if Commission
approval is later than such date, immediately upon Commission approval.
In addition, NSCC will amend Addendum A, to remove the fee
structure applicable to the Service.
As noted above, prior to implementation of the Service, NSCC did
not maintain or store any IPS Data; it merely transmitted such data
from one member to another. In connection with elimination of the
Service, NSCC proposes to amend Rule 57, Section 1, to explicitly state
that NSCC will maintain and store IPS Data transmitted to it by and
between its members, which IPS Data has not otherwise been rejected,
withdrawn or deleted pursuant to the provisions of Rule 57.\5\ NSCC
shall also retain the right to evaluate the usefulness of such IPS
Data, including by providing such IPS Data to third parties under
appropriate agreements of confidentiality and to prohibit such third
parties from using such IPS Data other than for evaluation of such IPS
Data's potential usefulness. Any proposed future use by NSCC of such
stored and maintained IPS Data shall be subject to a proposed rule
change filing with the Commission. With respect to Storage Data
supplied to NSCC for inclusion in the Service, NSCC shall only retain
such Storage Data in compliance with its data retention policy and
shall dispose of all Storage Data in accordance with such policy.
Storage Data shall not be stored or maintained for purposes of
evaluation for future use by NSCC.
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\5\ NSCC notes that IPS Data that constitutes ``Clearing Data''
is and will be subject to the prohibitions, limitations and
exceptions set forth in Rule 49 (Release of Clearing Data and
Clearing Fund Data). In general, Rule 49 limits NSCC's ability to
release Clearing Data relating to transactions of a particular
participant. Rule 49 defines ``Clearing Data'' as transaction data
which is received by NSCC for inclusion in the clearance and/or
settlement process of NSCC, or such data, reports or summaries
thereof, which may be produced as a result of processing such
transaction data.
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2. Statutory Basis
NSCC believes that the proposed rule change is consistent with the
requirements of the Act, and the rules and regulations thereunder
applicable to NSCC, in particular Section 17A(b)(3)(F) of the Act,\6\
which requires that NSCC's Rules be designed to promote the prompt and
accurate clearance and settlement of securities transactions. Given the
limited number of subscribers to the Service, NSCC has determined that
it is not economically efficient to maintain the Service. As such, by
identifying and eliminating a Service [sic] that is not economically
efficient, NSCC can better apply its economic resources, which promotes
the prompt and accurate clearance and settlement of securities
transactions. Further, discontinuance of the Service will be
implemented consistently with the safeguarding of securities and funds
in NSCC's custody or control or for which NSCC is responsible because
the Service is strictly an information service; accordingly,
discontinuance of the Service will neither directly nor indirectly
affect NSCC's safeguarding of securities or funds in its custody or
control or for which it is responsible.
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\6\ 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 have any
impact, or impose any burden on competition.
(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 change have not yet
been solicited or received. NSCC will notify the Commission of any
written comments when received by NSCC.
III. Date of Effectiveness of the Proposed Rule Change, and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate 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 or disapprove such a 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, 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-2014-12 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NSCC-2014-12. This file
[[Page 73940]]
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 the filing also will be available
for inspection and copying at the principal office of NSCC and on
NSCC's Web site at http://dtcc.com/legal/sec-rule-filings.aspx. 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-2014-12 and should be
submitted on or before January 2, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29105 Filed 12-11-14; 8:45 am]
BILLING CODE 8011-01-P