81 FR 37229 - Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving Proposed Rule Change To Remove From the DTCC Limit Monitoring Tool the 50% Early Warning Limit Alert and Make Technical Revisions to the Rules
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 111 (June 9, 2016)
Federal Register Volume 81, Issue 111 (June 9, 2016)
| Page Range | 37229-37231 | |
| FR Document | 2016-13613 |
[Federal Register Volume 81, Number 111 (Thursday, June 9, 2016)] [Notices] [Pages 37229-37231] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-13613] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77990; File No. SR-NSCC-2016-001] Self-Regulatory Organizations; National Securities Clearing Corporation; Order Approving Proposed Rule Change To Remove From the DTCC Limit Monitoring Tool the 50% Early Warning Limit Alert and Make Technical Revisions to the Rules June 3, 2016. On April 18, 2016, National Securities Clearing Corporation (``NSCC'') filed with the Securities and Exchange Commission (``Commission'') proposed rule change SR-NSCC-2016-001 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ to amend NSCC's Rules and Procedures (``Rules'') \3\ in order to (i) remove from the DTCC Limit Monitoring tool the alert that is sent to Members when trading activity in any of their Risk Entities reaches 50% of the pre-set trading limits for that Risk Entity and (ii) to make related technical changes and corrections to the Rules, as more fully described below. The proposed rule change was published for comment [[Page 37230]] in the Federal Register on May 2, 2016.\4\ The Commission did not receive any comment letters on the proposed rule 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\ Available at http://dtcc.com/~/media/Files/Downloads/legal/ rules/nscc_rules.pdf. Terms not defined herein are defined in the Rules. \4\ See Securities Exchange Act Release No. 77709 (April 26, 2016), 81 FR 26274 (May 2, 2016) (SR-NSCC-2016-001). --------------------------------------------------------------------------- I. Description of the Proposed Rule Change The following is a description of the proposed rule change, as provided by NSCC: Reasons for Adopting the Proposed Rule Change. NSCC provides its Members with a risk management tool called DTCC Limit Monitoring, for which certain types of Members are required to register.\5\ DTCC Limit Monitoring enables Members that use the tool to monitor post-trade activity and to be notified when pre-set trading limits are reached. To use the tool, Members must (1) define one or more ``Risk Entities,'' which may include (i) the trading activity of a single trading desk within the firm; (ii) for Members that clear trades for other firms, i.e., their correspondents, the trading activity of a correspondent firm; (iii) for Members acting as a Special Representative or a QSR, as such terms are defined in the Rules,\6\ the trading activity of a firm with which it has a clearing relationship; (iv) the trading activity of a single clearing number within the Member's NSCC account structure; or (v) all trading activity of the Member submitted to NSCC for clearing; and (2) set a trading limit, at a net notional value, for each Risk Entity. DTCC Limit Monitoring then sets early warning limits at 50%, 75%, and 90% of those trading limits.\7\ Members receive alerts when trading activity for their Risk Entities reaches each of these early warning limits, as well as the pre-set trading limits. --------------------------------------------------------------------------- \5\ Rule 54 (DTCC Limit Monitoring) and Procedure XVII (DTCC Limit Monitoring), supra note 3; see Securities Exchange Act Release No. 71637 (February 28, 2014), 79 FR 12708 (March 6, 2014) (SR-NSCC- 2013-12). \6\ Rule 7 (Comparison and Trade Recording Operation) and Procedure IV (Special Representative Service), supra note 3. \7\ Rule 54 (DTCC Limit Monitoring) and Procedure XVII (DTCC Limit Monitoring, supra note 3. --------------------------------------------------------------------------- Since the implementation of DTCC Limit Monitoring in 2014, NSCC has periodically met with a working group of its Members to discuss the functioning of the tool and to confirm it provides Members with effective post-trade surveillance as intended. In response to Member feedback provided during these discussions, NSCC has proposed to remove the 50% early warning alert for the reasons described below. Additionally, NSCC has proposed to make technical revisions to Procedure XVII (DTCC Limit Monitoring Procedure) primarily to revise the verb tense and add clarity regarding use of the tool. Issues the Proposed Rule Change Is Intended to Address. The proposed rule change will address concerns that (1) the 50% early warning alert is set too low and, thus, may not provide Members with useful information for purposes of effective post-trade monitoring; (2) the frequency of the 50% early warning alert could have a negative impact on Member responsiveness to more critical alerts; and (3) the verb tense and certain other language in the Rule may be unclear and/or technically inaccurate. Manner in which the Proposed Rule Change Will Operate to Resolve the Issues. The proposed rule change will remove the 50% early warning alert from DTCC Limit Monitoring. DTCC Limit Monitoring will retain the 75% and 90% early warning alerts, which continue to provide Members with valuable notice of changes in their post-trade activity for purposes of effective risk management. Additionally, the proposed rule change will make certain technical changes that will clarify the Rule, primarily by updating the verb tense from future tense to present tense to reflect the present applicability of the Rule and by making certain other technical clarifications to language used in the Rule. Manner in which the Proposed Rule Change Will Affect Various Persons. Members that use DTCC Limit Monitoring will no longer receive the 50% early warning alert, but they will continue to receive alerts when their trading activity in each Risk Entity reaches 75% and 90% of their pre-set trading limits. No other changes are proposed with respect to the functioning of DTCC Limit Monitoring. The proposed technical changes are not anticipated to have any effect on Members that use DTCC Limit Monitoring. Significant Problems Known to the Self-Regulatory Organization that Persons Affected Are Likely to Have in Complying with the Proposed Rule Change. Members that use DTCC Limit Monitoring will not have to take any action as a result of the proposed rule change, and NSCC is not aware of any problems that Members will have in continuing to comply with the Rules \8\ that address DTCC Limit Monitoring after the implementation of the proposed rule change. --------------------------------------------------------------------------- \8\ Id. --------------------------------------------------------------------------- As stated above, the proposed technical changes are not anticipated to have any effect on Members that use DTCC Limit Monitoring. Description of the Proposed Rule Change. In order to implement this proposed rule change, NSCC will amend Section 4 of Procedure XVII (DTCC Limit Monitoring Procedure) of the Rules to remove reference to the 50% early warning alert and to make certain technical clarifications to language used in the Rule, primarily by updating the verb tense used therein. No other changes to the Rules are contemplated by this proposed rule change. II. Discussion and Commission Findings Section 19(b)(2)(C) of the Act \9\ 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,\10\ as described in detail below. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(2)(C). \10\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- 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 and to protect investors and the public interest.\11\ As described above, the 50% early warning alert may not provide Members with information that is useful for purposes of post-trade monitoring, but, rather, may distract Members from such information. By removing the 50% alert, a distraction is removed, thus increasing the effectiveness of the DTCC Limit Monitoring tool for Members to monitor their post-trade activity. Therefore, the proposed rule change will enhance Members' ability to manage risks from their trades, facilitating the protection of investors and the public interest from such risks. --------------------------------------------------------------------------- \11\ Id. --------------------------------------------------------------------------- As the proposed rule change pertains to technical changes to the Rules, the Commission finds the technical changes also consistent with Section 17A(b)(3)(F) of the Act \12\ because technical updates to the Rules to make them more clear, consistent, and current for Members that rely on the Rules supports the prompt and accurate [[Page 37231]] clearance and settlement of securities transactions. --------------------------------------------------------------------------- \12\ Id. --------------------------------------------------------------------------- III. 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 \13\ and the rules and regulations thereunder. --------------------------------------------------------------------------- \13\ 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-2016-001 be, and hereby is, approved.\14\ --------------------------------------------------------------------------- \14\ 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.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-13613 Filed 6-8-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 111 / Thursday, June 9, 2016 / Notices 37229
[sic] Bulletin of the special C. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be
characteristics and risks associated with Statement on Comments on the available for Web site viewing and
trading the Shares. Trading in Shares of Proposed Rule Change Received From printing in the Commission’s Public
the Fund will be halted if the circuit Members, Participants, or Others Reference Room, 100 F Street NE.,
breaker parameters in NYSE Arca No written comments were solicited Washington, DC 20549 on official
Equities Rule 7.12 have been reached or or received with respect to the proposed business days between the hours of
because of market conditions or for rule change. 10:00 a.m. and 3:00 p.m. Copies of such
reasons that, in the view of the filing also will be available for
Exchange, make trading in the Shares III. Date of Effectiveness of the inspection and copying at the principal
inadvisable, and trading in the Shares Proposed Rule Change and Timing for offices of the Exchange. All comments
Commission Action received will be posted without change;
will be subject to NYSE Arca Equities
Rule 8.600(d)(2)(D), which sets forth Within 45 days of the date of the Commission does not edit personal
publication of this notice in the Federal identifying information from
circumstances under which Shares of
Register or within such longer period submissions. You should submit only
the Fund may be halted. The intra-day,
up to 90 days (i) as the Commission may information that you wish to make
closing and settlement prices of the
designate if it finds such longer period available publicly. All submissions
portfolio securities are also readily should refer to File Number SR–
available from the national securities to be appropriate and publishes its
reasons for so finding or (ii) as to which NYSEArca–2016–79, and should be
exchanges trading such securities, submitted on or before June 30, 2016.
automated quotation systems, published the self-regulatory organization
or other public sources, or on-line consents, the Commission will: For the Commission, by the Division of
(A) By order approve or disapprove Trading and Markets, pursuant to delegated
information services such as Bloomberg authority.29
the proposed rule change, or
or Reuters. In addition, as noted above, Brent J. Fields,
(B) institute proceedings to determine
investors will have ready access to whether the proposed rule change Secretary.
information regarding the Fund’s should be disapproved. [FR Doc. 2016–13615 Filed 6–8–16; 8:45 am]
holdings, the IIV, the Disclosed
BILLING CODE 8011–01–P
Portfolio, and quotation and last sale IV. Solicitation of Comments
information for the Shares. Interested persons are invited to
The proposed rule change is designed submit written data, views, and SECURITIES AND EXCHANGE
to perfect the mechanism of a free and arguments concerning the foregoing, COMMISSION
open market and, in general, to protect including whether the proposed rule
investors and the public interest in that change is consistent with the Act. [Release No. 34–77990; File No. SR–NSCC–
it will facilitate the listing and trading Comments may be submitted by any of 2016–001]
of an additional type of actively- the following methods:
Self-Regulatory Organizations;
managed exchange-traded product that Electronic Comments National Securities Clearing
will enhance competition among market
• Use the Commission’s Internet Corporation; Order Approving
participants, to the benefit of investors comment form (http://www.sec.gov/ Proposed Rule Change To Remove
and the marketplace. As noted above, rules/sro.shtml); or From the DTCC Limit Monitoring Tool
the Exchange has in place surveillance • Send an email to rule-comments@ the 50% Early Warning Limit Alert and
procedures relating to trading in the sec.gov. Please include File Number SR– Make Technical Revisions to the Rules
Shares and may obtain information via NYSEArca–2016–79 on the subject line.
ISG from other exchanges that are June 3, 2016.
members of ISG or with which the Paper Comments On April 18, 2016, National Securities
Exchange has entered into a CSSA. In • Send paper comments in triplicate Clearing Corporation (‘‘NSCC’’) filed
addition, as noted above, investors will to Secretary, Securities and Exchange with the Securities and Exchange
have ready access to information Commission, 100 F Street NE., Commission (‘‘Commission’’) proposed
regarding the Fund’s holdings, the IIV, Washington, DC 20549–1090. rule change SR–NSCC–2016–001
the Disclosed Portfolio, and quotation All submissions should refer to File pursuant to Section 19(b)(1) of the
and last sale information for the Shares. Number SR–NYSEArca–2016–79. This Securities Exchange Act of 1934
file number should be included on the (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to
B. Self-Regulatory Organization’s amend NSCC’s Rules and Procedures
subject line if email is used. To help the
Statement on Burden on Competition Commission process and review your (‘‘Rules’’) 3 in order to (i) remove from
comments more efficiently, please use the DTCC Limit Monitoring tool the
The Exchange does not believe that alert that is sent to Members when
the proposed rule change will impose only one method. The Commission will
post all comments on the Commission’s trading activity in any of their Risk
any burden on competition that is not Entities reaches 50% of the pre-set
necessary or appropriate in furtherance Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the trading limits for that Risk Entity and
of the purpose of the Act. The Exchange (ii) to make related technical changes
submission, all subsequent
notes that the proposed rule change will and corrections to the Rules, as more
amendments, all written statements
facilitate the listing and trading of an fully described below. The proposed
with respect to the proposed rule
sradovich on DSK3TPTVN1PROD with NOTICES
actively-managed exchange-traded change that are filed with the rule change was published for comment
product that will principally hold non- Commission, and all written
U.S. equity securities and that will communications relating to the
29 17 CFR 200.30–3(a)(12).
enhance competition among market proposed rule change between the
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
participants, to the benefit of investors Commission and any person, other than 3 Available at http://dtcc.com/∼/media/Files/
and the marketplace. those that may be withheld from the Downloads/legal/rules/nscc_rules.pdf. Terms not
public in accordance with the defined herein are defined in the Rules.
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![Federal Register / Vol. 81, No. 111 / Thursday, June 9, 2016 / Notices 37231
clearance and settlement of securities solicitation. The Notice takes Management and Budget for extension
transactions. approximately 0.25 hours per response and approval.
and is filed by approximately 4 Form S–8 (17 CFR 239.16b) under the
III. Conclusion Securities Act of 1933 (15 U.S.C. 77a et
respondents for a total of one annual
On the basis of the foregoing, the burden hour (0.25 hours per response × seq.) is the primary registration
Commission finds that the proposal is 4 response). statement used by eligible registrants to
consistent with the requirements of the Written comments are invited on: (a) register securities to be issued in
Act and in particular with the Whether this proposed collection of connection with an employee benefit
requirements of Section 17A of the information is necessary for the proper plan. We estimate that Form S–8 takes
Act 13 and the rules and regulations performance of the functions of the approximately 24 hours per response to
thereunder. agency, including whether the prepare and is filed by approximately
It is therefore ordered, pursuant to 2,140 respondents. In addition, we
information will have practical utility;
Section 19(b)(2) of the Act, that estimate that 50% of the preparation
(b) the accuracy of the agency’s estimate
proposed rule change SR–NSCC–2016– time (12 hours) is completed in-house
of the burden imposed by the collection
001 be, and hereby is, approved.14 by the filer for a total annual reporting
of information; (c) ways to enhance the
For the Commission, by the Division of quality, utility, and clarity of the burden of 25,680 (12 hours per response
Trading and Markets, pursuant to delegated information collected; and (d) ways to × 2,140 responses).
authority.15 Written comments are invited on: (a)
minimize the burden of the collection of
Brent J. Fields, Whether this proposed collection of
information on respondents, including
Secretary. information is necessary for the proper
through the use of automated collection
[FR Doc. 2016–13613 Filed 6–8–16; 8:45 am] performance of the functions of the
techniques or other forms of information
agency, including whether the
BILLING CODE 8011–01–P technology. Consideration will be given
information will have practical utility;
to comments and suggestions submitted
(b) the accuracy of the agency’s estimate
in writing within 60 days of this
SECURITIES AND EXCHANGE of the burden imposed by the collection
publication.
COMMISSION of information; (c) ways to enhance the
An agency may not conduct or quality, utility, and clarity of the
Proposed Collection; Comment sponsor, and a person is not required to information collected; and (d) ways to
Request respond to, a collection of information minimize the burden of the collection of
unless it displays a currently valid information on respondents, including
Upon Written Request Copies Available control number. through the use of automated collection
From: Securities and Exchange Please direct your written comments techniques or other forms of information
Commission, Office of FOIA Services, to Pamela Dyson, Director/Chief technology. Consideration will be given
100 F Street, NE., Washington, DC Information Officer, Securities and to comments and suggestions submitted
20549–2736. Exchange Commission, c/o Remi Pavlik- in writing within 60 days of this
Extension: Simon, 100 F Street NE., Washington, publication.
Notice of Exempt Preliminary Roll-Up
DC 20549 or send an email to: PRA_ An agency may not conduct or
Communication, SEC File No. 270–396,
OMB Control No. 3235–0452. Mailbox@sec.gov. sponsor, and a person is not required to
Dated: June 3, 2016. respond to, a collection of information
Notice is hereby given that, pursuant unless it displays a currently valid
to the Paperwork Reduction Act of 1995 Brent J. Fields,
control number.
(44 U.S.C. 3501 et seq.), the Securities Secretary.
Please direct your written comments
and Exchange Commission [FR Doc. 2016–13617 Filed 6–8–16; 8:45 am]
to Pamela Dyson, Director/Chief
(‘‘Commission’’) is soliciting comments BILLING CODE 8011–01–P Information Officer, Securities and
on the collection of information Exchange Commission, c/o Remi Pavlik-
summarized below. The Commission Simon, 100 F Street NE., Washington,
plans to submit this existing collection SECURITIES AND EXCHANGE DC 20549 or send an email to: PRA_
of information to the Office of COMMISSION Mailbox@sec.gov.
Management and Budget for extension
Proposed Collection; Comment Dated: June 3, 2016.
and approval.
Exchange Act Rule 14a–6(n) (17 CFR Request Brent J. Fields,
240.14a–6(n)) requires any person that Secretary.
Upon Written Request Copies Available
engages in a proxy solicitation subject to [FR Doc. 2016–13616 Filed 6–8–16; 8:45 am]
From: Securities and Exchange
Exchange Act Rule 14a–2(b)(4) [(17 CFR BILLING CODE 8011–01–P
Commission, Office of FOIA Services,
240.14a–2(b)(4))] to file a Notice of
100 F Street NE., Washington, DC
Exempt Preliminary Roll-Up
20549–2736. SECURITIES AND EXCHANGE
Communication (‘‘Notice’’) [(17 CFR
240.14a–104)] with the Commission. Extension: COMMISSION
The Notice provides information Form S–8; SEC File No. 270–66, OMB
regarding ownership interest and any Control No. 3235–0066. Proposed Collection; Comment
potential conflicts of interest to be Request
Notice is hereby given that, pursuant
included in statements submitted by or to the Paperwork Reduction Act of 1995 Upon Written Request Copies Available
sradovich on DSK3TPTVN1PROD with NOTICES
on behalf of a person engaging in the (44 U.S.C. 3501 et seq.), the Securities From: Securities and Exchange
and Exchange Commission Commission, Office of FOIA Services,
13 15 U.S.C. 78q–1. (‘‘Commission’’) is soliciting comments 100 F Street NE., Washington, DC
14 In approving the proposed rule change, the on the collection of information 20549–2736.
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15 summarized below. The Commission Extension:
U.S.C. 78c(f). plans to submit this existing collection Rule 155; SEC File No. 270–492, OMB
15 17 CFR 200.30–3(a)(12). of information to the Office of Control No. 3235–0549.
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Document Created: 2018-02-08 07:33:52
Document Modified: 2018-02-08 07:33:52
| 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 | 81 FR 37229 |
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