Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change Relating To Remove Functionality in the Government Securities Division's Rules That Is No Longer Utilized by Participants, 25522-25523 [2012-10308]

Download as PDF 25522 Federal Register / Vol. 77, No. 83 / Monday, April 30, 2012 / Notices contact: The Office of the Secretary at (202) 551–5400. Dated: April 26, 2012 Elizabeth M. Murphy, Secretary. [FR Doc. 2012–10512 Filed 4–26–12; 4:15 pm] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66853; File No. SR–ICC– 2012–02] Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change to Provide for a T+1 Settlement of the Initial Payment Related to the CDS Contracts Cleared by ICE Clear Credit LLC April 24, 2012. mstockstill on DSK4VPTVN1PROD with NOTICES I. Introduction On March 1, 2012, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–ICC–2012–02 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’).1 The proposed rule change was published for comment in the Federal Register on March 12, 2012.2 The Commission received no comment letters. For the reasons discussed below, the Commission is granting approval of the proposed rule change. II. Description ICC proposed rule amendments that were intended to modify the terms of each of the various CDS Contracts cleared by ICC (CDX.NA Untranched Contracts, Standard North American Corporate (‘‘SNAC’’) Single Name Contracts and Standard Emerging Sovereign (‘‘SES’’) Single Name Contracts) to make the Initial Payment 3 date the first business day immediately following the trade date, provided that with respect to CDS Contracts that are accepted for clearing after the trade date, the Initial Payment date will be the date that is the first business day following the date when the CDS Contract is accepted for clearing. The Initial Payment under a CDS Contract is established at the time the contract is executed and may be payable from either the protection buyer to the protection seller or vice versa. Under 1 15 U.S.C. 78s(b)(1). Exchange Act Release No. 34–66517 (March 6, 2012), 77 FR 14578 (March 12, 2012). 3 The Initial Payment is an obligation by either counterparty to make an upfront payment established at the time the contract is executed. See ICE Clear Credit Clearing Rules, Section 301(b). 2 Securities VerDate Mar<15>2010 17:59 Apr 27, 2012 Jkt 226001 the current ICC Rules (by way of the incorporated ISDA Credit Derivatives Definitions), and consistent with practice in the market for uncleared credit default swaps, the Initial Payment is required to be made on the third business day following the trade date (the execution date). ICC proposed to add the definition of Initial Payment Date to its Clearing Rules to provide instead that the Initial Payment is to be made on the first business day following the trade date (or, if the transaction is accepted for clearing after the trade date, the Initial Payment is to be made on the first business day following the date of acceptance for clearing). ICC believes that this change from ‘‘T+3’’ settlement to ‘‘T+1’’ settlement for the Initial Payment will facilitate customerrelated clearing. In addition, this change will improve margin efficiency (as margin requirements will no longer need to take into account the additional risk from a T+3 as opposed to a T+1 settlement rule). The other proposed changes in the ICC Rules reflect updates to crossreferences and defined terms and similar drafting clarifications, and do not affect the substance of the ICC Rules or cleared products. III. Discussion Section 19(b)(2)(B) of the Act 4 directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. Section 17A(b)(3)(F) of the Act 5 requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions. Because the proposed rule change will accelerate the Initial Payment date, it will improve margin efficiency (as margin requirements will no longer need to take into account the additional risk from a T+3 as opposed to a T+1 settlement rule) thereby promoting the prompt and accurate clearance and settlement of derivative agreements, contracts, and transactions, and therefore is consistent with the requirements of Section 17A(b)(3)(F) of the Act. IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is 4 15 5 15 PO 00000 U.S.C. 78s(b)(2)(B). U.S.C. 78q–1(b)(3)(F). Frm 00123 Fmt 4703 Sfmt 4703 consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 6 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (File No. SR–ICC– 2012–02) be, and hereby is, approved.8 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin O’Neill, Deputy Secretary. [FR Doc. 2012–10307 Filed 4–27–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66856; File No. SR–FICC– 2012–02] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change Relating To Remove Functionality in the Government Securities Division’s Rules That Is No Longer Utilized by Participants April 25, 2012. I. Introduction On February 29, 2012, the Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–FICC–2012– 02 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 2 thereunder. The proposed rule change was published for comment in the Federal Register on March 16, 2012.3 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change. II. Description This rule change revises certain rules of the Government Securities Division (‘‘GSD’’) to eliminate references to functions or classifications that are either technologically obsolete or no longer utilized by GSD’s participants. 6 15 U.S.C. 78q–1. U.S.C. 78s(b)(2). 8 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 9 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 15822 (March 12, 2012), 77 FR 15822 (March 16, 2012). 7 15 E:\FR\FM\30APN1.SGM 30APN1 Federal Register / Vol. 77, No. 83 / Monday, April 30, 2012 / Notices 1. ‘‘Non-Conversion Participants’’/ ‘‘Conversion Participants’’ When first implemented, the DVP System required all participants that submitted when issued trades to resubmit those trades with final money calculations on the night of Auction Date, after the Treasury auction results were announced. Subsequent to the initial implementation, enhancements were incorporated such that the DVP System recalculated trades (repriced) based on auction results. FICC also incorporated an option whereby participants could decide if they wanted to resubmit their trades (participants who elected this option were known as ‘‘Non-Conversion Participants’’) or take FICC’s repricing notification (participants who elected this option were known as ‘‘Conversion Participants’’). With the implementation of Interactive Messaging in 2000, the few remaining Non-Conversion Participants agreed to take FICC’s calculations, rather than resubmit their trades to FICC. As such, FICC proposed to remove references in the rules to Non-Conversion Participants. Given that all participants who submit whenissued transactions for matching/netting are subject to accepting FICC’s calculations for their trades based on Treasury auction results, the proposed rule changes replace references to ‘‘Conversion Participants’’ with ‘‘Participants.’’ mstockstill on DSK4VPTVN1PROD with NOTICES 2. Auction Priority Delivery Requests and Customer Delivery Requests (‘‘CDR’’s) Auction Priority Delivery Requests, also known as CDRs, were originally built for FICC’s batch file transfer, which was the initial proprietary method that participants used to submit trade activity to FICC. This functionality allowed the dealer to instruct FICC to withhold certain auction trades from the net to ensure that a priority client received its auction allotment so the trade could not be netted out during FICC’s end of day netting process. However, when Interactive Messaging was implemented in 2000, this instruction type was not supported as it was no longer used. As a result, FICC proposed to remove references in the rules to Auction Priority Delivery Requests and CDRs. 3. Repo Substitution Criteria FICC initially provided optional fields for Repo Substitution Criteria for trade submissions. However, over the years, participants generally have not used these fields. Because the fields were provided as an informational courtesy VerDate Mar<15>2010 17:59 Apr 27, 2012 Jkt 226001 that has not been used by participants, FICC is deleting references to those fields in its rules. In addition to the above-referenced changes, FICC proposed to make the following additional technical corrections to the GSD rules: —Terminal interfaces and video display terminals are currently referenced in the rules. The terminals became obsolete when FICC replaced them with a web browser interface. Because the terminals are no longer in existence, FICC proposed to remove references to these methods from the GSD rules. —Currently, the ‘‘Schedule of Required and Other Data Submission Items from GCF Repo Transactions’’ refers to ‘‘Reverse dealer Exec. Id’’ and a ‘‘Repo dealer Exec Id.’’ When FICC began using the GSD RTTM web format, these fields were eliminated because they did not have any significance for GCF repo trades. As a result, FICC proposed to remove these references from the rules. III. Discussion Section 19(b)(2)(B) of the Act 4 directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. Section 17A(b)(3)(F) of the Act requires that the rules of a registered clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions.5 The proposed rule change clarifies GSD’s rules by removing references to functions or classifications that are either technologically obsolete or no longer utilized by GSD’s participants. The Commission believes that these clarifications will promote the prompt and accurate clearance and settlement of securities transactions for which FICC is responsible by ensuring that GSD’s rules describe only functions and classifications that are actually offered by GSD. IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act 6 and the rules and regulations thereunder. 4 15 U.S.C. 78s(b)(2)(B). U.S.C. 78a–1(b)(3)(F). 6 15 U.S.C. 78q–1. 5 15 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 25523 It is therefore ordered, pursuant to Section 19(b)(2) 7 of the Act, that the proposed rule change (File No. SR– FICC–2012–02) be, and hereby is, approved.8 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–10308 Filed 4–27–12; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Office of the Secretary Semi-Annual Workforce Management Conference U.S. Department of Transportation, Office of the Secretary of Transportation. ACTION: Notice of Conference. AGENCY: The Department of Transportation, Office of the Secretary, announces the second Semi-Annual Workforce Management Conference. The Conference will be hosted by the Secretary of Transportation, Ray LaHood. It will be held in Washington, DC. This conference was recommended by the former Future of Aviation Advisory Committee (FAAC). DATES: The Conference will be held June 21, 2012, from 9:00 a.m. to 12:30 p.m. (EDT). ADDRESSES: The Conference will be held at the Department of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590, in the atrium on the ground floor of the West Building located across the street from the Navy Yard (Green Line) Metro station. Public Access: Members of the public and members of the aviation community are invited to attend. Pre-registration is required of all attendees. (See below for registration instructions) SUPPLEMENTARY INFORMATION: The agenda will include aviation workforce development issues that focus on the need for a future workforce with solid foundations in the STEM disciplines, best practices for addressing labor/ management issues, and safety. SUMMARY: Registration • Space is limited. Registration will be available on a first-come, first-serve 7 15 U.S.C. 78s(b)(2). approving this proposed rule change the Commission has considered the proposed rule’s impact of efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 17 CFR 200.30–3(a)(12). 8 In E:\FR\FM\30APN1.SGM 30APN1

Agencies

[Federal Register Volume 77, Number 83 (Monday, April 30, 2012)]
[Notices]
[Pages 25522-25523]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-10308]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66856; File No. SR-FICC-2012-02]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Order Approving Proposed Rule Change Relating To Remove Functionality 
in the Government Securities Division's Rules That Is No Longer 
Utilized by Participants

April 25, 2012.

I. Introduction

    On February 29, 2012, the Fixed Income Clearing Corporation 
(``FICC'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change SR-FICC-2012-02 pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ 
and Rule 19b-4 \2\ thereunder. The proposed rule change was published 
for comment in the Federal Register on March 16, 2012.\3\ The 
Commission received no comment letters on the proposed rule change. 
This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 15822 (March 12, 2012), 
77 FR 15822 (March 16, 2012).
---------------------------------------------------------------------------

II. Description

    This rule change revises certain rules of the Government Securities 
Division (``GSD'') to eliminate references to functions or 
classifications that are either technologically obsolete or no longer 
utilized by GSD's participants.

[[Page 25523]]

1. ``Non-Conversion Participants''/``Conversion Participants''

    When first implemented, the DVP System required all participants 
that submitted when issued trades to resubmit those trades with final 
money calculations on the night of Auction Date, after the Treasury 
auction results were announced. Subsequent to the initial 
implementation, enhancements were incorporated such that the DVP System 
recalculated trades (repriced) based on auction results. FICC also 
incorporated an option whereby participants could decide if they wanted 
to resubmit their trades (participants who elected this option were 
known as ``Non-Conversion Participants'') or take FICC's repricing 
notification (participants who elected this option were known as 
``Conversion Participants''). With the implementation of Interactive 
Messaging in 2000, the few remaining Non-Conversion Participants agreed 
to take FICC's calculations, rather than resubmit their trades to FICC. 
As such, FICC proposed to remove references in the rules to Non-
Conversion Participants. Given that all participants who submit when-
issued transactions for matching/netting are subject to accepting 
FICC's calculations for their trades based on Treasury auction results, 
the proposed rule changes replace references to ``Conversion 
Participants'' with ``Participants.''

2. Auction Priority Delivery Requests and Customer Delivery Requests 
(``CDR''s)

    Auction Priority Delivery Requests, also known as CDRs, were 
originally built for FICC's batch file transfer, which was the initial 
proprietary method that participants used to submit trade activity to 
FICC. This functionality allowed the dealer to instruct FICC to 
withhold certain auction trades from the net to ensure that a priority 
client received its auction allotment so the trade could not be netted 
out during FICC's end of day netting process. However, when Interactive 
Messaging was implemented in 2000, this instruction type was not 
supported as it was no longer used. As a result, FICC proposed to 
remove references in the rules to Auction Priority Delivery Requests 
and CDRs.

3. Repo Substitution Criteria

    FICC initially provided optional fields for Repo Substitution 
Criteria for trade submissions. However, over the years, participants 
generally have not used these fields. Because the fields were provided 
as an informational courtesy that has not been used by participants, 
FICC is deleting references to those fields in its rules.
    In addition to the above-referenced changes, FICC proposed to make 
the following additional technical corrections to the GSD rules:

--Terminal interfaces and video display terminals are currently 
referenced in the rules. The terminals became obsolete when FICC 
replaced them with a web browser interface. Because the terminals are 
no longer in existence, FICC proposed to remove references to these 
methods from the GSD rules.
--Currently, the ``Schedule of Required and Other Data Submission Items 
from GCF Repo Transactions'' refers to ``Reverse dealer Exec. Id'' and 
a ``Repo dealer Exec Id.'' When FICC began using the GSD RTTM web 
format, these fields were eliminated because they did not have any 
significance for GCF repo trades. As a result, FICC proposed to remove 
these references from the rules.

III. Discussion

    Section 19(b)(2)(B) of the Act \4\ directs the Commission to 
approve a proposed rule change of a self-regulatory organization if it 
finds that such proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to such organization. Section 17A(b)(3)(F) of the Act 
requires that the rules of a registered clearing agency be designed to 
promote the prompt and accurate clearance and settlement of securities 
transactions.\5\ The proposed rule change clarifies GSD's rules by 
removing references to functions or classifications that are either 
technologically obsolete or no longer utilized by GSD's participants. 
The Commission believes that these clarifications will promote the 
prompt and accurate clearance and settlement of securities transactions 
for which FICC is responsible by ensuring that GSD's rules describe 
only functions and classifications that are actually offered by GSD.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(2)(B).
    \5\ 15 U.S.C. 78a-1(b)(3)(F).
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act and in 
particular with the requirements of Section 17A of the Act \6\ and the 
rules and regulations thereunder.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) \7\ of the 
Act, that the proposed rule change (File No. SR-FICC-2012-02) be, and 
hereby is, approved.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).
    \8\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact of efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-10308 Filed 4-27-12; 8:45 am]
BILLING CODE 8011-01-P
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