83 FR 12986 - Self-Regulatory Organizations; National Securities Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Adopt a Recovery & Wind-Down Plan and Related Rules
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 58 (March 26, 2018)
Federal Register Volume 83, Issue 58 (March 26, 2018)
| Page Range | 12986-12988 | |
| FR Document | 2018-06022 |
[Federal Register Volume 83, Number 58 (Monday, March 26, 2018)] [Notices] [Pages 12986-12988] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-06022] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82908; File No. SR-NSCC-2017-017] Self-Regulatory Organizations; National Securities Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Adopt a Recovery & Wind-Down Plan and Related Rules March 20, 2018. I. Introduction On December 18, 2017, National Securities Clearing Corporation (``NSCC'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ proposed rule change SR-NSCC-2017-017 to adopt a recovery and wind-down plan and related rules (``Proposed Rule Change'').\3\ The Proposed Rule Change was published for comment in the Federal Register on January 8, 2018.\4\ The Commission did not receive any comments on the Proposed Rule Change. On February 8, 2018, pursuant to Section 19(b)(2)(A)(ii)(I) of the Act,\5\ the Commission designated a longer period within which to approve, disapprove, or institute proceedings to determine whether to approve or disapprove the Proposed Rule Change.\6\ This order institutes proceedings, pursuant to Section 19(b)(2)(B) of the Act,\7\ to determine whether to approve or disapprove the Proposed Rule Change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ On December 18, 2017, NSCC filed this proposal as an advance notice (SR-NSCC-2017-805) with the Commission pursuant to Section 806(e)(1) of the Payment, Clearing, and Settlement Supervision Act of 2010 (``Clearing Supervision Act'') and Rule 19b-4(n)(1)(i) of the Act (``Advance Notice''). On January 24, 2018, the Commission extended the review period of the Advance Notice for an additional 60 days pursuant to Section 806(e)(1)(H) of the Clearing Supervision Act. See 12 U.S.C. 5465(e)(1); 17 CFR 240.19b-4(n)(1)(i); 12 U.S.C. 5465(e)(1)(H); and Securities Exchange Act Release No. 82581 (January 24, 2018), 83 FR 4327 (January 30, 2018) (SR-NSCC-2017- 805). \4\ Securities Exchange Act Release No. 82430 (January 2, 2018), 83 FR 841 (January 8, 2018) (SR-NSCC-2017-017) (``Notice''). \5\ 15 U.S.C. 78s(b)(2)(A)(ii)(I). \6\ Securities Exchange Act Release No. 82669 (February 8, 2018), 83 FR 6653 (February 14, 2018) (SR-DTC-2017-021; SR-FICC- 2017-021; SR-NSCC-2017-017). \7\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- II. Summary of the Proposed Rule Change As described in the Notice,\8\ NSCC proposes to adopt a Recovery & Wind-down Plan (``R&W Plan'') and three proposed rules that would facilitate the implementation of the R&W Plan: (i) Proposed Rule 41 (Corporation Default) (``Corporation Default Rule''), (ii) proposed Rule 42 (Wind-down of the Corporation) (``Wind-down Rule''), and (iii) proposed Rule 60 (Market Disruption and Force Majeure) (``Force Majeure Rule''). Additionally, NSCC proposes to re-number existing Rule 42 (Wind-down of a Member, Fund Member or Insurance Carrier/Retirement Services Member) to Rule 40, which is currently reserved for future use. --------------------------------------------------------------------------- \8\ The description of the Proposed Rule Change is based on the statements prepared by NSCC in the Notice. See Notice, supra note 4. Capitalized terms used herein and not otherwise defined herein are defined in NSCC's Rules & Procedures, available at www.dtcc.com/~/ media/Files/Downloads/legal/rules/nscc_rules.pdf. --------------------------------------------------------------------------- NSCC states that the R&W Plan is intended to be used by NSCC's Board of Directors and management in the event that NSCC encounters scenarios that could potentially prevent it from being able to provide its critical services as a going concern.\9\ The R&W Plan would be structured to provide a roadmap, define the strategy, and identify the tools available to NSCC to either (i) recover in the event it experiences losses that exceed its prefunded resources or (ii) wind- down its business in a manner designed to permit the continuation of its critical services in the event that such recovery efforts are not successful.\10\ The R&W Plan would include tools that are provided for in NSCC's existing rules, policies, procedures, and contractual arrangements,\11\ as well as the proposed Corporation Default Rule, the proposed Wind-down Rule, and the proposed Force Majeure Rule.\12\ --------------------------------------------------------------------------- \9\ See Notice, supra note 4, at 842. \10\ Id. at 843. \11\ Contractual arrangements include, for example, NSCC's existing committed or pre-arranged liquidity arrangements. \12\ See Notice, supra note 4, at 842. --------------------------------------------------------------------------- NSCC states that the proposed Corporation Default Rule, proposed Wind-down Rule, and proposed Force Majeure Rule are designed to (i) facilitate the implementation of the R&W Plan when necessary; (ii) provide Members and Limited Members with transparency around critical provisions of the R&W Plan that relate to their rights, responsibilities and obligations; and (iii) provide NSCC with the legal basis to implement the provisions of the R&W Plan that concern the proposed Corporation Default Rule, the proposed Wind-down Rule, and the proposed Force Majeure Rule, when necessary.\13\ --------------------------------------------------------------------------- \13\ Id. at 841. --------------------------------------------------------------------------- NSCC states that it is proposing to re-number existing Rule 42 (Wind-down of a Member, Fund Member or Insurance Carrier/Retirement Services Member) to Rule 40 to align the order of NSCC's proposed rules with the order of comparable rules in the rulebooks of The Depository Trust Company and Fixed Income Clearing Corporation,\14\ which, together with NSCC, are subsidiaries of The Depository Trust & Clearing Corporation (``DTCC''), a user-owned and user-governed holding company.\15\ --------------------------------------------------------------------------- \14\ Id. at 851. \15\ Id. at 843. --------------------------------------------------------------------------- As an overview, the R&W Plan would provide, among other matters, (i) an overview of the business of NSCC and its parent DTCC; (ii) an analysis of NSCC's intercompany arrangements and critical links to other financial market infrastructures; (iii) a description of NSCC's services, and the criteria used to determine which services are considered critical; (iv) a description of the NSCC and DTCC governance structure; (v) a description of the governance around the overall recovery and wind-down program; (vi) a discussion of tools available to NSCC to [[Page 12987]] mitigate credit/market \16\ and liquidity risks, including recovery indicators and triggers, and the governance around management of a stress event along a ``Crisis Continuum'' timeline; (vii) a discussion of potential non-default losses and the resources available to NSCC to address such losses, including recovery triggers and tools to mitigate such losses; \17\ (viii) an analysis of the recovery tools' characteristics, including how they are comprehensive, effective, and transparent, how the tools provide appropriate incentives to Members to, among other things, control and monitor the risks they may present to NSCC, and how NSCC seeks to minimize the negative consequences of executing its recovery tools; and (ix) the framework and approach for the orderly wind-down and transfer of NSCC's business,\18\ including an estimate of the time and costs to effect a recovery or orderly wind- down of NSCC.\19\ --------------------------------------------------------------------------- \16\ NSCC states that NSCC manages its credit exposure to Members as part of its market risk management strategy. Id. at 844. \17\ As described in more detail in the Notice, this section of the R&W Plan would describe the proposed Force Majeure Rule, which would govern how NSCC would address extraordinary events that may occur outside its control. See Notice, supra note 4, at 851. The proposed Force Majeure Rule would identify the events or circumstances that would be considered a ``Market Disruption Event,'' including, for example, events that lead to the suspension or limitation of trading or banking in the markets in which NSCC operates, or the unavailability or failure of any material payment, bank transfer, wire or securities settlement systems. Id. Under the proposed Force Majeure Rule, during the pendency of a Market Disruption Event, NSCC would be entitled to (i) suspend the provision of any or all services; and (ii) take, or refrain from taking, or require Members and Limited Members to take, or refrain from taking, any actions it considers appropriate to address, alleviate, or mitigate the event and facilitate the continuation of NSCC's services as may be practicable. Id. \18\ This section of the R&W Plan would refer to the proposed Wind-down Rule and the proposed Corporation Default Rule. See Notice, supra note 4, at 847-49 (discussing wind-down), 849-51 (discussing the proposed Corporation Default Rule and the proposed Wind-down Rule). The proposed Wind-down Rule would provide a mechanism to implement the framework and approach for an orderly wind-down if recovery tools do not successfully return NSCC to financial viability. Id. at 847-51. As described more fully in the Notice, the proposed Corporation Default Rule would provide a mechanism for the termination, valuation, and netting of unsettled, guaranteed Continuous Net Settlement (``CNS'') transactions in the event NSCC is unable to perform its obligations or otherwise suffers a defined event of default, such as entering insolvency proceedings (``Corporation Default''). Id. at 849. Upon Corporation Default, the proposed Corporation Default Rule would provide that all unsettled, guaranteed CNS transactions would be terminated and, no later than forty-five days from the date on which the event that constitutes a Corporation Default occurred, the Board of Directors would determine a single net amount owed by or to each Member with respect to such transactions pursuant to the valuation procedures set forth in the proposed Corporation Default Rule. Id. \19\ See Notice, supra note 4, at 842. --------------------------------------------------------------------------- The framework and approach for orderly wind-down would provide (i) for the transfer of NSCC's business, assets, and membership to another legal entity; (ii) that NSCC would effectuate the transfer in connection with proceedings under Chapter 11 of the U.S. Bankruptcy Code; \20\ and (iii) that after effectuating this transfer, NSCC would liquidate any remaining assets in an orderly manner in bankruptcy proceedings.\21\ NSCC states that it believes that the proposed transfer approach to a wind-down would meet its objectives of (i) assuring that NSCC's critical services will be available to the market as long as there are Members in good standing, and (ii) minimizing disruption to the operations of Members and financial markets generally that might be caused by NSCC's failure.\22\ --------------------------------------------------------------------------- \20\ 11 U.S.C. 101 et seq. \21\ See Notice, supra note 4, at 847. \22\ Id. --------------------------------------------------------------------------- III. Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Change and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act \23\ to determine whether the Proposed Rule Change should be approved or disapproved. Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the Proposed Rule Change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to comment on the Proposed Rule Change, and provide the Commission with arguments to support the Commission's analysis as to whether to approve or disapprove the Proposed Rule Change. --------------------------------------------------------------------------- \23\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- Pursuant to Section 19(b)(2)(B) of the Act,\24\ the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of, and input from commenters with respect to, the Proposed Rule Change's consistency with Section 17A of the Act,\25\ and the rules thereunder, including the following provisions: --------------------------------------------------------------------------- \24\ Id. \25\ 15 U.S.C. 78q-1. ---------------------------------------------------------------------------Section 17A(b)(3)(F) of the Act,\26\ which requires, among other things, that the rules of a clearing agency, such as NSCC, must be designed to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible and to protect investors and the public interest; and --------------------------------------------------------------------------- \26\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Rule 17Ad-22(e)(3)(ii) under the Act,\27\ which requires a covered clearing agency,\28\ such as NSCC, to, among other things, establish, implement, maintain and enforce written policies and procedures reasonably designed to, as applicable, maintain a sound risk management framework for comprehensively managing legal, credit, liquidity, operational, general business, investment, custody, and other risks that arise in or are borne by NSCC, which includes plans for the recovery and orderly wind-down of NSCC necessitated by credit losses, liquidity shortfalls, losses from general business risk, or any other losses. --------------------------------------------------------------------------- \27\ 17 CFR 240.17Ad-22(e)(3)(ii). \28\ See 17 CFR 240.17Ad-22(a)(5) for the definition of a covered clearing agency. --------------------------------------------------------------------------- IV. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the Proposed Rule Change. In particular, the Commission invites the written views of interested persons concerning whether the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act,\29\ Rule 17Ad-22(e)(3)(ii) under the Act,\30\ or any other provision of the Act, or the rules and regulations thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b-4(g) under the Act,\31\ any request for an opportunity to make an oral presentation.\32\ --------------------------------------------------------------------------- \29\ 15 U.S.C. 78q-1(b)(3)(F). \30\ 17 CFR 240.17Ad-22(e)(3)(ii). \31\ 17 CFR 240.19b-4(g). \32\ Section 19(b)(2) of the Act grants to the Commission flexibility to determine what type of proceeding--either oral or notice and opportunity for written comments--is appropriate for consideration of a particular proposal by a self-regulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). --------------------------------------------------------------------------- Interested persons are invited to submit written data, views, and arguments regarding whether the Proposed Rule Change should be approved or disapproved by April 16, 2018. Any person who wishes to file a rebuttal to any other person's [[Page 12988]] submission must file that rebuttal by April 30, 2018. The Commission asks that commenters address the sufficiency of NSCC's statements in support of the Proposed Rule Change, which are set forth in the Notice,\33\ in addition to any other comments they may wish to submit about the Proposed Rule Change. --------------------------------------------------------------------------- \33\ See Notice, supra note 4. --------------------------------------------------------------------------- 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-NSCC-2017-017 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-NSCC-2017-017. 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 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 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-NSCC-2017-017 and should be submitted on or before April 16, 2018. Rebuttal comments should be submitted by April 30, 2018. --------------------------------------------------------------------------- \34\ 17 CFR 200.30-3(a)(57). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\34\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-06022 Filed 3-23-18; 8:45 am] BILLING CODE 8011-01-P
![12986 Federal Register / Vol. 83, No. 58 / Monday, March 26, 2018 / Notices
designed to enhance clarity and was published for comment in the recover in the event it experiences
transparency in FICC’s governance Federal Register on January 8, 2018.4 losses that exceed its prefunded
arrangements, as well as to specify clear The Commission did not receive any resources or (ii) wind-down its business
and direct lines of responsibility for comments on the Proposed Rule in a manner designed to permit the
various officer positions and the Board Change. On February 8, 2018, pursuant continuation of its critical services in
within FICC’s organizational structure, to Section 19(b)(2)(A)(ii)(I) of the Act,5 the event that such recovery efforts are
consistent with Rule 17Ad–22(e)(2)(i) the Commission designated a longer not successful.10 The R&W Plan would
and (v) under the Act.72 period within which to approve, include tools that are provided for in
disapprove, or institute proceedings to NSCC’s existing rules, policies,
III. Conclusion
determine whether to approve or procedures, and contractual
On the basis of the foregoing, the disapprove the Proposed Rule Change.6 arrangements,11 as well as the proposed
Commission finds that the proposal is This order institutes proceedings, Corporation Default Rule, the proposed
consistent with the requirements of the pursuant to Section 19(b)(2)(B) of the Wind-down Rule, and the proposed
Act, in particular the requirements of Act,7 to determine whether to approve Force Majeure Rule.12
Section 17A of the Act 73 and the rules or disapprove the Proposed Rule
and regulations thereunder. NSCC states that the proposed
Change. Corporation Default Rule, proposed
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that II. Summary of the Proposed Rule Wind-down Rule, and proposed Force
proposed rule change SR–FICC–2018– Change Majeure Rule are designed to (i)
002 be, and hereby is, APPROVED.74 As described in the Notice,8 NSCC facilitate the implementation of the
proposes to adopt a Recovery & Wind- R&W Plan when necessary; (ii) provide
For the Commission, by the Division of
Trading and Markets, pursuant to delegated down Plan (‘‘R&W Plan’’) and three Members and Limited Members with
authority.75 proposed rules that would facilitate the transparency around critical provisions
Eduardo A. Aleman, implementation of the R&W Plan: (i) of the R&W Plan that relate to their
Proposed Rule 41 (Corporation Default) rights, responsibilities and obligations;
Assistant Secretary.
(‘‘Corporation Default Rule’’), (ii) and (iii) provide NSCC with the legal
[FR Doc. 2018–06031 Filed 3–23–18; 8:45 am]
proposed Rule 42 (Wind-down of the basis to implement the provisions of the
BILLING CODE 8011–01–P
Corporation) (‘‘Wind-down Rule’’), and R&W Plan that concern the proposed
(iii) proposed Rule 60 (Market Corporation Default Rule, the proposed
Disruption and Force Majeure) (‘‘Force Wind-down Rule, and the proposed
SECURITIES AND EXCHANGE
Majeure Rule’’). Additionally, NSCC Force Majeure Rule, when necessary.13
COMMISSION
proposes to re-number existing Rule 42 NSCC states that it is proposing to re-
[Release No. 34–82908; File No. SR–NSCC–
(Wind-down of a Member, Fund number existing Rule 42 (Wind-down of
2017–017]
Member or Insurance Carrier/Retirement a Member, Fund Member or Insurance
Self-Regulatory Organizations; Services Member) to Rule 40, which is Carrier/Retirement Services Member) to
National Securities Clearing currently reserved for future use. Rule 40 to align the order of NSCC’s
Corporation; Order Instituting NSCC states that the R&W Plan is proposed rules with the order of
Proceedings To Determine Whether To intended to be used by NSCC’s Board of comparable rules in the rulebooks of
Approve or Disapprove a Proposed Directors and management in the event The Depository Trust Company and
Rule Change To Adopt a Recovery & that NSCC encounters scenarios that Fixed Income Clearing Corporation,14
Wind-Down Plan and Related Rules could potentially prevent it from being which, together with NSCC, are
able to provide its critical services as a subsidiaries of The Depository Trust &
March 20, 2018. going concern.9 The R&W Plan would Clearing Corporation (‘‘DTCC’’), a user-
I. Introduction be structured to provide a roadmap, owned and user-governed holding
define the strategy, and identify the company.15
On December 18, 2017, National tools available to NSCC to either (i)
Securities Clearing Corporation As an overview, the R&W Plan would
(‘‘NSCC’’) filed with the Securities and provide, among other matters, (i) an
4(n)(1)(i) of the Act (‘‘Advance Notice’’). On January
Exchange Commission (‘‘Commission’’), 24, 2018, the Commission extended the review
overview of the business of NSCC and
pursuant to Section 19(b)(1) of the period of the Advance Notice for an additional 60 its parent DTCC; (ii) an analysis of
Securities Exchange Act of 1934 days pursuant to Section 806(e)(1)(H) of the NSCC’s intercompany arrangements and
Clearing Supervision Act. See 12 U.S.C. 5465(e)(1); critical links to other financial market
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 17 CFR 240.19b–4(n)(1)(i); 12 U.S.C. 5465(e)(1)(H);
proposed rule change SR–NSCC–2017– and Securities Exchange Act Release No. 82581
infrastructures; (iii) a description of
017 to adopt a recovery and wind-down (January 24, 2018), 83 FR 4327 (January 30, 2018) NSCC’s services, and the criteria used to
plan and related rules (‘‘Proposed Rule (SR–NSCC–2017–805). determine which services are
Change’’).3 The Proposed Rule Change
4 Securities Exchange Act Release No. 82430
considered critical; (iv) a description of
(January 2, 2018), 83 FR 841 (January 8, 2018) (SR– the NSCC and DTCC governance
NSCC–2017–017) (‘‘Notice’’).
72 Id. 5 15 U.S.C. 78s(b)(2)(A)(ii)(I). structure; (v) a description of the
73 15 U.S.C. 78q-1. 6 Securities Exchange Act Release No. 82669 governance around the overall recovery
74 In approving the proposed rule change, the (February 8, 2018), 83 FR 6653 (February 14, 2018) and wind-down program; (vi) a
Commission considered the proposals’ impact on (SR–DTC–2017–021; SR–FICC–2017–021; SR– discussion of tools available to NSCC to
efficiency, competition, and capital formation. 15 NSCC–2017–017).
sradovich on DSK3GMQ082PROD with NOTICES
U.S.C. 78c(f). 7 15 U.S.C. 78s(b)(2)(B).
75 17 CFR 200.30–3(a)(12). 10 Id. at 843.
8 The description of the Proposed Rule Change is
1 15 U.S.C. 78s(b)(1). 11 Contractual arrangements include, for example,
based on the statements prepared by NSCC in the
2 17 CFR 240.19b–4. Notice. See Notice, supra note 4. Capitalized terms NSCC’s existing committed or pre-arranged
3 On December 18, 2017, NSCC filed this proposal used herein and not otherwise defined herein are liquidity arrangements.
12 See Notice, supra note 4, at 842.
as an advance notice (SR–NSCC–2017–805) with defined in NSCC’s Rules & Procedures, available at
13 Id. at 841.
the Commission pursuant to Section 806(e)(1) of the www.dtcc.com/∼/media/Files/Downloads/legal/
Payment, Clearing, and Settlement Supervision Act rules/nscc_rules.pdf. 14 Id. at 851.
of 2010 (‘‘Clearing Supervision Act’’) and Rule 19b– 9 See Notice, supra note 4, at 842. 15 Id. at 843.
VerDate Sep<11>2014 16:38 Mar 23, 2018 Jkt 244001 PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 E:\FR\FM\26MRN1.SGM 26MRN1](https://thefederalregister.org/doc/83_FR_13044/page/1.svg)
![12988 Federal Register / Vol. 83, No. 58 / Monday, March 26, 2018 / Notices
submission must file that rebuttal by comments should be submitted by April concerning the purpose of and basis for
April 30, 2018. 30, 2018. the proposed rule change and discussed
The Commission asks that For the Commission, by the Division of any comments it received on the
commenters address the sufficiency of Trading and Markets, pursuant to delegated proposed rule change. The text of these
NSCC’s statements in support of the authority.34 statements may be examined at the
Proposed Rule Change, which are set Eduardo A. Aleman, places specified in Item IV below. The
forth in the Notice,33 in addition to any Assistant Secretary. Exchange has prepared summaries, set
other comments they may wish to [FR Doc. 2018–06022 Filed 3–23–18; 8:45 am]
forth in sections A, B, and C below, of
submit about the Proposed Rule Change. the most significant aspects of such
BILLING CODE 8011–01–P
Comments may be submitted by any statements.
of the following methods:
A. Self-Regulatory Organization’s
Electronic Comments SECURITIES AND EXCHANGE Statement of the Purpose of, and
• Use the Commission’s internet COMMISSION Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ [Release No. 34–82905; File No. SR– Change
rules/sro.shtml); or NASDAQ–2018–021] 1. Purpose
• Send an email to rule-comments@
sec.gov. Please include File Number SR– Self-Regulatory Organizations; The The purpose of the proposed rule
NSCC–2017–017 on the subject line. Nasdaq Stock Market LLC; Notice of change is to amend the Exchange’s
Filing and Immediate Effectiveness of transaction fees at Rule 7018 to charge
Paper Comments Proposed Rule Change To Amend no transaction fee for execution of
• Send paper comments in triplicate Transaction Fees at Rule 7018 To Midpoint Extended Life Orders. On
to Secretary, Securities and Exchange Charge No Transaction Fee for March 7, 2018, the Commission
Commission, 100 F Street NE, Execution of Midpoint Extended Life approved the Exchange’s proposal to
Washington, DC 20549–1090. Orders adopt a new Order Type, the Midpoint
All submissions should refer to File Extended Life Order.3 The Midpoint
March 20, 2018. Extended Life Order is an Order Type
Number SR–NSCC–2017–017. This file
number should be included on the Pursuant to Section 19(b)(1) of the with a Non-Display Order Attribute that
subject line if email is used. To help the Securities Exchange Act of 1934 is priced at the midpoint between the
Commission process and review your (‘‘Act’’),1 and Rule 19b–4 thereunder,2 NBBO and that will not be eligible to
comments more efficiently, please use notice is hereby given that, on March 9, execute until the Holding Period of one
only one method. The Commission will 2018, The Nasdaq Stock Market LLC half of a second has passed after
post all comments on the Commission’s (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the acceptance of the Order by the System.
internet website (http://www.sec.gov/ Securities and Exchange Commission Once a Midpoint Extended Life Order
rules/sro.shtml). Copies of the (‘‘SEC’’ or ‘‘Commission’’) the proposed becomes eligible to execute by existing
submission, all subsequent rule change as described in Items I, II, unchanged for the Holding Period, the
amendments, all written statements and III below, which Items have been Order may only execute against other
with respect to the Proposed Rule prepared by the Exchange. The eligible Midpoint Extended Life Orders.
Change that are filed with the Commission is publishing this notice to The Exchange will begin offer Midpoint
Commission, and all written solicit comments on the proposed rule Extended Life Orders on March 12,
communications relating to the change from interested persons. 2018.4
Proposed Rule Change between the I. Self-Regulatory Organization’s Under Rule 7018, the Exchange
Commission and any person, other than Statement of the Terms of Substance of assesses fees for Orders entered into the
those that may be withheld from the the Proposed Rule Change Nasdaq System. The fees cover Orders
public in accordance with the in all three tapes and in securities both
The Exchange proposes to amend the priced $1 and above (Rule 7018(a)), and
provisions of 5 U.S.C. 552, will be
Exchange’s transaction fees at Rule 7018 below $1 (Rule 7018(b)). The Exchange
available for website viewing and
to charge no transaction fee for is proposing initially to not charge a
printing in the Commission’s Public
execution of Midpoint Extended Life transaction fee for execution of
Reference Room, 100 F Street NE,
Orders. While these amendments are Midpoint Extended Life Orders.
Washington, DC 20549 on official
effective upon filing, the Exchange has Allowing transactions to occur at no
business days between the hours of
designated the proposed amendments to cost will promote use of the Midpoint
10:00 a.m. and 3:00 p.m. Copies of the
be operative on March 12, 2018. Extended Life Order, which will help
filing also will be available for The text of the proposed rule change
inspection and copying at the principal bring liquidity in Midpoint Extended
is available on the Exchange’s website at Life Orders to the Exchange and
office of NSCC and on DTCC’s website http://nasdaq.cchwallstreet.com, at the
(http://dtcc.com/legal/sec-rule- promote market quality. The Exchange
principal office of the Exchange, and at plans to adopt fees for Midpoint
filings.aspx). All comments received the Commission’s Public Reference
will be posted without change. Persons Extended Life Orders in the future and
Room. will do so through the SEC rulemaking
submitting comments are cautioned that
we do not redact or edit personal II. Self-Regulatory Organization’s process.5 Accordingly, the Exchange is
identifying information from comment Statement of the Purpose of, and proposing to amend Rule 7018(a)(1)–(3)
Statutory Basis for, the Proposed Rule to note that members executing a
sradovich on DSK3GMQ082PROD with NOTICES
submissions. You should submit only
information that you wish to make Change Midpoint Extended Life Order will be
available publicly. All submissions In its filing with the Commission, the 3 See Securities Exchange Act Release No. 82825
should refer to File Number SR–NSCC– Exchange included statements (March 7, 2018) (SR–NASDAQ–2017–074) (pending
2017–017 and should be submitted on publication in the Federal Register).
or before April 16, 2018. Rebuttal 34 17 CFR 200.30–3(a)(57). 4 See http://www.nasdaqtrader.com/
1 15 U.S.C. 78s(b)(1). TraderNews.aspx?id=ETA2018-20.
33 See Notice, supra note 4. 2 17 CFR 240.19b–4. 5 Id.
VerDate Sep<11>2014 16:38 Mar 23, 2018 Jkt 244001 PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 E:\FR\FM\26MRN1.SGM 26MRN1](https://thefederalregister.org/doc/83_FR_13044/page/3.svg)
Document Created: 2018-03-24 00:59:52
Document Modified: 2018-03-24 00:59:52
| 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 | 83 FR 12986 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR