Federal Register / Vol. 83, No. 240 / Friday, December 14, 2018 / Notices 64393 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(2). 

11 15 U.S.C. 78s(b)(2)(B). 

12 17 CFR 200.30–3(a)(12). 

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). 

5Capitalized 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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 9 of the Act and 

subparagraph (f)(2) of Rule 19b–4 10

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 11 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

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 rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2018–57 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–NYSE–2018–57. 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 the Exchange. 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–NYSE–2018–57 and should 

be submitted on or before January 4, 

2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27084 Filed 12–13–18; 8:45 am] 

BILLING CODE 8011–01–P 

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. 

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

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 


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6NSCC 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. 7An 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. 

8NSCC 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. 

9NSCC 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. 

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. 

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. 

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® 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. 

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. 

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). 

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. 

(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 


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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). 

14 15 U.S.C. 78q–1(b)(3)(D). 

15 Id. 

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

Threshold level Minimum 

monthly fee 

Discount for transactions after 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 renumber 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. 

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. 

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 


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16 Id. 

17 Id. 

18 Id. 

19 15 U.S.C. 78q–1(b)(3)(F). 

20 Id. 

21 17 CFR 240.17Ad–22(e)(23)(ii). 

22 Id. 

23 15 U.S.C 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f). 

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

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

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

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

(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. 

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 rule-comments@

sec.gov. 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 


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25 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5See Exchange Rule 1.5(ee). The term ‘‘User’’ 

means any Member or Sponsored Participant who 

is authorized to obtain access to the System 

pursuant to Rule 11.3. As discussed below, the 

Exchange is proposing to replace references to 

‘‘Users’’ in Rule 21.16 with ‘‘Member’’. 

6See infra discussion accompanying footnotes 6– 

7 [sic]. 7See Securities Exchange Act Release No. 83214 

(May 11, 2018), 83 FR 22796 (May 16, 2018) (SR– 

C2–2018–005). 

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-rulefilings.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

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27081 Filed 12–13–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84777; File No. SRCboeBZX–2018–086] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Relating To 

Amend Its Provision Related to Its Risk 

Monitor Mechanism 

December 10, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

29, 2018, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) proposes to 

amend its provision related to its Risk 

Monitor Mechanism. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegal

RegulatoryHome.aspx), at the 

Exchange’s Office of the Secretary, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 21.16 which governs the Risk 

Monitor Mechanism. 

Background 

By way of background, the Risk 

Monitor Mechanism providers Users 5

with the ability to manage their order 

and execution risk. Particularly, Rule 

21.16 provides that the System will 

maintain a counting program for each 

User. A User may configure a single 

counting program or multiple counting 

programs to govern its trading activity 

(i.e., on a per port basis). The counting 

program counts executions, contract 

volume and notional value, within a 

specified time period established by 

each User (‘‘specified time period’’) and 

on an absolute basis for the trading day 

(‘‘absolute limits’’). The specified time 

period will commence for an option 

when a transaction occurs in any series 

in such option. The counting program 

will also count a User’s executions, 

contract volume and notional value 

across all options which a User trades 

(‘‘Firm Category’’). When the system 

determines that a User’s Specified 

Engagement Trigger (i.e., a volume 

trigger, notional trigger, count trigger 

and percentage trigger) has reached its 

established limit, the Risk Monitor 

Mechanism cancels or rejects such 

User’s orders or quotes 6 in all series of 

the class and cancels or rejects any 

additional orders or quotes from the 

User in the class until the counting 

program resets. 

Proposed Rule Change 

The Exchange proposes to amend 

Rule 21.16 to (i) adopt the Risk Monitor 

Mechanism rule language used by its 

affiliated exchange, Cboe C2 Exchange, 

Inc. (‘‘C2’’) (ii) provide the ability for 

Users [sic] to configure limits applicable 

to a group of EFIDs, and (iii) adopt a 

new a new risk parameter. 

Rule Harmonization 

First, the Exchange proposes to 

harmonize its Risk Monitor Mechanism 

Rule to that of its affiliated Exchange, 

C2. Particularly, C2 Rule 6.14 governs, 

among other things, its Risk Monitor 

Mechanism functionality. The Exchange 

notes the functionality of the Risk 

Monitor Mechanism is substantively the 

same as the Risk Monitor Mechanism on 

BZX. Indeed, the Exchange notes that 

C2 just recently adopted Rule 6.14 in 

connection with the technology 

migration of C2 onto the options 

platform of EDGX, and at such time 

conformed its previous Risk Monitor 

Mechanism functionality to the 

functionality that already existed on 

BZX.7 Although the functionality is 

substantively the same, the rule 

structure and terminology used in the 

BZX and C2 rules differ. The Exchange 

wishes to provide harmonization with 

respect to this rule across the two 

exchanges and accordingly proposes to 


amozie on DSK3GDR082PROD with NOTICES1