81 FR 91964 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the MBSD Schedule of Charges Dealer Account Group

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 243 (December 19, 2016)

Page Range		91964-91965
FR Document		2016-30388
Federal Register, Volume 81 Issue 243 (Monday, December 19, 2016)
[Federal Register Volume 81, Number 243 (Monday, December 19, 2016)]
[Notices]
[Pages 91964-91965]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30388]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79535; File No. SR-FICC-2016-008]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Modify the MBSD Schedule of Charges Dealer Account Group

December 13, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 2, 2016, Fixed Income Clearing Corporation (``FICC'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II and III below, which 
Items have been prepared by the clearing agency. 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\ 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change consists of an amendment to the Mortgage-
Backed Securities Division (``MBSD'') Clearing Rules (the ``MBSD 
Rules'') to include an additional fee in the ``Schedule of Charges 
Dealer Account Group,'' as described in greater detail below.\3\ The 
proposed fee would be implemented as of January 1, 2017.
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    \3\ Capitalized terms used herein and not otherwise defined 
shall have the meaning assigned to such terms in the MBSD Rules, 
available at http://www.dtcc.com/legal/rules-and-procedures.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency included 
statements concerning the purpose of and basis for the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. The clearing agency has prepared summaries, 
set forth in sections A, B, and C below, of the most significant 
aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    FICC is proposing to amend the MBSD ``Schedule of Charges Dealer 
Account Group'' to include an additional fee. The proposed rule change 
would allow FICC to pass through any daylight overdraft (``DOD'') fees 
that MBSD incurs from The Bank of New York Mellon (``BNY'') in 
connection with the settlement of Clearing Members' securities 
obligations. FICC would pass through these BNY DOD fees to Clearing 
Members who settle their securities obligations at BNY.\4\
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    \4\ This proposed rule change would be consistent with the fee 
schedule in FICC's Government Securities Division Rulebook, 
available at http://www.dtcc.com/legal/rules-and-procedures.
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    In October 2016, FICC began to incur the cost of the BNY DOD fees. 
FICC is proposing to amend the MBSD ``Schedule of Charges Dealer 
Account Group'' to allow FICC to pass through the BNY DOD fees to 
Clearing Members who settle their securities obligations at BNY.\5\ 
Specifically, each Clearing Member who settles securities obligations 
at BNY would be charged a pass-through fee, calculated as a percentage 
of the total of all such costs incurred by MBSD. This percentage would 
be calculated on a monthly basis as follows:
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    \5\ The proposed fee would not be applicable to Brokers because 
Brokers do not have securities settlement obligations.

(Total dollar value of Pool Deliver Obligations and Pool Receive 
Obligations of such Clearing Member at BNY)
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(Total dollar value of Pool Deliver Obligations and Pool Receive 
Obligations in all Dealer Accounts at BNY)
2. Statutory Basis
    Section 17A(b)(3)(D) of the Securities Exchange Act of 1934, as 
amended (``Act'') requires, in part, that the rules of the clearing 
agency provide for the equitable allocation of reasonable dues, fees 
and other charges among its participants.\6\ The proposed rule change 
would allow FICC to recover the costs of providing securities 
settlement services to Clearing Members by passing the BNY DOD fees 
incurred by MBSD to Clearing Members who settle their securities 
obligations at BNY. FICC believes that the proposed rule change is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to FICC, in particular Section 
17A(b)(3)(D), because the proposed fee would be allocated among all 
Clearing Members who settle their securities obligations at BNY, 
calculated as a percentage of the total of such costs incurred by MBSD 
in connection with the services that FICC provide provides for such 
Clearing Members.\7\
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    \6\ 15 U.S.C. 78q-1(b)(3)(D).
    \7\ Id.
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(B) Clearing Agency's Statement on Burden on Competition

    FICC believes that the proposed rule change could have an impact on 
competition because the proposed rule change would impose an additional 
fee on Clearing Members who settle their securities obligations at BNY. 
FICC believes, however, that any burden on competition that would be 
created by the proposed rule change would be necessary and appropriate 
in furtherance of the Act. Specifically, the proposed rule change is 
necessary to allow FICC to recover the cost of providing services to 
Clearing Members by passing through the BNY DOD fees to Clearing 
Members who settle their securities obligations at BNY. The proposed 
rule change is appropriate because, as stated, it would only apply to 
Clearing Members who settle their securities obligations at BNY, which 
is the third party that is charging the fees being incurred by MBSD to 
provide FICC's services.

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

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

[[Page 91965]]

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) \8\ of the Act and paragraph (f) of Rule 19b-4 \9\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form
    (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-FICC-2016-008 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549.
    All submissions should refer to File Number SR-FICC-2016-008. 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 the filing also will be available 
for inspection and copying at the principal office of FICC and on 
DTCC's Web site (http://dtcc.com/legal/sec-rule-filings.aspx). All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FICC-2016-008 and should be 
submitted on or before January 9, 2017.

    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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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30388 Filed 12-16-16; 8:45 am]
 BILLING CODE 8011-01-P
91964 Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Notices

writing within 60 days of this II. Clearing Agency’s Statement of the 2. Statutory Basis
publication. Purpose of, and Statutory Basis for, the
An agency may not conduct or Proposed Rule Change Section 17A(b)(3)(D) of the Securities
sponsor, and a person is not required to Exchange Act of 1934, as amended
respond to, a collection of information In its filing with the Commission, the (‘‘Act’’) requires, in part, that the rules
under the PRA unless it displays a clearing agency included statements of the clearing agency provide for the
currently valid OMB control number. concerning the purpose of and basis for equitable allocation of reasonable dues,
Please direct your written comments the proposed rule change and discussed fees and other charges among its
to: Pamela Dyson, Director/Chief any comments it received on the participants.6 The proposed rule change
Information Officer, Securities and proposed rule change. The text of these would allow FICC to recover the costs
Exchange Commission, c/o Remi Pavlik- statements may be examined at the of providing securities settlement
Simon, 100 F Street NE., Washington, places specified in Item IV below. The services to Clearing Members by passing
DC 20549 or send an email to: clearing agency has prepared the BNY DOD fees incurred by MBSD to
PRA_Mailbox@sec.gov. summaries, set forth in sections A, B, Clearing Members who settle their
and C below, of the most significant securities obligations at BNY. FICC
Dated: December 6, 2016.
aspects of such statements. believes that the proposed rule change
Brent J. Fields, is consistent with the requirements of
Secretary. (A) Clearing Agency’s Statement of the the Act and the rules and regulations
[FR Doc. 2016–30372 Filed 12–16–16; 8:45 am] Purpose of, and Statutory Basis for, the thereunder applicable to FICC, in
BILLING CODE 8011–01–P
Proposed Rule Change particular Section 17A(b)(3)(D), because
1. Purpose the proposed fee would be allocated
among all Clearing Members who settle
SECURITIES AND EXCHANGE FICC is proposing to amend the their securities obligations at BNY,
COMMISSION MBSD ‘‘Schedule of Charges Dealer calculated as a percentage of the total of
Account Group’’ to include an such costs incurred by MBSD in
[Release No. 34–79535; File No. SR–FICC– additional fee. The proposed rule connection with the services that FICC
2016–008] change would allow FICC to pass provide provides for such Clearing
through any daylight overdraft (‘‘DOD’’) Members.7
Self-Regulatory Organizations; Fixed fees that MBSD incurs from The Bank of
Income Clearing Corporation; Notice of New York Mellon (‘‘BNY’’) in (B) Clearing Agency’s Statement on
Filing and Immediate Effectiveness of connection with the settlement of Burden on Competition
a Proposed Rule Change To Modify the Clearing Members’ securities
MBSD Schedule of Charges Dealer FICC believes that the proposed rule
obligations. FICC would pass through change could have an impact on
Account Group these BNY DOD fees to Clearing competition because the proposed rule
December 13, 2016. Members who settle their securities change would impose an additional fee
Pursuant to Section 19(b)(1) of the obligations at BNY.4 on Clearing Members who settle their
Securities Exchange Act of 1934 In October 2016, FICC began to incur securities obligations at BNY. FICC
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 the cost of the BNY DOD fees. FICC is believes, however, that any burden on
notice is hereby given that on December proposing to amend the MBSD competition that would be created by
2, 2016, Fixed Income Clearing ‘‘Schedule of Charges Dealer Account the proposed rule change would be
Corporation (‘‘FICC’’) filed with the Group’’ to allow FICC to pass through necessary and appropriate in
Securities and Exchange Commission the BNY DOD fees to Clearing Members furtherance of the Act. Specifically, the
(‘‘Commission’’) the proposed rule who settle their securities obligations at proposed rule change is necessary to
change as described in Items I, II and III BNY.5 Specifically, each Clearing allow FICC to recover the cost of
below, which Items have been prepared Member who settles securities providing services to Clearing Members
by the clearing agency. The Commission obligations at BNY would be charged a by passing through the BNY DOD fees
is publishing this notice to solicit pass-through fee, calculated as a to Clearing Members who settle their
comments on the proposed rule change percentage of the total of all such costs securities obligations at BNY. The
from interested persons. incurred by MBSD. This percentage proposed rule change is appropriate
would be calculated on a monthly basis because, as stated, it would only apply
I. Clearing Agency’s Statement of the as follows: to Clearing Members who settle their
Terms of Substance of the Proposed
securities obligations at BNY, which is
Rule Change (Total dollar value of Pool Deliver
the third party that is charging the fees
Obligations and Pool Receive
The proposed rule change consists of being incurred by MBSD to provide
Obligations of such Clearing Member at
an amendment to the Mortgage-Backed FICC’s services.
BNY)
Securities Division (‘‘MBSD’’) Clearing
Rules (the ‘‘MBSD Rules’’) to include an lllllllllllllllllll (C) Clearing Agency’s Statement on
additional fee in the ‘‘Schedule of Comments on the Proposed Rule
(Total dollar value of Pool Deliver Change Received From Members,
Charges Dealer Account Group,’’ as Obligations and Pool Receive
described in greater detail below.3 The Participants, or Others
Obligations in all Dealer Accounts at
proposed fee would be implemented as BNY) Written comments related to the
sradovich on DSK3GMQ082PROD with NOTICES

of January 1, 2017. proposed rule change have not been
4 This proposed rule change would be consistent solicited or received. FICC will notify
1 15U.S.C. 78s(b)(1). with the fee schedule in FICC’s Government the Commission of any written
2 17CFR 240.19b–4. Securities Division Rulebook, available at http:// comments received by FICC.
3 Capitalized terms used herein and not otherwise www.dtcc.com/legal/rules-and-procedures.
defined shall have the meaning assigned to such 5 The proposed fee would not be applicable to
6 15 U.S.C. 78q–1(b)(3)(D).
terms in the MBSD Rules, available at http:// Brokers because Brokers do not have securities
www.dtcc.com/legal/rules-and-procedures. settlement obligations. 7 Id.

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Federal Register / Vol. 81, No. 243 / Monday, December 19, 2016 / Notices 91965

III. Date of Effectiveness of the 10:00 a.m. and 3:00 p.m. Copies of the I. Self-Regulatory Organization’s
Proposed Rule Change, and Timing for filing also will be available for Statement of the Terms of Substance of
Commission Action inspection and copying at the principal the Proposed Rule Change
The foregoing rule change has become office of FICC and on DTCC’s Web site The Exchange filed a proposal to
effective pursuant to Section (http://dtcc.com/legal/sec-rule- amend Exchange Rule 11.27(b)
19(b)(3)(A) 8 of the Act and paragraph (f) filings.aspx). All comments received regarding the data collection
of Rule 19b–4 9 thereunder. At any time will be posted without change; the requirements of the Regulation NMS
within 60 days of the filing of the Commission does not edit personal Plan to Implement a Tick Size Pilot
proposed rule change, the Commission identifying information from Program (‘‘Plan’’).
summarily may temporarily suspend submissions. You should submit only The text of the proposed rule change
such rule change if it appears to the information that you wish to make is available at the Exchange’s Web site
Commission that such action is available publicly. All submissions at www.batstrading.com, at the
necessary or appropriate in the public should refer to File Number SR–FICC– principal office of the Exchange, and at
interest, for the protection of investors, 2016–008 and should be submitted on the Commission’s Public Reference
or otherwise in furtherance of the or before January 9, 2017. Room.
purposes of the Act.
For the Commission, by the Division of II. Self-Regulatory Organization’s
IV. Solicitation of Comments Trading and Markets, pursuant to delegated Statement of the Purpose of, and
Interested persons are invited to authority.10 Statutory Basis for, the Proposed Rule
submit written data, views and Eduardo A. Aleman, Change
arguments concerning the foregoing, Assistant Secretary. In its filing with the Commission, the
including whether the proposed rule [FR Doc. 2016–30388 Filed 12–16–16; 8:45 am] Exchange included statements
change is consistent with the Act. concerning the purpose of and basis for
BILLING CODE 8011–01–P
Comments may be submitted by any of the proposed rule change and discussed
the following methods: any comments it received on the
Electronic Comments SECURITIES AND EXCHANGE proposed rule change. The text of these
COMMISSION statements may be examined at the
• Use the Commission’s Internet
places specified in Item IV below. The
comment form
(http://www.sec.gov/rules/sro.shtml); [Release No. 34–79534; File No. SR–
Exchange has prepared summaries, set
or BatsBYX–2016–37]
forth in Sections A, B, and C below, of
• Send an email to rule-comments@ the most significant parts of such
sec.gov. Please include File Number SR– Self-Regulatory Organizations; Bats statements.
FICC–2016–008 on the subject line. BYX Exchange, Inc.; Notice of Filing (A) Self-Regulatory Organization’s
Paper Comments and Immediate Effectiveness of a Statement of the Purpose of, and
Proposed Rule Change To Amend Statutory Basis for, the Proposed Rule
• Send paper comments in triplicate Exchange Rule 11.27(b) Regarding the Change
to Secretary, Securities and Exchange Data Collection Requirements of the
Commission, 100 F Street NE., 1. Purpose
Regulation NMS Plan To Implement a
Washington, DC 20549. Tick Size Pilot Program On August 25, 2014, the Exchange,
All submissions should refer to File and several other self-regulatory
Number SR–FICC–2016–008. This file December 13, 2016. organizations (the ‘‘Participants’’) filed
number should be included on the with the Commission, pursuant to
subject line if email is used. To help the Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the Section 11A of the Act 5 and Rule 608
Commission process and review your of Regulation NMS thereunder,6 the
comments more efficiently, please use ‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November Plan to Implement a Tick Size Pilot
only one method. The Commission will Program.7 The Participants filed the
post all comments on the Commission’s 30, 2016, Bats BYX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) filed with the Plan to comply with an order issued by
Internet Web site (http://www.sec.gov/ the Commission on June 24, 2014.8 The
rules/sro.shtml). Copies of the Securities and Exchange Commission
(‘‘Commission’’) the proposed rule Plan was published for comment in the
submission, all subsequent Federal Register on November 7, 2014,
amendments, all written statements change as described in Items I and II
and approved by the Commission, as
with respect to the proposed rule below, which Items have been prepared
modified, on May 6, 2015.9 The
change that are filed with the by the Exchange. The Exchange has
Commission approved the Pilot on a
Commission, and all written designated this proposal as a ‘‘non- two-year basis, with implementation to
communications relating to the controversial’’ proposed rule change begin no later than May 6, 2016.10 On
proposed rule change between the pursuant to Section 19(b)(3)(A) of the November 6, 2015, the SEC exempted
Commission and any person, other than Act 3 and Rule 19b–4(f)(6)(iii) the Participants from implementing the
those that may be withheld from the thereunder,4 which renders it effective
public in accordance with the upon filing with the Commission. The 5 15 U.S.C. 78k–1.
provisions of 5 U.S.C. 552, will be Commission is publishing this notice to 6 17 CFR 242.608.
sradovich on DSK3GMQ082PROD with NOTICES

available for Web site viewing and solicit comments on the proposed rule 7 See Letter from Brendon J. Weiss, Vice

printing in the Commission’s Public change from interested persons. President, Intercontinental Exchange, Inc., to
Reference Room, 100 F Street NE., Secretary, Commission, dated August 25, 2014.
8 See Securities Exchange Act Release No 72460
Washington, DC 20549 on official 10 17 CFR 200.30–3(a)(12). (June 24, 2014), 79 FR 36840 (June 30, 2014).
business days between the hours of 1 15 U.S.C. 78s(b)(1). 9 See Securities Exchange Act Release No. 74892
2 17 CFR 240.19b–4.
(May 6, 2015), 80 FR 27513 (May 13, 2015)
8 15 U.S.C. 78s(b)(3)(A). 3 15 U.S.C. 78s(b)(3)(A). (‘‘Approval Order’’).
9 17 CFR 240.19b–4(f). 4 17 CFR 240.19b–4(f)(6)(iii). 10 See Approval Order at 27533 and 27545.

VerDate Sep<11>2014 20:55 Dec 16, 2016 Jkt 241001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\19DEN1.SGM 19DEN1
Document Created: 2016-12-17 03:15:04
Document Modified: 2016-12-17 03:15:04
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 91964