Self-Regulatory Organizations; The National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Rule 52 (Mutual Fund Services) and Addendum A (NSCC's Fee Structure), 67410-67412 [2012-27357]
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67410
Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Notices
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
Number SR–NASDAQ–2012–124 on the
subject line.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change is effective
upon filing pursuant to Section
19(b)(3)(A) of the Act 11 and paragraph
(f)(6) of Rule 19b–4 thereunder,12 in that
the proposed rule change: (i) Does not
significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) does not become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest; provided the selfregulatory organization has given 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.
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. If the
Commission takes such action, the
Commission shall institute proceedings
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, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Paper Comments
All submissions should refer to File
Number SR–NASDAQ–2012–124. 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 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 offices 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–
NASDAQ–2012–124, and should be
submitted on or before November 30,
2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–27356 Filed 11–8–12; 8:45 am]
BILLING CODE 8011–01–P
tkelley on DSK3SPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
11 15
12 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
VerDate Mar<15>2010
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[Release No. 34–68159; File No. SR–NSCC–
2012–08]
Self-Regulatory Organizations; The
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify Rule 52
(Mutual Fund Services) and Addendum
A (NSCC’s Fee Structure)
November 5, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
October 22, 2012, the National
Securities Clearing Corporation
(‘‘NSCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change described in
Items I and II below, which Items have
been prepared primarily by NSCC.
NSCC filed the proposal pursuant to
Section 19(b)(3)(A)(iii) 2 of the Act, Rule
19b-4(f)(2),3 and Rule 19b-4(f)(4)(i) 4
thereunder so that the proposal was
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the rule change from
interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change modifies
Rule 52 (Mutual Fund Services) and
Addendum A (NSCC’s Fee Structure) of
NSCC’s Rules.
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.5
1 15
U.S.C. 78s(b)(1).
U.S.C. 78s(b)(3)(A)(iii).
3 17 CFR 240.19b–4(f)(2).
4 17 CFR 240.19b–4(f)(4)(i).
5 The Commission has modified the text of the
summaries prepared by NSCC.
2 15
13 17
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Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Notices
commission-related information from
the Funds to Distributors.
The Proposed Rule Changes. There
has been a growing trend in the mutual
fund industry toward omnibus
Pursuant to the rule change proposal,
processing, a practice pursuant to which
NSCC will (i) rename the ‘‘Mutual Fund Distributors maintain a single account at
Commission Settlement’’ service under
a Fund, which account represents
Rule 52 (the ‘‘Service’’) as the ‘‘DTCC
multiple investor positions of that
Payment aXis’’ service in order to better Distributor in that Fund’s securities.
align the name of the Service with the
Where multiple investor positions are
various commission and other fee data
held in Omnibus, the Distributor
transmission and payment settlement
maintains the individual investor
functionalities available through the
account records on the Distributor’s
Service (i.e., not solely commission
books and records. The trend toward
settlement), (ii) make clear that the
omnibus processing is anticipated to
Service permits for the transmission of
continue growing into the foreseeable
commission and other fee related data,
future; however, invoicing for the fees
and the settlement of such payments,
related to these investor accounts is not
among users of the Service without
standardized. The current state of fee
regard to whether the flow of funds is
invoicing with regard to such investor
from the fund company (‘‘Fund’’) to the accounts is manually intensive,
retail broker-dealer (‘‘Distributor’’), from involving the exchange of reports and
the Distributor to the Fund, from a
spreadsheets via fax, email, and regular
Distributor to another Distributor, or
mail, and the settlement of payments
otherwise, (iii) specify that commission
thereof generally occurs by check or
and other fee data transmission, and the wire. Due to the lack of standardization
settlement of such payments, with
and automation, the industry has sought
regard to investor accounts held on an
NSCC’s assistance to create a
omnibus account basis at the Fund
standardized file for omnibus invoicing.
(‘‘Omnibus’’) may be made through the
As a result, NSCC has enhanced the
Service, (iv) specify the process for the
Service’s functionality to permit for fee
payment of 12b–1 fees 6 with regard to
data transmission and settlement of
investor accounts held in Omnibus, and payments with regard to investor
(v) establish the fees that NSCC will
accounts held in Omnibus. By this
charge users of the Service with regard
proposed rule change, NSCC seeks to do
to investor accounts held in Omnibus.
the following:
a. Rename Service: The Service will
Background. The Service was initially
be renamed ‘‘DTCC Payment aXis’’ to
approved by the Commission on
December 9, 1992 (‘‘1992 Rule Filing’’).7 better represent the broadened
In the 1992 Rule Filing, NSCC described functionality of fee data exchange and
settlement capabilities offered by the
that the new service would provide for
Service today, as opposed to its
the automation of payments of
commissions owed in respect of mutual capabilities at initial implementation in
fund transactions, explaining that under 1992.
b. Clarify Scope of Commission and
the new service, Funds would be able to
transmit commission debit data to NSCC other Fee Data Transmission and Flow
on a daily basis. NSCC’s role in this new of Funds: Although the Service, as
described in Rule 52, does not specify
commission service would be to
from whom and to whom the
transmit data between the Funds (i.e.,
transmission of commission and fee
the payers of commission payments)
and the Distributors (i.e., the receivers of related data, and settlement of such
payments, may be made, the previous
commission payments). In 2005 (‘‘2005
rule filing descriptions do identify a
Rule Filing’’),8 NSCC expanded the
specific flow. In the 1992 Rule Filing,
scope of the Service to permit
the type of fee payment and the flow of
Distributors to submit fee data through
data and payments were specified to be
NSCC to other Distributors and to settle
commission data and settlements by the
the fee payments in respect thereof
through NSCC, expanding the Service to Fund to the Distributors. The 2005 Rule
Filing expanded the scope to permit the
allow for more than the exchange of
transmission of other fee payment data
and settlement thereof by one
6 This is a category of fees paid out by the Fund
Distributor to another Distributor. In the
out of Fund assets to cover distribution expenses
and sometimes shareholder service expenses.
current rule filing, NSCC seeks to make
7 Securities Exchange Act Release No. 34–31579
clear that the Service permits for the
(December 9, 1992), 57 FR 60018 (December 17,
transmission of commission and other
1992).
fee related data, and the settlement of
8 Securities Exchange Act Release No. 34–52458
such payments, among users of the
(September 16, 2005), 70 FR 56200 (September 26,
2005).
Service without regard to whether the
tkelley on DSK3SPTVN1PROD with NOTICES
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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67411
flow of funds is from the Fund to the
Distributor, from the Distributor to the
Fund, from a Distributor to another
Distributor, or otherwise.
c. Specify Omnibus Invoicing within
the Service: NSCC proposes to specify in
Rule 52 that the transmission of
commission and other fee data with
regard to investor accounts held in
Omnibus, and the settlement of
payments thereof, shall be included
within the suite of functionalities
offered by the Service. In all events, the
Fund or Distributor being debited will
either be the initiator of the commission
or other fee payment transaction, or will
otherwise confirm the debit that will be
charged against its account.
d. Specify 12b–1 Fee Payment Process
with regard to Omnibus Invoicing:
NSCC will specify in Rule 52 the
process for 12b–1 fee payments with
regard to investor accounts held in
Omnibus. Unlike the process applicable
to all other commission and other fee
payments within the Service, 12b–1 fee
payment instructions with regard to
investor accounts held in Omnibus in
all events must be initiated by the
Distributor. When NSCC receives the
12b–1 fee payment instruction with
regard to these accounts, NSCC will
transmit such instruction to the contraside Fund. The contra-side Fund will
then either (i) confirm or reject the
payment instruction, or (ii) release
settlement (either with or without a
confirmation). If NSCC receives a
confirmation or rejection instruction,
NSCC will transmit such confirmation
or rejection to the initiating Distributor.
e. Establish Fees to be charged by
NSCC: NSCC proposes to update
Addendum A of its Rules and
Procedures to incorporate the fees
associated with omnibus invoicing. The
NSCC fees for omnibus invoicing will be
as follows:
a. From 1 to 500,000 records $0.10
per 1 record.
b. From 500,001 to 1,000,000 records
$0.08 per 1 record.
c. More than 1,000,000 records $0.06
per 1 record.
d. Monthly Fee $500.
As with all of NSCC’s Mutual Fund
Services, the Service is a nonguaranteed service of NSCC and shall
remain so after the effectiveness of this
proposed rule change.
The proposed rule change is
consistent with the requirements of the
Act and the rules and regulations issued
thereunder applicable to NSCC because
it will promote processing efficiencies
between Funds and Distributors,
thereby facilitating the prompt and
accurate processing of commission and
other fee related payment data
E:\FR\FM\09NON1.SGM
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Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Notices
IV. Solicitation of Comments
transmissions and settlement with
respect to such payments.
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:
(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.
Electronic Comments
(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. NSCC will notify
the Commission of any written
comments received by NSCC.
tkelley on DSK3SPTVN1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective upon filing
pursuant to Section 19(b)(3)(A)(iii) 9 of
the Act, Rule 19b–4(f)(2),10 and Rule
19b–4(f)(4)(i) 11 thereunder because it
effects changes in an existing service of
NSCC that do not adversely affect the
safeguarding of securities or funds in
the custody or control of NSCC or for
which NSCC is responsible and do not
significantly affect the respective rights
or obligations of NSCC or persons using
the service. NSCC’s Mutual Fund
Services are non-guaranteed services,
and therefore, the funds in NSCC’s
control are not adversely affected by the
proposed rule change. Further, the
proposed rule change does not provide
any greater or lesser rights to or
obligations on either NSCC or the users
of the Service in comparison to the
current rights and obligations of the
respective parties with regard to the
Service as it is currently offered. In
addition, the proposed rule change
establishes fees charged by NSCC
applicable only to members. The
implementation date for the proposals
in this proposed rule change filing other
than the change in the Service’s name
will be December 1, 2012.
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.
9 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(2).
11 17 CFR 240.19b–4(f)(4)(i).
10 17
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Jkt 229001
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NSCC–2012–08 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–2012–08. 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
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/2012/nscc/SR-NSCC2012-08.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–2012–08 and should
be submitted on or before November 30,
2012.
PO 00000
Frm 00084
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For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–27357 Filed 11–8–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68158; File No. SR–
NYSEArca–2012–101]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Approval of
Proposed Rule Change To List and
Trade Shares of the PowerShares S&P
500 Downside Hedged Portfolio Under
NYSE Arca Equities Rule 8.600
November 5, 2012.
I. Introduction
On September 6, 2012, NYSE Arca,
Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’ or
‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
list and trade shares (‘‘Shares’’) of the
PowerShares S&P 500 Downside
Hedged Portfolio (‘‘Fund’’) under NYSE
Arca Equities Rule 8.600. The proposed
rule change was published for comment
in the Federal Register on September
24, 2012.3 The Commission received no
comments on the proposed rule change.
This order grants approval of the
proposed rule change.
II. Description of the Proposed Rule
Change
The Exchange proposes to list and
trade Shares of the Fund pursuant to
NYSE Arca Equities Rule 8.600, which
governs the listing and trading of
Managed Fund Shares on the Exchange.
The Shares will be offered by
PowerShares Actively Managed
Exchange-Traded Fund Trust (‘‘Trust’’),4
a statutory trust organized under the
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 67881
(September 18, 2012), 77 FR 58889 (‘‘Notice’’).
4 The Trust is registered under the Investment
Company Act of 1940 (‘‘1940 Act’’). On August 14,
2012, the Trust filed with the Commission a posteffective amendment to Form N–1A under the
Securities Act of 1933 (‘‘Securities Act’’) and under
the 1940 Act relating to the Fund (File Nos. 333–
147622 and 811–22148) (‘‘Registration Statement’’).
In addition, the Commission has issued an order
granting certain exemptive relief to the Trust under
the 1940 Act. See Investment Company Act Release
No. 28171 (February 27, 2008) (File No. 812–
13386).
1 15
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]]>Agencies
[Federal Register Volume 77, Number 218 (Friday, November 9, 2012)]
[Notices]
[Pages 67410-67412]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27357]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68159; File No. SR-NSCC-2012-08]
Self-Regulatory Organizations; The National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Modify Rule 52 (Mutual Fund Services) and Addendum A
(NSCC's Fee Structure)
November 5, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 22, 2012, the
National Securities Clearing Corporation (``NSCC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change described in Items I and II below, which Items have been
prepared primarily by NSCC. NSCC filed the proposal pursuant to Section
19(b)(3)(A)(iii) \2\ of the Act, Rule 19b-4(f)(2),\3\ and Rule 19b-
4(f)(4)(i) \4\ thereunder so that the proposal was effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the rule change from interested parties.
---------------------------------------------------------------------------
\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)(2).
\4\ 17 CFR 240.19b-4(f)(4)(i).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change modifies Rule 52 (Mutual Fund Services)
and Addendum A (NSCC's Fee Structure) of NSCC's Rules.
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.\5\
---------------------------------------------------------------------------
\5\ The Commission has modified the text of the summaries
prepared by NSCC.
---------------------------------------------------------------------------
[[Page 67411]]
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Pursuant to the rule change proposal, NSCC will (i) rename the
``Mutual Fund Commission Settlement'' service under Rule 52 (the
``Service'') as the ``DTCC Payment aXis'' service in order to better
align the name of the Service with the various commission and other fee
data transmission and payment settlement functionalities available
through the Service (i.e., not solely commission settlement), (ii) make
clear that the Service permits for the transmission of commission and
other fee related data, and the settlement of such payments, among
users of the Service without regard to whether the flow of funds is
from the fund company (``Fund'') to the retail broker-dealer
(``Distributor''), from the Distributor to the Fund, from a Distributor
to another Distributor, or otherwise, (iii) specify that commission and
other fee data transmission, and the settlement of such payments, with
regard to investor accounts held on an omnibus account basis at the
Fund (``Omnibus'') may be made through the Service, (iv) specify the
process for the payment of 12b-1 fees \6\ with regard to investor
accounts held in Omnibus, and (v) establish the fees that NSCC will
charge users of the Service with regard to investor accounts held in
Omnibus.
---------------------------------------------------------------------------
\6\ This is a category of fees paid out by the Fund out of Fund
assets to cover distribution expenses and sometimes shareholder
service expenses.
---------------------------------------------------------------------------
Background. The Service was initially approved by the Commission on
December 9, 1992 (``1992 Rule Filing'').\7\ In the 1992 Rule Filing,
NSCC described that the new service would provide for the automation of
payments of commissions owed in respect of mutual fund transactions,
explaining that under the new service, Funds would be able to transmit
commission debit data to NSCC on a daily basis. NSCC's role in this new
commission service would be to transmit data between the Funds (i.e.,
the payers of commission payments) and the Distributors (i.e., the
receivers of commission payments). In 2005 (``2005 Rule Filing''),\8\
NSCC expanded the scope of the Service to permit Distributors to submit
fee data through NSCC to other Distributors and to settle the fee
payments in respect thereof through NSCC, expanding the Service to
allow for more than the exchange of commission-related information from
the Funds to Distributors.
---------------------------------------------------------------------------
\7\ Securities Exchange Act Release No. 34-31579 (December 9,
1992), 57 FR 60018 (December 17, 1992).
\8\ Securities Exchange Act Release No. 34-52458 (September 16,
2005), 70 FR 56200 (September 26, 2005).
---------------------------------------------------------------------------
The Proposed Rule Changes. There has been a growing trend in the
mutual fund industry toward omnibus processing, a practice pursuant to
which Distributors maintain a single account at a Fund, which account
represents multiple investor positions of that Distributor in that
Fund's securities. Where multiple investor positions are held in
Omnibus, the Distributor maintains the individual investor account
records on the Distributor's books and records. The trend toward
omnibus processing is anticipated to continue growing into the
foreseeable future; however, invoicing for the fees related to these
investor accounts is not standardized. The current state of fee
invoicing with regard to such investor accounts is manually intensive,
involving the exchange of reports and spreadsheets via fax, email, and
regular mail, and the settlement of payments thereof generally occurs
by check or wire. Due to the lack of standardization and automation,
the industry has sought NSCC's assistance to create a standardized file
for omnibus invoicing. As a result, NSCC has enhanced the Service's
functionality to permit for fee data transmission and settlement of
payments with regard to investor accounts held in Omnibus. By this
proposed rule change, NSCC seeks to do the following:
a. Rename Service: The Service will be renamed ``DTCC Payment
aXis'' to better represent the broadened functionality of fee data
exchange and settlement capabilities offered by the Service today, as
opposed to its capabilities at initial implementation in 1992.
b. Clarify Scope of Commission and other Fee Data Transmission and
Flow of Funds: Although the Service, as described in Rule 52, does not
specify from whom and to whom the transmission of commission and fee
related data, and settlement of such payments, may be made, the
previous rule filing descriptions do identify a specific flow. In the
1992 Rule Filing, the type of fee payment and the flow of data and
payments were specified to be commission data and settlements by the
Fund to the Distributors. The 2005 Rule Filing expanded the scope to
permit the transmission of other fee payment data and settlement
thereof by one Distributor to another Distributor. In the current rule
filing, NSCC seeks to make clear that the Service permits for the
transmission of commission and other fee related data, and the
settlement of such payments, among users of the Service without regard
to whether the flow of funds is from the Fund to the Distributor, from
the Distributor to the Fund, from a Distributor to another Distributor,
or otherwise.
c. Specify Omnibus Invoicing within the Service: NSCC proposes to
specify in Rule 52 that the transmission of commission and other fee
data with regard to investor accounts held in Omnibus, and the
settlement of payments thereof, shall be included within the suite of
functionalities offered by the Service. In all events, the Fund or
Distributor being debited will either be the initiator of the
commission or other fee payment transaction, or will otherwise confirm
the debit that will be charged against its account.
d. Specify 12b-1 Fee Payment Process with regard to Omnibus
Invoicing: NSCC will specify in Rule 52 the process for 12b-1 fee
payments with regard to investor accounts held in Omnibus. Unlike the
process applicable to all other commission and other fee payments
within the Service, 12b-1 fee payment instructions with regard to
investor accounts held in Omnibus in all events must be initiated by
the Distributor. When NSCC receives the 12b-1 fee payment instruction
with regard to these accounts, NSCC will transmit such instruction to
the contra-side Fund. The contra-side Fund will then either (i) confirm
or reject the payment instruction, or (ii) release settlement (either
with or without a confirmation). If NSCC receives a confirmation or
rejection instruction, NSCC will transmit such confirmation or
rejection to the initiating Distributor.
e. Establish Fees to be charged by NSCC: NSCC proposes to update
Addendum A of its Rules and Procedures to incorporate the fees
associated with omnibus invoicing. The NSCC fees for omnibus invoicing
will be as follows:
a. From 1 to 500,000 records $0.10 per 1 record.
b. From 500,001 to 1,000,000 records $0.08 per 1 record.
c. More than 1,000,000 records $0.06 per 1 record.
d. Monthly Fee $500.
As with all of NSCC's Mutual Fund Services, the Service is a non-
guaranteed service of NSCC and shall remain so after the effectiveness
of this proposed rule change.
The proposed rule change is consistent with the requirements of the
Act and the rules and regulations issued thereunder applicable to NSCC
because it will promote processing efficiencies between Funds and
Distributors, thereby facilitating the prompt and accurate processing
of commission and other fee related payment data
[[Page 67412]]
transmissions and settlement with respect to such payments.
(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 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 proposed rule change has become effective upon filing
pursuant to Section 19(b)(3)(A)(iii) \9\ of the Act, Rule 19b-
4(f)(2),\10\ and Rule 19b-4(f)(4)(i) \11\ thereunder because it effects
changes in an existing service of NSCC that do not adversely affect the
safeguarding of securities or funds in the custody or control of NSCC
or for which NSCC is responsible and do not significantly affect the
respective rights or obligations of NSCC or persons using the service.
NSCC's Mutual Fund Services are non-guaranteed services, and therefore,
the funds in NSCC's control are not adversely affected by the proposed
rule change. Further, the proposed rule change does not provide any
greater or lesser rights to or obligations on either NSCC or the users
of the Service in comparison to the current rights and obligations of
the respective parties with regard to the Service as it is currently
offered. In addition, the proposed rule change establishes fees charged
by NSCC applicable only to members. The implementation date for the
proposals in this proposed rule change filing other than the change in
the Service's name will be December 1, 2012.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(2).
\11\ 17 CFR 240.19b-4(f)(4)(i).
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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:
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-2012-08 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-2012-08. 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 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/2012/nscc/SR-NSCC-2012-08.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-2012-08
and should be submitted on or before November 30, 2012.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27357 Filed 11-8-12; 8:45 am]
BILLING CODE 8011-01-P
