Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Government Securities Division Rulebook, Mortgage-Backed Securities Division Clearing Rules, and Mortgage-Backed Securities Division EPN Rules, 26747-26758 [2020-09518]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 85, Number 87 (Tuesday, May 5, 2020)]
[Notices]
[Pages 26747-26758]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09518]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88766; File No. SR-FICC-2020-005]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Modify the Government Securities Division Rulebook, Mortgage-Backed 
Securities Division Clearing Rules, and Mortgage-Backed Securities 
Division EPN Rules

April 29, 2020.
    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 April 27, 2020, Fixed Income Clearing Corporation (``FICC'') 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. FICC filed the 
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(4) thereunder.\4\ The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \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)(4).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change consists of modifications to the FICC 
Government Securities Division (``GSD'') Rulebook (``GSD Rules''), the 
FICC Mortgage-Backed Securities Division (``MBSD'') Clearing Rules 
(``MBSD Rules'') and the FICC MBSD EPN Rules (``EPN Rules,'' and 
together with the GSD Rules and the MBSD Rules, the ``Rules'') to: (i) 
Delete terms that are no longer used in the GSD Rules; (ii) delete 
references to services and service-related provisions that are no 
longer provided and/or active in the GSD Rules and the MBSD Rules; 
(iii) delete certain dates in the GSD Rules and the MBSD Rules; (iv) 
make certain clarifications in the Rules; (v) make certain corrections 
to the Rules; (vi) replace an officer title in the GSD Rules and the 
MBSD Rules; (vii) add a disclaimer regarding trademarks and 
servicemarks in the Rules and conform the usage of the registered 
trademark symbol in the GSD Rules; and (viii) make certain technical 
changes to the Rules.\5\
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    \5\ Capitalized terms used herein and not defined shall have the 
meanings assigned to such terms in the GSD Rules, MBSD Rules and EPN 
Rules, as applicable, available at https://www.dtcc.com/legal/rules-and-procedures.aspx.
---------------------------------------------------------------------------

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency included 
statements concerning the purpose of and basis for the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. 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 of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    FICC is proposing to (i) delete terms that are no longer used in 
the GSD Rules; (ii) delete references to services and service-related 
provisions that are no longer provided and/or active in the GSD Rules 
and the MBSD Rules; (iii) delete certain dates in the GSD Rules and the 
MBSD Rules; (iv) make certain clarifications in the Rules; (v) make 
certain corrections to the Rules; (vi) replace an officer title in the 
GSD Rules and the MBSD Rules; (vii) add a disclaimer regarding 
trademarks and servicemarks in the Rules and conform the usage of the 
registered trademark symbol in the GSD Rules; and (viii) make certain 
technical changes to the Rules.
(i) Proposal To Delete Terms That Are No Longer Used in the GSD Rules
    FICC is proposing to remove the following defined terms and 
definitions in GSD Rule 1 \6\ as these terms are defined, but not 
otherwise used, in the GSD Rules. Specifically, the terms proposed to 
be deleted are:
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    \6\ GSD Rule 1, id.

     ``Announcement Date''
     ``Collateral Management Service''
     ``Money-Fill Repo Transaction''
     ``Money Settlement Obligations''
     ``Non-Zero''
     ``Par-Fill Repo Transaction''
     ``Refunding Issue Date''
     ``Remaining Member''

[[Page 26748]]

(ii) Proposal To Delete References to Services and Service-Related 
Provisions That Are No Longer Provided and/or Active in the GSD Rules 
and the MBSD Rules
A. GSD Rules
(1) Freddie Mac Auctions
    The GSD Rules contain provisions related to Auction Purchases of 
Eligible Freddie Mac Securities, which is a service that was not 
utilized \7\ and which FICC does not expect to be utilized. As such, 
FICC proposes to delete all provisions associated with this service.
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    \7\ For the avoidance of doubt, the auction purchase service 
regarding Treasury securities is active, and remains as such.
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    Specifically, FICC is proposing to make the following changes in 
GSD Rule 1:

    a. Delete the last two sentences in the definition of ``Auction 
Purchase'' because these sentences relate to Freddie Mac auctions.
    b. Delete the last sentence in the definition of ``Average 
Auction Price'' because this sentence relates to Freddie Mac 
auctions.
    c. Delete the defined term ``Eligible Freddie Mac Security.''
    d. Delete the words ``or Eligible Freddie Mac Securities'' in 
the definition of ``Issue Date.''
    e. Delete the last sentence in the definition of ``Netting-
Eligible Auction Purchase'' because this sentence relates to Freddie 
Mac auctions.
    f. Delete the words ``or an Eligible Freddie Mac Security'' in 
the definition of ``When Issued Transaction.''
    Additionally, FICC is proposing to delete the following 
references in the GSD Rules to Freddie Mac auctions:
    1. The second paragraph in Section 3 of GSD Rule 6C because this 
paragraph relates to Freddie Mac auctions.
    2. The words ``or Freddie Mac, as applicable,'' from the only 
paragraph in Section 8 of GSD Rule 6C.
    3. The third paragraph in Section 11 of GSD Rule 6C because this 
paragraph relates to Freddie Mac submitting data regarding a Netting 
Eligible Auction Purchase. FICC is also proposing to delete the 
words ``or a Freddie Mac auction'' and ``or Freddie Mac, as 
applicable'' each time these words appear in Section 11 of GSD Rule 
6C.
    4. The words ``or Freddie Mac'' from the only paragraph in 
Section 3 of GSD Rule 17.
    5. The words ``or Freddie Mac, as applicable,'' each time the 
phrase appears in Section 4 of GSD Rule 17. In addition, FICC 
proposes to delete the words ``or a Freddie Mac auction'' and the 
sentence ``Notwithstanding the foregoing, the Corporation must make 
this notification to Freddie Mac as soon as it is practicable for it 
do so.'' in Sections 4 of GSD Rule 17. FICC is also proposing to 
delete two phrases that reference Freddie Mac in Section 5 of GSD 
Rule 17 and delete the two references to ``or Freddie Mac'' in 
Section 6 of GSD Rule 17.
    6. Section 7 of GSD Rule 17 because it relates to Freddie Mac 
auctions.

    In connection with the foregoing proposed changes regarding Freddie 
Mac auctions, FICC is proposing to delete the defined term ``Issuer'' 
from GSD Rule 1 because the term only appears in Section 7 of GSD Rule 
17, which FICC is proposing to delete. The defined term is not used in 
connection with the Treasury Department.
    Finally, the GSD Rules contain a list of Designated Locked-In Trade 
Sources, who can submit trade data for Locked-In Trades. Currently, 
Freddie Mac is listed as a Designated Locked-In Trade Source. FICC is 
proposing to delete the reference to Freddie Mac from this list.
(2) Inter-Clearing Bank GCF Repo Service
    In 2016, the Commission approved FICC's proposed rule change to 
suspend the interbank service of the GCF Repo Service.\8\ The GCF Repo 
Service has operated on both an ``interbank'' and ``intrabank'' 
basis.\9\ ``Interbank'' means that the two GCF Repo Participants, which 
have been matched in a GCF Repo transaction, each clear at a different 
clearing bank.\10\ ``Intrabank'' means that the two GCF Repo 
Participants, which have been matched in a GCF Repo transaction, clear 
at the same clearing bank.\11\
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    \8\ Securities Exchange Act Release No. 78206 (June 30, 2016), 
81 FR 44388 (July 7, 2016) (SR-FICC-2016-002).
    \9\ Id.
    \10\ Id.
    \11\ Id.
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    FICC does not expect to reinstitute the interbank service of the 
GCF Repo Service at this time and is proposing to remove all references 
to this service. Specifically, the following changes would be made:

    a. In GSD Rule 1, FICC is proposing to delete ``or interbank 
collateral allocation unwinds'' in the defined term ``Early Unwind 
Intraday Charge.''
    b. In GSD Rule 1, FICC is proposing to delete the following 
defined terms because they relate to the interbank service.

 ``Entitlement Holder''
 ``GCF Collateral Excess Account''
 ``GCF Custodian Bank''
 ``GCF Premium Charge''
 ``GCF Repo Event''
 ``GCF Repo Event Parameter''
 ``GCF Repo Event Clearing Fund Premium''
 ``GCF Repo Event Carry Charge''
 ``Interbank Cash Amount Debit''
 ``Interbank Pledging Member''
 ``NFE-Related Account''
 ``NFE-Related Collateral''
 ``Prorated Interbank Cash Amount''
 ``Securities Account Agreement''
 ``Security Entitlement''

    c. In Section 2 of GSD Rule 3, FICC would remove the fourth to 
last paragraph because the paragraph relates to the interbank 
service.
    d. In Section 11 of GSD Rule 3B, FICC would remove subpart 
(a)(iii) because (a)(iii) relates to the interbank service. In 
connection with this proposed change, FICC would renumber current 
romanettes iv and v to account for this deletion.
    e. In Section 1b(a)(iii) of GSD Rule 4, FICC would remove ``the 
GCF Premium Charge and/or GCF Repo Event Premium and/or'' because 
these terms relate to the interbank service.
    f. In Section 3 of GSD Rule 20, FICC would remove the current 
third (beginning with ``If an Interbank Pledging Member . . .'') and 
fourth (beginning with ``The Corporation shall be entitled . . .'') 
to last paragraphs because these paragraphs relate to the interbank 
service.
    g. FICC is proposing to delete the provisions of Section 3a of 
GSD Rule 20. This section describes scenarios when FICC would 
declare a GCF Repo Event. These instances relate to the interbank 
service, and therefore, FICC is proposing to delete this section. In 
connection with this proposed change, FICC would rename Section 3a 
``[RESERVED]'' in order to not impact the numbering of the rest of 
the sections.
    h. FICC is proposing to delete the entirety of Section 7 of GSD 
Rule 20 because this Section relates to the interbank service.
    i. FICC is proposing to delete the current description of the 
7:30 a.m. to 2:30 p.m. timeframe in the Schedule of GCF Repo 
Timeframes because this deadline relates to the interbank GCF Repo 
Service.
    j. FICC is proposing to delete ``, inclusive of inter-bank'' in 
subsection (c) of Section IV.B.4 of the Fee Structure.
    k. FICC is proposing to delete subsection (d) of Section IV.B.4 
of the Fee Structure because this subsection relates to the 
interbank service. In connection with this proposed change, FICC 
would change current subsection (e) to (d).
    (3) Proposal To Delete References to a Former FICC Clearing Bank 
From the GSD Rules
    FICC is proposing to remove provisions related to J.P. Morgan 
(``JPM'') providing clearing bank services to FICC and its Members as 
JPM is no longer providing this service. Specifically, FICC is 
proposing to:

    a. Delete ``and J.P. Morgan Chase (``JPM''), as applicable,'' in 
subsection (a) of Section IV.B.4 of the Fee Structure.
    b. Delete ``and to Dealer Accounts at JPM,'' in subsection (c) 
of IV.B.4 of the Fee Structure.
    c. Delete ``For Dealer Accounts at BNY,'' and capitalize the A 
in subsection (c)(i) of Section IV.B.4 of the Fee Structure because 
BNY is the sole bank providing clearing bank services to FICC.
    d. Delete subsection (c)(ii) of Section IV.B.4 of the Fee 
Structure.

[[Page 26749]]

(4) Proposal To Delete References to ``Clearing Fund Funds-Only 
Settlement Amount''
    FICC is proposing to delete references to the term ``Clearing Fund 
Funds-Only Settlement Amount'' because this is an outdated Clearing 
Fund component that should have been deleted when GSD moved to a VaR-
based Clearing Fund methodology. As such, FICC proposes to delete this 
term from the definitions in GSD Rule 1. FICC would delete ``and 
Clearing Fund Funds-Only Settlement Amounts'' from the definitions of 
``Collected/Paid Amount'' and ``Opening Balance'' and delete ``and 
Clearing Fund Funds-Only Settlement Amount'' from the subheading of 
Section 2 of GSD Rule 13. In addition, FICC proposes to delete the last 
paragraph of Section 2 of GSD Rule 13 because this paragraph covers the 
calculation of the Clearing Fund Funds-Only Settlement Amount, which is 
proposed to be deleted.
B. MBSD Rules
    FICC is proposing to delete the terms ``RTTM Compare Report'' and 
``RTTM Purchase and Sale Report'' from MBSD Rule 1 and delete 
references and a parenthetical associated with these terms in Section 8 
of MBSD Rule 5. FICC no longer generates these reports. The information 
that was formerly contained in these Reports is currently contained in 
the Open Commitment Report and the Purchase and Sale Report.
(iii) Delete Certain Dates in the GSD Rules and MBSD Rules
    FICC is proposing to remove certain historical dates contained in 
the GSD Rules and MBSD Rules related to specific provisions. These 
dates refer to either the effective date of a specific provision or 
when such provision was added to the GSD Rules and/or MBSD Rules. When 
there is an update to the GSD Rules or MBSD Rules, the effective date 
of the GSD Rules or MBSD Rules, as applicable, found on the top right 
corner of the first page of the GSD Rules and MBSD Rules is updated. 
This effective date covers all of the GSD Rules and MBSD Rules, as 
applicable, including schedules, interpretive guidance, fee structures 
and statements of policy. However, the dates contained in these certain 
schedules, interpretive guidance, fee structures and statements of 
policy are not updated to reflect the most recent effective date of the 
GSD Rules and MBSD Rules, as applicable.
    FICC believes that the inclusion of these historical dates in the 
GSD Rules and MBSD Rules is superfluous and confusing as the GSD Rules 
and MBSD Rules are effective as of the date listed on the first page. 
Therefore, FICC is proposing to remove these dates from the Schedule of 
Money Tolerances, Fee Structure, Board Statements of Policy and 
Interpretive Guidance with Respect to Watch List Consequences in the 
GSD Rules and the Interpretive Guidance with Respect to Watch List 
Consequences in the MBSD Rules.
(iv) Proposal To Make Certain Clarifications in the Rules
A. GSD Rules
(1) Amend Certain Defined Terms in GSD Rule 1 To Clarify Their Meaning
    FICC is proposing the following changes to better clarify the 
meaning and usage of certain defined terms in GSD Rule 1. While these 
changes do not change the substance of the defined terms, FICC believes 
these revisions would enhance the clarity of these defined terms.
    First, FICC is proposing to amend the definition of ``Close of 
Business'' to add language to include the deadline for final input of 
trade data by Members as noted in the Schedule of Timeframes, as the 
context requires. This clarification is necessary to make clear that 
for trade submission purposes, Close of Business is not 5 p.m. but 
rather the deadline noted in the Schedule of Timeframes.
    Second, FICC is proposing to amend the definition of ``Fannie Mae'' 
in GSD Rule 1 by deleting a portion of the current definition and 
replacing it with language to define Fannie Mae as ``the Federal 
National Mortgage Association.'' FICC is proposing to define this 
entity solely by its entity name and not by its government status. FICC 
believes that the government status of these entities does not impact 
the usage of the defined term and is therefore unnecessary.
    Third, FICC is proposing to amend the definition of ``Forward-
Starting Repo Transaction'' in GSD Rule 1 to restate the definition in 
the way that is generally understood by FICC's Members. Specifically, a 
forward-starting repo transaction is one which is scheduled to start 
one or more Business Days after the date it is submitted to FICC. FICC 
believes that the current way the term is defined, by reference to when 
the trade is compared by FICC, could cause confusion.
    Fourth, FICC is proposing to amend the definition of ``Forward 
Trade'' in GSD Rule 1 to restate the definition in the way it is 
generally understood by FICC's Members. Specifically, a forward trade 
is one that settles two or more Business Days after the date it is 
submitted to FICC. In addition, FICC is proposing to amend the 
definition of this term to make clear that it does not include Repo 
Transactions to reflect the way in which the term is used in the rest 
of the GSD Rules.
    Fifth, FICC is proposing to amend the definition of ``Government 
Securities Division'' in GSD Rule 1 to add ``or GSD'' to the defined 
term and the definition. FICC has determined that both the terms 
``Government Securities Division'' and ``GSD'' are used interchangeably 
in the GSD Rules to refer to GSD.
    Sixth, FICC is proposing an additional revision to the defined term 
``Government Securities Division'' in GSD Rule 1. The definition 
currently states that GSD provides clearing and other services related 
to government securities. FICC is proposing to change the reference 
from ``government securities'' to ``Eligible Securities'' for 
clarification purposes. Government securities are included in the 
definition of the term ``Eligible Securities'' and FICC believes that 
the term Eligible Securities better reflects the services that GSD 
provides.
    Seventh, FICC is proposing to amend the definition of ``Right of 
Substitution'' to clarify the timing as to when a Repo Party may 
substitute new collateral in replacement of existing collateral 
transferred to the Reverse Repo Party. The phrase ``during the period 
from the start of the Repo Transaction until its close'' is vague. FICC 
is proposing to revise this language to read ``during the period 
immediately after the Scheduled Settlement Date for the Start Leg of 
the Repo Transaction until the day prior to the Scheduled Settlement 
Date for the End Leg of the Repo Transaction.''
(2) Amend Certain Provisions in the GSD Rules To Clarify Their Meaning
    FICC is proposing the following changes to better clarify the 
meaning of certain provisions in the GSD Rules. While these changes do 
not change the substance of the provisions, FICC believes these 
revisions would enhance the clarity of these provisions.
    First, FICC is proposing to amend Section 14(c) of GSD Rule 3A 
(Sponsoring Members and Sponsored Members). This Section covers a 
scenario where FICC ceases to act for a Sponsoring Member in its 
capacity as a Sponsoring Member. FICC is proposing to add a sentence 
that gives FICC the discretion to determine whether to close-out the 
affected Sponsored Member Trades and/or to permit the Sponsored Members 
to complete their settlement. This sentence appears in Section 16(b) of 
GSD Rule 3A, which describes a scenario where FICC has

[[Page 26750]]

determined to treat a Sponsoring Member as insolvent. Both of these 
Sections describe similar situations and processes and therefore, for 
clarification purposes and consistency, FICC is proposing to add the 
sentence that appears in Section 16(b) to Section 14(c).
    Second, FICC is proposing to replace ``minimum Clearing Fund 
requirement'' with the defined term ``Minimum Charge'' in the second to 
last paragraph in Section 1b of GSD Rule 4. FICC believes that using 
the defined term here would remove any confusion that may arise as to 
whether the existing language differs from the defined term.
    Third, FICC is proposing to amend Section 4 of GSD Rule 18 by 
adding an additional sentence that states, ``This paragraph does not 
apply to GCF Repo Transactions.'' Section 4 provides instructions as to 
how a submitted General Collateral Repo Transaction that is also a 
Forward-Starting Repo Transaction may be included in a Member's Net 
Settlement Position of the Repo Start Date. The GSD Rules provide that 
the term General Collateral Repo Transactions generally do not include 
GCF Repo Transactions (unless the context indicates otherwise).\12\ 
Consistent with this definition, the proposed language would explicitly 
state that this Section does not apply to GCF Repo Transactions.
---------------------------------------------------------------------------

    \12\ See GSD Rule 1, definition of ``General Collateral Repo 
Transaction,'' supra note 5.
---------------------------------------------------------------------------

    Fourth, FICC is proposing to move certain paragraphs within Section 
3 of GSD Rule 20 and between Section 3 of GSD Rule 20 and Section 4 of 
GSD Rule 20 in order to improve the flow of these sections and the 
readability and also to put paragraphs under the more appropriate 
subheadings. These changes are as follows:

    a. Move the current fourth paragraph of Section 3 beginning 
``Every Collateral Allocation Entitlement and Collateral Allocation 
Obligation . . .'' to become part of the current first paragraph of 
Section 3.
    b. Make the first two sentences of the current first paragraph 
of Section 3 a separate paragraph, and move the remaining sentences 
of the current first paragraph of Section 3 into the following 
paragraph, so the second paragraph of Section 3 would begin with the 
sentence ``If a Netting Member does not satisfy its consequent 
Collateral Allocation Obligation . . .''.
    c. Move the current sixth paragraph of Section 3 beginning ``A 
Netting Member that has, on a particular Business Day, . . .'' to 
follow the newly created paragraph discussed in the previous bullet.
    d. Delete the current first paragraph of Section 4 because it 
does not relate to the subheading of Section 4 and is substantially 
similar to an existing paragraph in Section 3.
    e. Move the current eighth paragraph of Section 3 beginning ``On 
any Business Day (within the timeframes established by the 
Corporation . . .'' to Section 4.

    Fifth, FICC is proposing to amend Section 4 of GSD Rule 20 by 
adding a new paragraph that clarifies that a Netting Member may 
substitute collateral for cash in addition to substituting cash for 
collateral as this reflects current practice.
    Sixth, FICC is proposing to add the word ``and intraday'' before 
``funds-only settlement'' in the second 12:00 p.m. deadline and the 
2:00 p.m. deadlines in the Schedule of Timeframes. FICC believes that 
the word ``intraday'' was inadvertently omitted in these two deadlines.
    Seventh, FICC is proposing to amend the explanatory note in the 
Schedule of Timeframes related to the third 12:00 p.m. deadline, the 
12:30 p.m. deadline and the 1:00 p.m. deadline. The note currently 
states that FICC may extend certain deadlines by one hour on days that 
FICC determines are high volume days or SIFMA has announced in advance 
will be high volume days. From an operational practice, FICC does not 
define high volume days. Additionally, SIFMA, as part of its 
operational procedures, no longer announces high volume days in 
advance. FICC is proposing to amend the note to allow FICC to extend 
deadlines on days that operational or systems difficulties would 
reasonably prevent members from satisfying the applicable deadline. 
FICC believes that this proposed change reflects the current practice 
as is stated in the previous footnote in the Schedule of Timeframes.
    Eighth, FICC is proposing to amend subpart 1 of the Schedule of 
Required and Accepted Data Submission Items for Substitution. The 
Schedule lists the additional data items related to a Repo Transaction 
that are required to be received by FICC in order for FICC to process a 
substitution. The first data item on the list is the ``Specific 
Existing Securities Collateral CUSIP Number.'' FICC believes that the 
current formulation of this data item may be unclear and cause 
confusion as to the data item's intended meaning. FICC proposes to 
revise subpart 1 to read, ``the Specific CUSIP Number for the Existing 
Securities Collateral;''.
    Ninth, FICC is proposing to amend subpart 1 of the Schedule of 
Required and Accepted Data Submission Items for New Securities 
Collateral. The Schedule lists the additional data items related to a 
Repo Transaction that are required to be received by FICC in order for 
FICC to process a substitution. The first data item on the list is the 
``Specific Existing Securities Collateral CUSIP Number.'' FICC believes 
that the current formulation of this data item may be unclear and cause 
confusion as to the data item's intended meaning. Furthermore, this 
schedule refers to New Securities Collateral, while the data item 
refers to the ``Specific Existing Securities Collateral.'' FICC 
proposes to revise subpart 1 to read, ``the Specific CUSIP Number for 
the New Securities Collateral;''. FICC believes that the reference to 
``Existing Securities Collateral'' was made in error.
(3) Revise the Defined Term ``Close Leg'' to ``End Leg''
    FICC is proposing to replace the defined term ``Close Leg'' with 
the term ``End Leg'' and move ``End Leg'' to its correct placement 
alphabetically. The terms ``Close Leg'' and ``End Leg'' refer to the 
concluding settlement aspects of a Repo Transaction. FICC is proposing 
to replace Close Leg with End Leg because in the industry, ``End Leg'' 
is more often associated with ``Start Leg'' (which refers to the 
initial aspects of the settlement of a Repo Transaction and which term 
exists in the GSD Rules currently). FICC believes that this revision 
would enhance clarity in the GSD Rules.
    In connection with the change, FICC would revise all the references 
to ``Close Leg'' to ``End Leg.'' This includes revising the defined 
term ``Coupon-Eligible Close Leg'' to ``Coupon-Eligible End Leg'' to 
make it consistent with the newly revised term, ``End Leg.''
    FICC would also revise ``Close Leg'' to ``End Leg'' in the 
following defined terms in GSD Rule 1 and move them into alphabetical 
order as necessary:

    a. ``Contract Value'';
    b. ``Coupon Adjustment Payment'';
    c. ``Coupon-Eligible Close Leg'' (including from ``a Close Leg'' 
to ``an End Leg,'' as applicable);
    d. ``Credit Coupon Adjustment Payment'';
    e. ``Debit Coupon Adjustment Payment''
    f. ``Fail Net Long Position'';
    g. ``Fail Net Short Position'';
    h. ``Forward Net Settlement Position'';
    i. ``GCF Interest Rate Mark'';
    j. ``Interest Rate Mark'';
    k. ``Long Transaction'';
    l. ``Repo Interest Rate Differential'';
    m. ``Scheduled Settlement Date'' (from ``a Close Leg'' to ``an 
End Leg'');
    n. ``Short Transaction'';
    o. ``System Repo Rate'';
    p. ``Term GCF Repo Transaction''; and
    q. ``Term Repo Transaction''

    FICC would amend the reference to ``a Close Leg'' with ``an End 
Leg'' in the first sentence of the second paragraph of Section 2 of GSD 
Rule 11 (which begins ``Except to the extent that . . . '') and would 
amend ``Close Leg'' to read as

[[Page 26751]]

``End Leg'' in subsections (ii), (iii) and current (vi) of the same 
paragraph. FICC would replace ``Close Leg'' with ``End Leg'' in Section 
1(j) of GSD Rule 13, Section 5 of GSD Rule 18, Section 5 of GSD Rule 
19, and the Schedule of Required and Other Data Submission Items For 
GCF Repo Transactions. FICC would also replace ``a Close Leg'' with 
``an End Leg'' in Section VIII of the Fee Structure and ``Close Leg'' 
to ``End Leg'' the two times it appears.
    In connection with this change and for alphabetical purposes, FICC 
is proposing to move the definition of ``End Leg'' from after the 
defined term ``Clearing Organization'' to after the defined term 
``Eligible Treasury Security'' in GSD Rule 1.
(4) Clarify Certain GSD Rules Related to Inter-Dealer Broker Netting 
Members and Related Provisions
    FICC is proposing to amend certain definitions and provisions 
related to ``Inter-Dealer Broker Netting Members,'' ``Non-IDB Repo 
Brokers,'' ``Repo Brokers,'' ``Inter-Dealer Brokers'' and ``GCF-
Authorized Inter-Dealer Brokers'' in order to enhance the clarity of 
these provisions.
a. Clarifying Changes to GSD Rule 1 and the Fee Structure
    By way of background, a ``Repo Broker'' is a member firm that acts 
in a brokered capacity with respect to activity in its Segregated Repo 
Account; there are two types of members that can be Repo Brokers: 
Inter-Dealer Broker Netting Members and non-IDB Repo Brokers.
    FICC is proposing to amend the definition of ``Non-IDB Repo 
Broker'' in GSD Rule 1 by clarifying the characteristics of this type 
of broker. Specifically, FICC is proposing to move the description from 
the definition of ``Repo Broker'' to the definition of ``Non-IDB Repo 
Broker.'' FICC is also proposing to replace the reference to ``Repo 
Broker'' in the definition of ``Non-IDB Repo Broker'' with ``Netting 
Member'' to clarify that a Non-IDB Repo Broker is a Netting Member.
    In connection with the proposed change discussed in the previous 
paragraph, FICC is proposing to delete the description contained in 
romanette (ii) in the definition of ``Repo Broker.'' Since this 
information would now be described in the definition of ``Non-IDB Repo 
Broker,'' FICC would replace this information with ``a Non-IDB Repo 
Broker with respect to activity in its Segregated Repo Account.'' The 
definition of ``Repo Broker'' previously included a reference to an 
Inter-Dealer Broker Netting Member and the full description of a Non-
IDB Repo Broker.
    In the definition of ``Brokered Repo Transaction'' in GSD Rule 1, 
FICC is proposing to replace ``an Inter-Dealer Broker Netting Member or 
Non-IDB Repo Broker with respect to activity in its Segregated Repo 
Account'' with ``a Repo Broker.'' The proposed amended definition of 
``Repo Broker'' refers to both Inter-Dealer Broker Netting Members and 
Non-IDB Repo Brokers with respect to activity in their Segregated Repo 
Accounts. FICC believes that this proposed change will enhance the 
readability of the GSD Rules by replacing these terms with the defined 
term.
    Additionally, in connection with the proposed change to the 
definition of ``Repo Broker,'' FICC is proposing to delete Section IV.D 
of the Fee Structure, which is a definition of ``Repo Broker'' and is 
no longer necessary. In connection with this proposed change, FICC is 
proposing to delete ``(as defined in subsection IV.D below)'' in 
subsection 1(a) of Section IV.C of the Fee Structure since ``Repo 
Broker'' would no longer be defined in Section IV.D.
b. Clarifying Changes to Other Provisions and Rules
    FICC is proposing to replace the reference to ``Inter-Dealer 
Broker'' with ``Inter-Dealer Broker Netting Member'' in the second 
sentence of Section 8(e) of GSD Rule 3. This Section describes the 
specific continuance standards that Inter-Dealer Broker Netting Members 
must comply with as ongoing membership requirements. FICC believes that 
this reference to ``Inter-Dealer Broker'' was incorrect and was 
intended to refer to ``Inter-Dealer Broker Netting Members'' as the 
rest of the paragraph does.
    FICC is proposing to amend Section 2 of GSD Rule 6C to replace the 
reference to ``Inter-Dealer Broker Netting Member'' with ``GCF 
Authorized Inter-Dealer Broker.'' The term ``GCF Authorized Inter-
Dealer Broker'' is more accurate in this respect because that is the 
term that is used regarding the GCF Repo Service. Similarly, FICC is 
proposing to amend the Schedule of GCF Repo Timeframes by removing the 
defined term ``brokers'' as set forth in the 7:00 a.m. timeframe and 
replacing the references to ``Brokers'' and ``brokers'' in the 7:00 
a.m. and 3:00 p.m. timeframes, respectively, with ``GCF-Authorized 
Inter-Dealer Brokers,'' the more accurate defined term in this respect.
c. Proposed Changes Replacing References to ``Inter-Dealer Broker 
Netting Member'' and ``Non-IDB Repo Broker''
    Given the proposed rule changes discussed above in connection with 
the definition of ``Repo Broker,'' FICC proposes to delete references 
to ``Inter-Dealer Broker Netting Members'' and ``Non-IDB Repo Brokers'' 
when the context refers to both of these entity types and replace them 
with the term ``Repo Broker.'' In addition, there are instances where 
FICC proposes to replace ``Inter-Dealer Broker Netting Member'' with 
``Repo Broker'' in order to reflect current practice. Specifically, 
FICC proposes the following:

    i. Amend the definition of ``GCF-Authorized Inter-Dealer 
Broker'' in GSD Rule 1 to replace the two current references to ``an 
Inter-Dealer Broker Netting Member'' with ``a Repo Broker.''
    ii. Amend the definition of ``Submitting Member'' in GSD Rule 1 
to replace the current reference to ``an Inter-Dealer Broker'' with 
``a Repo Broker.''
    iii. Amend the second to the last paragraph of Section 1b of GSD 
Rule 4 by removing ``an Inter-Dealer Broker Netting Member or a 
Netting Member that maintains one or more Broker Accounts'' and 
replacing it with ``a Repo Broker.''
    iv. Replace the reference to ``an Inter-Dealer Broker Netting 
Member'' with ``a Repo Broker'' in Section 2(c) of GSD Rule 4.
    v. Amend the subheading of Section 2 of GSD Rule 15 by replacing 
the reference to ``Inter-Dealer Broker Netting Members'' with ``Repo 
Brokers.'' In connection with this proposed change, FICC is 
proposing to replace the references to ``Inter-Dealer Broker Netting 
Member'' with ``Repo Broker,'' ``an Inter-Dealer Broker Netting 
Member'' with ``a Repo Broker'' and ``Inter-Dealer Brokers'' with 
``Repo Brokers'' in the three paragraphs of this Section. Further, 
FICC would delete ``Inter-Dealer Broker with the Non-Member'' and 
replace it with ``Repo Broker'' in the third paragraph of Section 2 
of GSD Rule 15.
    vi. Amend the subheading of Section 2 of GSD Rule 19 by deleting 
``Inter-Dealer Broker Netting Members and non-IDB'' so that only the 
reference to ``Repo Brokers'' remains.
    vii. Amend the first paragraph of Section 2 of GSD Rule 19 by 
replacing ``an Inter-Dealer Broker Netting Member or non-IDB Repo 
Broker'' with ``a Repo Broker.''
    viii. Amend the second paragraph of Section 2 of GSD Rule 19 by 
replacing ``An Inter-Dealer Broker Netting Member or a Non-IDB Repo 
Broker'' with ``A Repo Broker.'' In both subsections (a) and (b) of 
this paragraph, FICC would delete ``Inter-Dealer Broker Netting 
Member's or Non-IDB'' so that only ``Repo Broker's remains.
    ix. Amend the third paragraph of Section 2 of GSD Rule 19 by 
replacing ``An Inter-Dealer Broker Netting Member or a Non-IDB Repo 
Broker'' with ``A Repo Broker.''
    x. Amend the second sentence of Section 3 of GSD Rule 19 to 
replace ``its counterparty Inter-Dealer Broker Netting Member or 
Non-

[[Page 26752]]

IDB Repo Broker with respect to activity in its Segregated Repo 
Account,'' with ``the Repo Broker's counterparty.''
    xi. Amend subpart 1 of the Schedule of Required Data Submission 
Items by replacing the reference to ``an Inter-Dealer Broker 
Member'' with ``a Repo Broker.''
    xii. Replace the references to ``Inter-Dealer Broker Netting 
Members'' in Sections IV.A.1 and IV.B.1 of the Fee Structure with 
``Repo Brokers.''
    xiii. Replace the reference to ``Inter-Dealer Broker Netting 
Member'' in the footnote to Section IV.A of the Fee Structure with 
``Repo Broker.''

d. Proposed Changes Related to ``non-Inter-Dealer Broker Netting 
Members'' and ``non GCF Authorized Inter-Dealer Brokers''
    FICC is proposing to amend the definition of ``GCF Counterparty'' 
in GSD Rule 1 to delete ``non-Inter-Dealer Broker'' and add ``, other 
than a Repo Broker,''. The term ``non-Inter-Dealer Broker Netting 
Member'' is not a defined term in the GSD Rules and FICC believes that 
this term is confusing. FICC believes that this term was intended to 
refer to Netting Members, other than Repo Brokers. FICC proposes the 
following:

    i. Amend the second half of the third paragraph of Section 2 of 
GSD Rule 19 by replacing the reference to ``non-Inter-Dealer Broker 
Netting Members'' with ``Netting Member counterparties.''
    ii. Amend the subheading of Section 3 of GSD Rule 19 by 
replacing the reference to ``a Non-Inter-Dealer Broker Netting 
Member'' with ``Netting Members With Respect to Their Brokered Repo 
Transactions,'' as this change would reflect the purpose of this 
section. FICC is also proposing to replace the reference to ``non-
Inter-Dealer Broker Netting Member'' in the first sentence of this 
Section with ``Netting Member whose counterparty is a Repo Broker.'' 
Furthermore, FICC is proposing to replace the reference to ``a Non-
Inter-Dealer Broker Netting Member'' in the second sentence of this 
Section with ``the Netting Member.''
    iii. Amend Section 4 of GSD Rule 19 by deleting ``Non-Inter-
Dealer Broker'' and adding ``of the Repo Broker.''

    FICC is proposing to replace the reference to ``non Inter-Dealer 
Broker Member'' with ``GCF Counterparty to the GCF Authorized Inter-
Dealer Broker'' in the second paragraph of Section I.G of the Fee 
Structure.
    Finally, the last sentence of the second paragraph of Section I.G 
of the Fee Structure refers to the Inter-Dealer Broker Member. FICC 
believes that the more precise term for this provision would be ``GCF-
Authorized Inter-Dealer Broker'' and proposes the changes to effectuate 
this replacement.
(5) Delete Certain Times in the Schedule of Timeframes
    FICC is proposing to delete the 8:30 a.m. time and the 3:00 p.m. 
deadlines in the GSD Schedule of Timeframes because these are external 
deadlines that FICC and its Members cannot control.
B. MBSD Rules
(1) Amend Certain Defined Terms To Clarify Their Meaning
    FICC is proposing the following changes to clarify the meaning and 
usage of certain defined terms in MBSD Rule 1. While these revisions do 
not change the substance of the defined terms, FICC believes these 
revisions would enhance the clarity of these defined terms.
    First, FICC is proposing to amend the defined term ``Clearing 
Members'' to ``Clearing Member.'' The defined terms in MBSD Rule are 
generally defined in their singular form. For example, the term 
``Dealer'' is defined as ``Dealer'' and not ``Dealers.'' FICC uses the 
plural version of a defined term should the context necessitate. 
Furthermore, in the definition of ``Clearing Members'' FICC references 
the term ``Clearing Member.''
    Second, FICC is proposing to amend the definition of ``Mortgage-
Backed Securities Division'' in MBSD Rule 1 to add ``or MBSD'' to the 
defined term and the definition. FICC has determined that both the 
terms ``Mortgage-Backed Securities Division'' and ``MBSD'' are used 
interchangeably in the MBSD Rules to refer to MBSD.
(2) Add Defined Terms to MBSD Rule 1
    FICC is proposing to add two defined terms to MBSD Rule 1 in an 
effort to enhance the clarity of the MBSD Rules.
    First, FICC is proposing to add the defined term ``EPN Rules.'' 
FICC is proposing this rule change because the term ``EPN Rules'' is 
used in the definition of ``EPN Service.'' FICC would define ``EPN 
Rules'' as ``the rules of the Corporation relating to the EPN Service, 
as amended from time to time.''
    Second, FICC is proposing to add the defined term ``EPN User.'' 
FICC is proposing this rule change because the term ``EPN User'' is 
used in the definition of ``EPN Service.'' FICC proposes to define 
``EPN User'' the way in which the term is defined in the EPN Rules.
(3) Amend Certain Provisions To Clarify Their Meaning
    FICC is proposing the following changes to clarify the meaning of 
certain provisions in the MBSD Rules. While these revisions do not 
change the substance of the provisions, FICC believes these revisions 
would enhance the clarity of these provisions.
    First, in Section 8(ii) of MBSD Rule 3, FICC is proposing to change 
the reference ``EPN Only Members'' to ``EPN Users that are not Clearing 
Members.'' ``EPN Only Members'' is not a defined term in the MBSD Rules 
and refers to EPN Users that are not Clearing Members. FICC believes 
that this change would enhance the clarity of the MBSD Rules by 
replacing an undefined term with a more useful descriptive phrase.
    Second, in Section 6 of MBSD Rule 5, FICC is proposing to change 
the format of the first two paragraphs of this Section by deleting 
``a)'' at the start of the second paragraph. There is no subsection b 
in this Section and therefore ``a)'' is superfluous and confusing. In 
connection with this proposed change, FICC is proposing to delete ``The 
following Net Position Match Mode shall govern the comparison of'' from 
the first paragraph. Since the section does not contain a list or 
additional subparts, FICC believes that this phrase can be confusing as 
it implies a list will be forthcoming. FICC proposes to start the 
section with ``Each'' and add ``shall be governed by the'' to the end 
of the current first paragraph. This addition would be used as the 
connecting phrase, and the next paragraph would be combined with the 
current first paragraph.
    Third, additionally in Section 6 of MBSD Rule 5, FICC is proposing 
to capitalize the word ``number'' after CUSIP in order to reference the 
defined term ``CUSIP Number.'' FICC believes that the word ``number'' 
was inadvertently written with lowercase letters and that the current 
reference to CUSIP number was intended to refer to the defined term.
    Fourth, FICC is proposing to amend the seventh paragraph of 
subsection (c) of MBSD Rule 17A by deleting the phrase ``under a 
netting'' from the phrase ``netting under a netting.'' FICC believes 
that this phrase is superfluous and creates confusion when reading this 
paragraph. The phrase ``under a netting'' does not provide any 
additional information and seems misplaced.
C. EPN Rules
(1) Amend Certain Defined Terms To Clarify Their Meaning
    FICC is proposing the following changes to clarify the meaning and 
usage of certain defined terms in Rule 1 of Article I of the EPN Rules. 
While these revisions do not change the substance of the defined terms, 
FICC

[[Page 26753]]

believes these revisions would enhance the clarity of these defined 
terms.
    First, FICC is proposing to make the following changes to the 
defined term ``FNMA.'' FNMA refers to the Federal National Mortgage 
Association. FICC is proposing to change the defined term ``FNMA'' to 
``Fannie Mae.'' ``Fannie Mae'' is the defined term that is used in both 
the GSD Rules and the MBSD Rules.
    FICC is also proposing to define Fannie Mae as the Federal National 
Mortgage Association. Fannie Mae is more commonly used when referring 
to the entity and FICC believes that this change would enhance clarity 
across the EPN Rules.
    Second, FICC is proposing make the following changes to the defined 
term ``FHLMC.'' FHLMC refers to the Federal Home Loan Mortgage 
Corporation. FICC is proposing to change the defined term ``FHLMC'' to 
``Freddie Mac.'' ``Freddie Mac'' is the defined term that is used in 
both the GSD Rules and the MBSD Rules. Freddie Mac is more commonly 
used when referring to the entity and FICC believes that this change 
would enhance clarity across the EPN Rules.
    FICC is also proposing to define ``Freddie Mac'' as the Federal 
Home Loan Mortgage Corporation. Currently, the FHLMC definition also 
refers to the fact that FHLMC is a corporate instrumentality of the 
United States of America. FICC is proposing to remove this reference in 
the revised definition of Freddie Mac. FICC believes that the 
government status of Freddie Mac does not affect the usage of the 
defined term and is therefore unnecessary. FICC is also proposing these 
changes to enhance consistency across the Rules as the GSD Rules and 
the MBSD Rules do not reference Freddie Mac's government status.
    Third, FICC is proposing make the following changes to the defined 
term ``GNMA.'' GNMA refers to the Government National Mortgage 
Association. FICC is proposing to change the defined term ``GNMA'' to 
``Ginnie Mae.'' ``Ginnie Mae'' is the defined term that is used in both 
the GSD Rules and the MBSD Rules. Ginnie Mae is more commonly used when 
referring to the entity and FICC believes that this change would 
enhance clarity across the EPN Rules.
    FICC is also proposing to define ``Ginnie Mae'' as the Government 
National Mortgage Association. Currently, the GNMA definition also 
refers to the fact that GNMA is a corporate instrumentality of the U.S. 
Department of Housing and Urban Development. FICC is proposing remove 
this reference in the revised definition of Ginnie Mae. FICC believes 
that the government status of Ginnie Mae does not affect the usage of 
the defined term and is therefore unnecessary. FICC is also proposing 
these changes to enhance consistency across the Rules as the GSD Rules 
and MBSD Rules do not reference Ginnie Mae's government status.
    In connection with these proposed changes, FICC is proposing to 
revise the order in which the revised terms ``Fannie Mae'' and 
``Freddie Mac'' appear in Rule 1 of Article I of the EPN Rules. While 
the current placement of ``FHLMC'' and ``FNMA'' are in correct 
alphabetical order, the revised term ``Fannie Mae'' should appear 
before ``Freddie Mac.''
    Finally, in connection with these proposed changes, FICC is 
proposing to amend the definition of ``Mortgage-Backed Securities.'' 
The defined terms ``GNMA,'' ``FHLMC'' and ``FNMA'' are used in this 
definition. FICC would change the references from ``GNMA'' to ``Ginnie 
Mae,'' ``FHLMC'' to ``Freddie Mac'' and ``FNMA'' to ``Fannie Mae'' to 
conform to the proposed changes described above.
(2) Amend the Governing Law Provision for Clarity
    FICC is proposing to amend Section 1 of Rule 9, Article V of the 
EPN Rules to change the governing law provision so that it is 
consistent with similar provisions in the GSD Rules and MBSD Rules, and 
therefore provide clarity to Members. This proposed change would also 
conform the EPN provision to similar provisions in the GSD Rules and 
MBSD Rules, and therefore, provide clarity to members who use two or 
more of these services.
(v) Make Certain Corrections to the Rules
A. GSD Rules
(1) Capitalize Terms To Refer to the Defined Term as Set Forth in GSD 
Rule 1
    Capitalized terms used throughout the GSD Rules have the meaning 
set forth in GSD Rule 1. FICC has determined that certain defined terms 
were subsequently not capitalized when later used in the GSD Rules. 
FICC believes that this was done inadvertently and proposes to amend 
these instances a follows:

    a. Amend the definition of ``Early Unwind Intraday Charge'' in 
GSD Rule 1 by capitalizing the word ``service'' in the phrase ``GCF 
Repo service'' to reflect the defined term, ``GCF Repo Service'' as 
set forth in GSD Rule 1.
    b. Capitalize the two current references to ``broker'' in 
Section 8(e) of GSD Rule 3 in order to reflect to the defined term 
``Broker'' as set forth in GSD Rule 1.
    c. Capitalize ``federal funds rate'' both times it appears in 
the second paragraph of Section 14 of GSD Rule 11 in order to 
reflect to the defined term ``Federal Funds Rate'' as set forth in 
GSD Rule 1.
    d. Capitalize ``brokered transaction'' in the Schedule of 
Required Data Submission Items in order to reflect the defined term, 
``Brokered Transaction'' as set forth in GSD Rule 1.
    e. Capitalize ``Transaction'' in subpart (6) of the Schedule of 
Required and Accepted Data Submission Items for a Substitution and 
in subpart (6) of the Schedule of Required and Accepted Data 
Submission Items for New Securities Collateral to reflect the 
defined term ``Transaction'' as set forth in GSD Rule 1.
    f. Amend Section I.G of the Fee Structure to amend a reference 
to ``Locked-in Trade Source'' and ``locked-in trade data'' by 
capitalizing the ``i'' in ``Locked-in Trade Source'' and the ``l,'' 
``i'' and ``t'' in ``locked-in trade data.''
    g. Capitalize the ``i'' in the reference to ``Locked-in-Trades'' 
in Section 6 of GSD Rule 17.

(2) Revise Terms To Reflect the Defined Terms
    FICC is proposing to amend the GSD Rules in order to amend various 
terms that do not match the defined term used in GSD Rule 1 but were 
otherwise intended to do so. These proposed changes include instances 
where a defined term was used in the GSD Rules but was not capitalized.
    First, FICC is proposing to amend the definition of ``Account'' in 
GSD Rule 1 to replace the references to ``Segregated Broker Account'' 
and ``Non-IDB Broker'' with ``Segregated Repo Account'' and ``Non-IDB 
Repo Broker,'' respectively. The proposed changes would reflect the 
defined terms as set forth in GSD Rule 1. FICC believes that these 
terms were used in error since ``Segregated Broker Account'' and ``Non-
IDB Broker'' are not defined terms in the GSD Rules. FICC believes that 
these terms were intended to refer to their respective defined terms.
    Second, FICC is proposing to correct certain references to the 
defined term ``GCF Repo Service'' where the word ``Service'' was 
inadvertently omitted. FICC believes that these terms refer to the 
defined term ``GCF Repo Service'' and is proposing this change to 
enhance the clarity of the GSD Rules. Specifically, the following 
changes would be made:

    a. Revise the current references to ``GCF Repo Deliver 
Obligation'' and ``GCF Repo Deliver Obligations'' to add ``Service'' 
so that they read ``GCF Repo Service Deliver Obligation'' and ``GCF 
Repo Service Deliver Obligations,'' respectively, in subsection (c) 
of Section IV.B.4 of the Fee Structure.
    b. Revise the current reference ``GCF Repo Receive Obligation'' 
to ``GCF Repo Service

[[Page 26754]]

Receive Obligation'' in subsection (c)(i) of Section IV.B.4 of the 
Fee Structure.

    Third, FICC is proposing to amend the definition of ``VaR Charge'' 
in GSD Rule 1 by replacing ``Clearing'' with ``Netting'' so that the 
term reads ``Netting Member's.'' FICC is proposing this change so that 
this term reflects the defined term ``Netting Member'' as set forth in 
GSD Rule 1. Clearing Member is not a defined term in the GSD Rules and 
FICC believes that this reference was intended to be to ``Netting 
Member.''
    Fourth, FICC is proposing to amend the first sentence of the second 
paragraph in Section 9(ii) of GSD Rule 3 by replacing the reference to 
``GSD Comparison Only Members'' with ``Comparison-Only Members.'' FICC 
is proposing this change so that this term reflects the defined term 
``Comparison-Only Members'' as set forth in GSD Rule 1.
    Fifth, FICC is proposing to amend the first sentence of the first 
paragraph in Section 2 of GSD Rule 19 by replacing ``Repo Brokered'' 
with ``Brokered Repo.'' FICC is proposing this change so that this term 
reflects the defined term ``Brokered Repo Transaction'' as set forth in 
GSD Rule 1. Repo Brokered Transaction is not a defined term and FICC 
believes that this reference was intended to refer to the defined term 
``Brokered Repo Transaction.''
    Sixth, FICC is proposing to replace ``Start date for Repo'' with 
``Scheduled Settlement Date for the Start Leg of the Transaction'' in 
subpart (4) of the Schedule of Required and Accepted Data Submission 
Items for a Substitution and subpart (4) of the Schedule of Required 
and Accepted Data Submission Items for New Securities Collateral in 
order to use the applicable defined terms.
(3) Amend Certain References to Third Party Names and Services
    Throughout the GSD Rules, FICC references certain third party names 
as well as certain third party services. FICC has determined that some 
of these references were incorrectly written.
    FICC is proposing to amend the defined term ``FedWire'' in GSD Rule 
1 to replace the defined term with ``Fedwire.'' It appears that 
throughout the GSD Rules, FICC has written the term ``Fedwire'' as both 
``FedWire'' and ``Fedwire.'' For consistency, FICC has decided to 
conform all references of the term and believes, based on a review of 
Federal Reserve materials, that the correct term should be ``Fedwire.''
    Specifically, FICC is proposing to replace ``FedWire'' with 
``Fedwire'' in the definition of ``Close of Business'' in GSD Rule 1, 
Section 3b of GSD Rule 4, Section 14 of GSD Rule 11, Sections 2, 6 and 
10 of GSD Rule 12, Section 7 of GSD Rule 13 and Section 2 of GSD Rule 
19.
    Second, FICC is proposing to correct the definition of ``The 
Securities Industry and Financial Market Association'' (``SIFMA'') to 
remove ``The'' from the defined term. In reviewing SIFMA's materials, 
FICC has determined that the correct name of the organization is 
``Securities and Financial Market Association.'' FICC is proposing to 
update the defined term to reflect SIFMA's correct name.
    In connection with this proposed change, FICC is proposing to 
lowercase the word ``The'' in each reference to SIFMA. Specifically 
this proposed change would occur in the definition of ``The Securities 
Industry and Financial Markets Association'' in GSD Rule 1, Section 11 
of GSD Rule 6C, and paragraph (f) of GSD Rule 29. Also in paragraph (f) 
of GSD Rule 29, the term ``The Bond Market Association'' would be 
deleted and replaced with ``the Securities Industry and Financial 
Market Association,'' correcting the outdated reference to this 
association's name.
    Furthermore, in connection with this change, FICC is proposing to 
move the updated definition of ``Securities Industry and Financial 
Market Association'' from its current placement in GSD Rule 1, after 
the definition of ``Termination Date,'' to after the definition of 
``SEC.'' FICC is proposing this change in an effort to keep the defined 
terms listed in GSD Rule 1 in alphabetical order.
(4) Other Corrections
    FICC is proposing to revise the definitions of ``Clearance 
Difference Amount,'' ``Credit Clearance Difference Amount'' and ``Debit 
Clearance Difference Amount'' in GSD Rule 1 to remove references to 
money differences derived from pairoffs. FICC is proposing this change 
because the Clearance Difference does not include money differences 
derived from pairoffs as FICC does not currently engage in pairoffs.
    FICC is proposing to revise the definitions of ``Fail Net Long 
Position'' and ``Fail Net Short Position'' in GSD Rule 1 to state that 
the position is open ``one Business Day after its original Scheduled 
Settlement Date.'' This is because GSD re-nets fails and as such the 
language regarding one or more Business Days is no longer applicable. 
The word ``original'' is proposed to be added for clarity.
    FICC is proposing to revise the definition of ``Netting-Eligible 
Auction Purchase'' to delete subsection (2) in its entirety because it 
references an outdated practice and is not currently applicable. FICC 
would also delete ``: (1)'' as it would no longer be needed.
    FICC is proposing to revise the definition of ``Right of 
Substitution'' to delete the last sentence. The process referenced in 
the last sentence is outdated. FICC currently facilitates rights of 
substitution by passing through requests from one member to the member 
on the other side of the transaction. Consistent with this change, FICC 
also proposes to delete the last sentence of Section 3(a) of GSD Rule 
18. In addition, FICC proposes to correct the reference to the two 
Netting Members in Section 3(a) of GSD Rule 18 to reflect that it is 
the one Netting Member that is the Repo Party that would send in the 
notification for a request for substitution.
    FICC is proposing to delete the subheading and contents of Section 
3 of GSD Rule 13 and designate this section as ``Reserved.'' The 
subject of Section 3 of GSD Rule 13 is intraday funds-only settlement 
collections, which is already covered by the third and fourth 
paragraphs of Section 2 of GSD Rule 13. In connection with this change, 
FICC also proposes to amend the reference to ``Section 3'' in Section 6 
of GSD Rule 13 to read ``Section 2.''
    FICC is proposing to amend the seventh paragraph of GSD Rule 22C by 
deleting the phrase ``under a netting'' from the phrase ``netting under 
a netting.'' FICC believes that the phrase proposed to be deleted was 
added in error.
B. MBSD Rules
(1) Amend References to Certain Third Party Names and Services
    Throughout the MBSD Rules, FICC references certain third party 
names as well as certain third party services. FICC has determined that 
some of these references were incorrectly written.
    FICC is proposing to amend the defined term ``FedWire'' to replace 
the defined term with ``Fedwire.'' It appears that throughout the MBSD 
Rules, FICC has written the term ``Fedwire'' as both ``FedWire'' and 
``Fedwire.'' For consistency, FICC has decided to conform all 
references of the term and believes, based on a review of Federal 
Reserve materials, that the correct term should be ``Fedwire.'' 
Specifically, in connection with this change, FICC is proposing to 
replace ``FedWire'' with ``Fedwire'' in the definition of ``Close of 
Business'' in MBSD Rule 1, Section 3b

[[Page 26755]]

of MBSD Rule 4, Sections 2 and 9 of MBSD Rule 9, Section 7(h) of MBSD 
Rule 11 and MBSD Rule 12.
    Second, FICC is proposing to correct the definition of ``Securities 
Industry and Financial Market Association'' to remove ``The'' from the 
defined term. As stated above, in reviewing SIFMA's materials, FICC has 
determined that the correct name of the organization is ``Securities 
and Financial Market Association.'' FICC is proposing to update the 
defined term to reflect SIFMA's correct name. FICC believes that when 
the defined term was added to the MBSD Rules the word ``The'' was 
incorrectly included in the definition. In connection with this 
correction, FICC is proposing to lowercase (or delete, as the context 
requires) the word ``The'' in each reference to SIFMA. Specifically, 
this proposed change would occur in the definition of ``The Securities 
Industry and Financial Markets Association'' in MBSD Rule 1, the 
definition of ``SIFMA Guidelines'' in MBSD Rule 1 and MBSD Rule 22.
(2) Other Correction
    FICC is proposing to amend the defined term ``EPN Service'' in MBSD 
Rule 1 by deleting ``and EPN procedures'' at the end of the definition. 
FICC is proposing this change because FICC does not maintain EPN 
Procedures. In 2018, the Commission approved FICC's proposed rule 
change proposing to, in part, delete references to the term ``EPN 
Procedures'' in the EPN Rules.\13\ FICC believes that this reference to 
EPN procedures was left in the MBSD Rules in error. FICC believes that 
this change would enhance the clarity of the rules and conform the MBSD 
Rules to the EPN Rules.
---------------------------------------------------------------------------

    \13\ Securities Exchange Act Release No. 84278 (September 25, 
2018), 83 FR 49445 (October 1, 2018) (SR-FICC-2018-007).
---------------------------------------------------------------------------

C. EPN Rules
(1) Revise Terms To Match the Defined Term in Rule 1 of Article I
    FICC is proposing to correct certain references to the defined term 
``EPN Service'' where the word ``Service'' was inadvertently omitted. 
Specifically, the following changes would be made:

    a. In Section 3 of Rule 1 of Article III of the EPN Rules, ``in 
the event of an EPN system disruption'' would be revised to ``in the 
event of an EPN Service system disruption.''
    b. In Section 3 of Rule 1 of Article III of the EPN Rules, ``the 
next Business Day after the EPN system has been recovered'' would be 
revised to ``the next Business Day after the EPN Service system has 
been recovered.''
    c. The title of ``FIXED INCOME CLEARING CORPORATION MORTGAGE-
BACKED SECURITIES DIVISION (``MBSD'') EPN SCHEDULE OF CHARGES'' 
would be revised to ``FIXED INCOME CLEARING CORPORATION MORTGAGE-
BACKED SECURITIES DIVISION (``MBSD'') EPN SERVICE SCHEDULE OF 
CHARGES.''
(2) Add Defined Term in Rule 1 of Article I
    FICC is proposing to add the defined term ``Officer of the 
Corporation'' to Rule 1 of Article I of the EPN Rules. FICC is 
proposing this rule change because the term ``Officer of the 
Corporation'' is used in Rule 12 of Article V of the EPN Rules.
    In connection with this change, FICC is proposing to capitalize the 
word ``officer'' in the phrase ``officer of the Corporation'' in 
Section 2 of Rule 7 of Article V of the EPN Rules.
(3) Other Corrections
    On August 9, 2018, FICC filed a proposed rule change with the 
Commission proposing to, in part, delete references to the term ``EPN 
Procedures'' in the EPN Rules.\14\ FICC decided to conform the EPN 
Rules to its practices by deleting EPN Procedures from the EPN Rules. 
The Commission approved this rule filing on September 25, 2018.\15\ 
After the Commission approved this rule filing all references to EPN 
Procedures were removed from the EPN Rules.
---------------------------------------------------------------------------

    \14\ Securities Exchange Act Release No. 83808 (August 9, 2018), 
83 FR 40611 (August 15, 2018) (SR-FICC-2018-007).
    \15\ Supra note 13.
---------------------------------------------------------------------------

    On January 2, 2018, FICC filed a proposed rule change with the 
Commission proposing to adopt the Recovery & Wind-down Plan of FICC and 
related rules \16\ (the ``R&W Proposed Rule Change''). On July 13, 
2018, FICC filed Amendment No. 1 to the proposed rule change to amend 
and replace in its entirety the proposed rule change \17\ (along with 
the R&W Proposed Rule Change, the ``R&W Filing''). The Commission 
approved the proposed rule change on August 28, 2018.\18\ When the 
proposed rule change and subsequent amendment were filed, there were 
proposed changes to the EPN Rules that added references to EPN 
Procedures. Specifically, these proposed changes were in Sections 5 and 
6 of Rule 1 of Article III of the EPN Rules.
---------------------------------------------------------------------------

    \16\ Securities Exchange Act Release No. 82431 (January 2, 
2018), 83 FR 871 (January 8, 2018) (SR-FICC-2017-021).
    \17\ Securities Exchange Act Release No. 83630 (July 13, 2018), 
83 FR 34213 (July 19, 2018) (SR-FICC-2017-021).
    \18\ Securities Exchange Act Release No. 83973 (August 28, 
2018), 83 FR 44942 (September 4, 2018) (SR-FICC-2017-021).
---------------------------------------------------------------------------

    The R&W Filing was approved after FICC submitted SR-FICC-2018-007, 
and therefore, these new references to EPN Procedures were not included 
in SR-FICC-2018-007 to be removed. Due to this oversight, there are now 
references to EPN Procedures in Sections 5 and 6 of Rule 1 of Article 
III of the EPN Rules, which FICC is proposing to delete. FICC is 
proposing this change because FICC has removed all references to ``EPN 
Procedures'' in the EPN Rules.
    Specifically, in Section 5 of Rule 1 of Article III of the EPN 
Rules, FICC is proposing to amend the clause that references EPN 
Procedures and that begins ``as if references'' to read as follows: as 
if references to ``Members'' therein were reference to ``EPN Users'' 
and references to ``Rules'' and ``Procedures'' therein were references 
to ``EPN Rules''. FICC is proposing this change so that the references 
to ``Rules'' and ``Procedures'' in MBSD Rule 17B and MBSD Rule 40 will 
only reference EPN Rules since all references to ``EPN Procedures'' 
have been removed from the EPN Rules.
    Additionally, the R&W Filing added roman numerals before specific 
provisions in Section 5 of Rule 1 of Article III of the EPN Rules. 
Since SR-FICC-2018-007 removed references to EPN Procedures, there is 
currently a stray romanette (ii). FICC is proposing to delete romanette 
(iii) in the first sentence in Section 5 of Rule 1 of Article III of 
the EPN Rules, renumber current romanette (iv) to (iii) and revise the 
subsequent references from items (iii) and (iv) to items (ii) and 
(iii), respectively.
    Finally, FICC is proposing to delete ``or EPN Procedures'' from the 
last sentence of Section 6 of Rule 1 of Article III of the EPN Rules. 
The R&W Filing added this sentence to the EPN Rules and included the 
reference to EPN Procedures. FICC is proposing this change because FICC 
has removed all references to ``EPN Procedures'' in the EPN Rules.
(vi) Proposal To Replace an Officer Title in the GSD Rules and MBSD 
Rules
    In 2018, the Commission approved FICC's proposed rule change to 
amend FICC's By-Laws.\19\ FICC, as part of the rule filing, proposed 
changing the title of ``Vice President'' to ``Executive Director'' and 
updating the related powers and duties.
---------------------------------------------------------------------------

    \19\ Securities Exchange Act Release No. 82917 (March 20, 2018), 
83 FR 12982 (March 26, 2018) (SR-FICC-2018-002).
---------------------------------------------------------------------------

    FICC is proposing to change the references to the title ``Vice 
President'' to ``Executive Director'' in the GSD Rules and MBSD Rules. 
FICC is

[[Page 26756]]

proposing to change the references to ``Vice President'' to ``Executive 
Director'' in the definition of ``Officer of the Corporation'' in GSD 
Rule 1 and MBSD Rule 1 and the reference in GSD Rule 44 and MBSD Rule 
34.
(vii) Proposal To Add a Disclaimer Regarding Trademarks and 
Servicemarks in the Rules and Conform the Usage of the Registered 
Trademark Symbol in the GSD Rules
    FICC is proposing to add a disclaimer at the bottom of the first 
page of each of the Rules regarding trademarks and servicemarks that 
appear or may appear in the future in the Rules. FICC has adapted the 
disclaimer that appears in the Terms of Use page on The Depository 
Trust & Clearing Corporation's (``DTCC'') website for this purpose. The 
disclaimer would state that (i) all products and services provided by 
FICC referenced in the Rules are either registered trademarks or 
servicemarks of, or trademarks or servicemarks of, DTCC or its 
affiliates, and (ii) other names of companies, products or services 
appearing in the Rules are the trademarks or servicemarks of their 
respective owners.
    While certain terms that are registered trademarks are denoted with 
a TM or a [supreg] in the GSD Rules, FICC believes that the addition of 
this disclaimer provides additional protection to the marks of DTCC 
and/or its affiliates as well as the marks of third parties.
    In connection with the addition of this disclaimer, FICC is 
proposing to standardize its usage of ``TM'' and ``[supreg]'' 
throughout the GSD Rules. Currently, terms that are registered 
trademarks are written inconsistently with the ``[supreg]'' and without 
the ``[supreg]'' after the term is used. FICC is proposing, for all 
marks of DTCC and/or its affiliates, that are currently denoted with a 
``TM'' or a ``[supreg],'' to include the ``TM'' or ``[supreg]'' in the 
first instance that the term is used the GSD Rules. FICC further 
proposes to remove the ``[supreg]'' on all third party marks as these 
marks are not registered by DTCC and/or its affiliates and would be 
covered by the proposed disclaimer. Specifically, FICC proposes to 
remove the registered trademark symbol as described below.
     In the definition of ``CCLF'' in GSD Rule 1, the [supreg] 
after ``CCLF'' would be deleted.
     In Section 1 of GSD Rule 20, the [supreg] after ``GCF 
Repo'' would be deleted.
     In the second paragraph of Section I.G of the Fee 
Structure, the [supreg] after ``GCF Repo'' would be deleted.
     In subsection (b) of Section IV.B.4 of the Fee Structure, 
the [supreg] after ``Fedwire'' would be deleted.
(viii) Technical Changes
    FICC has identified the following technical changes that it 
proposes to make to the Rules to enhance the clarity and readability of 
the Rules.
A. GSD Rules
(1) Correct the Spelling of Certain Words
    First, FICC is proposing to make a technical change regarding 
references to ``intra-day'' in the GSD Rules. Currently, references to 
the word intraday are written as both ``intraday'' and ``intra-day'' in 
the GSD Rules. FICC is proposing to revise ``intra-day'' to 
``intraday'' to reflect the correct spelling of the word.
    Specifically, FICC proposes the following changes:

    a. In Section 2a of GSD Rule 4, the current reference to 
``Intra-day'' in the heading would be revised to ``Intraday.''
    b. In Sections 2 and 6(b) of GSD Rule 13, the current references 
to ``intra-day'' would be revised to ``intraday.''
    c. In the 3:15 p.m. deadline in the Schedule of Timeframes, the 
current reference to ``Intra-day'' would be revised to ``Intraday.''

    Second, FICC is proposing to make a technical change regarding 
references to ``over drafts'' in the GSD Rules. FICC is proposing to 
revise ``over drafts'' to ``overdrafts'' to reflect the correct 
spelling of the word. The current reference to ``over drafts'' in the 
revised subsection (d) of IV.B.4 of the Fee Structure would be replaced 
with ``overdrafts.''
(2) Lowercase References to Words That Are Not Defined Terms
    FICC would amend references to the word ``trade'' throughout the 
GSD Rules by making the ``t'' in the word ``Trade'' lowercase in 
instances where the ``T'' in ``trade'' is capitalized. Currently, the 
word trade is written as ``Trade'' and ``trade'' in the GSD rules. The 
word trade is not a defined term and should therefore not be 
capitalized. Specifically, FICC proposes to make the following changes:

    a. In the definition of ``Non-Conversion-Participating Member'' 
in GSD Rule 1, the proposed change would lowercase the ``t'' in 
``Trades.''
    b. In the first paragraph of Section 4 of GSD Rule 6B, the 
proposed change would lowercase the ``t'' in ``Trades.''
    c. In the second paragraph of Section 2 of GSD Rule 6C, the 
proposed change would lowercase the ``t'' in ``Trades.''
    d. In the first and third paragraphs of Section 2 of GSD Rule 9, 
the proposed change would lowercase the ``t'' in ``Trades.''
    e. In the 4:00 p.m. deadline in the Schedule of Timeframes, the 
proposed change would lowercase the ``t'' in ``Trades.''
(3) Remove Abbreviations of Defined Terms That Are Not Used
    First, FICC is proposing to make a technical change to the defined 
term ``Derivatives Clearing Organization or ``DCO'''' in GSD Rule 1. 
FICC proposes to delete ``or ``DCO'''' from the defined term. FICC 
believes that ``or ``DCO'''' was included in the defined term to 
provide FICC with flexibility when it referenced this term. However, 
``DCO'' is not used in the GSD Rules to reference Derivatives Clearing 
Organization. Therefore, FICC is proposing to delete ``or ``DCO'''' for 
clarity purposes.
    Second, FICC is proposing to make a technical change in the first 
paragraph of GSD Rule 22C by deleting ``(``FDICIA'').'' ``FDICIA'' has 
not been used in GSD Rule 22C nor has it been used in the GSD Rules and 
FICC is proposing to delete ``(``FDICIA'')''.
(4) Add Quotation Marks Around Defined Terms in GSD Rule 1
    FICC is proposing to add quotation marks to certain defined terms 
that are currently missing these quotation marks. Each reference to a 
defined term in its definition, as set forth in GSD Rule 1, contains 
open and closed quotation marks around the term. FICC believes that due 
to an oversight certain terms are missing an open quotation mark or are 
missing both quotation marks.
    Specifically, FICC is proposing to add open and closed quotation 
marks around ``Fannie Mae'' in the definition of ``Fannie Mae'' and an 
open quotation mark to ``Forward-Starting Repo Transaction'' in the 
definition of ``Forward-Starting Repo Transaction.''
(5) Grammar Related Technical Changes
    FICC is proposing to make the following grammar related technical 
changes in the GSD Rules.
    In Section 4(b)(ii)(A)(5) and (6) of GSD Rule 2A and in Section 
8(d) and (e) of GSD Rule 3 certain references to Inter-Dealer Broker 
Netting Member are preceded by the word ``a.'' FICC believes that in 
these instances ``a'' was inadvertently used instead of ``an.'' FICC is 
proposing to amend ``a'' to ``an'' in these cases.
(6) Other Technical Changes
    FICC proposes to make the additional technical changes described 
below.

    a. The defined term ``CPU'' in GSD Rule 1 would be moved from 
after ``Cleared Institutional Triparty Service or CCIT Service'' to 
after ``Covered Affiliate.'' FICC is proposing this change to keep 
the defined terms listed in GSD Rule 1 in alphabetical order.

[[Page 26757]]

    b. FICC is proposing to make the following technical change in 
the definition of ``Federal Funds Rate'' in GSD Rule 1. The 
definition refers to the rate set forth opposite the caption 
``Federal Funds (Effective).'' In confirming the citation, FICC has 
determined that the caption as set forth on the Federal Reserve 
Board's website \20\ is written as ``Federal funds (effective).'' 
FICC is proposing to lowercase the words ``Funds'' and ``Effective'' 
to match the caption on the Federal Reserve Board's website.
---------------------------------------------------------------------------

    \20\ Selected Interest Rates (Daily)--H.15, Board of Governors 
of the Federal Reserve System, https://www.federalreserve.gov/releases/h15/ (last visited October 8, 2019).
---------------------------------------------------------------------------

    c. The defined term ``Funds-Only Settling Bank Member'' in GSD 
Rule 1 would be moved from after ``FRB'' to after ``Funds-Only 
Settlement Payments Procedures Agreement.'' FICC is proposing this 
change to keep the defined terms listed in GSD Rule 1 in 
alphabetical order.
    d. In the defined term ``Overnight Investment Rate'' in GSD Rule 
1 the letter ``s'' in ``its Clearing Fund'' is italicized and has a 
double underline. FICC is proposed to remove the double underlining 
and the italics font from the letter ``s.''
    e. In the subheading for Section 2a of GSD Rule 4, the stray 
dash after the word ``Amounts'' would be removed.
    f. Current subsections (vi) and (vii) of Section 2 of GSD Rule 
11 would be renumbered to reflect that subsection (v) had been 
skipped. Current subsection (vi) would become (v) and current 
subsection (vii) would become (vi).
    g. In Section 5 of GSD Rule 19, the references to Section 2(k) 
of GSD Rule 11 would be changed to refer to Section 2(v) of GSD Rule 
11. FICC is proposed to change the reference to Section 2(v) because 
there is no Section 2(k) of GSD Rule 11, which FICC believes is an 
error.
    h. FICC is proposing to rename Section 5 of GSD Rule 20, from 
``Netting'' to ``Novation.'' Currently, both Sections 2 and Section 
5 of GSD Rule 20 are named ``Netting.''
    i. In GSD Rule 22B, a period would be added to the last sentence 
of the rule.
    j. In the first sentence of GSD Rule 35, ``As soon a 
practicable'' would be replaced with ``As soon as practicable'' to 
correct a typographical error.
    k. In the definition of ``Shareholders Agreement'' in Section 1 
of GSD Rule 49, ``heretofor'' would be replaced with ``heretofore'' 
to correct a typographical error.
    l. In the Schedule of Required and Accepted Data Submission 
Items for a Substitution, the colon at the end of subsection 1 would 
be replaced with a semicolon for consistency purposes.
    m. In the Schedule of Required and Accepted Data Submission 
Items for a Substitution, the first words in subsections 5 and 6 
will be made lowercase. These are not defined terms and should 
therefore not be capitalized.
    n. In the Schedule of Required and Accepted Data Submission 
Items for New Securities Collateral, the first words in subsections 
5 and 6 will be made lowercase. These are not defined terms and 
should therefore not be capitalized.
    o. In the Schedule of Required and Other Data Submission Items 
for GCF Repo Transactions, the reference to ``GSCC TID'' will be 
revised to ``GSD TID.'' GSCC refers to the Government Securities 
Clearing Corporation, GSD's predecessor, before GSCC and the MBS 
Clearing Corporation merged to form FICC on January 1, 2003.
    p. In subsection 2 of Section IV.C of the Fee Structure, the 
``(a)'' in subsection 2 would be deleted. There is no subsection 
2(b) and therefore 2(a) is superfluous.
    q. FICC is proposing to replace ``Settlemnt'' with 
``Settlement'' to correct a typographical error in the heading 
entitled ``Interpretive Guidance With Respect to Settlemnt 
Finality.''
    r. FICC is proposing to delete the hyphen between ``in'' and 
``Trades'' in the reference to ``Locked-in-Trades'' in Section 6 of 
GSD Rule 17 to correct a typographical error.

B. MBSD Rules
(1) Add Quotation Marks Around Defined Terms in MBSD Rule 1
    FICC is proposing to add quotation marks around the term Ginnie Mae 
in the definition of the term in MBSD Rule 1. Each reference to a 
defined term in its definition, as set forth in MBSD Rule 1, contains 
open and closed quotation marks around the term.
(2) Remove Abbreviations of Defined Terms That Are Not Used
    FICC is proposing to make a technical change in the second 
paragraph of subsection (c) of MBSD Rule 17A (Corporation Default) by 
deleting ``(FDICIA).'' ``FDICIA'' has not been used in MBSD Rule 17A 
nor has it been used in the MBSD Rules to reference Federal Deposit 
Insurance Corporation Act of 1991.
(3) Lowercase References to Words That Are Not Defined Terms
    FICC would amend references to the word ``trade'' throughout the 
MBSD Rules by making the ``t'' in the word ``Trade'' lowercase in 
instances where the ``T'' in ``trade'' is capitalized. Currently, the 
word trade is written as ``Trade'' and ``trade'' in the MBSD Rules. The 
word ``trade'' is not a defined term and should therefore not be 
capitalized. Specifically, FICC proposes to amend Section 13(a) of MBSD 
Rule 5 to reflect that ``trade'' is not a defined term.
(4) Other Technical Changes
    In addition to the changes proposed above, FICC proposes to make 
the additional technical changes described below.

    a. In subsection (a) of MBSD Rule 3A, there is a reference to 
Section 4 of MBSD Rule 11 regarding the Cash Settlement process. 
FICC has determined that the correct reference is to Section 9 of 
MBSD Rule 11 and proposes to correct this.
    b. At the end of Section 5(b)(ii) of MBSD Rule 5 there are 
parentheses around the ``s'' in ``acting.'' FICC believes that 
``(s)'' was added in error since the verb acting is a present 
participle and would not need to change based on the noun.
    c. FICC is proposing to replace the period with a dash after 
``Section 2a'' in the subheading of Section 2a of MBSD Rule 17 to 
conform with the format of the rest of the MBSD Rules.
    d. FICC is proposing to delete the stray ``_'' marks after the 
words ``these'' and ``Corporation,'' in MBSD Rule 34.
    e. In the definition of ``Shareholders Agreement'' in Section 1 
of MBSD Rule 39, ``heretofor'' would be replaced with ``heretofore'' 
to correct a typographical error.
    f. FICC is proposing to replace ``Settlemnt'' with 
``Settlement'' to correct a typographical error in the heading 
entitled ``Interpretive Guidance With Respect to Settlemnt 
Finality.''

C. EPN Rules
    FICC is proposing to delete the stray comma that appears in the 
first sentence of Section 6 of Rule 1 of Article III of the EPN Rules. 
FICC believes that this stray comma was inadvertently included in the 
EPN Rules. FICC is also proposing to delete the comma after ``These EPN 
Rules.'' Based on the sentence, FICC does not believes a comma is 
necessary after this phrase.
    FICC is proposing to add the word ``EPN'' in Section 2 of Rule 9 of 
Article V of the EPN Rules in order to use the defined term ``EPN 
Rules.''
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules 
be designed to promote the prompt and accurate clearance and settlement 
of securities transactions.\21\
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The proposed changes to (i) delete terms that are no longer used in 
the GSD Rules; (ii) Delete references to services and service-related 
provisions that are no longer provided and/or active in the GSD Rules 
and the MBSD Rules; (iii) delete certain dates in the GSD Rules and the 
MBSD Rules; (iv) make certain clarifications in the Rules; (v) make 
certain corrections to the Rules; (vi) replace an officer title in the 
GSD Rules and the MBSD Rules; (vii) add a disclaimer regarding 
trademarks and servicemarks in the Rules, and conform the usage of the 
registered trademark symbol in the GSD Rules; and (viii) make certain 
technical changes to the Rules would help to ensure that the Rules are 
accurate and clear to

[[Page 26758]]

participants. When participants better understand their rights and 
obligations regarding the Rules, such participants are more likely to 
act in accordance with the Rules, which FICC believes would promote the 
prompt and accurate clearance and settlement of securities 
transactions. As such, FICC believes that the proposed changes would be 
consistent with Section 17A(b)(3)(F) of the Act.\22\
---------------------------------------------------------------------------

    \22\ Id.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    FICC does not believe the proposed rule changes to (i) delete terms 
that are no longer used in the GSD Rules; (ii) delete references to 
services and service-related provisions that are no longer provided 
and/or active in the GSD Rules and the MBSD Rules; (iii) delete certain 
dates in the GSD Rules and the MBSD Rules; (iv) make certain 
clarifications in the Rules; (v) make certain corrections to the Rules; 
(vi) replace an officer title in the GSD Rules and the MBSD Rules; 
(vii) add a disclaimer regarding trademarks and servicemarks in the 
Rules and conform the usage of the registered trademark symbol in the 
GSD Rules; and (viii) make certain technical changes to the Rules would 
impact competition. The proposed rule changes would help to ensure that 
the Rules remain clear and accurate. In addition, the changes would 
facilitate participants' understanding of the Rules and their 
obligations thereunder. These changes would not affect FICC's 
operations or the rights and obligations of the membership. As such, 
FICC believes the proposed rule changes would not have any impact on 
competition.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    Written comments relating to the proposed rule change have not been 
solicited or received. FICC will notify the Commission of any written 
comments received by FICC.

III. Date of Effectiveness of the Proposed Rule Change, and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) \23\ of the Act and paragraph (f) \24\ of Rule 19b-4 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \23\ 15 U.S.C 78s(b)(3)(A).
    \24\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-FICC-2020-005 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-FICC-2020-005. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of FICC and on DTCC's website 
(https://dtcc.com/legal/sec-rule-filings.aspx). All comments received 
will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-FICC-2020-005 and should be submitted on 
or before May 26, 2020.
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
---------------------------------------------------------------------------
pursuant to delegated authority.\25\

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09518 Filed 5-4-20; 8:45 am]
BILLING CODE 8011-01-P