80 FR 61256 - Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving Proposed Rule Change to Enhance NSCC's Margining Methodology as Applied to Family-Issued Securities of Certain NSCC Members
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 196 (October 9, 2015)
Federal Register Volume 80, Issue 196 (October 9, 2015)
| Page Range | 61256-61258 | |
| FR Document | 2015-25702 |
[Federal Register Volume 80, Number 196 (Friday, October 9, 2015)] [Notices] [Pages 61256-61258] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-25702] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76077; File No. SR-NSCC-2015-003] Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving Proposed Rule Change to Enhance NSCC's Margining Methodology as Applied to Family-Issued Securities of Certain NSCC Members October 5, 2015. On August 14, 2015, National Securities Clearing Corporation (``NSCC'') filed with the Securities and Exchange Commission (``Commission'') proposed rule change SR-NSCC-2015-003 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ to change its margin charge with respect to a member's positions in securities that are issued by such member or its affiliate (i.e., ``family-issued securities'') by excluding positions in these securities, when the member is on NSCC's Watch List,\3\ from its volatility margining model. The proposed rule change was published for comment in the Federal Register on September 2, 2015.\4\ The Commission did not receive comment letters regarding the proposed change. For the reasons discussed below, the Commission is granting approval of the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ As part of its ongoing monitoring of its membership, NSCC utilizes an internal credit risk rating matrix to rate its risk exposures to its members based on a scale from 1 (the strongest) to 7 (the weakest). Members that fall within the weakest three rating categories (i.e., 5, 6, and 7) are placed on NSCC's ``Watch List'' and, as provided under NSCC's Rules and Procedures (``Rules''), may be subject to enhanced surveillance or additional margin charges. See Section 4 of Rule 2B and Section I(B)(1) of Procedure XV of NSCC's Rules, available at http://dtcc.com/~/media/Files/Downloads/ legal/rules/nscc_rules.pdf. \4\ See Securities Exchange Act Release No. 75768 (August 27, 2015), 80 FR 53219 (September 2, 2015) (SR-NSCC-2015-003). NSCC also filed an advance notice with the Commission seeking approval of changes to its Rules necessary to implement the proposed rule change. This advance notice was published in the Federal Register on September 17, 2015. Securities Exchange Act Release No. 75899 (September 11, 2015), 80 FR 55883 (September 17, 2015) (File No. SR- NSCC-2015-803). --------------------------------------------------------------------------- I. Description of the Proposed Rule Change The following is a description of the proposed rule change, as provided by NSCC: The proposed rule change consists of amendments to NSCC's Rules in order to enhance NSCC's margining methodology as applied to family- issued securities of NSCC Members \5\ that are placed on NSCC's ``Watch List'', i.e., those Members who present a heightened credit risk to NSCC or have demonstrated higher risk related to their ability to meet settlement, as more fully described below. --------------------------------------------------------------------------- \5\ Terms not defined herein are defined in the Rules, available at http://dtcc.com/~/media/Files/Downloads/legal/rules/ nscc_rules.pdf. --------------------------------------------------------------------------- Background As a central counterparty, NSCC occupies an important role in the securities settlement system by interposing itself between counterparties to financial transactions and thereby reducing the risk faced by participants and contributing to global [[Page 61257]] financial stability. The effectiveness of a central counterparty's risk controls and the adequacy of its financial resources are critical to achieving these risk-reducing goals. In that context, NSCC continuously reviews its margining methodology in order to ensure the reliability of its margining in achieving the desired coverage. In order to be most effective, NSCC must take into consideration the risk characteristics specific to certain securities when margining those securities. Among the various risks that NSCC considers when evaluating the effectiveness of its margining methodology are its counterparty risks and identification and mitigation of ``wrong-way'' risk, particularly specific wrong-way risk, defined as the risk that an exposure to a counterparty is highly likely to increase when the creditworthiness of that counterparty deteriorates.\6\ NSCC has identified an exposure to wrong-way risk when it acts as central counterparty to a Member with respect to positions in securities that are issued by that Member or that Member's affiliate. These positions are referred to as ``family- issued securities.'' In the event that a Member with unsettled long positions in family-issued securities defaults, NSCC would close out those positions following a likely drop in the credit-worthiness of the issuer, possibly resulting in a loss to NSCC. --------------------------------------------------------------------------- \6\ See Principles for financial market infrastructures, issued by the Committee on Payment and Settlement Systems and the Technical Committee of the International Organization of Securities Commissions 47 n.65 (April 2012), available at http://www.bis.org/publ/cpss101a.pdf. --------------------------------------------------------------------------- NSCC has proposed to address its exposure to this type of wrong-way risk in two steps. First, NSCC has proposed in this filing to enhance its margin methodology as applied to the family-issued securities of its Members that are on its Watch List by excluding these securities from the volatility component, or ``VaR'' charge, and then charging an amount calculated by multiplying the absolute value of the long net unsettled positions in that Member's family-issued securities by a percentage that is no less than 40%. The haircut rate to be charged will be determined based on the Member's rating on the credit risk rating matrix and the type of family-issued security submitted to NSCC. Fixed income securities that are family-issued securities will be charged a haircut rate of no less than 80% for firms that are rated 6 or 7 on the credit risk rating matrix, and no less than 40% for firms that are rated 5 on the credit risk rating matrix; and equity securities that are family-issued securities will be charged a haircut rate of 100% for firms that are rated 6 or 7 on the credit risk rating matrix, and no less than 50% for firms that are rated 5 on the credit risk rating matrix. NSCC will have the authority to adjust these haircut rates from time to time within these parameters as described in Procedure XV of NSCC's Rules without filing a proposed rule change with the Commission pursuant to Section 19(b)(1) of the Act,\7\ and the rules thereunder, or an advance notice with the Commission pursuant to Section 806(e)(1) of the Clearing Supervision Act,\8\ and the rules thereunder. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(1). \8\ 12 U.S.C. 5465(e)(1). --------------------------------------------------------------------------- Because NSCC Members that are on its Watch List present a heightened credit risk to the clearing agency or have demonstrated higher risk related to their ability to meet settlement, NSCC believes that this charge will more effectively capture the risk characteristics of these positions and can help mitigate NSCC's exposure to wrong-way risk. Second, NSCC will continue to evaluate its exposures to wrong-way risk, specifically wrong-way risk presented by family-issued securities, including by reviewing the impact of expanding the application of the proposed margining methodology to the family-issued securities of those Members that are not on the Watch List. NSCC has proposed to apply the enhanced margining methodology to the family- issued securities of Members that are on the Watch List at this time because, as stated above, these Members present a heightened credit risk to the clearing agency or have demonstrated higher risk related to their ability to meet settlement. As such, there is a clear and more urgent need to address NSCC's exposure to wrong-way risk presented by these firms' family-issued securities. However, any future change to the margining methodology as applied to the family-issued securities of Members that are not on the Watch List would be subject to a separate proposed rule change pursuant to Section 19(b)(1) of the Act,\9\ and the rules thereunder, and an advance notice pursuant to Section 806(e)(1) of the Clearing Supervision Act,\10\ and the rules thereunder. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(1). \10\ 12 U.S.C. 5465(e)(1). --------------------------------------------------------------------------- Implementation The effective date of the proposed rule change will be announced via a NSCC Important Notice. NSCC expects to run these changes in a test environment for a three month parallel period prior to implementation. Details and dates regarding this test will be communicated to Members through an NSCC Important Notice. As stated above, NSCC will conduct additional analysis of its exposure to wrong- way risk, and, following implementation of this proposed rule change, will engage in outreach to its membership when evaluating whether to expand the application of the proposed enhanced margining methodology to Members not on its Watch List. III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act \11\ 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 rules and regulations thereunder applicable to such organization. The Commission believes the proposal is consistent with Section 17A(b)(3)(F) of the Act,\12\ and Rule 17Ad- 22(b)(1) \13\ and Rule 17Ad-22(b)(2) \14\ under the Act, as described in detail below. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(2)(C). \12\ 15 U.S.C. 78q-1(b)(3)(F). \13\ 17 CFR 240.17Ad-22(b)(1). \14\ 17 CFR 240.17Ad-22(b)(2). --------------------------------------------------------------------------- Consistency with Section 17A(b)(3)(F) of the Act. Section 17A(b)(3)(F) of the Act requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions, as well as, in general, protect investors and the public interest.\15\ By enhancing the margin methodology applied to family-issued securities of members that are on NSCC's Watch List, the proposal will assist NSCC in collecting margin that more accurately reflects NSCC's exposure to a clearing member that clears family-issued securities and will assist NSCC in its continuous efforts to improve the reliability and effectiveness of its risk-based margining methodology by taking into account specific wrong-way risk. As such, the proposal will help NSCC, as a central counterparty, promote robust risk management, and thus promoting the prompt and accurate clearance and settlement of securities transactions, as well as, in general, protecting investors and the public interest. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Consistency with Rule 17Ad-22(b)(1). Rule 17Ad-22(b)(1) \16\ under the Act requires a CCP, such as NSCC, to [[Page 61258]] ``establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . limit its exposures to potential losses from defaults by its participants under normal market conditions . . . .'' NSCC faces specific wrong-way risk in all circumstances where a member submits family-issued securities to NSCC for clearance, including under normal market conditions. By enhancing the margin methodology applied to family-issued securities of NSCC's members that are on its Watch List, the proposal will limit NSCC's exposure to potential losses from the default of a member on NSCC's Watch List with family-issued securities under normal market conditions. As such, the Commission believes that the proposal is consistent with Rule 17Ad-22(b)(1). --------------------------------------------------------------------------- \16\ 17 CFR 240.17Ad-22(b)(1). --------------------------------------------------------------------------- Consistency with Rule 17Ad-22(b)(2). Rule 17Ad-22(b)(2) \17\ under the Act requires a CCP, such as NSCC, to ``establish, implement, maintain and enforce written policies and procedures reasonably designed to . . . [u]se margin requirements to limit its credit exposures to participants under normal market conditions and use risk- based models and parameters to set margin requirements . . . '' By enhancing the margin methodology applied to family-issued securities of NSCC's members that are on its Watch List, the proposal will better account for and cover NSCC's credit exposure to less creditworthy members. In addition, by taking into account specific wrong-way risk arising from family-issued securities submitted to NSCC, the proposal is consistent with using risk based models and parameters to set margin requirements. As such, the Commission believes that the proposal is consistent with Rule 17Ad-22(b)(2). --------------------------------------------------------------------------- \17\ 17 CFR 240.17Ad-22(b)(2). --------------------------------------------------------------------------- IV. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act \18\ and the rules and regulations thereunder. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78q-1. --------------------------------------------------------------------------- It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that proposed rule change SR-NSCC-2015-003 be, and hereby is, APPROVED.\19\ --------------------------------------------------------------------------- \19\ In approving the proposed rule change, the Commission considered the proposal's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-25702 Filed 10-8-15; 8:45 a.m.] BILLING CODE 8011-01-P
![61256 Federal Register / Vol. 80, No. 196 / Friday, October 9, 2015 / Notices
draw additional volume to the All submissions should refer to File proposed rule change SR–NSCC–2015–
Exchange. As stated above, the Number SR–BATS–2015–82. This file 003 pursuant to Section 19(b)(1) of the
Exchange notes that it operates in a number should be included on the Securities Exchange Act of 1934
highly competitive market in which subject line if email is used. To help the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
market participants can readily direct Commission process and review your to change its margin charge with respect
order flow to competing venues if the comments more efficiently, please use to a member’s positions in securities
deem fee structures to be unreasonable only one method. The Commission will that are issued by such member or its
or excessive. The proposed changes are post all comments on the Commission’s affiliate (i.e., ‘‘family-issued securities’’)
generally intended to enhance the Internet Web site (http://www.sec.gov/ by excluding positions in these
rebates for liquidity added to the rules/sro.shtml). Copies of the securities, when the member is on
Exchange, which is intended to draw submission, all subsequent NSCC’s Watch List,3 from its volatility
additional liquidity to the Exchange. amendments, all written statements margining model. The proposed rule
The Exchange does not believe the with respect to the proposed rule change was published for comment in
proposed tiers would burden change that are filed with the the Federal Register on September 2,
intramarket competition as they would Commission, and all written 2015.4 The Commission did not receive
apply to all Members uniformly. communications relating to the comment letters regarding the proposed
proposed rule change between the change. For the reasons discussed
C. Self-Regulatory Organization’s below, the Commission is granting
Commission and any person, other than
Statement on Comments on the approval of the proposed rule change.
those that may be withheld from the
Proposed Rule Change Received From
public in accordance with the I. Description of the Proposed Rule
Members, Participants, or Others
provisions of 5 U.S.C. 552, will be Change
The Exchange has not solicited, and available for Web site viewing and
does not intend to solicit, comments on printing in the Commission’s Public The following is a description of the
this proposed rule change. The Reference Room, 100 F Street NE., proposed rule change, as provided by
Exchange has not received any Washington, DC 20549 on official NSCC:
unsolicited written comments from The proposed rule change consists of
business days between the hours of
Members or other interested parties. amendments to NSCC’s Rules in order
10:00 a.m. and 3:00 p.m. Copies of such
to enhance NSCC’s margining
III. Date of Effectiveness of the filing also will be available for
methodology as applied to family-issued
Proposed Rule Change and Timing for inspection and copying at the principal
securities of NSCC Members 5 that are
Commission Action office of the Exchange. All comments
placed on NSCC’s ‘‘Watch List’’, i.e.,
received will be posted without change;
The foregoing rule change has become those Members who present a
the Commission does not edit personal
effective pursuant to Section 19(b)(3)(A) heightened credit risk to NSCC or have
identifying information from
of the Act 12 and paragraph (f) of Rule demonstrated higher risk related to their
submissions. You should submit only
19b–4 thereunder.13 At any time within ability to meet settlement, as more fully
information that you wish to make
60 days of the filing of the proposed rule described below.
available publicly. All submissions
change, the Commission summarily may should refer to File Number SR–BATS– Background
temporarily suspend such rule change if 2015–82, and should be submitted on or As a central counterparty, NSCC
it appears to the Commission that such before October 30, 2015. occupies an important role in the
action is necessary or appropriate in the
For the Commission, by the Division of securities settlement system by
public interest, for the protection of
Trading and Markets, pursuant to delegated interposing itself between
investors, or otherwise in furtherance of authority.14 counterparties to financial transactions
the purposes of the Act.
Robert W. Errett, and thereby reducing the risk faced by
IV. Solicitation of Comments Deputy Secretary. participants and contributing to global
Interested persons are invited to [FR Doc. 2015–25697 Filed 10–8–15; 8:45 am]
1 15 U.S.C. 78s(b)(1).
submit written data, views, and BILLING CODE 8011–01–P
2 17 CFR 240.19b–4.
arguments concerning the foregoing, 3 As part of its ongoing monitoring of its
including whether the proposed rule membership, NSCC utilizes an internal credit risk
change is consistent with the Act. SECURITIES AND EXCHANGE rating matrix to rate its risk exposures to its
Comments may be submitted by any of COMMISSION members based on a scale from 1 (the strongest) to
7 (the weakest). Members that fall within the
the following methods: [Release No. 34–76077; File No. SR–NSCC– weakest three rating categories (i.e., 5, 6, and 7) are
Electronic Comments 2015–003] placed on NSCC’s ‘‘Watch List’’ and, as provided
under NSCC’s Rules and Procedures (‘‘Rules’’), may
• Use the Commission’s Internet Self-Regulatory Organizations; be subject to enhanced surveillance or additional
comment form (http://www.sec.gov/ margin charges. See Section 4 of Rule 2B and
National Securities Clearing Section I(B)(1) of Procedure XV of NSCC’s Rules,
rules/sro.shtml); or Corporation; Order Approving available at http://dtcc.com/∼/media/Files/
• Send an email to rule-comments@ Proposed Rule Change to Enhance Downloads/legal/rules/nscc_rules.pdf.
sec.gov. Please include File Number SR– NSCC’s Margining Methodology as 4 See Securities Exchange Act Release No. 75768
BATS–2015–82 on the subject line. Applied to Family-Issued Securities of (August 27, 2015), 80 FR 53219 (September 2, 2015)
(SR–NSCC–2015–003). NSCC also filed an advance
Paper Comments Certain NSCC Members notice with the Commission seeking approval of
changes to its Rules necessary to implement the
tkelley on DSK3SPTVN1PROD with NOTICES
• Send paper comments in triplicate October 5, 2015. proposed rule change. This advance notice was
to Brent J. Fields, Secretary, Securities On August 14, 2015, National published in the Federal Register on September 17,
and Exchange Commission, 100 F Street Securities Clearing Corporation 2015. Securities Exchange Act Release No. 75899
(September 11, 2015), 80 FR 55883 (September 17,
NE., Washington, DC 20549–1090. (‘‘NSCC’’) filed with the Securities and 2015) (File No. SR–NSCC–2015–803).
Exchange Commission (‘‘Commission’’) 5 Terms not defined herein are defined in the
12 15 U.S.C. 78s(b)(3)(A). Rules, available at http://dtcc.com/∼/media/Files/
13 17 CFR 240.19b–4(f). 14 17 CFR 200.30–3(a)(12). Downloads/legal/rules/nscc_rules.pdf.
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![61258 Federal Register / Vol. 80, No. 196 / Friday, October 9, 2015 / Notices
‘‘establish, implement, maintain and For the Commission, by the Division of set forth in sections A, B, and C below,
enforce written policies and procedures Trading and Markets, pursuant to delegated of the most significant parts of such
reasonably designed to . . . limit its authority.20 statements.
exposures to potential losses from Robert W. Errett,
Deputy Secretary.
A. Self-Regulatory Organization’s
defaults by its participants under Statement of the Purpose of, and the
normal market conditions . . . .’’ NSCC [FR Doc. 2015–25702 Filed 10–8–15; 8:45 a.m.]
Statutory Basis for, the Proposed Rule
faces specific wrong-way risk in all BILLING CODE 8011–01–P
Change
circumstances where a member submits
family-issued securities to NSCC for 1. Purpose
clearance, including under normal SECURITIES AND EXCHANGE The Exchange proposes to amend its
COMMISSION Price List to change the monthly fees for
market conditions. By enhancing the
margin methodology applied to family- [Release No. 34–76072; File No. SR–NYSE– the use of certain ports.3 The Exchange
issued securities of NSCC’s members 2015–43] proposes to implement the fee changes
that are on its Watch List, the proposal on October 1, 2015.
Self-Regulatory Organizations; New The Exchange currently makes ports
will limit NSCC’s exposure to potential
York Stock Exchange LLC; Notice of available that provide connectivity to
losses from the default of a member on
Filing and Immediate Effectiveness of the Exchange’s trading systems (i.e.,
NSCC’s Watch List with family-issued Proposed Rule Change Amending Its ports for entry of orders and/or quotes
securities under normal market Price List To Change the Monthly Fees (‘‘order/quote entry ports’’)) and charges
conditions. As such, the Commission for the Use of Certain Ports $200 per port per month for users of 1–
believes that the proposal is consistent 5 ports, and $500 per port per month for
with Rule 17Ad–22(b)(1). October 5, 2015. users of 6 or more ports. The Exchange
Consistency with Rule 17Ad–22(b)(2). Pursuant to Section 19(b)(1) of the also currently makes ports available for
Rule 17Ad–22(b)(2) 17 under the Act Securities Exchange Act of 1934 drop copies and charges $500 per port
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 per month.4
requires a CCP, such as NSCC, to
notice is hereby given that on
‘‘establish, implement, maintain and
September 23, 2015, New York Stock 3 The Exchange has a Common Customer Gateway
enforce written policies and procedures Exchange LLC (‘‘NYSE’’ or the (‘‘CCG’’) that accesses the equity trading systems
reasonably designed to . . . [u]se ‘‘Exchange’’) filed with the Securities that it shares with its affiliates, NYSE MKT LLC
margin requirements to limit its credit and Exchange Commission (‘‘SEC’’ or (‘‘NYSE MKT’’) and NYSE Arca, Inc. (‘‘NYSE
exposures to participants under normal Arca’’), and all ports connect to the CCG. See, e.g.,
‘‘Commission’’) the proposed rule Securities Exchange Act Release No. 64542 (May
market conditions and use risk-based change as described in Items I, II, and 25, 2011), 76 FR 31659 (June 1, 2011) (SR–NYSE–
models and parameters to set margin III below, which Items have been 2011–13). All NYSE member organizations are also
requirements . . . ’’ By enhancing the NYSE MKT member organizations and, accordingly,
prepared by the Exchange. The a member organization utilizes its ports for activity
margin methodology applied to family- Commission is publishing this notice to on both NYSE and/or NYSE MKT and is charged
issued securities of NSCC’s members solicit comments on the proposed rule port fees based on the total number of ports
that are on its Watch List, the proposal change from interested persons. connected to the CCG, whether the ports are used
to quote and trade on NYSE, NYSE MKT, and/or
will better account for and cover NSCC’s both, because those trading systems are integrated.
I. Self-Regulatory Organization’s
credit exposure to less creditworthy See Supplementary Material .10 to Rule 2. The
Statement of the Terms of Substance of NYSE Arca trading platform is not integrated in the
members. In addition, by taking into
the Proposed Rule Change same manner. Therefore, it does not share its ports
account specific wrong-way risk arising with NYSE or NYSE MKT.
from family-issued securities submitted The Exchange proposes to amend its 4 Only one fee per drop copy port applies, even
to NSCC, the proposal is consistent with Price List to change the monthly fees for if receiving drop copies from multiple order/quote
using risk based models and parameters the use of certain ports. The Exchange entry ports. In addition, the Price List provides that
proposes to implement the fee change (i) users of the Exchange’s Risk Management
to set margin requirements. As such, the Gateway service (‘‘RMG’’) are not charged for order/
Commission believes that the proposal effective October 1, 2015. The text of the quote entry ports if such ports are designated as
proposed rule change is available on the being used for RMG purposes, and (ii) Designated
is consistent with Rule 17Ad–22(b)(2).
Exchange’s Web site at www.nyse.com, Market Makers (‘‘DMMs’’) are not charged for order/
IV. Conclusion at the principal office of the Exchange, quote entry ports that connect to the Exchange via
the DMM Gateway. See Securities Exchange Act
and at the Commission’s Public Release No. 68229 (November 14, 2012), 77 FR
On the basis of the foregoing, the Reference Room. 69688 (November 20, 2012) (SR–NYSE–2012–60).
Commission finds that the proposal is Two methods are available to DMMs to connect to
consistent with the requirements of the II. Self-Regulatory Organization’s the Exchange: DMM Gateway and CCG. Only DMMs
Act and in particular with the Statement of the Purpose of, and may connect to the DMM Gateway and only when
Statutory Basis for, the Proposed Rule acting in their capacity as a DMM. DMMs are
requirements of Section 17A of the required to use the DMM Gateway for certain DMM-
Change
Act 18 and the rules and regulations specific functions that relate to the DMM’s role on
thereunder. In its filing with the Commission, the the Exchange and the obligations attendant
therewith, which are not applicable to other market
self-regulatory organization included
It is therefore ordered, pursuant to participants on the Exchange. By contrast, non-
statements concerning the purpose of, DMMs as well as DMMs may use the CCG. Use of
Section 19(b)(2) of the Act, that
and basis for, the proposed rule change the CCG by a DMM is optional, and a DMM that
proposed rule change SR–NSCC–2015– connects to the Exchange via CCG can use the
and discussed any comments it received
003 be, and hereby is, APPROVED.19 on the proposed rule change. The text relevant order/quote entry port for orders and
quotes both in its capacity as a DMM and for orders
tkelley on DSK3SPTVN1PROD with NOTICES
of those statements may be examined at and quotes in other securities. Because DMMs are
17 17 CFR 240.17Ad–22(b)(2). the places specified in Item IV below. required to utilize DMM Gateway, but not CCG, to
18 15 The Exchange has prepared summaries, fulfill their functions as DMMs, DMMs are not
U.S.C. 78q–1.
charged for order/quote entry ports that connect to
19 In approving the proposed rule change, the
the Exchange via the DMM Gateway. However,
Commission considered the proposal’s impact on 20 17 CFR 200.30–3(a)(12). DMMs, like other market participants, are charged
efficiency, competition, and capital formation. 15 1 15 U.S.C. 78s(b)(1). for order/entry ports that connect to the Exchange
U.S.C. 78c(f). 2 17 CFR 240.19b–4. via the CCG.
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Document Created: 2015-12-15 08:34:17
Document Modified: 2015-12-15 08:34:17
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 61256 |
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