82 FR 19136 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish Effective Date of Government Securities Division Margin Proxy Rule Changes

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 78 (April 25, 2017)

[Federal Register Volume 82, Number 78 (Tuesday, April 25, 2017)]
[Notices]
[Pages 19136-19137]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-08282]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80484; File No. SR-FICC-2017-011]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Establish Effective Date of Government Securities Division Margin 
Proxy Rule Changes

April 19, 2017.
    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 April 13, 2017, 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 amendments to the Government 
Securities Division (``GSD'') Rulebook (``GSD Rules'') \3\ of FICC in 
order to establish April 24, 2017 as the effective date of rule changes 
submitted pursuant to rule filing SR-FICC-2017-001 (``Rule Filing'') 
\4\ and advance notice SR-FICC-2017-801 (``Advance Notice'').\5\
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    \3\ Capitalized terms used herein and not otherwise defined 
shall have the meaning assigned to such terms in the GSD Rules, 
available at www.dtcc.com/~/media/Files/Downloads/legal/rules/
ficc_gov_rules.pdf.
    \4\ See Securities Exchange Act Release No. 79958 (February 3, 
2017), 82 FR 10117 (February 9, 2017) (SR-FICC-2017-001).
    \5\ See Securities Exchange Act Release No. 80139 (March 2, 
2017), 82 FR 13026 (March 8, 2017) (SR-FICC-2017-801).
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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
    On March 30, 2017, the Commission issued an order approving the 
Rule Filing,\6\ which was filed by FICC pursuant to Section 19(b)(2) of 
the Act.\7\ The Commission also issued a notice of no objection to the 
Advance Notice,\8\ which was filed with the Commission pursuant to 
Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act entitled the Payment, Clearing, and 
Settlement Supervision Act of 2010 \9\ and Rule 19b-4(n)(1)(i) of the 
Act.\10\
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    \6\ See Securities Exchange Act Release No. 80349 (March 30, 
2017), 82 FR 16638 (April 5, 2017) (SR-FICC-2017-001).
    \7\ 15 U.S.C. 78s(b)(2).
    \8\ See Securities Exchange Act Release No. 80341 (March 30, 
2017), 82 FR 16644 (April 5, 2017) (SR-FICC-2017-801).
    \9\ 12 U.S.C. 5465(e)(1).
    \10\ 17 CFR 240.19b-4(n)(1)(i).
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    The purpose of the Rule Filing and the Advance Notice is to amend 
the GSD Rules to (i) include a minimum volatility calculation (referred 
to as the ``Margin Proxy'') when determining a GSD Netting Member's VaR 
Charge, (ii) modify the calculation of GSD's Coverage Charge in 
circumstances where the Margin Proxy applies and (iii) make certain 
technical corrections.
    FICC is filing this proposed rule change to establish April 24, 
2017 as the effective date of rule changes submitted pursuant to the 
Rule Filing and the Advance Notice. Specifically, FICC would add a 
legend to both GSD Rule 1 and GSD Rule 4 to state that the rule changes 
submitted pursuant to the Rule Filing and the Advance Notice have been 
approved and not objected to, respectively, but are not yet effective. 
The legend would provide April 24, 2017 as the date on which these rule 
changes would become effective, and would include the file numbers of 
the Rule Filing and the Advance Notice. The legend would state that 
bold and underlined text indicates added language, and that bold and 
strikethrough text indicates deleted language. The legend would also 
state that, once effective, the legend would automatically be removed 
from the GSD Rules and the formatting of the rule changes would 
automatically be revised accordingly.
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires, in part, that the GSD 
Rules be designed to (i) promote the prompt and accurate clearance and 
settlement of securities transactions and (ii) remove impediments to 
and perfect the mechanism of a national system for the prompt and 
accurate clearance and settlement of securities transactions, and, in 
general, to protect investors and the public interest.\11\ The proposed 
rule change would establish the effective date of rule changes 
described above and provide GSD Members with an understanding of when 
these rule changes will begin to affect them. Knowing when the rule 
changes will begin to affect GSD Members would enable them to timely 
fulfill their obligations to FICC, which would in turn ensure FICC's 
processes work as intended. Therefore, FICC believes that the proposed 
rule change would promote the prompt and accurate clearance and 
settlement of securities transactions as well as remove impediments to 
and perfect the mechanism of a national system for the prompt and 
accurate clearance and settlement of securities transactions, 
consistent with Section 17A(b)(3)(F) of the Act cited above.
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    \11\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Clearing Agency's Statement on Burden on Competition

    FICC does not believe that the proposed rule change to establish an 
effective date for the rule changes described above would have any 
impact, or impose any burden, on competition because the proposed rule 
change is intended to provide additional clarity in the GSD Rules with 
respect to when these rule changes would become effective for GSD 
Members. As such, the

[[Page 19137]]

proposed rule change would not impact a particular category of GSD 
Members nor would it impact particular types of businesses that GSD 
Members are engaged in.

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

    FICC has not received or solicited any written comments relating to 
this proposal. FICC will notify the Commission of any written comments 
received by FICC.

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) of the Act and paragraph (f) of Rule 19b-4 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.

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-2017-011 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-2017-011. 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-2017-011 and should be 
submitted on or before May 16, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08282 Filed 4-24-17; 8:45 am]
 BILLING CODE 8011-01-P