Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Certain Adjustments, Clarifications and Corrections to the Fee Provisions for Insurance and Retirement Processing Services, 37932-37936 [2017-17044]

Download as PDF 37932 Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices adjustment of transactions. To that end, the selection and implementation of a TP Provider utilized by all options exchanges will further reduce the possibility that participants with potentially erroneous transactions that span multiple options exchanges are handled differently on such exchanges. Similarly, the proposed ability to consider quotations invalid on another options exchange if ultimately originating from a party to a potentially erroneous transaction on the Exchange represents a proposal intended to further foster cooperation by the options exchanges with respect to market events. The Exchange understands that all other options exchanges either have or they intend to file proposals that are substantially similar to this proposal. The Exchange does not believe that the proposed rule change imposes a burden on intramarket competition because the proposed provisions apply to all market participants equally. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action sradovich on DSK3GMQ082PROD with NOTICES Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 24 and subparagraph (f)(6) of Rule 19b–4 thereunder.25 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings 24 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 25 17 VerDate Sep<11>2014 16:45 Aug 11, 2017 Jkt 241001 to determine whether the proposed rule should be approved or 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– MRX–2017–16 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–MRX–2017–16. 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 such filing also will be available for inspection and copying at the principal office of the Exchange. 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–MRX– 2017–16, and should be submitted on or before September 5, 2017. 26 17 PO 00000 CFR 200.30–3(a)(12). Frm 00094 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–17068 Filed 8–11–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81339; File No. SR–NSCC– 2017–011] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Certain Adjustments, Clarifications and Corrections to the Fee Provisions for Insurance and Retirement Processing Services August 8, 2017. 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 August 3, 2017, 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 the clearing agency. NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) 3 of the Act and subparagraphs (f)(2) 4 and (f)(4) 5 of Rule 19b–4 thereunder so that the proposal 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 would make certain adjustments, clarifications and corrections to the fee provisions for NSCC’s Insurance and Retirement Processing Services (‘‘I&RS’’) set forth in Addendum A (Fee Structure) (‘‘Addendum A’’) of NSCC’s Rules & Procedures (‘‘Rules’’), as described below.6 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). 6 Capitalized terms not defined herein are defined in the Rules, available at https://www.dtcc.com/∼/ media/Files/Downloads/legal/rules/nscc_rules.pdf. 2 17 E:\FR\FM\14AUN1.SGM 14AUN1 Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the clearing agency 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. The clearing agency 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. Purpose NSCC is proposing to make adjustments, clarifications and corrections to the fee provisions for I&RS set forth in Addendum A, as described below, in order to (i) align the fees charged more closely with the costs of providing the associated products and services to Members and Limited Members of NSCC (collectively, ‘‘NSCC Members’’); (ii) allocate those fees equitably among NSCC Members; and (iii) make the Rules more consistent and clear with respect to these fees. sradovich on DSK3GMQ082PROD with NOTICES (i) Proposed Changes to Fees NSCC is proposing to make the following changes to fees set forth in Section IV.K. of Addendum A: A. Proposed Change to Fees for Multiple Destination Files NSCC currently charges NSCC Members an additional monthly fee for directing NSCC to deliver I&RS files to more than two destinations.7 NSCC added the additional monthly fees for multiple destinations in 2016 to align the fees charged with the cost of providing products and services to NSCC Members with multiple file destinations.8 Currently, the Rules state that NSCC charges an additional $50 per month for delivering files to three to four destinations and an additional $100 per month for delivering files to five or more destinations.9 NSCC has determined that charging an additional $50 monthly fee for NSCC Members that send files to five destinations is sufficient to allow NSCC to recover costs to NSCC of delivering files to such 7 Note 6 to Section IV.K. of Addendum A, supra note 6. 8 Securities Exchange Act Release No. 76787 (December 29, 2015), 81 FR 283 (January 5, 2016) (File No. SR–NSCC–2015–009). 9 Note 6 to Section IV.K. of Addendum A, supra note 6. VerDate Sep<11>2014 16:45 Aug 11, 2017 Jkt 241001 multiple destinations. Therefore, NSCC is proposing to amend its fee structure so that NSCC Members that direct NSCC to deliver files to five destinations would be charged an additional $50 per month rather than an additional $100 per month. As such, NSCC is proposing to change the additional fees charged for delivering files to multiple destinations, as described in Section IV.K. of Addendum A, to charge an additional $50 per month for delivering files to three to five destinations, and an additional $100 per month for delivering files to more than five destinations. B. Proposed Change to Fees for Positions for Retirement Plans Files NSCC is proposing to add a fee for the Positions for Retirement Plans file type into the billing tier for the Positions and Valuations service (‘‘Positions’’) in Section IV.K. of Addendum A.10 Pursuant to Section 5 of Rule 57, NSCC Members can send four file types using Positions—Positions Full, Positions New, Positions for Retirement Plans, and Positions Focused.11 In 2009, NSCC created two billing tiers for Positions, with one fee for Positions Full and Positions New, and a reduced fee charged for Positions Focused.12 The fees charged for processing Positions Focused file types are lower because these files include less data than other Positions file types.13 In 2015, NSCC introduced a new file type for Positions—Positions for Retirement Plans. This file type is a full data file type, similar to the Positions Full and Positions New file types. Therefore, NSCC is now proposing to amend Addendum A to add a fee for the Positions for Retirement Plans file type that is identical to the fee for the Positions Full and Positions New file types. NSCC believes this proposed change would align the fees for processing the Positions for Retirement Plans file type with the costs of delivering this service because the costs of processing the Positions for Retirement Plans file type are similar to the cost of processing the Positions Full and Positions New file types. C. Proposed Change to Fees for Positions Focused As stated above, NSCC amended Addendum A in the 2009 Fee Filing to change the fees to be charged for 10 Section IV.K. of Addendum A, supra note 6. 57, supra note 6. 12 Securities Exchange Act Release No. 59285 (January 23, 2009), 74 FR 5875 (February 2, 2009) (File No. SR–NSCC–2008–13) (‘‘2009 Fee Filing’’). 13 Subsection 2.a.(ii), Section IV.K. of Addendum A, supra note 6. 11 Rule PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 37933 processing the Positions Full, Positions New, and Positions Focused file types.14 The 2009 Fee Filing incorrectly amended Addendum A to state that NSCC would charge $1.50 per 1,000 items for processing Positions Focused files from 2,000,001 to 4,000,000 items per month.15 NSCC management had previously determined that, in order to align the fee charged with the cost of providing this service, the fee for processing Positions Focused files from 2,000,001 to 4,000,000 items per month should be $1.00 per 1,000 items.16 Therefore, NSCC is proposing to correct this error and amend Addendum A to provide that NSCC would charge $1.00 per 1,000 items for processing Positions Focused files from 2,000,001 to 4,000,000 items per month. D. Proposed Change to Fees for APP Non-Settlement Tiers NSCC is proposing to modify the fee structure for the Initial Application Information feature of I&RS (‘‘APP’’) in order to align the fees charged to settling NSCC Members with the fees charged to non-settling NSCC Members. In 2003, NSCC established two categories for the fee structure for APP—a category for settling NSCC Members and a separate category for non-settling NSCC Members.17 When the fee structure was implemented in 2003, the fees charged to settling NSCC Members were higher than the fees charged to non-settling NSCC Members and the category for settling NSCC Members contained three tiers while the category for non-settling NSCC Members contained two tiers.18 In the 2009 Fee Filing, NSCC reduced the fees applicable to settling NSCC Members for APP resulting in the fees in the first two tiers being identical to the fees in the tiers for the non-settling 14 2009 Fee Filing, supra note 12. 2.a.(ii), Section IV.K. of Addendum A, supra note 6. NSCC’s Important Notice announcing the 2009 fee changes identified the intended price for this tier at $1.00 per 1,000 items. See NSCC Important Notice, ‘‘2009 Fee Revisions,’’ A# 6766, P&S# 6336, dated December 31, 2008, available at https://www.dtcc.com/∼/media/Files/ pdf/2008/12/31/a6766.pdf. 16 A fee of $1.00 per 1,000 items for processing Positions Focused files from 2,000,001 to 4,000,000 items per month was approved by the NSCC Core Services Operations and Planning Committee on November 13, 2008. 17 See Securities Exchange Act Release No. 48284 (August 5, 2003), 68 FR 48430 (August 13, 2003) (File No. SR–NSCC–2003–13). 18 See id. The fees for settling NSCC Members contained three tiers: (1) 0–1,999 items per month, (2) 2,000–3,499 items per month and (3) more than 3,499 per month. The fees for non-settling NSCC Members contained only two tiers: (1) 0–1,999 items per month, and (2) more than 1,999 items per month. 15 Subsection E:\FR\FM\14AUN1.SGM 14AUN1 37934 Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices NSCC Members.19 In addition, in the 2009 Fee Filing, NSCC reduced the fees in the third tier for settling NSCC Members. The result of these changes is that currently, settling NSCC Members that process more than 3,499 items a month receive a discount per item while non-settling NSCC Members do not.20 NSCC believes the discount tier for processing more than 3,499 items a month was not added in the category for non-settling NSCC Members because these firms are unlikely to process transactions with more than 1,999 items per month and a tier for processing more items per month above 1,999 was unnecessary. Although NSCC believes it is unlikely that non-settling NSCC Members will process more than 1,999 items per month, NSCC is proposing to remove the separate fee categories for settling and non-settling NSCC Members in order to provide that the same fees apply to both settling NSCC Members and non-settling NSCC Members. The cost to NSCC for processing APP files for settling NSCC Members and nonsettling NSCC Members is the same. Therefore, NSCC proposes to amend subsection 2.d. of Section IV.K of Addendum A to provide non-settling NSCC Members with the same discount that settling NSCC Members receive if they process more than 3,499 items per month. (ii) Proposed Changes to the Organization of Addendum A NSCC is also proposing to make the following changes to the organization of Section IV.K. of Addendum A, as described below: sradovich on DSK3GMQ082PROD with NOTICES A. Proposed Change to Location of Fees for Producer Management Portal NSCC is proposing to revise Addendum A, Section IV.K., by deleting subsection 4. and moving the fees under the heading ‘‘Batch Service Fees’’ in that subsection to subsection 2.h.21 These fees would be renamed ‘‘Distributor Batch Service Fees.’’ These fees are charged in connection with use of the Producer Management Portal and are only charged to NSCC Members that are distributors, which include brokerdealers, banks and insurance agencies that act as intermediaries for insurance companies. The proposed change would include these fees with the other fees 19 2009 Fee Filing, supra note 12. 2.d. Section IV.K. of Addendum A, supra note 6 (provides that settling NSCC Members that process more than 3,499 items per month in APP are charged $0.50 per item compared to $1.00 per item for processing 2,000 to 3,499 items per month). 21 Subsections 2. and 4., Section IV.K. of Addendum A, supra note 6. 20 Subsection VerDate Sep<11>2014 16:45 Aug 11, 2017 Jkt 241001 charged for use of the Producer Management Portal, so such fees are identified in one section, and would further clarify that these fees are only charged to distributors. This proposed change would clarify this section of Addendum A, and would not change the fees charged for any services or products. B. Proposed Change to Location of Fees Listed Under TIER 6 NSCC is proposing to revise Addendum A, Section IV.K., subsection 3., by deleting TIER 6, and moving each of the fees listed under this TIER into TIERS 3 and 5 based on the fees being charged.22 As a result of the proposed change, each product would be listed together with other products for which the same fee is being charged under one TIER.23 The proposed rule change would move fees for ‘‘Values Inquiry’’ and ‘‘Policy Administration Inquiry’’ to TIER 3 and move fees for ‘‘Policy Administration Request,’’ ‘‘Death Notification Request,’’ ‘‘Fund Transfer,’’ ‘‘Withdrawals,’’ and ‘‘Arrangements’’ to TIER 5. Each of the fees moved from TIER 6 would be identified as being subject to the ‘‘In Force Transaction Chart,’’ which is currently set forth at the end of subsection 3., and would continue to apply to these fees. This proposed change would clarify this subsection of Addendum A, and would not change the fees charged for any services or products. 2. Statutory Basis Section 17A(b)(3)(D) of the Act requires, in part, that the Rules provide for the equitable allocation of reasonable dues, fees, and other charges among its participants.24 The proposed changes to Addendum A set forth in item II(A)(1)(i)(A) above are consistent with 17A(b)(3)(D) of the Act 25 because the proposed fees would be equitably allocated among NSCC Members based on each NSCC Member’s utilization of directing NSCC to send files to multiple destinations. In addition, NSCC believes that the proposed fee changes are reasonable because the proposed $50 additional fee is less than the $100 additional fee currently charged for delivering to five destinations, while continuing to allow NSCC to recover the costs associated with delivering to five destinations. Therefore, NSCC believes the proposed fee modifications set forth in item 22 Subsection 3., Section IV.K. of Addendum A of the Rules, supra note 6. 23 TIER 6, subsection 3., Section IV.K. of Addendum A of the Rules, supra note 6. 24 15 U.S.C. 78q–1(b)(3)(D). 25 Id. PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 II(A)(1)(i)(A) above are consistent with the requirements of Section 17A(b)(3)(D) of the Act.26 The proposed changes to Addendum A set forth in items II(A)(1)(i)(B) and (D) above are consistent with 17A(b)(3)(D) of the Act 27 because the proposed fees would be allocated equitably among the NSCC Members that subscribe for those services based on each NSCC Member’s use of such services. In addition, NSCC believes that the proposed fees are reasonable because they would enable NSCC to better align its revenue with the costs and expenses required for NSCC to provide the services to NSCC Members. Specifically, with respect to II(A)(1)(i)(B), the costs of processing the Positions for Retirement Plans file type are similar to the cost of processing other full data file types and NSCC has determined that charging the same fee as is charged for other full data file types would enable it to recover its costs for processing the Positions for Retirement Plans file type. With respect to II(A)(1)(i)(D), the cost to NSCC of processing over 3,499 items per month in APP is the same for settling NSCC Members and non-settling NSCC Members and therefore the fees for settling NSCC Members and non-settling NSCC Members for APP should be the same. Therefore, by establishing fees that align with the cost of delivery of these products and services and allocating those fees equitably among the subscribing NSCC Members, the proposed changes to Addendum A set forth in items II(A)(1)(i)(B) and (D) are consistent with the requirements of Section 17A(b)(3)(D) of the Act.28 NSCC believes the proposed fees set forth in item II(A)(1)(i)(C) above are also consistent with the requirements of 17A(b)(3)(D) of the Act.29 Specifically, the proposed fees would be equitably allocated among NSCC Members that choose to process the file type for Positions Focused. NSCC also believes the proposed fees set forth in item II(A)(1)(i)(C) above are reasonable because the proposed fee for processing Position Focused files from 2,000,001 to 4,000,000 items per month is less than the fee currently charged, while continuing to allow NSCC to recover the costs associated with processing such items. In addition, the proposed fee changes were previously approved by NSCC management,30 and NSCC Members were previously notified of the 26 Id. 27 Id. 28 Id. 29 Id. 30 See E:\FR\FM\14AUN1.SGM supra, note 16. 14AUN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices fee changes,31 at the time the fee changes were originally contemplated for 2009. Therefore, NSCC believes the proposed fee modifications are consistent with the requirements of Section 17A(b)(3)(D) of the Act.32 Section 17A(b)(3)(F) of the Act requires, in part, that the Rules promote the prompt and accurate clearance and settlement of securities transactions.33 The proposed changes to Addendum A set forth in item II(A)(1)(ii) above would enhance NSCC Members’ ability to understand the fees associated with the I&RS services. Specifically, the proposed rule change relating to Addendum A described above in item II(A)(1)(ii) would clarify the meaning of certain provisions of Addendum A relating to the fees and enhance clarity and consistency in the Rules in this regard. As such, the proposed rule change would allow NSCC Members to have a better understanding of the Rules in relation to their I&RS activity, and thereby assist in promoting the prompt and accurate clearance and settlement of securities transactions, consistent with the requirements of Section 17A(b)(3)(F) of the Act.34 Rule 17Ad–22(e)(23)(i) under the Act requires, in part, that NSCC establish, implement, maintain and enforce written policies and procedures reasonably designed to provide for publicly disclosing all relevant rules and material procedures.35 Rule 17Ad– 22(e)(23)(ii) under the Act requires, in part, that NSCC establish, implement, maintain and enforce written policies and procedures reasonably designed to provide for providing sufficient information to enable participants to identify and evaluate the risks, fees, and other material costs they incur by participating in NSCC.36 The proposed rule change set forth in item II(A)(1)(ii) above would enhance clarity and consistency with respect to the fees described herein. In this way, the proposed rule change would provide for the public disclosure of these fees through the proposed changes to Addendum A. The proposed rule change would allow NSCC to further provide its participants with sufficient information to enable those participants to identify and evaluate the fees incurred through their participation in NSCC. As such, NSCC believes the proposed rule change is consistent with 31 See supra, note 15. U.S.C. 78q–1(b)(3)(D). 33 15 U.S.C. 78q–1(b)(3)(F). 34 Id. 35 17 CFR 240.17Ad–22(e)(23)(i). 36 17 CFR 240.17Ad–22(e)(23)(ii). 32 15 VerDate Sep<11>2014 16:45 Aug 11, 2017 both Rule 17Ad–22(e)(23)(i) and (ii) under the Act.37 (B) Clearing Agency’s Statement on Burden on Competition NSCC does not believe that the proposed changes to Addendum A set forth in items II(A)(1)(i)(A), (C) and (D) above would have an adverse impact, or impose any burden, on competition because, in each case, the proposed fee changes would be a reduction in fees as currently set forth in the Rules that would not disproportionally impact any NSCC Members. As a reduction to the fees currently in the Addendum A for these services, the proposed changes would not impede any NSCC Members from engaging in the services or have an adverse impact on any NSCC Members. Moreover, the proposed rule changes may promote competition because, in each case, the proposed fee modifications would allow NSCC Members to engage in a greater number of transactions with lower fee costs than they would incur today for the same number of transactions. For instance, the proposed changes in item II(A)(1)(i)(A) above would allow NSCC Members that are currently sending to three or four destinations to begin to send to five destinations without incurring a higher fee than if files were sent to only three or four destinations because, as a result of the proposed rule change, the additional fee incurred by NSCC Members to send to five destinations would be the same as the additional fee to send to three or four destinations. Similarly, the proposed changes in item II(A)(1)(i)(C) above could result in NSCC Members that are currently sending 500,001 to 2,000,000 items per month to begin to send 2,000,001 to 4,000,000 items per month in order to take advantage of the proposed stated fee of $1.00 per 1,000 items rather than $1.50 per 1,000 items which is the current fee. In addition, the proposed change in item II(A)(1)(i)(D) above could result in non-settling NSCC Members that are currently sending less than 3,499 items per month to be more likely to send more than 3,499 items per month in order to take advantage of the proposed stated fee of $0.50 per item rather than $1.00 per item which is the current fee for non-settling NSCC Members. NSCC Members sending data to more destinations and sending additional data items relating to Positions and APP products and services would enhance participation in the marketplace by providing NSCC Members and their counterparties with more data. Finally, as discussed above, 37 17 Jkt 241001 PO 00000 CFR 240.17Ad–22(e)(23)(i), (ii). Frm 00097 Fmt 4703 Sfmt 4703 37935 NSCC believes that the proposed fee changes are appropriate in light of the expenses incurred by NSCC in providing its services. NSCC believes that the proposed changes to Addendum A set forth in item II(A)(1)(i)(B), could have an impact on competition because NSCC Members would need to pay the fees for a full file type in order to deliver Positions for Retirement Plan file types similar to Positions Full and Position New file types rather than paying the reduced fee that NSCC Members pay to deliver the Positions Focused file type. The higher fee may make it less likely for some NSCC Members to deliver the Position for Retirement Plan file type rather than the Position Focused file type. NSCC believes, however, that any burden on competition that would be created by the proposed rule change would be necessary and appropriate in furtherance of the Act. Specifically, the proposed rule change is necessary to align the fees charged for sending the Positions for Retirement Plans file type feature with the costs and expenses required for NSCC to process that file type. As stated above, NSCC believes the costs of processing the Positions for Retirement Plans file type for NSCC are similar to the cost of processing the Positions Full and the Positions New file types. As such, NSCC believes that the fee for processing the Positions Full and the Positions for Retirement Plans file type should be the same as the fee for processing the Positions Full and Positions New file types and is appropriate given the costs to NSCC of delivering the full data file types. NSCC does not believe that the proposed changes to Addendum A set forth in item II(A)(1)(ii) above would have any impact on competition because such changes are clarifications of the Rules which would not affect the rights or obligations of NSCC Members. Moreover, the proposed changes set forth in item II(A)(1)(ii) are revenue neutral and would not affect one set of NSCC Members in favor of another. (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 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 E:\FR\FM\14AUN1.SGM 14AUN1 37936 Federal Register / Vol. 82, No. 155 / Monday, August 14, 2017 / Notices 19(b)(3)(A) 38 of the Act and subparagraphs (f)(2) 39 and (f)(4) 40 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 is consistent with the Act. Comments may be submitted by any of the following methods: sradovich on DSK3GMQ082PROD with NOTICES 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 Number SR– NSCC–2017–011 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–2017–011. 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 DTCC’s Web site (https://dtcc.com/legal/sec-rulefilings.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– 2017–011 and should be submitted on or before September 5, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.41 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–17044 Filed 8–11–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81340; File No. SR– NYSEAMER–2017–03] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material .01 and .02 to NYSE American Rule 5.2E(j)(3) To Provide for the Inclusion of Cash in an Index Underlying a Series of Investment Company Units August 8, 2017. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on July 27, 2017, NYSE American LLC (the ‘‘Exchange’’ or ‘‘NYSE American’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 proposes to amend Supplementary Material .01 and .02 to NYSE American Rule 5.2E(j)(3) to provide for the inclusion of cash in an index underlying a series of Investment Company Units, which amendments conform to amendments to NYSE Arca Equities Rule 5.2(j)(3) previously approved by the Commission. The 41 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 38 15 U.S.C 78s(b)(3)(A). 39 17 CFR 240.19b–4(f)(2). 40 17 CFR 240.19b–4(f)(4). VerDate Sep<11>2014 16:45 Aug 11, 2017 1 15 Jkt 241001 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 proposed rule change is available on the Exchange’s Web site at www.nyse.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 self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes (1) to amend Supplementary Material .01 and .02 to NYSE American Rule 5.2E(j)(3) to provide for the inclusion of cash in an index underlying a series of Investment Company Units (‘‘Units’’), which amendments conform to amendments to NYSE Arca Equities Rule 5.2(j)(3) previously approved by the Commission.4 Amendments to NYSE American Rule 5.2E(j)(3) NYSE American Rule 5.2E(j)(3) permits the trading of Units pursuant to unlisted trading privileges (‘‘UTP’’). The Exchange proposes to amend Commentaries .01 and .02 to NYSE American Rule 5.2E(j)(3) to permit trading of Units based on an index or portfolio that includes cash as a component. While Units, like mutual funds, will generally hold an amount of cash, NYSE American Rule 5.2E(j)(3) currently provides that components of an index or portfolio underlying a series of Units consist of securities—namely, US Component Stocks, Non-US Component Stocks, Fixed Income Securities or a combination thereof. As described below, the proposed amendments to Supplementary Material .01 and .02 to Rule 5.2E(j)(3) would 4 See Securities Exchange Act Release No. 80777 (May 25, 2017) (SR–NYSEArca–2017–30) (order approving amendments to Commentary .01 and Commentary .02 to NYSE Arca Equities Rule 5.2(j)(3) to provide for the inclusion of cash in an index underlying a series of Investment Company Units). E:\FR\FM\14AUN1.SGM 14AUN1

Agencies

[Federal Register Volume 82, Number 155 (Monday, August 14, 2017)]
[Notices]
[Pages 37932-37936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17044]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81339; File No. SR-NSCC-2017-011]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Make Certain Adjustments, Clarifications and Corrections 
to the Fee Provisions for Insurance and Retirement Processing Services

August 8, 2017.
    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 August 3, 2017, 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 the clearing agency. NSCC filed the 
proposed rule change pursuant to Section 19(b)(3)(A) \3\ of the Act and 
subparagraphs (f)(2) \4\ and (f)(4) \5\ of Rule 19b-4 thereunder so 
that the proposal 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 would make certain adjustments, 
clarifications and corrections to the fee provisions for NSCC's 
Insurance and Retirement Processing Services (``I&RS'') set forth in 
Addendum A (Fee Structure) (``Addendum A'') of NSCC's Rules & 
Procedures (``Rules''), as described below.\6\
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    \6\ Capitalized terms not defined herein are defined in the 
Rules, available at https://www.dtcc.com/~/media/Files/Downloads/
legal/rules/nscc_rules.pdf.

---------------------------------------------------------------------------

[[Page 37933]]

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency 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. The clearing agency 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. Purpose
    NSCC is proposing to make adjustments, clarifications and 
corrections to the fee provisions for I&RS set forth in Addendum A, as 
described below, in order to (i) align the fees charged more closely 
with the costs of providing the associated products and services to 
Members and Limited Members of NSCC (collectively, ``NSCC Members''); 
(ii) allocate those fees equitably among NSCC Members; and (iii) make 
the Rules more consistent and clear with respect to these fees.
(i) Proposed Changes to Fees
    NSCC is proposing to make the following changes to fees set forth 
in Section IV.K. of Addendum A:
A. Proposed Change to Fees for Multiple Destination Files
    NSCC currently charges NSCC Members an additional monthly fee for 
directing NSCC to deliver I&RS files to more than two destinations.\7\ 
NSCC added the additional monthly fees for multiple destinations in 
2016 to align the fees charged with the cost of providing products and 
services to NSCC Members with multiple file destinations.\8\ Currently, 
the Rules state that NSCC charges an additional $50 per month for 
delivering files to three to four destinations and an additional $100 
per month for delivering files to five or more destinations.\9\ NSCC 
has determined that charging an additional $50 monthly fee for NSCC 
Members that send files to five destinations is sufficient to allow 
NSCC to recover costs to NSCC of delivering files to such multiple 
destinations. Therefore, NSCC is proposing to amend its fee structure 
so that NSCC Members that direct NSCC to deliver files to five 
destinations would be charged an additional $50 per month rather than 
an additional $100 per month. As such, NSCC is proposing to change the 
additional fees charged for delivering files to multiple destinations, 
as described in Section IV.K. of Addendum A, to charge an additional 
$50 per month for delivering files to three to five destinations, and 
an additional $100 per month for delivering files to more than five 
destinations.
---------------------------------------------------------------------------

    \7\ Note 6 to Section IV.K. of Addendum A, supra note 6.
    \8\ Securities Exchange Act Release No. 76787 (December 29, 
2015), 81 FR 283 (January 5, 2016) (File No. SR-NSCC-2015-009).
    \9\ Note 6 to Section IV.K. of Addendum A, supra note 6.
---------------------------------------------------------------------------

B. Proposed Change to Fees for Positions for Retirement Plans Files
    NSCC is proposing to add a fee for the Positions for Retirement 
Plans file type into the billing tier for the Positions and Valuations 
service (``Positions'') in Section IV.K. of Addendum A.\10\ Pursuant to 
Section 5 of Rule 57, NSCC Members can send four file types using 
Positions--Positions Full, Positions New, Positions for Retirement 
Plans, and Positions Focused.\11\ In 2009, NSCC created two billing 
tiers for Positions, with one fee for Positions Full and Positions New, 
and a reduced fee charged for Positions Focused.\12\ The fees charged 
for processing Positions Focused file types are lower because these 
files include less data than other Positions file types.\13\ In 2015, 
NSCC introduced a new file type for Positions--Positions for Retirement 
Plans. This file type is a full data file type, similar to the 
Positions Full and Positions New file types.
---------------------------------------------------------------------------

    \10\ Section IV.K. of Addendum A, supra note 6.
    \11\ Rule 57, supra note 6.
    \12\ Securities Exchange Act Release No. 59285 (January 23, 
2009), 74 FR 5875 (February 2, 2009) (File No. SR-NSCC-2008-13) 
(``2009 Fee Filing'').
    \13\ Subsection 2.a.(ii), Section IV.K. of Addendum A, supra 
note 6.
---------------------------------------------------------------------------

    Therefore, NSCC is now proposing to amend Addendum A to add a fee 
for the Positions for Retirement Plans file type that is identical to 
the fee for the Positions Full and Positions New file types. NSCC 
believes this proposed change would align the fees for processing the 
Positions for Retirement Plans file type with the costs of delivering 
this service because the costs of processing the Positions for 
Retirement Plans file type are similar to the cost of processing the 
Positions Full and Positions New file types.
C. Proposed Change to Fees for Positions Focused
    As stated above, NSCC amended Addendum A in the 2009 Fee Filing to 
change the fees to be charged for processing the Positions Full, 
Positions New, and Positions Focused file types.\14\ The 2009 Fee 
Filing incorrectly amended Addendum A to state that NSCC would charge 
$1.50 per 1,000 items for processing Positions Focused files from 
2,000,001 to 4,000,000 items per month.\15\ NSCC management had 
previously determined that, in order to align the fee charged with the 
cost of providing this service, the fee for processing Positions 
Focused files from 2,000,001 to 4,000,000 items per month should be 
$1.00 per 1,000 items.\16\ Therefore, NSCC is proposing to correct this 
error and amend Addendum A to provide that NSCC would charge $1.00 per 
1,000 items for processing Positions Focused files from 2,000,001 to 
4,000,000 items per month.
---------------------------------------------------------------------------

    \14\ 2009 Fee Filing, supra note 12.
    \15\ Subsection 2.a.(ii), Section IV.K. of Addendum A, supra 
note 6. NSCC's Important Notice announcing the 2009 fee changes 
identified the intended price for this tier at $1.00 per 1,000 
items. See NSCC Important Notice, ``2009 Fee Revisions,'' A# 6766, 
P&S# 6336, dated December 31, 2008, available at https://
www.dtcc.com/~/media/Files/pdf/2008/12/31/a6766.pdf.
    \16\ A fee of $1.00 per 1,000 items for processing Positions 
Focused files from 2,000,001 to 4,000,000 items per month was 
approved by the NSCC Core Services Operations and Planning Committee 
on November 13, 2008.
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D. Proposed Change to Fees for APP Non-Settlement Tiers
    NSCC is proposing to modify the fee structure for the Initial 
Application Information feature of I&RS (``APP'') in order to align the 
fees charged to settling NSCC Members with the fees charged to non-
settling NSCC Members. In 2003, NSCC established two categories for the 
fee structure for APP--a category for settling NSCC Members and a 
separate category for non-settling NSCC Members.\17\ When the fee 
structure was implemented in 2003, the fees charged to settling NSCC 
Members were higher than the fees charged to non-settling NSCC Members 
and the category for settling NSCC Members contained three tiers while 
the category for non-settling NSCC Members contained two tiers.\18\ In 
the 2009 Fee Filing, NSCC reduced the fees applicable to settling NSCC 
Members for APP resulting in the fees in the first two tiers being 
identical to the fees in the tiers for the non-settling

[[Page 37934]]

NSCC Members.\19\ In addition, in the 2009 Fee Filing, NSCC reduced the 
fees in the third tier for settling NSCC Members. The result of these 
changes is that currently, settling NSCC Members that process more than 
3,499 items a month receive a discount per item while non-settling NSCC 
Members do not.\20\
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    \17\ See Securities Exchange Act Release No. 48284 (August 5, 
2003), 68 FR 48430 (August 13, 2003) (File No. SR-NSCC-2003-13).
    \18\ See id. The fees for settling NSCC Members contained three 
tiers: (1) 0-1,999 items per month, (2) 2,000-3,499 items per month 
and (3) more than 3,499 per month. The fees for non-settling NSCC 
Members contained only two tiers: (1) 0-1,999 items per month, and 
(2) more than 1,999 items per month.
    \19\ 2009 Fee Filing, supra note 12.
    \20\ Subsection 2.d. Section IV.K. of Addendum A, supra note 6 
(provides that settling NSCC Members that process more than 3,499 
items per month in APP are charged $0.50 per item compared to $1.00 
per item for processing 2,000 to 3,499 items per month).
---------------------------------------------------------------------------

    NSCC believes the discount tier for processing more than 3,499 
items a month was not added in the category for non-settling NSCC 
Members because these firms are unlikely to process transactions with 
more than 1,999 items per month and a tier for processing more items 
per month above 1,999 was unnecessary. Although NSCC believes it is 
unlikely that non-settling NSCC Members will process more than 1,999 
items per month, NSCC is proposing to remove the separate fee 
categories for settling and non-settling NSCC Members in order to 
provide that the same fees apply to both settling NSCC Members and non-
settling NSCC Members. The cost to NSCC for processing APP files for 
settling NSCC Members and non-settling NSCC Members is the same. 
Therefore, NSCC proposes to amend subsection 2.d. of Section IV.K of 
Addendum A to provide non-settling NSCC Members with the same discount 
that settling NSCC Members receive if they process more than 3,499 
items per month.
(ii) Proposed Changes to the Organization of Addendum A
    NSCC is also proposing to make the following changes to the 
organization of Section IV.K. of Addendum A, as described below:
A. Proposed Change to Location of Fees for Producer Management Portal
    NSCC is proposing to revise Addendum A, Section IV.K., by deleting 
subsection 4. and moving the fees under the heading ``Batch Service 
Fees'' in that subsection to subsection 2.h.\21\ These fees would be 
renamed ``Distributor Batch Service Fees.'' These fees are charged in 
connection with use of the Producer Management Portal and are only 
charged to NSCC Members that are distributors, which include broker-
dealers, banks and insurance agencies that act as intermediaries for 
insurance companies. The proposed change would include these fees with 
the other fees charged for use of the Producer Management Portal, so 
such fees are identified in one section, and would further clarify that 
these fees are only charged to distributors. This proposed change would 
clarify this section of Addendum A, and would not change the fees 
charged for any services or products.
---------------------------------------------------------------------------

    \21\ Subsections 2. and 4., Section IV.K. of Addendum A, supra 
note 6.
---------------------------------------------------------------------------

B. Proposed Change to Location of Fees Listed Under TIER 6
    NSCC is proposing to revise Addendum A, Section IV.K., subsection 
3., by deleting TIER 6, and moving each of the fees listed under this 
TIER into TIERS 3 and 5 based on the fees being charged.\22\ As a 
result of the proposed change, each product would be listed together 
with other products for which the same fee is being charged under one 
TIER.\23\ The proposed rule change would move fees for ``Values 
Inquiry'' and ``Policy Administration Inquiry'' to TIER 3 and move fees 
for ``Policy Administration Request,'' ``Death Notification Request,'' 
``Fund Transfer,'' ``Withdrawals,'' and ``Arrangements'' to TIER 5. 
Each of the fees moved from TIER 6 would be identified as being subject 
to the ``In Force Transaction Chart,'' which is currently set forth at 
the end of subsection 3., and would continue to apply to these fees. 
This proposed change would clarify this subsection of Addendum A, and 
would not change the fees charged for any services or products.
---------------------------------------------------------------------------

    \22\ Subsection 3., Section IV.K. of Addendum A of the Rules, 
supra note 6.
    \23\ TIER 6, subsection 3., Section IV.K. of Addendum A of the 
Rules, supra note 6.
---------------------------------------------------------------------------

2. Statutory Basis
    Section 17A(b)(3)(D) of the Act requires, in part, that the Rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its participants.\24\
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78q-1(b)(3)(D).
---------------------------------------------------------------------------

    The proposed changes to Addendum A set forth in item II(A)(1)(i)(A) 
above are consistent with 17A(b)(3)(D) of the Act \25\ because the 
proposed fees would be equitably allocated among NSCC Members based on 
each NSCC Member's utilization of directing NSCC to send files to 
multiple destinations. In addition, NSCC believes that the proposed fee 
changes are reasonable because the proposed $50 additional fee is less 
than the $100 additional fee currently charged for delivering to five 
destinations, while continuing to allow NSCC to recover the costs 
associated with delivering to five destinations. Therefore, NSCC 
believes the proposed fee modifications set forth in item 
II(A)(1)(i)(A) above are consistent with the requirements of Section 
17A(b)(3)(D) of the Act.\26\
---------------------------------------------------------------------------

    \25\ Id.
    \26\ Id.
---------------------------------------------------------------------------

    The proposed changes to Addendum A set forth in items 
II(A)(1)(i)(B) and (D) above are consistent with 17A(b)(3)(D) of the 
Act \27\ because the proposed fees would be allocated equitably among 
the NSCC Members that subscribe for those services based on each NSCC 
Member's use of such services. In addition, NSCC believes that the 
proposed fees are reasonable because they would enable NSCC to better 
align its revenue with the costs and expenses required for NSCC to 
provide the services to NSCC Members. Specifically, with respect to 
II(A)(1)(i)(B), the costs of processing the Positions for Retirement 
Plans file type are similar to the cost of processing other full data 
file types and NSCC has determined that charging the same fee as is 
charged for other full data file types would enable it to recover its 
costs for processing the Positions for Retirement Plans file type. With 
respect to II(A)(1)(i)(D), the cost to NSCC of processing over 3,499 
items per month in APP is the same for settling NSCC Members and non-
settling NSCC Members and therefore the fees for settling NSCC Members 
and non-settling NSCC Members for APP should be the same. Therefore, by 
establishing fees that align with the cost of delivery of these 
products and services and allocating those fees equitably among the 
subscribing NSCC Members, the proposed changes to Addendum A set forth 
in items II(A)(1)(i)(B) and (D) are consistent with the requirements of 
Section 17A(b)(3)(D) of the Act.\28\
---------------------------------------------------------------------------

    \27\ Id.
    \28\ Id.
---------------------------------------------------------------------------

    NSCC believes the proposed fees set forth in item II(A)(1)(i)(C) 
above are also consistent with the requirements of 17A(b)(3)(D) of the 
Act.\29\ Specifically, the proposed fees would be equitably allocated 
among NSCC Members that choose to process the file type for Positions 
Focused. NSCC also believes the proposed fees set forth in item 
II(A)(1)(i)(C) above are reasonable because the proposed fee for 
processing Position Focused files from 2,000,001 to 4,000,000 items per 
month is less than the fee currently charged, while continuing to allow 
NSCC to recover the costs associated with processing such items. In 
addition, the proposed fee changes were previously approved by NSCC 
management,\30\ and NSCC Members were previously notified of the

[[Page 37935]]

fee changes,\31\ at the time the fee changes were originally 
contemplated for 2009. Therefore, NSCC believes the proposed fee 
modifications are consistent with the requirements of Section 
17A(b)(3)(D) of the Act.\32\
---------------------------------------------------------------------------

    \29\ Id.
    \30\ See supra, note 16.
    \31\ See supra, note 15.
    \32\ 15 U.S.C. 78q-1(b)(3)(D).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules 
promote the prompt and accurate clearance and settlement of securities 
transactions.\33\ The proposed changes to Addendum A set forth in item 
II(A)(1)(ii) above would enhance NSCC Members' ability to understand 
the fees associated with the I&RS services. Specifically, the proposed 
rule change relating to Addendum A described above in item II(A)(1)(ii) 
would clarify the meaning of certain provisions of Addendum A relating 
to the fees and enhance clarity and consistency in the Rules in this 
regard. As such, the proposed rule change would allow NSCC Members to 
have a better understanding of the Rules in relation to their I&RS 
activity, and thereby assist in promoting the prompt and accurate 
clearance and settlement of securities transactions, consistent with 
the requirements of Section 17A(b)(3)(F) of the Act.\34\
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78q-1(b)(3)(F).
    \34\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(23)(i) under the Act requires, in part, that NSCC 
establish, implement, maintain and enforce written policies and 
procedures reasonably designed to provide for publicly disclosing all 
relevant rules and material procedures.\35\ Rule 17Ad-22(e)(23)(ii) 
under the Act requires, in part, that NSCC establish, implement, 
maintain and enforce written policies and procedures reasonably 
designed to provide for providing sufficient information to enable 
participants to identify and evaluate the risks, fees, and other 
material costs they incur by participating in NSCC.\36\ The proposed 
rule change set forth in item II(A)(1)(ii) above would enhance clarity 
and consistency with respect to the fees described herein. In this way, 
the proposed rule change would provide for the public disclosure of 
these fees through the proposed changes to Addendum A. The proposed 
rule change would allow NSCC to further provide its participants with 
sufficient information to enable those participants to identify and 
evaluate the fees incurred through their participation in NSCC. As 
such, NSCC believes the proposed rule change is consistent with both 
Rule 17Ad-22(e)(23)(i) and (ii) under the Act.\37\
---------------------------------------------------------------------------

    \35\ 17 CFR 240.17Ad-22(e)(23)(i).
    \36\ 17 CFR 240.17Ad-22(e)(23)(ii).
    \37\ 17 CFR 240.17Ad-22(e)(23)(i), (ii).
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    NSCC does not believe that the proposed changes to Addendum A set 
forth in items II(A)(1)(i)(A), (C) and (D) above would have an adverse 
impact, or impose any burden, on competition because, in each case, the 
proposed fee changes would be a reduction in fees as currently set 
forth in the Rules that would not disproportionally impact any NSCC 
Members. As a reduction to the fees currently in the Addendum A for 
these services, the proposed changes would not impede any NSCC Members 
from engaging in the services or have an adverse impact on any NSCC 
Members.
    Moreover, the proposed rule changes may promote competition 
because, in each case, the proposed fee modifications would allow NSCC 
Members to engage in a greater number of transactions with lower fee 
costs than they would incur today for the same number of transactions. 
For instance, the proposed changes in item II(A)(1)(i)(A) above would 
allow NSCC Members that are currently sending to three or four 
destinations to begin to send to five destinations without incurring a 
higher fee than if files were sent to only three or four destinations 
because, as a result of the proposed rule change, the additional fee 
incurred by NSCC Members to send to five destinations would be the same 
as the additional fee to send to three or four destinations. Similarly, 
the proposed changes in item II(A)(1)(i)(C) above could result in NSCC 
Members that are currently sending 500,001 to 2,000,000 items per month 
to begin to send 2,000,001 to 4,000,000 items per month in order to 
take advantage of the proposed stated fee of $1.00 per 1,000 items 
rather than $1.50 per 1,000 items which is the current fee. In 
addition, the proposed change in item II(A)(1)(i)(D) above could result 
in non-settling NSCC Members that are currently sending less than 3,499 
items per month to be more likely to send more than 3,499 items per 
month in order to take advantage of the proposed stated fee of $0.50 
per item rather than $1.00 per item which is the current fee for non-
settling NSCC Members. NSCC Members sending data to more destinations 
and sending additional data items relating to Positions and APP 
products and services would enhance participation in the marketplace by 
providing NSCC Members and their counterparties with more data. 
Finally, as discussed above, NSCC believes that the proposed fee 
changes are appropriate in light of the expenses incurred by NSCC in 
providing its services.
    NSCC believes that the proposed changes to Addendum A set forth in 
item II(A)(1)(i)(B), could have an impact on competition because NSCC 
Members would need to pay the fees for a full file type in order to 
deliver Positions for Retirement Plan file types similar to Positions 
Full and Position New file types rather than paying the reduced fee 
that NSCC Members pay to deliver the Positions Focused file type. The 
higher fee may make it less likely for some NSCC Members to deliver the 
Position for Retirement Plan file type rather than the Position Focused 
file type. NSCC believes, however, that any burden on competition that 
would be created by the proposed rule change would be necessary and 
appropriate in furtherance of the Act. Specifically, the proposed rule 
change is necessary to align the fees charged for sending the Positions 
for Retirement Plans file type feature with the costs and expenses 
required for NSCC to process that file type. As stated above, NSCC 
believes the costs of processing the Positions for Retirement Plans 
file type for NSCC are similar to the cost of processing the Positions 
Full and the Positions New file types. As such, NSCC believes that the 
fee for processing the Positions Full and the Positions for Retirement 
Plans file type should be the same as the fee for processing the 
Positions Full and Positions New file types and is appropriate given 
the costs to NSCC of delivering the full data file types.
    NSCC does not believe that the proposed changes to Addendum A set 
forth in item II(A)(1)(ii) above would have any impact on competition 
because such changes are clarifications of the Rules which would not 
affect the rights or obligations of NSCC Members. Moreover, the 
proposed changes set forth in item II(A)(1)(ii) are revenue neutral and 
would not affect one set of NSCC Members in favor of another.

(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 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

[[Page 37936]]

19(b)(3)(A) \38\ of the Act and subparagraphs (f)(2) \39\ and (f)(4) 
\40\ 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.
---------------------------------------------------------------------------

    \38\ 15 U.S.C 78s(b)(3)(A).
    \39\ 17 CFR 240.19b-4(f)(2).
    \40\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------

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 Number SR-NSCC-2017-011 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-2017-011. 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 
DTCC's Web site (https://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-2017-011 and should be 
submitted on or before September 5, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\41\
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    \41\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17044 Filed 8-11-17; 8:45 am]
 BILLING CODE 8011-01-P
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