Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 52 (Mutual Fund Services) and Addendum A (Fee Structure) With Respect to the DTCC Payment aXis Service, and To Make Certain Technical Changes, 62977-62979 [2014-24946]

Download as PDF Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. Please direct your written comments to: Thomas Bayer, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, DC 20549, or send an email to: PRA_ Mailbox@sec.gov. Dated: October 15, 2014. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–24955 Filed 10–20–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION mstockstill on DSK4VPTVN1PROD with NOTICES Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a Closed Meeting on Thursday, October 23, 2014 at 2:00 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the scheduled matter at the Closed Meeting. Commissioner Gallagher, as duty officer, voted to consider the items listed for the Closed Meeting in closed session. The subject matter of the Closed Meeting will be: Institution and settlement of injunctive actions; Institution settlement of administrative proceedings; Adjudicatory matter; Other matters relating to enforcement proceedings. 18:05 Oct 20, 2014 Jkt 235001 Dated: October 16, 2014. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–25084 Filed 10–17–14; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73358; File No. SR–NSCC– 2014–09] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 52 (Mutual Fund Services) and Addendum A (Fee Structure) With Respect to the DTCC Payment aXis Service, and To Make Certain Technical Changes October 15, 2014. Sunshine Act Meeting VerDate Sep<11>2014 At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551–5400. 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 October 2, 2014, 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 by NSCC. NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) 3 of the Act and Rule 19b-4(f)(2) 4 and (4) 5 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. I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change consists of amendments to Rule 52 (Mutual Fund Services) and Addendum A (Fee Structure) of NSCC’s Rules & Procedures with respect to the DTCC Payment aXis service, and certain technical changes in connection therewith, as more fully described below. The text of the proposed rule change is available on 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(2). 5 17 CFR 240.19b–4(f)(4). 2 17 PO 00000 Frm 00038 Fmt 4703 62977 NSCC’s Web site at https://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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change (1) Statement of Purpose Background. NSCC’s DTCC Payment aXis service (‘‘Service’’) 6 was initially approved by the Commission on December 9, 1992 (‘‘1992 Rule Filing’’).7 In the 1992 Rule Filing, NSCC described that the new service would provide for the automation of payments of commissions owed in respect of mutual fund transactions between fund companies (‘‘Funds’’) and their retail broker-dealers (‘‘Distributors’’) and that NSCC’s role in this new commission service would be to transmit data between the Funds (i.e., the commission payers) and the Distributors (i.e., the commission receivers). In 2005, NSCC expanded the scope of the Service to permit Distributors to transmit fee data through NSCC to other Distributors, and to settle the fee payments in respect thereof, expanding the Service to allow for more than the exchange of commission-related information from Funds to Distributors.8 On October 22, 2012, NSCC filed a proposed rule change (‘‘2012 Rule Filing’’),9 which, in particular and relevant to the current proposed rule change, introduced a unique data processing flow to the Service.10 In the 6 The Service was formerly known as ‘‘Mutual Fund Commission Settlement’’. 7 Securities Exchange Act Release No. 31579 (December 9, 1992), 57 FR 60017 (December 17, 1992) (SR–NSCC–1992–13). 8 See Securities Exchange Act Release No. 52458 (September 16, 2005), 70 FR 56200 (September 26, 2005) (SR–NSCC–2005–10). 9 Securities Exchange Act Release No. 68159 (November 5, 2012), 77 FR 67410 (November 9, 2012) (SR–NSCC–2012–08). 10 The 2012 Rule Filing also (i) renamed the Service from ‘‘Mutual Fund Commission Settlement’’ to the current ‘‘DTCC Payment aXis’’, Continued Sfmt 4703 E:\FR\FM\21OCN1.SGM 21OCN1 62978 Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices 2012 Rule Filing, NSCC explained that unlike the processing flow applicable to all other commission and fee payment types processed through the Service, instructions for the payment of 12b–1 fees to a Distributor with regard to investor accounts held on an omnibus account basis at the Fund (‘‘12b–1 Omnibus Fees’’) must in all events be initiated by the Distributor seeking payment. Having received the payment instruction in proper form from the Distributor, NSCC would then transmit such payment instruction to the contraside Fund. The contra-side Fund could then either (i) confirm or reject the payment instruction, or (ii) release payment (either with or without confirmation). Currently, NSCC is preparing to add three additional fee types to the list of commission and fee payments that may be processed through DTCC Payment aXis. The three fee types are known in the Funds industry as Sub-Accounting Service Fees, Retirement/Bank Trust Service Fees and Networking Service Fees. All three fee types will be subject to the same processing flow as 12b-1 Omnibus Fees, where the party seeking payment must initiate the transaction (‘‘Payee Initiated Processing Flow’’).11 mstockstill on DSK4VPTVN1PROD with NOTICES The Proposed Rule Change Commission and Other Fee Payments between DTCC Payment aXis Users. Because the 2012 Rule Filing described the newly introduced Payee Initiated Processing Flow as having applicability only with regard to 12b-1 Omnibus Fees, NSCC proposes to amend Rule 52 to remove the 12b-1 Omnibus Fee limitation. In connection with this amendment, NSCC will also specify that the Payee Initiated Processing Flow may also apply to fee types where any party, including a Fund, is the recipient of the payment. Upon effectiveness of this proposed rule change, going forward NSCC will issue an Important Notice to its DTCC Payment aXis users regarding which commission and other fee types will be subject to the Payee Initiated Processing Flow. These rule changes will be effective immediately, with (ii) specified that the Service permits for the flow of commission and other fee data, and the settlement of payments thereof, among users of the Service without regard to whether the flow of funds is from the Fund to the Distributor, from the Distributor to the Fund, from a Distributor to another Distributor, or otherwise, (iii) specified that transmission of commission and other fee data with regard to investor accounts held on an omnibus account basis was included within the suite of functionalities offered by the Service and (iv) amended the fee structure with respect to the fees charged by NSCC with regard to the Service. 11 Networking Service Fees may also be processed using the traditional process flow, at the paying Fund’s discretion. VerDate Sep<11>2014 18:05 Oct 20, 2014 Jkt 235001 implementation for the processing of the three additional fee types named above to begin November 24, 2014, or otherwise, at such later date thereafter as NSCC may announce through Important Notice. NSCC Charges. NSCC is also amending Addendum A (NSCC’s Fee Structure) with regard to DTCC Payment aXis. Addendum A will be amended as follows: the DTCC Payment aXis fee category currently entitled ‘‘NonOmnibus’’ will be renamed ‘‘Commission & Fee Settlement’’, and the DTCC Payment aXis fee category currently entitled ‘‘Omnibus’’ will be renamed ‘‘Invoicing & Fee Settlement’’, to better conform to the industry naming convention. In addition, ‘‘detail records’’ transaction charges, currently charged within the ‘‘Omnibus’’ fee category (being renamed ‘‘Invoicing & Fee Settlement’’), are being reduced by NSCC and will be charged under a separate fee structure to match the fee structure applicable to ‘‘Commission & Fee Settlement’’ (currently named, ‘‘Non-Omnibus’’), except that there will be no minimum charge applicable to detail records transactions.12 These rule changes will be effective immediately, with NSCC’s implementation of the new detail records transaction fee structure to begin November 24, 2014, or at such later date thereafter as NSCC may announce through Important Notice. Technical Changes. In connection with the above changes to NSCC’s Rules & Procedures, NSCC is also making four technical changes as follows: First, in Rule 52, to remove the footnote in the heading explaining that the ‘‘Mutual Fund Services’’ were formerly known as the ‘‘Mutual Fund Settlement, Entry and Registration Verification Service’’ (the name change occurred several years ago, and NSCC does not believe that the explanation is required any longer); second, in Rule 52, to revise the phrasing for the term ‘‘Omnibus’’ for purposes of clarity; third, in Rule 52, to merge Subsections 3 and 4 of Section C (DTCC Payment aXis) into one Subsection as the two Subsections are substantially related; and four, in Addendum A, to add the subheading ‘‘Transaction Fees’’ under the current ‘‘Non-Omnibus’’ heading (being renamed ‘‘Commission & Fee Settlement), which subheading was inadvertently omitted in the 2012 Rule Filing. There are no new NSCC charges associated with this technical change to Addendum A. These rule changes will be effective immediately. 12 For DTCC Payment aXis Non-Omnibus transactions, NSCC charges its members $.30 per hundred records for the first 500,000 records submitted each month, with a minimum charge of $50. This $50 minimum charge will not apply to detail records transactions. The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) PO 00000 Frm 00039 Fmt 4703 Sfmt 4703 (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, the proposed rule change is consistent with (i) Section 17A(b)(3)(F) 13 of the Act because it provides a mechanism for members to communicate commission and fee payment instructions and to settle payments between themselves in a standardized and automated form, fostering cooperation and coordination with persons engaged in the clearance and settlement of securities transactions, and (ii) Section 17A(b)(3)(D) 14 of the Act because it amends the service fees NSCC charges in connection with use of the Service, which helps to provide for the equitable allocation of reasonable dues, fees and other charges among members in connection with use of the Service. In addition, the proposed rule change 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 proposed rule change applies solely to non-guaranteed services and also solely with respect commission and fee payments between or among Funds and their distribution partners. Accordingly, the proposed rule change does not affect the safeguarding of securities or funds in NSCC’s custody or control or for which NSCC is responsible. 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 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 13 15 14 15 E:\FR\FM\21OCN1.SGM U.S.C. 78q–1(b)(3)(F). U.S.C. 78q–1(b)(3)(D). 21OCN1 Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices of the Act 15 and paragraph (f) of Rule 19b–4 16 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. 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–2014–09 and should be submitted on or before November 12, 2014. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– NSCC–2014–09 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES 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–2014–09. 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 (https://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 (https://www.dtcc.com/legal/sec-rulefilings.aspx). 15 15 16 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). VerDate Sep<11>2014 18:05 Oct 20, 2014 Jkt 235001 [FR Doc. 2014–24946 Filed 10–20–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73357; File No. SR–BYX– 2014–027] Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.16 of BATS Y-Exchange, Inc. October 15, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on October 7, 2014, BATS Y-Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposed rule change to amend paragraph (f) of Rule 11.16 to provide Members 3 with additional time within which to submit a written claim for compensation for ‘‘losses resulting directly from the malfunction of the Exchange’s physical 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The term ‘‘Member’’ is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange. A Member will have the status of a ‘‘member’’ of the Exchange as that term is defined in Section 3(a)(3) of the Act. Membership may be granted to a sole proprietor, partnership, corporation, limited liability company or other organization which is a registered broker or dealer pursuant to Section 15 of the Act, and which has been approved by the Exchange.’’ See Exchange Rule 1.5(n). 1 15 PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 62979 equipment, devices and/or programming or the negligent acts or omissions of its employees’’ (‘‘Exchange Systems Issues’’). In addition, the Exchange proposes to add a new paragraph (g) to Rule 11.16 to permit the Exchange, subject to certain conditions and limitations, to compensate Members for certain losses incurred in connection with orders or portions of orders routed by the Exchange through its affiliated routing broker-dealer, BATS Trading, Inc. (‘‘BATS Trading’’), to Trading Centers 4 where such losses are claimed by the Member to have resulted directly from a malfunction of the physical equipment, devices and/or programming, or the negligent acts or omissions of the employees, of such Trading Centers (‘‘Trading Center Systems Issue’’). The proposed rule change is substantially similar to the existing functionality on EDGX Exchange, Inc. (‘‘EDGX’’) and EDGA Exchange, Inc. (‘‘EDGA’’).5 The Exchange has designated the proposed rule change as non-controversial and provided the Commission with the notice required by Rule 19b–4(f)(6)(iii) under the Act.6 The text of the proposed rule change is available at the Exchange’s Web site at https://www.batstrading.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements 4 Rule 600(b)(78) of Regulation NMS, 17 CFR 242.600(b)(78), defines a ‘‘Trading Center’’ as ‘‘a national securities exchange or national securities association that operates an SRO trading facility, an alternative trading system, an exchange market maker, an OTC market maker, or any other broker or dealer that executes orders internally by trading as principal or crossing orders as agent.’’ See also Exchange Rule 2.11(a). 5 See EDGA Rules 11.12(d)(3) and (e); EDGX Rules 11.12(d)(3) and (e). See also Securities Exchange Act Release Nos. 71061 (December 12, 2013), 78 FR 76685 (December 18, 2013) (SR– EDGA–2013–36) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend EDGX Rule 11.12, Limitations of Liability); and 71062 (December 12, 2013), 78 FR 76693 (December 18, 2013) (SR–EDGX–2013–45) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend EDGX Rule 11.12, Limitations of Liability). The Exchange notes that proposed Rule 11.16(g)(4) refers the liability limits under BATS Rule 11.16(d)(1)–(3), which differ from the existing EDGA and EDGX monthly liability limit of $500,00 referenced under EDGA and EDGX Rules 11.12(e)(4) and set forth under EDGA and EDGX Rules 11.12(d)(1). The Exchange understands that both EDGA and EDGX intend to submit a proposed rule change to harmonize its liability limits with those of BATS and BYX. 6 17 CFR 240.19b–4(f)(6)(iii). E:\FR\FM\21OCN1.SGM 21OCN1

Agencies

[Federal Register Volume 79, Number 203 (Tuesday, October 21, 2014)]
[Notices]
[Pages 62977-62979]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-24946]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73358; File No. SR-NSCC-2014-09]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Amend Rule 52 (Mutual Fund Services) and Addendum A (Fee 
Structure) With Respect to the DTCC Payment aXis Service, and To Make 
Certain Technical Changes

October 15, 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 October 2, 2014, 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 by NSCC. NSCC filed the proposed rule change 
pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-4(f)(2) \4\ 
and (4) \5\ 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
    \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 52 (Mutual 
Fund Services) and Addendum A (Fee Structure) of NSCC's Rules & 
Procedures with respect to the DTCC Payment aXis service, and certain 
technical changes in connection therewith, as more fully described 
below. The text of the proposed rule change is available on NSCC's Web 
site at https://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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

(1) Statement of Purpose
    Background. NSCC's DTCC Payment aXis service (``Service'') \6\ was 
initially approved by the Commission on December 9, 1992 (``1992 Rule 
Filing'').\7\ In the 1992 Rule Filing, NSCC described that the new 
service would provide for the automation of payments of commissions 
owed in respect of mutual fund transactions between fund companies 
(``Funds'') and their retail broker-dealers (``Distributors'') and that 
NSCC's role in this new commission service would be to transmit data 
between the Funds (i.e., the commission payers) and the Distributors 
(i.e., the commission receivers). In 2005, NSCC expanded the scope of 
the Service to permit Distributors to transmit fee data through NSCC to 
other Distributors, and to settle the fee payments in respect thereof, 
expanding the Service to allow for more than the exchange of 
commission-related information from Funds to Distributors.\8\
---------------------------------------------------------------------------

    \6\ The Service was formerly known as ``Mutual Fund Commission 
Settlement''.
    \7\ Securities Exchange Act Release No. 31579 (December 9, 
1992), 57 FR 60017 (December 17, 1992) (SR-NSCC-1992-13).
    \8\ See Securities Exchange Act Release No. 52458 (September 16, 
2005), 70 FR 56200 (September 26, 2005) (SR-NSCC-2005-10).
---------------------------------------------------------------------------

    On October 22, 2012, NSCC filed a proposed rule change (``2012 Rule 
Filing''),\9\ which, in particular and relevant to the current proposed 
rule change, introduced a unique data processing flow to the 
Service.\10\ In the

[[Page 62978]]

2012 Rule Filing, NSCC explained that unlike the processing flow 
applicable to all other commission and fee payment types processed 
through the Service, instructions for the payment of 12b-1 fees to a 
Distributor with regard to investor accounts held on an omnibus account 
basis at the Fund (``12b-1 Omnibus Fees'') must in all events be 
initiated by the Distributor seeking payment. Having received the 
payment instruction in proper form from the Distributor, NSCC would 
then transmit such payment instruction to the contra-side Fund. The 
contra-side Fund could then either (i) confirm or reject the payment 
instruction, or (ii) release payment (either with or without 
confirmation).
---------------------------------------------------------------------------

    \9\ Securities Exchange Act Release No. 68159 (November 5, 
2012), 77 FR 67410 (November 9, 2012) (SR-NSCC-2012-08).
    \10\ The 2012 Rule Filing also (i) renamed the Service from 
``Mutual Fund Commission Settlement'' to the current ``DTCC Payment 
aXis'', (ii) specified that the Service permits for the flow of 
commission and other fee data, and the settlement of payments 
thereof, among users of the Service without regard to whether the 
flow of funds is from the Fund to the Distributor, from the 
Distributor to the Fund, from a Distributor to another Distributor, 
or otherwise, (iii) specified that transmission of commission and 
other fee data with regard to investor accounts held on an omnibus 
account basis was included within the suite of functionalities 
offered by the Service and (iv) amended the fee structure with 
respect to the fees charged by NSCC with regard to the Service.
---------------------------------------------------------------------------

    Currently, NSCC is preparing to add three additional fee types to 
the list of commission and fee payments that may be processed through 
DTCC Payment aXis. The three fee types are known in the Funds industry 
as Sub-Accounting Service Fees, Retirement/Bank Trust Service Fees and 
Networking Service Fees. All three fee types will be subject to the 
same processing flow as 12b-1 Omnibus Fees, where the party seeking 
payment must initiate the transaction (``Payee Initiated Processing 
Flow'').\11\
---------------------------------------------------------------------------

    \11\ Networking Service Fees may also be processed using the 
traditional process flow, at the paying Fund's discretion.
---------------------------------------------------------------------------

The Proposed Rule Change
    Commission and Other Fee Payments between DTCC Payment aXis Users. 
Because the 2012 Rule Filing described the newly introduced Payee 
Initiated Processing Flow as having applicability only with regard to 
12b-1 Omnibus Fees, NSCC proposes to amend Rule 52 to remove the 12b-1 
Omnibus Fee limitation. In connection with this amendment, NSCC will 
also specify that the Payee Initiated Processing Flow may also apply to 
fee types where any party, including a Fund, is the recipient of the 
payment. Upon effectiveness of this proposed rule change, going forward 
NSCC will issue an Important Notice to its DTCC Payment aXis users 
regarding which commission and other fee types will be subject to the 
Payee Initiated Processing Flow. These rule changes will be effective 
immediately, with implementation for the processing of the three 
additional fee types named above to begin November 24, 2014, or 
otherwise, at such later date thereafter as NSCC may announce through 
Important Notice.
    NSCC Charges. NSCC is also amending Addendum A (NSCC's Fee 
Structure) with regard to DTCC Payment aXis. Addendum A will be amended 
as follows: the DTCC Payment aXis fee category currently entitled 
``Non-Omnibus'' will be renamed ``Commission & Fee Settlement'', and 
the DTCC Payment aXis fee category currently entitled ``Omnibus'' will 
be renamed ``Invoicing & Fee Settlement'', to better conform to the 
industry naming convention.
    In addition, ``detail records'' transaction charges, currently 
charged within the ``Omnibus'' fee category (being renamed ``Invoicing 
& Fee Settlement''), are being reduced by NSCC and will be charged 
under a separate fee structure to match the fee structure applicable to 
``Commission & Fee Settlement'' (currently named, ``Non-Omnibus''), 
except that there will be no minimum charge applicable to detail 
records transactions.\12\ These rule changes will be effective 
immediately, with NSCC's implementation of the new detail records 
transaction fee structure to begin November 24, 2014, or at such later 
date thereafter as NSCC may announce through Important Notice.
---------------------------------------------------------------------------

    \12\ For DTCC Payment aXis Non-Omnibus transactions, NSCC 
charges its members $.30 per hundred records for the first 500,000 
records submitted each month, with a minimum charge of $50. This $50 
minimum charge will not apply to detail records transactions.
---------------------------------------------------------------------------

    Technical Changes. In connection with the above changes to NSCC's 
Rules & Procedures, NSCC is also making four technical changes as 
follows: First, in Rule 52, to remove the footnote in the heading 
explaining that the ``Mutual Fund Services'' were formerly known as the 
``Mutual Fund Settlement, Entry and Registration Verification Service'' 
(the name change occurred several years ago, and NSCC does not believe 
that the explanation is required any longer); second, in Rule 52, to 
revise the phrasing for the term ``Omnibus'' for purposes of clarity; 
third, in Rule 52, to merge Subsections 3 and 4 of Section C (DTCC 
Payment aXis) into one Subsection as the two Subsections are 
substantially related; and four, in Addendum A, to add the subheading 
``Transaction Fees'' under the current ``Non-Omnibus'' heading (being 
renamed ``Commission & Fee Settlement), which subheading was 
inadvertently omitted in the 2012 Rule Filing. There are no new NSCC 
charges associated with this technical change to Addendum A. These rule 
changes will be effective immediately.
(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, the proposed rule change is 
consistent with (i) Section 17A(b)(3)(F) \13\ of the Act because it 
provides a mechanism for members to communicate commission and fee 
payment instructions and to settle payments between themselves in a 
standardized and automated form, fostering cooperation and coordination 
with persons engaged in the clearance and settlement of securities 
transactions, and (ii) Section 17A(b)(3)(D) \14\ of the Act because it 
amends the service fees NSCC charges in connection with use of the 
Service, which helps to provide for the equitable allocation of 
reasonable dues, fees and other charges among members in connection 
with use of the Service. In addition, the proposed rule change 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 proposed rule change applies solely to non-guaranteed services and 
also solely with respect commission and fee payments between or among 
Funds and their distribution partners. Accordingly, the proposed rule 
change does not affect the safeguarding of securities or funds in 
NSCC's custody or control or for which NSCC is responsible.
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    \13\ 15 U.S.C. 78q-1(b)(3)(F).
    \14\ 15 U.S.C. 78q-1(b)(3)(D).
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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 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)

[[Page 62979]]

of the Act \15\ and paragraph (f) of Rule 19b-4 \16\ 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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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-NSCC-2014-09 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-2014-09. 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 (https://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 (https://www.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 No. SR-NSCC-2014-09 and 
should be submitted on or before November 12, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-24946 Filed 10-20-14; 8:45 am]
BILLING CODE 8011-01-P
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