82 FR 3032 - Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adjust Fees Related to Insurance and Retirement Processing Services
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 6 (January 10, 2017)
Federal Register Volume 82, Issue 6 (January 10, 2017)
| Page Range | 3032-3034 | |
| FR Document | 2017-00223 |
[Federal Register Volume 82, Number 6 (Tuesday, January 10, 2017)] [Notices] [Pages 3032-3034] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-00223] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79739; File No. SR-NSCC-2016-009] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adjust Fees Related to Insurance and Retirement Processing Services January 4, 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 December 28, 2016, National Securities Clearing Corporation (``NSCC'') 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. NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(2) thereunder.\4\ The proposed rule change was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- [[Page 3033]] I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change consists of modifications to Addendum A (Fee Structure) of Rules & Procedures (``Rules'') of NSCC in order to implement a tiered pricing structure for the Settlement Processing for Insurance (``STL'')[hairsp]\SM\ feature of NSCC's Insurance and Retirement Processing Services (``I&RS''), as described below.\5\ --------------------------------------------------------------------------- \5\ Capitalized terms not defined herein are defined in the Rules, available at http://www.dtcc.com/~/media/Files/Downloads/ legal/rules/nscc_rules.pdf. --------------------------------------------------------------------------- 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 The proposed rule change would adjust the fee schedule associated with NSCC's I&RS.\6\ Specifically, NSCC proposes to implement a tiered pricing structure for the STL feature.\7\ Currently, NSCC charges a flat rate of $0.65 per transaction per side for the STL feature.\8\ The proposed tiered structure would reduce the monthly fees for increased STL volumes. Therefore, under the proposed tiered pricing structure, a monthly transaction volume between 0-20,000 items would be charged a fee of $0.65 per transaction, per side; a monthly transaction volume between 20,001-30,000 items would be charged a fee of $0.35 per transaction, per side; a monthly transaction volume between 30,001- 40,000 items would be charged a fee of $0.25 per transaction, per side; and a monthly transaction volume over 40,000 items would be charged a fee of $0.15 per transaction, per side. As with all I&RS products, volume would be calculated on an aggregate basis among qualified insurance carrier members or qualified distributor members, as applicable.\9\ --------------------------------------------------------------------------- \6\ I&RS is a suite of non-guaranteed services that enables NSCC members using I&RS to exchange information and settle payments with respect to insurance products, retirement plans or programs, and other benefit plans or programs. See Rule 57 (Insurance and Retirement Processing Services), supra note 5. \7\ STL automates and centralizes the settlement of money/ funding activities between insurance companies and their intermediaries, such as broker-dealers, banks, and insurance agencies, that distribute participating insurance products. STL is a service within the In Force Transaction suite of services within I&RS. See Section 9 of Rule 57 (Insurance and Retirement Processing Services), supra note 5. \8\ See Section IV(K)(3), TIER 4 of Addendum A of the Rules, supra note 5. \9\ See note 6 to Section IV(K) of Addendum A of the Rules, supra note 5. --------------------------------------------------------------------------- The proposed fee structure is intended to incentivize use of the STL feature by discounting transaction fees for members that reach the defined transaction tier volume thresholds. In addition, by basing the fee on each member's utilization of the STL feature, the proposed rule change would reduce STL fees to further align these fees with the costs of providing the service because, as volumes increase the cost of providing this service decreases. The proposed changes would take effect on January 1, 2017. 2. Statutory Basis Section 17A(b)(3)(D) of the Act \10\ requires that NSCC's Rules provide for the equitable allocation of reasonable dues, fees, and other charges among its members. The proposed fee is equitably allocated among members because it is based on each member's utilization of the STL feature, as measured by their monthly STL volume. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78q-1(b)(3)(D). --------------------------------------------------------------------------- In addition, NSCC believes that the proposed fee is reasonable because it would enable NSCC to better align its revenue for STL with the costs and expenses required for NSCC to provide this service to its members, while also providing this service to members at a lower cost. Specifically, as STL volumes increase, the costs of providing the STL feature decreases. NSCC has determined that reducing the fees as volumes increase would better align the revenue from STL to the cost of providing this service to members. Therefore, NSCC believes the proposed rule change is consistent with Section 17A(b)(3)(D).\11\ --------------------------------------------------------------------------- \11\ Id. --------------------------------------------------------------------------- (B) Clearing Agency's Statement on Burden on Competition NSCC believes that the proposed rule change could have an impact on competition because the proposed rule change would charge a lower fee for higher STL volumes. NSCC 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 better align the fees charged for the STL feature with the costs and expenses required for NSCC to provide this service to its members, because, as volumes increase the cost of providing this service decreases. The proposed rule change is appropriate because, as stated, the proposed fee would be equitably allocated among members based on each member's utilization of the STL feature, as measured by their monthly STL volume. (C) Clearing Agency's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others NSCC has not received or solicited any written comments relating to this proposal. NSCC will notify the Commission of any written comments received by NSCC. 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 \12\ and subparagraph (f) of Rule 19b-4 thereunder.\13\ 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. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- 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 CommentsUse 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-NSCC-2016-009 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. [[Page 3034]] All submissions should refer to File Number SR-NSCC-2016-009. 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 NSCC 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-NSCC-2016-009 and should be submitted on or before January 31, 2017. --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-00223 Filed 1-9-17; 8:45 am] BILLING CODE 8011-01-P
![3032 Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices
continue to be processed on a trade-for- and replace it with ‘‘Settlement Date’’ in III. Conclusion
trade basis. the definition for ‘‘T’’ to clarify that T+2
Similarly, in Section B, with regards would normally be the Settlement Date On the basis of the foregoing, the
to trades that are to be processed on a after the implementation of the Commission finds that the proposals are
trade-for-trade basis, clarify that such Shortened Settlement Cycle. consistent with the requirements of the
process occurs for securities that are Act and in particular with the
• In Procedure XVI, correct a
subject to a voluntary corporate requirements of Section 17A of the
grammatical error.
reorganization which have a trade date Act 11 and the rules and regulations
on or before the expiration of the II. Discussion and Commission thereunder.
voluntary corporate reorganization and Findings It is therefore ordered, pursuant to
which are compared or received ‘‘on Section 19(b)(2) of the Act, that
SD–1, after the cutoff time established Section 19(b)(2)(C) of the Act 7 directs
the Commission to approve a proposed proposed rule change SR–NSCC–2016–
by the Corporation’’ and not ‘‘after SD–
rule change of a self-regulatory 007 be, and hereby is, approved.12
1.’’ This shift in cutoff time is because
‘‘as of’’ regular way trades compared organization if it finds that such For the Commission, by the Division of
and received prior to 11:30 a.m. on SD– proposed rule change is consistent with Trading and Markets, pursuant to delegated
1 would be processed as multilaterally the requirements of the Act and rules authority.13
netted balance orders when reported on and regulations thereunder applicable to Eduardo A. Aleman,
the Consolidated Trade Summary issued such organization. The Commission Assistant Secretary.
at approximately 12:00 p.m. ET on SD– believes the proposal is consistent with [FR Doc. 2017–00218 Filed 1–9–17; 8:45 am]
1. ‘‘As of’’ regular way trades compared Section 17A(b)(3)(F) of the Act.
BILLING CODE 8011–01–P
and reported thereafter would continue Section 17A(b)(3)(F) of the Act
to be processed on a trade-for-trade requires, in part, that NSCC’s Rules be
basis. designed to promote the prompt and SECURITIES AND EXCHANGE
2. Procedure VII (CNS Accounting accurate clearance and settlement of COMMISSION
Operation) securities transactions.8 The
Commission believes that the proposed
In Section D.1, with regards to the [Release No. 34–79739; File No. SR–NSCC–
changes are consistent with the
timing of the distribution of Projection 2016–009]
requirements of Section 17A(b)(3)(F)
Reports, delete the reference to ‘‘[e]ach because by conforming NSCC’s
morning’’ and replace it with ‘‘[t]wice a Self-Regulatory Organizations;
timeframes and/or cutoff times to National Securities Clearing
day’’ because currently NSCC accommodate the Shortened Settlement
distributes the Projection Report only Corporation; Notice of Filing and
Cycle, the proposal would help ensure
once a day; however, after the Immediate Effectiveness of Proposed
that securities transactions would be
implementation of the Shortened Rule Change To Adjust Fees Related to
promptly and accurately cleared and
Settlement Cycle, NSCC would be settled within the Shortened Settlement Insurance and Retirement Processing
distributing the Projection Reports twice Cycle. Similarly, the related process Services
a day to enable Members to view their changes proposed are designed to
updated positions on a more timely January 4, 2017.
update NSCC’s operations in order to
basis. facilitate the move to the Shortened Pursuant to Section 19(b)(1) of the
C. Other Technical Changes and Settlement Cycle and, by extension, Securities Exchange Act of 1934
Corrections facilitate the prompt and accurate (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
clearance and settlement of securities notice is hereby given that on December
During its review of the Rules in 28, 2016, National Securities Clearing
transactions submitted to NSCC for
connection with the Shortened Corporation (‘‘NSCC’’) filed with the
clearing and settlement. Therefore, the
Settlement Cycle, NSCC has identified Securities and Exchange Commission
proposed rule change would help
the following technical changes and/or (‘‘Commission’’) the proposed rule
promote the prompt and accurate
corrections that it proposes to make to change as described in Items I, II and III
clearance and settlement of securities
the Rules in order to ensure that the
transactions, consistent with Section below, which Items have been prepared
Rules remain consistent and accurate:
• In Rule 3, Section 1(c), add a 17A(b)(3)(F) of the Act.9 by the clearing agency. NSCC filed the
footnote that identifies the term As the proposed rule change pertains proposed rule change pursuant to
‘‘CUSIP’’ as a registered trademark of to technical changes to the Rules, the Section 19(b)(3)(A) of the Act 3 and Rule
the American Bankers Association. Commission finds the technical changes 19b–4(f)(2) thereunder.4 The proposed
• In Procedure II, Section G, correct a also consistent with Section rule change was effective upon filing
grammatical error. 17A(b)(3)(F) of the Act 10 because the with the Commission. The Commission
• In Procedure VII, Sections B and D, technical updates are designed to make is publishing this notice to solicit
correct grammatical errors. the Rules more clear, consistent, and comments on the proposed rule change
• In Procedure X, Section B, delete current for Members that rely on them. from interested persons.
the reference to the timeframe for the Therefore, the proposed technical
delivery of Liability Notices to the changes would help support NSCC’s 11 15 U.S.C. 78q–1.
pmangrum on DSK3GDR082PROD with NOTICES
contra party by Members holding the prompt and accurate clearance and 12 In approving the proposed rule change, the
receive balance orders for warrants, settlement of securities transactions Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
rights, convertible securities or certain made by Members. U.S.C. 78c(f).
other securities so the Members would 13 17 CFR 200.30–3(a)(12).
remain solely subject to the schedules of 7 15 U.S.C. 78s(b)(2)(C). 1 15 U.S.C. 78s(b)(1).
the relevant exchanges. 8 15 U.S.C. 78q–1(b)(3)(F). 2 17 CFR 240.19b–4.
• In Procedure XIII, delete the 9 Id. 3 15 U.S.C. 78s(b)(3)(A).
incorrect reference to ‘‘Settlement Day’’ 10 Id. 4 17 CFR 240.19b–4(f)(2).
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![3034 Federal Register / Vol. 82, No. 6 / Tuesday, January 10, 2017 / Notices
All submissions should refer to File notice is hereby given that on December and to provide a revised date for adding
Number SR–NSCC–2016–009. This file 23, 2016, ISE Gemini, LLC (‘‘ISE replacement issues to the Penny Pilot
number should be included on the Gemini’’ or ‘‘Exchange’’) filed with the Program. The Exchange proposes that
subject line if email is used. To help the Securities and Exchange Commission any Penny Pilot Program issues that
Commission process and review your (‘‘SEC’’ or ‘‘Commission’’) the proposed have been delisted may be replaced on
comments more efficiently, please use rule change as described in Items I and the second trading day following
only one method. The Commission will II, below, which Items have been January 1, 2017. The replacement issues
post all comments on the Commission’s prepared by the Exchange. The will be selected based on trading
Internet Web site (http://www.sec.gov/ Commission is publishing this notice to activity for the most recent six month
rules/sro.shtml). Copies of the solicit comments on the proposed rule period excluding the month
submission, all subsequent change from interested persons. immediately preceding the replacement
amendments, all written statements (i.e., beginning June 1, 2016, and ending
I. Self-Regulatory Organization’s
with respect to the proposed rule November 30, 2016). This filing does
Statement of the Terms of Substance of
change that are filed with the not propose any substantive changes to
the Proposed Rule Change
Commission, and all written the Penny Pilot Program: All classes
communications relating to the The Exchange proposes to amend its currently participating will remain the
proposed rule change between the rules to extend a pilot program to quote same and all minimum increments will
Commission and any person, other than and to trade certain options classes in remain unchanged. The Exchange
those that may be withheld from the penny increments. believes the benefits to public customers
public in accordance with the The text of the proposed rule change and other market participants who will
provisions of 5 U.S.C. 552, will be is available on the Exchange’s Web site be able to express their true prices to
available for Web site viewing and at www.ise.com, at the principal office buy and sell options have been
printing in the Commission’s Public of the Exchange, and at the demonstrated to outweigh any increase
Reference Room, 100 F Street NE., Commission’s Public Reference Room. in quote traffic.
Washington, DC 20549, on official II. Self-Regulatory Organization’s
business days between the hours of 2. Statutory Basis
Statement of the Purpose of, and
10:00 a.m. and 3:00 p.m. Copies of the Statutory Basis for, the Proposed Rule The Exchange believes that the
filing also will be available for Change proposed rule change is consistent with
inspection and copying at the principal the requirements of the Act and the
office of NSCC and on DTCC’s Web site In its filing with the Commission, the rules and regulations thereunder that
(http://dtcc.com/legal/sec-rule- Exchange included statements are applicable to a national securities
filings.aspx). All comments received concerning the purpose of and basis for exchange, and, in particular, with the
will be posted without change; the the proposed rule change and discussed requirements of Section 6(b) of the Act.4
Commission does not edit personal any comments it received on the Specifically, the proposed rule change is
identifying information from proposed rule change. The text of these consistent with Section 6(b)(5) of the
submissions. You should submit only statements may be examined at the Act,5 because it is designed to promote
information that you wish to make places specified in Item IV below. The just and equitable principles of trade,
available publicly. All submissions Exchange has prepared summaries, set remove impediments to and perfect the
should refer to File Number SR–NSCC– forth in sections A, B, and C below, of mechanisms of a free and open market
2016–009 and should be submitted on the most significant aspects of such and a national market system and, in
or before January 31, 2017. statements. general, to protect investors and the
For the Commission, by the Division of A. Self-Regulatory Organization’s public interest. In particular, the
Trading and Markets, pursuant to delegated Statement of the Purpose of, and proposed rule change, which extends
authority.14 Statutory Basis for, the Proposed Rule the Penny Pilot Program for an
Eduardo A. Aleman, Change additional six months, will enable
Assistant Secretary. public customers and other market
1. Purpose participants to express their true prices
[FR Doc. 2017–00223 Filed 1–9–17; 8:45 am]
BILLING CODE 8011–01–P
Under the Penny Pilot Program, the to buy and sell options to the benefit of
minimum price variation for all all market participants.
participating options classes, except for
B. Self-Regulatory Organization’s
SECURITIES AND EXCHANGE the Nasdaq–100 Index Tracking Stock
Statement on Burden on Competition
COMMISSION (‘‘QQQQ’’), the SPDR S&P 500 Exchange
Traded Fund (‘‘SPY’’) and the iShares In accordance with Section 6(b)(8) of
[Release No. 34–79741; File No. SR– the Act,6 the Exchange does not believe
Russell 2000 Index Fund (‘‘IWM’’), is
ISEGemini–2016–25] that the proposed rule change will
$0.01 for all quotations in options series
Self-Regulatory Organizations; ISE that are quoted at less than $3 per impose any burden on intermarket or
Gemini, LLC; Notice of Filing and contract and $0.05 for all quotations in intramarket competition that is not
Immediate Effectiveness of Proposed options series that are quoted at $3 per necessary or appropriate in furtherance
Rule Change To Amend Rules To contract or greater. QQQQ, SPY and of the purposes of the Act. Specifically,
Extend a Pilot Program IWM are quoted in $0.01 increments for the Exchange believes that, by extending
all options series. The Penny Pilot the expiration of the Penny Pilot
pmangrum on DSK3GDR082PROD with NOTICES
January 4, 2017. Program is currently scheduled to Program, the proposed rule change will
Pursuant to Section 19(b)(1) of the expire on December 31, 2016.3 The allow for further analysis of the Penny
Securities Exchange Act of 1934 Exchange proposes to extend the Penny Pilot Program and a determination of
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Pilot Program through June 30, 2017, how the Penny Pilot Program should be
14 17 CFR 200.30–3(a)(12). 3 See Exchange Act Release No. 78201 (June 30, 4 15 U.S.C. 78f(b).
1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78f(b)(5).
2016), 81 FR 44393 (July 7, 2016) (SR–ISE Gemini–
2 17 CFR 240.19b–4. 2016–06). 6 15 U.S.C. 78f(b)(8).
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Document Created: 2018-02-01 14:54:13
Document Modified: 2018-02-01 14:54:13
| 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 | 82 FR 3032 |
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