82 FR 61624 - Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Eliminate the Development Fees From the Mortgage-Backed Securities Division Clearing Rules

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 248 (December 28, 2017)

Page Range		61624-61625
FR Document		2017-28001
Federal Register, Volume 82 Issue 248 (Thursday, December 28, 2017)
[Federal Register Volume 82, Number 248 (Thursday, December 28, 2017)]
[Notices]
[Pages 61624-61625]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-28001]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82386; File No. SR-FICC-2017-023]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Eliminate the Development Fees From the Mortgage-Backed Securities 
Division Clearing Rules

December 21, 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 19, 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. FICC 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 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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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 the elimination of the 
Development Fees from the Fee Schedule in the FICC Mortgage-Backed 
Securities Division (``MBSD'') Clearing Rules (``MBSD Rules''),\5\ as 
described in greater detail below.
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    \5\ Capitalized terms not defined herein are defined 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
    On December 30, 2014, FICC filed proposed rule change SR-FICC-2014-
12 \6\ with the Commission to amend the MBSD Rules to include fees to 
cover the development cost of the MBSD novation service (``Development 
Fees'').\7\ The filing stated that Clearing Members would be assessed 
the Development Fees as of January 1, 2015 and such fees would remain 
in effect for three (3) consecutive years.\8\ Because the Development 
Fees will have been in place for three (3) consecutive years as of 
December 31, 2017, and FICC has used the Development Fees to develop 
the operational aspect of the MBSD novation service,\9\ FICC is 
proposing to

[[Page 61625]]

eliminate the Development Fees from the MBSD Rules as of January 1, 
2018.
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    \6\ See Securities Exchange Act Release No. 74033 (January 12, 
2015), 80 FR 2452 (January 16, 2015) (SR-FICC-2014-12).
    \7\ Id. at 2453.
    \8\ Id.
    \9\ See Securities Exchange Act Release No. 80716 (May 18, 
2017), 82 FR 23852 (May 24, 2017) (SR-FICC-2017-012). Specifically, 
the purpose of the rule filing SR-FICC-2017-012 was to amend the 
MBSD Rules to (1) move the time that FICC treats itself as the 
settlement counterparty for SBO-Destined Trades to the time of trade 
comparison, which is earlier in the lifecycle of the trade, (2) move 
the time that FICC novates and treats itself as the settlement 
counterparty for Trade-for-Trade Transactions to the time of trade 
comparison, which is earlier in the lifecycle of the trade, (3) 
novate and establish FICC as the settlement counterparty at the time 
of trade comparison for Specified Pool Trades, and (4) guarantee and 
novate Stipulated Trades, a proposed new trade type, at the time of 
trade comparison and treat FICC as the settlement counterparty at 
such time. In connection with these changes, FICC also proposed new 
processes that would promote operational efficiencies for Clearing 
Members. The full text of rule filing SR-FICC-2017-012 is available 
at http://www.dtcc.com/legal/sec-rule-filings.
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2. Statutory Basis
    Section 17A(b)(3)(D) of the Act requires that the MBSD Rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its participants.\10\ FICC believes that its 
proposal to eliminate the Development Fees would be equitable because 
the proposed change would be eliminated for all Clearing Members. FICC 
believes that the proposed change to eliminate the Development Fees is 
reasonable because, consistent with SR-FICC-2014-12 (which instituted 
these fees),\11\ the Development Fees will have been in place for three 
(3) consecutive years as of December 31, 2017, and such fees have been 
used to develop the operational aspects of the MBSD novation service 
that has been implemented. Therefore, FICC believes the proposed rule 
change is consistent with the requirements of Section 17A(b)(3)(D) of 
the Act.
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    \10\ 15 U.S.C. 78q-1(b)(3)(D).
    \11\ Supra note 6.
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    The proposed rule change is also designed to be consistent with 
Rule 17Ad-22(e)(23) under the Act. Rule 17Ad-22(e)(23) requires FICC, 
inter alia, to establish, implement, maintain and enforce written 
policies and procedures reasonably designed to provide sufficient 
information to enable participants to identify and evaluate the risks, 
fees, and other material costs they incur by participating in FICC.\12\ 
The proposed rule change, as described above, would amend the MBSD 
Rules to eliminate the Development Fees. As such, FICC believes that 
the proposed change would provide sufficient information to enable 
Clearing Members to evaluate fees and other material costs of utilizing 
MBSD's services, in accordance with the requirements of Rule 17Ad-
22(e)(23), promulgated under the Act, cited above.
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    \12\ 17 CFR 240.17Ad-22(e)(23).
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(B) Clearing Agency's Statement on Burden on Competition

    FICC does not believe that the proposed change would impact, or 
impose any burden on, competition \13\ because the elimination of the 
Development Fees would result in a reduction of costs incurred by 
Clearing Members that utilize MBSD's services.
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    \13\ 15 U.S.C. 78q-1(b)(3)(I).
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    Written comments relating to the proposed rule change have not been 
solicited or received. 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 \14\ and paragraph (f) of Rule 19b-4 
thereunder.\15\ 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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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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-2017-023 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-FICC-2017-023. 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 website (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 website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549-1090 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 
website (http://dtcc.com/legal/sec-rule-filings.aspx). All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly.
    All submissions should refer to File Number SR-FICC-2017-023 and 
should be submitted on or before January 18, 2018.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-28001 Filed 12-27-17; 8:45 am]
 BILLING CODE 8011-01-P
61624 Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices

Commission designates the proposed printing in the Commission’s Public I. Clearing Agency’s Statement of the
rule change as operative upon filing Reference Room, 100 F Street NE, Terms of Substance of the Proposed
with the Commission.14 Washington, DC 20549, on official Rule Change
At any time within 60 days of the business days between the hours of The proposed rule change consists of
filing of such proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the the elimination of the Development Fees
Commission summarily may filing also will be available for from the Fee Schedule in the FICC
temporarily suspend such rule change if inspection and copying at the principal Mortgage-Backed Securities Division
it appears to the Commission that such office of the Exchange. All comments (‘‘MBSD’’) Clearing Rules (‘‘MBSD
action is necessary or appropriate in the Rules’’),5 as described in greater detail
received will be posted without change.
public interest, for the protection of below.
Persons submitting comments are
investors, or otherwise in furtherance of
the purposes of the Act. If the cautioned that we do not redact or edit II. Clearing Agency’s Statement of the
Commission takes such action, the personal identifying information from Purpose of, and Statutory Basis for, the
Commission shall institute proceedings comment submissions. You should Proposed Rule Change
under Section 19(b)(2)(B) 15 of the Act to submit only information that you wish
In its filing with the Commission, the
determine whether the proposed rule to make available publicly. All
clearing agency included statements
change should be approved or submissions should refer to File concerning the purpose of and basis for
disapproved. Number SR–PEARL–2017–39 and the proposed rule change and discussed
should be submitted on or before any comments it received on the
IV. Solicitation of Comments
January 18, 2018. proposed rule change. The text of these
Interested persons are invited to
For the Commission, by the Division of statements may be examined at the
submit written data, views, and
Trading and Markets, pursuant to delegated places specified in Item IV below. The
arguments concerning the foregoing,
authority.16 clearing agency has prepared
including whether the proposed rule
Eduardo A. Aleman, summaries, set forth in sections A, B,
change is consistent with the Act.
Assistant Secretary.
and C below, of the most significant
Comments may be submitted by any of
aspects of such statements.
the following methods: [FR Doc. 2017–28079 Filed 12–27–17; 8:45 am]
BILLING CODE 8011–01–P (A) Clearing Agency’s Statement of the
Electronic Comments
Purpose of, and Statutory Basis for, the
• Use the Commission’s internet Proposed Rule Change
comment form (http://www.sec.gov/ SECURITIES AND EXCHANGE
rules/sro.shtml); or 1. Purpose
COMMISSION
• Send an email to rule-comments@ On December 30, 2014, FICC filed
sec.gov. Please include File Number SR– proposed rule change SR–FICC–2014–
PEARL–2017–39 on the subject line. [Release No. 34–82386; File No. SR–FICC–
12 6 with the Commission to amend the
2017–023]
Paper Comments MBSD Rules to include fees to cover the
Self-Regulatory Organizations; Fixed development cost of the MBSD novation
• Send paper comments in triplicate service (‘‘Development Fees’’).7 The
to Secretary, Securities and Exchange Income Clearing Corporation; Notice of
filing stated that Clearing Members
Commission, 100 F Street NE, Filing and Immediate Effectiveness of
would be assessed the Development
Washington, DC 20549–1090. a Proposed Rule Change To Eliminate
Fees as of January 1, 2015 and such fees
All submissions should refer to File the Development Fees From the would remain in effect for three (3)
Number SR–PEARL–2017–39. This file Mortgage-Backed Securities Division consecutive years.8 Because the
number should be included on the Clearing Rules Development Fees will have been in
subject line if email is used. To help the place for three (3) consecutive years as
December 21, 2017.
Commission process and review your of December 31, 2017, and FICC has
comments more efficiently, please use Pursuant to Section 19(b)(1) of the used the Development Fees to develop
only one method. The Commission will Securities Exchange Act of 1934 the operational aspect of the MBSD
post all comments on the Commission’s (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 novation service,9 FICC is proposing to
internet website (http://www.sec.gov/ notice is hereby given that on December
rules/sro.shtml). Copies of the 19, 2017, Fixed Income Clearing 5 Capitalized terms not defined herein are defined

submission, all subsequent Corporation (‘‘FICC’’) filed with the in the MBSD Rules, available at http://
www.dtcc.com/legal/rules-and-procedures.
amendments, all written statements Securities and Exchange Commission 6 See Securities Exchange Act Release No. 74033
with respect to the proposed rule (‘‘Commission’’) the proposed rule (January 12, 2015), 80 FR 2452 (January 16, 2015)
change that are filed with the change as described in Items I, II and III (SR–FICC–2014–12).
Commission, and all written below, which Items have been prepared 7 Id. at 2453.

communications relating to the by the clearing agency. FICC filed the 8 Id.
9 See Securities Exchange Act Release No. 80716
proposed rule change between the proposed rule change pursuant to (May 18, 2017), 82 FR 23852 (May 24, 2017) (SR–
Commission and any person, other than Section 19(b)(3)(A) of the Act 3 and Rule FICC–2017–012). Specifically, the purpose of the
those that may be withheld from the 19b–4(f)(2) thereunder.4 The rule filing SR–FICC–2017–012 was to amend the
public in accordance with the Commission is publishing this notice to MBSD Rules to (1) move the time that FICC treats
provisions of 5 U.S.C. 552, will be itself as the settlement counterparty for SBO-
sradovich on DSK3GMQ082PROD with NOTICES

solicit comments on the proposed rule Destined Trades to the time of trade comparison,
available for website viewing and change from interested persons. which is earlier in the lifecycle of the trade, (2)
move the time that FICC novates and treats itself as
14 For purposes only of waiving the operative
16 17 the settlement counterparty for Trade-for-Trade
delay for this proposal, the Commission has CFR 200.30–3(a)(12).
1 15
Transactions to the time of trade comparison, which
considered the proposed rule’s impact on U.S.C. 78s(b)(1). is earlier in the lifecycle of the trade, (3) novate and
2 17 CFR 240.19b–4.
efficiency, competition, and capital formation. See establish FICC as the settlement counterparty at the
15 U.S.C. 78c(f). 3 15 U.S.C. 78s(b)(3)(A).
time of trade comparison for Specified Pool Trades,
15 15 U.S.C. 78s(b)(2)(B). 4 17 CFR 240.19b–4(f)(2). and (4) guarantee and novate Stipulated Trades, a

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Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices 61625

eliminate the Development Fees from reduction of costs incurred by Clearing communications relating to the
the MBSD Rules as of January 1, 2018. Members that utilize MBSD’s services. proposed rule change between the
Commission and any person, other than
2. Statutory Basis (C) Clearing Agency’s Statement on
those that may be withheld from the
Section 17A(b)(3)(D) of the Act Comments on the Proposed Rule
public in accordance with the
requires that the MBSD Rules provide Change Received From Members,
provisions of 5 U.S.C. 552, will be
for the equitable allocation of reasonable Participants, or Others
available for website viewing and
dues, fees, and other charges among its Written comments relating to the printing in the Commission’s Public
participants.10 FICC believes that its proposed rule change have not been Reference Room, 100 F Street NE,
proposal to eliminate the Development solicited or received. FICC will notify Washington, DC 20549–1090 on official
Fees would be equitable because the the Commission of any written business days between the hours of
proposed change would be eliminated comments received by FICC. 10:00 a.m. and 3:00 p.m. Copies of the
for all Clearing Members. FICC believes III. Date of Effectiveness of the filing also will be available for
that the proposed change to eliminate Proposed Rule Change, and Timing for inspection and copying at the principal
the Development Fees is reasonable Commission Action office of FICC and on DTCC’s website
because, consistent with SR–FICC– (http://dtcc.com/legal/sec-rule-
2014–12 (which instituted these fees),11 The foregoing rule change has become filings.aspx). All comments received
the Development Fees will have been in effective pursuant to Section 19(b)(3)(A) will be posted without change. Persons
place for three (3) consecutive years as of the Act 14 and paragraph (f) of Rule submitting comments are cautioned that
of December 31, 2017, and such fees 19b–4 thereunder.15 At any time within we do not redact or edit personal
have been used to develop the 60 days of the filing of the proposed rule identifying information from comment
operational aspects of the MBSD change, the Commission summarily may submissions. You should submit only
novation service that has been temporarily suspend such rule change if information that you wish to make
implemented. Therefore, FICC believes it appears to the Commission that such available publicly.
the proposed rule change is consistent action is necessary or appropriate in the All submissions should refer to File
with the requirements of Section public interest, for the protection of Number SR–FICC–2017–023 and should
17A(b)(3)(D) of the Act. investors, or otherwise in furtherance of be submitted on or before January 18,
The proposed rule change is also the purposes of the Act. 2018.
designed to be consistent with Rule IV. Solicitation of Comments For the Commission, by the Division of
17Ad–22(e)(23) under the Act. Rule Trading and Markets, pursuant to delegated
17Ad–22(e)(23) requires FICC, inter alia, Interested persons are invited to
authority.16
to establish, implement, maintain and submit written data, views and
arguments concerning the foregoing, Eduardo A. Aleman,
enforce written policies and procedures Assistant Secretary.
reasonably designed to provide including whether the proposed rule
sufficient information to enable change is consistent with the Act. [FR Doc. 2017–28001 Filed 12–27–17; 8:45 am]

participants to identify and evaluate the Comments may be submitted by any of BILLING CODE 8011–01–P

risks, fees, and other material costs they the following methods:
incur by participating in FICC.12 The Electronic Comments SECURITIES AND EXCHANGE
proposed rule change, as described • Use the Commission’s internet COMMISSION
above, would amend the MBSD Rules to comment form (http://www.sec.gov/
eliminate the Development Fees. As rules/sro.shtml); or [Release No. 34–82390; File No. SR–NYSE
such, FICC believes that the proposed • Send an email to rule-comments@ Arca–2017–107]
change would provide sufficient sec.gov. Please include File Number SR–
information to enable Clearing Members FICC–2017–023 on the subject line. Self-Regulatory Organizations; NYSE
to evaluate fees and other material costs Arca, Inc.; Notice of Filing of
of utilizing MBSD’s services, in Paper Comments Amendment No. 1, and Order Granting
accordance with the requirements of • Send paper comments in triplicate Approval on an Accelerated Basis of a
Rule 17Ad–22(e)(23), promulgated to Secretary, Securities and Exchange Proposed Rule Change, as Modified by
under the Act, cited above. Commission, 100 F Street NE, Amendments No. 1 and No. 3, to List
Washington, DC 20549–1090. and Trade of Shares of the Breakwave
(B) Clearing Agency’s Statement on Dry Bulk Shipping ETF Under NYSE
Burden on Competition All submissions should refer to File
Arca Rule 8.200–E, Commentary .02
Number SR–FICC–2017–023. This file
FICC does not believe that the
number should be included on the December 22, 2017.
proposed change would impact, or
subject line if email is used. To help the
impose any burden on, competition 13 I. Introduction
Commission process and review your
because the elimination of the comments more efficiently, please use On September 8, 2017, NYSE Arca,
Development Fees would result in a only one method. The Commission will Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
post all comments on the Commission’s with the Securities and Exchange
proposed new trade type, at the time of trade
comparison and treat FICC as the settlement
internet website (http://www.sec.gov/ Commission (‘‘Commission’’), pursuant
counterparty at such time. In connection with these rules/sro.shtml). Copies of the to Section 19(b)(1)1 of the Securities
sradovich on DSK3GMQ082PROD with NOTICES

changes, FICC also proposed new processes that submission, all subsequent Exchange Act of 1934 (‘‘Act’’ or
would promote operational efficiencies for Clearing amendments, all written statements ‘‘Exchange Act’’)2 and Rule 19b–4
Members. The full text of rule filing SR–FICC–
2017–012 is available at http://www.dtcc.com/
with respect to the proposed rule thereunder,3 a proposed rule change to
legal/sec-rule-filings. change that are filed with the
10 15 U.S.C. 78q–1(b)(3)(D). Commission, and all written 16 17 CFR 200.30–3(a)(12).
11 Supra note 6. 1 15 U.S.C. 78s(b)(1).
12 17 CFR 240.17Ad–22(e)(23). 14 15 U.S.C. 78s(b)(3)(A). 2 15 U.S.C. 78a.
13 15 U.S.C. 78q–1(b)(3)(I). 15 17 CFR 240.19b–4(f). 3 17 CFR 240.19b–4.

VerDate Sep<11>2014 18:14 Dec 27, 2017 Jkt 244001 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1
Document Created: 2017-12-28 00:44:06
Document Modified: 2017-12-28 00:44:06
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 61624