83 FR 64393 - Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Certain Fees Relating to Mutual Fund Services, and Insurance and Retirement Processing Services
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 240 (December 14, 2018)
Federal Register Volume 83, Issue 240 (December 14, 2018)
| Page Range | 64393-64397 | |
| FR Document | 2018-27081 |
[Federal Register Volume 83, Number 240 (Friday, December 14, 2018)] [Notices] [Pages 64393-64397] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-27081] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No 34-84771; File No. SR-NSCC-2018-012] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Certain Fees Relating to Mutual Fund Services, and Insurance and Retirement Processing Services December 10, 2018. 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 November 26, 2018, 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 Rules 19b-4(f)(2) and (f)(4) thereunder.\4\ 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) and (f)(4). --------------------------------------------------------------------------- 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) (``Addendum A'') of NSCC's Rules & Procedures (``Rules'') in order to make certain adjustments and clarifications in the fee provisions for NSCC's Mutual Fund Services (``MFS'') and Insurance and Retirement Processing Services (``I&RS''), as described below.\5\ --------------------------------------------------------------------------- \5\ Capitalized terms used herein and not otherwise defined shall have the meaning assigned to such terms in the Rules, available at http://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 purpose of this proposed rule change is to reduce certain fees for MFS and I&RS set forth in Addendum A as described below, in order to better align fees with the costs of services provided by NSCC by reducing the fees so that the revenue received by NSCC would be closer to the costs of providing the services. In addition, certain fee reductions as described below are also intended to incentivize greater use of certain MFS and I&RS products. The proposed rule change would also clarify the description of certain fees as described below to improve clarity and transparency of the Rules. NSCC expects the proposed rule change would result in a decrease in revenue of [[Page 64394]] approximately 9.5% for each of the MFS and I&RS services. (i) Background NSCC has undertaken a strategic review of its pricing structure, and developed a revenue and pricing strategy with the goal of among other things, reducing pricing complexity in Addendum A and aligning pricing with costs.\6\ As a result of the review, NSCC has determined that certain fees in MFS and I&RS have over time become misaligned with the costs of services. Such fees are misaligned because the revenue that NSCC has been receiving for such services has increased over time more than the costs to provide the services. NSCC believes that this is a result of streamlined processes in such services which have resulted in the reduction of processing costs for NSCC for such services. NSCC believes it is reasonable and appropriate to assess Members and Limited Members (collectively, ``NSCC Members'') fees that are commensurate with the costs of services provided to NSCC Members. Accordingly, the proposed changes would adjust certain fees in MFS and I&RS so that revenue for NSCC would better align with the costs of the services by reducing the revenue that NSCC receives so that it is closer to the costs of providing the services by NSCC. NSCC believes that the proposed fee reductions would allow NSCC to lower the costs for services to NSCC Members while still providing adequate funding to enable NSCC to recover its costs in providing the services. --------------------------------------------------------------------------- \6\ NSCC is also proposing changes to fees for NSCC services that are not MFS and I&RS services in a separate proposal. In addition, NSCC's affiliates, The Depository Trust Company and Fixed Income Clearing Corporation are proposing changes to their respective fees. --------------------------------------------------------------------------- NSCC is also proposing certain fee changes as described below to incentivize greater use of certain MFS and I&RS products. In addition, NSCC is proposing certain clarifying changes to the description of certain fees in Addendum A as described below to enhance clarity and transparency of the Rules. (ii) Proposed Rule Changes A. Networking Omni/SERV[supreg] Fee Reductions Omni/SERV, which is a feature of the MFS Networking service, provides a streamlined communication platform for the transmission of files for fund accounts held in omnibus.\7\ NSCC is proposing to reduce the monthly fee for Omni/SERV file transmissions in Section IV.H.3. of Addendum A from $2,500 per month to $1,500 per month. As discussed below, NSCC believes that the proposed fee reduction would better align the fees with the costs of providing Omni/SERV. --------------------------------------------------------------------------- \7\ An omnibus fund account is a fund account held by a financial intermediary on behalf of multiple underlying investors. Omni/SERV allows NSCC Members to communicate information relating to the underlying investors' sub-accounts. --------------------------------------------------------------------------- B. Profile Phases I and II Fee Reductions NSCC is proposing to reduce the monthly fee for Phases I and II of the Mutual Fund Profile Service (``Profile'') in Section IV.J.b. of Addendum A from $2,000 per month to $1,250 per month.\8\ In addition, NSCC is proposing to change the credit that Profile II users (with 25 or fewer Funds) receive in footnote 1 of Addendum A from $1,150 to $1,000. Together, with the reduction in the monthly fee from $2,000 to $1,250, this proposed change would reduce the overall net fee for such users from $850 to $250. --------------------------------------------------------------------------- \8\ NSCC offers two levels of service through Profile, which are referred to in NSCC's fee schedule as ``Phase I'' and ``Phase II.'' Phase I is used by NSCC Members to transmit price and rate information for mutual funds and pooled investment entities (each a ``Fund'' and collectively, ``Funds''). Phase II consists of three databases, (i) the participant profile database, (ii) the security issue profile database, and (iii) the distribution declaration information profile database. Through these three databases, NSCC offers a centralized repository for prospectus and operational information for securities of Funds, Fund distributions and Fund processing capabilities. The current fee to use both Phase I and Phase II is $2,000 per month. See Section IV.J.b. of Addendum A, supra note 5. --------------------------------------------------------------------------- As discussed below, NSCC believes that the proposed fee reduction would better align the fees with the costs of providing Phases I and II. In addition, NSCC believes that the proposed reduction in the fees and the credit for smaller firms for Phases I and II would incentivize more firms to use the service. NSCC believes that more firms using the service would increase the value of the service by providing greater access to more Fund data to NSCC Members. C. Positions Fee Reductions NSCC is proposing to reduce the fees in three tiers for Positions (Full, New and Retirement Plans) in Section IV.K.2.a.(i) of Addendum A as follows: (i) Reduce fees for 0 to 500,000 items/month from $8 to $6 per 1,000 items, (ii) reduce fees for 500,001 to 2,000,000 items/month from $4 to $3.50 per 1,000 items, and (iii) reduce fees for 4,000,001 or more items/month from $2 to $1.25 per 1,000 items. NSCC is not proposing to reduce the fees for 2,000,001 to 4,000,000 items/month.\9\ As discussed below, NSCC believes that the proposed fee reduction would better align the fees with the costs of providing Positions (Full, New and Retirement Plans). --------------------------------------------------------------------------- \9\ NSCC has determined that, based on the average number of users and revenues generated for each tier, the intended overall revenue decrease for the service could be accomplished by reducing the three tiers as indicated without reducing the fees for the tier for 2,000,001 to 4,000,000 items/month. In addition, NSCC determined that the proposed tier structure following the Fee Reductions would continue to incentivize NSCC Members to increase their use of the service which NSCC believes increases efficiency in sending contract details. All NSCC Members using the service would benefit from the proposed fee reductions because the NSCC Members who reach the tier for 2,000,001 to 4,000,000 items/month would benefit from the fee reductions in the lower two tiers. --------------------------------------------------------------------------- D. IFT Tiered Pricing Program Fee Reductions and Revised Description NSCC proposes to restructure the current In Force Transactions (``IFT'') \10\ tiered pricing program, including certain fee reductions and certain clarifications as described below. --------------------------------------------------------------------------- \10\ IFT is an I&RS offering that automates data processing with respect to transactions relating to ``in-force'' contracts among participating NSCC Members. ``In-force'' contract transactions are transactions that occur after the underlying insurance contract has become effective. --------------------------------------------------------------------------- (1) IFT Fee Reductions Currently, NSCC Members engaged in IFTs are required to choose an Activity Level (Level 1, Level 2 or Level 3) based on their projected activity. Each Activity Level has a corresponding minimum monthly fee. NSCC Members that choose Level 2 and Level 3 benefit from discounted fees per transaction after the amount of fees incurred for the month reaches the amount of the minimum monthly fee. Once the respective amount of the monthly fee is met, the discount for Level 2 is 20% (i.e., from $1.25/$.35 per transaction to $1.00/$.28 per transaction) and the discount for Level 3 is 40% (i.e., from $1.25/$.35 per transaction to $.75/$.21 per transaction). The discounts are set forth in an IFT Chart in Addendum A. NSCC is proposing to decrease the overall price of certain IFTs in Section IV.K.3. of Addendum A from $1.25 per request to $.65 per request, increase the number of levels in the IFT tiered pricing program from three to four, set new monthly minimum fees for each level and apply new discount percentages for the proposed Level 2, Level 3 and Level 4. As discussed below, NSCC believes that the proposed fee reduction would better align the fees with the costs of providing the IFT service. In addition, the IFT tiered pricing program is intended to incentivize greater use of the IFT product by discounting transaction fees once the minimum monthly fee has been met for [[Page 64395]] higher Activity Level designations. The proposed changes are intended to further incentivize greater use by reducing transaction pricing for IFTs generally and increasing the number of minimum monthly fee thresholds, and thus discounts, from which NSCC Members may choose. (2) IFT Clarifications NSCC is proposing to change the description of the IFT chart in Addendum A to clarify when the discounts are applied and update the description in the chart for readability, including changing ``Activity Level'' to ``Threshold Level'' and stating the discounts as a percentage rather than a dollar amount for each Level and revising the description of the discount in the table. Below is the proposed updated chart: * In Force Transactions Chart ------------------------------------------------------------------------ Discount for Minimum transactions after Threshold level monthly fee fees exceed minimum monthly fee amount ------------------------------------------------------------------------ Level 1........................... $250 No Discount (pay base price of $0.65/$0.35 for Requests/ Inquiries). Level 2........................... 500 5%. Level 3........................... 1,000 10%. Level 4........................... 3,000 20%. ------------------------------------------------------------------------ NSCC is also proposing to move the fees for the IFTs that are currently listed in TIER 5 ($1.25) to TIER 4 ($0.65) in Section IV.K.3. of Addendum A with other transactions that are $0.65 per request to reflect the proposed fee reductions set forth above. In addition, NSCC is proposing to move the description of the fee for Producer Management Portal (per inquiry), which is currently in TIER 5 in Section IV.K.3. of Addendum A, to Section IV.K.2.h. of Addendum A so that the fee is in the same section as other Producer Management Portal fees and to re- number the items in Section IV.K.2.h. of Addendum A to reflect the addition of the fee in this Section. NSCC is also proposing to remove TIER 5 in Section IV.K.3. of Addendum A since there would no longer be any fees in that TIER following the proposed changes described above. In addition, NSCC is proposing to rename the Producer Management Portal fee to ``Distributor Subscription Fee'' to clarify that the $1.25 fee is for distributor inquiries for Producer Management Portal and to add a provision clarifying that the maximum fee paid by Distributors is $6,000 per month. There is a $6,000 per month maximum because if the number of inquiries would result in more than $6,000 in fees in a month, the distributor could pay the $6,000 Distributor Batch Service Fee for the month rather than pay on a per inquiry basis. NSCC is proposing to revise the description of the * In Force Transaction Chart as described above, move the IFT transaction fees to TIER 4 with other transaction fees that are $0.65, delete TIER 5, move and rename the Producer Management Portal fee, re-number the items in Section IV.K.2.h. of Addendum A and add language relating to a $6,000 maximum per month for the Distributor Subscription Fee for enhanced clarity and transparency of the Rules. E. Decimals In Section IV.H. through Section IV.K. of Addendum A, where a dollar amount is less than one and where there is not currently a zero in front of the decimal point, NSCC is proposing to place a zero before the decimal point for enhanced clarity and consistency with other decimals contained in Addendum A. The proposed changes set forth in items II(A)(1)(ii)(A), (B), (C) and (D)(1) above are proposed fee reductions and are referred to herein as ``Fee Reductions.'' For each of the services for which Fee Reductions are being proposed, NSCC has determined that the revenue has increased over time more than the overall costs to provide the service. Since implementation of the current fees, revenues have increased for each of the services due to existing NSCC Members increasing their use of the services and new NSCC Members using the services. In addition, costs to provide the services are lower as a result of streamlined processes which increase efficiency in such services to allow NSCC to provide the services for lower costs than when the current fees were implemented. NSCC has determined that the revenue that it would receive for each of the services above following the proposed Fee Reductions would be closer to the costs of providing the services and sufficient to enable NSCC to recover costs to NSCC to provide the services. As such, NSCC believes that the proposed Fee Reductions would better align the fees with the costs of providing each of the services for which Fee Reductions are being proposed. The proposed changes set forth herein in items II(A)(1)(ii)(D)(2) and (E) are proposed clarifying changes to the description of the fees and are referred to herein as ``Clarifications.'' Each of the Clarifications are being proposed in order to improve the clarity and transparency of the Rules. (iii) Implementation Timeframe NSCC expects to implement the proposed rule changes on January 1, 2019. As proposed, a legend would be added to Addendum A stating there are changes that became effective upon filing with the Commission but have not yet been implemented. The proposed legend also would include January 1, 2019, as the date on which such changes would be implemented and the file number of this proposal, and state that, once this proposal is implemented, the legend would automatically be removed from Addendum A. 2. Statutory Basis NSCC believes this proposal is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a registered clearing agency. Specifically, NSCC believes this proposal is consistent with Sections 17A(b)(3)(D) \11\ and 17A(b)(3)(F) \12\ of the Act and Rule 17Ad-22(e)(23)(ii),\13\ as promulgated under the Act, for the reasons described below. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78q-1(b)(3)(D). \12\ 15 U.S.C. 78q-1(b)(3)(F). \13\ 17 CFR 240.17Ad-22(e)(23)(ii). --------------------------------------------------------------------------- Section 17A(b)(3)(D) of the Act \14\ requires, in part, that the Rules provide for the equitable allocation of reasonable dues, fees, and other charges among its participants. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78q-1(b)(3)(D). --------------------------------------------------------------------------- The proposed Fee Reductions set forth above are consistent with 17A(b)(3)(D) of the Act \15\ because the proposed fees would be allocated equitably among the NSCC Members [[Page 64396]] that subscribe for those services based on each NSCC Member's use of such services. In addition, NSCC believes that the proposed Fee Reductions are reasonable because they would enable NSCC to better align its revenue with the costs and expenses required for NSCC to provide the services to NSCC Members. Specifically, NSCC has determined that based on the current usage and projected revenue for each of the services listed above for which Fee Reductions are proposed, the decrease in fees would result in revenues for those services that would be closer to the costs of providing such services. Therefore, by establishing fees that align with the costs of delivery of these products and services and allocating those fees equitably among the subscribing NSCC Members, the proposed Fee Reductions are consistent with the requirements of Section 17A(b)(3)(D) of the Act.\16\ --------------------------------------------------------------------------- \15\ Id. \16\ Id. --------------------------------------------------------------------------- NSCC also believes that the proposed Clarifications above are consistent with 17A(b)(3)(D) of the Act \17\ because each of the proposed Clarifications would clarify the meaning of the fees in the Rules without affecting the amount of the existing fee for such line item. The amounts of the existing fees would continue to be equitably allocated among the subscribing NSCC Members in accordance with their utilization of the services. Therefore, NSCC believes that the proposed Clarifications would not affect the allocation or amount of fees, and would thereby continue to provide for the equitable allocation of reasonable fees, consistent with Section 17A(b)(3)(D) of the Act.\18\ --------------------------------------------------------------------------- \17\ Id. \18\ Id. --------------------------------------------------------------------------- Section 17A(b)(3)(F) of the Act \19\ requires, in part, that the Rules promote the prompt and accurate clearance and settlement of securities transactions. NSCC believes that the proposed Clarifications set forth above would enhance NSCC Members' ability to understand the fees associated with the MFS and I&RS services. Specifically, the proposed Clarifications would clarify the meaning of certain provisions of Addendum A relating to the IFT tiered pricing program and Producer Management Portal and revise certain decimals to be consistent with other decimals in the Rules and enhance clarity and transparency in the Rules in this regard. As such, the proposed Clarifications would allow NSCC Members to have a better understanding of the Rules in relation to their activities and thereby assist in promoting the requirements of Section 17A(b)(3)(F) of the Act.\20\ --------------------------------------------------------------------------- \19\ 15 U.S.C. 78q-1(b)(3)(F). \20\ Id. --------------------------------------------------------------------------- Rule 17Ad-22(e)(23)(ii) under the Act \21\ requires NSCC 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 the covered clearing agency. The proposed Clarifications set forth above would help ensure that the fees set forth in Addendum A are clear and transparent to NSCC Members. Having a clear and transparent Addendum A would help NSCC Members to better understand NSCC's fees and help provide NSCC Members with increased predictability and certainty regarding the fees they incur in participating in NSCC. As such, by improving the clarity and transparency of the Rules, NSCC believes the proposed Clarifications are consistent with Rule 17Ad-22(e)(23)(ii) under the Act.\22\ --------------------------------------------------------------------------- \21\ 17 CFR 240.17Ad-22(e)(23)(ii). \22\ Id. --------------------------------------------------------------------------- (B) Clearing Agency's Statement on Burden on Competition NSCC does not believe that the proposed Fee Reductions would have an adverse impact, or impose any burden, on competition because, in each case, the proposed Fee Reductions would be a reduction in fees as currently set forth in the Rules that would not disproportionally impact any NSCC Members. As a reduction to the fees currently in the Addendum A for these services, the proposed Fee Reductions would not impede any NSCC Members from engaging in the services or have an adverse impact on any NSCC Members. Moreover, the proposed Fee Reductions may promote competition because, in each case, the proposed Fee Reductions would allow NSCC Members to engage in a greater number of transactions with lower costs than they would incur today for the same transactions. In addition, as described above, NSCC believes that the proposed fee changes to the Profile Phase I and Phase II and the proposed fee reductions and increased discount levels for the IFT tiered pricing program would incentivize greater use of those services by NSCC Members. NSCC believes that increased use of the NSCC services as a result of the fee reductions would enhance participation in the marketplace by providing all NSCC Members that use the services more data which would increase the value of the services and promote competition among NSCC Members that use the services. NSCC does not believe that the proposed Clarifications would have any impact on competition because such changes are clarifications of the Rules that would not affect the rights or obligations of NSCC Members. (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 \23\ and paragraph (f) of Rule 19b-4 thereunder.\24\ 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. --------------------------------------------------------------------------- \23\ 15 U.S.C 78s(b)(3)(A). \24\ 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-2018-012 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-NSCC-2018-012. 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 [[Page 64397]] 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-2018-012 and should be submitted on or before January 4, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2018-27081 Filed 12-13-18; 8:45 am] BILLING CODE 8011-01-P
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C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the below, which Items have been prepared
Statement on Comments on the submission, all subsequent by the clearing agency. NSCC filed the
Proposed Rule Change Received From amendments, all written statements proposed rule change pursuant to
Members, Participants, or Others with respect to the proposed rule Section 19(b)(3)(A) of the Act 3 and
No written comments were solicited change that are filed with the Rules 19b–4(f)(2) and (f)(4) thereunder.4
or received with respect to the proposed Commission, and all written The Commission is publishing this
rule change. communications relating to the notice to solicit comments on the
proposed rule change between the proposed rule change from interested
III. Date of Effectiveness of the Commission and any person, other than persons.
Proposed Rule Change and Timing for those that may be withheld from the
Commission Action public in accordance with the I. Clearing Agency’s Statement of the
provisions of 5 U.S.C. 552, will be Terms of Substance of the Proposed
The foregoing rule change is effective Rule Change
upon filing pursuant to Section available for website viewing and
19(b)(3)(A) 9 of the Act and printing in the Commission’s Public The proposed rule change consists of
subparagraph (f)(2) of Rule 19b–4 10 Reference Room, 100 F Street NE, modifications to Addendum A (Fee
thereunder, because it establishes a due, Washington, DC 20549 on official Structure) (‘‘Addendum A’’) of NSCC’s
fee, or other charge imposed by the business days between the hours of Rules & Procedures (‘‘Rules’’) in order to
Exchange. 10:00 a.m. and 3:00 p.m. Copies of the make certain adjustments and
At any time within 60 days of the filing also will be available for clarifications in the fee provisions for
filing of such proposed rule change, the inspection and copying at the principal NSCC’s Mutual Fund Services (‘‘MFS’’)
Commission summarily may office of the Exchange. All comments and Insurance and Retirement
temporarily suspend such rule change if received will be posted without change. Processing Services (‘‘I&RS’’), as
it appears to the Commission that such Persons submitting comments are described below.5
action is necessary or appropriate in the cautioned that we do not redact or edit
personal identifying information from II. Clearing Agency’s Statement of the
public interest, for the protection of Purpose of, and Statutory Basis for, the
investors, or otherwise in furtherance of comment submissions. You should
submit only information that you wish Proposed Rule Change
the purposes of the Act. If the
Commission takes such action, the to make available publicly. All In its filing with the Commission, the
Commission shall institute proceedings submissions should refer to File clearing agency included statements
under Section 19(b)(2)(B) 11 of the Act to Number SR–NYSE–2018–57 and should concerning the purpose of and basis for
determine whether the proposed rule be submitted on or before January 4, the proposed rule change and discussed
change should be approved or 2019. any comments it received on the
disapproved. For the Commission, by the Division of proposed rule change. The text of these
Trading and Markets, pursuant to delegated statements may be examined at the
IV. Solicitation of Comments authority.12 places specified in Item IV below. The
Interested persons are invited to Eduardo A. Aleman, clearing agency has prepared
submit written data, views, and Deputy Secretary. summaries, set forth in sections A, B,
arguments concerning the foregoing, [FR Doc. 2018–27084 Filed 12–13–18; 8:45 am] and C below, of the most significant
including whether the proposed rule BILLING CODE 8011–01–P
aspects of such statements.
change is consistent with the Act. (A) Clearing Agency’s Statement of the
Comments may be submitted by any of Purpose of, and Statutory Basis for, the
the following methods: SECURITIES AND EXCHANGE Proposed Rule Change
Electronic Comments COMMISSION
1. Purpose
• Use the Commission’s internet [Release No 34–84771; File No. SR–NSCC–
The purpose of this proposed rule
2018–012]
comment form (http://www.sec.gov/ change is to reduce certain fees for MFS
rules/sro.shtml); or Self-Regulatory Organizations; and I&RS set forth in Addendum A as
• Send an email to rule-comments@ National Securities Clearing described below, in order to better align
sec.gov. Please include File Number SR– Corporation; Notice of Filing and fees with the costs of services provided
NYSE–2018–57 on the subject line. Immediate Effectiveness of a Proposed by NSCC by reducing the fees so that the
Paper Comments Rule Change To Amend Certain Fees revenue received by NSCC would be
• Send paper comments in triplicate Relating to Mutual Fund Services, and closer to the costs of providing the
to Secretary, Securities and Exchange Insurance and Retirement Processing services. In addition, certain fee
Commission, 100 F Street NE, Services reductions as described below are also
Washington, DC 20549–1090. December 10, 2018.
intended to incentivize greater use of
All submissions should refer to File certain MFS and I&RS products. The
Pursuant to Section 19(b)(1) of the
Number SR–NYSE–2018–57. This file Securities Exchange Act of 1934 proposed rule change would also clarify
number should be included on the (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 the description of certain fees as
subject line if email is used. To help the notice is hereby given that on November described below to improve clarity and
Commission process and review your 26, 2018, National Securities Clearing transparency of the Rules. NSCC expects
comments more efficiently, please use Corporation (‘‘NSCC’’) filed with the the proposed rule change would result
amozie on DSK3GDR082PROD with NOTICES1
only one method. The Commission will Securities and Exchange Commission in a decrease in revenue of
post all comments on the Commission’s (‘‘Commission’’) the proposed rule 3 15U.S.C. 78s(b)(3)(A).
internet website (http://www.sec.gov/ change as described in Items I, II and III 4 17CFR 240.19b–4(f)(2) and (f)(4).
5 Capitalized terms used herein and not otherwise
9 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 200.30–3(a)(12). defined shall have the meaning assigned to such
10 17 CFR 240.19b–4(f)(2). 1 15 U.S.C. 78s(b)(1). terms in the Rules, available at http://dtcc.com/∼/
11 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4. media/Files/Downloads/legal/rules/nscc_rules.pdf.
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internet website (http://www.sec.gov/ below, which Items have been prepared User. A User may configure a single
rules/sro.shtml). Copies of the by the Exchange. The Exchange filed the counting program or multiple counting
submission, all subsequent proposal as a ‘‘non-controversial’’ programs to govern its trading activity
amendments, all written statements proposed rule change pursuant to (i.e., on a per port basis). The counting
with respect to the proposed rule Section 19(b)(3)(A)(iii) of the Act 3 and program counts executions, contract
change that are filed with the Rule 19b–4(f)(6) thereunder.4 The volume and notional value, within a
Commission, and all written Commission is publishing this notice to specified time period established by
communications relating to the solicit comments on the proposed rule each User (‘‘specified time period’’) and
proposed rule change between the change from interested persons. on an absolute basis for the trading day
Commission and any person, other than (‘‘absolute limits’’). The specified time
I. Self-Regulatory Organization’s
those that may be withheld from the period will commence for an option
Statement of the Terms of Substance of
public in accordance with the when a transaction occurs in any series
the Proposed Rule Change
provisions of 5 U.S.C. 552, will be in such option. The counting program
available for website viewing and Cboe BZX Exchange, Inc. (the will also count a User’s executions,
printing in the Commission’s Public ‘‘Exchange’’ or ‘‘BZX’’) proposes to contract volume and notional value
Reference Room, 100 F Street NE, amend its provision related to its Risk across all options which a User trades
Washington, DC 20549 on official Monitor Mechanism. The text of the (‘‘Firm Category’’). When the system
business days between the hours of proposed rule change is provided in determines that a User’s Specified
10:00 a.m. and 3:00 p.m. Copies of the Exhibit 5. Engagement Trigger (i.e., a volume
filing also will be available for The text of the proposed rule change trigger, notional trigger, count trigger
inspection and copying at the principal is also available on the Exchange’s and percentage trigger) has reached its
office of NSCC and on DTCC’s website website (http://www.cboe.com/ established limit, the Risk Monitor
(http://dtcc.com/legal/sec-rule- AboutCBOE/CBOELegal Mechanism cancels or rejects such
filings.aspx). All comments received RegulatoryHome.aspx), at the User’s orders or quotes 6 in all series of
will be posted without change. Persons Exchange’s Office of the Secretary, and the class and cancels or rejects any
submitting comments are cautioned that at the Commission’s Public Reference additional orders or quotes from the
we do not redact or edit personal Room. User in the class until the counting
identifying information from comment II. Self-Regulatory Organization’s program resets.
submissions. You should submit only Statement of the Purpose of, and Proposed Rule Change
information that you wish to make Statutory Basis for, the Proposed Rule
available publicly. All submissions The Exchange proposes to amend
Change
should refer to File Number SR–NSCC– Rule 21.16 to (i) adopt the Risk Monitor
2018–012 and should be submitted on In its filing with the Commission, the Mechanism rule language used by its
or before January 4, 2019. Exchange included statements affiliated exchange, Cboe C2 Exchange,
concerning the purpose of and basis for Inc. (‘‘C2’’) (ii) provide the ability for
For the Commission, by the Division of
the proposed rule change and discussed Users [sic] to configure limits applicable
Trading and Markets, pursuant to delegated
authority.25 any comments it received on the to a group of EFIDs, and (iii) adopt a
Eduardo A. Aleman,
proposed rule change. The text of these new a new risk parameter.
statements may be examined at the
Deputy Secretary.
places specified in Item IV below. The Rule Harmonization
[FR Doc. 2018–27081 Filed 12–13–18; 8:45 am] First, the Exchange proposes to
Exchange has prepared summaries, set
BILLING CODE 8011–01–P
forth in sections A, B, and C below, of harmonize its Risk Monitor Mechanism
the most significant aspects of such Rule to that of its affiliated Exchange,
statements. C2. Particularly, C2 Rule 6.14 governs,
SECURITIES AND EXCHANGE among other things, its Risk Monitor
COMMISSION A. Self-Regulatory Organization’s Mechanism functionality. The Exchange
[Release No. 34–84777; File No. SR-
Statement of the Purpose of, and notes the functionality of the Risk
CboeBZX–2018–086] Statutory Basis for, the Proposed Rule Monitor Mechanism is substantively the
Change same as the Risk Monitor Mechanism on
Self-Regulatory Organizations; Cboe 1. Purpose BZX. Indeed, the Exchange notes that
BZX Exchange, Inc.; Notice of Filing C2 just recently adopted Rule 6.14 in
and Immediate Effectiveness of a The Exchange proposes to amend
connection with the technology
Proposed Rule Change Relating To Rule 21.16 which governs the Risk
migration of C2 onto the options
Amend Its Provision Related to Its Risk Monitor Mechanism.
platform of EDGX, and at such time
Monitor Mechanism Background conformed its previous Risk Monitor
December 10, 2018. By way of background, the Risk Mechanism functionality to the
Pursuant to Section 19(b)(1) of the Monitor Mechanism providers Users 5 functionality that already existed on
Securities Exchange Act of 1934 (the with the ability to manage their order BZX.7 Although the functionality is
‘‘Act’’),1 and Rule 19b–4 thereunder,2 and execution risk. Particularly, Rule substantively the same, the rule
notice is hereby given that on November 21.16 provides that the System will structure and terminology used in the
29, 2018, Cboe BZX Exchange, Inc. (the maintain a counting program for each BZX and C2 rules differ. The Exchange
‘‘Exchange’’ or ‘‘BZX’’) filed with the wishes to provide harmonization with
amozie on DSK3GDR082PROD with NOTICES1
Securities and Exchange Commission 3 15 U.S.C. 78s(b)(3)(A)(iii).
respect to this rule across the two
(the ‘‘Commission’’) the proposed rule 4 17 CFR 240.19b–4(f)(6). exchanges and accordingly proposes to
5 See Exchange Rule 1.5(ee). The term ‘‘User’’
change as described in Items I and II 6 See infra discussion accompanying footnotes 6–
means any Member or Sponsored Participant who
is authorized to obtain access to the System 7 [sic].
25 17 CFR 200.30–3(a)(12). pursuant to Rule 11.3. As discussed below, the 7 See Securities Exchange Act Release No. 83214
1 15 U.S.C. 78s(b)(1). Exchange is proposing to replace references to (May 11, 2018), 83 FR 22796 (May 16, 2018) (SR–
2 17 CFR 240.19b–4. ‘‘Users’’ in Rule 21.16 with ‘‘Member’’. C2–2018–005).
VerDate Sep<11>2014 16:57 Dec 13, 2018 Jkt 247001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\14DEN1.SGM 14DEN1](https://thefederalregister.org/doc/83_FR_64633/page/5.svg)
Document Created: 2018-12-14 03:50:09
Document Modified: 2018-12-14 03:50:09
| 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 64393 |
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