Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Government Securities Division Fee Schedule, 1450-1454 [2016-00335]
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Federal Register / Vol. 81, No. 7 / Tuesday, January 12, 2016 / Notices
allotted for each presentation. The
agenda will be available at the hearing.
A written summary of the hearing will
be compiled, and such summary will be
made available, upon written request to
OPIC’s Corporate Secretary, at the cost
of reproduction.
Dated: January 8, 2016.
Catherine F.I. Andrade,
OPIC Corporate Secretary.
[FR Doc. 2016–00530 Filed 1–8–16; 4:15 pm]
BILLING CODE 3210–01–P
POSTAL REGULATORY COMMISSION
[Docket No. CP2014–79; Order No. 2994]
compliance with 39 U.S.C. 3633(a), as
required by 39 CFR 3015.5.
The Postal Service also filed the
unredacted modification and supporting
financial information under seal. The
Postal Service seeks to incorporate by
reference the Application for NonPublic Treatment originally filed in this
docket for the protection of information
that it has filed under seal. Id. at 1–2.
The modification revises Article 15
(concerning postage updates) and
replaces Annex 1 of the agreement. Id.
at 1. The Postal Service intends to notify
the customer of the effective date of the
modification within 30 days after the
Commission completes its review. Id.
II. Notice of Filings
New Postal Product
Postal Regulatory Commission.
ACTION: Notice.
AGENCY:
The Commission is noticing a
recent Postal Service filing concerning a
modification to a Global Expedited
Package Services 3 negotiated service
agreement. This notice informs the
public of the filing, invites public
comment, and takes other
administrative steps.
DATES: Comments are due: January 13,
2016.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Notice of Filings
III. Ordering Paragraphs
tkelley on DSK3SPTVN1PROD with NOTICES
I. Introduction
On January 5, 2016, the Postal Service
filed notice that it has agreed to a
modification to the existing Global
Expedited Package Services 3 negotiated
service agreement approved in this
docket.1 In support of its Notice, the
Postal Service includes a redacted copy
of the modification and a certification of
The Commission invites comments on
whether the changes presented in the
Postal Service’s Notice are consistent
with the policies of 39 U.S.C. 3632,
3633, or 3642, 39 CFR 3015.5, and 39
CFR part 3020, subpart B. Comments are
due no later than January 13, 2016. The
public portions of these filings can be
accessed via the Commission’s Web site
(https://www.prc.gov).
The Commission appoints Curtis E.
Kidd to represent the interests of the
general public (Public Representative)
in this docket.
III. Ordering Paragraphs
It is ordered:
1. The Commission reopens Docket
No. CP2014–79 for consideration of
matters raised by the Postal Service’s
Notice.
2. Pursuant to 39 U.S.C. 505, the
Commission appoints Curtis E. Kidd to
serve as an officer of the Commission
(Public Representative) to represent the
interests of the general public in this
proceeding.
3. Comments are due no later than
January 13, 2016.
4. The Secretary shall arrange for
publication of this order in the Federal
Register.
By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2016–00382 Filed 1–11–16; 8:45 am]
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[Release No. 34–76840; File No. SR–FICC–
2015–005]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify the
Government Securities Division Fee
Schedule
January 6, 2016.
Pursuant to section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (‘‘Act’’)
and Rule 19b–4 2 thereunder, notice is
hereby given that on December 30, 2015,
the Fixed Income Clearing Corporation
(‘‘FICC’’) 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 FICC. FICC filed
the proposed rule change pursuant to
section 19(b)(3)(A) 3 of the Act and Rule
19b–4(f)(2) 4 thereunder. The proposed
rule change 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. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to the Fee Schedule in the
Government Securities Division
(‘‘GSD’’) Rulebook 5 (the ‘‘GSD Rules’’).
The fee changes will be effective as of
January 1, 2016.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
FICC 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. FICC has prepared
summaries, set forth in sections A, B
and C below, of the most significant
aspects of such statements.
BILLING CODE 7710–FW–P
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
5 The GSD Rulebook is available at https://
www.dtcc.com/legal/rules-and-procedures.
2 17
1 Notice of the United States Postal Service of
Filing Modification to Global Expedited Package
Services 3 Negotiated Service Agreement, January 5,
2016 (Notice).
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SECURITIES AND EXCHANGE
COMMISSION
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Federal Register / Vol. 81, No. 7 / Tuesday, January 12, 2016 / Notices
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
FICC is modifying the GSD fee
structure to (1) change the fees for the
existing services that GSD provides to
its Members 6 and (2) permit the passthrough of new and existing fees
imposed on FICC by its clearing banks
and the Federal Reserve’s Fedwire
Service (‘‘Fedwire®’’) (collectively,
‘‘third party’’) with respect to the
services that FICC provides to its
Members.
A. Describe the Reasons for Adopting
the Proposed Rule Change
Based on the revenue that GSD
generated in 2015, GSD requires fee
modifications in order to meet the
budgeted expenses associated with
providing its services to Members. Thus,
FICC is adopting the proposed rule
changes in order to ensure that FICC can
achieve and maintain GSD’s operating
margin.
B. Describe Any Problems the Proposed
Rule Change Is Intended To Address
GSD’s ability to achieve its operating
margin has been negatively impacted by
(i) a decline in the dollar values of
transactions; (ii) increased infrastructure
costs; (iii) increased risk management
costs and (iv) increased third party fees,
which GSD has historically absorbed. In
addition, GSD also anticipates that the
clearing banks will impose new fees for
the services that FICC provides to its
Members.
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C. Describe the Manner in Which the
Proposed Rule Change Will Operate To
Resolve Those Problems
The proposed fee modifications to
GSD’s services and the pass through of
existing and new third party fees are
expected to aide FICC’s ability to
achieve and maintain its operating
margin because all of the fees will be
aligned to FICC’s cost of delivering its
services to Members.
D. Describe the Manner in Which the
Proposed Rule Change Will Affect
Various Persons (e.g., Brokers, Dealers,
Issuers, and Investors)
The proposed rule changes will
establish different trade submission and
netting fee structures for Broker
Accounts and Dealer Accounts because
6 The term ‘‘Member’’ means a comparison-only
member or a Netting Member. The term ‘‘Member’’
shall include a sponsoring member in its capacity
as a sponsoring member and a sponsored member,
each to the extent specified in Rule 3A. GSD Rule
1, Definitions.
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20:14 Jan 11, 2016
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Members who utilize each of these
accounts represent two different types
of functions that are performed in the
market served by the GSD. The Broker
Accounts provide the marketplace with
the blind-brokered screens through
which Dealer Accounts are matched as
counterparties (on a blind basis) to the
transactions that are submitted to GSD.
The Broker Accounts submit two sets of
transaction details for every one set that
the Dealer Account submits; for
example, if Broker A matches Dealer A
and Dealer B in a transaction to be
submitted to the GSD, each Dealer will
submit one transaction as between the
Dealer Account and the Broker Account.
However, Broker A will submit two
transactions, one between the Broker
and Dealer A and one between the
Broker and Dealer B. The Broker
Account will net out for purposes of
GSD’s processing of the transaction.
However, as the trade submission and
netting fees are currently structured, the
Broker pays for the two sets of
transactions (as opposed to the one set
paid by the Dealer Account). FICC is
proposing to recognize this difference
between the Broker Accounts and the
Dealer Accounts by charging the Broker
Accounts less with respect to the trade
submission and netting fees. This
approach is consistent with the way in
which GSD currently applies its Repo
Transaction Processing Fee which is
contained in Section III.E of the GSD
Fee Structure; specifically, GSD charges
Repo Brokers less than other Netting
Members. FICC’s pass-through of fees
imposed on FICC by third parties will
affect all Members based on their
activity.
E. Describe Any Significant Problems
Known to the Self-Regulatory
Organization That Persons Affected Are
Likely To Have in Complying With the
Proposed Rule Change
FICC is not aware of any significant
problems that the affected Members are
likely to have in complying with the
proposed rule changes.
F. The Proposed Rule Changes Are
Described Below
(1) Trade Submission
Currently, the comparison fees for
trade submissions are structured to
reflect a uniform fee structure based on
a Member’s total monthly volume. FICC
is proposing to change this approach to
a structure whereby each incremental
number of trades is charged a different
price based on tiers with declining
marginal rates. In addition, GSD is
proposing to establish different fees for
Dealer Accounts and Broker Accounts.
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(2) Locked-In Trade Data
In connection with the charge to
Members for data received by FICC from
a Locked-In Trade Source,7 FICC is
proposing to eliminate the existing fee
for the processing and reporting of this
data and instead charge Members in
accordance with the proposed trade
submission schedule in the GSD Rules.
In connection with the charge to nonInter-Dealer Broker Netting Members 8
for FICC’s processing and reporting of
GCF Repo® Transactions,9 FICC is
proposing to increase the amount of the
onetime recording fee.
(3) Netting Fee
(a) For each side of a Compared
Trade, Start Leg of a Repo Transaction,
Close Leg of a Repo Transaction, Fail
Deliver Obligation and Fail Receive
Obligation, other than a GCF Repo
Transaction, that is netted, the fee
structure is currently based on a
Member’s total monthly number of
sides.10 FICC is proposing to change this
7 Pursuant to the GSD Rules, the term ‘‘LockedIn Trade Source’’ means a source of data on lockedin trades that the Corporation has so designated,
subject to such terms and conditions as to which
the Locked-In Trade Source and the Corporation
may agree. GSD Rule 1, Definitions.
8 Pursuant to the GSD Rules, the term ‘‘InterDealer Broker Netting Member’’ has the meaning set
forth in Section 2 of GSD Rule 2A. GSD Rule 1,
Definitions.
9 Pursuant to the GSD Rules, the term ‘‘GCF Repo
Transaction’’ means a Repo Transaction involving
Generic CUSIP Numbers the data on which are
submitted to the Corporation on a locked-in-trade
basis pursuant to the provisions of GSD Rule 6C,
for netting and settlement by the Corporation
pursuant to the provisions of GSD Rule 20. GSD
Rule 1, Definitions.
10 Pursuant to the GSD Rules, the terms used in
the referenced clause are defined below. GSD Rule
1, Definitions.
The term ‘‘Compared Trade’’ means a trade,
including a Repo Transaction, the data on which
has been compared or deemed compared in the
Comparison System pursuant to the GSD Rules, as
the result of any one of the following methods: (1)
Bilateral comparison, which requires the matching
by the Corporation of data submitted by two
Members, (2) demand comparison, which requires
that data to be submitted to the Corporation by a
demand trade source, or (3) locked-in comparison,
which requires the data to be submitted to the
Corporation by a locked-in trade source.
The term ‘‘Close Leg’’ means, as regards a Repo
Transaction other than a GCF Repo Transaction, the
concluding settlement aspects of the transaction,
involving the retransfer of the underlying eligible
netting securities by the Netting Member that is, or
is submitting data on behalf of, the funds lender (if
netting eligible, through satisfaction of the
applicable Deliver Obligation generated by the
Corporation) and the taking back of such eligible
securities by the Netting Member that is, or is
submitting data on behalf of, the funds borrower (if
netting eligible, through satisfaction of the
applicable Receive Obligation generated by the
Corporation). The term ‘‘Close Leg’’ means, as
regards a GCF Repo Transaction, the concluding
settlement aspects of the transaction, involving the
retransfer of the underlying eligible netting
E:\FR\FM\12JAN1.SGM
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tkelley on DSK3SPTVN1PROD with NOTICES
approach to a structure whereby each
incremental number of sides is charged
a different price based on tiers with
declining marginal rates. In addition,
GSD is proposing to establish different
fees for Dealer Accounts and Broker
Accounts.
(b) For each one million par of a
Compared Trade, Start Leg of a Repo
Transaction, Close Leg of a Repo
Transaction, Fail Deliver Obligation and
Fail Receive Obligation, other than a
GCF Repo Transaction, the existing fee
will be applicable to Broker Accounts
and a new fee will be established for
Dealer Accounts.
(c) For each one million par of Deliver
Obligation 11 and Receive Obligation 12
securities by the Netting Member that is in the GCF
net funds lender position and the taking back of
such eligible netting securities by the Netting
Member that is in the GCF net funds borrower
position.
The term ‘‘Fail Deliver Obligation’’ means a
Deliver Obligation with respect to a fail net short
position.
The term ‘‘Fail Receive Obligation’’ means a
Receive Obligation with respect to a fail net long
position.
The term ‘‘Repo Transaction’’ means: (1) An
agreement of a party to transfer eligible securities
to another party in exchange for the receipt of cash,
and the simultaneous agreement of the former party
to later take back the same eligible securities (or any
subsequently substituted eligible securities) from
the latter party in exchange for the payment of cash,
or (2) an agreement of a party to take in eligible
securities from another party in exchange for the
payment of cash, and the simultaneous agreement
of the former party to later transfer back the same
eligible securities (or any subsequently substituted
eligible securities) to the latter party in exchange for
the receipt of cash, as the context may indicate, the
data on which have been submitted to the
Corporation pursuant to the GSD Rules. A ‘‘Repo
Transaction’’ includes a GCF Repo Transaction,
unless the context indicates otherwise.
The term ‘‘Start Leg’’ means, as regards a Repo
Transaction other than a GCF Repo Transaction, the
initial settlement aspects of the Transaction,
involving the transfer of the underlying eligible
netting securities by the Netting Member that is, or
is submitting data on behalf of, the funds borrower
(through satisfaction of the applicable Deliver
Obligation generated by the Corporation) and the
taking in of such eligible securities by the Netting
Member that is, or is submitting data on behalf of,
the funds lender (if netting eligible, through
satisfaction of the applicable Receive Obligation
generated by the Corporation). The term ‘‘Start Leg’’
means, as regards a GCF Repo Transaction, the
initial settlement aspects of the Transaction,
involving the transfer of the underlying eligible
netting securities by the Netting Member that is in
the GCF net funds borrower position and the taking
in of such eligible netting securities by the Netting
Member that is in the GCF net funds lender
position.
11 The term ‘‘Deliver Obligation’’ means a Netting
Member’s obligation to deliver eligible netting
securities to the Corporation at the appropriate
settlement value either in satisfaction of all or a part
of a Net Short Position or to implement a collateral
substitution in connection with a Repo Transaction
with a right of substitution. GSD Rule 1,
Definitions.
12 The term ‘‘Receive Obligation’’ means a Netting
Member’s obligation to receive eligible netting
securities from the Corporation at the appropriate
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20:14 Jan 11, 2016
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created as a result of the netting process,
fees will be increased.
(4) Auction Takedown Process
In connection with the auction
takedown Service, FICC is proposing to
eliminate the existing fee for locked-in
trades and charge Members in
accordance with the proposed trade
submission schedule in the GSD Rules.
(5) Clearance Charges
Currently, FICC charges a flat
standard charge of $2.35, a portion of
which is used to cover the settlement
fees of its Deliver Obligations and
Receive Obligations. These fees consist
of the clearing banks’ fees and the
Federal Reserve’s Fedwire® fees that are
incurred by FICC for the services that it
provides to Members related to settling
obligations at the clearing banks. At the
time of this rule filing, the fees are as
follows:
1. Fees for the settlement of each
Receive Obligation and each Deliver
Obligation in the actual amount charged
by the applicable clearing bank.
2. Fedwire® fee for the settlement of
each treasury security in an amount of
$0.92 and for the settlement of each
agency security in an amount of $0.65.
FICC is proposing to reduce the
amount of this flat charge, which is
currently $2.35 and bill Netting
Members as a separate item on their
billing statement for the applicable
clearing bank fees and Fedwire® fees
listed above. In addition, FICC will
pass-through to Netting Members, new
fees that will be imposed by the clearing
banks on FICC as well as other existing
fees that the clearing banks have
imposed on FICC but which FICC has
not historically passed through to its
Netting Members.
These fees are as follows:
1. The Bank of New York Mellon
(‘‘BNY’’) fee of 1 basis point (1bp) per
annum on each GCF Repo Deliver
Obligation that FICC creates from its
BNY account, inclusive of inter-bank.13
This fee will be allocated to Dealer
Accounts at BNY and to Dealer
Accounts at JPMorgan Chase (‘‘JPM’’), as
follows:
a. For Dealer Accounts at BNY, a passthrough fee is calculated as 1bp per
annum on a dollar amount of such
Netting Member’s 14 GCF Repo Receive
settlement value either in satisfaction of all or a part
of a Net Long Position or to implement a collateral
substitution in connection with a Repo Transaction
with a right of substitution. GSD Rule 1,
Definitions.
13 This is a new fee that BNY intends to charge
as of January 1, 2016.
14 The term ‘‘Netting Member’’ means a Member
that is a Member of the Comparison System and the
Netting System. GSD Rule 1, Definitions.
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Obligation from FICC in each Generic
CUSIP Number.15
b. For Dealer Accounts at JPM, a passthrough charge is calculated as 1bp per
annum on a prorated dollar amount of
FICC’s interbank GCF Repo Deliver
Obligation from BNY to JPM in each
Generic CUSIP Number. The proration
is calculated as follows:
(Dollar amount of such Netting
Member’s GCF Repo Receive
Obligation in a given Generic
CUSIP Number at JPM)
llllllllllllllllll
l
(Aggregate dollar amount of all GCF
Repo Receive Obligations in a given
Generic CUSIP Number for all
Netting Members at JPM)
2. BNY fees for daylight over drafts for
FICC’s interbank GCF Repo Deliver
Obligations.
This pass-through fee will be charged
to Dealer Accounts at BNY and will be
calculated on a percentage of the total
of all such costs incurred by FICC. This
percentage is calculated on a monthly
basis as follows:
(Total dollar value of GCF Repo Deliver
Obligations of such Dealer Account
at BNY)
llllllllllllllllll
l
(Total dollar value of GCF Repo Deliver
Obligations of all Dealer Accounts
at BNY)
3. BNY fees for daylight over drafts on
securities settlement obligations. This
pass-through fee will be charged to
Dealer Accounts at BNY and will be
calculated on a percentage of the total
of all such costs incurred by FICC. This
percentage is calculated on a monthly
basis as follows:
(Total dollar value of Deliver and
Receive Obligations of each Netting
Member at BNY)
llllllllllllllllll
l
(Total dollar value of Deliver and
Receive Obligations in all Dealer
Accounts at BNY)
FICC will inform Members via
Important Notice if there are any
changes to the referenced fees and
charges imposed by the clearing banks
and/or Fedwire.
15 The term ‘‘Generic CUSIP Number’’ means a
Committee on Uniform Securities Identification
Procedures identifying number established for a
category of securities, as opposed to a specific
security. The Corporation shall use separate Generic
CUSIP Numbers for general collateral Repo
Transactions and GCF Repo Transactions. GSD Rule
1, Definitions.
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Federal Register / Vol. 81, No. 7 / Tuesday, January 12, 2016 / Notices
(6) Repo Transaction Processing Fee
FICC is proposing to increase certain
fees for its processing of Repo
Transactions.
The above-referenced modifications to
GSD’s fees are noted below.
TRADE SUBMISSION SCHEDULE
Current breakpoint schedule
(Charge is applied to all submissions if breakpoint is reached)
Current charge
per
submission for
all netting
members
Per submission for total monthly submissions
up to 49,999.
Per submission for total monthly submissions
between 50,000 to 99,999.
$0.250
Per submission for total monthly submissions
between 100,000 to 249,999.
0.150
Per submission for total monthly submissions
between 250,000 to 399,999.
0.125
Per submission for total monthly submissions
between 400,000 to 499,999.
0.100
Per submission for total monthly submissions
between 500,000 and 999,999.
0.085
Per submission for total monthly submissions
1M and greater.
0.085
0.200
Proposed fee per submission
Proposed tiered schedule
(Charge is applied to all submissions
within tier)
Dealer
account
Per submission for the initial 49,999 submissions per month.
Per submission for those submissions between 50,000 to 99,999 submissions per
month.
Per submission for those submissions between 100,000 to 249,999 submissions
per month.
Per submission for those submissions between 250,000 to 399,999 submissions
per month.
Per submission for those submissions between 400,000 to 499,999 submissions
per month.
Per submission for those submissions between 500,000 to 999,999 submissions
per month.
Per submission for those submissions at 1M
or greater submissions per month.
Broker
account
$0.270
$0.250
0.190
0.150
0.140
0.100
0.100
0.075
0.080
0.035
0.010
0.025
0.010
0.010
LOCKED–IN TRADE DATA
Fee description
Current fee
Non-GCF Repo trade processing from Locked-In Trade Data
Source.
GCF Repo trade comparison for non-Inter Dealer Broker Netting Members.
$0.16/M
0.05/M
Proposed fee
In accordance with the trade submission fee schedule.
$0.07/M.
NETTING FEES SCHEDULE
Current breakpoint schedule
(Charge is applied to all sides if breakpoint is
reached)
Current charge
per side for all
netting
members
Per side for total monthly sides up to 49,999
tkelley on DSK3SPTVN1PROD with NOTICES
Per side for total monthly
50,000 to 99,999.
Per side for total monthly
100,000 to 249,999.
Per side for total monthly
250,000 to 399,999.
Per side for total monthly
400,000 to 499,999.
Per side for total monthly
500,000 and 999,999.
Per side for total monthly
greater.
$0.150
sides between
0.125
sides between
0.125
sides between
0.100
sides between
0.050
sides between
0.050
sides 1M and
0.035
Current fee
Into-the-net par per month—Dealer Account ........................
Clearance (out-of-the-net) par per month .............................
Auction takedown processing ...............................................
Clearance (out-of-the-net) items per month ..........................
Clearance (non-GSD) items per month ................................
DVP Repo Transaction Processing Fees (cost of carry):
$0.015/M ...................
0.17/M .......................
0.50/50M ...................
2.35/obligation ...........
2.35/obligation ...........
....................................
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Dealer
account
Per side for the initial 49,999 sides per
month.
Per side for those sides between 50,000 to
99,999 sides per month.
Per side for those sides between 100,000 to
249,999 sides per month.
Per side for those sides between 250,000 to
399,999 sides per month.
Per side for those sides between 400,000 to
499,999 sides per month.
Per side for those sides between 500,000 to
999,999 sides per month.
Per side for those sides at 1M or greater
sides per month.
Fee description
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Proposed fee per side
Proposed tiered schedule
(Charge is applied to all sides
within tier)
Fmt 4703
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Broker
account
$0.170
$0.150
0.120
0.110
0.100
0.090
0.070
0.040
0.040
0.025
0.030
0.010
0.010
0.010
Proposed fee
$0.016/M
0.175/M
In accordance with the trade submission fee schedule.
0.25/obligation
0.25/obligation
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Fee description
Current fee
Fee for gross dollar amount ...........................................
Other Netting Members and Repo Brokers with respect to
their non-brokered transactions.
Fee for net dollar amount ......................................................
GCF Repo Processing Fees (cost of carry):
Fee for gross dollar amount ...........................................
Netting Members that are not Repo Brokers .................
Fee for net dollar amount ..............................................
....................................
0.025bps ....................
2. Statutory Basis
FICC believes that the proposed fees
are reasonable because the fees are
correlated to each Member’s use of
GSD’s services and will allow FICC to
recover the cost of providing its services
to Members. In addition, the proposed
change will allow FICC to further
recover the cost of providing its services
to its Members by passing through
certain third-party fees that FICC is
incurring and/or will be incurring to
provide its services to its Members.
Therefore, FICC believes the proposed
rule change is consistent with the
requirements of the Act, as amended
and the rules and regulations
thereunder applicable to FICC, in
particular section 17A(b)(3)(D) of the
Act,16 which requires that the GSD
Rules provide for the equitable
allocation of reasonable dues, fees, and
other charges among its Members that
use those services.
tkelley on DSK3SPTVN1PROD with NOTICES
(B) Clearing Agency’s Statement on
Burden on Competition
The proposed filing could have an
impact on competition based on the fact
that fees will increase for certain
services, but because of the following
reasons, FICC believes that any burden
on competition would be necessary and
appropriate in furtherance of the
purposes of the Act. These reasons are
as follows: The proposed change
modifies the fees for existing services
provided by GSD in order to meet GSD’s
budgeted expenses and allow GSD to
achieve and maintain its operating
margin and recover the cost of providing
its services. The proposed change also
allows FICC to recover the cost of
providing its services to Members by
passing through certain third-party fees
that FICC is incurring and/or will be
incurring to provide its services to its
Members. Finally, the proposed change
also establishes different comparison
and netting fee structures for Brokers
Accounts and Dealer Accounts for the
reasons more fully described above.
U.S.C. 78q–1(b)(3)(D).
VerDate Sep<11>2014
20:14 Jan 11, 2016
0.08bps
0.04bps
0.08bps
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)(ii) 17 of the Act and Rule
19b–4(f)(2) 18 thereunder. 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–
FICC–2015–005 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–FICC–2015–005. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
18 17
Jkt 238001
0.060bps ....................
....................................
....................................
0.025bps ....................
0.060bps ....................
0.04bps
(C) Clearing Agency’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. FICC will notify
the Commission of any written
comments received by FICC.
17 15
16 5
Proposed fee
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
Frm 00069
Fmt 4703
Sfmt 4703
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 the
filing also will be available for
inspection and copying at the principal
office of FICC and on DTCC’s Web site
(https://dtcc.com/legal/sec-rulefilings.aspx). 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–FICC–2015–005 and should
be submitted on or before February 2,
2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–00335 Filed 1–11–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
19 17
E:\FR\FM\12JAN1.SGM
CFR 200.30–3(a)(12).
12JAN1
]]>Agencies
[Federal Register Volume 81, Number 7 (Tuesday, January 12, 2016)]
[Notices]
[Pages 1450-1454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00335]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76840; File No. SR-FICC-2015-005]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify the Government Securities Division Fee Schedule
January 6, 2016.
Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') and Rule 19b-4 \2\ thereunder, notice is hereby given
that on December 30, 2015, the Fixed Income Clearing Corporation
(``FICC'') 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 FICC. FICC filed the
proposed rule change pursuant to section 19(b)(3)(A) \3\ of the Act and
Rule 19b-4(f)(2) \4\ thereunder. The proposed rule change 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\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change consists of amendments to the Fee Schedule
in the Government Securities Division (``GSD'') Rulebook \5\ (the ``GSD
Rules''). The fee changes will be effective as of January 1, 2016.
---------------------------------------------------------------------------
\5\ The GSD Rulebook is available at https://www.dtcc.com/legal/rules-and-procedures.
---------------------------------------------------------------------------
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections A, B
and C below, of the most significant aspects of such statements.
[[Page 1451]]
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Purpose
FICC is modifying the GSD fee structure to (1) change the fees for
the existing services that GSD provides to its Members \6\ and (2)
permit the pass-through of new and existing fees imposed on FICC by its
clearing banks and the Federal Reserve's Fedwire Service
(``Fedwire[supreg]'') (collectively, ``third party'') with respect to
the services that FICC provides to its Members.
---------------------------------------------------------------------------
\6\ The term ``Member'' means a comparison-only member or a
Netting Member. The term ``Member'' shall include a sponsoring
member in its capacity as a sponsoring member and a sponsored
member, each to the extent specified in Rule 3A. GSD Rule 1,
Definitions.
---------------------------------------------------------------------------
A. Describe the Reasons for Adopting the Proposed Rule Change
Based on the revenue that GSD generated in 2015, GSD requires fee
modifications in order to meet the budgeted expenses associated with
providing its services to Members. Thus, FICC is adopting the proposed
rule changes in order to ensure that FICC can achieve and maintain
GSD's operating margin.
B. Describe Any Problems the Proposed Rule Change Is Intended To
Address
GSD's ability to achieve its operating margin has been negatively
impacted by (i) a decline in the dollar values of transactions; (ii)
increased infrastructure costs; (iii) increased risk management costs
and (iv) increased third party fees, which GSD has historically
absorbed. In addition, GSD also anticipates that the clearing banks
will impose new fees for the services that FICC provides to its
Members.
C. Describe the Manner in Which the Proposed Rule Change Will Operate
To Resolve Those Problems
The proposed fee modifications to GSD's services and the pass
through of existing and new third party fees are expected to aide
FICC's ability to achieve and maintain its operating margin because all
of the fees will be aligned to FICC's cost of delivering its services
to Members.
D. Describe the Manner in Which the Proposed Rule Change Will Affect
Various Persons (e.g., Brokers, Dealers, Issuers, and Investors)
The proposed rule changes will establish different trade submission
and netting fee structures for Broker Accounts and Dealer Accounts
because Members who utilize each of these accounts represent two
different types of functions that are performed in the market served by
the GSD. The Broker Accounts provide the marketplace with the blind-
brokered screens through which Dealer Accounts are matched as
counterparties (on a blind basis) to the transactions that are
submitted to GSD. The Broker Accounts submit two sets of transaction
details for every one set that the Dealer Account submits; for example,
if Broker A matches Dealer A and Dealer B in a transaction to be
submitted to the GSD, each Dealer will submit one transaction as
between the Dealer Account and the Broker Account. However, Broker A
will submit two transactions, one between the Broker and Dealer A and
one between the Broker and Dealer B. The Broker Account will net out
for purposes of GSD's processing of the transaction. However, as the
trade submission and netting fees are currently structured, the Broker
pays for the two sets of transactions (as opposed to the one set paid
by the Dealer Account). FICC is proposing to recognize this difference
between the Broker Accounts and the Dealer Accounts by charging the
Broker Accounts less with respect to the trade submission and netting
fees. This approach is consistent with the way in which GSD currently
applies its Repo Transaction Processing Fee which is contained in
Section III.E of the GSD Fee Structure; specifically, GSD charges Repo
Brokers less than other Netting Members. FICC's pass-through of fees
imposed on FICC by third parties will affect all Members based on their
activity.
E. Describe Any Significant Problems Known to the Self-Regulatory
Organization That Persons Affected Are Likely To Have in Complying With
the Proposed Rule Change
FICC is not aware of any significant problems that the affected
Members are likely to have in complying with the proposed rule changes.
F. The Proposed Rule Changes Are Described Below
(1) Trade Submission
Currently, the comparison fees for trade submissions are structured
to reflect a uniform fee structure based on a Member's total monthly
volume. FICC is proposing to change this approach to a structure
whereby each incremental number of trades is charged a different price
based on tiers with declining marginal rates. In addition, GSD is
proposing to establish different fees for Dealer Accounts and Broker
Accounts.
(2) Locked-In Trade Data
In connection with the charge to Members for data received by FICC
from a Locked-In Trade Source,\7\ FICC is proposing to eliminate the
existing fee for the processing and reporting of this data and instead
charge Members in accordance with the proposed trade submission
schedule in the GSD Rules.
---------------------------------------------------------------------------
\7\ Pursuant to the GSD Rules, the term ``Locked-In Trade
Source'' means a source of data on locked-in trades that the
Corporation has so designated, subject to such terms and conditions
as to which the Locked-In Trade Source and the Corporation may
agree. GSD Rule 1, Definitions.
---------------------------------------------------------------------------
In connection with the charge to non-Inter-Dealer Broker Netting
Members \8\ for FICC's processing and reporting of GCF Repo[supreg]
Transactions,\9\ FICC is proposing to increase the amount of the
onetime recording fee.
---------------------------------------------------------------------------
\8\ Pursuant to the GSD Rules, the term ``Inter-Dealer Broker
Netting Member'' has the meaning set forth in Section 2 of GSD Rule
2A. GSD Rule 1, Definitions.
\9\ Pursuant to the GSD Rules, the term ``GCF Repo Transaction''
means a Repo Transaction involving Generic CUSIP Numbers the data on
which are submitted to the Corporation on a locked-in-trade basis
pursuant to the provisions of GSD Rule 6C, for netting and
settlement by the Corporation pursuant to the provisions of GSD Rule
20. GSD Rule 1, Definitions.
---------------------------------------------------------------------------
(3) Netting Fee
(a) For each side of a Compared Trade, Start Leg of a Repo
Transaction, Close Leg of a Repo Transaction, Fail Deliver Obligation
and Fail Receive Obligation, other than a GCF Repo Transaction, that is
netted, the fee structure is currently based on a Member's total
monthly number of sides.\10\ FICC is proposing to change this
[[Page 1452]]
approach to a structure whereby each incremental number of sides is
charged a different price based on tiers with declining marginal rates.
In addition, GSD is proposing to establish different fees for Dealer
Accounts and Broker Accounts.
---------------------------------------------------------------------------
\10\ Pursuant to the GSD Rules, the terms used in the referenced
clause are defined below. GSD Rule 1, Definitions.
The term ``Compared Trade'' means a trade, including a Repo
Transaction, the data on which has been compared or deemed compared
in the Comparison System pursuant to the GSD Rules, as the result of
any one of the following methods: (1) Bilateral comparison, which
requires the matching by the Corporation of data submitted by two
Members, (2) demand comparison, which requires that data to be
submitted to the Corporation by a demand trade source, or (3)
locked-in comparison, which requires the data to be submitted to the
Corporation by a locked-in trade source.
The term ``Close Leg'' means, as regards a Repo Transaction
other than a GCF Repo Transaction, the concluding settlement aspects
of the transaction, involving the retransfer of the underlying
eligible netting securities by the Netting Member that is, or is
submitting data on behalf of, the funds lender (if netting eligible,
through satisfaction of the applicable Deliver Obligation generated
by the Corporation) and the taking back of such eligible securities
by the Netting Member that is, or is submitting data on behalf of,
the funds borrower (if netting eligible, through satisfaction of the
applicable Receive Obligation generated by the Corporation). The
term ``Close Leg'' means, as regards a GCF Repo Transaction, the
concluding settlement aspects of the transaction, involving the
retransfer of the underlying eligible netting securities by the
Netting Member that is in the GCF net funds lender position and the
taking back of such eligible netting securities by the Netting
Member that is in the GCF net funds borrower position.
The term ``Fail Deliver Obligation'' means a Deliver Obligation
with respect to a fail net short position.
The term ``Fail Receive Obligation'' means a Receive Obligation
with respect to a fail net long position.
The term ``Repo Transaction'' means: (1) An agreement of a party
to transfer eligible securities to another party in exchange for the
receipt of cash, and the simultaneous agreement of the former party
to later take back the same eligible securities (or any subsequently
substituted eligible securities) from the latter party in exchange
for the payment of cash, or (2) an agreement of a party to take in
eligible securities from another party in exchange for the payment
of cash, and the simultaneous agreement of the former party to later
transfer back the same eligible securities (or any subsequently
substituted eligible securities) to the latter party in exchange for
the receipt of cash, as the context may indicate, the data on which
have been submitted to the Corporation pursuant to the GSD Rules. A
``Repo Transaction'' includes a GCF Repo Transaction, unless the
context indicates otherwise.
The term ``Start Leg'' means, as regards a Repo Transaction
other than a GCF Repo Transaction, the initial settlement aspects of
the Transaction, involving the transfer of the underlying eligible
netting securities by the Netting Member that is, or is submitting
data on behalf of, the funds borrower (through satisfaction of the
applicable Deliver Obligation generated by the Corporation) and the
taking in of such eligible securities by the Netting Member that is,
or is submitting data on behalf of, the funds lender (if netting
eligible, through satisfaction of the applicable Receive Obligation
generated by the Corporation). The term ``Start Leg'' means, as
regards a GCF Repo Transaction, the initial settlement aspects of
the Transaction, involving the transfer of the underlying eligible
netting securities by the Netting Member that is in the GCF net
funds borrower position and the taking in of such eligible netting
securities by the Netting Member that is in the GCF net funds lender
position.
---------------------------------------------------------------------------
(b) For each one million par of a Compared Trade, Start Leg of a
Repo Transaction, Close Leg of a Repo Transaction, Fail Deliver
Obligation and Fail Receive Obligation, other than a GCF Repo
Transaction, the existing fee will be applicable to Broker Accounts and
a new fee will be established for Dealer Accounts.
(c) For each one million par of Deliver Obligation \11\ and Receive
Obligation \12\ created as a result of the netting process, fees will
be increased.
---------------------------------------------------------------------------
\11\ The term ``Deliver Obligation'' means a Netting Member's
obligation to deliver eligible netting securities to the Corporation
at the appropriate settlement value either in satisfaction of all or
a part of a Net Short Position or to implement a collateral
substitution in connection with a Repo Transaction with a right of
substitution. GSD Rule 1, Definitions.
\12\ The term ``Receive Obligation'' means a Netting Member's
obligation to receive eligible netting securities from the
Corporation at the appropriate settlement value either in
satisfaction of all or a part of a Net Long Position or to implement
a collateral substitution in connection with a Repo Transaction with
a right of substitution. GSD Rule 1, Definitions.
---------------------------------------------------------------------------
(4) Auction Takedown Process
In connection with the auction takedown Service, FICC is proposing
to eliminate the existing fee for locked-in trades and charge Members
in accordance with the proposed trade submission schedule in the GSD
Rules.
(5) Clearance Charges
Currently, FICC charges a flat standard charge of $2.35, a portion
of which is used to cover the settlement fees of its Deliver
Obligations and Receive Obligations. These fees consist of the clearing
banks' fees and the Federal Reserve's Fedwire[supreg] fees that are
incurred by FICC for the services that it provides to Members related
to settling obligations at the clearing banks. At the time of this rule
filing, the fees are as follows:
1. Fees for the settlement of each Receive Obligation and each
Deliver Obligation in the actual amount charged by the applicable
clearing bank.
2. Fedwire[supreg] fee for the settlement of each treasury security
in an amount of $0.92 and for the settlement of each agency security in
an amount of $0.65.
FICC is proposing to reduce the amount of this flat charge, which
is currently $2.35 and bill Netting Members as a separate item on their
billing statement for the applicable clearing bank fees and
Fedwire[supreg] fees listed above. In addition, FICC will pass-through
to Netting Members, new fees that will be imposed by the clearing banks
on FICC as well as other existing fees that the clearing banks have
imposed on FICC but which FICC has not historically passed through to
its Netting Members.
These fees are as follows:
1. The Bank of New York Mellon (``BNY'') fee of 1 basis point (1bp)
per annum on each GCF Repo Deliver Obligation that FICC creates from
its BNY account, inclusive of inter-bank.\13\
---------------------------------------------------------------------------
\13\ This is a new fee that BNY intends to charge as of January
1, 2016.
---------------------------------------------------------------------------
This fee will be allocated to Dealer Accounts at BNY and to Dealer
Accounts at JPMorgan Chase (``JPM''), as follows:
a. For Dealer Accounts at BNY, a pass-through fee is calculated as
1bp per annum on a dollar amount of such Netting Member's \14\ GCF Repo
Receive Obligation from FICC in each Generic CUSIP Number.\15\
---------------------------------------------------------------------------
\14\ The term ``Netting Member'' means a Member that is a Member
of the Comparison System and the Netting System. GSD Rule 1,
Definitions.
\15\ The term ``Generic CUSIP Number'' means a Committee on
Uniform Securities Identification Procedures identifying number
established for a category of securities, as opposed to a specific
security. The Corporation shall use separate Generic CUSIP Numbers
for general collateral Repo Transactions and GCF Repo Transactions.
GSD Rule 1, Definitions.
---------------------------------------------------------------------------
b. For Dealer Accounts at JPM, a pass-through charge is calculated
as 1bp per annum on a prorated dollar amount of FICC's interbank GCF
Repo Deliver Obligation from BNY to JPM in each Generic CUSIP Number.
The proration is calculated as follows:
(Dollar amount of such Netting Member's GCF Repo Receive Obligation in
a given Generic CUSIP Number at JPM)
-----------------------------------------------------------------------
(Aggregate dollar amount of all GCF Repo Receive Obligations in a given
Generic CUSIP Number for all Netting Members at JPM)
2. BNY fees for daylight over drafts for FICC's interbank GCF Repo
Deliver Obligations.
This pass-through fee will be charged to Dealer Accounts at BNY and
will be calculated on a percentage of the total of all such costs
incurred by FICC. This percentage is calculated on a monthly basis as
follows:
(Total dollar value of GCF Repo Deliver Obligations of such Dealer
Account at BNY)
-----------------------------------------------------------------------
(Total dollar value of GCF Repo Deliver Obligations of all Dealer
Accounts at BNY)
3. BNY fees for daylight over drafts on securities settlement
obligations. This pass-through fee will be charged to Dealer Accounts
at BNY and will be calculated on a percentage of the total of all such
costs incurred by FICC. This percentage is calculated on a monthly
basis as follows:
(Total dollar value of Deliver and Receive Obligations of each Netting
Member at BNY)
-----------------------------------------------------------------------
(Total dollar value of Deliver and Receive Obligations in all Dealer
Accounts at BNY)
FICC will inform Members via Important Notice if there are any
changes to the referenced fees and charges imposed by the clearing
banks and/or Fedwire.
[[Page 1453]]
(6) Repo Transaction Processing Fee
FICC is proposing to increase certain fees for its processing of
Repo Transactions.
The above-referenced modifications to GSD's fees are noted below.
Trade Submission Schedule
----------------------------------------------------------------------------------------------------------------
Current charge Proposed fee per submission
Current breakpoint schedule (Charge per Proposed tiered schedule -------------------------------
is applied to all submissions if submission for (Charge is applied to
breakpoint is reached) all netting all submissions within Dealer Broker
members tier) account account
----------------------------------------------------------------------------------------------------------------
Per submission for total monthly $0.250 Per submission for the $0.270 $0.250
submissions up to 49,999. initial 49,999
submissions per month.
Per submission for total monthly 0.200 Per submission for those 0.190 0.150
submissions between 50,000 to 99,999. submissions between
50,000 to 99,999
submissions per month.
Per submission for total monthly 0.150 Per submission for those 0.140 0.100
submissions between 100,000 to submissions between
249,999. 100,000 to 249,999
submissions per month.
Per submission for total monthly 0.125 Per submission for those 0.100 0.075
submissions between 250,000 to submissions between
399,999. 250,000 to 399,999
submissions per month.
Per submission for total monthly 0.100 Per submission for those 0.080 0.035
submissions between 400,000 to submissions between
499,999. 400,000 to 499,999
submissions per month.
Per submission for total monthly 0.085 Per submission for those 0.010 0.025
submissions between 500,000 and submissions between
999,999. 500,000 to 999,999
submissions per month.
Per submission for total monthly 0.085 Per submission for those 0.010 0.010
submissions 1M and greater. submissions at 1M or
greater submissions per
month.
----------------------------------------------------------------------------------------------------------------
Locked-In Trade Data
------------------------------------------------------------------------
Fee description Current fee Proposed fee
------------------------------------------------------------------------
Non-GCF Repo trade processing from $0.16/M In accordance with
Locked-In Trade Data Source. the trade
submission fee
schedule.
GCF Repo trade comparison for non- 0.05/M $0.07/M.
Inter Dealer Broker Netting
Members.
------------------------------------------------------------------------
Netting Fees Schedule
----------------------------------------------------------------------------------------------------------------
Current charge Proposed fee per side
Current breakpoint schedule (Charge per side for Proposed tiered schedule -------------------------------
is applied to all sides if breakpoint all netting (Charge is applied to Dealer Broker
is reached) members all sides within tier) account account
----------------------------------------------------------------------------------------------------------------
Per side for total monthly sides up to $0.150 Per side for the initial $0.170 $0.150
49,999. 49,999 sides per month.
Per side for total monthly sides 0.125 Per side for those sides 0.120 0.110
between 50,000 to 99,999. between 50,000 to
99,999 sides per month.
Per side for total monthly sides 0.125 Per side for those sides 0.100 0.090
between 100,000 to 249,999. between 100,000 to
249,999 sides per month.
Per side for total monthly sides 0.100 Per side for those sides 0.070 0.040
between 250,000 to 399,999. between 250,000 to
399,999 sides per month.
Per side for total monthly sides 0.050 Per side for those sides 0.040 0.025
between 400,000 to 499,999. between 400,000 to
499,999 sides per month.
Per side for total monthly sides 0.050 Per side for those sides 0.030 0.010
between 500,000 and 999,999. between 500,000 to
999,999 sides per month.
Per side for total monthly sides 1M 0.035 Per side for those sides 0.010 0.010
and greater. at 1M or greater sides
per month.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Fee description Current fee Proposed fee
----------------------------------------------------------------------------------------------------------------
Into-the-net par per month--Dealer $0.015/M............................. $0.016/M
Account.
Clearance (out-of-the-net) par per month 0.17/M............................... 0.175/M
Auction takedown processing............. 0.50/50M............................. In accordance with the trade
submission fee schedule.
Clearance (out-of-the-net) items per 2.35/obligation...................... 0.25/obligation
month.
Clearance (non-GSD) items per month..... 2.35/obligation...................... 0.25/obligation
DVP Repo Transaction Processing Fees ..................................... ...............................
(cost of carry):
[[Page 1454]]
Fee for gross dollar amount......... ..................................... ...............................
Other Netting Members and Repo Brokers 0.025bps............................. 0.04bps
with respect to their non-brokered
transactions.
Fee for net dollar amount............... 0.060bps............................. 0.08bps
GCF Repo Processing Fees (cost of ..................................... ...............................
carry):
Fee for gross dollar amount......... ..................................... ...............................
Netting Members that are not Repo 0.025bps............................. 0.04bps
Brokers.
Fee for net dollar amount........... 0.060bps............................. 0.08bps
----------------------------------------------------------------------------------------------------------------
2. Statutory Basis
FICC believes that the proposed fees are reasonable because the
fees are correlated to each Member's use of GSD's services and will
allow FICC to recover the cost of providing its services to Members. In
addition, the proposed change will allow FICC to further recover the
cost of providing its services to its Members by passing through
certain third-party fees that FICC is incurring and/or will be
incurring to provide its services to its Members. Therefore, FICC
believes the proposed rule change is consistent with the requirements
of the Act, as amended and the rules and regulations thereunder
applicable to FICC, in particular section 17A(b)(3)(D) of the Act,\16\
which requires that the GSD Rules provide for the equitable allocation
of reasonable dues, fees, and other charges among its Members that use
those services.
---------------------------------------------------------------------------
\16\ 5 U.S.C. 78q-1(b)(3)(D).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
The proposed filing could have an impact on competition based on
the fact that fees will increase for certain services, but because of
the following reasons, FICC believes that any burden on competition
would be necessary and appropriate in furtherance of the purposes of
the Act. These reasons are as follows: The proposed change modifies the
fees for existing services provided by GSD in order to meet GSD's
budgeted expenses and allow GSD to achieve and maintain its operating
margin and recover the cost of providing its services. The proposed
change also allows FICC to recover the cost of providing its services
to Members by passing through certain third-party fees that FICC is
incurring and/or will be incurring to provide its services to its
Members. Finally, the proposed change also establishes different
comparison and netting fee structures for Brokers Accounts and Dealer
Accounts for the reasons more fully described above.
(C) Clearing Agency'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. FICC will notify the Commission of any
written comments received by FICC.
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)(ii) \17\ of the Act and Rule 19b-4(f)(2) \18\ thereunder.
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.
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\17\ 15 U.S.C. 78s(b)(3)(A)(ii).
\18\ 17 CFR 240.19b-4(f)(2).
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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-FICC-2015-005 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-FICC-2015-005. 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 the filing also will be available
for inspection and copying at the principal office of FICC and on
DTCC's Web site (https://dtcc.com/legal/sec-rule-filings.aspx). 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-FICC-2015-005 and
should be submitted on or before February 2, 2016.
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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00335 Filed 1-11-16; 8:45 am]
BILLING CODE 8011-01-P
