80 FR 27833 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Rules of the Government Securities Division and the Mortgage-Backed Securities Division Regarding the Default of Fixed Income Clearing Corporation

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 93 (May 14, 2015)

[Federal Register Volume 80, Number 93 (Thursday, May 14, 2015)]
[Notices]
[Pages 27833-27834]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-11590]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74908; File No. SR-FICC-2015-001]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Clarify the Rules of the Government Securities Division and the 
Mortgage-Backed Securities Division Regarding the Default of Fixed 
Income Clearing Corporation

May 8, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on April 24, 2015, The Fixed Income Clearing Corporation 
(``FICC'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by FICC. FICC filed the 
proposed rule change pursuant to Section 19(b)(3)(A) \3\ of the Act and 
Rule 19b-4(f)(1) \4\ thereunder, so that the proposal was effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit comments on the rule change from interested parties.
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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)(1).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change is a clarification of the meaning of 
clause (b)(i) of Rule 22B of the Government Securities Division 
(``GSD'') of Fixed Income Clearing Corporation (``FICC'' or the 
``Corporation'') and the meaning of clause (b)(i) of Rule 17A of the 
Mortgage-Backed Securities Division (``MBSD'') of FICC (together the 
``Corporation Default Rules''). This clarification does not require a 
change to the text of the rules of GSD (the ``GSD Rules'') or the text 
of the rules of MBSD (the ``MBSD Rules'').

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

    In its filing with the Commission, FICC 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. FICC 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
    It has come to the attention of FICC that, although the texts of 
the Corporation Default Rules are clear, the narrative description of 
the rule changes to the Corporation Default Rules recently implemented 
by FICC in its rule filing SR-FICC-2014-09 \5\ could be construed as 
ambiguous as to the relationship between the 7 calendar day grace 
period applicable under clause (b)(i) of the Corporation Default Rules 
and FICC's authority to suspend its rules under GSD Rule 42 (Suspension 
of Rules) and MBSD Rule 33 (Suspension of Rules in Emergency 
Circumstances), as applicable. By this proposed rule change, FICC is 
clarifying that the 7 calendar day grace period applicable under clause 
(b)(i) of GSD Rule 22B cannot be extended by application of any GSD 
Rule, including GSD Rule 42 (Suspension of Rules), and that the 7 
calendar day grace period applicable under clause (b)(i) of MBSD Rule 
17A cannot be extended by application of any MBSD Rule, including MBSD 
Rule 33 (Suspension of Rules in Emergency Circumstances).
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    \5\ See Securities Exchange Act Release No. 73682 (November 25, 
2014), 79 FR 71481 (December 2, 2014) (File No. SR-FICC-2014-09).
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(2) Statutory Basis
    The proposed rule change is consistent with Section 17A(b)(3)(F) 
\6\ of the Act and the rules and regulations promulgated thereunder 
because it will promote the prompt and accurate clearance and 
settlement of securities transactions in that it will provide clarity 
to FICC members regarding their rights and obligations and the rights 
and obligations of the Corporation under clause (b)(i) of the 
Corporation Default Rules.
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    \6\ 15 U.S.C. 78q-1(b)(3)(F).

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[[Page 27834]]

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

    FICC does not believe that the proposed rule change will have any 
impact, or impose any burden, on competition because it relates to a 
clarification of the meaning of the Corporation Default Rules that 
would apply equally to all FICC members.

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

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

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

    The foregoing change has become effective pursuant to Section 
19(b)(3)(A) of the Act and paragraph (f)(1) 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-FICC-2015-001 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-FICC-2015-001. 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 of submission. The Commission will post all 
comments on the Commission's Internet Web site (http://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 Web site 
viewing and printing in the Commission's Public Reference Section, 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 such filing also will 
be available for inspection and copying at the principal office of FICC 
and on FICC's Web site at http://www.dtcc.com/legal/sec-rule-filings.aspx. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly.
    All submissions should refer to File Number SR-FICC-2015-001 and 
should be submitted on or before June 4, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-11590 Filed 5-13-15; 8:45 am]
BILLING CODE 8011-01-P