80 FR 36879 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change to the Government Securities Division Rules in Connection With the Extension of the GCF Repo Service Pilot Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 123 (June 26, 2015)
Federal Register Volume 80, Issue 123 (June 26, 2015)
| Page Range | 36879-36881 | |
| FR Document | 2015-15691 |
[Federal Register Volume 80, Number 123 (Friday, June 26, 2015)] [Notices] [Pages 36879-36881] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-15691] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75258; File No. SR-FICC-2015-002] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change to the Government Securities Division Rules in Connection With the Extension of the GCF Repo Service Pilot Program June 22, 2015. On May 7, 2015, the Fixed Income Clearing Corporation (``FICC'') filed with the Securities and Exchange Commission (``Commission'') proposed rule change SR-FICC-2015-002 pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder.\2\ The proposed rule change was published for comment in the Federal [[Page 36880]] Register on May 21, 2015.\3\ The Commission received no comments on the proposed rule change. For the reasons discussed below, the Commission is approving the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ Securities Exchange Act Release No. 34-74973 (May 15, 2015), 80 FR 29352 (May 21, 2015) (SR-FICC-2015-002). --------------------------------------------------------------------------- I. Description of the Proposed Rule Change FICC seeks the Commission's approval to extend the pilot program that is currently in effect for the GCF Repo[supreg] service (``2014 Pilot Program'').\4\ FICC requests that the 2014 Pilot Program be extended for one year following the Commission's approval of this filing. FICC represents that, during this extension period, the final phase of tri-party reform will be implemented.\5\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 34-72457 (June 24, 2014), 79 FR 36856 (June 30, 2014) (SR-FICC-2014-02) (order approving the 2014 Pilot Program). \5\ The final phase of tri-party reform includes the development of an interactive messaging system to facilitate the substitution of collateral between settlement banks. FICC has represented that, if it determines to change the parameters of the GCF Repo[supreg] service during the one-year extension period, it will file a proposed rule change with the Commission. FICC has further warranted that, if it seeks to extend the 2014 Pilot Program beyond the one- year extension period or proposes to make the program permanent, it will also file a proposed rule change with the Commission. --------------------------------------------------------------------------- A. The GCF Repo[supreg] Service The GCF Repo[supreg] service allows dealer members of FICC's Government Services Division to trade general collateral finance repos (``GCF Repos'') \6\ throughout the day without requiring intraday, trade-for-trade settlement on a delivery-versus-payment \7\ basis. The service allows dealers to trade GCF Repos, based on rate and term, with inter-dealer broker netting members on a blind basis. Standardized, generic CUSIP numbers have been established exclusively for GCF Repo processing, and are used to specify the type of underlying security that is eligible to serve as collateral for GCF Repos. Only Fedwire eligible, book-entry securities may serve as collateral for GCF Repos. Acceptable collateral for GCF Repos include most U.S. Treasury securities, non-mortgage-backed federal agency securities, fixed and adjustable rate mortgage-backed securities, Treasury Inflation- Protected Securities (``TIPS'') and separate trading of registered interest and principal securities (``STRIPS'').\8\ --------------------------------------------------------------------------- \6\ A GCF Repo is one in which the lender of funds is willing to accept any of a class of U.S. Treasuries, U.S. government agency securities, and certain mortgage-backed securities as collateral for the repurchase obligation. This is in contrast to a specific collateral repo. \7\ Delivery-versus-payment is a settlement procedure in which the buyer's cash payment for the securities it has purchased is due at the time the securities are delivered. \8\ See Securities Exchange Act Release No. 34-58696 (September 30, 2008), 73 FR 58698, 58699 (October 7, 2008) (SR-FICC-2008-04). --------------------------------------------------------------------------- B. Background of the Pilot Program Because FICC's GCF Repo[supreg] service operates as a tri-party mechanism, FICC was asked to alter the service to align it with the recommendations of the Tri-Party Repo Infrastructure Reform Task Force (``TPR'').\9\ FICC consequently developed a pilot program (``2011 Pilot Program'') to address the TPR's recommendations,\10\ and sought Commission approval to institute that program.\11\ The Commission approved the 2011 Pilot Program on August 29, 2011 for a period of one year.\12\ When the expiration date for the 2011 Pilot Program approached, FICC sought Commission approval to implement the 2012 Pilot Program, which continued the 2011 Pilot Program in some aspects, and modified it in others.\13\ On August 8, 2012, the Commission approved the 2012 Pilot Program for a period of one year.\14\ --------------------------------------------------------------------------- \9\ The TPR was an industry group formed and sponsored in 2009 by the Federal Reserve Bank of New York to address weaknesses that emerged in the tri-party repo market during the financial crisis. The TPR's chief goal was to develop recommendations to address the risks presented by the reversal of tri-party repo transactions, and to develop procedures to ensure that tri-party repos would be collateralized throughout the day, rather than at the end of the day. \10\ The TPR issued preliminary and final reports setting forth its recommendations for the reform of the tri-party repo market. See Tri-Party Repo Infrastructure Reform Task Force Report of May 17, 2000, available at http://www.newyorkfed.org/prc/files/report_100517.pdf; see also Tri-Party Repo Infrastructure Reform Task Force Final Report (February 15, 2012), available at http://www.newyorkfed.org/tripartyrepo/pdf/report_120215.pdf. \11\ Securities Exchange Act Release No. 34-64955 (July 25, 2011), 76 FR 45638 (July 29, 2011) (SR-FICC-2011-05). \12\ Securities Exchange Act Release No. 34-65213 (August 29, 2011), 76 FR 54824 (September 2, 2011) (SR-FICC-2011-05). \13\ The 2012 Pilot Program implemented several changes which, although described in the rule filing that accompanied the 2011 Pilot Program, were not implemented during the 2011 Pilot Program's period of effectiveness. They include: (i) Moving the time for unwinding repos from 7:30 a.m. to 3:30 p.m.; (ii) moving the net- free-equity process from morning to the evening; and (iii) establishing rules for intraday GCF Repo collateral substitutions. See Securities Exchange Act Release No. 34-67227 (June 20, 2012), 77 FR 38108 (June 26, 2012) (SR-FICC-2012-05). \14\ Securities Exchange Release No. 34-67621 (August 8, 2012), 77 FR 48572 (August 14, 2012) (SR-FICC-2012-05). --------------------------------------------------------------------------- C. The 2014 Pilot Program The 2014 Pilot Program, as well its predecessors, the 2013 and 2012 Pilot Programs, have been the subject of a number of notices and approval orders published by the Commission.\15\ These notices and orders provide extensive detail on both the GCF Repo[supreg] service and the pilot program itself. Under this proposed rule change, FICC is not proposing to alter the current pilot program in any way; rather, it proposes only to extend that program, as approved in 2012, 2013, and 2014 for one additional year.\16\ --------------------------------------------------------------------------- \15\ See Securities Exchange Act Release Nos. 34-67227 (June 20, 2012), 77 FR 38108 (June 26, 2012) (SR-FICC-2012-05); 34-67621 (August 8, 2012), 77 FR 48572 (August 14, 2012) (SR-FICC-2012-05); 34-69774 (June 17, 2013), 78 FR 37631 (June 21, 2013) (SR-FICC-2013- 06); 34-70068 (July 30, 2013), 78 FR 47453 (August 5, 2013) (SR- FICC-2013-06); and 34-72457 (June 24, 2014), 79 FR 36856 (June 30, 2014) (SR-FICC-2014-02). \16\ FICC would be required to file a proposed rule change with the Commission pursuant to section 19(b) of the Act if were to do any of the following: (i) Change the parameters of the GCF Repo[supreg] service during the one-year extension period, (ii) extend the Pilot Program beyond the one-year period extension period, or (iii) establish the Pilot Program as a permanent program. --------------------------------------------------------------------------- II. Discussion Section 19(b)(2)(C) of the Act \17\ directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. Section 17A(b)(3)(F) of the Act \18\ requires, among other things, that the rules of a clearing agency be designed to achieve several goals, including (i) promoting the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions, (ii) assuring the safeguarding of securities and funds that are in the custody or control of the clearing agency or for which it is responsible, and (iii) protecting investors and the public interest. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(2)(C). \18\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- The Commission concludes that extending the 2014 Pilot Program for one additional year is consistent with the requirements of the Act and the rules and regulations thereunder. The 2014 Pilot Program furthers the Act's goals because it helps attenuate the substantial risks confronting the tri-party repo market, particularly those risks associated with the provision of intraday credit to market participants.\19\ [[Page 36881]] The Commission believes that extending the 2014 Pilot Program will ensure that these risks remain subject to more stringent controls and that this, in turn, will help promote the prompt and accurate clearance and settlement of securities transactions. The Commission further believes that, by requiring tri-party repos to remain collateralized for a longer period each day, the 2014 Pilot Program helps to assure the safety of the securities and funds within FICC's control, or for which it is responsible.\20\ --------------------------------------------------------------------------- \19\ The TPR characterized the ``practical elimination'' of this intraday credit as its ``first and most significant . . . recommendation.'' Tri-Party Repo Infrastructure Reform Task Force Final Report, 4 (February 15, 2012), available at http://www.newyorkfed.org/tripartyrepo/pdf/report_120215.pdf. \20\ See 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- III. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act, particularly those set forth in section 17A,\21\ and the rules and regulations thereunder. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78q-1. --------------------------------------------------------------------------- It is therefore ordered, pursuant to section 19(b)(2) of the Act,\22\ that the proposed rule change (SR-FICC-2015-002) be, and hereby is, approved.\23\ --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(2). \23\ In approving the proposed rule change, the Commission considered the proposal's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\24\ --------------------------------------------------------------------------- \24\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-15691 Filed 6-25-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Notices 36879
process for its members, and that credits, and are reflective of the need for amendments, all written statements
accordingly, it is equitable to increase exchanges to offer and to let the with respect to the proposed rule
the maximum fees payable by members financial incentives to attract order flow change that are filed with the
that participate in the process. evolve. While the Exchange does not Commission, and all written
Additionally, Nasdaq believes that the believe that the proposed changes will communications relating to the
change is not unfairly discriminatory result in any burden on competition, if proposed rule change between the
because it applies solely to members the changes proposed herein are Commission and any person, other than
that opt to participate in the Nasdaq unattractive to market participants, it is those that may be withheld from the
Opening Cross. likely that Nasdaq will lose market public in accordance with the
Finally, Nasdaq notes that it operates share as a result. provisions of 5 U.S.C. 552, will be
in a highly competitive market in which
C. Self-Regulatory Organization’s available for Web site viewing and
market participants can readily favor
Statement on Comments on the printing in the Commission’s Public
competing venues if they deem fee
levels at a particular venue to be Proposed Rule Change Received From Reference Room, 100 F Street NE.,
excessive. In such an environment, Members, Participants, or Others Washington, DC 20549 on official
Nasdaq must continually adjust its fees Written comments were neither business days between the hours of
to remain competitive with other solicited nor received. 10:00 a.m. and 3:00 p.m. Copies of such
exchanges and with alternative trading filing also will be available for
systems that have been exempted from III. Date of Effectiveness of the inspection and copying at the principal
compliance with the statutory standards Proposed Rule Change and Timing for offices of the Exchange. All comments
applicable to exchanges. Nasdaq Commission Action received will be posted without change;
believes that the proposed rule change The foregoing change has become the Commission does not edit personal
reflects this competitive environment effective pursuant to section identifying information from
because it is designed to reduce fees for 19(b)(3)(A)(ii) of the Act.9 At any time submissions. You should submit only
members that enhance the quality of within 60 days of the filing of the information that you wish to make
Nasdaq’s market. proposed rule change, the Commission available publicly. All submissions
summarily may temporarily suspend should refer to File Number SR–
B. Self-Regulatory Organization’s
such rule change if it appears to the NASDAQ–2015–062, and should be
Statement on Burden on Competition
Commission that such action is submitted on or before July 17, 2015.
Nasdaq does not believe that the necessary or appropriate in the public
proposed rule changes will result in any For the Commission, by the Division of
interest, for the protection of investors,
burden on competition that is not Trading and Markets, pursuant to delegated
or otherwise in furtherance of the
necessary or appropriate in furtherance authority.10
purposes of the Act.
of the purposes of the Act, as amended.8 Robert W. Errett,
Nasdaq notes that it operates in a highly IV. Solicitation of Comments Deputy Secretary.
competitive market in which market Interested persons are invited to [FR Doc. 2015–15694 Filed 6–25–15; 8:45 am]
participants can readily favor competing submit written data, views, and BILLING CODE 8011–01–P
venues if they deem fee levels at a arguments concerning the foregoing,
particular venue to be excessive, or including whether the proposed rule
rebate opportunities available at other change is consistent with the Act. SECURITIES AND EXCHANGE
venues to be more favorable. In such an Comments may be submitted by any of COMMISSION
environment, Nasdaq must continually the following methods:
adjust its fees to remain competitive
with other exchanges and with Electronic Comments [Release No. 34–75258; File No. SR–FICC–
alternative trading systems that have • Use the Commission’s Internet 2015–002]
been exempted from compliance with comment form (http://www.sec.gov/
Self-Regulatory Organizations; Fixed
the statutory standards applicable to rules/sro.shtml); or
• Send an email to rule-comments@ Income Clearing Corporation; Order
exchanges. Because competitors are free
to modify their own fees in response, sec.gov. Please include File Number SR– Approving Proposed Rule Change to
and because market participants may NASDAQ–2015–062 on the subject line. the Government Securities Division
readily adjust their order routing Rules in Connection With the
Paper Comments Extension of the GCF Repo Service
practices, the Exchange believes that the
degree to which fee changes may • Send paper comments in triplicate Pilot Program
impose any burden on competition is to Secretary, Securities and Exchange
June 22, 2015.
extremely limited. Commission, 100 F Street NE.,
Nasdaq believes that the degree to Washington, DC 20549–1090. On May 7, 2015, the Fixed Income
which fee changes in this market may All submissions should refer to File Clearing Corporation (‘‘FICC’’) filed
impose any burden on competition is Number SR–NASDAQ–2015–062. This with the Securities and Exchange
extremely limited or even non-existent. file number should be included on the Commission (‘‘Commission’’) proposed
In this instance, the changes to Nasdaq subject line if email is used. To help the rule change SR–FICC–2015–002
Rules 7014 and 7018 do not impose a Commission process and review your pursuant to section 19(b)(1) of the
burden on competition because these comments more efficiently, please use Securities Exchange Act of 1934
tkelley on DSK3SPTVN1PROD with NOTICES
Nasdaq incentive programs (other than only one method. The Commission will (‘‘Act’’) 1 and Rule 19b–4 thereunder.2
the program for select symbols in post all comments on the Commission’s The proposed rule change was
Nasdaq Rule 7018), remain in place and Internet Web site (http://www.sec.gov/ published for comment in the Federal
now also include the NBBO Program, rules/sro.shtml). Copies of the
still offer economically advantageous submission, all subsequent 10 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
8 15 U.S.C. 78f(b)(8). 9 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Notices 36881
The Commission believes that extending Disbursement Center, 14925 Kingsport docket without change and will be
the 2014 Pilot Program will ensure that Road, Fort Worth, TX 76155. available online at www.regulations.gov.
these risks remain subject to more FOR FURTHER INFORMATION CONTACT: A. All submissions, including attachments
stringent controls and that this, in turn, Escobar, Office of Disaster Assistance, and other supporting materials, will
will help promote the prompt and U.S. Small Business Administration, become part of the public record and
accurate clearance and settlement of 409 3rd Street SW., Suite 6050, subject to public disclosure. Sensitive
securities transactions. The Commission Washington, DC 20416. information and information that you
further believes that, by requiring tri- SUPPLEMENTARY INFORMATION: The notice consider to be Confidential Business
party repos to remain collateralized for of the President’s major disaster Information or otherwise protected
a longer period each day, the 2014 Pilot declaration for Private Non-Profit should not be included. Submissions
Program helps to assure the safety of the organizations in the State of will not be edited to remove any
securities and funds within FICC’s OKLAHOMA, dated 06/04/2015, is identifying or contact information.
control, or for which it is responsible.20 hereby amended to include the FOR FURTHER INFORMATION CONTACT:
III. Conclusion following areas as adversely affected by Michael Schrader, Office of General
the disaster. Counsel, 409 Third Street SW.,
On the basis of the foregoing, the Primary Counties: Craig, Custer, Dewey, Washington, DC 20416; (202) 205–7115.
Commission finds that the proposed Grant, Jefferson, Kay, Kingfisher, SUPPLEMENTARY INFORMATION: The SBIC
rule change is consistent with the Kiowa, Major, Noble, Oklahoma, Program was established under the
requirements of the Act, particularly Ottawa, Roger Mills, Wagoner. Small Business Investment Act of 1958.
those set forth in section 17A,21 and the SBICs are privately owned and managed
rules and regulations thereunder. All other information in the original
declaration remains unchanged. investment funds, licensed and
It is therefore ordered, pursuant to regulated by SBA, that use privately-
section 19(b)(2) of the Act,22 that the (Catalog of Federal Domestic Assistance
Numbers 59002 and 59008) raised capital plus funds borrowed with
proposed rule change (SR–FICC–2015– an SBA guarantee to make equity and
002) be, and hereby is, approved.23 James E. Rivera, debt investments in qualifying small
For the Commission, by the Division of Associate Administrator for Disaster businesses. The SBIC license
Trading and Markets, pursuant to delegated Assistance. application (SBA Form 2183) requires
authority.24 [FR Doc. 2015–15684 Filed 6–25–15; 8:45 am] an applicant to submit, among other
Robert W. Errett, BILLING CODE 8025–01–P things, its organizational documents.
Deputy Secretary. The majority of applicants to the SBIC
[FR Doc. 2015–15691 Filed 6–25–15; 8:45 am] program are formed as limited
BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION partnerships, and these applicants must
[Docket ID No: SBA–2015–0010] submit their limited partnership
agreement as part of their application.
SMALL BUSINESS ADMINISTRATION Small Business Investment Company The original version of the Model was
(SBIC) Program: SBA Model Form of developed in 2000 to assist applicants
[Disaster Declaration #14344 and #14345] in producing a limited partnership
Agreement of Limited Partnership for
Oklahoma Disaster Number OK–00081 an SBIC Issuing Debentures agreement suitable for an SBIC and to
facilitate this process by including
AGENCY: U.S. Small Business AGENCY: Small Business Administration. provisions required by the regulations
Administration. ACTION: Notice; request for comments on governing the SBIC Program (13 CFR
ACTION: Amendment 4. Revised SBA Model Form of Agreement part 107) and other SBA policy
of Limited Partnership for an SBIC requirements designed to minimize the
SUMMARY: This is an amendment of the Issuing Debentures Only. risk of loss to SBA in providing
Presidential declaration of a major financial assistance to SBICs. The Model
disaster for Public Assistance Only for SUMMARY: The Small Business was updated in 2004, with additional
the State of Oklahoma (FEMA–4222– Administration (SBA) has updated the limited updates since that time. The
DR), dated 06/04/2015. SBA Model Form of Agreement of Model is available at https://
Incident: Severe Storms, Tornadoes, Limited Partnership for an SBIC Issuing www.sba.gov/content/model-
Straight Line Winds, and Flooding. Debentures Only (the Model). This partnership-agreement-0.
Incident Period: 05/05/2015 through update reflects comments received from Since the last comprehensive update
06/04/2015. the public in response to SBA’s notice to the Model, changes have occurred
Effective Date: 06/17/2015. published in the Federal Register on both in the structure and operation of
Physical Loan Application Deadline April 22, 2014. SBA is preparing to limited partnerships and in the venture
Date: 08/03/2015. issue the updated Model for use by SBIC capital industry. As part of its process
Economic Injury (EIDL) Loan applicants, and welcomes final of updating the Model, SBA published
Application Deadline Date: 03/04/2016. comments from the public on the a notice in the Federal Register
ADDRESSES: Submit completed loan
updated Model. soliciting comments and
applications to: U.S. Small Business DATES: Comments on the Model must be recommendations from the public on
Administration, Processing and received on or before August 10, 2015. April 22, 2014, 79 FR 22568. Those
ADDRESSES: Submit your comments, comments were posted and are available
tkelley on DSK3SPTVN1PROD with NOTICES
20 See 15 U.S.C. 78q–1(b)(3)(F). identified by Docket ID No. SBA–2015– at Docket ID No: SBA–2014–0004, at
21 15 U.S.C. 78q–1. 0010, at www.regulations.gov. www.regulations.gov. SBA carefully
22 15 U.S.C. 78s(b)(2).
Comments may only be submitted at considered the comments received and
23 In approving the proposed rule change, the
this Web address; follow the incorporated those that the Agency
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. See instructions on the Web site for believed were appropriate into the
15 U.S.C. 78c(f). submitting comments. All comments Model. The updated form of the Model
24 17 CFR 200.30–3(a)(12). received will be included in the public is available at Docket ID No. SBA–2015-
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Document Created: 2015-12-15 14:14:42
Document Modified: 2015-12-15 14:14:42
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 36879 |
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