Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Advance Notice To Expand the Application of the Family-Issued Securities Charge, 37141-37144 [2017-16631]
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Federal Register / Vol. 82, No. 151 / Tuesday, August 8, 2017 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–16639 Filed 8–7–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81286; File No. SR–NSCC–
2017–804]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing of
Advance Notice To Expand the
Application of the Family-Issued
Securities Charge
August 2, 2017.
Pursuant to Section 806(e)(1) of Title
VIII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
entitled the Payment, Clearing, and
Settlement Supervision Act of 2010
(‘‘Clearing Supervision Act’’) 1 and Rule
19b–4(n)(1)(i) under the Securities
Exchange Act of 1934 (‘‘Act’’),2 notice is
hereby given that on July 10, 2017,
National Securities Clearing Corporation
(‘‘NSCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the advance notice SR–NSCC–2017–804
(‘‘Advance Notice’’) as described in
Items I, II and III below, which Items
have been prepared by the clearing
agency.3 The Commission is publishing
this notice to solicit comments on the
Advance Notice from interested
persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Advance
Notice
The Advance Notice consists of
amendments to the NSCC Rules and
Procedures (‘‘Rules’’) 4 in order to (i)
expand the application of NSCC’s
existing family-issued securities charge 5
to apply to all Members, as described
below, and (ii) include a definition of
‘‘Family-Issued Security’’ as a security
32 17
CFR 200.30–3(a)(12).
U.S.C. 5465(e)(1).
2 17 CFR 240.19b–4(n)(1)(i).
3 On July 10, 2017, NSCC filed this Advance
Notice as a proposed rule change (SR–NSCC–2017–
010) with the Commission pursuant to Section
19(b)(1) of the Act, 15 U.S.C. 78s(b)(1), and Rule
19b–4, 17 CFR 240.19b–4. A copy of the proposed
rule change is available at https://www.dtcc.com/
legal/sec-rule-filings.aspx.
4 Terms not defined herein are defined in the
Rules, available at www.dtcc.com/∼/media/Files/
Downloads/legal/rules/nscc_rules.pdf.
5 The family-issued securities charge is currently
described in Procedure XV, Section I.(B)(1) of the
Rules, supra note 4.
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that was issued by a Member or by an
affiliate of that Member, as described in
greater detail below.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Advance Notice
In its filing with the Commission, the
clearing agency included statements
concerning the purpose of and basis for
the Advance Notice and discussed any
comments it received on the Advance
Notice. The text of these statements may
be examined at the places specified in
Item IV below. The clearing agency has
prepared summaries, set forth in
sections A, B, and C below, of the most
significant aspects of such statements.
(A) Clearing Agency’s Statement on
Comments on the Advance Notice
Received From Members, Participants,
or Others
NSCC has not received or solicited
any written comments relating to this
proposal. NSCC will notify the
Commission of any written comments
received by NSCC.
(B) Advance Notice Filed Pursuant to
Section 806(e) of the Payment, Clearing,
and Settlement Supervision Act
Description of Proposed Changes
Currently, in calculating its Members’
required deposits to the Clearing Fund,
NSCC excludes positions in FamilyIssued Securities of certain Members
from its parametric volatility Clearing
Fund component (‘‘VaR Charge’’), and
instead charges an amount calculated by
multiplying the absolute value of the
long, net unsettled positions in that
Member’s Family-Issued Securities by a
percentage that is no less than 40
percent (‘‘FIS Charge’’). The FIS Charge
is currently only applied to Members
that are rated 5, 6, or 7 on the Credit
Risk Rating Matrix (‘‘CRRM’’). The
proposed change would expand the
application of the FIS Charge to the
positions in Family-Issued Securities of
all Members to help NSCC cover the
specific wrong-way risk posed by
Family-Issued Securities, as described
further below.6 Therefore, NSCC is
proposing to amend (i) Rule 1
(Definitions and Descriptions) to add a
definition of ‘‘Family-Issued Security,’’
and (ii) Procedure XV (Clearing Fund
Formula and Other Matters) to expand
the application of the FIS Charge to all
Members by moving the description of
FIS Charge from Section I.(B)(1) to
Sections I.(A)(1) and I.(A)(2) in order to
make clear that the FIS Charge would be
included as a component of the Clearing
6 Members that do not trade in Family-Issued
Securities would not be subject to the FIS Charge.
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37141
Fund formula calculated for all
Members.
As a central counterparty, NSCC
occupies an important role in the
securities settlement system by
interposing itself between
counterparties to financial transactions
and thereby reducing the risk faced by
participants and contributing to global
financial stability. The effectiveness of a
central counterparty’s risk controls and
the adequacy of its financial resources
are critical to achieving these riskreducing goals. In that context, NSCC
continuously reviews its margining
methodology in order to ensure the
reliability of its margining in achieving
the desired coverage. In order to be most
effective, NSCC must take into
consideration the risk characteristics
specific to certain securities when
margining those securities.
Among the various risks that NSCC
considers when evaluating the
effectiveness of its margining
methodology are its counterparty risks
and identification and mitigation of
‘‘wrong-way’’ risk, particularly specific
wrong-way risk, defined as the risk that
an exposure to a counterparty is highly
likely to increase when the
creditworthiness of that counterparty
deteriorates. 7 NSCC has identified an
exposure to specific wrong-way risk
when it acts as central counterparty to
a Member with respect to positions in
Family-Issued Securities. In the event
that a Member with unsettled long
positions in Family-Issued Securities
defaults, NSCC would close out those
positions following a likely drop in the
credit-worthiness of the issuer, possibly
resulting in a loss to NSCC.
In 2015, NSCC proposed to address its
exposure to specific wrong-way risk in
two ways.8 First, NSCC proposed to
apply the FIS Charge to its Members
that are rated a 5, 6, or 7 on the CRRM
(i.e., Members on the Watch List).9
7 See Principles for financial market
infrastructures, issued by the Committee on
Payment and Settlement Systems and the Technical
Committee of the International Organization of
Securities Commissions 47 n.65 (April 2012),
available at https://www.bis.org/publ/cpss101a.pdf.
8 See Securities Exchange Act Release No. 76077
(October 5, 2015), 80 FR 61256 (October 9, 2015),
(SR–NSCC–2015–003) (‘‘FIS Phase 1 Rule Change’’).
9 As part of its ongoing monitoring of its
membership, NSCC utilizes the CRRM to rate its
risk exposures to its Members based on a scale from
1 (the strongest) to 7 (the weakest). Members that
fall within the higher risk rating categories (i.e., 5,
6, and 7) are placed on NSCC’s ‘‘Watch List,’’ and
may be subject to enhanced surveillance or
additional margin charges, as permitted under the
Rules. See Rule 2B, Section 4 and Procedure XV,
Section I.(B)(1) of the Rules, supra note 4. See also
Securities Exchange Act Release No. 80734 (May
19, 2017), 82 FR 24174 (May 25, 2017), (SR–DTC–
2017–002, SR–FICC–2017–006, SR–NSCC–2017–
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Today, following implementation of the
FIS Phase 1 Rule Change, the FIS Charge
is applied by excluding positions in
Family-Issued Securities of those
Members from NSCC’s VaR Charge, and
instead charging an amount calculated
by multiplying the absolute value of the
long net unsettled positions in that
Member’s Family-Issued Securities by a
percentage.10 That percentage is no less
than 40 percent and up to 100 percent,
and is determined by NSCC based on
the Member’s rating on the CRRM and
on the type of Family-Issued Securities
submitted to NSCC. As such, under
Procedure XV (1) fixed income
securities that are Family-Issued
Securities are charged a haircut rate of
no less than 80 percent for Members
that are rated 6 or 7 on the CRRM, and
no less than 40 percent for Members
rated 5 on the CRRM; and (2) equity
securities that are Family-Issued
Securities are charged a haircut rate of
100 percent for Members that are rated
6 or 7 on the CRRM, and no less than
50 percent for Members that are rated 5
on the CRRM. Members that have a
rating on the CRRM of 1 through 4 are
not currently subject to the FIS Charge.
As stated above, Family-Issued
Securities present NSCC with specific
wrong-way risk such that, in the event
that a Member with unsettled long
positions in Family-Issued Securities
defaults, NSCC would close out those
positions following a likely drop in the
credit-worthiness of the issuer, possibly
resulting in a loss to NSCC. Therefore,
the FIS Charge is applied to the
unsettled long positions in FamilyIssued Securities, which are the
positions that NSCC would close out
following a Member default, as opposed
to the short positions in net unsettled
securities. The haircut rates were
calibrated based on historical corporate
issue recovery rate data, and address the
risk that the Family-Issued Securities of
a Member would be devalued in the
event of that Member’s default.
The FIS Charge is currently applied
only to Members on the Watch List
because these Members present a
heightened credit risk to NSCC or have
demonstrated higher risk related to their
ability to meet settlement, and, as such,
at the time the FIS Phase 1 Rule Change
was proposed, NSCC believed there was
a clear and more urgent need to address
NSCC’s exposure to specific wrong-way
risk presented by these Members’
positions in Family-Issued Securities.
002) (approving proposed changes to the CRRM
methodology).
10 Procedure XV (Clearing Fund Formula and
Other Matters), Section I.(B)(1), supra note 4.
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Second, NSCC proposed to further
evaluate its exposure to wrong-way risk
presented by positions in Family-Issued
Securities by reviewing the impact of
expanding the application of the FIS
Charge to positions in Family-Issued
Securities of all Members.11 Following
its evaluation, NSCC has determined
that the risk characteristics to be
considered when margining FamilyIssued Securities extend beyond
Members’ creditworthiness. More
specifically, exposure to specific wrongway risk is based on the correlation to
the default of the issuer Member, and
NSCC may face this risk with respect to
positions in Family-Issued Securities of
all of its Members, not only those
Members on the Watch List. As such, in
order to more effectively mitigate its
exposure to specific wrong-way risk,
NSCC is proposing to apply the FIS
Charge to positions in Family-Issued
Securities of all Members.
In order to implement this proposal,
NSCC would amend Procedure XV to
move the FIS Charge from Section
I.(B)(1), where it is currently described
as an additional deposit for Members on
surveillance, to Sections I.(A)(1) and (2),
to include the FIS Charge as a
component of the Clearing Fund
formula that is calculated for each
Member.12 Under the proposed change,
the calculation of the FIS Charge would
not change as applied to Members that
are rated 5, 6, or 7 on the CRRM. NSCC
is proposing to revise the description of
the FIS Charge to include Members that
are rated 1 through 4 on the CRRM.13
Specifically, NSCC is proposing to
amend the description of the FIS Charge
in Procedure XV such that (1) fixedincome securities that are Family-Issued
Securities would be charged a haircut
rate of no less than 80 percent for
Members that are rated 6 or 7 on the
CRRM, and no less than 40 percent for
Members that are rated 1 through 5 on
the CRRM; and (2) equities that are
Family-Issued Securities would be
charged a haircut rate of 100 percent for
Members rated 6 or 7 on the CRRM, and
no less than 50 percent for Members
that are rated 1 through 5 on the CRRM.
The proposed change would also
amend NSCC Rule 1 (Definitions and
Descriptions) to include a definition of
Family-Issued Securities in order to
provide more clarity to the Rules. Under
the proposed change, ‘‘Family-Issued
Security’’ would be defined as a security
11 FIS
Phase 1 Rule Change, supra note 8.
XV, Sections I.(A)(1) and (2) and
I.(B), supra note 4.
13 Members that are not rated on the CRRM are
not subject to the FIS Charge and would not be
subject to the FIS Charge under the proposed
change.
12 Procedure
PO 00000
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that was issued by a Member or an
affiliate of that Member.
Expected Effect on and Management of
Risk
By expanding the application of the
FIS Charge to all Members, the proposed
change would more allow NSCC to more
effectively mitigate its exposure to
specific wrong-way risk as posed by
Family-Issued Securities. As described
above, Family-Issued Securities present
NSCC with specific wrong-way risk
such that, in the event that a Member
with unsettled long positions in FamilyIssued Securities defaults, NSCC would
close out those positions following a
likely drop in the credit-worthiness of
the issuer, possibly resulting in a loss to
NSCC. The FIS Charge addresses this
risk by using haircut rates that are
calibrated based on historical corporate
issue recovery rate data, and address the
risk that the Family-Issued Securities of
a Member would be devalued in the
event of that Member’s default. Because
NSCC may face specific wrong-way risk
with respect to positions in FamilyIssued Securities of all of its Members,
the proposed change to expand the FIS
Charge to all Members would reduce
NSCC’s exposure to specific wrong-way
risk.
By mitigating specific wrong-way risk
for NSCC as described above, the
proposed change would also mitigate
risk for Members because lowering the
risk profile for NSCC would in turn
lower the risk exposure that Members
may have with respect to NSCC in its
role as a central counterparty.
Consistency With the Clearing
Supervision Act
The stated purpose of Title VIII of the
Clearing Supervision Act is to mitigate
systemic risk in the financial system
and promote financial stability by,
among other things, promoting uniform
risk management standards for
systemically important financial market
utilities and strengthening the liquidity
of systemically important financial
market utilities.14 Section 805(a)(2) of
the Clearing Supervision Act 15 also
authorizes the Commission to prescribe
risk management standards for the
payment, clearing and settlement
activities of designated clearing entities,
like NSCC, for which the Commission is
the supervisory agency. Section 805(b)
of the Clearing Supervision Act 16 states
that the objectives and principles for
risk management standards prescribed
under Section 805(a) shall be to, among
14 12
U.S.C. 5461(b).
U.S.C. 5464(a)(2).
16 12 U.S.C. 5464(b).
15 12
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other things, promote robust risk
management.
NSCC believes that the proposed
change is consistent with Section 805(b)
of the Clearing Supervision Act because
it is designed to promote robust risk
management. By enhancing the margin
methodology applied to Family-Issued
Securities of all Members, the proposal
would assist NSCC in collecting margin
that more accurately reflects NSCC’s
exposure to a Member that clears
Family-Issued Securities and would
assist NSCC in its continuous efforts to
improve the reliability and effectiveness
of its risk-based margining methodology
by taking into account specific wrongway risk. By assisting NSCC in more
effectively mitigating its exposure to
specific wrong-way risk, the proposal is
designed to promote robust risk
management, consistent with Section
805(b) of the Clearing Supervision
Act.17
The Commission has adopted risk
management standards under Section
805(a)(2) of the Clearing Supervision
Act 18 and Section 17A of the Act.19
Rule 17Ad–22 requires registered
clearing agencies to establish,
implement, maintain, and enforce
written policies and procedures that are
reasonably designed to meet certain
minimum requirements for their
operations and risk management
practices on an ongoing basis.20 For the
reasons set forth below, NSCC believes
the proposed change is consistent with
Rules 17Ad–22(e)(4)(i), and (e)(6)(i) and
(v), each promulgated under the Act.21
Rule 17Ad–22(e)(4)(i) under the Act
requires, in part, that each covered
clearing agency establish, implement,
maintain and enforce written policies
and procedures reasonably designed to
effectively identify, measure, monitor,
and manage its credit exposures to
participants and those arising from its
payment, clearing, and settlement
processes, including by maintaining
sufficient financial resources to cover its
credit exposure to each participant fully
with a high degree of confidence.22 The
specific wrong-way risk presented by
Family-Issued Securities is the risk that,
in the event that a Member with
unsettled long positions in FamilyIssued Securities defaults, NSCC would
close out those positions following a
likely drop in the credit-worthiness of
the issuer, possibly resulting in a loss to
NSCC. The haircut rates of the FIS
17 Id.
18 12
U.S.C. 5464(a)(2).
19 17 CFR 240.17Ad–22 (‘‘Rule 17Ad–22’’).
20 Id.
21 17 CFR 240.17Ad–22(e)(4) and (e)(6).
22 17 CFR 240.17Ad–22(e)(4)(i).
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Charge more accurately reflect this risk
because they were calibrated based on
historical corporate issue recovery rate
data, and, therefore, address the risk
that the Family-Issued Securities of a
Member would be devalued in the event
of that Member’s default. In this way,
NSCC has determined that the
margining methodology used in
calculating the FIS Charge more
accurately reflects the risk
characteristics of Family-Issued
Securities than applying its VaR Charge,
and would permit NSCC to more
accurately identify, measure, monitor
and manage its credit exposures to those
Members with positions in FamilyIssued Securities. Further, by expanding
the application of the FIS Charge to all
Members, the proposed change would
assist NSCC in collecting and
maintaining financial resources that
reflect its credit exposures to those
Members. Therefore, NSCC believes the
proposed change is consistent with Rule
17Ad–22(e)(4)(i).
Rule 17Ad–22(e)(6)(i) under the Act
requires, in part, that each covered
clearing agency that provides central
counterparty services establish,
implement, maintain and enforce
written policies and procedures
reasonably designed to cover its credit
exposures to its participants by
establishing a risk-based margin system
that, at a minimum, considers, and
produces margin levels commensurate
with, the risks and particular attributes
of each relevant product, portfolio, and
market.23 Rule 17Ad–22(e)(6)(v) under
the Act requires, in part, that each
covered clearing agency that provides
central counterparty services establish,
implement, maintain and enforce
written policies and procedures
reasonably designed to cover its credit
exposures to its participants by
establishing a risk-based margin system
that, at a minimum, uses an appropriate
method for measuring credit exposure
that accounts for relevant product risk
factors and portfolio effects across
products.24
As stated above, Family-Issued
Securities present NSCC with specific
wrong-way risk that, in the event that a
Member with unsettled long positions
in Family-Issued Securities defaults,
NSCC would close out those positions
following a likely drop in the creditworthiness of the issuer, possibly
resulting in a loss to NSCC. Therefore,
the haircut rates were calibrated based
on historical corporate issue recovery
rate data, and address the risk that the
Family-Issued Securities of a Member
23 17
24 17
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CFR 240.17Ad–22(e)(6)(i).
CFR 240.17Ad–22(e)(6)(v).
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37143
would be devalued in the event of that
Member’s default, and would more
accurately reflect the risk characteristics
of Family-Issued Securities than
applying its VaR Charge. In this way,
the proposal would assist NSCC in
maintaining a risk-based margin system
that considers, and produces margin
levels commensurate with, the risks and
particular attributes of Family-Issued
Securities. Additionally, NSCC believes
application of the FIS Charge to
positions in Family-Issued Securities of
all Members is an appropriate method
for measuring its credit exposures,
because the FIS Charge accounts for the
risk factors presented by these
securities, i.e. the risk that these
securities would be devalued in the
event of a Member default. Therefore,
NSCC believes the proposed change is
consistent with Rule 17Ad–22(e)(6)(i)
and (v).
III. Date of Effectiveness of the Advance
Notice, and Timing for Commission
Action
The proposed change may be
implemented if the Commission does
not object to the proposed change
within 60 days of the later of (i) the date
that the proposed change was filed with
the Commission or (ii) the date that any
additional information requested by the
Commission is received. The clearing
agency shall not implement the
proposed change if the Commission has
any objection to the proposed change.
The Commission may extend the
period for review by an additional 60
days if the proposed change raises novel
or complex issues, subject to the
Commission providing the clearing
agency with prompt written notice of
the extension. A proposed change may
be implemented in less than 60 days
from the date the advance notice is
filed, or the date further information
requested by the Commission is
received, if the Commission notifies the
clearing agency in writing that it does
not object to the proposed change and
authorizes the clearing agency to
implement the proposed change on an
earlier date, subject to any conditions
imposed by the Commission.
The clearing agency shall post notice
on its Web site of proposed changes that
are implemented.
The proposal shall not take effect
until all regulatory actions required
with respect to the proposal are
completed.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the Advance Notice
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is consistent with the Clearing
Supervision Act. Comments may be
submitted by any of the following
methods:
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81292; File No. SR–BOX–
2016–48]
Electronic Comments
Self-Regulatory Organizations; BOX
Options Exchange LLC; Order
Approving a Proposed Rule Change,
as Modified by Amendment Nos. 1 and
2, To Adopt Rules for an Open-Outcry
Trading Floor
Paper Comments
I. Introduction
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549.
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• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NSCC–2017–804 on the subject line.
On November 16, 2016, BOX Options
Exchange LLC (the ‘‘Exchange’’ or
‘‘BOX’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to adopt rules for
an open-outcry trading floor. The
proposed rule change was published for
comment in the Federal Register on
December 05, 2016.3 The Commission
received three comment letters on the
proposed rule change.4 On January 10,
2017, the Commission extended the
time period within which to approve,
disapprove the proposed rule change, or
institute proceedings to determine
whether to approve or disapprove the
proposed rule change to March 05,
2017.5 On February 21, 2017, the
Commission received a response letter
from the Exchange, as well as
Amendment No. 1 to the proposed rule
change.6 On March 1, 2017, the
Commission instituted proceedings to
determine whether to approve or
disapprove the proposed rule change, as
modified by Amendment No. 1.7 In
response to the Order Instituting
Proceedings, the Commission received
All submissions should refer to File
Number SR–NSCC–2017–804. 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 Advance Notice that
are filed with the Commission, and all
written communications relating to the
Advance Notice 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 NSCC 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–NSCC–
2017–804 and should be submitted on
or before August 23, 2017.
By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–16631 Filed 8–7–17; 8:45 am]
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August 2, 2017.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 79421
(November 29, 2016), 81 FR 87607 (‘‘Notice’’).
4 See letters to Brent J. Fields, Secretary,
Commission, from Angelo Evangelou, Deputy
General Counsel, The Chicago Board Options
Exchange, Inc. (‘‘CBOE’’), dated January 10, 2017
(‘‘CBOE Letter I’’); Steve Crutchfield, Head of
Market Structure, CTC Trading Group, LLC (‘‘CTC
Trading’’), dated December 31, 2016 (‘‘CTC Letter
I’’); and Joan C. Conley, Senior Vice President and
Corporate Secretary, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’), dated December 22, 2016 (‘‘Nasdaq
Letter I’’).
5 See Securities Exchange Act Release No. 79768,
82 FR 4956 (January 17, 2017).
6 See letter to Brent J. Fields, Secretary,
Commission, from Lisa J. Fall, President, Exchange,
received February 21, 2017 (‘‘BOX Response Letter
I’’), and Amendment No. 1, dated February 21,
2017.
7 See Securities Exchange Act Release No. 80134,
82 FR 12864 (March 7, 2017) (‘‘Order Instituting
Proceedings’’).
2 17
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five additional comment letters.8 On
May 17, 2017, the Exchange filed
Amendment No. 2 to the proposed rule
change, which replaced and superseded
the original filing, as modified by
Amendment No.1, in its entirety.9 On
May 18, 2016, the Commission extended
the time period for Commission action
on the proceedings to determine
whether to disapprove the proposed
rule change to August 2, 2017.10
Amendment No. 2 was published for
comment in the Federal Register on
May 23, 2017.11 On May 25, 2017, the
Commission received a second response
letter from the Exchange.12 The
Commission received two comment
letters in response to the publication of
Amendment No. 2.13 On July 14, 2017,
the Commission received a third
response letter from the Exchange.14
This order approves the proposed rule
change, as modified by Amendment
Nos. 1 and 2.
II. Description of the Proposed Rule
Change, as Modified by Amendment
Nos. 1 and 2
The Exchange proposes to adopt rules
that would allow for open-outcry
trading on BOX’s physical trading floor,
located in Chicago (‘‘Trading Floor’’) as
described below.15
A. BOX Floor Procedure
The Exchange proposes to allow two
categories of market participants (‘‘Floor
Participants’’) 16 to transact business on
the Trading Floor.17 One of these
categories of market participants
8 See letters to Brent J. Fields, Secretary,
Commission, from Angelo Evangelou, Deputy
General Counsel, CBOE, dated April 21, 2017
(‘‘CBOE Letter II’’); Steve Crutchfield, Head of
Market Structure, CTC Trading, dated April 13,
2017 (‘‘CTC Letter II’’); John Kinahan, CEO, Group
One Trading, LP, dated April 11, 2017 (‘‘Group One
Letter’’); Elizabeth King, General Counsel and
Corporate Secretary, New York Stock Exchange,
dated March 28, 2017 (‘‘NYSE Letter’’); and Joan C.
Conley, Senior Vice President and Corporate
Secretary, Nasdaq, dated March 27, 2017 (‘‘Nasdaq
Letter II’’).
9 See Amendment No. 2, dated May 17, 2017.
10 See Securities Exchange Act Release No. 80719,
82 FR 23935 (May 24, 2017).
11 See Securities Exchange Act Release No. 80720
(May 18, 2017), 82 FR 23657 (‘‘Notice of
Amendment No. 2’’).
12 See letter to Brent J. Fields, Secretary,
Commission, from Lisa J. Fall, President, Exchange,
received May 25, 2017 (‘‘BOX Response Letter II’’).
13 See letters to Brent J. Fields, Secretary,
Commission, from Steve Crutchfield, Head of
Market Structure, CTC Trading, dated July 10, 2017
(‘‘CTC Letter III’’); and Joan C. Conley, Senior Vice
President and Corporate Secretary, Nasdaq, dated
July 6, 2017 (‘‘Nasdaq Letter III’’).
14 See letter to Brent J. Fields, Secretary,
Commission, from Lisa J. Fall, President, Exchange,
received July 14, 2017 (‘‘BOX Response Letter III’’).
15 See proposed BOX Rule 100(a)(67).
16 See proposed BOX Rule 100(a)(26).
17 See proposed BOX Rule 100(a)(67).
E:\FR\FM\08AUN1.SGM
08AUN1
Agencies
[Federal Register Volume 82, Number 151 (Tuesday, August 8, 2017)]
[Notices]
[Pages 37141-37144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16631]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81286; File No. SR-NSCC-2017-804]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Advance Notice To Expand the
Application of the Family-Issued Securities Charge
August 2, 2017.
Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act entitled the Payment,
Clearing, and Settlement Supervision Act of 2010 (``Clearing
Supervision Act'') \1\ and Rule 19b-4(n)(1)(i) under the Securities
Exchange Act of 1934 (``Act''),\2\ notice is hereby given that on July
10, 2017, National Securities Clearing Corporation (``NSCC'') filed
with the Securities and Exchange Commission (``Commission'') the
advance notice SR-NSCC-2017-804 (``Advance Notice'') as described in
Items I, II and III below, which Items have been prepared by the
clearing agency.\3\ The Commission is publishing this notice to solicit
comments on the Advance Notice from interested persons.
---------------------------------------------------------------------------
\1\ 12 U.S.C. 5465(e)(1).
\2\ 17 CFR 240.19b-4(n)(1)(i).
\3\ On July 10, 2017, NSCC filed this Advance Notice as a
proposed rule change (SR-NSCC-2017-010) with the Commission pursuant
to Section 19(b)(1) of the Act, 15 U.S.C. 78s(b)(1), and Rule 19b-4,
17 CFR 240.19b-4. A copy of the proposed rule change is available at
https://www.dtcc.com/legal/sec-rule-filings.aspx.
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the Advance
Notice
The Advance Notice consists of amendments to the NSCC Rules and
Procedures (``Rules'') \4\ in order to (i) expand the application of
NSCC's existing family-issued securities charge \5\ to apply to all
Members, as described below, and (ii) include a definition of ``Family-
Issued Security'' as a security that was issued by a Member or by an
affiliate of that Member, as described in greater detail below.
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\4\ Terms not defined herein are defined in the Rules, available
at www.dtcc.com/~/media/Files/Downloads/legal/rules/nscc_rules.pdf.
\5\ The family-issued securities charge is currently described
in Procedure XV, Section I.(B)(1) of the Rules, supra note 4.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Advance Notice
In its filing with the Commission, the clearing agency included
statements concerning the purpose of and basis for the Advance Notice
and discussed any comments it received on the Advance Notice. The text
of these statements may be examined at the places specified in Item IV
below. The clearing agency has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
(A) Clearing Agency's Statement on Comments on the Advance Notice
Received From Members, Participants, or Others
NSCC has not received or solicited any written comments relating to
this proposal. NSCC will notify the Commission of any written comments
received by NSCC.
(B) Advance Notice Filed Pursuant to Section 806(e) of the Payment,
Clearing, and Settlement Supervision Act
Description of Proposed Changes
Currently, in calculating its Members' required deposits to the
Clearing Fund, NSCC excludes positions in Family-Issued Securities of
certain Members from its parametric volatility Clearing Fund component
(``VaR Charge''), and instead charges an amount calculated by
multiplying the absolute value of the long, net unsettled positions in
that Member's Family-Issued Securities by a percentage that is no less
than 40 percent (``FIS Charge''). The FIS Charge is currently only
applied to Members that are rated 5, 6, or 7 on the Credit Risk Rating
Matrix (``CRRM''). The proposed change would expand the application of
the FIS Charge to the positions in Family-Issued Securities of all
Members to help NSCC cover the specific wrong-way risk posed by Family-
Issued Securities, as described further below.\6\ Therefore, NSCC is
proposing to amend (i) Rule 1 (Definitions and Descriptions) to add a
definition of ``Family-Issued Security,'' and (ii) Procedure XV
(Clearing Fund Formula and Other Matters) to expand the application of
the FIS Charge to all Members by moving the description of FIS Charge
from Section I.(B)(1) to Sections I.(A)(1) and I.(A)(2) in order to
make clear that the FIS Charge would be included as a component of the
Clearing Fund formula calculated for all Members.
---------------------------------------------------------------------------
\6\ Members that do not trade in Family-Issued Securities would
not be subject to the FIS Charge.
---------------------------------------------------------------------------
As a central counterparty, NSCC occupies an important role in the
securities settlement system by interposing itself between
counterparties to financial transactions and thereby reducing the risk
faced by participants and contributing to global financial stability.
The effectiveness of a central counterparty's risk controls and the
adequacy of its financial resources are critical to achieving these
risk-reducing goals. In that context, NSCC continuously reviews its
margining methodology in order to ensure the reliability of its
margining in achieving the desired coverage. In order to be most
effective, NSCC must take into consideration the risk characteristics
specific to certain securities when margining those securities.
Among the various risks that NSCC considers when evaluating the
effectiveness of its margining methodology are its counterparty risks
and identification and mitigation of ``wrong-way'' risk, particularly
specific wrong-way risk, defined as the risk that an exposure to a
counterparty is highly likely to increase when the creditworthiness of
that counterparty deteriorates. \7\ NSCC has identified an exposure to
specific wrong-way risk when it acts as central counterparty to a
Member with respect to positions in Family-Issued Securities. In the
event that a Member with unsettled long positions in Family-Issued
Securities defaults, NSCC would close out those positions following a
likely drop in the credit-worthiness of the issuer, possibly resulting
in a loss to NSCC.
---------------------------------------------------------------------------
\7\ See Principles for financial market infrastructures, issued
by the Committee on Payment and Settlement Systems and the Technical
Committee of the International Organization of Securities
Commissions 47 n.65 (April 2012), available at https://www.bis.org/publ/cpss101a.pdf.
---------------------------------------------------------------------------
In 2015, NSCC proposed to address its exposure to specific wrong-
way risk in two ways.\8\ First, NSCC proposed to apply the FIS Charge
to its Members that are rated a 5, 6, or 7 on the CRRM (i.e., Members
on the Watch List).\9\
[[Page 37142]]
Today, following implementation of the FIS Phase 1 Rule Change, the FIS
Charge is applied by excluding positions in Family-Issued Securities of
those Members from NSCC's VaR Charge, and instead charging an amount
calculated by multiplying the absolute value of the long net unsettled
positions in that Member's Family-Issued Securities by a
percentage.\10\ That percentage is no less than 40 percent and up to
100 percent, and is determined by NSCC based on the Member's rating on
the CRRM and on the type of Family-Issued Securities submitted to NSCC.
As such, under Procedure XV (1) fixed income securities that are
Family-Issued Securities are charged a haircut rate of no less than 80
percent for Members that are rated 6 or 7 on the CRRM, and no less than
40 percent for Members rated 5 on the CRRM; and (2) equity securities
that are Family-Issued Securities are charged a haircut rate of 100
percent for Members that are rated 6 or 7 on the CRRM, and no less than
50 percent for Members that are rated 5 on the CRRM. Members that have
a rating on the CRRM of 1 through 4 are not currently subject to the
FIS Charge. As stated above, Family-Issued Securities present NSCC with
specific wrong-way risk such that, in the event that a Member with
unsettled long positions in Family-Issued Securities defaults, NSCC
would close out those positions following a likely drop in the credit-
worthiness of the issuer, possibly resulting in a loss to NSCC.
Therefore, the FIS Charge is applied to the unsettled long positions in
Family-Issued Securities, which are the positions that NSCC would close
out following a Member default, as opposed to the short positions in
net unsettled securities. The haircut rates were calibrated based on
historical corporate issue recovery rate data, and address the risk
that the Family-Issued Securities of a Member would be devalued in the
event of that Member's default.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 76077 (October 5,
2015), 80 FR 61256 (October 9, 2015), (SR-NSCC-2015-003) (``FIS
Phase 1 Rule Change'').
\9\ As part of its ongoing monitoring of its membership, NSCC
utilizes the CRRM to rate its risk exposures to its Members based on
a scale from 1 (the strongest) to 7 (the weakest). Members that fall
within the higher risk rating categories (i.e., 5, 6, and 7) are
placed on NSCC's ``Watch List,'' and may be subject to enhanced
surveillance or additional margin charges, as permitted under the
Rules. See Rule 2B, Section 4 and Procedure XV, Section I.(B)(1) of
the Rules, supra note 4. See also Securities Exchange Act Release
No. 80734 (May 19, 2017), 82 FR 24174 (May 25, 2017), (SR-DTC-2017-
002, SR-FICC-2017-006, SR-NSCC-2017-002) (approving proposed changes
to the CRRM methodology).
\10\ Procedure XV (Clearing Fund Formula and Other Matters),
Section I.(B)(1), supra note 4.
---------------------------------------------------------------------------
The FIS Charge is currently applied only to Members on the Watch
List because these Members present a heightened credit risk to NSCC or
have demonstrated higher risk related to their ability to meet
settlement, and, as such, at the time the FIS Phase 1 Rule Change was
proposed, NSCC believed there was a clear and more urgent need to
address NSCC's exposure to specific wrong-way risk presented by these
Members' positions in Family-Issued Securities.
Second, NSCC proposed to further evaluate its exposure to wrong-way
risk presented by positions in Family-Issued Securities by reviewing
the impact of expanding the application of the FIS Charge to positions
in Family-Issued Securities of all Members.\11\ Following its
evaluation, NSCC has determined that the risk characteristics to be
considered when margining Family-Issued Securities extend beyond
Members' creditworthiness. More specifically, exposure to specific
wrong-way risk is based on the correlation to the default of the issuer
Member, and NSCC may face this risk with respect to positions in
Family-Issued Securities of all of its Members, not only those Members
on the Watch List. As such, in order to more effectively mitigate its
exposure to specific wrong-way risk, NSCC is proposing to apply the FIS
Charge to positions in Family-Issued Securities of all Members.
---------------------------------------------------------------------------
\11\ FIS Phase 1 Rule Change, supra note 8.
---------------------------------------------------------------------------
In order to implement this proposal, NSCC would amend Procedure XV
to move the FIS Charge from Section I.(B)(1), where it is currently
described as an additional deposit for Members on surveillance, to
Sections I.(A)(1) and (2), to include the FIS Charge as a component of
the Clearing Fund formula that is calculated for each Member.\12\ Under
the proposed change, the calculation of the FIS Charge would not change
as applied to Members that are rated 5, 6, or 7 on the CRRM. NSCC is
proposing to revise the description of the FIS Charge to include
Members that are rated 1 through 4 on the CRRM.\13\ Specifically, NSCC
is proposing to amend the description of the FIS Charge in Procedure XV
such that (1) fixed-income securities that are Family-Issued Securities
would be charged a haircut rate of no less than 80 percent for Members
that are rated 6 or 7 on the CRRM, and no less than 40 percent for
Members that are rated 1 through 5 on the CRRM; and (2) equities that
are Family-Issued Securities would be charged a haircut rate of 100
percent for Members rated 6 or 7 on the CRRM, and no less than 50
percent for Members that are rated 1 through 5 on the CRRM.
---------------------------------------------------------------------------
\12\ Procedure XV, Sections I.(A)(1) and (2) and I.(B), supra
note 4.
\13\ Members that are not rated on the CRRM are not subject to
the FIS Charge and would not be subject to the FIS Charge under the
proposed change.
---------------------------------------------------------------------------
The proposed change would also amend NSCC Rule 1 (Definitions and
Descriptions) to include a definition of Family-Issued Securities in
order to provide more clarity to the Rules. Under the proposed change,
``Family-Issued Security'' would be defined as a security that was
issued by a Member or an affiliate of that Member.
Expected Effect on and Management of Risk
By expanding the application of the FIS Charge to all Members, the
proposed change would more allow NSCC to more effectively mitigate its
exposure to specific wrong-way risk as posed by Family-Issued
Securities. As described above, Family-Issued Securities present NSCC
with specific wrong-way risk such that, in the event that a Member with
unsettled long positions in Family-Issued Securities defaults, NSCC
would close out those positions following a likely drop in the credit-
worthiness of the issuer, possibly resulting in a loss to NSCC. The FIS
Charge addresses this risk by using haircut rates that are calibrated
based on historical corporate issue recovery rate data, and address the
risk that the Family-Issued Securities of a Member would be devalued in
the event of that Member's default. Because NSCC may face specific
wrong-way risk with respect to positions in Family-Issued Securities of
all of its Members, the proposed change to expand the FIS Charge to all
Members would reduce NSCC's exposure to specific wrong-way risk.
By mitigating specific wrong-way risk for NSCC as described above,
the proposed change would also mitigate risk for Members because
lowering the risk profile for NSCC would in turn lower the risk
exposure that Members may have with respect to NSCC in its role as a
central counterparty.
Consistency With the Clearing Supervision Act
The stated purpose of Title VIII of the Clearing Supervision Act is
to mitigate systemic risk in the financial system and promote financial
stability by, among other things, promoting uniform risk management
standards for systemically important financial market utilities and
strengthening the liquidity of systemically important financial market
utilities.\14\ Section 805(a)(2) of the Clearing Supervision Act \15\
also authorizes the Commission to prescribe risk management standards
for the payment, clearing and settlement activities of designated
clearing entities, like NSCC, for which the Commission is the
supervisory agency. Section 805(b) of the Clearing Supervision Act \16\
states that the objectives and principles for risk management standards
prescribed under Section 805(a) shall be to, among
[[Page 37143]]
other things, promote robust risk management.
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\14\ 12 U.S.C. 5461(b).
\15\ 12 U.S.C. 5464(a)(2).
\16\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------
NSCC believes that the proposed change is consistent with Section
805(b) of the Clearing Supervision Act because it is designed to
promote robust risk management. By enhancing the margin methodology
applied to Family-Issued Securities of all Members, the proposal would
assist NSCC in collecting margin that more accurately reflects NSCC's
exposure to a Member that clears Family-Issued Securities and would
assist NSCC in its continuous efforts to improve the reliability and
effectiveness of its risk-based margining methodology by taking into
account specific wrong-way risk. By assisting NSCC in more effectively
mitigating its exposure to specific wrong-way risk, the proposal is
designed to promote robust risk management, consistent with Section
805(b) of the Clearing Supervision Act.\17\
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\17\ Id.
---------------------------------------------------------------------------
The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act \18\ and Section 17A of the
Act.\19\ Rule 17Ad-22 requires registered clearing agencies to
establish, implement, maintain, and enforce written policies and
procedures that are reasonably designed to meet certain minimum
requirements for their operations and risk management practices on an
ongoing basis.\20\ For the reasons set forth below, NSCC believes the
proposed change is consistent with Rules 17Ad-22(e)(4)(i), and
(e)(6)(i) and (v), each promulgated under the Act.\21\
---------------------------------------------------------------------------
\18\ 12 U.S.C. 5464(a)(2).
\19\ 17 CFR 240.17Ad-22 (``Rule 17Ad-22'').
\20\ Id.
\21\ 17 CFR 240.17Ad-22(e)(4) and (e)(6).
---------------------------------------------------------------------------
Rule 17Ad-22(e)(4)(i) under the Act requires, in part, that each
covered clearing agency establish, implement, maintain and enforce
written policies and procedures reasonably designed to effectively
identify, measure, monitor, and manage its credit exposures to
participants and those arising from its payment, clearing, and
settlement processes, including by maintaining sufficient financial
resources to cover its credit exposure to each participant fully with a
high degree of confidence.\22\ The specific wrong-way risk presented by
Family-Issued Securities is the risk that, in the event that a Member
with unsettled long positions in Family-Issued Securities defaults,
NSCC would close out those positions following a likely drop in the
credit-worthiness of the issuer, possibly resulting in a loss to NSCC.
The haircut rates of the FIS Charge more accurately reflect this risk
because they were calibrated based on historical corporate issue
recovery rate data, and, therefore, address the risk that the Family-
Issued Securities of a Member would be devalued in the event of that
Member's default. In this way, NSCC has determined that the margining
methodology used in calculating the FIS Charge more accurately reflects
the risk characteristics of Family-Issued Securities than applying its
VaR Charge, and would permit NSCC to more accurately identify, measure,
monitor and manage its credit exposures to those Members with positions
in Family-Issued Securities. Further, by expanding the application of
the FIS Charge to all Members, the proposed change would assist NSCC in
collecting and maintaining financial resources that reflect its credit
exposures to those Members. Therefore, NSCC believes the proposed
change is consistent with Rule 17Ad-22(e)(4)(i).
---------------------------------------------------------------------------
\22\ 17 CFR 240.17Ad-22(e)(4)(i).
---------------------------------------------------------------------------
Rule 17Ad-22(e)(6)(i) under the Act requires, in part, that each
covered clearing agency that provides central counterparty services
establish, implement, maintain and enforce written policies and
procedures reasonably designed to cover its credit exposures to its
participants by establishing a risk-based margin system that, at a
minimum, considers, and produces margin levels commensurate with, the
risks and particular attributes of each relevant product, portfolio,
and market.\23\ Rule 17Ad-22(e)(6)(v) under the Act requires, in part,
that each covered clearing agency that provides central counterparty
services establish, implement, maintain and enforce written policies
and procedures reasonably designed to cover its credit exposures to its
participants by establishing a risk-based margin system that, at a
minimum, uses an appropriate method for measuring credit exposure that
accounts for relevant product risk factors and portfolio effects across
products.\24\
---------------------------------------------------------------------------
\23\ 17 CFR 240.17Ad-22(e)(6)(i).
\24\ 17 CFR 240.17Ad-22(e)(6)(v).
---------------------------------------------------------------------------
As stated above, Family-Issued Securities present NSCC with
specific wrong-way risk that, in the event that a Member with unsettled
long positions in Family-Issued Securities defaults, NSCC would close
out those positions following a likely drop in the credit-worthiness of
the issuer, possibly resulting in a loss to NSCC. Therefore, the
haircut rates were calibrated based on historical corporate issue
recovery rate data, and address the risk that the Family-Issued
Securities of a Member would be devalued in the event of that Member's
default, and would more accurately reflect the risk characteristics of
Family-Issued Securities than applying its VaR Charge. In this way, the
proposal would assist NSCC in maintaining a risk-based margin system
that considers, and produces margin levels commensurate with, the risks
and particular attributes of Family-Issued Securities. Additionally,
NSCC believes application of the FIS Charge to positions in Family-
Issued Securities of all Members is an appropriate method for measuring
its credit exposures, because the FIS Charge accounts for the risk
factors presented by these securities, i.e. the risk that these
securities would be devalued in the event of a Member default.
Therefore, NSCC believes the proposed change is consistent with Rule
17Ad-22(e)(6)(i) and (v).
III. Date of Effectiveness of the Advance Notice, and Timing for
Commission Action
The proposed change may be implemented if the Commission does not
object to the proposed change within 60 days of the later of (i) the
date that the proposed change was filed with the Commission or (ii) the
date that any additional information requested by the Commission is
received. The clearing agency shall not implement the proposed change
if the Commission has any objection to the proposed change.
The Commission may extend the period for review by an additional 60
days if the proposed change raises novel or complex issues, subject to
the Commission providing the clearing agency with prompt written notice
of the extension. A proposed change may be implemented in less than 60
days from the date the advance notice is filed, or the date further
information requested by the Commission is received, if the Commission
notifies the clearing agency in writing that it does not object to the
proposed change and authorizes the clearing agency to implement the
proposed change on an earlier date, subject to any conditions imposed
by the Commission.
The clearing agency shall post notice on its Web site of proposed
changes that are implemented.
The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the Advance
Notice
[[Page 37144]]
is consistent with the Clearing Supervision Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NSCC-2017-804 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549.
All submissions should refer to File Number SR-NSCC-2017-804. 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 Advance Notice that are filed
with the Commission, and all written communications relating to the
Advance Notice 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 NSCC 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-NSCC-2017-804 and should be submitted on
or before August 23, 2017.
By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16631 Filed 8-7-17; 8:45 am]
BILLING CODE 8011-01-P