Self-Regulatory Organizations; The Depository Trust Company; Order Approving Proposed Rule Change To Modify Its Practice Regarding the Collection of Participants' Required Participants Fund Deposits, 29186-29187 [2013-11758]

Download as PDF 29186 Federal Register / Vol. 78, No. 96 / Friday, May 17, 2013 / 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 Number SR–NYSE–2013–33 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. wreier-aviles on DSK5TPTVN1PROD with NOTICES All submissions should refer to File Number SR–NYSE–2013–33. 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 a.m. and 3 p.m. Copies of the filing will also be available for inspection and copying at the principal office 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–NYSE– 2013–33 and should be submitted on or before June 7, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–11759 Filed 5–16–13; 8:45 am] BILLING CODE 8011–01–P 27 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 15:20 May 16, 2013 Jkt 229001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69562; File No. SR–DTC– 2013–01] Self-Regulatory Organizations; The Depository Trust Company; Order Approving Proposed Rule Change To Modify Its Practice Regarding the Collection of Participants’ Required Participants Fund Deposits May 13, 2013. I. Introduction On March 20, 2013, The Depository Trust Company (‘‘DTC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) proposed rule change SR–DTC–2013–01 (‘‘Proposed Rule Change’’) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The Proposed Rule Change was published in the Federal Register on April 8, 2013.3 This order approves the Proposed Rule Change. II. Description DTC filed the Proposed Rule Change to accelerate DTC’s collection of a Participant’s required deposit to DTC’s Participants Fund in certain circumstances from two business days to the same day that the Participant is notified of the requirement, as described below. A. Participants Fund Pursuant to Rule 4 of its Rules, Bylaws, Organization Certificate (‘‘DTC Rules’’), DTC maintains resources funded by its Participants that is a liquidity resource and is available to satisfy any uninsured loss incurred by DTC, including a loss resulting from a Participant’s failure to settle its transactions (‘‘Participants Fund’’).4 Each Participant’s required deposit to the Participants Fund (‘‘Required Participants Fund Deposit’’) is calculated daily pursuant to an established formula.5 While the minimum deposit is $10,000, each Participant is required to make a deposit to the Participants Fund based upon a formula that takes into account the Participant’s six largest intraday net debit peaks over a rolling 60 businessday period.6 Typically DTC collects new 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Release No. 34–69276 (Apr. 2, 2013), 78 FR 20999 (Apr. 8, 2013). 4 See DTC Rules (https://dtcc.com/legal/ rules_proc/dtc_rules.pdf). 5 Id., Rule 4(a). 6 See DTC Settlement Service Guide (https:// dtcc.com/downloads/products/learning/ 2 17 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 Participants Fund deposits once per month for each Participant.7 However, if the Participant’s newly calculated Required Participants Fund Deposit is greater than its prior day’s Required Participants Fund Deposit, and the difference thereof (i) equals or exceeds $500,000 and (ii) represents 25 percent or more of that Participant’s newly calculated required fund deposit (‘‘Threshold Amount and Percentage’’), the Participant currently must deposit the difference, to the extent any excess amount of the Participant’s Actual Participants Fund Deposit 8 does not already satisfy the new requirement, in the Participants Fund within two business days.9 B. Proposed Rule Change In order to enhance its liquidity and risk coverage, DTC is accelerating the collection of Participants’ Required Participants Fund Deposits, in the circumstances where DTC currently collects it within two business days, to the same day the Participant is notified of the requirement. In other words, for both the daily and monthly calculations that trigger collections, as described above, increased deposit requirements will be collected by DTC on a same-day basis, instead of within two business days. To account for this rule change, DTC is revising the text of its Settlement Services Guide to provide that where a Participant’s calculated Required Participants Fund Deposit meets the Threshold Amount and Percentage, the increased amount must (to the extent any excess amount of the Participant’s Actual Participants Fund Deposit does not already satisfy the new requirement) be deposited with DTC on the same business day as (i) the calculation of the increase, and (ii) a report or other notification of the change is made available to the Participant. As mentioned above, in order to harmonize the Participants Fund collection processes, monthly increases Settlement.pdf). DTC may also require an additional deposit to the Participants Fund in the event that DTC becomes concerned with a Participant’s financial soundness. See DTC Rules, supra note 4, Rule 9(A). Separately, a Participant may make a voluntary deposit to the Participants Fund (‘‘Voluntary Participants Fund Deposit’’) in excess of the amount required. See id., Rule 4(c). These two provisions are not impacted by the Proposed Rule Change. 7 See DTC Rules, supra note 4, Rule 4(b). 8 See DTC Rules, supra note 4, Rule 4(b). ‘‘Actual Participants Fund Deposit’’ means the actual amount the Participant has deposited to the Participants Fund, including both its Required Participants Fund Deposit and any Voluntary Participants Fund Deposit. Id., Rule 1. 9 See DTC Settlement Service Guide, supra note 6. E:\FR\FM\17MYN1.SGM 17MYN1 Federal Register / Vol. 78, No. 96 / Friday, May 17, 2013 / Notices wreier-aviles on DSK5TPTVN1PROD with NOTICES will also be collected on a same-day basis and DTC is adding language to the Settlement Service Guide in this regard. In addition, DTC is adding language to the Settlement Service Guide to clarify that the relevant Guide provisions shall apply only to the calculation and collection of DTC Participants Fund deposits, as described in the Guide, and do not supersede or limit any provisions of the DTC Rules or any rights of DTC in accordance with applicable law and DTC’s Rules and Procedures, including but not limited to transactions in securities and money payments. Finally, DTC is making certain clarifying and technical changes to the language as set forth in the ‘‘Participants Fund’’ section of its Settlement Service Guide, including (i) updating the description of the purpose of the Participants Fund, (ii) updating the use of defined terms, such as ‘‘Participant,’’ and (iii) updating and adding subject headings. III. Discussion Section 19(b)(2)(C) of the Act 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.10 Section 17A(b)(3)(F) of the Act requires that, among other things, ‘‘[t]he rules of the clearing agency are designed to promote the prompt and accurate clearance and settlement of securities transactions and . . . to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible.’’ 11 Furthermore, Commission Rule 17Ad–22(d)(11) regarding default procedures, adopted as part of the Clearing Agency Standards,12 requires that registered clearing agencies ‘‘establish, implement, maintain and enforce written policies and procedures reasonably designed to, as applicable: . . . establish default procedures that ensure that the clearing agency can take timely action to contain losses and liquidity pressures and to continue meeting its obligations in the event of a participant default.’’13 Here, as described above, DTC’s proposed rule change to accelerate collection of increases in Participants’ Required Participants Fund Deposits in certain circumstances from two business 10 15 U.S.C. 78(s)(b)(2)(C). U.S.C. 78q–1(b)(3)(F). 12 Release No. 34–68080 (Oct. 22, 2012), 77 FR 66219 (Nov. 2, 2012). 13 17 CFR 240.17Ad–22(d)(11). 11 15 VerDate Mar<15>2010 15:20 May 16, 2013 Jkt 229001 days to the same day that the Participant is notified of the increase should, generally, help further safeguard the securities and settlement process as a whole, as required by Section 17A(b)(3)(F) of the Act,14 since DTC will have access to the required funds, which are calculated by an established formula, more quickly. More specifically, this rule change should help improve DTC’s ability to take timely action to contain losses and liquidity pressures and to continue meeting its obligations in the event of a Participant default, as required by Commission Rule 17Ad–22(d)(11),15 by providing DTC with funds likely necessary to contain such losses and liquidity pressures in the event of a defaulting Participant. IV. Conclusion On the basis of the foregoing, the Commission finds the Proposed Rule Change is consistent with the requirements of the Act, particularly with the requirements of Section 17A of the Act,16 and the rules and regulations thereunder. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,17 that the proposed rule change SR–DTC–2013–01 be and hereby is approved.18 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.19 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–11758 Filed 5–16–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69563; File No. SR– NASDAQ–2013–073] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4120 To Adopt a Modification in the Process for Initiating Trading of a Security That Is the Subject of a Trading Halt or Pause on NASDAQ Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the 14 15 U.S.C. 78q–1(b)(3)(F). CFR 240.17Ad–22(d)(11). 16 15 U.S.C. 78q–1. 17 15 U.S.C. 78s(b)(2). 18 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). 19 17 CFR 200.30–3(a)(12). 15 17 Frm 00077 ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 29, 2013, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. 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 NASDAQ proposes to amend Rule 4120 to adopt a modification in the process for initiating trading of a security that is the subject of a trading halt or pause on NASDAQ, and to make several additional modifications to Rule 4120 to clarify the conditions under which NASDAQ will conduct a halt cross. NASDAQ proposes to implement the proposed rule change on a date that is on, or shortly after, the 30th day following the date of the filing. The text of the proposed rule change is available on the Exchange’s Web site at https:// www.nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose May 13, 2013. PO 00000 29187 Fmt 4703 Sfmt 4703 In 2012, NASDAQ modified its process for commencing trading of a security that is the subject of an initial public offering (an ‘‘IPO’’) on NASDAQ by allowing market participants to enter orders to be held in an undisplayed state until the commencement of the Display-Only Period that occurs prior to 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\17MYN1.SGM 17MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 78, Number 96 (Friday, May 17, 2013)]
[Notices]
[Pages 29186-29187]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11758]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69562; File No. SR-DTC-2013-01]


Self-Regulatory Organizations; The Depository Trust Company; 
Order Approving Proposed Rule Change To Modify Its Practice Regarding 
the Collection of Participants' Required Participants Fund Deposits

May 13, 2013.

I. Introduction

    On March 20, 2013, The Depository Trust Company (``DTC'') filed 
with the Securities and Exchange Commission (``Commission'') proposed 
rule change SR-DTC-2013-01 (``Proposed Rule Change'') pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ 
and Rule 19b-4 thereunder.\2\ The Proposed Rule Change was published in 
the Federal Register on April 8, 2013.\3\ This order approves the 
Proposed Rule Change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Release No. 34-69276 (Apr. 2, 2013), 78 FR 20999 (Apr. 8, 
2013).
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II. Description

    DTC filed the Proposed Rule Change to accelerate DTC's collection 
of a Participant's required deposit to DTC's Participants Fund in 
certain circumstances from two business days to the same day that the 
Participant is notified of the requirement, as described below.

A. Participants Fund

    Pursuant to Rule 4 of its Rules, By-laws, Organization Certificate 
(``DTC Rules''), DTC maintains resources funded by its Participants 
that is a liquidity resource and is available to satisfy any uninsured 
loss incurred by DTC, including a loss resulting from a Participant's 
failure to settle its transactions (``Participants Fund'').\4\ Each 
Participant's required deposit to the Participants Fund (``Required 
Participants Fund Deposit'') is calculated daily pursuant to an 
established formula.\5\ While the minimum deposit is $10,000, each 
Participant is required to make a deposit to the Participants Fund 
based upon a formula that takes into account the Participant's six 
largest intraday net debit peaks over a rolling 60 business-day 
period.\6\ Typically DTC collects new Participants Fund deposits once 
per month for each Participant.\7\ However, if the Participant's newly 
calculated Required Participants Fund Deposit is greater than its prior 
day's Required Participants Fund Deposit, and the difference thereof 
(i) equals or exceeds $500,000 and (ii) represents 25 percent or more 
of that Participant's newly calculated required fund deposit 
(``Threshold Amount and Percentage''), the Participant currently must 
deposit the difference, to the extent any excess amount of the 
Participant's Actual Participants Fund Deposit \8\ does not already 
satisfy the new requirement, in the Participants Fund within two 
business days.\9\
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    \4\ See DTC Rules (https://dtcc.com/legal/rules_proc/dtc_rules.pdf).
    \5\ Id., Rule 4(a).
    \6\ See DTC Settlement Service Guide (https://dtcc.com/downloads/products/learning/Settlement.pdf). DTC may also require an 
additional deposit to the Participants Fund in the event that DTC 
becomes concerned with a Participant's financial soundness. See DTC 
Rules, supra note 4, Rule 9(A). Separately, a Participant may make a 
voluntary deposit to the Participants Fund (``Voluntary Participants 
Fund Deposit'') in excess of the amount required. See id., Rule 
4(c). These two provisions are not impacted by the Proposed Rule 
Change.
    \7\ See DTC Rules, supra note 4, Rule 4(b).
    \8\ See DTC Rules, supra note 4, Rule 4(b). ``Actual 
Participants Fund Deposit'' means the actual amount the Participant 
has deposited to the Participants Fund, including both its Required 
Participants Fund Deposit and any Voluntary Participants Fund 
Deposit. Id., Rule 1.
    \9\ See DTC Settlement Service Guide, supra note 6.
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B. Proposed Rule Change

    In order to enhance its liquidity and risk coverage, DTC is 
accelerating the collection of Participants' Required Participants Fund 
Deposits, in the circumstances where DTC currently collects it within 
two business days, to the same day the Participant is notified of the 
requirement. In other words, for both the daily and monthly 
calculations that trigger collections, as described above, increased 
deposit requirements will be collected by DTC on a same-day basis, 
instead of within two business days.
    To account for this rule change, DTC is revising the text of its 
Settlement Services Guide to provide that where a Participant's 
calculated Required Participants Fund Deposit meets the Threshold 
Amount and Percentage, the increased amount must (to the extent any 
excess amount of the Participant's Actual Participants Fund Deposit 
does not already satisfy the new requirement) be deposited with DTC on 
the same business day as (i) the calculation of the increase, and (ii) 
a report or other notification of the change is made available to the 
Participant.
    As mentioned above, in order to harmonize the Participants Fund 
collection processes, monthly increases

[[Page 29187]]

will also be collected on a same-day basis and DTC is adding language 
to the Settlement Service Guide in this regard. In addition, DTC is 
adding language to the Settlement Service Guide to clarify that the 
relevant Guide provisions shall apply only to the calculation and 
collection of DTC Participants Fund deposits, as described in the 
Guide, and do not supersede or limit any provisions of the DTC Rules or 
any rights of DTC in accordance with applicable law and DTC's Rules and 
Procedures, including but not limited to transactions in securities and 
money payments.
    Finally, DTC is making certain clarifying and technical changes to 
the language as set forth in the ``Participants Fund'' section of its 
Settlement Service Guide, including (i) updating the description of the 
purpose of the Participants Fund, (ii) updating the use of defined 
terms, such as ``Participant,'' and (iii) updating and adding subject 
headings.

III. Discussion

    Section 19(b)(2)(C) of the Act 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.\10\ Section 17A(b)(3)(F) of the Act requires that, among 
other things, ``[t]he rules of the clearing agency are designed to 
promote the prompt and accurate clearance and settlement of securities 
transactions and . . . to assure the safeguarding of securities and 
funds which are in the custody or control of the clearing agency or for 
which it is responsible.'' \11\ Furthermore, Commission Rule 17Ad-
22(d)(11) regarding default procedures, adopted as part of the Clearing 
Agency Standards,\12\ requires that registered clearing agencies 
``establish, implement, maintain and enforce written policies and 
procedures reasonably designed to, as applicable: . . . establish 
default procedures that ensure that the clearing agency can take timely 
action to contain losses and liquidity pressures and to continue 
meeting its obligations in the event of a participant default.''\13\
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    \10\ 15 U.S.C. 78(s)(b)(2)(C).
    \11\ 15 U.S.C. 78q-1(b)(3)(F).
    \12\ Release No. 34-68080 (Oct. 22, 2012), 77 FR 66219 (Nov. 2, 
2012).
    \13\ 17 CFR 240.17Ad-22(d)(11).
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    Here, as described above, DTC's proposed rule change to accelerate 
collection of increases in Participants' Required Participants Fund 
Deposits in certain circumstances from two business days to the same 
day that the Participant is notified of the increase should, generally, 
help further safeguard the securities and settlement process as a 
whole, as required by Section 17A(b)(3)(F) of the Act,\14\ since DTC 
will have access to the required funds, which are calculated by an 
established formula, more quickly. More specifically, this rule change 
should help improve DTC's ability to take timely action to contain 
losses and liquidity pressures and to continue meeting its obligations 
in the event of a Participant default, as required by Commission Rule 
17Ad-22(d)(11),\15\ by providing DTC with funds likely necessary to 
contain such losses and liquidity pressures in the event of a 
defaulting Participant.
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    \14\ 15 U.S.C. 78q-1(b)(3)(F).
    \15\ 17 CFR 240.17Ad-22(d)(11).
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IV. Conclusion

    On the basis of the foregoing, the Commission finds the Proposed 
Rule Change is consistent with the requirements of the Act, 
particularly with the requirements of Section 17A of the Act,\16\ and 
the rules and regulations thereunder.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\17\ that the proposed rule change SR-DTC-2013-01 be and hereby is 
approved.\18\
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    \17\ 15 U.S.C. 78s(b)(2).
    \18\ 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).

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11758 Filed 5-16-13; 8:45 am]
BILLING CODE 8011-01-P

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