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 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 http://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 http://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