Self-Regulatory Organizations; The National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Aggregate Obligations in Certain Securities Transactions Designated for Settlement on a Trade-for-Trade Basis, 15479-15480 [2010-6873]

Download as PDF Federal Register / Vol. 75, No. 59 / Monday, March 29, 2010 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61762; File No. SR–NSCC– 2010–02] Self-Regulatory Organizations; The National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Aggregate Obligations in Certain Securities Transactions Designated for Settlement on a Tradefor-Trade Basis March 23, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on March 4, 2010, The 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. NSCC filed the proposal pursuant to Section 19(b)(3)(A)(iii) of the Act 2 and Rule 19b–4(f)(4) 3 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. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The purpose of the proposed rule change is to allow NSCC to aggregate obligations in certain securities transactions designated for settlement on a trade-for-trade basis. cprice-sewell on DSK89S0YB1PROD with NOTICES 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.4 1 15 U.S.C. 78s(b)(1). U.S.C. 78s(b)(3)(A)(iii). 3 17 CFR 240.19b–4(f)(4). 4 The Commission has modified the text of the summaries prepared by NSCC. 2 15 VerDate Nov<24>2008 09:18 Apr 05, 2010 Jkt 220001 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change NSCC may designate some or all transactions in a security to settle on a trade-for-trade basis.5 In such cases, NSCC marks the transaction as a Special Trade and provides the counterparties with corresponding receive and deliver instructions to settle the transaction between themselves. Independent of action by NSCC, members may also agree to settle a transaction on a tradefor-trade basis and mark it as a Special Trade. NSCC proposes amending its Rules so that when NSCC is responsible for designating a transaction to settle as a Special Trade it may aggregate the daily receive and deliver obligations in that security between the counterparties. As a result, each counterparty at the end of the day would have only one aggregate receive obligation and one aggregate deliver obligation in the designated security as opposed to individually settling the multiple transactions.6 The resulting buy order obligation and sell order obligation between the counterparties would not be netted against each other.7 Receive and deliver orders for transactions designated by Members as Special Trades would continue to be issued on an individual transaction basis. To facilitate this proposal, NSCC would amend Procedure II of its Rules to provide for aggregated receive and deliver instructions for trade-for-trade items and to clarify that receive and deliver instructions for trade-for-trade items are reported on the Consolidated Trade Summary. The proposed changes to NSCC’s Rules can be found in Exhibit 5 to proposed rule change SR–NSCC– 2010–02 at https://www.dtcc.com/ downloads/legal/rule_filings/2010/nscc/ 2010–02.pdf. NSCC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 8 5 This practice is addressed by NSCC’s Rules and Procedures in the section titled ‘‘Procedure II. Trade Comparison and Recording Service.’’ 6 As is currently the case for trade-for-trade items, NSCC would not guaranty the settlement of transactions aggregated pursuant to this proposal. 7 For example, if on a given day Broker A has 15 buys against Broker B in Security X, the transactions would be aggregated into one receive obligation for A and one deliver obligation for B. Likewise, if Broker A has 20 sells with Broker B on that same day for the same security, those items would also be aggregated into one deliver obligation for A and one receive obligation for B. In this example, A and B would each have two settlement obligations with the other party for Security X rather than the 35 obligations each would have without aggregation. 8 15 U.S.C. 78q–1. PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 15479 and the rules and regulations thereunder applicable to NSCC because the proposed rule change promotes efficiencies in the clearance and settlement of securities transactions by modifying NSCC’s Rules to reduce the number of settlement obligations for members when NSCC designates a transaction as a Special Trade. (B) Self-Regulatory Organization’s Statement on Burden on Competition NSCC does not believe that the proposed rule change will have any impact or impose any burden on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. NSCC will notify the Commission of any written comments received by NSCC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 9 and Rule 19b–4(f)(4) 10 thereunder because the proposed rule change effects a change in an existing service of a registered clearing agency that: (i) Does not adversely affect the safeguarding of securities or funds in the custody or control of the clearing agency or for which it is responsible and (ii) does not significantly affect the respective rights or obligations 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. 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 • Electronic comments may be submitted by using the Commission’s 9 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(4). 10 17 E:\FR\FM\29MRN1.SGM 29MRN1 15480 Federal Register / Vol. 75, No. 59 / Monday, March 29, 2010 / Notices Internet comment form (https:// www.sec.gov/rules/sro.shtml), or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–NSCC–2010–02 on the subject line. Paper Comments cprice-sewell on DSK89S0YB1PROD with NOTICES • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61757; File No. SR– NASDAQ–2010–036)] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify and Modify the Applicability of Nasdaq Rule 5615 To Exchange Traded Funds March 22, 2010. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 All submissions should refer to File (‘‘Act’’) 1, and Rule 19b–4 2 thereunder, Number SR–NSCC–2010–02. This file notice is hereby given that on March 11, number should be included on the 2010, The NASDAQ Stock Market LLC subject line if e-mail is used. To help the (‘‘Nasdaq’’ or ‘‘the Exchange’’) filed with Commission process and review your the Securities and Exchange comments more efficiently, please use Commission (‘‘SEC’’ or ‘‘Commission’’) only one method. The Commission will the proposed rule change as described post all comments on the Commission’s in Items I and II below, which Items have been prepared by Nasdaq. Nasdaq Internet Web site (https://www.sec.gov/ has designated the proposed rule change rules/sro.shtml). Copies of the as constituting 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. 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 available for Web site viewing and The Exchange proposes to clarify and modify the applicability of Nasdaq Rule printing in the Commission’s Public 5615 to Exchange Traded Funds. The Reference Section, 100 F Street, NE., text of the proposed rule change is Washington, DC 20549, on official below. Proposed new language is in business days between the hours of 10 italics; proposed deletions are in a.m. and 3 p.m. Copies of such filings 4 also will be available for inspection and [brackets]. * * * * * copying at the principal office of NSCC and on NSCC’s Web site at https:// 5615. Exemptions from Certain www.dtcc.com/downloads/legal/ Corporate Governance Requirements rule_filings/2010/nscc/2010–02.pdf. This rule provides the exemptions All comments received will be posted from the corporate governance rules without change; the Commission does afforded to certain types of Companies, not edit personal identifying and sets forth the phase-in schedules for information from submissions. You initial public offerings, Companies should submit only information that emerging from bankruptcy and you wish to make available publicly. All Companies transferring from other submissions should refer to file number markets. This rule also describes the applicability of the corporate SR–NSCC–2010–02 and should be governance rules to controlled submitted on or before April 19, 2010. companies and sets forth the phase-in For the Commission, by the Division of schedule afforded to Companies ceasing Trading and Markets, pursuant to delegated to be controlled companies. authority.11 (a) Exemptions to the Corporate Florence E. Harmon, Governance Requirements Deputy Secretary. [FR Doc. 2010–6873 Filed 3–26–10; 8:45 am] CFR 200.30–3(a)(12). VerDate Nov<24>2008 09:18 Apr 05, 2010 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 4 Changes are marked to the rules of The NASDAQ Stock Market LLC found at https:// nasdaq.cchwallstreet.com. 2 17 BILLING CODE 8011–01–P 11 17 1 15 Jkt 220001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 (1) Asset-backed Issuers and Other Passive Issuers The following are exempt from the requirements relating to Majority Independent Board {Rule 5605(b)}, Audit Committee {Rule 5605(c)}, Independent Director Oversight of Executive Officer Compensation {Rule 5605(d)} and Director Nominations {Rule 5605(e)}, the Controlled Company Exemption {Rule 5615(c)(2)}, and Code of Conduct {Rule 5610}: (A) No change. (B) issuers, such as unit investment trusts, including Portfolio Depository Receipts, which [that] are organized as trusts or other unincorporated associations that do not have a board of directors or persons acting in a similar capacity and whose activities are limited to passively owning or holding (as well as administering and distributing amounts in respect of) securities, rights, collateral or other assets on behalf of or for the benefit of the holders of the listed securities. * * * * * (2)–(4) No change. (5) Management Investment Companies Management investment companies (including business development companies) are subject to all the requirements of the Rule 5600 Series, except that management investment companies registered under the Investment Company Act of 1940 are exempt from the Independent Directors requirement, the Independent Director Oversight of Executive Officer Compensation and Director Nominations requirements, and the Code of Conduct requirement, set forth in Rules 5605(b), (d) and (e) and 5610, respectively. In addition, management investment companies that are Index Fund Shares and Managed Fund Shares, as defined in Rules 5705(b) and 5735, are exempt from the Audit Committee requirements set forth in Rule 5605(c), except for the applicable requirements of SEC Rule 10A–3. IM–5615–4. Management Investment Companies Management investment companies registered under the Investment Company Act of 1940 are already subject to a pervasive system of federal regulation in certain areas of corporate governance covered by 5600. In light of this, Nasdaq exempts from Rules 5605(b), (d), (e) and 5610 management investment companies registered under the Investment Company Act of 1940. Business development companies, which are a type of closed-end management investment company defined in Section 2(a)(48) of the E:\FR\FM\29MRN1.SGM 29MRN1

Agencies

[Federal Register Volume 75, Number 59 (Monday, March 29, 2010)]
[Notices]
[Pages 15479-15480]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6873]



[[Page 15479]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61762; File No. SR-NSCC-2010-02]


Self-Regulatory Organizations; The National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change to Aggregate Obligations in Certain Securities Transactions 
Designated for Settlement on a Trade-for-Trade Basis

March 23, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 4, 2010, The 
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. NSCC filed the proposal pursuant to 
Section 19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) \3\ 
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\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------

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 allow NSCC to 
aggregate obligations in certain securities transactions designated for 
settlement on a trade-for-trade basis.

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.\4\
---------------------------------------------------------------------------

    \4\ 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

    NSCC may designate some or all transactions in a security to settle 
on a trade-for-trade basis.\5\ In such cases, NSCC marks the 
transaction as a Special Trade and provides the counterparties with 
corresponding receive and deliver instructions to settle the 
transaction between themselves. Independent of action by NSCC, members 
may also agree to settle a transaction on a trade-for-trade basis and 
mark it as a Special Trade.
---------------------------------------------------------------------------

    \5\ This practice is addressed by NSCC's Rules and Procedures in 
the section titled ``Procedure II. Trade Comparison and Recording 
Service.''
---------------------------------------------------------------------------

    NSCC proposes amending its Rules so that when NSCC is responsible 
for designating a transaction to settle as a Special Trade it may 
aggregate the daily receive and deliver obligations in that security 
between the counterparties. As a result, each counterparty at the end 
of the day would have only one aggregate receive obligation and one 
aggregate deliver obligation in the designated security as opposed to 
individually settling the multiple transactions.\6\ The resulting buy 
order obligation and sell order obligation between the counterparties 
would not be netted against each other.\7\ Receive and deliver orders 
for transactions designated by Members as Special Trades would continue 
to be issued on an individual transaction basis.
---------------------------------------------------------------------------

    \6\ As is currently the case for trade-for-trade items, NSCC 
would not guaranty the settlement of transactions aggregated 
pursuant to this proposal.
    \7\ For example, if on a given day Broker A has 15 buys against 
Broker B in Security X, the transactions would be aggregated into 
one receive obligation for A and one deliver obligation for B. 
Likewise, if Broker A has 20 sells with Broker B on that same day 
for the same security, those items would also be aggregated into one 
deliver obligation for A and one receive obligation for B. In this 
example, A and B would each have two settlement obligations with the 
other party for Security X rather than the 35 obligations each would 
have without aggregation.
---------------------------------------------------------------------------

    To facilitate this proposal, NSCC would amend Procedure II of its 
Rules to provide for aggregated receive and deliver instructions for 
trade-for-trade items and to clarify that receive and deliver 
instructions for trade-for-trade items are reported on the Consolidated 
Trade Summary. The proposed changes to NSCC's Rules can be found in 
Exhibit 5 to proposed rule change SR-NSCC-2010-02 at https://www.dtcc.com/downloads/legal/rule_filings/2010/nscc/2010-02.pdf.
    NSCC believes that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \8\ and the rules and 
regulations thereunder applicable to NSCC because the proposed rule 
change promotes efficiencies in the clearance and settlement of 
securities transactions by modifying NSCC's Rules to reduce the number 
of settlement obligations for members when NSCC designates a 
transaction as a Special Trade.
---------------------------------------------------------------------------

    \8\ 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 or impose any burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments relating to the proposed rule change have not yet 
been solicited or received. NSCC will notify the Commission of any 
written comments received by NSCC.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(4) \10\ thereunder 
because the proposed rule change effects a change in an existing 
service of a registered clearing agency that: (i) Does not adversely 
affect the safeguarding of securities or funds in the custody or 
control of the clearing agency or for which it is responsible and (ii) 
does not significantly affect the respective rights or obligations 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 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

     Electronic comments may be submitted by using the 
Commission's

[[Page 15480]]

Internet comment form (https://www.sec.gov/rules/sro.shtml), or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-NSCC-2010-02 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-2010-02. 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 Web site viewing and 
printing 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/downloads/legal/rule_filings/2010/nscc/2010-02.pdf.
    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-2010-02 
and should be submitted on or before April 19, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6873 Filed 3-26-10; 8:45 am]
BILLING CODE 8011-01-P
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