Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Clarifications, Corrections and Certain Other Changes to the NSCC Rules & Procedures, 26999-27003 [2021-10392]
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Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices
written notice to its members whenever
FINRA proposes to change a rule that
the Exchange has incorporated by
reference.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–10391 Filed 5–17–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91881; File No. SR–NSCC–
2021–006]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Make Clarifications,
Corrections and Certain Other
Changes to the NSCC Rules &
Procedures
May 12, 2021.
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 May 7,
2021, National Securities Clearing
Corporation (‘‘NSCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the clearing agency. NSCC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(4) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
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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 NSCC Rules &
Procedures (‘‘Rules’’) in order to (i)
correct or clarify the use of certain
defined terms in the Rules, (ii) make
certain clarifications in the Rules, (iii)
make certain technical changes to the
Rules, (iv) add a disclaimer regarding
trademarks and servicemarks in the
Rules and (v) change certain notice
provisions relating to rule changes, each
as described in more detail below.5
19 17
CFR 200.30–3(a)(76).
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).
5 Terms not defined herein are defined in the
Rules, available at https://dtcc.com/∼/media/Files/
Downloads/legal/rules/nscc_rules.pdf.
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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
NSCC is proposing to (i) correct or
clarify the use of certain defined terms
in the Rules, (ii) make certain
clarifications in the Rules, (iii) make
certain technical changes to the Rules,
(iv) add a disclaimer regarding
trademarks and servicemarks in the
Rules and (v) change certain notice
provisions relating to rule changes, each
as described in more detail below.
(i) Proposal To Correct the Use of
Certain Defined Terms in the Rules
Certain capitalized terms are used but
not defined, certain terms are defined
but the defined terms are not used
consistently and certain defined terms
are duplicative in the Rules. NSCC is
proposing to correct and clarify the use
of certain defined terms in the Rules as
follows:
• Move the defined term ‘‘Affiliate’’
from Rule 4A to Rule 1 as the term is
used in a number of places in the
Rules and remove ‘‘, as defined in
Rule 4A’’ after the use of the term
Affiliate in Section 7 of Rule 7 and
Section A of Procedure II
• clarify the definitions of ‘‘Board’’ and
‘‘Board of Directors’’ in Rule 1 to
ensure that it is clear that both terms
are defined and have the same
meaning
• capitalize ‘‘business day’’ throughout
the Rules to reflect that it is a defined
term
• add a defined term ‘‘Exchange Act’’ in
Rule 1 for the Securities Exchange Act
of 1934, as amended and replace
‘‘Securities Exchange Act of 1934, as
amended’’ and ‘‘Securities Exchange
Act of 1934’’ and ‘‘Act’’ with the new
defined term in a number of places in
the Rules
• capitalize ‘‘affiliate’’ in the definition
of ‘‘Family-Issued Securities’’ in Rule
1 to reflect that it is a defined term
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• add a defined term ‘‘GAAP’’ in Rule
1 as the abbreviation is currently used
in a number of places in the Rules to
describe generally accepted
accounting principles, consistently
applied
• delete ‘‘(or IMA Member)’’ from the
definition of ‘‘Investment Manager/
Agent Member’’ in Rule 1 and delete
‘‘IMA’’ as a defined term in Section
2(j) of Rule 2 as they are duplicative
of an existing defined term
‘‘Investment Manager/Agent Member’’
that has the same meaning; replace
the use of ‘‘IMA Members’’ in a
footnote in Rule 2A with ‘‘Investment
Manager/Agent Members’’ using the
existing defined term Investment
Manager/Agent Member
• add a defined term ‘‘NSCC’’ in Rule
1 as the term is currently used in a
number of places in the Rules to
describe NSCC
• add a defined term ‘‘SEC’’ in Rule 1
for the Securities Exchange
Commission and replace ‘‘Securities
Exchange Commission,’’ ‘‘U.S.
Securities and Exchange
Commission’’ and ‘‘Commission’’
with the defined term in a number of
places in the Rules
• change reference of ‘‘Non-U.S.’’ to
‘‘non-U.S.’’ in a footnote in Rule 2A
to reflect that Non-U.S. is not a
defined term
• use the existing defined term ‘‘NSCC
website’’ rather than other
descriptions of the NSCC website
such as the ‘‘Corporation’s website’’
and ‘‘website’’ in Section 2 of Rule 2B
and ‘‘website’’ and ‘‘NSCC’s website’’
in Section 7 of Rule 45; remove a
duplicative definition of NSCC
website in Section 7 of Rule 45
• capitalize ‘‘corporation’’ in Section 4
of Rule 7 to reflect the existing
defined term
• use the existing defined term ‘‘CFTC’’
in place of ‘‘Commodity Futures
Trading Commission’’ in Section 6 of
Rule 7 and in place of ‘‘Commodities
Futures Trading Commission’’ in,
Section (b) of Rule 49
• change ‘‘Guidelines’’ to ‘‘guidelines’’
in Section 2(b)(vii) of Rule 15 to
reflect that Guidelines is not a defined
term
• change references to ‘‘Time of
Insolvency’’ to ‘‘time of insolvency’’
in Section 4 of Rule 45 to reflect that
the term is not defined in the Rules
• capitalize ‘‘rules’’ in Section 7 of Rule
45 and in Section C(3) of Rule 52 to
reflect the existing defined term
• change ‘‘Fund/Serv Eligible Fund’’ to
‘‘Fund/SERV Eligible Fund’’ in
Section 12 of Rule 50 to reflect the
correct capitalization of the defined
term
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• replace ‘‘the Fund/SERV Service’’
with ‘‘Fund/SERV’’ in a footnote in
Section A.2 of Rule 52 and Section
A.10 of Rule 52 to reflect that the
defined term Fund/SERV is referring
to the Fund/SERV service
• remove references of ‘‘NSCC’’ and
‘‘NSCC full service’’ before
‘‘Members’’ and ‘‘Member’’ in Section
1 of Rule 54 and Section A of
Procedure XVII as they are
unnecessary
• capitalize ‘‘balance’’ in the phrase
‘‘Net Debit balance’’ and capitalize
‘‘net credit balance’’ and ‘‘net debit
balance’’ in Section 2 of Rule 55 to
reflect the existing defined terms
• capitalize the words ‘‘registered
clearing agencies’’ in a number of
places in Section VII of Addendum A
to reflect the existing defined term
• replace ‘‘Investment Company’’ with
‘‘investment company’’ in Section
1.A(v) of Addendum B to reflect that
it is not a defined term
• replace ‘‘Principal Underwriter’’ with
‘‘principal underwriter’’ in Section
3.A(i) of Addendum B to reflect that
it is not a defined term
• replace ‘‘Investment Company’’ with
‘‘investment company’’ in Section
3.A(ii) of Addendum B to reflect that
it is not a defined term
• replace ‘‘Investment Adviser’’ with
‘‘investment adviser’’ in Section
3.A(iii) of Addendum B to reflect that
it is not a defined term
• replace ‘‘Services’’ with ‘‘services’’ in
Section 3.A(vi) of Addendum B to
reflect that it is not a defined term
• replace ‘‘Investment Company’’ with
‘‘investment company’’ in Section
5.A(v) of Addendum B to reflect that
it is not a defined term
• replace ‘‘Principal Underwriter’’ with
‘‘principal underwriter’’ in Section
6.A(vi) of Addendum B to reflect that
it is not a defined term
• replace ‘‘Investment Adviser’’ with
‘‘investment adviser’’ in Section
6.A(vii) of Addendum B to reflect that
it is not a defined term
• capitalize the word ‘‘system’’ in the
reference to ‘‘Federal Reserve system’’
in Section 10.A.(iii) of Addendum B
to be consistent with the use of the
reference to Federal Reserve System
in other sections of the Rules
• add ‘‘of 1940, as amended’’ after
Investment Company Act in Section
10.A(vi) of Addendum B to reflect
that it is not a defined term
• replace ‘‘registered clearing agencies’’
and ‘‘SEC registered clearing
agencies’’ with ‘‘Registered Clearing
Agencies’’ in Addendum L to reflect
that it is a defined term
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• add a definition of ‘‘AML’’ in
Addendum O to clarify that AML
refers to Anti-Money Laundering
(ii) Proposal To Make Certain
Clarifications in the Rules
NSCC is proposing to make the
following changes in the Rules to better
clarify the meaning of certain provisions
and the usage of certain defined terms:
• Change ‘‘acting on delegated
authority’’ to ‘‘acting under delegated
authority’’ in the definition of
‘‘Board’’ and ‘‘Board of Directors’’ in
Rule 1 to reflect the more common
phraseology
• clarify that the NSCC website may
include DTCC’s website in the
definition of ‘‘NSCC website’’ in Rule
1
• remove ‘‘decline or’’ or ‘‘declined or’’
in each instance where the phrase
‘‘decline or cease to act’’ or ‘‘declined
or ceased to act’’ is used in a number
of places in the Rules to reflect that
declining to act is not different from
ceasing to act in the context used in
the Rules
• add ‘‘and set forth in these Rules &
Procedures’’ in the definition of
‘‘Procedures’’ to clarify that the
defined term Procedures is referring
to the Procedures set forth in the
NSCC Rules & Procedures
• make ‘‘General Rules and
Regulations’’ lowercase in the
definition of ‘‘Security’’ in Rule 1 to
reflect that it is not a defined term and
add ‘‘promulgated’’ to reflect that it is
referring to general rules and
regulations promulgated under the
Exchange Act
• replace ‘‘Corporation’’ with ‘‘entity’’
in two places in Section 1(G)(v) of
Rule 2A to reflect that the phrase is
referring to any entity that engages in
clearance and settlement activities
and not to NSCC
• replace the phrase ‘‘SEC Rule 17a–11’’
with ‘‘Rule 17a–11 of the Exchange
Act’’ in Section 2.A(b) of Rule 2B to
reflect that it is referring to Rule 17a–
11 promulgated under the Exchange
Act
• replace a reference to the ‘‘Securities
and Exchange Commission’’ with
‘‘Exchange Act’’ in Section 1(a) of
Rule 3 to clarify that Rule 10b–17 is
referring to Rule 10b–17 promulgated
under the Exchange Act
• add Mutual Fund/Insurance Services
Members and AIP Members as
Limited Members that are required to
file signatures in Section 2 of Rule 5
in order to formalize that NSCC
requires those Limited Members to
file signatures in the same manner as
the other Members and Limited
Members listed in that section
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• replace the heading ‘‘Sec’’ with ‘‘SEC’’
in Section 4 of Rule 9 to conform to
usage of section references in other
Rules
• remove the word ‘‘for’’ in Section 1(a)
of Rule 11 as it is unnecessary
• change the phrase ‘‘information and
otherwise’’ to ‘‘information or
otherwise’’ in Section 4 of Rule 15 to
reflect that the phrase is intended to
mean that a participant could be
subject to a fine for failure to furnish
information or for failure to otherwise
comply with the requirements of Rule
15
• capitalize ‘‘important notice’’ in
Section 3 of Rule 18 to conform to
other usage of that term in the Rules
• replace ‘‘Commission Rules 8c–1 and
15c2–1’’ with ‘‘Rules 8c–1 and 15c2–
1 of the Exchange Act’’ in Section 8(b)
of Rule 18 to reflect that it is referring
to rules promulgated under the
Exchange Act
• change the reference of the title ‘‘Vice
President’’ to ‘‘Executive Director’’ in
Rule 23 to reflect that NSCC changed
the title of Vice President to Executive
Director 6
• clarify in Rule 26 that fee descriptions
and charges are set forth in
Addendum A by adding the following
sentence: ‘‘Please refer to Addendum
A (Fee Structure) for fee descriptions
and charges.’’
• clarify in Rule 35 that the financial
statements provided by NSCC are U.S.
GAAP financial statements and that
the audited financial statements
include the independent auditors’
report on the financial statements
• replace ‘‘close’’ with ‘‘last day’’ in two
places in Rule 35 to clarify that the
close of each fiscal quarter is meant to
be the last day of each fiscal quarter
• add ‘‘or Procedure’’ in Rule 36 to
clarify that NSCC will notify
Members, Limited Members and
Registered Clearing Agencies of
proposals to change, revise, add or
repeal any Procedure as well as any
Rule
• clarify in Rule 36 that NSCC will
notify Members, Limited Members
and Registered Clearing Agencies of
any rule change proposals to any Rule
or Procedure by posting the proposal
on the NSCC website
• replace ‘‘five’’ with ‘‘5’’ in Sections 1
and 3 of Rule 37 to conform to other
descriptions of the number of
business days in Rule 37
6 In 2018, the Securities and Exchange
Commission (‘‘Commission’’) approved NSCC’s
proposed rule change to amend NSCC’s By-Laws to,
among other things, change the title of ‘‘Vice
President’’ to ‘‘Executive Director.’’ Securities
Exchange Act Release No. 82916 (March 20, 2018),
83 FR 12974 (March 26, 2018) (SR–NSCC–2018–
001).
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• add ‘‘decision’’ after ‘‘Panel’s’’ in
Section 7 of Rule 37 to clarify that in
subsection (iii) an action or proposed
action shall be deemed final if a
hearing has been held when the
Corporation gives notice to the
Interested Person of the Panel’s
decision
• change a reference of ‘‘Rules,
Procedures’’ in Rule 38 to ‘‘Rules and
Procedures’’ to conform the phrase to
other instances in the Rules and add
a comma after the phrase for
grammatical effect
• remove the references to NSCC
delivering notice to an Interested
Person’s box maintained on NSCC’s
premises in Section 1 of Rule 45
because NSCC does not maintain
boxes for Members, Limited Members
or applicants
• add a heading title ‘‘E. MF Info
Xchange’’ and place the MF Info
Xchange description under the
heading and remove the subsection
reference ‘‘SEC 6.’’ in Rule 52 in order
to reflect that MF Info Xchange is a
separate service from Mutual Fund
Profile Service 7
• replace ‘‘Securities and Commission
Rule 15c3–3’’ with ‘‘Rule 15c3–3 of
the Exchange Act’’ in Section 9(b)(vi)
of Rule 53 to reflect that it is referring
to a rule promulgated under the
Exchange Act
• replace ‘‘Securities and Commission
Rule 17a–3’’ with ‘‘Rule 17a–3 of the
Exchange Act’’ in Section 9(c)(ii) of
Rule 53 to reflect that it is referring to
a rule promulgated under the
Exchange Act
• remove references to settlement of
payments in Section 4 of Rule 57 as
NSCC stopped settlement with respect
to Licensing and Appointments in
2012 8
• replace ‘‘SEC Rule 15c3–3’’ with
‘‘Rule 15c3–3 of the Exchange Act’’ in
Section E(5) of Procedure VII to reflect
that it is referring to a rule
promulgated under the Exchange Act
• replace ‘‘SEC Rule 15c3–3(d)(1)’’ with
‘‘Rule 15c3–3(d)(1) of the Exchange
Act’’ in Section E(5) of Procedure VII
to reflect that it is referring to a rule
promulgated under the Exchange Act
7 MF Info Xchange was added to the Rules in
2018 as an enhancement of the Mutual Fund Profile
Service. Securities Exchange Act Release No. 84611
(November 16, 2018), 83 FR 59427 (November 23,
2018) (SR–NSCC–2018–010). Although it is still
integrated with the Mutual Fund Profile Service,
NSCC would like to market MF Info Xchange as a
separate service and not just a function of the
Mutual Fund Profile Service.
8 NSCC removed the settlement function of
Licensing and Appointments in 2012 because it was
not being used by Members or Limited Members but
the references were not removed from the Rules at
that time.
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• replace ‘‘NSCC’s Rule & Procedures’’
with ‘‘these Rules and Procedures’’ in
Section D.2 of Procedure VIII to
conform to usage throughout the
Rules
• remove ‘‘NSCC’s’’ and ‘‘NSCC’’ before
Settling Banks in Section D.2 of
Procedure VIII as the reference is
unnecessary
• replace ‘‘SEC Rule 15c3–1(a)(8)’’ with
‘‘Rule 15c3–1(a)(8) of the Exchange
Act’’ in Section 1.B.1 of Addendum B
to reflect that it is referring to rules
promulgated under the Exchange Act
• remove ‘‘it is’’ in Section 6.A(v) of
Addendum B as it is unnecessary
• remove ‘‘it is’’ in Section 6.A(xi) of
Addendum B as it is unnecessary
• add ‘‘(as defined in Rule 53)’’ in
Section 10.A(xi) of Addendum B to
reflect that AIP Manufacturer is
defined in Rule 53
• replace ‘‘under Section 4 of this Rule’’
with ‘‘in Rule 53’’ in Section 10.A(xi)
of Addendum B to reflect that Eligible
AIP Products is defined in Rule 53
• replace ‘‘SEC Rule 15c3–3’’ with
‘‘Rule 15c3–3 of the Exchange Act’’ in
Section I of Addendum G to reflect
that it is referring to a rule
promulgated under the Exchange Act
• add ‘‘of the Exchange Act’’ following
Rule 19(b) in Addendum L to reflect
that it is a rule promulgated under the
Exchange Act
• change references of ‘‘Non-US’’ to
‘‘non-U.S.’’ in Addendum O to reflect
that Non-US is not a defined term
• change reference of ‘‘Standard
Requirements’’ to ‘‘standard
requirements’’ in Addendum O to
reflect that the term is not defined in
the Rules
• change reference of ‘‘US Entities’’ to
‘‘U.S. entities’’ in Addendum O to
reflect the correct abbreviation for
U.S. and to reflect that entities is not
defined in the Rules
• change a reference from ‘‘the
Corporation’’ to ‘‘NSCC’’ in
Addendum O to be consistent with
other references to NSCC in
Addendum O and to reflect the
proposed defined term NSCC
(iii) Proposal To Make Certain Technical
Changes in the Rules
NSCC is proposing to make the
following technical changes in the Rules
to better clarify the meaning of certain
provisions and to be consistent with
other provisions in the Rules:
• Conform the use of dashes in Section
2 of Rule 2
• delete the parentheses in references to
‘‘Rule 4(A)’’ in Rule 4(A) to conform
to titles of other Rules
• conform the use of the abbreviation
‘‘SEC’’ for ‘‘Section’’ or to identify the
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•
•
•
•
•
•
•
•
•
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sections in Rules 42, 44 and 60 and
the use of letters to identify
subsections in Section 4 of Rule 60 to
be consistent with other Rules
delete the parentheses in the titles of
Rule 40, Rule 41 and Rule 60 to
conform to titles in other Rules
add tabs to the paragraphs in Rule 54
to conform with formatting in other
Rules
replace ‘‘Section XII’’ with
‘‘Procedure XIII’’ in Procedure I to
reflect that Procedure XIII contains
the definitions referred to in that
paragraph
remove a duplicative use of the word
‘‘plus’’ prior to subsection I.(A)(1)(d)
of Procedure XV
replace the subsection reference (i)
with (h) in I.(A)(1) of Procedure XV
replace the subsection reference (g)
with (f) in I.(A)(2) of Procedure XV
replace ‘‘Rule 2A, Section 4 (Ongoing
Monitoring (Surveillance Status))’’
with ‘‘Rule 2B, Section 4 (Ongoing
Monitoring)’’ in a footnote in
Addendum B as that section is
referring to Rule 2B, Section 4
delete the incorrect use of an
apostrophe in Addendum J
remove a reference to item ‘‘seven’’ in
Addendum P as there is no item seven
in Addendum P
(iv) Proposal To Add a Disclaimer
Regarding Trademarks and
Servicemarks in the Rules
NSCC is proposing to add a
disclaimer in a footnote to Rule 1
regarding trademarks and servicemarks
that appear or may appear in the future
in the Rules. NSCC 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 NSCC 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
® in the Rules, NSCC 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.
(v) Proposal To Change Certain Notice
Provisions Relating to Rule Changes
NSCC is proposing to delete a
requirement in Rule 33 that Members
and Limited Members be given 10
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business days’ notice of any proposed
amendment to the Procedures. NSCC is
also proposing to replace ‘‘immediately’’
with ‘‘promptly’’ in Rule 36 in order to
provide that NSCC will promptly—but
might not immediately—notify
Members and Limited Members of any
proposed rule changes. NSCC believes
that the foregoing requirements are not
necessary or practical because, as
explained below, Members and Limited
Members are already provided adequate
notice of any changes or proposed
changes to NSCC’s Rules or Procedures
through the rule change process.
As a clearing agency registered with
the Commission, the Securities
Exchange Act of 1934 (the ‘‘Act’’)
provides a clear framework under which
NSCC’s Rules are adopted and enforced.
Under the rule change process,
generally, before a proposed rule change
may take effect, (i) the change and an
explanatory statement must be filed
with the Commission and posted by
NSCC on the NSCC website, (ii) notice
of the filing and the substantive terms
or description of the change must be
published by the Commission in the
Federal Register for public review and
comment, and (iii) the Commission
must approve the change (or the change
must otherwise be permitted to take
effect). NSCC’s Rules are filed with and
reviewed by the Commission. As a
clearing agency registered under Section
17A of the Act,9 a self-regulatory
organization subject to Section 19 of the
Act,10 and a systemically important
financial market utility under Title VIII
of Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010
(‘‘Dodd-Frank’’),11 NSCC is required to
follow: (1) A specified process 12
whenever it proposes a new rule or a
change or amendment to its Rules and
(2) a specified process 13 whenever it
proposes to make a change to its rules,
procedures or operations that could
materially affect the nature or level of
risks presented by NSCC.
These rule change processes provide
notice to Members and Limited
Members and provide an opportunity
for those parties to comment on such
changes. Rule 19b–4 under the Act
requires that NSCC post any rule change
proposals on its website within two
business days after the filing of a
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9 15
U.S.C. 78q–1.
U.S.C. 78s.
11 12 U.S.C. 5465(e)(1).
12 This process is set forth in Section 19(b) of the
Act and Rule 19b–4 thereunder. 15 U.S.C. 78s(b)
and 17 CFR 240.19b–4.
13 This process is set forth in Section 806(e) of
Dodd-Frank and Rule 19b–4 thereunder. 12 U.S.C.
5465(e) and 17 CFR 240.19b–4.
10 15
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proposed rule change,14 post any rule
changes that are approved by the
Commission within two business days
after it has been notified of the
Commission’s approval 15 and post any
rule change within two business days of
the Commission’s notice of such
proposed change for rule changes that
are effective upon filing.16 NSCC
complies—and will continue to
comply—with such notice requirements
which it believes are adequate.
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.17
NSCC believes that the proposed
changes to (i) correct or clarify the use
of certain defined terms in the Rules, (ii)
make certain clarifications in the Rules,
(iii) make certain technical changes to
the Rules and (iv) add a disclaimer
regarding trademarks and servicemarks
in the Rules are consistent with Section
17(A)(b)(3)(F) of the Act 18 because such
changes would enhance the clarity and
transparency of the Rules. By enhancing
the clarity and transparency of the
Rules, the proposed changes would
allow Members and Limited Members to
more efficiently and effectively conduct
their business in accordance with the
Rules, which NSCC believes would
promote the prompt and accurate
clearance and settlement of securities
transactions. As such, NSCC believes
that the proposed changes would be
consistent with Section 17A(b)(3)(F) of
the Act.19
NSCC believes that the proposed
changes would enhance the efficiency of
NSCC’s process for notifying its
Members and Limited Members about
changes to its Rules and Procedures. As
discussed above in detail, NSCC
believes that Members and Limited
Members are already provided adequate
notice of any rule changes, including
changes to its Procedures, through the
rule change process. As such, the
requirements for NSCC to immediately
provide notice of any proposal it has
made to change any Rule and to provide
ten Business Days’ notice of any
proposed amendment to the Procedures
are impractical and unnecessary and
therefore can negatively impact the
efficiency of the process. Specifically,
because NSCC is already subject to—
14 17
15 17
CFR 240.19b–4(l).
CFR 240.19b–4(m)(2).
16 Id.
17 15
U.S.C. 78q–1(b)(3)(F).
and complies with—the timeframes
required by the Act and Dodd Frank,
NSCC believes that self-imposed
requirements to provide notice more
quickly (in the case of proposed rule
changes) or farther in advance (in case
of changes to Procedures) than what is
required by statute is unnecessary. In
addition, NSCC believes that the
requirements are impractical because
(i)(x) the requirement to immediately
give notice requires NSCC to coordinate
an almost simultaneous submission of a
proposed rule filing and notification to
Members and Limited Members, and (y)
Members and Limited Members would
not be prejudiced by the delta between
immediately and promptly; and (ii) the
requirement to provide Members and
Limited Members notice of changes to
Procedures ten Business Days in
advance, especially when such parties
already receive adequate notice of the
changes, could cause delays in the rule
filing process and/or the
implementation of an amended rule and
procedure. Accordingly, NSCC believes
that, by removing unnecessary and
impractical timing requirements for
notice, the proposed rule change is
designed to enhance the efficiency of
NSCC’s notice process and
implementation of the amended Rules
and Procedures, thereby promoting the
prompt and accurate clearance and
settlement of securities transactions, as
provided under such amended Rules
and Procedures. As such, NSCC believes
that the proposed changes would be
consistent with Section 17A(b)(3)(F) of
the Act.20
(B) Clearing Agency’s Statement on
Burden on Competition
NSCC does not believe the proposed
rule changes to (i) correct or clarify the
use of certain defined terms in the
Rules, (ii) make certain clarifications in
the Rules, (iii) make certain technical
changes to the Rules, (iv) add a
disclaimer regarding trademarks and
servicemarks in the Rules and (v)
change certain notice provisions relating
to rule changes would impact
competition. The proposed rule changes
described in (i)–(iv) above would merely
enhance the clarity and transparency of
the Rules and would not affect NSCC’s
operations or the rights and obligations
of the membership. While the proposed
changes to the notice provisions
described in (v) above would impact the
rights and obligations of the Members
and Limited Members to receive notices
more quickly (in the case of proposed
rule changes) or farther in advance (in
case of changes to Procedures) than
18 Id.
19 Id.
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20 Id.
Fmt 4703
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Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices
what is required by statute, the impact
of the proposed changes on the
Members and Limited Members would
be minimal. As discussed above, NSCC
believes that the proposed changes to
the notice provisions are removing
unnecessary and impractical timing
requirements for notices, and Members
and Limited Members would continue
to receive adequate notice under the
rule change process and continue to be
treated equally with respect to such
notices. As such, NSCC 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
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.
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) 21 of the Act and paragraph
(f) 22 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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NSCC–2021–006 on the subject line.
jbell on DSKJLSW7X2PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
21 15
22 17
U.S.C 78s(b)(3)(A).
CFR 240.19b–4(f).
VerDate Sep<11>2014
16:40 May 17, 2021
All submissions should refer to File
Number SR–NSCC–2021–006. 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 NSCC and on DTCC’s website
(https://dtcc.com/legal/sec-rulefilings.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–NSCC–
2021–006 and should be submitted on
or before June 8, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–10392 Filed 5–17–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91864; File No. SR–BX–
2021–022]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Delay the
Implementation of BX’s Request for
PRISM
May 12, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
23 17
Jkt 253001
PO 00000
CFR 200.30–3(a)(12).
Frm 00112
Fmt 4703
Sfmt 4703
27003
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 4,
2021, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to delay the
implementation of an amendment to
Options 3, Section 7(d)(1)(A) relating to
‘‘Financial Information eXchange’’ or
‘‘FIX’’ in connection with offering BX
Participants the ability to utilize FIX to
submit orders to its Price Improvement
Auction (‘‘PRISM’’) mechanism.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/bx/rules, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
BX received approval 3 to amend
Options 3, Section 7(d)(1)(A), relating to
FIX, to offer BX Participants the ability
to utilize FIX to submit orders to its
PRISM mechanism. BX’s amendment
permitted it to offer Participants a
manner in which to send messages
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 91124
(February 12, 2021), 86 FR 10363 (February 19,
2021) (SR–BX–2020–033) (Order Granting Approval
of a Proposed Rule Change To Utilize the FIX
Protocol To Submit Orders to BX’s Price
Improvement Auction Mechanism) (‘‘Approval
Order’’).
2 17
E:\FR\FM\18MYN1.SGM
18MYN1
]]>Agencies
[Federal Register Volume 86, Number 94 (Tuesday, May 18, 2021)]
[Notices]
[Pages 26999-27003]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10392]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91881; File No. SR-NSCC-2021-006]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed
Rule Change To Make Clarifications, Corrections and Certain Other
Changes to the NSCC Rules & Procedures
May 12, 2021.
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 May 7, 2021, National Securities Clearing Corporation (``NSCC'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the clearing agency. NSCC filed the
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(4) thereunder.\4\ The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change consists of modifications to the NSCC
Rules & Procedures (``Rules'') in order to (i) correct or clarify the
use of certain defined terms in the Rules, (ii) make certain
clarifications in the Rules, (iii) make certain technical changes to
the Rules, (iv) add a disclaimer regarding trademarks and servicemarks
in the Rules and (v) change certain notice provisions relating to rule
changes, each as described in more detail below.\5\
---------------------------------------------------------------------------
\5\ Terms not defined herein are defined in the Rules, available
at https://dtcc.com/~/media/Files/Downloads/legal/rules/
nscc_rules.pdf.
---------------------------------------------------------------------------
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
NSCC is proposing to (i) correct or clarify the use of certain
defined terms in the Rules, (ii) make certain clarifications in the
Rules, (iii) make certain technical changes to the Rules, (iv) add a
disclaimer regarding trademarks and servicemarks in the Rules and (v)
change certain notice provisions relating to rule changes, each as
described in more detail below.
(i) Proposal To Correct the Use of Certain Defined Terms in the Rules
Certain capitalized terms are used but not defined, certain terms
are defined but the defined terms are not used consistently and certain
defined terms are duplicative in the Rules. NSCC is proposing to
correct and clarify the use of certain defined terms in the Rules as
follows:
Move the defined term ``Affiliate'' from Rule 4A to Rule 1 as
the term is used in a number of places in the Rules and remove ``, as
defined in Rule 4A'' after the use of the term Affiliate in Section 7
of Rule 7 and Section A of Procedure II
clarify the definitions of ``Board'' and ``Board of
Directors'' in Rule 1 to ensure that it is clear that both terms are
defined and have the same meaning
capitalize ``business day'' throughout the Rules to reflect
that it is a defined term
add a defined term ``Exchange Act'' in Rule 1 for the
Securities Exchange Act of 1934, as amended and replace ``Securities
Exchange Act of 1934, as amended'' and ``Securities Exchange Act of
1934'' and ``Act'' with the new defined term in a number of places in
the Rules
capitalize ``affiliate'' in the definition of ``Family-Issued
Securities'' in Rule 1 to reflect that it is a defined term
add a defined term ``GAAP'' in Rule 1 as the abbreviation is
currently used in a number of places in the Rules to describe generally
accepted accounting principles, consistently applied
delete ``(or IMA Member)'' from the definition of ``Investment
Manager/Agent Member'' in Rule 1 and delete ``IMA'' as a defined term
in Section 2(j) of Rule 2 as they are duplicative of an existing
defined term ``Investment Manager/Agent Member'' that has the same
meaning; replace the use of ``IMA Members'' in a footnote in Rule 2A
with ``Investment Manager/Agent Members'' using the existing defined
term Investment Manager/Agent Member
add a defined term ``NSCC'' in Rule 1 as the term is currently
used in a number of places in the Rules to describe NSCC
add a defined term ``SEC'' in Rule 1 for the Securities
Exchange Commission and replace ``Securities Exchange Commission,''
``U.S. Securities and Exchange Commission'' and ``Commission'' with the
defined term in a number of places in the Rules
change reference of ``Non-U.S.'' to ``non-U.S.'' in a footnote
in Rule 2A to reflect that Non-U.S. is not a defined term
use the existing defined term ``NSCC website'' rather than
other descriptions of the NSCC website such as the ``Corporation's
website'' and ``website'' in Section 2 of Rule 2B and ``website'' and
``NSCC's website'' in Section 7 of Rule 45; remove a duplicative
definition of NSCC website in Section 7 of Rule 45
capitalize ``corporation'' in Section 4 of Rule 7 to reflect
the existing defined term
use the existing defined term ``CFTC'' in place of ``Commodity
Futures Trading Commission'' in Section 6 of Rule 7 and in place of
``Commodities Futures Trading Commission'' in, Section (b) of Rule 49
change ``Guidelines'' to ``guidelines'' in Section 2(b)(vii)
of Rule 15 to reflect that Guidelines is not a defined term
change references to ``Time of Insolvency'' to ``time of
insolvency'' in Section 4 of Rule 45 to reflect that the term is not
defined in the Rules
capitalize ``rules'' in Section 7 of Rule 45 and in Section
C(3) of Rule 52 to reflect the existing defined term
change ``Fund/Serv Eligible Fund'' to ``Fund/SERV Eligible
Fund'' in Section 12 of Rule 50 to reflect the correct capitalization
of the defined term
[[Page 27000]]
replace ``the Fund/SERV Service'' with ``Fund/SERV'' in a
footnote in Section A.2 of Rule 52 and Section A.10 of Rule 52 to
reflect that the defined term Fund/SERV is referring to the Fund/SERV
service
remove references of ``NSCC'' and ``NSCC full service'' before
``Members'' and ``Member'' in Section 1 of Rule 54 and Section A of
Procedure XVII as they are unnecessary
capitalize ``balance'' in the phrase ``Net Debit balance'' and
capitalize ``net credit balance'' and ``net debit balance'' in Section
2 of Rule 55 to reflect the existing defined terms
capitalize the words ``registered clearing agencies'' in a
number of places in Section VII of Addendum A to reflect the existing
defined term
replace ``Investment Company'' with ``investment company'' in
Section 1.A(v) of Addendum B to reflect that it is not a defined term
replace ``Principal Underwriter'' with ``principal
underwriter'' in Section 3.A(i) of Addendum B to reflect that it is not
a defined term
replace ``Investment Company'' with ``investment company'' in
Section 3.A(ii) of Addendum B to reflect that it is not a defined term
replace ``Investment Adviser'' with ``investment adviser'' in
Section 3.A(iii) of Addendum B to reflect that it is not a defined term
replace ``Services'' with ``services'' in Section 3.A(vi) of
Addendum B to reflect that it is not a defined term
replace ``Investment Company'' with ``investment company'' in
Section 5.A(v) of Addendum B to reflect that it is not a defined term
replace ``Principal Underwriter'' with ``principal
underwriter'' in Section 6.A(vi) of Addendum B to reflect that it is
not a defined term
replace ``Investment Adviser'' with ``investment adviser'' in
Section 6.A(vii) of Addendum B to reflect that it is not a defined term
capitalize the word ``system'' in the reference to ``Federal
Reserve system'' in Section 10.A.(iii) of Addendum B to be consistent
with the use of the reference to Federal Reserve System in other
sections of the Rules
add ``of 1940, as amended'' after Investment Company Act in
Section 10.A(vi) of Addendum B to reflect that it is not a defined term
replace ``registered clearing agencies'' and ``SEC registered
clearing agencies'' with ``Registered Clearing Agencies'' in Addendum L
to reflect that it is a defined term
add a definition of ``AML'' in Addendum O to clarify that AML
refers to Anti-Money Laundering
(ii) Proposal To Make Certain Clarifications in the Rules
NSCC is proposing to make the following changes in the Rules to
better clarify the meaning of certain provisions and the usage of
certain defined terms:
Change ``acting on delegated authority'' to ``acting under
delegated authority'' in the definition of ``Board'' and ``Board of
Directors'' in Rule 1 to reflect the more common phraseology
clarify that the NSCC website may include DTCC's website in
the definition of ``NSCC website'' in Rule 1
remove ``decline or'' or ``declined or'' in each instance
where the phrase ``decline or cease to act'' or ``declined or ceased to
act'' is used in a number of places in the Rules to reflect that
declining to act is not different from ceasing to act in the context
used in the Rules
add ``and set forth in these Rules & Procedures'' in the
definition of ``Procedures'' to clarify that the defined term
Procedures is referring to the Procedures set forth in the NSCC Rules &
Procedures
make ``General Rules and Regulations'' lowercase in the
definition of ``Security'' in Rule 1 to reflect that it is not a
defined term and add ``promulgated'' to reflect that it is referring to
general rules and regulations promulgated under the Exchange Act
replace ``Corporation'' with ``entity'' in two places in
Section 1(G)(v) of Rule 2A to reflect that the phrase is referring to
any entity that engages in clearance and settlement activities and not
to NSCC
replace the phrase ``SEC Rule 17a-11'' with ``Rule 17a-11 of
the Exchange Act'' in Section 2.A(b) of Rule 2B to reflect that it is
referring to Rule 17a-11 promulgated under the Exchange Act
replace a reference to the ``Securities and Exchange
Commission'' with ``Exchange Act'' in Section 1(a) of Rule 3 to clarify
that Rule 10b-17 is referring to Rule 10b-17 promulgated under the
Exchange Act
add Mutual Fund/Insurance Services Members and AIP Members as
Limited Members that are required to file signatures in Section 2 of
Rule 5 in order to formalize that NSCC requires those Limited Members
to file signatures in the same manner as the other Members and Limited
Members listed in that section
replace the heading ``Sec'' with ``SEC'' in Section 4 of Rule
9 to conform to usage of section references in other Rules
remove the word ``for'' in Section 1(a) of Rule 11 as it is
unnecessary
change the phrase ``information and otherwise'' to
``information or otherwise'' in Section 4 of Rule 15 to reflect that
the phrase is intended to mean that a participant could be subject to a
fine for failure to furnish information or for failure to otherwise
comply with the requirements of Rule 15
capitalize ``important notice'' in Section 3 of Rule 18 to
conform to other usage of that term in the Rules
replace ``Commission Rules 8c-1 and 15c2-1'' with ``Rules 8c-1
and 15c2-1 of the Exchange Act'' in Section 8(b) of Rule 18 to reflect
that it is referring to rules promulgated under the Exchange Act
change the reference of the title ``Vice President'' to
``Executive Director'' in Rule 23 to reflect that NSCC changed the
title of Vice President to Executive Director \6\
---------------------------------------------------------------------------
\6\ In 2018, the Securities and Exchange Commission
(``Commission'') approved NSCC's proposed rule change to amend
NSCC's By-Laws to, among other things, change the title of ``Vice
President'' to ``Executive Director.'' Securities Exchange Act
Release No. 82916 (March 20, 2018), 83 FR 12974 (March 26, 2018)
(SR-NSCC-2018-001).
---------------------------------------------------------------------------
clarify in Rule 26 that fee descriptions and charges are set
forth in Addendum A by adding the following sentence: ``Please refer to
Addendum A (Fee Structure) for fee descriptions and charges.''
clarify in Rule 35 that the financial statements provided by
NSCC are U.S. GAAP financial statements and that the audited financial
statements include the independent auditors' report on the financial
statements
replace ``close'' with ``last day'' in two places in Rule 35
to clarify that the close of each fiscal quarter is meant to be the
last day of each fiscal quarter
add ``or Procedure'' in Rule 36 to clarify that NSCC will
notify Members, Limited Members and Registered Clearing Agencies of
proposals to change, revise, add or repeal any Procedure as well as any
Rule
clarify in Rule 36 that NSCC will notify Members, Limited
Members and Registered Clearing Agencies of any rule change proposals
to any Rule or Procedure by posting the proposal on the NSCC website
replace ``five'' with ``5'' in Sections 1 and 3 of Rule 37 to
conform to other descriptions of the number of business days in Rule 37
[[Page 27001]]
add ``decision'' after ``Panel's'' in Section 7 of Rule 37 to
clarify that in subsection (iii) an action or proposed action shall be
deemed final if a hearing has been held when the Corporation gives
notice to the Interested Person of the Panel's decision
change a reference of ``Rules, Procedures'' in Rule 38 to
``Rules and Procedures'' to conform the phrase to other instances in
the Rules and add a comma after the phrase for grammatical effect
remove the references to NSCC delivering notice to an
Interested Person's box maintained on NSCC's premises in Section 1 of
Rule 45 because NSCC does not maintain boxes for Members, Limited
Members or applicants
add a heading title ``E. MF Info Xchange'' and place the MF
Info Xchange description under the heading and remove the subsection
reference ``SEC 6.'' in Rule 52 in order to reflect that MF Info
Xchange is a separate service from Mutual Fund Profile Service \7\
---------------------------------------------------------------------------
\7\ MF Info Xchange was added to the Rules in 2018 as an
enhancement of the Mutual Fund Profile Service. Securities Exchange
Act Release No. 84611 (November 16, 2018), 83 FR 59427 (November 23,
2018) (SR-NSCC-2018-010). Although it is still integrated with the
Mutual Fund Profile Service, NSCC would like to market MF Info
Xchange as a separate service and not just a function of the Mutual
Fund Profile Service.
---------------------------------------------------------------------------
replace ``Securities and Commission Rule 15c3-3'' with ``Rule
15c3-3 of the Exchange Act'' in Section 9(b)(vi) of Rule 53 to reflect
that it is referring to a rule promulgated under the Exchange Act
replace ``Securities and Commission Rule 17a-3'' with ``Rule
17a-3 of the Exchange Act'' in Section 9(c)(ii) of Rule 53 to reflect
that it is referring to a rule promulgated under the Exchange Act
remove references to settlement of payments in Section 4 of
Rule 57 as NSCC stopped settlement with respect to Licensing and
Appointments in 2012 \8\
---------------------------------------------------------------------------
\8\ NSCC removed the settlement function of Licensing and
Appointments in 2012 because it was not being used by Members or
Limited Members but the references were not removed from the Rules
at that time.
---------------------------------------------------------------------------
replace ``SEC Rule 15c3-3'' with ``Rule 15c3-3 of the Exchange
Act'' in Section E(5) of Procedure VII to reflect that it is referring
to a rule promulgated under the Exchange Act
replace ``SEC Rule 15c3-3(d)(1)'' with ``Rule 15c3-3(d)(1) of
the Exchange Act'' in Section E(5) of Procedure VII to reflect that it
is referring to a rule promulgated under the Exchange Act
replace ``NSCC's Rule & Procedures'' with ``these Rules and
Procedures'' in Section D.2 of Procedure VIII to conform to usage
throughout the Rules
remove ``NSCC's'' and ``NSCC'' before Settling Banks in
Section D.2 of Procedure VIII as the reference is unnecessary
replace ``SEC Rule 15c3-1(a)(8)'' with ``Rule 15c3-1(a)(8) of
the Exchange Act'' in Section 1.B.1 of Addendum B to reflect that it is
referring to rules promulgated under the Exchange Act
remove ``it is'' in Section 6.A(v) of Addendum B as it is
unnecessary
remove ``it is'' in Section 6.A(xi) of Addendum B as it is
unnecessary
add ``(as defined in Rule 53)'' in Section 10.A(xi) of
Addendum B to reflect that AIP Manufacturer is defined in Rule 53
replace ``under Section 4 of this Rule'' with ``in Rule 53''
in Section 10.A(xi) of Addendum B to reflect that Eligible AIP Products
is defined in Rule 53
replace ``SEC Rule 15c3-3'' with ``Rule 15c3-3 of the Exchange
Act'' in Section I of Addendum G to reflect that it is referring to a
rule promulgated under the Exchange Act
add ``of the Exchange Act'' following Rule 19(b) in Addendum L
to reflect that it is a rule promulgated under the Exchange Act
change references of ``Non-US'' to ``non-U.S.'' in Addendum O
to reflect that Non-US is not a defined term
change reference of ``Standard Requirements'' to ``standard
requirements'' in Addendum O to reflect that the term is not defined in
the Rules
change reference of ``US Entities'' to ``U.S. entities'' in
Addendum O to reflect the correct abbreviation for U.S. and to reflect
that entities is not defined in the Rules
change a reference from ``the Corporation'' to ``NSCC'' in
Addendum O to be consistent with other references to NSCC in Addendum O
and to reflect the proposed defined term NSCC
(iii) Proposal To Make Certain Technical Changes in the Rules
NSCC is proposing to make the following technical changes in the
Rules to better clarify the meaning of certain provisions and to be
consistent with other provisions in the Rules:
Conform the use of dashes in Section 2 of Rule 2
delete the parentheses in references to ``Rule 4(A)'' in Rule
4(A) to conform to titles of other Rules
conform the use of the abbreviation ``SEC'' for ``Section'' or
to identify the sections in Rules 42, 44 and 60 and the use of letters
to identify subsections in Section 4 of Rule 60 to be consistent with
other Rules
delete the parentheses in the titles of Rule 40, Rule 41 and
Rule 60 to conform to titles in other Rules
add tabs to the paragraphs in Rule 54 to conform with
formatting in other Rules
replace ``Section XII'' with ``Procedure XIII'' in Procedure I
to reflect that Procedure XIII contains the definitions referred to in
that paragraph
remove a duplicative use of the word ``plus'' prior to
subsection I.(A)(1)(d) of Procedure XV
replace the subsection reference (i) with (h) in I.(A)(1) of
Procedure XV
replace the subsection reference (g) with (f) in I.(A)(2) of
Procedure XV
replace ``Rule 2A, Section 4 (Ongoing Monitoring (Surveillance
Status))'' with ``Rule 2B, Section 4 (Ongoing Monitoring)'' in a
footnote in Addendum B as that section is referring to Rule 2B, Section
4
delete the incorrect use of an apostrophe in Addendum J
remove a reference to item ``seven'' in Addendum P as there is
no item seven in Addendum P
(iv) Proposal To Add a Disclaimer Regarding Trademarks and Servicemarks
in the Rules
NSCC is proposing to add a disclaimer in a footnote to Rule 1
regarding trademarks and servicemarks that appear or may appear in the
future in the Rules. NSCC 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 NSCC 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 Rules, NSCC 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.
(v) Proposal To Change Certain Notice Provisions Relating to Rule
Changes
NSCC is proposing to delete a requirement in Rule 33 that Members
and Limited Members be given 10
[[Page 27002]]
business days' notice of any proposed amendment to the Procedures. NSCC
is also proposing to replace ``immediately'' with ``promptly'' in Rule
36 in order to provide that NSCC will promptly--but might not
immediately--notify Members and Limited Members of any proposed rule
changes. NSCC believes that the foregoing requirements are not
necessary or practical because, as explained below, Members and Limited
Members are already provided adequate notice of any changes or proposed
changes to NSCC's Rules or Procedures through the rule change process.
As a clearing agency registered with the Commission, the Securities
Exchange Act of 1934 (the ``Act'') provides a clear framework under
which NSCC's Rules are adopted and enforced. Under the rule change
process, generally, before a proposed rule change may take effect, (i)
the change and an explanatory statement must be filed with the
Commission and posted by NSCC on the NSCC website, (ii) notice of the
filing and the substantive terms or description of the change must be
published by the Commission in the Federal Register for public review
and comment, and (iii) the Commission must approve the change (or the
change must otherwise be permitted to take effect). NSCC's Rules are
filed with and reviewed by the Commission. As a clearing agency
registered under Section 17A of the Act,\9\ a self-regulatory
organization subject to Section 19 of the Act,\10\ and a systemically
important financial market utility under Title VIII of Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (``Dodd-Frank''),\11\
NSCC is required to follow: (1) A specified process \12\ whenever it
proposes a new rule or a change or amendment to its Rules and (2) a
specified process \13\ whenever it proposes to make a change to its
rules, procedures or operations that could materially affect the nature
or level of risks presented by NSCC.
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\9\ 15 U.S.C. 78q-1.
\10\ 15 U.S.C. 78s.
\11\ 12 U.S.C. 5465(e)(1).
\12\ This process is set forth in Section 19(b) of the Act and
Rule 19b-4 thereunder. 15 U.S.C. 78s(b) and 17 CFR 240.19b-4.
\13\ This process is set forth in Section 806(e) of Dodd-Frank
and Rule 19b-4 thereunder. 12 U.S.C. 5465(e) and 17 CFR 240.19b-4.
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These rule change processes provide notice to Members and Limited
Members and provide an opportunity for those parties to comment on such
changes. Rule 19b-4 under the Act requires that NSCC post any rule
change proposals on its website within two business days after the
filing of a proposed rule change,\14\ post any rule changes that are
approved by the Commission within two business days after it has been
notified of the Commission's approval \15\ and post any rule change
within two business days of the Commission's notice of such proposed
change for rule changes that are effective upon filing.\16\ NSCC
complies--and will continue to comply--with such notice requirements
which it believes are adequate.
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\14\ 17 CFR 240.19b-4(l).
\15\ 17 CFR 240.19b-4(m)(2).
\16\ Id.
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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.\17\
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\17\ 15 U.S.C. 78q-1(b)(3)(F).
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NSCC believes that the proposed changes to (i) correct or clarify
the use of certain defined terms in the Rules, (ii) make certain
clarifications in the Rules, (iii) make certain technical changes to
the Rules and (iv) add a disclaimer regarding trademarks and
servicemarks in the Rules are consistent with Section 17(A)(b)(3)(F) of
the Act \18\ because such changes would enhance the clarity and
transparency of the Rules. By enhancing the clarity and transparency of
the Rules, the proposed changes would allow Members and Limited Members
to more efficiently and effectively conduct their business in
accordance with the Rules, which NSCC believes would promote the prompt
and accurate clearance and settlement of securities transactions. As
such, NSCC believes that the proposed changes would be consistent with
Section 17A(b)(3)(F) of the Act.\19\
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\18\ Id.
\19\ Id.
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NSCC believes that the proposed changes would enhance the
efficiency of NSCC's process for notifying its Members and Limited
Members about changes to its Rules and Procedures. As discussed above
in detail, NSCC believes that Members and Limited Members are already
provided adequate notice of any rule changes, including changes to its
Procedures, through the rule change process. As such, the requirements
for NSCC to immediately provide notice of any proposal it has made to
change any Rule and to provide ten Business Days' notice of any
proposed amendment to the Procedures are impractical and unnecessary
and therefore can negatively impact the efficiency of the process.
Specifically, because NSCC is already subject to--and complies with--
the timeframes required by the Act and Dodd Frank, NSCC believes that
self-imposed requirements to provide notice more quickly (in the case
of proposed rule changes) or farther in advance (in case of changes to
Procedures) than what is required by statute is unnecessary. In
addition, NSCC believes that the requirements are impractical because
(i)(x) the requirement to immediately give notice requires NSCC to
coordinate an almost simultaneous submission of a proposed rule filing
and notification to Members and Limited Members, and (y) Members and
Limited Members would not be prejudiced by the delta between
immediately and promptly; and (ii) the requirement to provide Members
and Limited Members notice of changes to Procedures ten Business Days
in advance, especially when such parties already receive adequate
notice of the changes, could cause delays in the rule filing process
and/or the implementation of an amended rule and procedure.
Accordingly, NSCC believes that, by removing unnecessary and
impractical timing requirements for notice, the proposed rule change is
designed to enhance the efficiency of NSCC's notice process and
implementation of the amended Rules and Procedures, thereby promoting
the prompt and accurate clearance and settlement of securities
transactions, as provided under such amended Rules and Procedures. As
such, NSCC believes that the proposed changes would be consistent with
Section 17A(b)(3)(F) of the Act.\20\
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\20\ Id.
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(B) Clearing Agency's Statement on Burden on Competition
NSCC does not believe the proposed rule changes to (i) correct or
clarify the use of certain defined terms in the Rules, (ii) make
certain clarifications in the Rules, (iii) make certain technical
changes to the Rules, (iv) add a disclaimer regarding trademarks and
servicemarks in the Rules and (v) change certain notice provisions
relating to rule changes would impact competition. The proposed rule
changes described in (i)-(iv) above would merely enhance the clarity
and transparency of the Rules and would not affect NSCC's operations or
the rights and obligations of the membership. While the proposed
changes to the notice provisions described in (v) above would impact
the rights and obligations of the Members and Limited Members to
receive notices more quickly (in the case of proposed rule changes) or
farther in advance (in case of changes to Procedures) than
[[Page 27003]]
what is required by statute, the impact of the proposed changes on the
Members and Limited Members would be minimal. As discussed above, NSCC
believes that the proposed changes to the notice provisions are
removing unnecessary and impractical timing requirements for notices,
and Members and Limited Members would continue to receive adequate
notice under the rule change process and continue to be treated equally
with respect to such notices. As such, NSCC 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
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.
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) \21\ of the Act and paragraph (f) \22\ 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.
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\21\ 15 U.S.C 78s(b)(3)(A).
\22\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NSCC-2021-006 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-2021-006. 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 NSCC 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-NSCC-2021-006 and should be submitted on
or before June 8, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10392 Filed 5-17-21; 8:45 am]
BILLING CODE 8011-01-P
