81 FR 24919 - Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Adopting Initial and Continued Listing Standards for the Listing of Equity Investment Tracking Stocks and Adopting Listing Fees Specific to Equity Investment Tracking Stocks

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 81 (April 27, 2016)

Page Range		24919-24922
FR Document		2016-09717
Federal Register, Volume 81 Issue 81 (Wednesday, April 27, 2016)
[Federal Register Volume 81, Number 81 (Wednesday, April 27, 2016)]
[Notices]
[Pages 24919-24922]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-09717]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77674; File No. SR-NYSE-2016-22)


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Adopting Initial and Continued 
Listing Standards for the Listing of Equity Investment Tracking Stocks 
and Adopting Listing Fees Specific to Equity Investment Tracking Stocks

April 21, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on April 7, 2016, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') 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 self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt initial and continued listing 
standards for the listing of Equity Investment Tracking Stocks. The 
Exchange also proposes to adopt listing fees specific to Equity 
Investment Tracking Stocks. The proposed rule change is available on 
the Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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 those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt initial and continued listing 
standards for the listing of Equity Investment Tracking Stocks. The 
Exchange also proposes to adopt listing fees specific to Equity 
Investment Tracking Stocks.
    For purposes of proposed new Section 102.07 of the Manual, an 
Equity Investment Tracking Stock refers to a class of common stock that 
is the listed company's sole class of common equity securities listed 
on the Exchange and that is designed solely to track the performance of 
an investment by the issuer in the common stock of another company 
listed on the Exchange.
    In order to qualify for initial listing under proposed Section 
102.07, an Equity Investment Tracking Stock will be required to meet 
the distribution and public float requirements currently applicable for 
initial public offerings set forth in Sections 102.01A and 102.01B

[[Page 24920]]

of the Manual, respectively, and the quantitative requirements set 
forth in Section 102.01C. As such, as required under Section 102.01A, 
an Equity Investment Tracking Stock, at the time of initial listing, 
will be required to have at least 400 holders of 100 shares or more and 
1,100,000 public held shares available for trading. Further, as 
required under Section 102.01B, an Equity Investment Tracking Stock 
must have an aggregated market value of publicly-held shares of 
$40,000,000 and a per share price of $4 at the time of initial listing. 
Under Section 102.01C, the issuer of an Equity Investment Tracking 
Stock will be required to meet either the Earnings Test or the Global 
Market Capitalization Test. Under the Earnings test, an issuer must 
have pre-tax earnings totaling (x) at least $10,000,000 in the 
aggregate for the last three fiscal years together with a minimum of 
$2,000,000 in each of the two most recent fiscal years, and positive 
amounts in all three years or (y) at least $12,000,000 in the aggregate 
for the last three fiscal years together with a minimum of $5,000,000 
in the most recent fiscal year and $2,000,000 in the next most recent 
fiscal year.\4\ Under the Global Market Capitalization Test, the issuer 
must have $200 million in global market capitalization at the time of 
initial listing.
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    \4\ A company that (i) qualifies as an emerging growth company 
as defined in Section 2(a)(19) of the Securities Act and Section 
3(a)(80) of the Exchange Act and (ii) avails itself of the 
provisions of the Securities Act and the Exchange Act permitting 
emerging growth companies to report only two years of audited 
financial statements, can qualify under the Earnings Test by meeting 
the following requirements: Pre-tax earnings totaling at least 
$10,000,000 in the aggregate for the last two fiscal years together 
with a minimum of $2,000,000 in both years.
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    The Exchange will not list an Equity Investment Tracking Stock if, 
at the time of the proposed listing, the issuer of the equity tracked 
by the Equity Investment Tracking Stock has been deemed below 
compliance with listing standards by the Exchange.
    The Exchange proposes to subject the issuer of an Equity Investment 
Tracking Stock to the same continued listing standards under Sections 
802.01A and 802.01B as are applicable to other companies listing common 
stocks on the Exchange. As such, these companies will be considered to 
be below compliance with Section 802.01A if (i) their number of total 
stockholders is less than 400 OR (ii) their number of total 
stockholders is less than 1,200 and their average monthly trading 
volume is less than 100,000 shares (for the most recent 12 months) OR 
(iii) their number of publicly-held shares is less than 600,000. Such 
companies will be deemed to be below compliance with Section 802.01B if 
their average global market capitalization over a consecutive 30 
trading-day period is less than $50,000,000 and, at the same time 
stockholders' equity is less than $50,000,000 and (will be subject to 
immediate delisting if they are determined to have average global 
market capitalization over a consecutive 30 trading-day period of less 
than $15,000,000. In addition, the Exchange will promptly initiate 
suspension and delisting proceedings with respect to an Equity 
Investment Tracking Stock if the underlying equity security whose value 
is tracked by the Equity Investment Tracking Stock ceases to be listed 
on one of (i) the Exchange, (ii) the Nasdaq Stock Market, (iii) NYSE 
MKT or (iv) one of the markets listed in SEC Rule 146(b) \5\ or is 
converted into or exchanged for another security that is not listed on 
one of the aforementioned markets.
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    \5\ 17 CFR 230.146(b).
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    The Exchange proposes to amend Sections 902.02 and 902.03 of the 
Manual to provide that, where an Equity Investment Tracking Stock is 
listed on the Exchange, listing and annual fees for such security will 
be subject to a single fee cap at the time of original listing and on 
an annual basis. The Exchange further proposes to amend Section 907.00 
of the Manual to limit the products and services provided to the issuer 
of an Equity Investment Tracking Stock. The proposed fees would apply 
to the initial and continued listing on the Exchange of an Equity 
Investment Tracking Stock and to the products and services provided to 
issuers of such security for as long as the Equity Investment Tracking 
Stock is the only class of security that is listed on the Exchange.
    Pursuant to Section 902.02 and 902.03 of the Manual, listed 
companies are charged an annual security fee for each class or series 
of security listed on the Exchange. The annual fee is calculated based 
on the number of shares issued and outstanding and is currently set at 
a rate of $0.001025 for the primary listed class of equity, subject to 
an annual minimum of $52,500. In its first year of listing, a company's 
annual fee is prorated from the date of initial listing through the 
year end. Listed companies also pay other fees to the Exchange, 
including fees associated with initial and supplemental listing 
applications. In any given calendar year, however, Section 902.02 of 
the Manual specifies that the total fees that the Exchange may bill a 
listed company are capped at $500,000 (the ``Total Maximum Fee''). For 
an Equity Investment Tracking Stock, the Exchange proposes to adopt a 
Total Maximum Fee of $200,000.
    Section 902.03 of the Manual currently provides, in part, for 
listing fees the first time an issuer lists a class of common shares, 
charged on a per share basis based on tiers set forth in the rule. The 
first time that an issuer lists a class of common shares, the issuer is 
also subject to a one-time special charge of $50,000. Once listed, if 
an issuer lists additional shares of a class of previously listed 
securities, the issuer is subject to listing fees for such additional 
shares. The minimum and maximum listing fees applicable the first time 
an issuer lists a class of common shares are $125,000 and $250,000, 
respectively, which amounts include the special charge of $50,000. In 
lieu of the foregoing, the Exchange proposes to establish for Equity 
Investment Tracking Stocks a fixed initial listing fee (inclusive of 
the one-time charge) of $100,000. Subject to the Total Maximum Fee of 
$200,000 per year described above, the Exchange proposes to charge the 
same per share annual fee for Equity Investment Tracking Stocks as for 
the primary class of equity of a listed operating company (i.e., 
currently $0.001025 per share).
    Finally, Section 907.00 of the Manual sets forth certain 
complimentary products and services that are offered to certain 
currently and newly listed issuers. These products and services are 
developed or delivered by NYSE or by a third party for use by NYSE-
listed companies. Some of these products are commercially available 
from such third-party vendors. All listed issuers receive some 
complimentary products and services through the NYSE Market Access 
Center. The Exchange proposes to exclude issuers of an Equity 
Investment Tracking Stock from receiving the products and services 
provided for under Section 907.00, with the exception that such issuers 
will receive the complimentary products and services and access to 
discounted third-party products and services through the NYSE Market 
Access Center available to all listed issuers.
    The Exchange proposes to limit the fees that would be payable for 
the listing on an Equity Investment Tracking Stock as an incentive for 
the issuer to list such security on the Exchange. As described below, 
the Exchange proposes to make the aforementioned fee changes to better 
reflect the Exchange's costs related to listing Equity Investment 
Tracking Stocks and the corresponding value of such listing to issuers.

[[Page 24921]]

    The Exchange proposes to make three other minor changes in this 
filing: (i) To remove from Section 902.03 references to the annual fee 
schedule applicable to years prior to 2016; (ii) to update the web link 
included in Section 907.00 and (iii) to delete the word ``four'' from 
Section 802.01B, as there are no longer four continued listing 
standards referred to in that rule.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections 6(b)(4) \7\ and 6(b)(5) \8\ of the Act, in 
particular.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed initial and continued 
listing standards for Equity Investment Tracking Stocks further the 
objectives of Section 6(b)(5) of the Act,\9\ in particular in that they 
are designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers. In particular, the proposed listing 
standards are designed to protect investors and the public interest by 
ensuring that Equity Investment Tracking Stocks listed on the Exchange 
meet stringent quantitative and qualitative listing standards to 
qualify for initial and continued listing.
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    \9\ 15 U.S.C. 78f(b)(5).
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    The proposed fee provisions further the objectives of Sections 
6(b)(4) in that they are designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities. The 
Exchange believes that the proposed fee provisions are consistent with 
Section 6(b)(5) of the Act in that they do not unfairly discriminate 
among listed companies because there is a reasonable justification for 
charging the issuer of an Equity Investment Tracking Stock different 
fees from those charged to other issuers as there are cost and 
regulatory efficiencies for the Exchange when the issuer of an Equity 
Investment Tracking Stock and the issuer of the underlying equity 
security are both listed on the Exchange. Under the Exchange's 
proposal, the issuer of an Equity Investment Tracking Stock would pay a 
fixed initial listing fee of $100,000, which is less than the minimum 
fee charged in connection with the listing of the primary class of 
equity of an operating company. In addition, Equity Investment Tracking 
Stocks would be billed annual fees at the same rate per share as the 
primary class of equity of an operating company, but subject to a lower 
annual fee cap that may cause an issuer of an Equity Investment 
Tracking Stock to be subject to a lower effective fee rate per share 
than if it were a regular operating company. Given the unique nature of 
an Equity Investment Tracking Stock, including especially the fact that 
its trading price will likely be primarily derivative of the trading 
price of the security of another company, most of the services provided 
by the Exchange under Section 907.00 would be of limited value and 
appeal to issuers of Equity Investment Tracking Stocks and the Exchange 
believes it is appropriate to exclude the issuers of Equity Investment 
Tracking Stocks from its services program. The Exchange believes that 
the fact that it will not provide these costly services makes it 
appropriate to charge lower fees. In addition, the Exchange believes 
there will be regulatory efficiencies when the same regulatory staff is 
responsible for oversight of an Equity Investment Tracking Stock and 
the underlying equity security. This would include, for example, the 
fact that news that is material to the issuer of the underlying 
security would also be material to an investment in the Equity 
Investment Tracking Stock.
    The Exchange does not expect many issuers will seek to list an 
Equity Investment Tracking Stock. Accordingly, the Exchange does not 
anticipate that it will experience any meaningful diminution in revenue 
as a result of the proposed lower fees and therefore does not believe 
that the proposed fees would in any way negatively affect its ability 
to continue to adequately fund its regulatory program or the services 
the Exchange provides to issuers

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
designed to provide listing standards for Equity Investment Tracking 
Stocks that are appropriately protective of investors and is not 
designed to limit the ability of the issuers of those securities to 
list them on any other national securities exchange. The proposed rule 
change is designed to ensure that the fees charged by the Exchange 
accurately reflect the services provided and benefits realized by 
listed companies. The market for listing services is extremely 
competitive. Each listing exchange has a different fee schedule that 
applies to issuers seeking to list securities on its exchange. Issuers 
have the option to list their securities on these alternative venues 
based on the fees charged and the value provided by each listing. 
Because issuers have a choice to list their securities on a different 
national securities exchange, the Exchange does not believe that the 
proposed listing standards and fee changes impose a burden on 
competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or (ii) as to which the self-regulatory 
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-NYSE-2016-22 on the subject line.

[[Page 24922]]

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-NYSE-2016-22. 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 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 Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. 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-NYSE-2016-22, and should be 
submitted on or before May 18, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-09717 Filed 4-26-16; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 81 / Wednesday, April 27, 2016 / Notices 24919

under the Act. Rule 6c–10 permits open- fairly intended by the policy and change as described in Items I, II, and
end investment companies to impose provisions of the Act. Applicants further III below, which Items have been
CDSLs, subject to certain conditions. submit that the relief requested prepared by the self-regulatory
Applicants note that rule 6c–10 is pursuant to section 23(c)(3) will be organization. The Commission is
grounded in policy considerations consistent with the protection of publishing this notice to solicit
supporting the employment of CDSLs investors and will insure that applicants comments on the proposed rule change
where there are adequate safeguards for do not unfairly discriminate against any from interested persons.
the investor and state that the same holders of the class of securities to be
policy considerations support purchased. Finally, applicants state that I. Self-Regulatory Organization’s
imposition of EWCs in the interval fund the Funds’ imposition of asset-based Statement of the Terms of Substance of
context. In addition, applicants state distribution fees is consistent with the the Proposed Rule Change
that EWCs may be necessary for the provisions, policies and purposes of the The Exchange proposes to adopt
distributor to recover distribution costs. Act and does not involve participation initial and continued listing standards
Applicants represent that any EWC on a basis different from or less for the listing of Equity Investment
imposed by the Funds will comply with advantageous than that of other Tracking Stocks. The Exchange also
rule 6c–10 under the Act as if the rule participants. proposes to adopt listing fees specific to
were applicable to closed-end Equity Investment Tracking Stocks. The
Applicants’ Condition
investment companies. The Funds will proposed rule change is available on the
disclose EWCs in accordance with the Applicants agree that any order Exchange’s Web site at www.nyse.com,
requirements of Form N–1A concerning granting the requested relief will be at the principal office of the Exchange,
CDSLs. subject to the following condition: and at the Commission’s Public
Each Fund relying on the order will Reference Room.
Asset-Based Distribution Fees comply with the provisions of rules 6c–
1. Section 17(d) of the Act and rule 10, 12b–1, 17d–3, 18f–3, 22d–1, and, II. Self-Regulatory Organization’s
17d–1 under the Act prohibit an where applicable, 11a–3 under the Act, Statement of the Purpose of, and
affiliated person of a registered as amended from time to time, as if Statutory Basis for, the Proposed Rule
investment company, or an affiliated those rules applied to closed-end Change
person of such person, acting as management investment companies, In its filing with the Commission, the
principal, from participating in or and will comply with the NASD Sales self-regulatory organization included
effecting any transaction in connection Charge Rule, as amended from time to statements concerning the purpose of,
with any joint enterprise or joint time, as if that rule applied to all closed- and basis for, the proposed rule change
arrangement in which the investment end management investment and discussed any comments it received
company participates unless the companies. on the proposed rule change. The text
Commission issues an order permitting For the Commission, by the Division of of those statements may be examined at
the transaction. In reviewing Investment Management, under delegated the places specified in Item IV below.
applications submitted under section authority. The Exchange has prepared summaries,
17(d) and rule 17d–1, the Commission Brent J. Fields, set forth in sections A, B, and C below,
considers whether the participation of Secretary. of the most significant parts of such
the investment company in a joint [FR Doc. 2016–09715 Filed 4–26–16; 8:45 am] statements.
enterprise or joint arrangement is
BILLING CODE 8011–01–P
consistent with the provisions, policies A. Self-Regulatory Organization’s
and purposes of the Act, and the extent Statement of the Purpose of, and the
to which the participation is on a basis Statutory Basis for, the Proposed Rule
SECURITIES AND EXCHANGE
different from or less advantageous than Change
COMMISSION
that of other participants. 1. Purpose
2. Rule 17d–3 under the Act provides [Release No. 34–77674; File No. SR–NYSE–
an exemption from section 17(d) and 2016–22) The Exchange proposes to adopt
rule 17d–1 to permit open-end initial and continued listing standards
investment companies to enter into Self-Regulatory Organizations; New for the listing of Equity Investment
distribution arrangements pursuant to York Stock Exchange LLC; Notice of Tracking Stocks. The Exchange also
rule 12b–1 under the Act. Applicants Filing of Proposed Rule Change proposes to adopt listing fees specific to
request an order under section 17(d) and Adopting Initial and Continued Listing Equity Investment Tracking Stocks.
rule 17d–1 under the Act to the extent Standards for the Listing of Equity For purposes of proposed new Section
necessary to permit the Funds to impose Investment Tracking Stocks and 102.07 of the Manual, an Equity
asset-based distribution fees. Applicants Adopting Listing Fees Specific to Investment Tracking Stock refers to a
have agreed to comply with rules 12b– Equity Investment Tracking Stocks class of common stock that is the listed
1 and 17d–3 as if those rules applied to April 21, 2016. company’s sole class of common equity
closed-end investment companies, Pursuant to Section 19(b)(1) 1 of the securities listed on the Exchange and
which they believe will resolve any Securities Exchange Act of 1934 that is designed solely to track the
concerns that might arise in connection (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 performance of an investment by the
with a Fund financing the distribution issuer in the common stock of another
asabaliauskas on DSK3SPTVN1PROD with NOTICES

notice is hereby given that, on April 7,
of its shares through asset-based 2016, New York Stock Exchange LLC company listed on the Exchange.
distribution fees. (‘‘NYSE’’ or ‘‘Exchange’’) filed with the In order to qualify for initial listing
3. For the reasons stated above, Securities and Exchange Commission under proposed Section 102.07, an
applicants submit that the exemptions (‘‘Commission’’) the proposed rule Equity Investment Tracking Stock will
requested under section 6(c) are be required to meet the distribution and
necessary and appropriate in the public 1 15 U.S.C.78s(b)(1). public float requirements currently
interest and are consistent with the 2 15 U.S.C. 78a. applicable for initial public offerings set
protection of investors and the purposes 3 17 CFR 240.19b–4. forth in Sections 102.01A and 102.01B

VerDate Sep<11>2014 17:29 Apr 26, 2016 Jkt 238001 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 E:\FR\FM\27APN1.SGM 27APN1
24922 Federal Register / Vol. 81, No. 81 / Wednesday, April 27, 2016 / Notices

Paper Comments (‘‘Act’’),1 and Rule 19b–4 thereunder,2 (A) Clearing Agency’s Statement of the
• Send paper comments in triplicate notice is hereby given that on April 19, Purpose of, and Statutory Basis for, the
to Brent J. Fields, Secretary, Securities 2016, the Fixed Income Clearing Proposed Rule Change
and Exchange Commission, 100 F Street Corporation (‘‘FICC’’ or the 1. Purpose
NE., Washington, DC 20549–1090. ‘‘Corporation’’) filed with the Securities
and Exchange Commission i. Background: Description of the GCF
All submissions should refer to File Repo Service and History
Number SR–NYSE–2016–22. This file (‘‘Commission’’) the proposed rule
number should be included on the change as described in Items I and II (1) Development of the GCF Repo
subject line if email is used. To help the below, which Items have been prepared Service
Commission process and review your primarily by FICC. The Commission is The GCF Repo service was developed
comments more efficiently, please use publishing this notice to solicit as part of a collaborative effort among
only one method. The Commission will comments on the proposed rule change the Government Securities Clearing
post all comments on the Commission’s from interested persons. Corporation (‘‘GSCC’’) (FICC’s
Internet Web site (http://www.sec.gov/ predecessor), its two clearing banks
rules/sro.shtml). Copies of the I. Clearing Agency’s Statement of the
(The Bank of New York Mellon (‘‘BNY’’)
submission, all subsequent Terms of Substance of the Proposed and JPMorgan Chase Bank, National
amendments, all written statements Rule Change Association (‘‘Chase’’)) and industry
with respect to the proposed rule representatives. GSCC introduced the
The proposed rule change consists of
change that are filed with the GCF Repo service on an intra-clearing
amendments to the Government
Commission, and all written bank basis in 1998.6 Under the
communications relating to the Securities Division (‘‘GSD’’) Rulebook 3
intrabank service, Dealers 7 could only
proposed rule change between the (‘‘GSD Rules’’) in order to: (1)
engage in GCF Repo Transactions 8 with
Commission and any person, other than Permanently adopt the pilot program
other Dealers that cleared at the same
those that may be withheld from the (the ‘‘2015 Pilot Program’’) 4 that is
clearing bank.
public in accordance with the currently in effect for the GCF Repo® 5 Currently, the GCF Repo service
provisions of 5 U.S.C. 552, will be service and that is scheduled to expire allows Netting Members 9 that
available for Web site viewing and on June 22, 2016; (2) add clarifying rule participate in the service to trade
printing in the Commission’s Public changes regarding a process that is general collateral repos 10 throughout
Reference Room, 100 F Street NE., currently in effect with respect to the the day without requiring intra-day,
Washington, DC 20549 on official GCF Repo service and that FICC refers trade-for-trade settlement on a delivery-
business days between the hours of to as the ‘‘net-of-net’’ settlement versus-payment (‘‘DVP’’) basis. The
10:00 a.m. and 3:00 p.m. Copies of such process; and (3) make technical changes service allows Dealers to trade such
filing also will be available for to the GSD Rules. The proposed rule general collateral repos, based on rate
inspection and copying at the principal changes consist of changes to GSD Rule and term, throughout the day with Inter-
office of the Exchange. All comments 1, GSD Rule 20 and the Schedule of GCF Dealer Broker Netting Members 11 on a
received will be posted without change; Timeframes. blind basis. Standardized Generic
the Commission does not edit personal CUSIP Numbers 12 have been
Capitalized terms used herein and not
identifying information from established exclusively for GCF Repo
otherwise defined shall have the
submissions. You should submit only
information that you wish to make meaning assigned to those terms in the 6 Securities Exchange Act Release No. 34–40623

available publicly. All submissions GSD Rules. (October 30, 1998) 63 FR 59831 (November 5, 1998)
(SR–GSCC–98–02).
should refer to File Number SR–NYSE– II. Clearing Agency’s Statement of the 7 Pursuant to the GSD Rules, the term ‘‘Dealer’’
2016–22, and should be submitted on or Purpose of, and Statutory Basis for, the means a member that is a registered Government
before May 18, 2016. Proposed Rule Change Securities Dealer. GSD Rule 1, Definitions.
8 Pursuant to the GSD Rules, the term ‘‘GCF Repo
For the Commission, by the Division of
Trading and Markets, pursuant to delegated In its filing with the Commission, the Transaction’’ means a Repo Transaction involving
Generic CUSIP Numbers the data on which are
authority.10 clearing agency included statements submitted to the Corporation on a Locked-In-Trade
Brent J. Fields, concerning the purpose of and basis for basis pursuant to the provisions of Rule 6C, for
Secretary. the proposed rule change and discussed netting and settlement by the Corporation pursuant
any comments it received on the to the provisions of Rule 20. GSD Rule 1,
[FR Doc. 2016–09717 Filed 4–26–16; 8:45 am] Definitions.
BILLING CODE 8011–01–P proposed rule change. The text of these 9 Pursuant to the GSD Rules, the term ‘‘Netting
statements may be examined at the Member’’ means a Member that is a Member of the
places specified in Item IV below. The Comparison System and the Netting System. GSD
SECURITIES AND EXCHANGE Rule 1, Definitions.
clearing agency has prepared 10 A general collateral repo is a repo in which the
COMMISSION summaries, set forth in sections A, B, underlying securities collateral is nonspecific,
[Release No. 34–77675; File No. SR–FICC– and C below, of the most significant general collateral whose identification is at the
2016–001] aspects of such statements. option of the seller. This is in contrast to a specific
collateral repo.
11 Pursuant to the GSD Rules, the term ‘‘Inter-
Self-Regulatory Organizations; Fixed 1 15 U.S.C. 78s(b)(1). Dealer Broker Netting Member’’ shall have the
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Income Clearing Corporation; Notice of 2 17 CFR 240.19b–4. meaning set forth in Section 2 of Rule 2A. GSD Rule
Filing of Proposed Rule Change 3 The GSD Rulebook is available at DTCC’s Web 1, Definitions.
Relating to the GCF Repo® Service site, www.dtcc.com/legal/rules-and- 12 Pursuant to the GSD Rules, the term ‘‘Generic

procedures.aspx. CUSIP Number’’ means a Committee on Uniform
April 21, 2016. 4 Securities Exchange Act Release No. 34–75258 Securities Identification Procedures identifying
Pursuant to Section 19(b)(1) of the number established for a category of securities, as
(June 22, 2015), 80 FR 36879 (June 26, 2015) (SR– opposed to a specific security. The Corporation
Securities Exchange Act of 1934 FICC–2015–002). shall use separate Generic CUSIP Numbers for
5 GCF Repo is a registered trademark of FICC/
General Collateral Repo Transactions and GCF Repo
10 17 CFR 200.30–3(a)(12). DTCC. Transactions. GSD Rule 1, Definitions.

VerDate Sep<11>2014 17:29 Apr 26, 2016 Jkt 238001 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 E:\FR\FM\27APN1.SGM 27APN1
Document Created: 2018-02-07 13:55:31
Document Modified: 2018-02-07 13:55:31
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		81 FR 24919