Self-Regulatory Organizations; National Securities Clearing Corporation; Order Granting Approval of Proposed Rule Change To Accommodate Shorter Standard Settlement Cycle and Make Other Changes, 3030-3032 [2017-00218]
Download as PDF
<![CDATA[
3030
Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices
from radioactive material released in
gaseous effluents, without allowing an
increase in the dose limits to members
of the public in unrestricted areas
specified in 10 CFR 20.1301, Appendix
I to 10 CFR part 50, and 40 CFR 190.
With regard to potential nonradiological impacts, the proposed
action does not have any foreseeable
impacts to land, air quality, or water
resources, including impacts to biota. In
addition, there are also no known
socioeconomic or environmental justice
impacts or impacts to historic and
cultural resources associated with the
proposed action. Therefore, there are no
significant non-radiological
environmental impacts associated with
the proposed action.
Accordingly, the NRC concludes that
there are no significant environmental
impacts associated with the proposed
action.
Environmental Impacts of the
Alternatives to the Proposed Action
As an alternative to the proposed
action, the NRC staff considered denial
of the proposed action (i.e., the ‘‘noaction’’ alternative). Denial of the TS
amendment request would result in no
change in current environmental
impacts. The environmental impacts of
the proposed TS amendment request
and the ‘‘no action’’ alternative are
similar.
Alternative Use of Resources
The action does not involve the use of
any different resources than those
previously considered in the ‘‘Generic
Environmental Impact Statement for
License Renewal of Nuclear Plants
[NUREG–1437], Supplement 52,
Regarding Davis-Besse Nuclear Power
Station, Final Report,’’ Volumes 1 and 2,
dated April 2015 (ADAMS Accession
Nos. ML15112A098 and ML15113A187,
respectively).
pmangrum on DSK3GDR082PROD with NOTICES
Agencies and Persons Consulted
The staff did not enter into
consultation with any other Federal
agency or with the State of Ohio
regarding the environmental impact of
the proposed action.
III. Finding of No Significant Impact
The licensee has requested an
amendment to revise Davis-Besse TS
5.5.3 to provide operational flexibility
by allowing an increase in the
instantaneous concentrations of
radioactive material released in liquid
effluents and an increase in the
instantaneous dose rates from
radioactive material released in gaseous
effluents. The licensee would continue
to maintain the TS and regulatory
VerDate Sep<11>2014
14:59 Jan 09, 2017
Jkt 241001
limitations on the overall level of
effluent control at Davis-Besse,
including limitations on the dose to a
member of the public in an unrestricted
area. Based on the environmental
assessment, the NRC concludes that the
proposed action will not have a
significant effect on the quality of the
human environment. Accordingly, the
NRC has determined not to prepare an
environmental impact statement for the
proposed action.
Dated: January 5, 2017.
Brent J. Fields,
Secretary.
Dated at Rockville, Maryland, this 4th day
of January 2017.
For the Nuclear Regulatory Commission.
Blake A. Purnell,
Project Manager, Plant Licensing Branch III,
Division of Operating Reactor Licensing,
Office of Nuclear Reactor Regulation.
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Order Granting Approval
of Proposed Rule Change To
Accommodate Shorter Standard
Settlement Cycle and Make Other
Changes
[FR Doc. 2017–00263 Filed 1–9–17; 8:45 am]
January 4, 2017.
BILLING CODE 7590–01–P
On November 7, 2016, National
Securities Clearing Corporation NSCC
filed with the Securities and Exchange
Commission (‘‘Commission’’) proposed
rule change SR–NSCC–2016–007,
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 for comment in the Federal
Register on November 25, 2016.3 The
Commission did not receive any
comment letters on the proposed rule
change. For the reasons discussed
below, the Commission is granting
approval of the proposed rule change.
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
Commission will hold a closed meeting
on Thursday, January 12, 2017 at 2 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or her designee, has
certified that, in her opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (a)(5), (a)(7),
(a)(9)(ii) and (a)(10), permit
consideration of the scheduled matter at
the closed meeting.
Commissioner Piwowar, as duty
officer, voted to consider the items
listed for the closed meeting in closed
session.
The subject matter of the closed
meeting will be:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed; please
contact Brent J. Fields from the Office of
the Secretary at (202) 551–5400.
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
[FR Doc. 2017–00376 Filed 1–6–17; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79734; File No. SR–NSCC–
2016–007]
I. Description of the Proposed Rule
Change
The proposed rule change consists of
amendments to NSCC’s Rules &
Procedures (‘‘Rules’’) 4 in order to
ensure, according to NSCC, that the
Rules are consistent with the
anticipated industry-wide move to a
shorter standard settlement cycle for
certain securities 5 from the third
business day after the trade date (‘‘T+3’’)
to the second business day after the
trade date (‘‘T+2’’), as described below.
However, NSCC would not implement
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 79356
(November 18, 2016), 81 FR 85299 (November 25,
2016) (SR–NSCC–2016–007); (‘‘Notice’’).
4 Capitalized terms not defined herein are defined
in the Rules, available at https://dtcc.com/∼/media/
Files/Downloads/legal/rules/nscc_rules.pdf.
5 The financial services industry, in coordination
with its regulators, is planning to shorten the
standard settlement cycle for equities, corporate
and municipal bonds, unit investment trusts and
financial instruments comprised of the foregoing
products traded on the secondary market from T+3
to T+2 (‘‘Shortened Settlement Cycle’’). See
Securities Exchange Act Release No. 78962
(September 28, 2016), 81 FR 69240 (October 5,
2016) (S7–22–16) (Amendment to Securities
Transaction Settlement Cycle).
2 17
E:\FR\FM\10JAN1.SGM
10JAN1
Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices
the proposed rule change until NSCC
files with the Commission a subsequent
proposed rule change, under Rule 19b–
4,6 to establish an effective date for the
proposed change.
While the core functions of NSCC
would continue to operate in the same
way in the Shortened Settlement Cycle,
NSCC has determined that the move to
T+2 would necessitate certain
amendments to the Rules because
currently the Rules are designed to
accommodate a T+3 settlement cycle. In
particular, NSCC has identified and
proposes to change (i) rules that have
timeframes and/or cutoff times that are
tied to the current T+3 standard
settlement cycle, and (ii) rules affected
by process changes relating to the
Shortened Settlement Cycle. In
addition, NSCC also proposes to make a
number of technical changes and
corrections to the Rules.
3. Procedure III (Trade Recording
Service (Interface With Qualified
Clearing Agencies))
A. Rules Tied to the Current T+3
Standard Settlement Cycle
5. Procedure VII (CNS Accounting
Operation)
NSCC proposes changes to the
following Rules because they contain
provisions that are tied to the current
T+3 standard settlement cycle and
would need to be changed to facilitate
the move to Shortened Settlement
Cycle:
In Section B, (i) with regards to the
timing of the comparison or recording of
trades in CNS Securities for inclusion
on the Consolidated Trade Summary,
delete the words ‘‘T+1 up to’’ and (ii)
with regards to the timing of as-of trades
in CNS Securities that are reported on
the Consolidated Trade Summary,
delete references to ‘‘T+2’’ and ‘‘T+3’’
and replace them with ‘‘T+1’’ and
‘‘T+2,’’ respectively.
In Section G.3, with regards to the
time period for determining the rate of
the split for adjustments to Current
Market Price in the case of stock splits,
delete the reference to ‘‘last two days’’
and replace it with ‘‘one day.’’
In Section H.4(b), (i) with regards to
timing related to securities subject to
voluntary reorganizations, delete
references to protect periods of ‘‘two
days,’’ ‘‘three days,’’ and ‘‘greater than
three days’’ and replace them with ‘‘one
day,’’ ‘‘two days,’’ and ‘‘greater than two
days,’’ respectively, and delete
references to ‘‘E+2,’’ ‘‘E+3,’’ and ‘‘E+4’’
and replace them with ‘‘E+1,’’ ‘‘E+2,’’
and ‘‘E+3,’’ respectively; (ii) in the table
listing the time frames for the
processing of securities subject to
voluntary reorganizations with a protect
period, delete the reference to ‘‘two days
or less’’ and replace it with ‘‘one day or
less’’ as well as delete the entries for the
two-day protect period; and (iii) with
regards to the timing for the recording
of ID Net Service eligible transactions
on the Miscellaneous Activity Report,
delete the words ‘‘on the night of T+2.’’
In Section K, with regards to the
timing for advising a Member about its
potential liability with respect to a short
1. Rule 4A (Supplemental Liquidity
Deposits)
In Section 2, delete references to the
‘‘third Settlement Day’’ and replace
them with references to the ‘‘second
Settlement Day’’ in the definition of
‘‘Options Expiration Activity Period.’’
pmangrum on DSK3GDR082PROD with NOTICES
2. Procedure II (Trade Comparison and
Recording Service)
In Section C.1.(p), with regards to
trade input and comparison of debt
securities transactions submitted for
non-standard settlement, delete the
reference to ‘‘T+2 and T+1 settlement’’
and replace it with ‘‘T+1 settlement.’’
In Section D.2.(A)(1)(b), with regards
to municipal and corporate debt
securities, delete the reference to ‘‘two
days’’ and replace it with ‘‘one day.’’
In Section F.2, with regards to the
Settlement Date for the Index Receipts,
delete the reference to ‘‘T+1, T+2 or
T+3’’ and replace it with ‘‘T+1 or T+2.’’
In Section G, with regards to the
eligibility of trades to be settled in the
normal settlement cycle and the cutoff
time for updating the totals reported for
such trades, delete references to ‘‘T+3’’
and replace them with ‘‘T+2.’’
6 17
CFR 240.19b–4.
VerDate Sep<11>2014
14:59 Jan 09, 2017
Jkt 241001
In Section B, with regards to the
Settlement Date for the exercise or
assignment of options at The Options
Clearing Corporation, delete the
reference to ‘‘three days’’ and replace it
with ‘‘two days.’’
4. Procedure V (Balance Order
Accounting Operation)
Frm 00093
Fmt 4703
Sfmt 4703
position or a short Settling Trade
position in a security to which an
exercise privilege attaches, delete the
reference to ‘‘T+2’’ and replace it with
‘‘T+1.’’
6. Procedure XIII (Definitions)
In the definition for ‘‘T,’’ delete the
reference to ‘‘T+3’’ and replace it with
‘‘T+2.’’
7. Procedure XVI (ID Net Service)
In Section C, (i) with regards to the
timing for the netting of trades in
Balance Order Securities, delete
references to ‘‘T and T+1’’ and replace
them with ‘‘T’’ and (ii) with regards to
the listing of the Clearance Cash
Adjustment amount for all Balance
Orders on the Consolidated Trade
Summary, delete the reference to the
Consolidated Trade Summary being
available on T+2.
PO 00000
3031
In Procedure XVI, with regards to the
timing for processing by NSCC of ID Net
Service transactions, delete references to
‘‘the evening of T+2’’ and ‘‘the night of
T+2’’ and replace them with ‘‘the
evening prior to Settlement Date’’ and
‘‘the night prior to Settlement Date,’’
respectively.
8. Addendum A (Fee Structure)
In Section E.1, with regards to the fee
for Index Creation and Redemption
instructions submitted for regular way
settlement, delete the explanatory
parenthetical ‘‘(T+3)’’ and replace it
with ‘‘(T+2).’’
9. Addendum K (Interpretation of the
Board of Directors Application of
Clearing Fund
In Section I.2, with regards to the
endpoint of NSCC’s guaranty for balance
order transactions, delete the reference
to ‘‘T+3’’ and replace it with ‘‘T+2.’’
B. Rules Covering Processes Affected by
a Shortened Settlement Cycle
According to NSCC, it conducted an
in-depth review of its internal
operational processes to identify those
processes that would require changes in
order to accommodate the Shortened
Settlement Cycle. In connection with
that review, NSCC has identified the
following provisions in the Rules that
would need to be updated in connection
with such process changes:
1. Procedure V (Balance Order
Accounting Operation)
In Section B, with regards to trades
that are to be processed on a trade-fortrade basis, clarify that such processing
occurs for trades that are compared or
otherwise entered into the Balance
Order Accounting Operation on SD–1,
‘‘after the cutoff time established by the
Corporation.’’ This is because under the
Shortened Settlement Cycle, trades that
are compared or otherwise entered into
the Balance Order Accounting
Operation on SD–1 would be processed
as multilaterally netted balance orders
when reported on the Consolidated
Trade Summary issued at approximately
12:00 p.m. ET on SD–1. Trades
compared and reported thereafter would
E:\FR\FM\10JAN1.SGM
10JAN1
3032
Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices
continue to be processed on a trade-fortrade basis.
Similarly, in Section B, with regards
to trades that are to be processed on a
trade-for-trade basis, clarify that such
process occurs for securities that are
subject to a voluntary corporate
reorganization which have a trade date
on or before the expiration of the
voluntary corporate reorganization and
which are compared or received ‘‘on
SD–1, after the cutoff time established
by the Corporation’’ and not ‘‘after SD–
1.’’ This shift in cutoff time is because
‘‘as of’’ regular way trades compared
and received prior to 11:30 a.m. on SD–
1 would be processed as multilaterally
netted balance orders when reported on
the Consolidated Trade Summary issued
at approximately 12:00 p.m. ET on SD–
1. ‘‘As of’’ regular way trades compared
and reported thereafter would continue
to be processed on a trade-for-trade
basis.
pmangrum on DSK3GDR082PROD with NOTICES
2. Procedure VII (CNS Accounting
Operation)
In Section D.1, with regards to the
timing of the distribution of Projection
Reports, delete the reference to ‘‘[e]ach
morning’’ and replace it with ‘‘[t]wice a
day’’ because currently NSCC
distributes the Projection Report only
once a day; however, after the
implementation of the Shortened
Settlement Cycle, NSCC would be
distributing the Projection Reports twice
a day to enable Members to view their
updated positions on a more timely
basis.
C. Other Technical Changes and
Corrections
During its review of the Rules in
connection with the Shortened
Settlement Cycle, NSCC has identified
the following technical changes and/or
corrections that it proposes to make to
the Rules in order to ensure that the
Rules remain consistent and accurate:
• In Rule 3, Section 1(c), add a
footnote that identifies the term
‘‘CUSIP’’ as a registered trademark of
the American Bankers Association.
• In Procedure II, Section G, correct a
grammatical error.
• In Procedure VII, Sections B and D,
correct grammatical errors.
• In Procedure X, Section B, delete
the reference to the timeframe for the
delivery of Liability Notices to the
contra party by Members holding the
receive balance orders for warrants,
rights, convertible securities or certain
other securities so the Members would
remain solely subject to the schedules of
the relevant exchanges.
• In Procedure XIII, delete the
incorrect reference to ‘‘Settlement Day’’
VerDate Sep<11>2014
14:59 Jan 09, 2017
Jkt 241001
and replace it with ‘‘Settlement Date’’ in
the definition for ‘‘T’’ to clarify that T+2
would normally be the Settlement Date
after the implementation of the
Shortened Settlement Cycle.
• In Procedure XVI, correct a
grammatical error.
II. Discussion and Commission
Findings
Section 19(b)(2)(C) of the Act 7 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 rules
and regulations thereunder applicable to
such organization. The Commission
believes the proposal is consistent with
Section 17A(b)(3)(F) of the Act.
Section 17A(b)(3)(F) of the Act
requires, in part, that NSCC’s Rules be
designed to promote the prompt and
accurate clearance and settlement of
securities transactions.8 The
Commission believes that the proposed
changes are consistent with the
requirements of Section 17A(b)(3)(F)
because by conforming NSCC’s
timeframes and/or cutoff times to
accommodate the Shortened Settlement
Cycle, the proposal would help ensure
that securities transactions would be
promptly and accurately cleared and
settled within the Shortened Settlement
Cycle. Similarly, the related process
changes proposed are designed to
update NSCC’s operations in order to
facilitate the move to the Shortened
Settlement Cycle and, by extension,
facilitate the prompt and accurate
clearance and settlement of securities
transactions submitted to NSCC for
clearing and settlement. Therefore, the
proposed rule change would help
promote the prompt and accurate
clearance and settlement of securities
transactions, consistent with Section
17A(b)(3)(F) of the Act.9
As the proposed rule change pertains
to technical changes to the Rules, the
Commission finds the technical changes
also consistent with Section
17A(b)(3)(F) of the Act 10 because the
technical updates are designed to make
the Rules more clear, consistent, and
current for Members that rely on them.
Therefore, the proposed technical
changes would help support NSCC’s
prompt and accurate clearance and
settlement of securities transactions
made by Members.
7 15
8 15
U.S.C. 78s(b)(2)(C).
U.S.C. 78q–1(b)(3)(F).
9 Id.
10 Id.
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
III. Conclusion
On the basis of the foregoing, the
Commission finds that the proposals are
consistent with the requirements of the
Act and in particular with the
requirements of Section 17A of the
Act 11 and the rules and regulations
thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that
proposed rule change SR–NSCC–2016–
007 be, and hereby is, approved.12
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–00218 Filed 1–9–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79739; File No. SR–NSCC–
2016–009]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Adjust Fees Related to
Insurance and Retirement Processing
Services
January 4, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
28, 2016, National Securities Clearing
Corporation (‘‘NSCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the clearing agency. NSCC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder.4 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.
11 15
U.S.C. 78q–1.
approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
13 17 CFR 200.30–3(a)(12).
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).
12 In
E:\FR\FM\10JAN1.SGM
10JAN1
]]>Agencies
[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)]
[Notices]
[Pages 3030-3032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00218]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79734; File No. SR-NSCC-2016-007]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Order Granting Approval of Proposed Rule Change To
Accommodate Shorter Standard Settlement Cycle and Make Other Changes
January 4, 2017.
On November 7, 2016, National Securities Clearing Corporation NSCC
filed with the Securities and Exchange Commission (``Commission'')
proposed rule change SR-NSCC-2016-007, 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 for comment in
the Federal Register on November 25, 2016.\3\ The Commission did not
receive any comment letters on the proposed rule change. For the
reasons discussed below, the Commission is granting approval of the
proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 79356 (November 18,
2016), 81 FR 85299 (November 25, 2016) (SR-NSCC-2016-007);
(``Notice'').
---------------------------------------------------------------------------
I. Description of the Proposed Rule Change
The proposed rule change consists of amendments to NSCC's Rules &
Procedures (``Rules'') \4\ in order to ensure, according to NSCC, that
the Rules are consistent with the anticipated industry-wide move to a
shorter standard settlement cycle for certain securities \5\ from the
third business day after the trade date (``T+3'') to the second
business day after the trade date (``T+2''), as described below.
However, NSCC would not implement
[[Page 3031]]
the proposed rule change until NSCC files with the Commission a
subsequent proposed rule change, under Rule 19b-4,\6\ to establish an
effective date for the proposed change.
---------------------------------------------------------------------------
\4\ Capitalized terms not defined herein are defined in the
Rules, available at https://dtcc.com/~/media/Files/Downloads/legal/
rules/nscc_rules.pdf.
\5\ The financial services industry, in coordination with its
regulators, is planning to shorten the standard settlement cycle for
equities, corporate and municipal bonds, unit investment trusts and
financial instruments comprised of the foregoing products traded on
the secondary market from T+3 to T+2 (``Shortened Settlement
Cycle''). See Securities Exchange Act Release No. 78962 (September
28, 2016), 81 FR 69240 (October 5, 2016) (S7-22-16) (Amendment to
Securities Transaction Settlement Cycle).
\6\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
While the core functions of NSCC would continue to operate in the
same way in the Shortened Settlement Cycle, NSCC has determined that
the move to T+2 would necessitate certain amendments to the Rules
because currently the Rules are designed to accommodate a T+3
settlement cycle. In particular, NSCC has identified and proposes to
change (i) rules that have timeframes and/or cutoff times that are tied
to the current T+3 standard settlement cycle, and (ii) rules affected
by process changes relating to the Shortened Settlement Cycle. In
addition, NSCC also proposes to make a number of technical changes and
corrections to the Rules.
A. Rules Tied to the Current T+3 Standard Settlement Cycle
NSCC proposes changes to the following Rules because they contain
provisions that are tied to the current T+3 standard settlement cycle
and would need to be changed to facilitate the move to Shortened
Settlement Cycle:
1. Rule 4A (Supplemental Liquidity Deposits)
In Section 2, delete references to the ``third Settlement Day'' and
replace them with references to the ``second Settlement Day'' in the
definition of ``Options Expiration Activity Period.''
2. Procedure II (Trade Comparison and Recording Service)
In Section C.1.(p), with regards to trade input and comparison of
debt securities transactions submitted for non-standard settlement,
delete the reference to ``T+2 and T+1 settlement'' and replace it with
``T+1 settlement.''
In Section D.2.(A)(1)(b), with regards to municipal and corporate
debt securities, delete the reference to ``two days'' and replace it
with ``one day.''
In Section F.2, with regards to the Settlement Date for the Index
Receipts, delete the reference to ``T+1, T+2 or T+3'' and replace it
with ``T+1 or T+2.''
In Section G, with regards to the eligibility of trades to be
settled in the normal settlement cycle and the cutoff time for updating
the totals reported for such trades, delete references to ``T+3'' and
replace them with ``T+2.''
3. Procedure III (Trade Recording Service (Interface With Qualified
Clearing Agencies))
In Section B, with regards to the Settlement Date for the exercise
or assignment of options at The Options Clearing Corporation, delete
the reference to ``three days'' and replace it with ``two days.''
4. Procedure V (Balance Order Accounting Operation)
In Section C, (i) with regards to the timing for the netting of
trades in Balance Order Securities, delete references to ``T and T+1''
and replace them with ``T'' and (ii) with regards to the listing of the
Clearance Cash Adjustment amount for all Balance Orders on the
Consolidated Trade Summary, delete the reference to the Consolidated
Trade Summary being available on T+2.
5. Procedure VII (CNS Accounting Operation)
In Section B, (i) with regards to the timing of the comparison or
recording of trades in CNS Securities for inclusion on the Consolidated
Trade Summary, delete the words ``T+1 up to'' and (ii) with regards to
the timing of as-of trades in CNS Securities that are reported on the
Consolidated Trade Summary, delete references to ``T+2'' and ``T+3''
and replace them with ``T+1'' and ``T+2,'' respectively.
In Section G.3, with regards to the time period for determining the
rate of the split for adjustments to Current Market Price in the case
of stock splits, delete the reference to ``last two days'' and replace
it with ``one day.''
In Section H.4(b), (i) with regards to timing related to securities
subject to voluntary reorganizations, delete references to protect
periods of ``two days,'' ``three days,'' and ``greater than three
days'' and replace them with ``one day,'' ``two days,'' and ``greater
than two days,'' respectively, and delete references to ``E+2,''
``E+3,'' and ``E+4'' and replace them with ``E+1,'' ``E+2,'' and
``E+3,'' respectively; (ii) in the table listing the time frames for
the processing of securities subject to voluntary reorganizations with
a protect period, delete the reference to ``two days or less'' and
replace it with ``one day or less'' as well as delete the entries for
the two-day protect period; and (iii) with regards to the timing for
the recording of ID Net Service eligible transactions on the
Miscellaneous Activity Report, delete the words ``on the night of
T+2.''
In Section K, with regards to the timing for advising a Member
about its potential liability with respect to a short position or a
short Settling Trade position in a security to which an exercise
privilege attaches, delete the reference to ``T+2'' and replace it with
``T+1.''
6. Procedure XIII (Definitions)
In the definition for ``T,'' delete the reference to ``T+3'' and
replace it with ``T+2.''
7. Procedure XVI (ID Net Service)
In Procedure XVI, with regards to the timing for processing by NSCC
of ID Net Service transactions, delete references to ``the evening of
T+2'' and ``the night of T+2'' and replace them with ``the evening
prior to Settlement Date'' and ``the night prior to Settlement Date,''
respectively.
8. Addendum A (Fee Structure)
In Section E.1, with regards to the fee for Index Creation and
Redemption instructions submitted for regular way settlement, delete
the explanatory parenthetical ``(T+3)'' and replace it with ``(T+2).''
9. Addendum K (Interpretation of the Board of Directors Application of
Clearing Fund
In Section I.2, with regards to the endpoint of NSCC's guaranty for
balance order transactions, delete the reference to ``T+3'' and replace
it with ``T+2.''
B. Rules Covering Processes Affected by a Shortened Settlement Cycle
According to NSCC, it conducted an in-depth review of its internal
operational processes to identify those processes that would require
changes in order to accommodate the Shortened Settlement Cycle. In
connection with that review, NSCC has identified the following
provisions in the Rules that would need to be updated in connection
with such process changes:
1. Procedure V (Balance Order Accounting Operation)
In Section B, with regards to trades that are to be processed on a
trade-for-trade basis, clarify that such processing occurs for trades
that are compared or otherwise entered into the Balance Order
Accounting Operation on SD-1, ``after the cutoff time established by
the Corporation.'' This is because under the Shortened Settlement
Cycle, trades that are compared or otherwise entered into the Balance
Order Accounting Operation on SD-1 would be processed as multilaterally
netted balance orders when reported on the Consolidated Trade Summary
issued at approximately 12:00 p.m. ET on SD-1. Trades compared and
reported thereafter would
[[Page 3032]]
continue to be processed on a trade-for-trade basis.
Similarly, in Section B, with regards to trades that are to be
processed on a trade-for-trade basis, clarify that such process occurs
for securities that are subject to a voluntary corporate reorganization
which have a trade date on or before the expiration of the voluntary
corporate reorganization and which are compared or received ``on SD-1,
after the cutoff time established by the Corporation'' and not ``after
SD-1.'' This shift in cutoff time is because ``as of'' regular way
trades compared and received prior to 11:30 a.m. on SD-1 would be
processed as multilaterally netted balance orders when reported on the
Consolidated Trade Summary issued at approximately 12:00 p.m. ET on SD-
1. ``As of'' regular way trades compared and reported thereafter would
continue to be processed on a trade-for-trade basis.
2. Procedure VII (CNS Accounting Operation)
In Section D.1, with regards to the timing of the distribution of
Projection Reports, delete the reference to ``[e]ach morning'' and
replace it with ``[t]wice a day'' because currently NSCC distributes
the Projection Report only once a day; however, after the
implementation of the Shortened Settlement Cycle, NSCC would be
distributing the Projection Reports twice a day to enable Members to
view their updated positions on a more timely basis.
C. Other Technical Changes and Corrections
During its review of the Rules in connection with the Shortened
Settlement Cycle, NSCC has identified the following technical changes
and/or corrections that it proposes to make to the Rules in order to
ensure that the Rules remain consistent and accurate:
In Rule 3, Section 1(c), add a footnote that identifies
the term ``CUSIP'' as a registered trademark of the American Bankers
Association.
In Procedure II, Section G, correct a grammatical error.
In Procedure VII, Sections B and D, correct grammatical
errors.
In Procedure X, Section B, delete the reference to the
timeframe for the delivery of Liability Notices to the contra party by
Members holding the receive balance orders for warrants, rights,
convertible securities or certain other securities so the Members would
remain solely subject to the schedules of the relevant exchanges.
In Procedure XIII, delete the incorrect reference to
``Settlement Day'' and replace it with ``Settlement Date'' in the
definition for ``T'' to clarify that T+2 would normally be the
Settlement Date after the implementation of the Shortened Settlement
Cycle.
In Procedure XVI, correct a grammatical error.
II. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \7\ 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 rules and regulations thereunder applicable
to such organization. The Commission believes the proposal is
consistent with Section 17A(b)(3)(F) of the Act.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(2)(C).
---------------------------------------------------------------------------
Section 17A(b)(3)(F) of the Act requires, in part, that NSCC's
Rules be designed to promote the prompt and accurate clearance and
settlement of securities transactions.\8\ The Commission believes that
the proposed changes are consistent with the requirements of Section
17A(b)(3)(F) because by conforming NSCC's timeframes and/or cutoff
times to accommodate the Shortened Settlement Cycle, the proposal would
help ensure that securities transactions would be promptly and
accurately cleared and settled within the Shortened Settlement Cycle.
Similarly, the related process changes proposed are designed to update
NSCC's operations in order to facilitate the move to the Shortened
Settlement Cycle and, by extension, facilitate the prompt and accurate
clearance and settlement of securities transactions submitted to NSCC
for clearing and settlement. Therefore, the proposed rule change would
help promote the prompt and accurate clearance and settlement of
securities transactions, consistent with Section 17A(b)(3)(F) of the
Act.\9\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q-1(b)(3)(F).
\9\ Id.
---------------------------------------------------------------------------
As the proposed rule change pertains to technical changes to the
Rules, the Commission finds the technical changes also consistent with
Section 17A(b)(3)(F) of the Act \10\ because the technical updates are
designed to make the Rules more clear, consistent, and current for
Members that rely on them. Therefore, the proposed technical changes
would help support NSCC's prompt and accurate clearance and settlement
of securities transactions made by Members.
---------------------------------------------------------------------------
\10\ Id.
---------------------------------------------------------------------------
III. Conclusion
On the basis of the foregoing, the Commission finds that the
proposals are consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \11\ and the
rules and regulations thereunder.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that proposed rule change SR-NSCC-2016-007 be, and hereby is,
approved.\12\
---------------------------------------------------------------------------
\12\ 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.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-00218 Filed 1-9-17; 8:45 am]
BILLING CODE 8011-01-P
