Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Haircuts Applied to Eligible Clearing Fund Securities, 37275-37277 [E9-17935]

Download as PDF Federal Register / Vol. 74, No. 143 / Tuesday, July 28, 2009 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60368; File No. SR–NSCC– 2009–05] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Haircuts Applied to Eligible Clearing Fund Securities July 22, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on July 10, 2009, the National Securities Clearing Corporation (‘‘NSCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change 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 parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The purpose of the proposed rule change is to modify the haircuts applied to Eligible Clearing Fund Securities.2 1 15 U.S.C. 78s(b)(1). Rule 1 (Definitions and Descriptions) defines Eligible Clearing Fund Securities and its mstockstill on DSKH9S0YB1PROD with NOTICES 2 NSCC VerDate Nov<24>2008 19:36 Jul 27, 2009 Jkt 217001 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 these statements.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Under NSCC’s Rules and Procedures, Members are required to make deposits to the Clearing Fund with the amount of each Member’s required deposit being established by NSCC in accordance with one or more formulas (‘‘Required Deposit’’). A Member may satisfy its Required Deposit with a cash deposit, and NSCC may permit a portion of the Member’s Required Deposit (with the exception of the deposit of a Mutual components which are Eligible Clearing Fund Treasury Securities, Eligible Clearing Fund Agency Securities, and Eligible Clearing Fund MortgageBacked Securities. 3 The Commission has modified the text of the summaries prepared by NSCC. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 37275 Fund/Insurance Services Member) to be evidenced by an open account indebtedness secured by Eligible Clearing Fund Securities. Eligible Clearing Fund Securities consist of certain Treasury, Agency, and mortgagebacked securities. NSCC’s Rules and Procedures permit NSCC to fund settlement by pledging Clearing Fund deposits as collateral for loans. NSCC maintains a committed borrowing facility for this purpose. Due to elevated volatility experienced in the financial markets, collateral haircuts imposed on NSCC under the borrowing facility have increased. Therefore, NSCC is required to make corresponding increases in Clearing Fund collateral haircuts to maintain alignment with this facility. NSCC proposes to modify Procedure XV (Clearing Fund Formula and Other Matters) to update the correlating range of haircuts applied to the types of Eligible Clearing Fund Securities. In general, NSCC proposes to increase the haircuts for: (i) Interest bearing Treasuries with terms greater than 10 years but less than 15 years from 5 percent to a 6 percent and (ii) zero coupon Treasury and Agency securities from 2 to 10 percent based on term to 5 to 12 percent based on term. A complete listing of the haircut schedule, showing modifications, is as follows: BILLING CODE 8010–01–P E:\FR\FM\28JYN1.SGM 28JYN1 Federal Register / Vol. 74, No. 143 / Tuesday, July 28, 2009 / Notices BILLING CODE 8010–01–C VerDate Nov<24>2008 20:05 Jul 27, 2009 Jkt 217001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\28JYN1.SGM 28JYN1 EN28JY09.028</GPH> mstockstill on DSKH9S0YB1PROD with NOTICES 37276 Federal Register / Vol. 74, No. 143 / Tuesday, July 28, 2009 / Notices NSCC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 4 and the rules and regulations thereunder applicable to NSCC because the proposed rule change should facilitate the prompt and accurate clearance and settlement of securities transactions by adjusting NSCC’s haircut levels on Clearing Fund collateral and facilitating NSCC’s ability to ensure adequate collateral levels are maintained to facilitate settlement in the event of a participant default. (B) Self-Regulatory Organization’s Statement on Burden on Competition NSCC does not believe that the proposed rule change will have any impact on 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 No written comments relating to the proposed rule change have 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 upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 5 and Rule 19b–4(f)(4) 6 thereunder because the proposed rule change effects a change in an existing service of NSCC that (i) does not adversely affect the safeguarding of securities or funds in the custody or control of NSCC or for which it is responsible and (ii) does not significantly affect the respective rights of the clearing agency or persons using the service. At any time within sixty days of the filing of such rule change, the Commission may summarily abrogate 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. mstockstill on DSKH9S0YB1PROD with 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–2009–05 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. U.S.C. 78q–1. U.S.C. 78s(b)(3)(A)(iii). 6 17 CFR 240.19b–4(f)(4). 19:36 Jul 27, 2009 [Release No. 34–60358; File Nos. SR–BX– 2009–040, SR–Phlx–2009–60] Self-Regulatory Organizations; NASDAQ OMX BX, Inc. and NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Changes Amending the By-Laws of The NASDAQ OMX Group, Inc., Their Parent Company July 21, 2009. 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 July 16, All submissions should refer to File 2009, NASDAQ OMX BX, Inc. (‘‘BX’’) Number SR–NSCC–2009–05. This file and NASDAQ OMX PHLX, Inc. (‘‘Phlx’’) number should be included on the subject line if e-mail is used. To help the (collectively, the ‘‘NASDAQ OMX Exchange Subsidiaries’’) filed with the Commission process and review your Securities and Exchange Commission comments more efficiently, please use only one method. The Commission will (‘‘Commission’’) the proposed rule post all comments on the Commission’s changes as described in Items I, II, and III below, which Items have been Internet Web site (https://www.sec.gov/ substantially prepared by the NASDAQ rules/sro.shtml). Copies of the OMX Exchange Subsidiaries. The submission, all subsequent Commission is publishing this notice to amendments, all written statements solicit comments on the proposed rule with respect to the proposed rule changes from interested persons. change that are filed with the Commission, and all written I. Self-Regulatory Organizations’ communications relating to the Statement of the Terms of Substance of proposed rule change between the the Proposed Rule Changes Commission and any person, other than The NASDAQ OMX Exchange those that may be withheld from the Subsidiaries are filing these proposed public in accordance with the rule changes with regard to proposed provisions of 5 U.S.C. 552, will be changes to the By-Laws of their parent available for inspection and copying in corporation, The NASDAQ OMX Group, the Commission’s Public Reference Inc. (‘‘NASDAQ OMX’’). The proposed Section, 100 F Street, NE., Washington, rule changes will be implemented as DC 20549, on official business days soon as practicable following between the hours of 10 a.m. and 3 p.m. submission of these filings. The text of Copies of such filings also will be the proposed rule changes is available at available for inspection and copying at https://nasdaqomxbx.cchwallstreet.com the principal office of NSCC and on and https:// NSCC’s Web site at https:// nasdaqomxphlx.cchwallstreet.com/ www.dtcc.com/legal/rule_filings/nscc/ nasdaqomxphlx/phlx, respectively, and 2009.php. All comments received will at the respective NASDAQ OMX be posted without change; the Exchange Subsidiary’s principal office, Commission does not edit personal and at the Commission’s Public identifying information from Reference Room. submissions. You should submit only II. Self-Regulatory Organizations’ information that you wish to make Statement of the Purpose of, and available publicly. All submissions Statutory Basis for, the Proposed Rule should refer to File Number SR–NSCC– 2009–05 and should be submitted on or Changes before August 18, 2009. In their filings with the Commission, each of the NASDAQ OMX Exchange For the Commission by the Division of Subsidiaries included statements Trading and Markets, pursuant to delegated concerning the purpose of and basis for authority.7 its proposed rule change and discussed Elizabeth M. Murphy, any comments it received on its Secretary. proposed rule change. The text of these [FR Doc. E9–17935 Filed 7–27–09; 8:45 am] statements may be examined at the 5 15 VerDate Nov<24>2008 SECURITIES AND EXCHANGE COMMISSION BILLING CODE 8010–01–P 4 15 1 15 7 17 Jkt 217001 37277 PO 00000 CFR 200.30–3(a)(12). Frm 00091 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\28JYN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 28JYN1

Agencies

[Federal Register Volume 74, Number 143 (Tuesday, July 28, 2009)]
[Notices]
[Pages 37275-37277]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-17935]



[[Page 37275]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60368; File No. SR-NSCC-2009-05]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Modify Haircuts Applied to Eligible Clearing Fund 
Securities

July 22, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on July 10, 2009, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change 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 parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of the proposed rule change is to modify the haircuts 
applied to Eligible Clearing Fund Securities.\2\
---------------------------------------------------------------------------

    \2\ NSCC Rule 1 (Definitions and Descriptions) defines Eligible 
Clearing Fund Securities and its components which are Eligible 
Clearing Fund Treasury Securities, Eligible Clearing Fund Agency 
Securities, and Eligible Clearing Fund Mortgage-Backed Securities.
---------------------------------------------------------------------------

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 these 
statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified the text of the summaries 
prepared by NSCC.
---------------------------------------------------------------------------

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

    Under NSCC's Rules and Procedures, Members are required to make 
deposits to the Clearing Fund with the amount of each Member's required 
deposit being established by NSCC in accordance with one or more 
formulas (``Required Deposit''). A Member may satisfy its Required 
Deposit with a cash deposit, and NSCC may permit a portion of the 
Member's Required Deposit (with the exception of the deposit of a 
Mutual Fund/Insurance Services Member) to be evidenced by an open 
account indebtedness secured by Eligible Clearing Fund Securities. 
Eligible Clearing Fund Securities consist of certain Treasury, Agency, 
and mortgage-backed securities.
    NSCC's Rules and Procedures permit NSCC to fund settlement by 
pledging Clearing Fund deposits as collateral for loans. NSCC maintains 
a committed borrowing facility for this purpose. Due to elevated 
volatility experienced in the financial markets, collateral haircuts 
imposed on NSCC under the borrowing facility have increased. Therefore, 
NSCC is required to make corresponding increases in Clearing Fund 
collateral haircuts to maintain alignment with this facility.
    NSCC proposes to modify Procedure XV (Clearing Fund Formula and 
Other Matters) to update the correlating range of haircuts applied to 
the types of Eligible Clearing Fund Securities. In general, NSCC 
proposes to increase the haircuts for: (i) Interest bearing Treasuries 
with terms greater than 10 years but less than 15 years from 5 percent 
to a 6 percent and (ii) zero coupon Treasury and Agency securities from 
2 to 10 percent based on term to 5 to 12 percent based on term. A 
complete listing of the haircut schedule, showing modifications, is as 
follows:
BILLING CODE 8010-01-P

[[Page 37276]]

[GRAPHIC] [TIFF OMITTED] TN28JY09.028

BILLING CODE 8010-01-C

[[Page 37277]]

    NSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \4\ and the rules and 
regulations thereunder applicable to NSCC because the proposed rule 
change should facilitate the prompt and accurate clearance and 
settlement of securities transactions by adjusting NSCC's haircut 
levels on Clearing Fund collateral and facilitating NSCC's ability to 
ensure adequate collateral levels are maintained to facilitate 
settlement in the event of a participant default.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

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

    NSCC does not believe that the proposed rule change will have any 
impact on 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

    No written comments relating to the proposed rule change have 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 upon filing pursuant 
to Section 19(b)(3)(A)(iii) of the Act \5\ and Rule 19b-4(f)(4) \6\ 
thereunder because the proposed rule change effects a change in an 
existing service of NSCC that (i) does not adversely affect the 
safeguarding of securities or funds in the custody or control of NSCC 
or for which it is responsible and (ii) does not significantly affect 
the respective rights of the clearing agency or persons using the 
service. At any time within sixty days of the filing of such rule 
change, the Commission may summarily abrogate 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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \6\ 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NSCC-2009-05 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NSCC-2009-05. 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, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filings 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/rule_filings/nscc/2009.php. 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-2009-05 and should be 
submitted on or before August 18, 2009.
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-17935 Filed 7-27-09; 8:45 am]
BILLING CODE 8010-01-P
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