[Federal Register Volume 84, Number 245 (Friday, December 20, 2019)]
[Notices]
[Pages 70258-70260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27451]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87755; File No. SR-NSCC-2019-005]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed
Rule Change To Extend the Implementation Timeframe for an Approved Rule
Change To Amend Procedure VII With Respect to the Receipt of CNS
Securities and Make Other Changes
December 16, 2019.
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 11, 2019, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the clearing agency.
NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) of
the Act \3\ and Rule 19b-4(f)(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)(4).
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change would amend NSCC Rules & Procedures
(``Rules'') \5\ to extend the implementation timeframe for a rule
change (``Approved Rule Change'') that became effective pursuant to
rule filing SR-NSCC-2019-002, as amended (``Original Rule Filing'') \6\
upon approval by the Commission. In this regard, pursuant to the
proposed rule change, the Rules would be amended to state that the
Approved Rule Change will be implemented by March 6, 2020, rather than
being implemented by December 6, 2019, as stated in the Rules, as
discussed below.
---------------------------------------------------------------------------
\5\ Capitalized terms not defined herein are defined in the
Rules, available at http://www.dtcc.com/~/media/Files/Downloads/
legal/rules/nscc_rules.pdf.
\6\ Available at http://www.dtcc.com/legal/sec-rule-filings?subsidiary=NSCC&pgs=1.
---------------------------------------------------------------------------
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, the clearing agency included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. The clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Purpose
The proposed rule change would amend the Rules to extend the
implementation timeframe for the Approved Rule Change. In this regard,
pursuant to the proposed rule change, the Rules would be amended to
state that the Approved Rule Change will be implemented by March 6,
2020, rather than being implemented by December 6, 2019, as stated in
the Rules, as discussed below.
(i) Background
Pursuant to the Approved Rule Change, NSCC (i) amended Procedure
VII (CNS Accounting Operation) in the Rules with respect to the receipt
of securities from NSCC's Continuous Net Settlement (``CNS'') System in
order to reflect a change in the allocation algorithm used during the
night cycle and (ii) made certain other technical changes to the Rules.
Pursuant to the Rules, the changes set forth in the Approved Rule
Change are to take effect by December 6, 2019. NSCC proposes to extend
the implementation timeframe for the Approved Rule Change to allow
additional time to facilitate finalization of operational testing of
NSCC system changes related to the implementation of the Approved Rule
Change.
In this regard, pursuant to the proposed rule change, NSCC proposes
to amend the Rules with respect to the implementation timeframe setting
forth the date by which the Approved Rule Change will become effective,
as described below.
(ii) Proposed Rule Change
Procedure VII of the Rules contains the following legend
(``Original Procedure VII Legend'') \7\ regarding the implementation
timeframe for the Approved Rule Change.
---------------------------------------------------------------------------
\7\ See Rules, supra note 5 at 248.
[Changes to this Procedure VII, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the
Securities and Exchange Commission but have not yet been
[[Page 70259]]
implemented. By December 6, 2019, these changes will be implemented,
and this legend will automatically be removed from this Procedure
---------------------------------------------------------------------------
VII.]
Pursuant to the proposed rule change, the Original Procedure VII
Legend would be deleted and replaced with the following revised legend
(``Revised Procedure VII Legend'').
[Changes to this Procedure VII, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the
Securities and Exchange Commission but have not yet been implemented.
By March 6, 2020, these changes will be implemented, and this legend
will automatically be removed from this Procedure VII.]
Addendum G of the Rules contains the following legend (``Original
Addendum G Legend'') \8\ regarding the implementation timeframe for the
Approved Rule Change.
\8\ See Rules, supra note 5 at 349.
---------------------------------------------------------------------------
[Changes to this Addendum G, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the
Securities and Exchange Commission but have not yet been
implemented. By December 6, 2019, these changes will be implemented,
and this legend will automatically be removed from this Addendum G.]
Pursuant to the proposed rule change, the Original Addendum G
Legend would be deleted and replaced with the following revised legend
(``Revised Addendum G Legend'').
[Changes to this Addendum G, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the
Securities and Exchange Commission but have not yet been
implemented. By March 6, 2020, these changes will be implemented,
and this legend will automatically be removed from this Addendum G.]
(iii) Implementation Timeframe
The proposed rule change would become effective upon filing with
the Commission such that the text of the Rules would be revised to
delete the Original Procedure VII Legend and Original Addendum G Legend
and replace them with the Revised Procedure VII Legend and Revised
Addendum G Legend, respectively, as discussed above.
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 Section 17A(b)(3)(F) of the Act \9\ for the reason
described below.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
Section 17A(b)(3)(F) of the Act requires, in part, that the Rules
be designed to promote the prompt and accurate clearance and settlement
of securities transactions.\10\ NSCC believes that by allowing
additional time to finalize operational testing of NSCC system changes
related to the implementation of the Approved Rule Change, the proposed
rule change would facilitate the ability of NSCC to implement the
Approved Rule Change in a manner that minimizes the possibility of
disruptions to NSCC systems, including the CNS System.\11\ Therefore,
NSCC believes that the proposed rule change to extend the
implementation timeframe, which would allow additional time for NSCC to
complete operational testing relating to the Approved Rule Change,
would promote the prompt and accurate clearance and settlement of
securities transactions, consistent with Section 17A(b)(3)(F) of the
Act.
---------------------------------------------------------------------------
\10\ Id.
\11\ The CNS System and its operation are described in Rule 11
(CNS System) and Procedure VII (CNS Accounting Operation) of the
Rules, supra note 5.
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
NSCC does not believe the proposed rule change will have any impact
on competition. The proposed rule change would extend the
implementation timeframe for the Approved Rule Change and not affect
existing processing of securities transactions at NSCC.
(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others
Written comments relating to this proposed rule change have not
been solicited or received. NSCC will notify the Commission of any
written comments received by NSCC.
III. Date of Effectiveness of the Proposed Rule Change, and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4
thereunder.\13\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic 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-2019-005 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-2019-005. 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-
[[Page 70260]]
2019-005 and should be submitted on or before January 10, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019-27451 Filed 12-19-19; 8:45 am]
BILLING CODE 8011-01-P