Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to the Collecting of Fees for Services Provided by Other Entities, 25636-25637 [E5-2375]

Download as PDF 25636 Federal Register / Vol. 70, No. 92 / Friday, May 13, 2005 / Notices functions are noncustodial in that it does not hold its members’ funds or securities. It is reasonable for NSCC, which is member-owned and governed, and its members to agree through board approval of the proposed rule change and to contract with one another in a cooperative arrangement as to how to allocate NSCC’s liability among NSCC and its members. Therefore, the Commission has determined that given the noncustodial nature of NSCC’s services, a gross negligence standard of care and limitation of liability is allowable for NSCC.12 IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular Section 17A of the Act and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR– NSCC–2004–09) be and hereby is approved. For the Commission by the Division of Market Regulation, pursuant to delegated authority.13 Jill Peterson, Assistant Secretary. [FR Doc. E5–2374 Filed 5–12–05; 8:45 am] BILLING CODE 8010–01–P high degree of clearing agency care with the effect resulting liabilities may have on clearing agency operations, costs, and safeguarding of securities and funds. Securities Exchange Act Release No. 22940 (February 24, 1986), 51 FR 7169. Subsequently, in a release granting temporary registration as a clearing agency to The Intermarket Clearing Corporation, the Commission stated that a gross negligence standard of care may be appropriate for certain noncustodial functions that, consistent with minimizing risk mutualization, a clearing agency, its board of directors, and its members determine to allocate to individual service users. Securities Exchange Act Release No. 26154 (October 3, 1988), 53 FR 39556. Finally, in a release granting the approval of temporary registration as a clearing agency to the International Securities Clearing Corporation, the Commission indicated that historically it has left to user-governed clearing agencies the question of how to allocate losses associated with noncustodial, data processing, clearing agency functions and has approved clearing agency services embodying a grossnegligence standard of care. Securities Exchange Act Release No. 26812 (May 12, 1989), 54 FR 21691. 12 The Commission notes that the rule change does not alleviate NSCC from liability for violation of the Federal securities laws where there exists a private right of action and therefore is not designed to adversely affect NSCC’s compliance with the Federal securities laws and private rights of action that exist for violations of the Federal securities laws. 13 17 CFR 200.30–3(a)(12). VerDate jul<14>2003 15:59 May 12, 2005 Jkt 205001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51674; File No. SR–NSCC– 2005–03] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to the Collecting of Fees for Services Provided by Other Entities May 9, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on April 26, 2005, National Securities Clearing Corporation (‘‘NSCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which items have been prepared primarily by NSCC. 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 proposed rule change would amend NSCC’s rules to allow NSCC to collect fees for services provided by unregulated subsidiaries of The Depository Trust and Clearing Corporation (‘‘DTCC’’) and by other entities. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NSCC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NSCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.2 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change NSCC is a subsidiary of DTCC. Members of NSCC and their affiliates may from time to time utilize the services of DTCC subsidiaries that are not registered as clearing agencies with the Commission. Such subsidiaries U.S.C. 78s(b)(1). Commission has modified parts of these statements. PO 00000 1 15 2 The Frm 00116 Fmt 4703 Sfmt 4703 include Global Asset Solutions LLC and DTCC Deriv/Serv LLC. In addition, members of NSCC and their affiliates may utilize the services of other third parties. NSCC has determined that it would be more efficient and less costly if the fees that members agree to pay for such services were collected by NSCC rather than through independent billing mechanisms that would otherwise have to be established by each subsidiary of DTCC and third party that is not a registered clearing agency. NSCC’s rules currently allow for fee collection arrangements with respect to collection of fees from members. The proposed rule change would further clarify this practice and facilitate collection of fees with respect to affiliates of members. NSCC will enter into appropriate agreements with such subsidiaries and others regarding the collection of fees. NSCC believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder because NSCC will implement the service in a manner whereby NSCC will be able to assure the safeguarding of securities and funds which are in its custody or control or for which it is responsible. (B) Self-Regulatory Organization’s Statement on Burden on Competition NSCC does not believe that the proposed rule change would 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 been solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (a) By order approve the proposed rule change or (b) Institute proceedings to determine whether the proposed rule change should be disapproved. E:\FR\FM\13MYN1.SGM 13MYN1 25637 Federal Register / Vol. 70, No. 92 / Friday, May 13, 2005 / Notices 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 e-mail to rulecomments@sec.gov. Please include File Number SR–NSCC–2005–03 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549–0609. For the Commission by the Division of Market Regulation, pursuant to delegated authority.3 Jill M. Peterson, Assistant Secretary. [FR Doc. E5–2375 Filed 5–12–05; 8:45 am] SECURITIES AND EXCHANGE COMMISSION Privileges Basis (‘‘UTP’’). The pilot is set to expire on May 8, 2005. For purposes of the allocation policy, ETFs include both Investment Company Units (as defined in paragraph 703.16 of the Listed Company Manual) and Trust Issued Receipts (as defined in Rule 1200). The text of the proposed rule change is below. Proposed new language is italicized. * * * * * [Release No. 34–51665; File No. SR–NYSE– 2005–23] Rule 103B Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Seek Permanent Approval of the Pilot Relating to the Allocation Policy for Trading of Exchange-Traded Funds on an Unlisted Trading Privileges Basis (NYSE Rule 103B) * BILLING CODE 8010–01–P May 6, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 All submissions should refer to File notice is hereby given that on March 29, Number SR–NSCC–2005–03. This file 2005, the New York Stock Exchange, number should be included on the subject line if e-mail is used. To help the Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission process and review your Commission (‘‘Commission’’) the comments more efficiently, please use proposed rule change as described in only one method. The Commission will items I and II below, which items have post all comments on the Commission’s been prepared by the NYSE. The Internet Web site (https://www.sec.gov/ proposed rule change has been filed by rules/sro.shtml). Copies of the the NYSE as a ‘‘non-controversial’’ rule submission, all subsequent change under Rule 19b–4(f)(6) under the amendments, all written statements Act,3 which renders the proposal with respect to the proposed rule effective upon filing with the change that are filed with the Commission.4 The Commission is Commission, and all written publishing this notice to solicit communications relating to the comments on the proposed rule change proposed rule change between the from interested persons. Commission and any person, other than I. Self-Regulatory Organization’s those that may be withheld from the Statement of the Terms of Substance of public in accordance with the the Proposed Rule Change provisions of 5 U.S.C. 552, will be The proposed rule change seeks to available for inspection and copying in adopt on a permanent basis the pilot the Commission’s Public Reference program relating to the allocation policy Section, 450 Fifth Street, NW., for trading certain Exchange-Traded Washington, DC 20549. Copies of such Funds (‘‘ETFs’’), which has been filing also will be available for codified in NYSE Rule 103B, section inspection and copying at the principal VIII. This policy applies to ETFs which office of NSCC and on NSCC’s Web site are traded on an Unlisted Trading at https://www.nscc.com. All comments received will be posted without change; 3 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). the Commission does not edit personal 2 17 CFR 240.19b–4. identifying information from 3 17 CFR 240.19b–4(f)(6). submissions. You should submit only 4 Rule 19b–4(f)(6) under the Act requires the information that you wish to make NYSE to provide the Commission with five available publicly. All submissions business days notice of its intention to file a nonshould refer to File Number SR–NSCC– controversial proposed rule change. The NYSE did 2005–03 and should be submitted on or not provide such notice but requested that the Commission waive the notice requirement. The before June 3, 2005. NYSE also requested that the Commission waive the 30-day operative delay. See Rule 19b–4(f)(6)(iii) under the Act. 17 CFR 240.19b–4(f)(6)(iii). VerDate jul<14>2003 15:59 May 12, 2005 Jkt 205001 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 Specialist Stock Allocation I–VII. No Changes * * * * VIII. Policy for Allocation of Exchange Traded Funds Admitted To Trading on the Exchange on an Unlisted Trading Privileges Basis Investment Company Units (as defined in paragraph 703.16 of the Listed Company Manual) and Trust Issued Receipts (as defined in Exchange Rule 1200) (collectively known as Exchange-Traded Funds) (‘‘ETFs’’) admitted to trading on the Exchange on an unlisted trading privileges basis shall be allocated pursuant to this Policy rather than the Exchange’s policy for allocating securities to be listed on the Exchange. ETFs shall be allocated by a special committee consisting of the Chairman of the Allocation Committee, the three most senior Floor broker members of the Allocation Committee, and four members of the Exchange’s senior management as designated by the Chief Executive Officer of the Exchange. This committee shall solicit allocation applications from interested specialist units, and shall review the same performance and disciplinary material with respect to specialist unit applicants as would be reviewed by the Allocation Committee in allocating listed stocks. The committee shall reach its decisions by majority vote with any tie votes being decided by the Chief Executive Officer of the Exchange. Specialist unit applicants may appear before the committee. Special Criteria In their allocation applications, specialist units must demonstrate: (a) An understanding of the trading characteristics of ETFs; (b) Expertise in the trading of derivatively-priced instruments; (c) Ability and willingness to engage in hedging activity as appropriate; (d) Knowledge of other markets in which the ETF to be allocated trades; (e) Willingness to provide financial and other support to Exchange marketing and educational initiatives with respect to the ETF to be allocated. E:\FR\FM\13MYN1.SGM 13MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 92 (Friday, May 13, 2005)]
[Notices]
[Pages 25636-25637]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2375]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51674; File No. SR-NSCC-2005-03]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of a Proposed Rule Change Relating to the 
Collecting of Fees for Services Provided by Other Entities

May 9, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 26, 2005, National 
Securities Clearing Corporation (``NSCC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II, and III below, which items have been prepared 
primarily by NSCC. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change would amend NSCC's rules to allow NSCC to 
collect fees for services provided by unregulated subsidiaries of The 
Depository Trust and Clearing Corporation (``DTCC'') and by other 
entities.

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

    In its filing with the Commission, NSCC included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. NSCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\2\
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    \2\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    NSCC is a subsidiary of DTCC. Members of NSCC and their affiliates 
may from time to time utilize the services of DTCC subsidiaries that 
are not registered as clearing agencies with the Commission. Such 
subsidiaries include Global Asset Solutions LLC and DTCC Deriv/Serv 
LLC. In addition, members of NSCC and their affiliates may utilize the 
services of other third parties. NSCC has determined that it would be 
more efficient and less costly if the fees that members agree to pay 
for such services were collected by NSCC rather than through 
independent billing mechanisms that would otherwise have to be 
established by each subsidiary of DTCC and third party that is not a 
registered clearing agency.
    NSCC's rules currently allow for fee collection arrangements with 
respect to collection of fees from members. The proposed rule change 
would further clarify this practice and facilitate collection of fees 
with respect to affiliates of members. NSCC will enter into appropriate 
agreements with such subsidiaries and others regarding the collection 
of fees.
    NSCC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
because NSCC will implement the service in a manner whereby NSCC will 
be able to assure the safeguarding of securities and funds which are in 
its custody or control or for which it is responsible.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change would 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 been 
solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period (i) as the 
Commission may designate up to ninety days of such date if it finds 
such longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (a) By order approve the proposed rule change or
    (b) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

[[Page 25637]]

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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NSCC-2005-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.

All submissions should refer to File Number SR-NSCC-2005-03. This file 
number should be included on the subject line if e-mail 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 inspection and 
copying in the Commission's Public Reference Section, 450 Fifth Street, 
NW., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of NSCC and on 
NSCC's Web site at https://www.nscc.com. All comments received will be 
posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NSCC-2005-03 and should be submitted on 
or before June 3, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\3\
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    \3\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-2375 Filed 5-12-05; 8:45 am]
BILLING CODE 8010-01-P

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