82112 Federal Register / Vol. 75, No. 249 / Wednesday, December 29, 2010 / Notices 

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

2Securities Exchange Act Release No. 63126 

(October 18, 2010), 75 FR 65546 (October 25, 2010). 

3Only non-CNS eligible ACATS items and CNSeligible ACATS items that have been designated as 

ex-CNS shall be forwarded to the OW. Non-CNS 

ACATS items for mutual funds, limited 

partnerships, and safekeeping items, however, will 

not be eligible for OW. 

4Balance Orders will be forwarded to the OW 

after netting and allotting has occurred in 

accordance with NSCC’s Procedures. 

5These functionalities will be made available at 

a date no less than ten business days following 

announcement of implementation by Important 

Notice. 

6All NSCC members that are also members of the 

Financial Industry Regulatory Authority (‘‘FINRA’’) 

are required to participate in the RECAPS service, 

however, the service is available to all NSCC 

members. See FINRA Rule 11190(a). 

7Procedure II (Trade Comparison and Recording 

Service) sets forth the procedures for comparison of 

direct submissions by members and for trade 

recording of locked-in transactions. In accordance 

with Municipal Securities Rulemaking Board 

(‘‘MSRB’’) rules, NSCC reports transactions in 

municipal securities compared through its Realtime Trade Matching (‘‘RTTM’’) service to the MSRB 

on behalf of members; however, transactions 

submitted through the OW will not be reported by 

NSCC to the MSRB. In order to remain compliant 

with MSRB reporting requirements, members will 

have to continue to make submissions subject to 

MSRB rules through RTTM. 

8Such items will be subject to the validation 

criteria of the systems or services that forwarded 

them to the OW; therefore, the matching or 

validation criteria (which are set forth in footnote 

9 below) will not apply. 

9Adjustments for mandatory reorganization 

events are expected to be available shortly after 

February 4, 2011, or a date no less than 10 business 

days following announcement of its 

implementation by Important Notice. 

10This functionality is anticipated to be rolled 

out in early March 2011. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63588; File No. SR–NSCC– 

2010–11] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Order Granting Approval 

of a Proposed Rule Change to 

Enhance the Reconfirmation and 

Pricing Service, Including the Creation 

of the Obligation Warehouse 

December 21, 2010. 

I. Introduction 

On October 10, 2010, the National 

Securities Clearing Corporation 

(‘‘NSCC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

proposed rule change SR–NSCC–2010– 

11 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’).1 Notice of the proposal was 

published in the Federal Register on 

October 25, 2010.2 The Commission 

received no comment letters. For the 

reasons discussed below, the 

Commission is granting approval of the 

proposed rule change. 

II. Description 

Reconfirmation and Pricing Service 

(‘‘RECAPS’’) is NSCC’s automated fail 

clearance system for eligible securities. 

Through RECAPS, members are 

provided with an opportunity on a 

quarterly basis to reconfirm and reprice 

compared transactions which remain 

unsettled (i.e., fail transactions). As 

approved, the rule change modifies 

RECAPS to run on a more frequent 

basis, enhances RECAPS, and renames 

the RECAPS process the Obligation 

Warehouse (‘‘OW’’ or ‘‘OW Service’’). As 

more fully described below, the new 

enhanced service will provide: (1) 

Comparison of transactions that are not 

otherwise submitted by the applicable 

marketplaces or members themselves for 

trade comparison or recording through 

other NSCC trade capture services; (2) 

tracking, storage, and maintenance of 

unsettled obligations either compared 

through the service or forwarded to it 

from other NSCC services in accordance 

with NSCC rules including trades 

involving securities exited from NSCC’s 

Continuous Net Settlement (‘‘CNS’’) 

system, non-CNS Automated Customer 

Account Transfer Service (‘‘ACATS’’) 

items,3 NSCC Balance Order 

transactions, and Special Trades 

(collectively ‘‘OW Obligations’’); 4 and 

(3) repricing and netting of fail 

obligations. The tracking, storage, and 

maintenance functionality of the OW 

will provide transparency, will make 

information available to its users, will 

serve as a central depository of open 

(i.e., failed or unsettled) broker-tobroker obligations, and will allow users 

to manage and to resolve exceptions 

(e.g., ‘‘don’t know’’ or ‘‘DK’’ obligations) 

in an efficient and timely manner. The 

OW will also simultaneously provide 

on-going maintenance and servicing of 

open OW Obligations such as 

adjustments for corporate actions and 

regular scans for CNS eligibility.5

Currently RECAPS allows members 6

to periodically reconfirm open, aged 

fails (i.e., fails that are five or more days 

old), reprice such fails to the current 

market value, and when possible, net 

the reconfirmed and repriced fails. As 

part of the RECAPS process, those CNSeligible recompared fails are forwarded 

to CNS for processing and settlement. 

Transactions in non-CNS eligible issues 

are repriced, netted, and allotted, when 

applicable, and Balance Orders 

generated for them or they are 

designated to settle trade-for-trade. 

RECAPS provides reject and DK 

capabilities for received advisories. 

Advisories that are either ‘‘unresponded 

to’’ or ‘‘DK’d’’ are subject to close-out 

action under the rules of the appropriate 

marketplace. RECAPS requires members 

to respond through batch overnight 

submissions to all open fails submitted 

by a contraparty. RECAPS provides for 

a one-day settlement capability for all 

compared fails. 

Obligation Warehouse 

Many of the transactions submitted to 

RECAPS by members are subject to 

noncentralized, manual processes for 

purposes of comparison of fail details 

and fail confirmation. Under this rule 

change, NSCC will enhance and rename 

the RECAPS service as the OW to which 

members may submit and may 

subsequently maintain and manage their 

unsettled transactions. As part of these 

enhancements, NSCC will provide a 

trade matching and confirmation 

process pursuant to which members 

may submit to NSCC information on 

certain obligations that are not 

otherwise submitted to NSCC by the 

applicable marketplaces or by the 

members themselves through NSCC’s 

other trade comparison or recording 

services.7 Comparison of transactions 

submitted through the OW will occur in 

real-time. Obligations will be tracked 

and maintained within the OW and will 

be made available for RECAPS 

processing (as described below) until 

settled or otherwise cancelled. In 

addition, transactions exited from CNS, 

non-CNS-eligible ACATS items, Balance 

Orders, and Special Trades will also be 

forwarded to the OW for storage and 

maintenance and RECAPS processing.8

Compared items stored in the OW 

(whether compared by the OW or 

forwarded to it from other NSCC 

services or systems) will be referred to 

as ‘‘OW Obligations.’’ In order to further 

reduce manual processing by members, 

NSCC may automatically adjust any OW 

Obligations for certain mandatory 

reorganization events, which will 

initially be limited to adjustments for 

forward splits, name changes, 

redemptions, mergers (both cash and 

stock), and full calls with respect to 

bonds.9

As approved, the OW Service will 

now forward to CNS on a daily basis (or 

such other time frame as NSCC 

determines from time to time) OW 

Obligations in CNS-eligible securities.10

However, the OW will not be a 

guaranteed service, and an obligation 

forwarded to CNS will only be 

guaranteed to the extent that the 

member pays its full settlement 

obligation on the date the item is 

originally scheduled to settle in CNS. 


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Federal Register / Vol. 75, No. 249 / Wednesday, December 29, 2010 / Notices 82113 

11 Data required for a valid submission will 

include security identification, quantity to which 

party is deliverer or receiver, contrabroker, 

deliverer’s final money, settlement date, market 

participation identification (MPID) (if applicable), 

Member’s unique reference number (‘‘x-ref’’) 

whether a transaction should be excluded from CNS 

processing, and other identifying details as NSCC 

may require or permit. 

12Obligations will be able to be submitted to the 

OW in real-time. Required matching criteria will 

include the data required for a valid submission 

(i.e., specific criteria listed in the immediately 

preceding footnote except for the x-ref), and other 

identifying details as NSCC may require or permit. 

Any submission of a DK must include the 

applicable reason code pertaining to the Member’s 

disagreement with the transaction. 

13For purposes of deeming a trade compared, 

NSCC will use an initial money tolerance of $5 per 

million. The amount of the money tolerance may 

change from time to time pursuant to the filing of 

a proposed rule change by NSCC. 

14Modification of transaction details will result 

in the cancellation of the existing entry and the 

opening of a new submission. Transaction details 

that have been DK’d by a contraparty will be 

deleted from processing in accordance with time 

frames specified by NSCC from time to time. 

Initially, such transaction details will be deleted on 

the fifth business day following submission of the 

DK by the contraparty. 

15 In the event that NSCC ceases to act for a 

member pursuant to Rule 18, NSCC will reverse 

credits and debits relating to such a cash 

adjustment. 

16This functionality is expected to be rolled out 

by March 2011 or on a date no less than 10 business 

days following announcement of its 

implementation by Important Notice. 

17Transaction details required will be identical to 

those required when comparing an obligation. 

Supra note 7. 

Transactions eligible for submission 

will have to have a valid CUSIP or ISIN 

and be denominated in U.S. Dollars or 

such other currencies as NSCC may 

designate from time to time. NSCC may 

determine from time to time and shall 

announce by Important Notice which 

items are eligible for submission to OW. 

Initially, government, mortgage-backed, 

and foreign securities will all 

specifically not be eligible. Further, cash 

trades will be processed by OW only 

after settlement failure of these trades. 

OW Comparison and Trade Resolution 

Procedures 

As approved, the rule change will 

provide that once a party enters the 

required transaction information,11 the 

contraparty will receive an advisory to 

which it must respond by submitting 

identical transaction details to facilitate 

a compared obligation or by submitting 

a DK.12 If a member does not act on an 

advisory submitted against it by the 

close of business on the day after 

submission, NSCC may impose a fee 

upon the member. If the deliverer and 

receiver submit trade data that matches 

in all required respects, the trade will be 

deemed compared.13 NSCC may permit 

uncompared trade details to be modified 

or cancelled by the submitter on the 

submission date through the use of the 

appropriate instruction.14 Upon 

comparison, NSCC may permit 

obligations to be cancelled if both 

receiver and deliverer agree by 

submitting a cancel request or if one 

party accepts the other party’s cancel 

request. Each OW Obligation will 

receive an ‘‘OW Control Number’’ to 

facilitate tracking the obligation through 

its settlement, cancellation, or closure. 

NSCC will have no responsibility for 

determining whether any trade 

submission is duplicative of an earlier 

trade submission. All trade submissions 

will be treated as separate submissions. 

NSCC may delete trade input which is 

not matched by such time frames as it 

determines from time to time. 

Maintenance and Tracking 

As a result of the rule change, the OW 

service will permit members to track 

each OW Obligation for the life of the 

obligation until it has been (i) settled, 

(ii) cancelled by the members that are 

the parties to the obligation, or (iii) 

otherwise closed in the OW Service by 

NSCC pursuant to NSCC Rules (e.g., 

when the obligation becomes CNSeligible and is sent to CNS for 

settlement). NSCC may adjust any 

compared OW Obligation with respect 

to certain mandatory reorganization 

events, which will initially be limited to 

forward splits, name changes, 

redemptions, mergers (both cash and 

stock), and full calls with respect to 

bonds. In the case of such a mandatory 

reorganization, at such time on or after 

the effective date of the reorganization 

as NSCC shall determine and to the 

extent NSCC has the relevant 

information, the affected OW Obligation 

may be adjusted in accordance with the 

terms of the reorganization event. With 

respect to name changes and forward 

splits, OW positions in the subject 

security will be converted into the 

equivalent positions of the new 

securities, cash, or both and a new 

obligation will be created automatically 

as part of the processing in the OW. Any 

cash component associated with a 

mandatory reorganization will be 

included as part of the member’s daily 

money settlement with NSCC.15

Unless otherwise excluded by a 

member, all CNS-eligible OW 

Obligations that reach the status of 

settlement date minus one (‘‘SD–1’’) or 

that have reached or passed their 

scheduled settlement date, may be 

forwarded to CNS by NSCC on a daily 

basis.16 However, the settlement of any 

such item forwarded to CNS will be 

guaranteed only to the extent that the 

member pays its full settlement 

obligation on the date the item is 

scheduled to settle in CNS. An item 

forwarded to CNS from the OW may be 

exited from CNS to the extent the 

member fails to complete its settlement 

obligation. If NSCC exits an item, any 

credits received by a member arising 

from the corresponding payment 

obligation shall be reversed, and 

settlement of the item shall be effected 

between the receiving and delivering 

member outside the facilities of NSCC. 

OW Obligations for which deliveries 

are made through The Depository Trust 

Company (‘‘DTC’’) through either The 

New York Window (‘‘NYW’’) or 

electronic book-entry deliver order will 

be updated to indicate that they have 

settled in accordance with proper 

instructions from DTC or the member, 

respectively. In order to give effect to 

such an update, members must provide 

DTC with instructions in accordance 

with DTC’s procedures and must 

include the OW Control Number. In the 

event of a partial delivery through DTC, 

NSCC will update the records for the 

respective OW Obligation accordingly 

based on information received either 

from DTC or the member’s update to 

their own OW Obligation records. Other 

items will be recorded as settled upon 

the submission of appropriate 

instructions by the counterparties. 

Obligations that have been reflected in 

the OW as settled may be reopened 

(either partially or fully) as a result of 

a delivery reclaim message sent by 

either party to the obligation to OW. 

Updates to reflect reclaims of settled 

transactions will be made once one 

party enters details of the original 

transaction and the original 

transaction’s OW Control Number.17

Once these details are submitted, an 

advisory of the reclaim will be sent to 

the contraparty that must then submit 

either identical transaction details to 

facilitate the reclaim and reopening of 

the obligation in OW or notification that 

it does not accept the reclaim details 

entered by the initiating party. Updates 

for reclaims may only be submitted to 

the OW for a period of two business 

days following the actual settlement 

date of the relevant obligation. If the 

reclaim message is not accepted by the 

contraparty, it will be deleted from the 

OW, and the parties will need to 

generate a new reclaim message in OW. 

If the original obligation has been 

settled for longer than two business 

days, any reclaim message will be 

rejected. 

Pursuant to the approved rule change, 

if NSCC ceases to act for a member, all 

open activity relating to that member 


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82114 Federal Register / Vol. 75, No. 249 / Wednesday, December 29, 2010 / Notices 

18 It is expected that the first RECAPS process in 

the OW will run in late March or early April 2011. 

19Upon implementation of the changes described 

herein, NSCC anticipates operating the RECAPS 

process on a monthly cycle. Members will be 

notified of changes in the processing cycle, if any, 

by an NSCC Important Notice. 

20Obligations that are matched and have a 

settlement date of at least two days prior to the date 

on which the RECAPS process commences will be 

considered for inclusion in the RECAPS process. 

Fail items not already in the OW but eligible for 

RECAPS processing must be submitted to OW by 

the member prior to RECAPS processing. 

21 In the event that the current market price for 

a security is not available, the obligation will be 

priced at the amount at which the obligation was 

previously matched. 

22The dates set forth in this section are the dates 

NSCC anticipates taking action. As stated above, 

NSCC will keep its members informed of actual 

implementation and action dates by Important 

Notice. 

will be deleted from the OW. However, 

the reports relating to such activity will 

be maintained in accordance with 

NSCC’s record retention requirements. 

Modified RECAPS Process 

Pursuant to the rule change, the 

existing RECAPS process will continue 

to function but in a modified form.18

Upon implementation of OW, the 

RECAPS process will be incorporated 

into OW and will require one day to 

complete. It is anticipated that the 

process will occur more frequently than 

the current quarterly schedule.19

On a day specified by NSCC, each OW 

Obligation eligible for RECAPS 20 will 

be re-priced, if appropriate,21 renetted 

and allotted, if appropriate, the 

settlement date will be updated to the 

next business date, and a new OW 

Obligation will be opened. Securities 

that are not CNS-eligible or that are 

designated as trade-for-trade will not be 

netted and allotted. Obligations eligible 

for RECAPS in the OW can be excluded 

from the RECAPS process if so 

designated by the member. 

All new obligations arising from the 

RECAPS process will be tracked and 

processed in accordance with the OW 

procedures described above. If a fail was 

open over an interest payment date, the 

parties to the trade will be required to 

settle that interest payment outside of 

NSCC. Any net cash adjustments 

resulting from the RECAPS process will 

be sent to NSCC as they are under the 

current process. 

Reporting 

Under the new rule, each member 

will receive real-time updates regarding 

its OW activity. In addition, NSCC will 

make available to each member an endof-day report that reflects all end-of-day 

positions of such member in OW, which 

may be accessed by members through 

NSCC’s systems. Accordingly, NSCC 

will discontinue issuance of all RECAPS 

reports (e.g., RECAPS Contracts/ 

Supplemental Contracts and RECAPS 

Compared Trade Summaries). 

The rule change also creates a new 

Rule 51 (Obligation Warehouse) and 

Procedure IIA (Obligation Warehouse) 

to reflect the changes and enhancements 

as described above. Rule 51 provides: (i) 

A general description of the OW service, 

(ii) a provision relating to the settlement 

of OW Obligations and the nonguaranteed nature of the service, and 

(iii) a limitation of liability on the part 

of NSCC with respect to obligations 

processed through the OW. 

Furthermore, the provisions of 

Procedure IIA will supersede those set 

forth in Procedure II, Section F 

(RECAPS), and thus Section F will be 

deleted. 

In addition, NSCC will make 

conforming changes to: 

a. Rule 1 (Definitions) to add a 

definition for ‘‘Obligation Warehouse’’ 

and ‘‘OW Obligation’’; 

b. Rule 7 (Comparison and Trade 

Recording Operation) to remove 

language from the rule relating to 

submission of data to NSCC for 

reconfirmation and repricing of trade 

data with respect to transactions already 

compared through the facilities of NSCC 

or other facilities, as this service will 

now occur pursuant to Rule 51 and 

Procedure XVII; 

c. Rule 11 (CNS System) to provide 

that obligations arising from Special 

Trades will be automatically entered 

into the OW; 

d. Rule 18 (Procedures for When 

NSCC Ceases to Act) to reflect that (i) 

the OW Obligations that have been 

forwarded to CNS for settlement relating 

to a member for which NSCC has ceased 

to act will be removed from the CNS 

Accounting Operation and that any 

outstanding OW Obligations of the 

member will be removed from the OW 

service and (ii) NSCC will reverse any 

cash adjustments that were forwarded to 

settlement relating to the OW activity of 

a member for which NSCC has ceased 

to act; 

e. Rule 50 (Automated Customer 

Account Transfer Service) to reflect that 

non-CNS ACATS items (as well as CNSeligible items designated to be delivered 

ex-CNS) will be automatically entered 

into the OW; 

f. Procedure V (Balance Order 

Accounting Operation) to reflect that 

Balance Orders will be automatically 

entered into the OW; and 

g. Procedure VII (CNS Accounting 

Operation) to reflect (i) the addition of 

CNS-eligible OW activity to the CNS 

Miscellaneous Activity Report and (ii) 

securities removed from CNS that result 

in CNS Receive or Deliver Instructions 

will be entered into the Obligation 

Warehouse service. 

Pilot and Participant Testing 

NSCC implemented a pilot program of 

the OW process in early February 2010 

for firms that had completed systems 

changes necessary to participate in the 

process. This pilot program ended at the 

beginning of June 2010 as additional 

discussions ensued between NSCC and 

its participant members regarding the 

additional functionalities, which are 

described in this filing, sought to be 

included within the service. Prior to 

implementation of OW, a participating 

member testing period will take place 

between November 2010 and January 

2011. An industry-wide test of the OW 

RECAPS process will be scheduled for 

some time in the first quarter of 2011. 

Implementation Time Frame 

NSCC will implement the changes set 

forth in this filing for all members 

during the first quarter of 2011 with the 

first settlement date expected to be on 

January 24, 2011. Mandatory 

reorganization events are anticipated to 

be applied to OW Obligations shortly 

after February 4, 2011, on a date no less 

than 10 business days following 

announcement of the implementation 

by Important Notice. Similarly, at the 

request of the industry, the functionality 

providing for OW Obligations to be 

reviewed for CNS-eligiblility and if 

eligible sent to CNS will be 

implemented several weeks after the 

initial launch to give members time to 

familiarize themselves with the OW 

settlement tracking functionality. 

Accordingly, after March 4, 2011, or on 

a date no less than 10 business days 

following announcement of its 

implementation by Important Notice 

obligations in the OW will be reviewed 

for CNS-eligibility and if eligible will be 

closed and sent to CNS. The first 

RECAPS process in the OW will be run 

in late March or early April 2011. NSCC 

members will be advised of the 

implementation dates through issuance 

of NSCC’s Important Notices.22

III. Discussion 

Section 17A(b)(3)(F) of the Act 

requires, among other things, that the 

rules of a clearing agency be designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions and to remove 

impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 


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Federal Register / Vol. 75, No. 249 / Wednesday, December 29, 2010 / Notices 82115 

23 15 U.S.C. 78q–1(b)(3)(F). 

24 In approving the proposed rule change, the 

Commission has considered its impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

25 17 CFR 200.30–3(a)(12). 

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

2The text of proposed new Section 12 to NSCC 

Rule 57 can be viewed at http://www.dtcc.com/ 

downloads/legal/rule_filings/2010/nscc/2010- 

18.pdf. 

settlement of securities transactions.23

With the rule change modifying and 

enhancing the RECAPS to establish the 

OW service, NSCC will provide for 

greater efficiency and transparency with 

respect to securities transactions 

obligations processed through the OW. 

Furthermore, the modifications and 

enhancements will allow NSCC to 

improve its service by providing prompt 

and automated confirmation, 

comparison, and tracking of fail 

transactions.24

Accordingly, for the reasons stated 

above the Commission believes that the 

rule change is consistent with NSCC’s 

obligation under Section 17A of the 

Exchange Act, as amended, and the 

rules and regulations thereunder. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and in 

particular with the requirements of 

Section 17A of the Act and the rules and 

regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act, that the 

proposed rule change (File No. SR– 

NSCC–2010–11) be and hereby is 

approved. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32730 Filed 12–28–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63604; File No. SR–NSCC– 

2010–18] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing of 

Proposed Rule Change Relating to the 

Insurance and Retirement Processing 

Services To Incorporate a New 

Analytics Reporting Service 

December 23, 2010. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

December 10, 2010, the National 

Securities Clearing Corporation 

(‘‘NSCC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I and II below, which Items 

have been prepared primarily by NSCC. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of Terms of Substance of the 

Proposed Rule Change 

NSCC is proposing to expand its 

Insurance and Retirement Processing 

Service (‘‘IPS’’) by providing a new 

Analytics Reporting Service in order to 

provide greater transparency to the 

insurance market. 

II. Self-Regulatory Organization’s 

Statement of Purpose of, and Statutory 

Basis for, the Proposed Rule Change 

In its filing with the Commission, 

NSCC 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. NSCC 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 Purpose of, and Statutory 

Basis for, the Proposed Rule Change 

1. Background 

Currently, service providers that make 

insurance information available to the 

insurance industry generally utilize a 

combination of publicly accessible 

financial information, responses 

provided by market participants to 

optional surveys, and proprietary 

analytical tools. These services also rank 

the various market participants and 

products in the insurance market to 

provide relative rankings by revenue or 

other criteria. Reliance on survey results 

and the aggregation and analysis of 

those results often makes the 

information several months old by the 

time it is distributed to subscribers. 

2. Proposed Amendments 

NSCC proposes to add a new Section 

12 to NSCC Rule 57 to provide an 

Analytics Reporting Service.2 The 

Analytics Reporting Service would use 

actual transaction information currently 

used by NSCC in processing IPS 

transactions rather than survey results. 

NSCC believes that this would allow IPS 

to provide more efficient, cost-effective, 

and timely benchmarking and other 

market information about the insurance 

market. The Analytics Reporting Service 

would assist NSCC Members and 

Limited Members in better 

understanding their business and the 

broader market for insurance products; 

would help them to better understand 

investor needs; would support the 

efficient development of products that 

meet investor needs; and would assist 

them in making decisions related to 

sales, marketing, and product 

development. 

3. Overview 

The Analytics Reporting Service 

would provide NSCC Members and 

Limited Members with the ability to 

perform market analysis based on IPS 

data. This market analysis (commonly 

referred to as ‘‘benchmarking’’) would 

allow users of this service to obtain and 

compare aggregated data from different 

perspectives including, but not limited 

to, geographic location, type of 

transaction, and other criteria that NSCC 

and the NSCC Members and Limited 

Members determine to be most useful. 

The benchmarking portion of the service 

would provide information on an 

aggregate basis and would not reveal the 

confidential or proprietary information 

of any NSCC Member or Limited 

Member. The service would permit 

NSCC Members and Limited Members 

to monitor and to analyze their business 

through benchmarking relative 

performance by comparing their own 

transactional information against the 

overall market’s and by conducting 

market research and analyzing market 

trends. 

Additionally, NSCC would provide 

information that attributes aggregated 

transaction information to specific 

NSCC Members and Limited Members 

for the purposes of providing a relative 

ranking of products and market 

participants (i.e., league tables). This 

aspect of the Analytics Reporting 

Service would allow NSCC Members 

and Limited Members to conduct peer 

analysis and to understand their 

performance relative to other NSCC 

Members or Limited Members. 

Although service providers already 

provide league tables on the basis of 

surveys and other tools, this information 

may be considered confidential or 

proprietary information by NSCC or the 

individual NSCC Members or Limited 

Members to which it pertains. 

NSCC would offer the Analytics 

Reporting Service through a proprietary 

online service. 


srobinson on DSKHWCL6B1PROD with NOTICES