Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Addendum A (Fee Structure), 89485-89488 [2023-28457]
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Federal Register / Vol. 88, No. 247 / Wednesday, December 27, 2023 / Notices
Section 19(b)(2) of the Act 8 provides
that, after initiating proceedings, the
Commission shall issue an order
approving or disapproving the proposed
rule change not later than 180 days after
the date of publication of notice of filing
of the proposed rule change. The
Commission may extend the period for
issuing an order approving or
disapproving the proposed rule change,
however, by not more than 60 days if
the Commission determines that a
longer period is appropriate and
publishes the reasons for such
determination. The proposed rule
change was published for notice and
comment in the Federal Register on
June 26, 2023.9 December 23, 2023 is
180 days from that date, and February
21, 2024 is 240 days from that date.
The Commission finds it appropriate
to designate a longer period within
which to issue an order approving or
disapproving the proposed rule change
so that it has sufficient time to consider
the proposed rule change. Accordingly,
the Commission, pursuant to section
19(b)(2) of the Act,10 designates
February 21, 2024 as the date by which
the Commission shall either approve or
disapprove the proposed rule change
(File No. SR–MIAX–2023–23).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023–28454 Filed 12–26–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99209; File No. SR–
EMERALD–2023–13]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Designation of
Longer Period for Commission Action
on Proceedings To Determine Whether
To Approve or Disapprove Proposed
Rule Change To Increase Fees for the
ToM Market Data Product and
Establish Fees for the cToM Market
Data Product
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December 20, 2023.
On June 7, 2023, MIAX Emerald, LLC
(‘‘MIAX Emerald’’ or the ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’),1 and
8 15
U.S.C. 78s(b)(2).
Notice, supra note 4.
10 15 U.S.C. 78s(b)(2).
11 17 CFR 200.30–3(a)(57).
1 15 U.S.C. 78s(b)(1).
9 See
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Rule 19b–4 thereunder,2 a proposed rule
change (File Number SR–EMERALD–
2023–13) to increase fees for the MIAX
Emerald Top of Market (‘‘ToM’’) market
data product and establish fees for the
MIAX Emerald Complex Top of Market
(‘‘cToM’’) market data product. The
proposed rule change was immediately
effective upon filing with the
Commission pursuant to Section
19(b)(3)(A) of the Act.3 The proposed
rule change was published for comment
in the Federal Register on June 26,
2023.4 On August 3, 2023, the
Commission issued an order
temporarily suspending the proposed
rule change pursuant to Section
19(b)(3)(C) of the Act 5 and
simultaneously instituting proceedings
under Section 19(b)(2)(B) of the Act 6 to
determine whether to approve or
disapprove the proposed rule change.7
Section 19(b)(2) of the Act 8 provides
that, after initiating proceedings, the
Commission shall issue an order
approving or disapproving the proposed
rule change not later than 180 days after
the date of publication of notice of filing
of the proposed rule change. The
Commission may extend the period for
issuing an order approving or
disapproving the proposed rule change,
however, by not more than 60 days if
the Commission determines that a
longer period is appropriate and
publishes the reasons for such
determination. The proposed rule
change was published for notice and
comment in the Federal Register on
June 26, 2023.9 December 23, 2023 is
180 days from that date, and February
21, 2024 is 240 days from that date.
The Commission finds it appropriate
to designate a longer period within
which to issue an order approving or
disapproving the proposed rule change
so that it has sufficient time to consider
the proposed rule change. Accordingly,
the Commission, pursuant to Section
19(b)(2) of the Act,10 designates
February 21, 2024 as the date by which
the Commission shall either approve or
2 17
CFR 240.19b–4.
U.S.C. 78s(b)(3)(A). A proposed rule change
may take effect upon filing with the Commission if
it is designated by the exchange as ‘‘establishing or
changing a due, fee, or other charge imposed by the
self-regulatory organization on any person, whether
or not the person is a member of the self-regulatory
organization.’’ 15 U.S.C. 78s(b)(3)(A)(ii).
4 See Securities Exchange Act Release No. 97767
(June 20, 2023), 88 FR 41442 (‘‘Notice’’).
5 15 U.S.C. 78s(b)(3)(C).
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 98051,
88 FR 53937 (August 9, 2023) (‘‘Order Instituting
Proceedings’’).
8 15 U.S.C. 78s(b)(2).
9 See Notice, supra note 4.
10 15 U.S.C. 78s(b)(2).
3 15
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89485
disapprove the proposed rule change
(File No. SR–EMERALD–2023–13).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023–28452 Filed 12–26–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–99208; File No. SR–NSCC–
2023–013]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify Addendum A
(Fee Structure)
December 20, 2023.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
15, 2023, National Securities Clearing
Corporation (‘‘NSCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the clearing agency. NSCC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
NSCC is filing the proposed rule
change to modify Addendum A (Fee
Structure) (‘‘Addendum A’’) of NSCC’s
Rules & Procedures (‘‘Rules’’) to
increase its Clearing Fund Maintenance
Fee, as described below.5
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
11 17
CFR 200.30–3(a)(57).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
5 Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to such
terms in the Rules, available at www.dtcc.com/∼/
media/Files/Downloads/legal/rules/nscc_rules.pdf.
1 15
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Federal Register / Vol. 88, No. 247 / Wednesday, December 27, 2023 / Notices
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
The purpose of this proposed rule
change is to amend Addendum A (Fee
Structure) of the Rules to modify
NSCC’s Clearing Fund Maintenance Fee
effective January 1, 2024. The proposed
fee change is discussed in detail below.
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Background
NSCC’s Clearing Fund Maintenance
Fee was implemented in 2016 in order
to (i) diversify NSCC’s revenue sources,
mitigating NSCC’s dependence on
revenues driven by trading volumes and
(ii) add a stable revenue source that
would contribute to NSCC’s operating
margin by offsetting increasing costs
and expenses.6 The fee is charged to all
NSCC Members that are required to
make deposits to the NSCC Clearing
Fund in proportion to the Member’s
average monthly cash deposit to the
Clearing Fund.
As part of the annual budgeting
process, NSCC reviews price levels
against its cost of operations and
evaluates potential expense reductions
and/or fee changes to correct any
misalignment of costs and fees. NSCC’s
fees are cost-based plus a markup as
approved by the Board of Directors or
management (pursuant to authority
delegated by the Board), as applicable.
This markup is applied to recover
development costs and operating
expenses and to accumulate capital
sufficient to meet regulatory and
economic requirements.7
During the 2024 budgeting process,
NSCC identified opportunities to better
align fees and costs for NSCC, which
were approved by the Businesses,
Technology and Operations Committee
of the Board of Directors. NSCC
anticipates an increase in the cost of
funding NSCC’s default liquidity
resources due to the rising interest rate
environment, which would constitute
6 See Securities Exchange Act Release No. 78525
(Aug. 9, 2016), 81 FR 54146 (Aug. 15, 2016) (SR–
NSCC–2016–002).
7 NSCC maintains procedures to control costs and
regularly review pricing levels against costs of
operation. See NSCC Disclosure Framework for
Covered Clearing Agencies and Financial Market
Infrastructures, available at www.dtcc.com/-/media/
Files/Downloads/legal/policy-and-compliance/
NSCC_Disclosure_Framework.pdf, at 124.
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the significant majority of the projected
increase in NSCC’s overall operating
expenses. Specifically, two tranches of
senior notes issued in 2020 with lower
coupon rates are maturing in 2023, and
these notes need to be refinanced with
new issuances at significantly higher
prevailing market rates. As a result, the
weighted average rate of NSCC’s senior
notes portfolio and its related interest
expense would increase. NSCC is
therefore proposing to increase the
Clearing Fund Maintenance Fee to
partially offset its increasing cost of
default liquidity resources.
Proposed Fee Changes
Pursuant to Section V.F of Addendum
A, NSCC charges a Clearing Fund
Maintenance Fee, which is a monthly
fee calculated, in arrears, as the product
of (A) 0.25% and (B) the average of each
Member’s (or Limited Member’s, if
applicable) cash deposit balance in the
Clearing Fund, as of the end of each
day, for the month, multiplied by the
number of days for that month and
divided by 360. Based on its annal
budgeting review, NSCC proposes to
increase the rate used to calculate the
Clearing Fund Maintenance Fee by 10
basis points from 0.25% to 0.35%. To
effectuate the proposed fee change,
NSCC would amend Section V.F. of
Addendum A concerning the Clearing
Fund Maintenance Fee to reflect the
new calculation rate of 0.35%. NSCC
would also remove the reference to
Limited Members in the Clearing Fund
Maintenance Fee description because
Limited Members are no longer required
to maintain Clearing Fund deposits at
NSCC and therefore the Clearing Fund
Maintenance Fee no longer applies to
Limited Members.8
Expected Member Impact
The proposed rule change would
result in increased Clearing Fund
Maintenance Fees for NSCC Members,
the impact of which would vary based
on each Member’s average monthly cash
deposit to the Clearing Fund. Taken
alone, the proposed rule change could
be expected to result in an increase of
approximately $9 million in fee
revenue. However, NSCC notes that
8 In
December 2021, NSCC adopted a proposed
rule change to (i) remove the requirement that
Members and Mutual Fund/Insurance Services
Members pay a Mutual Fund Deposit into the
Clearing Fund relating to Mutual Fund Services, (ii)
remove provisions relating to the Mutual Fund
Deposit and the Insurance Deposit and (iii) remove
a provision relating to establishing a Clearing Fund
requirement for NSCC Members that currently do
not have a Clearing Fund requirement. See
Securities Exchange Act Release No. 93722 (Dec. 6,
2021), 86 FR 70548 (Dec. 10, 2021) (SR–NSCC–
2021–015).
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while the Clearing Fund Maintenance
Fee is being increased, NSCC also
anticipates that average Clearing Fund
balances would be reduced following
the implementation of the T+1
settlement cycle in May 2024.9 As a
result, the proposed fee change is
expected to increase NSCC’s overall
annual fee revenue by approximately $3
million. NSCC projects that over half of
its Members would see an increase of
less than $25,000, approximately 29
Members would see increases ranging
from $25,000–$100,000, and
approximately 20 Members would see
an increase of over $100,000.
Member Outreach
NSCC has conducted ongoing
outreach to Members in order to provide
them with notice of the proposed
changes and the anticipated impact for
the Member. As of the date of this filing,
no written comments relating to the
proposed changes have been received in
response to this outreach. The
Commission will be notified of any
written comments received.
Implementation Timeframe
NSCC would implement this proposal
on January 1, 2024. As proposed, a
legend would be added to Addendum A
stating there are changes that became
effective upon filing with the
Commission but have not yet been
implemented. The proposed legend also
would include the date on which such
changes would be implemented and the
file number of this proposal, and state
that, once this proposal is implemented,
the legend would automatically be
removed.
2. Statutory Basis
NSCC believes the proposed rule
change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a registered clearing agency.
Specifically, NSCC believes the
proposed rule change is consistent with
Section 17A(b)(3)(D) of the Act 10 and
Rule 17Ad–22(e)(23)(ii) 11 thereunder
for the reasons set forth below.
9 See Securities Exchange Act Release No. 96930
(Feb. 15, 2023), 88 FR 13872 (Mar. 6, 2023) (S7–
05–22) (Shortening the Securities Transaction
Settlement Cycle). For example, NSCC analysis
suggests that the aggregate volatility component of
NSCC’s margin calculation could potentially be
reduced by 41% by a move to a T+1 settlement
cycle. See DTCC White Paper, Advancing Together:
Leading the Industry to Accelerated Settlement
(February 2021), available at www.dtcc.com/-/
media/Files/PDFs/White%20Paper/DTCCAccelerated-Settle-WP-2021.pdf.
10 15 U.S.C. 78q–1(b)(3)(D).
11 17 CFR 240.17Ad–22(e)(23)(ii).
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Federal Register / Vol. 88, No. 247 / Wednesday, December 27, 2023 / Notices
Section 17A(b)(3)(D) of the Act 12
requires that the rules of a clearing
agency provide for the equitable
allocation of reasonable dues, fees, and
other charges among its participants.
NSCC believes the proposed fee is
reasonable and would be allocated
equitably among its full-service
Members. Because the proposed
changes do not alter how the Clearing
Fund Maintenance Fee is currently
allocated (i.e., charged) to Members,
NSCC believes the fee would continue
to be equitably allocated. More
specifically, as mentioned above, the
Clearing Fund Maintenance Fee is and
would continue to be charged to all
Members in proportion to the Member’s
average monthly cash deposit to the
Clearing Fund. As such, and as is
currently the case, Members that make
greater use of NSCC’s guaranteed
services or which have activity in those
services that present greater risk to
NSCC would generally be subject to a
larger Clearing Fund Maintenance Fee
because such Members would typically
be required to maintain larger Clearing
Fund deposits pursuant to the Rules.13
NSCC also believes that the Clearing
Fund Maintenance Fee would continue
to be a reasonable fee under the
described changes. As described above,
the Clearing Fund Maintenance Fee was
implemented in 2016 in order to (i)
diversify NSCC’s revenue sources,
mitigating NSCC’s dependence on
revenues driven by trading volumes and
(ii) add a stable revenue source that
would contribute to NSCC’s operating
margin by offsetting increasing costs
and expenses. NSCC proposes to adopt
a 10 basis point increase in the fee to
help offset increased costs funding
NSCC’s default liquidity resources due
to the rising interest rate environment.
As noted above, the net interest carry on
NSCC’s medium term notes is projected
to decline next year as legacy senior
notes mature and are refinanced at
higher prevailing market rates. For this
reason, NSCC believes the proposed
changes to the Clearing Fund
Maintenance Fee are reasonable.
Rule 17Ad–22(e)(23)(ii) under the
Act 14 requires NSCC to establish,
implement, maintain and enforce
written policies and procedures
reasonably designed to provide
sufficient information to enable
participants to identify and evaluate the
risks, fees, and other material costs they
incur by participating in the covered
clearing agency. The proposed fees
would be clearly and transparently
U.S.C. 78q–1(b)(3)(D).
Rule 4 and Procedure XV, supra note 5.
14 17 CFR 240.17Ad–22(e)(23)(ii).
published in Addendum A of the Rules,
which are available on a public
website,15 thereby enabling Members to
identify the fees and costs associated
with participating in NSCC. As such,
NSCC believes the proposed rule change
is consistent with Rule 17Ad–
22(e)(23)(ii) under the Act.16
(B) Clearing Agency’s Statement on
Burden on Competition
NSCC does not believe that the
changes to the Clearing Fund
Maintenance Fee would impose any
burden on competition. The Clearing
Fund Maintenance Fee is charged
ratably based on each Members’ use of
NSCC’s guaranteed services, as reflected
in Members’ cash deposits to the
Clearing Fund. Thus, the fee is designed
to be reflective of each Member’s
individual activity at NSCC. While
Member’s may experience some impact
from the increase in fees, NSCC notes
that average Clearing Fund balances
would also be reduced following the
implementation of the T+1 settlement
cycle in May 2024, offsetting some of
this impact.17 NSCC believes the
proposed fee change would not unfairly
inhibit access to NSCC’s services by any
Member. NSCC therefore believes the
proposed rule change would have a
minimal impact on Members and would
not impose any burden on competition.
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants, or Others
NSCC has conducted outreach to
Members to provide them with notice of
the proposed fees.
NSCC has not received or solicited
any written comments relating to this
proposal. If any written comments are
received, NSCC will amend this filing to
publicly file such comments as an
Exhibit 2 to this filing, as required by
Form 19b–4 and the General
Instructions thereto.
Persons submitting comments are
cautioned that, according to Section IV
(Solicitation of Comments) of the
Exhibit 1A in the General Instructions to
Form 19b–4, the Commission does not
edit personal identifying information
from comment submissions.
Commenters should submit only
information that they wish to make
available publicly, including their
name, email address, and any other
identifying information.
All prospective commenters should
follow the Commission’s instructions on
12 15
15 See
13 See
16 17
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supra note 5.
CFR 240.17Ad–22(e)(23)(ii).
17 See supra note 9.
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89487
how to submit comments, available at
www.sec.gov/regulatory-actions/how-tosubmit-comments. General questions
regarding the rule filing process or
logistical questions regarding this filing
should be directed to the Main Office of
the Commission’s Division of Trading
and Markets at tradingandmarkets@
sec.gov or 202–551–5777.
NSCC reserves the right not to
respond to any comments received.
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) 18 of the Act and paragraph
(f) 19 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–2023–013 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–2023–013. 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
18 15
19 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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Federal Register / Vol. 88, No. 247 / Wednesday, December 27, 2023 / Notices
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
a.m. and 3 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). Do
not include personal identifiable
information in submissions; you should
submit only information that you wish
to make available publicly. We may
redact in part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection. All submissions should refer
to file number SR–NSCC–2023–013 and
should be submitted on or before
January 17, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023–28457 Filed 12–26–23; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice: 12294]
Notice of Public Meeting: International
Information and Communications
Policy Division Stakeholder Briefing
ACTION:
Notice of public meeting.
Digital Economy Task Force, and other
multilateral processes and bilateral
digital and ICT dialogues.
DATES: The meeting will be on January
18, 2024.
FOR FURTHER INFORMATION CONTACT:
Please contact Daniel Oates, Global
Technology Policy Advisor, CDP/ICP, at
OatesDM@state.gov or 202–436–5516.
SUPPLEMENTARY INFORMATION:
Additional information about the
Bureau of Cyberspace and Digital Policy
is accessible at https://www.state.gov/
bureaus-offices/deputy-secretary-ofstate/bureau-of-cyberspace-and-digitalpolicy/.
We encourage anyone wanting to
attend this virtual meeting to register
using the following link by 5:00PM
Tuesday, January 16: https://
statedept.webex.com/weblink/register/
r5293d97462276d4d02be7fb36b04879a.
Requests for reasonable
accommodation made after January 8
will be considered but might not be able
to be accommodated. The public may
have an opportunity to provide
comments at this meeting.
Agenda
Thursday, January 18, at 2 p.m. (ET)
Opening Remarks
Briefings on CDP/ICP’s past and
upcoming activities
Public Comment
Adjournment
Stephan A. Lang,
Deputy Assistant Secretary, International
Information and Communications Policy,
Bureau of Cyberspace and Digital Policy,
Department of State.
[FR Doc. 2023–28447 Filed 12–26–23; 8:45 am]
BILLING CODE 4710–10–P
The State Department will
hold a public meeting at 2 p.m.–3:30
p.m. (ET) on WebEx with the Bureau of
Cyberspace and Digital Policy’s
International Information and
Communications Policy (CDP/ICP)
division. The purpose of the meeting is
to brief stakeholders on CDP/ICP’s past
and upcoming international
engagements. These include engagement
at the International Telecommunication
Union (ITU), the Organization of
American States Inter-American
Telecommunication Commission
(CITEL), the Organization for Economic
Cooperation and Development (OECD),
the Asia Pacific Economic Cooperation
(APEC) Forum Telecommunications and
Information Working Group, the Group
of Seven (G7) Digital & Tech Working
Group, the Group of Twenty (G20)
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SUMMARY:
20 17
CFR 200.30–3(a)(12).
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SURFACE TRANSPORTATION BOARD
Release of Waybill Data
The Surface Transportation Board has
received a request from the Utah Inland
Port Authority (WB23–72—12/20/23)
for permission to use select data from
the Board’s annual 2021 masked
Carload Waybill Sample. A copy of this
request may be obtained from the
Board’s website under Docket No.
WB23–72.
The waybill sample contains
confidential railroad and shipper data;
therefore, if any parties object to these
requests, they should file their
objections with the Director of the
Board’s Office of Economics within 14
calendar days of the date of this notice.
The rules for release of waybill data are
codified at 49 CFR 1244.9.
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Contact: Alexander Dusenberry, (202)
245–0319.
Brendetta Jones,
Clearance Clerk.
[FR Doc. 2023–28568 Filed 12–26–23; 8:45 am]
BILLING CODE 4915–01–P
TENNESSEE VALLEY AUTHORITY
Meeting of the Regional Resource
Stewardship Council and the Regional
Energy Resource Council
Tennessee Valley Authority
(TVA).
ACTION: Notice of Federal advisory
committee meeting.
AGENCY:
The TVA Regional Resource
Stewardship Council (RRSC) and
Regional Energy Resource Council
(RERC) will hold a combined meeting of
both councils on January 18, 2024, to
seek advice on the Valley Pathways
Study, a study led by both TVA and the
University of Tennessee Baker Center
for Public Policy to develop a roadmap
for Net Zero greenhouse gas (GHG)
emission economy by 2050.
DATES: The meeting will be held in
Knoxville, Tennessee, at the Downtown
Knoxville Marriott on Thursday,
January 18, 2024, from 8:30 a.m. to 4
p.m. E.T. RRSC and RERC council
members are invited to attend the
meeting in person. The public is invited
to view the meeting virtually or to
attend in-person. There will be a 1-hour
public listening session at 1:30 E.T.
Those wishing to speak virtually must
email Bekim Haliti at bhaliti@tva.gov by
5 p.m. on Tuesday, January 16. Written
comments are invited and can be sent
by email to Bekim Haliti at bhaliti@
tva.gov. A link and instructions to view
the meeting will be posted on TVA’s
RRSC website at www.tva.com/rrsc and
TVA’s RERC website at www.tva.com/
rerc prior to the scheduled meeting.
ADDRESSES: The public is invited to
view the meeting virtually or attend in
person. The in-person meeting will be
held at the Downtown Knoxville
Marriott at 525 Henley St. Knoxville, TN
37902. There will be a 1-hour Public
Listening Session from 1:30 to 2:30.
Persons who wish to speak virtually
during the public listening session must
pre-register by 5 p.m. E.T. Tuesday,
January 16, by emailing bhaliti@tva.gov.
Anyone needing special
accommodations should let the contact
below know at least one week in
advance.
FOR FURTHER INFORMATION CONTACT:
Bekim Haliti, bhaliti@tva.gov, 931–349–
1894.
SUMMARY:
E:\FR\FM\27DEN1.SGM
27DEN1
]]>Agencies
[Federal Register Volume 88, Number 247 (Wednesday, December 27, 2023)]
[Notices]
[Pages 89485-89488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28457]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99208; File No. SR-NSCC-2023-013]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Modify Addendum A (Fee Structure)
December 20, 2023.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 15, 2023, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the clearing agency.
NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) of
the Act \3\ and Rule 19b-4(f)(2) thereunder.\4\ The 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)(2).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
NSCC is filing the proposed rule change to modify Addendum A (Fee
Structure) (``Addendum A'') of NSCC's Rules & Procedures (``Rules'') to
increase its Clearing Fund Maintenance Fee, as described below.\5\
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\5\ Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to such terms in the Rules,
available at www.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
[[Page 89486]]
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
The purpose of this proposed rule change is to amend Addendum A
(Fee Structure) of the Rules to modify NSCC's Clearing Fund Maintenance
Fee effective January 1, 2024. The proposed fee change is discussed in
detail below.
Background
NSCC's Clearing Fund Maintenance Fee was implemented in 2016 in
order to (i) diversify NSCC's revenue sources, mitigating NSCC's
dependence on revenues driven by trading volumes and (ii) add a stable
revenue source that would contribute to NSCC's operating margin by
offsetting increasing costs and expenses.\6\ The fee is charged to all
NSCC Members that are required to make deposits to the NSCC Clearing
Fund in proportion to the Member's average monthly cash deposit to the
Clearing Fund.
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\6\ See Securities Exchange Act Release No. 78525 (Aug. 9,
2016), 81 FR 54146 (Aug. 15, 2016) (SR-NSCC-2016-002).
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As part of the annual budgeting process, NSCC reviews price levels
against its cost of operations and evaluates potential expense
reductions and/or fee changes to correct any misalignment of costs and
fees. NSCC's fees are cost-based plus a markup as approved by the Board
of Directors or management (pursuant to authority delegated by the
Board), as applicable. This markup is applied to recover development
costs and operating expenses and to accumulate capital sufficient to
meet regulatory and economic requirements.\7\
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\7\ NSCC maintains procedures to control costs and regularly
review pricing levels against costs of operation. See NSCC
Disclosure Framework for Covered Clearing Agencies and Financial
Market Infrastructures, available at www.dtcc.com/-/media/Files/Downloads/legal/policy-and-compliance/NSCC_Disclosure_Framework.pdf,
at 124.
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During the 2024 budgeting process, NSCC identified opportunities to
better align fees and costs for NSCC, which were approved by the
Businesses, Technology and Operations Committee of the Board of
Directors. NSCC anticipates an increase in the cost of funding NSCC's
default liquidity resources due to the rising interest rate
environment, which would constitute the significant majority of the
projected increase in NSCC's overall operating expenses. Specifically,
two tranches of senior notes issued in 2020 with lower coupon rates are
maturing in 2023, and these notes need to be refinanced with new
issuances at significantly higher prevailing market rates. As a result,
the weighted average rate of NSCC's senior notes portfolio and its
related interest expense would increase. NSCC is therefore proposing to
increase the Clearing Fund Maintenance Fee to partially offset its
increasing cost of default liquidity resources.
Proposed Fee Changes
Pursuant to Section V.F of Addendum A, NSCC charges a Clearing Fund
Maintenance Fee, which is a monthly fee calculated, in arrears, as the
product of (A) 0.25% and (B) the average of each Member's (or Limited
Member's, if applicable) cash deposit balance in the Clearing Fund, as
of the end of each day, for the month, multiplied by the number of days
for that month and divided by 360. Based on its annal budgeting review,
NSCC proposes to increase the rate used to calculate the Clearing Fund
Maintenance Fee by 10 basis points from 0.25% to 0.35%. To effectuate
the proposed fee change, NSCC would amend Section V.F. of Addendum A
concerning the Clearing Fund Maintenance Fee to reflect the new
calculation rate of 0.35%. NSCC would also remove the reference to
Limited Members in the Clearing Fund Maintenance Fee description
because Limited Members are no longer required to maintain Clearing
Fund deposits at NSCC and therefore the Clearing Fund Maintenance Fee
no longer applies to Limited Members.\8\
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\8\ In December 2021, NSCC adopted a proposed rule change to (i)
remove the requirement that Members and Mutual Fund/Insurance
Services Members pay a Mutual Fund Deposit into the Clearing Fund
relating to Mutual Fund Services, (ii) remove provisions relating to
the Mutual Fund Deposit and the Insurance Deposit and (iii) remove a
provision relating to establishing a Clearing Fund requirement for
NSCC Members that currently do not have a Clearing Fund requirement.
See Securities Exchange Act Release No. 93722 (Dec. 6, 2021), 86 FR
70548 (Dec. 10, 2021) (SR-NSCC-2021-015).
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Expected Member Impact
The proposed rule change would result in increased Clearing Fund
Maintenance Fees for NSCC Members, the impact of which would vary based
on each Member's average monthly cash deposit to the Clearing Fund.
Taken alone, the proposed rule change could be expected to result in an
increase of approximately $9 million in fee revenue. However, NSCC
notes that while the Clearing Fund Maintenance Fee is being increased,
NSCC also anticipates that average Clearing Fund balances would be
reduced following the implementation of the T+1 settlement cycle in May
2024.\9\ As a result, the proposed fee change is expected to increase
NSCC's overall annual fee revenue by approximately $3 million. NSCC
projects that over half of its Members would see an increase of less
than $25,000, approximately 29 Members would see increases ranging from
$25,000-$100,000, and approximately 20 Members would see an increase of
over $100,000.
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\9\ See Securities Exchange Act Release No. 96930 (Feb. 15,
2023), 88 FR 13872 (Mar. 6, 2023) (S7-05-22) (Shortening the
Securities Transaction Settlement Cycle). For example, NSCC analysis
suggests that the aggregate volatility component of NSCC's margin
calculation could potentially be reduced by 41% by a move to a T+1
settlement cycle. See DTCC White Paper, Advancing Together: Leading
the Industry to Accelerated Settlement (February 2021), available at
www.dtcc.com/-/media/Files/PDFs/White%20Paper/DTCC-Accelerated-Settle-WP-2021.pdf.
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Member Outreach
NSCC has conducted ongoing outreach to Members in order to provide
them with notice of the proposed changes and the anticipated impact for
the Member. As of the date of this filing, no written comments relating
to the proposed changes have been received in response to this
outreach. The Commission will be notified of any written comments
received.
Implementation Timeframe
NSCC would implement this proposal on January 1, 2024. As proposed,
a legend would be added to Addendum A stating there are changes that
became effective upon filing with the Commission but have not yet been
implemented. The proposed legend also would include the date on which
such changes would be implemented and the file number of this proposal,
and state that, once this proposal is implemented, the legend would
automatically be removed.
2. Statutory Basis
NSCC believes the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a registered clearing agency. Specifically, NSCC believes
the proposed rule change is consistent with Section 17A(b)(3)(D) of the
Act \10\ and Rule 17Ad-22(e)(23)(ii) \11\ thereunder for the reasons
set forth below.
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\10\ 15 U.S.C. 78q-1(b)(3)(D).
\11\ 17 CFR 240.17Ad-22(e)(23)(ii).
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[[Page 89487]]
Section 17A(b)(3)(D) of the Act \12\ requires that the rules of a
clearing agency provide for the equitable allocation of reasonable
dues, fees, and other charges among its participants. NSCC believes the
proposed fee is reasonable and would be allocated equitably among its
full-service Members. Because the proposed changes do not alter how the
Clearing Fund Maintenance Fee is currently allocated (i.e., charged) to
Members, NSCC believes the fee would continue to be equitably
allocated. More specifically, as mentioned above, the Clearing Fund
Maintenance Fee is and would continue to be charged to all Members in
proportion to the Member's average monthly cash deposit to the Clearing
Fund. As such, and as is currently the case, Members that make greater
use of NSCC's guaranteed services or which have activity in those
services that present greater risk to NSCC would generally be subject
to a larger Clearing Fund Maintenance Fee because such Members would
typically be required to maintain larger Clearing Fund deposits
pursuant to the Rules.\13\
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\12\ 15 U.S.C. 78q-1(b)(3)(D).
\13\ See Rule 4 and Procedure XV, supra note 5.
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NSCC also believes that the Clearing Fund Maintenance Fee would
continue to be a reasonable fee under the described changes. As
described above, the Clearing Fund Maintenance Fee was implemented in
2016 in order to (i) diversify NSCC's revenue sources, mitigating
NSCC's dependence on revenues driven by trading volumes and (ii) add a
stable revenue source that would contribute to NSCC's operating margin
by offsetting increasing costs and expenses. NSCC proposes to adopt a
10 basis point increase in the fee to help offset increased costs
funding NSCC's default liquidity resources due to the rising interest
rate environment. As noted above, the net interest carry on NSCC's
medium term notes is projected to decline next year as legacy senior
notes mature and are refinanced at higher prevailing market rates. For
this reason, NSCC believes the proposed changes to the Clearing Fund
Maintenance Fee are reasonable.
Rule 17Ad-22(e)(23)(ii) under the Act \14\ requires NSCC to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to provide sufficient information to
enable participants to identify and evaluate the risks, fees, and other
material costs they incur by participating in the covered clearing
agency. The proposed fees would be clearly and transparently published
in Addendum A of the Rules, which are available on a public
website,\15\ thereby enabling Members to identify the fees and costs
associated with participating in NSCC. As such, NSCC believes the
proposed rule change is consistent with Rule 17Ad-22(e)(23)(ii) under
the Act.\16\
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\14\ 17 CFR 240.17Ad-22(e)(23)(ii).
\15\ See supra note 5.
\16\ 17 CFR 240.17Ad-22(e)(23)(ii).
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(B) Clearing Agency's Statement on Burden on Competition
NSCC does not believe that the changes to the Clearing Fund
Maintenance Fee would impose any burden on competition. The Clearing
Fund Maintenance Fee is charged ratably based on each Members' use of
NSCC's guaranteed services, as reflected in Members' cash deposits to
the Clearing Fund. Thus, the fee is designed to be reflective of each
Member's individual activity at NSCC. While Member's may experience
some impact from the increase in fees, NSCC notes that average Clearing
Fund balances would also be reduced following the implementation of the
T+1 settlement cycle in May 2024, offsetting some of this impact.\17\
NSCC believes the proposed fee change would not unfairly inhibit access
to NSCC's services by any Member. NSCC therefore believes the proposed
rule change would have a minimal impact on Members and would not impose
any burden on competition.
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\17\ See supra note 9.
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others
NSCC has conducted outreach to Members to provide them with notice
of the proposed fees.
NSCC has not received or solicited any written comments relating to
this proposal. If any written comments are received, NSCC will amend
this filing to publicly file such comments as an Exhibit 2 to this
filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to
Section IV (Solicitation of Comments) of the Exhibit 1A in the General
Instructions to Form 19b-4, the Commission does not edit personal
identifying information from comment submissions. Commenters should
submit only information that they wish to make available publicly,
including their name, email address, and any other identifying
information.
All prospective commenters should follow the Commission's
instructions on how to submit comments, available at www.sec.gov/regulatory-actions/how-to-submit-comments. General questions regarding
the rule filing process or logistical questions regarding this filing
should be directed to the Main Office of the Commission's Division of
Trading and Markets at [email protected] or 202-551-5777.
NSCC reserves the right not to respond to any comments received.
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) \18\ of the Act and paragraph (f) \19\ 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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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 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-2023-013 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-2023-013. 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
[[Page 89488]]
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 a.m. and 3 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). Do not include personal identifiable
information in submissions; you should submit only information that you
wish to make available publicly. We may redact in part or withhold
entirely from publication submitted material that is obscene or subject
to copyright protection. All submissions should refer to file number
SR-NSCC-2023-013 and should be submitted on or before January 17, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023-28457 Filed 12-26-23; 8:45 am]
BILLING CODE 8011-01-P
