Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices 40611 

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

2 17 CFR 240.19b–4. 

3Terms not defined herein are defined in the EPN 

Rules, available at http://www.dtcc.com/legal/rulesand-procedures. 

4See Article II, EPN Rule 2, Sec. 5, supra note 

3. 

5The reference to ‘‘T2’’ does not relate to the two 

business days settlement cycle for broker-dealer 

securities transactions, known as ‘‘T+2.’’ 

6MBSD maintains two sets of rulebooks. The EPN 

Rules govern MBSD’s EPN Service, and the MBSD 

Clearing Rules (the ‘‘MBSD Rules’’) govern MBSD’s 

clearance and settlement service. The MBSD Rules 

are available at http://www.dtcc.com/legal/rulesand-procedures. Pursuant to the MBSD Rules, the 

term ‘‘Clearing System’’ means the (i) system of 

services provided by MBSD to persons that are 

Clearing Members thereof, including trade 

comparison, to-be-announced netting, pool 

comparison, pool netting, and settlement, as 

applicable, and (ii) operations carried out by MBSD 

in the course of providing such services, as 

provided in the MBSD Rules. See MBSD Rule 1, 

Definitions. 

writing within 60 days of this 

publication. 

Rule 17f–1(c) is a reporting rule and 

does not specify a retention period. The 

rule requires an incident-based 

reporting requirement by the reporting 

institutions when securities certificates 

are discovered to be missing, lost, 

counterfeit, or stolen. Registering under 

Rule 17f–1(c) is mandatory to obtain the 

benefit of a central database that stores 

information about missing, lost, 

counterfeit, or stolen securities for the 

Lost and Stolen Securities Program. 

Reporting institutions required to 

register under Rule 17f–1(c) will not be 

kept confidential; however, the Lost and 

Stolen Securities Program database will 

be kept confidential. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: Pamela Dyson, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Candace 

Kenner, 100 F Street NE, Washington 

DC 20549, or send an email to: PRA_

Mailbox@sec.gov. 

Dated: August 9, 2018. 

Eduardo A. Aleman. 

Assistant Secretary. 

[FR Doc. 2018–17487 Filed 8–14–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83808; File No. SR–FICC– 

2018–007] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing of Proposed Rule Change To 

Correct Certain References, Provide 

Transparency to Existing Processes 

and Amend Existing Practices in 

Connection With the Mortgage-Backed 

Securities Division Electronic Pool 

Notification Rules 

August 9, 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 August 3, 

2018, Fixed Income Clearing 

Corporation (‘‘FICC’’) 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. 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 

amendments to the FICC MortgageBacked Securities Division (‘‘MBSD’’) 

electronic pool notification (‘‘EPN’’) 

Rules (the ‘‘EPN Rules’’) 3 as described 

below. 

FICC is proposing to correct the EPN 

Rules by (i) deleting references to the 

term ‘‘EPN Procedures,’’ (ii) amending 

the definition of the term ‘‘Interested 

Person’’ to delete the reference to 

‘‘Comparison Only System,’’ (iii) 

deleting the defined term for ‘‘Par 

Amount,’’ (iv) replacing references to 

the term ‘‘Vice President’’ with the term 

‘‘Executive Director,’’ (v) amending Sec. 

3 (Agreements of EPN User) in EPN Rule 

1 (Requirements Applicable to EPN 

Users) of Article III (EPN Users) to 

clarify an EPN User’s obligation to 

process Messages through the EPN 

system during a system disruption, and 

(vi) amending EPN Rule 4 (Admission to 

Premises of Corporation; Power of 

Attorney) of Article III (EPN Users) to 

replace a reference to ‘‘he’’ with ‘‘such 

person.’’ 

FICC is proposing to amend various 

sections in the EPN Rules to provide 

transparency to FICC’s existing 

processes. Specifically, FICC is 

proposing to amend EPN Rule 1 

(Definitions) of Article I (Definitions and 

General Provisions); Section 2 

(Limitations) in EPN Rule 1 (Accounts) 

and Section 1 (Availability of Reports), 

Section 2 (Message Detail Report), 

Section 3 (Message Summary Report), 

and Section 5 (Good Delivery; Time 

Stamps) in EPN Rule 2 (Reports) of 

Article II (Messages Processed by the 

Corporation); and EPN Rule 5 (Use of 

EPN Service) of Article III (EPN Users). 

FICC is also proposing to amend its 

existing practice in connection with an 

EPN User’s submission of a cancel and 

correct Message.4 Specifically, FICC is 

proposing to establish one good delivery 

time stamp (referred to as the ‘‘T2’’ 5

time stamp) that reflects the same 

processing time on the pool seller’s and 

the pool buyer’s cancel and correct 

Message, respectively. The proposed 

change would not affect FICC’s 

guarantee and novation of transactions 

submitted by Clearing Members through 

MBSD’s Clearing System.6

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 

FICC is proposing to correct the EPN 

Rules by (i) deleting references to the 

term ‘‘EPN Procedures’’ because FICC 

does not maintain EPN Procedures, (ii) 

amending the definition of the term 

‘‘Interested Person’’ to delete the 

reference to ‘‘Comparison Only System’’ 

because MBSD does not maintain a 

Comparison Only System, (iii) deleting 

the defined term for ‘‘Par Amount’’ 

because this term is not used in the EPN 

Rules, (iv) replacing references to the 

term ‘‘Vice President’’ with the term 

‘‘Executive Director’’ because FICC no 

longer utilizes the Vice President title, 

(v) amending Sec. 3 (Agreements of EPN 

User) in EPN Rule 1 (Requirements 

Applicable to EPN Users) of Article III 

(EPN Users) to clarify an EPN User’s 

obligation to process Messages through 

the EPN system during a system 

disruption because this change would 

be an accurate reflection of FICC’s 

existing practice, and (vi) amending 

EPN Rule 4 (Admission to Premises of 

Corporation; Power of Attorney) of 

Article III (EPN User) to replace a 

reference to ‘‘he’’ with ‘‘such person’’ 

because the reference to ‘‘such person’’ 

would be gender neutral. 


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7See supra note 4. 

8The good delivery T2 time stamp indicates 

whether good delivery has occurred with respect to 

a Message—meaning, if the T2 time stamp reflects 

a time that is at or before the established deadline, 

then good delivery has been established and the 

pool buyer will accept the Message with respect to 

the allocated securities. 

9The SIFMA Guidelines are available at https:// 

www.sifma.org/resources/general/tba-marketgovernance/. 

10See Article III, EPN Rule 1, supra note 3. 

11Pursuant to the MBSD Rules, the term 

‘‘Clearing Member’’ means any entity admitted into 

membership pursuant to MBSD Rule 2A. See MBSD 

Rule 1, Definitions, supra note 6. 

12See supra note 3. 

13FICC instituted the EPN Service and the related 

EPN Rules on a pilot basis in February 1995. The 

Commission’s temporary approval order notes that 

Amendment No. 2 to the proposed rule change 

clarified that ‘‘the only MBS rules and procedures 

applicable to EPN users are the rules and 

procedures located in Articles VI, VII, VIII, IX, and 

X of MBS’s rules.’’ See Release No. 35009 

(November 25, 1994) 59 FR 61913 (December 2, 

1994) (SR–MBS–94–02). The Commission granted 

permanent approval of the EPN Service and the 

related EPN Rules in November 1995. See Release 

No. 36540 (November 30, 1995) 60 FR 63089 

(December 8, 1995) (SR–MBS–95–09). It should be 

noted FICC submitted a proposed rule change in 

June 2017 which, among other things, renumbered 

the references of Articles VI, VII, VIII, IX, and X to 

refer to Articles I, II, III, IV and V, respectively. See 

Release No. 81002 (June 22, 2017) 82 FR 29355 

(June 28, 2017) (SR–FICC–2017–015). 

14Release No. 42721 (April 25, 2000) 65 FR 25778 

(May 3, 2000) (SR–MBSCC–99–8). 

FICC is proposing to amend various 

sections in the EPN Rules to provide 

transparency to FICC’s existing 

processes. Specifically, FICC is 

proposing to amend EPN Rule 1 

(Definitions) of Article 1 (Definitions 

and General Provisions); Section 2 

(Limitations) in EPN Rule 1 (Accounts) 

and Section 1 (Availability of Reports), 

Section 2 (Message Detail Report), 

Section 3 (Message Summary Report), 

and Section 5 (Good Delivery; Time 

Stamps) in EPN Rule 2 (Reports) of 

Article II (Messages Processed by the 

Corporation); and EPN Rule 5 (Use of 

EPN Service) of Article III (EPN Users). 

FICC is also proposing to amend its 

existing practice in connection with an 

EPN User’s submission of a cancel and 

correct Message.7 Specifically, FICC is 

proposing to establish one good delivery 

T2 time stamp 8 that reflects the same 

processing time on the pool seller’s and 

the pool buyer’s cancel and correct 

Message, respectively. As a result of this 

change, in the event that the T2 time 

stamp reflects a time that does not meet 

the good delivery requirements in 

accordance with the Securities Industry 

and Financial Markets Association’s 

(‘‘SIFMA’’) Uniform Practices Manual 

for the Clearance and Settlement of 

Mortgage-Backed Securities and Other 

Related Securities (referred to in the 

EPN Rules as the ‘‘SIFMA 

Guidelines’’),9 the financing of the 

mortgage pools associated with the 

Message, if any, would be the 

responsibility of the counterparties to 

such Message, as determined by such 

parties, in accordance with the SIFMA 

Guidelines. FICC is proposing this 

change because it would be consistent 

with the SIFMA Guidelines, and FICC 

believes that the parties to the Message 

are best positioned to ensure that a 

cancel and correct Message meets the 

good delivery requirements. The 

proposed change would not affect 

FICC’s guarantee and novation of 

transactions submitted by Clearing 

Members through MBSD’s Clearing 

System. 

The proposed changes are described 

in detail below. 

(1) MBSD’s EPN Service 

MBSD’s electronic pool notification 

service (referred to in the EPN Rules as 

the ‘‘EPN Service’’) enables users to 

reduce risk and streamline their 

operations by providing an automated 

manner for market participants that 

have an obligation to deliver pools 

(‘‘pool sellers’’) to transmit pool 

information efficiently and reliably to 

their counterparties (‘‘pool buyers’’) in 

real time. Market participants that wish 

to utilize the EPN Service are required 

to submit an application to MBSD. The 

application process and the use of the 

EPN Service are governed by the EPN 

Rules.10 The EPN Rules are designed to 

be consistent with the SIFMA 

Guidelines, which reflect common 

industry practices for the trading, 

clearance and settlement of mortgagebacked securities transactions. MBSD’s 

Clearing Members are required to be 

EPN Users; however, one can be an EPN 

User and not a Clearing Member.11

(2) Proposed Changes To Correct the 

EPN Rules 

FICC is proposing to amend the EPN 

Rules in order to correct various 

provisions in the EPN Rules. The 

proposed changes would help ensure 

that the EPN Rules are clear and 

accurate. The proposed changes reflect 

MBSD’s existing practices and FICC 

believes that these changes would help 

EPN Users better understand their rights 

and obligations under the EPN Rules. 

The proposed changes are described in 

detail below. 

a. Article I—Definitions and General 

Provisions 

Proposed Changes to EPN Rule 1— 

Definitions 

FICC is proposing to delete the term 

‘‘EPN Procedures.’’ EPN Rule 11 of 

Article V empowers FICC to adopt EPN 

Procedures as FICC ‘‘deems necessary or 

desirable.’’ 12 It appears that when FICC 

instituted the EPN Service and the 

related EPN Rules, EPN Procedures 

were not adopted at that time.13 Since 

FICC does not currently maintain EPN 

Procedures, FICC has decided to 

conform the EPN Rules to its practices 

by deleting this definition and the 

related references throughout the EPN 

Rules because this inchoate power is 

itself not necessary. 

FICC is proposing to amend the term 

‘‘EPN Service’’ to delete the reference to 

EPN Procedures. 

FICC is proposing to amend the term 

‘‘EPN User Profile’’ to delete the 

reference to EPN Procedures. In 

connection with this change, FICC is 

proposing to make a grammatical 

correction to this definition by replacing 

the word ‘‘in’’ with ‘‘by’’ so that the 

definition would state that ‘‘the EPN 

User Profile would be on a form 

specified ‘by’ FICC.’’ 

FICC is proposing to amend the term 

‘‘Interested Person’’ to delete the 

reference to Comparison Only System 

because MBSD does not maintain a 

Comparison Only System. FICC believes 

that the inclusion of this term in the 

EPN Rules was an error. 

FICC is proposing to delete the term 

‘‘Par Amount’’ because this term is not 

otherwise referred to in the EPN Rules. 

FICC believes that the inclusion of this 

term in the EPN Rules was an error and 

that it has no practical effect because 

this term is not used in the EPN Rules. 

FICC notes that this term was included 

and not defined in a version of the EPN 

Rules that was filed with the 

Commission on October 20, 1999.14

b. Article III—EPN Users 

i. Proposed Changes to EPN Rule 1— 

Requirements Applicable to EPN Users 

Section 3 (Agreements of EPN Users) 

sets forth a list of terms that an 

applicant is required to agree to, as 

specified in the EPN User Agreement. 

This list states, in part, that an applicant 

shall agree (i) to abide by and be bound 

by the EPN Rules and EPN Procedures, 

(ii) that the EPN Rules and EPN 

Procedures are incorporated into every 

contract or Message, (iii) that the EPN 

User shall pay fines that are imposed in 

accordance with the EPN Rules and EPN 

Procedures, and (iv) that it is bound by 

any amendment to the EPN Rules and 

EPN Procedures. FICC is proposing to 

delete all references in this section to 

the EPN Procedures. 

Section 3 also includes a paragraph 

that states that in the event of an EPN 


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15See supra note 3. 

16See supra note 13. 

system disruption and an extension of 

the cut-off times for communicating 

pool allocation information pursuant to 

the SIFMA Guidelines, EPN Users 

‘‘will’’ be relieved of their obligation to 

process Messages through the EPN 

Service until the beginning of the next 

Business Day after the EPN system has 

been recovered. FICC is proposing to 

amend this provision to state that EPN 

Users ‘‘may’’ be relieved of their 

obligation to process Messages through 

the EPN Service until ‘‘later in the 

Business Day or’’ the beginning of the 

next Business Day after the EPN system 

has been recovered. 

FICC is proposing this change because 

the nature of the EPN system disruption 

and MBSD’s ability to promptly fix such 

disruption determines whether the cutoff time would be extended to later in 

the Business Day or the next Business 

Day. In the event that FICC has the 

ability to promptly fix the EPN system 

disruption, EPN Users may be required 

to process their Messages in accordance 

with the applicable timeframes for the 

remainder of the Business Day. 

However, if FICC cannot promptly fix 

the EPN system disruption, MBSD 

would relieve EPN Users of their 

obligation to process Messages through 

the EPN Service until the beginning of 

the next Business Day. In all cases, FICC 

coordinates with EPN Users and, to the 

extent necessary, SIFMA to 

communicate whether an extension of 

the cut-off time is necessary. Though 

EPN system disruptions are rare, the 

proposed change is consistent with 

MBSD’s existing practice of handling 

system disruptions that impact the EPN 

Service. 

Section 5 (EPN Users Bound by EPN 

Rules, EPN Procedures and Applicable 

Laws) states, in part, that the use of 

FICC’s facilities by an EPN User shall 

constitute such EPN User’s agreement 

with FICC and with all other EPN Users 

to be bound by the provisions of, and by 

any action taken or order issued by FICC 

pursuant to the EPN Rules and any 

amendment thereto, and to such EPN 

Procedures that FICC from time to time 

may adopt. FICC is proposing to amend 

the title of this section and the 

paragraph in this section to delete all 

references to EPN Procedures. 

Section 6 (EPN Rules and EPN 

Procedures Incorporated in EPN User 

Messages) states that the EPN Rules and 

the EPN Procedures adopted from time 

to time by FICC shall be deemed 

incorporated in each Message that 

occurs through the EPN Service. It also 

states that if the terms contained in any 

other agreement between EPN Users are 

inconsistent with the provisions of the 

EPN Rules or the EPN Procedures, the 

EPN Rules and the EPN Procedures 

shall be controlling. FICC is proposing 

to amend the title of this section and the 

paragraph in this section to delete all 

references to EPN Procedures. 

ii. Proposed Changes to EPN Rule 3— 

When the Corporation Declines To Act 

for an EPN User 

Section 1 (Ceasing to Act for an EPN 

User) in EPN Rule 3 states, in part, that 

FICC may at any time cease to act for an 

EPN User if the EPN User has (i) failed 

to perform its obligations to FICC or 

other EPN Users under the EPN Rules or 

the EPN Procedures or (ii) materially 

violated any of the EPN Rules, EPN 

Procedures or any agreement with FICC. 

FICC is proposing to amend this section 

to delete all references to the EPN 

Procedures. 

iii. Proposed Changes to EPN Rule 4— 

Admission to Premises of Corporation; 

Powers of Attorney 

EPN Rule 4 states, in part, that no 

person shall be permitted to enter 

FICC’s premises as the representative of 

any EPN User unless ‘‘he’’ has first been 

approved by FICC. FICC is proposing to 

delete the reference to ‘‘he’’ and replace 

it with ‘‘such person’’ because FICC 

believes that it would be more 

appropriate to use gender neutral 

terminology. 

c. Article V—Miscellaneous 

i. Proposed Changes to EPN Rule 1— 

Action by the Corporation 

EPN Rule 1 states that except where 

action by the Board, or any committee 

of the Board, is specifically required by 

the By-Laws or the EPN Rules, FICC 

may act by its President, any Managing 

Director or any Vice President or by 

such person as may be designated from 

time to time by the Board. FICC is 

proposing to amend this sentence to 

delete the reference to Vice President 

and replace it with Executive Director. 

FICC is proposing this change because 

FICC no longer utilizes the Vice 

President title. This category of officers 

is currently referred to as Executive 

Directors. 

ii. Proposed Changes to EPN Rule 3— 

Fines and Other Sanctions 

EPN Rule 3 states that FICC may 

impose a fine on an EPN User for a 

violation of the EPN Rules or EPN 

Procedures. FICC is proposing to amend 

this paragraph to delete the reference to 

EPN Procedures. 

iii. Proposed Changes to EPN Rule 4— 

Communications 

Section 1 (Communications) states, in 

part, that each EPN User maintaining an 

Account shall be required to maintain 

such data processing and 

communications equipment as FICC 

may specify in the EPN Procedures. 

FICC is proposing to delete the reference 

to EPN Procedures and amend this 

sentence to state that each EPN User 

maintaining an Account shall be 

required to maintain such data 

processing and communications 

equipment as FICC may specify from 

time to time. The proposed change is 

consistent with FICC’s existing practice 

of providing data processing and 

communications equipment 

requirements to all approved applicants 

during the membership onboarding 

process. In the event that FICC changes 

or updates its data processing and 

communications equipment 

requirements, FICC partners with 

applicants and EPN Users to help 

ensure that their equipment is adequate 

and that such EPN Users are 

operationally ready. EPN Users are 

made aware of all changes or updates to 

FICC’s data processing and 

communications equipment 

requirements because FICC 

communicates such changes through 

various forms of communication 

including but not limited to important 

notices, electronic mail and phone. 

iv. Proposed Changes to EPN Rule 7— 

Hearings 

Section 1 (Requests for a Hearing) 

states, in part, that if an Interested 

Person’s written statement contests 

FICC’s determination that such 

Interested Person has violated an EPN 

Rule or EPN Procedure, the statement 

must specifically admit or deny each 

violation alleged and detail the reasons 

why the EPN Rules or EPN Procedures 

alleged to have been violated are being 

contested. FICC is proposing to amend 

this sentence to delete all references to 

the EPN Procedures. 

v. Proposed Changes to EPN Rule 11— 

EPN Procedures 

FICC is proposing to delete this rule 

its entirety because FICC does not 

maintain EPN Procedures. EPN Rule 11 

of Article V empowers FICC to adopt 

EPN Procedures as FICC ‘‘deems 

necessary or desirable.’’ 15 It appears 

that when FICC instituted the EPN 

Service and the related EPN Rules, EPN 

Procedures were not adopted at that 

time.16 Since FICC does not currently 

maintain EPN Procedures, FICC has 

decided to conform the EPN Rules to its 

practices by deleting this Rule, the 

defined term from EPN Rule 1 of Article 


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40614 Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices 

17Each Message reflects additional time stamps 

(e.g., T1, T3, T4, and T5) that are solely for FICC’s 

operational, processing and reporting purposes. T1 

represents the time when the Message is received 

by the EPN Service for processing; T3 represents the 

time when the EPN Service’s Message Processor 

sends the Message to the Outbound Table; T4 

represents the time when the Message Processor 

I (as stated above), and related 

references throughout the EPN Rules 

because this inchoate power is itself not 

necessary. FICC would reserve this rule 

for future use and this rule would be 

entitled ‘‘Reserved for Future Use.’’ 

vi. Proposed Changes to EPN Rule 12— 

Waivers, Etc. 

EPN Rule 12 states, in part, that the 

time fixed by the EPN Rules, the EPN 

Procedures or any regulations issued by 

FICC for the doing of any act may be 

extended, waived or suspended by the 

Board or by any officer of FICC having 

a rank of Vice President or higher 

whenever such extension, waiver or 

suspension is necessary or expedient. 

FICC is proposing to amend this 

sentence to delete all references to EPN 

Procedures and delete all references to 

regulations issued by FICC. FICC is also 

proposing to delete the reference to 

‘‘Vice President’’ and replace it with 

‘‘Executive Director’’ because FICC no 

longer utilizes the Vice President title. 

This category of officers is currently 

referred to as Executive Directors. 

vii. Proposed Changes to EPN Rule 17— 

Forms 

EPN Rule 17 states, in part, that any 

information required to be delivered to 

FICC by use of any such forms may be 

delivered by the use of any media, as 

shall be prescribed in the EPN 

Procedures or by FICC from time to 

time. FICC is proposing to delete the 

reference to EPN Procedures. In the 

event that FICC requires that a 

particular form should be delivered by 

use of any media, it is FICC’s existing 

practice to provide this information 

directly to the affected EPN User. To the 

extent that such requirement is 

applicable to a group or category of EPN 

Users, such EPN Users are made aware 

of FICC’s requirements because FICC 

announces such information through 

important notices, available at http://

www.dtcc.com/legal/important-notices. 

(3) Proposed Changes To Provide 

Enhanced Transparency to the EPN 

Rules 

FICC is proposing to amend the EPN 

Rules to provide transparency to various 

provisions in the EPN Rules. The 

proposed changes would help ensure 

that the EPN Rules are clear and 

accurate. The proposed changes reflect 

MBSD’s existing practices and FICC 

believes that these changes would help 

EPN Users better understand their rights 

and obligations under the EPN Rules. 

The proposed changes are described in 

detail below. 

a. Article I—Definitions and General 

Provisions 

Proposed Changes to EPN Rule 1— 

Definitions 

FICC is proposing to amend the term 

‘‘Message’’ to delete the reference to 

EPN Procedures. FICC would define this 

term as all electronic messages sent and 

received by an EPN User through the 

EPN Service. 

b. Article II—Messages Processed by the 

Corporation 

i. Proposed Changes to EPN Rule 1— 

Accounts 

Section 2 (Limitations) states that 

FICC may specify in the EPN Procedures 

that certain Messages between EPN 

Users are not eligible for the EPN 

Service. FICC is proposing to delete the 

reference to EPN Procedures and amend 

this section to state that certain 

Messages may be ineligible if FICC 

determines that such Messages are not 

submitted in a manner that is consistent 

with the communication links, formats, 

timeframes, and deadlines established 

by FICC. 

Currently, an EPN User is informed of 

the requisite communication links, 

formats, timeframes, and deadlines 

when such EPN User’s application has 

been approved by MBSD. This 

information is communicated to all 

approved applicants during the 

membership onboarding process. The 

communication links and formats are 

also available in MBSD’s 

implementation guidelines at http://

www.dtcc.com/clearing-services/ficcmbsd/ficc-mbsd-user-documentation. 

The timeframes and deadlines are 

available at http://www.dtcc.com/∼/ 

media/Files/Downloads/ClearingServices/FICC/MBSD/MBSD-ClearingSchedules-and-Timeframes.pdf. 

ii. Proposed Changes to EPN Rule 2— 

Reports 

Section 1 (Availability of Reports) 

states that the Message Detail Report 

and the Message Summary Report are 

available at a time specified in the EPN 

Procedures. FICC is proposing to delete 

the reference to EPN Procedures and 

amend this section to state that these 

reports would be available at a time 

specified in the time schedule posted on 

FICC’s website. This proposed change 

refers to the timeframes available at 

http://www.dtcc.com/∼/media/Files/ 

Downloads/Clearing-Services/FICC/ 

MBSD/MBSD-Clearing-Schedules-andTimeframes.pdf. 

Section 2 (Message Detail Report) 

states that the Message Detail Report 

shall list the contents of each Message 

as described in the EPN Procedures. 

FICC is proposing to delete the reference 

to EPN Procedures and amend this 

section to state that for each Eligible 

Security, the Message Detail Report 

would include, but would not be 

limited to, the pool number, original 

face value, current face value, maturity 

date, pool factor, CUSIP Number, issue 

date, principal and interest, and total 

net money. In connection with this 

change, FICC is proposing to amend 

Article I, EPN Rule 1 (Definitions) to 

include a defined term for ‘‘CUSIP 

Number.’’ This term would be defined 

as the Committee on Uniform Securities 

Identification Procedures identifying 

number for an EPN Eligible Security. 

The proposed change to this section 

would be consistent with the 

information that is currently included in 

the Message Detail Report. 

Section 3 (Message Summary Report) 

states that the Message Summary Report 

shall list the contents of each Message 

as described in the EPN Procedures. 

FICC is proposing to delete the reference 

to EPN Procedures and amend this 

section to state that for each Eligible 

Security, the Message Summary Report 

would include, but would not be 

limited to, the total original face value, 

total net money, CUSIP Number, and 

summary of the number and type of 

Messages. The proposed change to this 

section would be consistent with the 

information that is currently included in 

the Message Summary Report. 

Section 5 (Good Delivery; Time 

Stamps) states that each EPN Message 

shall include one or more time stamps, 

one of which will include a good 

delivery time stamp as described in the 

EPN Procedures. FICC is proposing to 

delete the reference to ‘‘EPN’’ in the 

term ‘‘EPN Message’’ because ‘‘EPN 

Message’’ is not a defined term, 

however, ‘‘Message’’ is a defined term. 

FICC is also proposing to delete the 

reference to EPN Procedures. FICC is 

also proposing to amend this section to 

state that the good delivery time stamp 

would be referred to as ‘‘T2’’ and that 

the application of this time stamp 

would determine good delivery among 

EPN Users pursuant to the SIFMA 

Guidelines. The proposed change would 

also state that the remainder of the time 

stamps would be for the EPN Service’s 

operational, processing, and reporting 

purposes.17


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archives the Message; and T5 represents the time 

when the EPN Service’s Output Formatter writes 

the Message to the Outbound Table. The Message 

Processor, Outbound Table and the Output 

Formatter are operational components of the EPN 

Service. 

18See MBSD’s timeframes, available at http://

www.dtcc.com/∼/media/Files/Downloads/ClearingServices/FICC/MBSD/MBSD-Clearing-Schedulesand-Timeframes.pdf; and see the SIFMA 

Guidelines, Chapter 7, supra note 9. 

19 In the event that a pool seller fails to submit 

its pool information, such pool seller’s obligation to 

submit the pool information remains ongoing until 

the pool information is submitted. 

20Supra note 18. 

21To date, all Messages have met the established 

good delivery requirements, and as a result, FICC 

has not had to finance any mortgage pools. 

In accordance with the SIFMA 

Guidelines, pool sellers use the EPN 

Service to transmit pool information in 

real-time to their pool buyer 

counterparties. Two Business Days prior 

to the established settlement date of tobe-announced settlement obligations 

(known as ‘‘48-Hour Day’’), pool sellers 

that have an obligation to deliver pools 

to pool buyers must submit pool 

information that such pool sellers 

intend to allocate in satisfaction of their 

settlement obligation. This notification 

must occur by 3:00 p.m. on 48-Hour 

Day.18 The 3:00 p.m. cut-off time 

establishes that good delivery has 

occurred for purposes of the established 

settlement date—meaning that, if a pool 

seller submits its pool information in a 

Message by the 3:00 p.m. cut-off time on 

48-Hour Day, then the pool buyer is 

obligated to accept the mortgage pools 

on the settlement date. In the event that 

the pool seller’s notification does not 

meet the 3:00 p.m. deadline, the pool 

buyer will determine whether it is 

willing to accept the pools subsequent 

to the settlement date, and either the 

pool seller or the pool buyer will 

finance the mortgage pools until the 

delivery date. The delivery of the 

mortgage pools and any financing 

arrangement occur outside of the EPN 

Service. 

Because the timing of each Message is 

important, the EPN system applies time 

stamps to each Message that is 

processed through the EPN Service. The 

time stamp designated as T2 establishes 

whether the pool seller has met good 

delivery—meaning, the 3:00 p.m. cut-off 

time on 48-Hour Day.19

In the event that the pool seller 

decides to substitute a mortgage pool for 

which pool information has already 

been provided, the pool seller must 

submit a cancel and correct Message by 

12:15 p.m. on any Business Day prior to 

the delivery of the mortgage pool.20

Upon receipt of the pool seller’s 

Message, the EPN system transmits the 

Message to the pool buyer. The T2 time 

stamp on the Message received by the 

pool buyer establishes whether good 

delivery has occurred for purposes of 

the pool seller’s pool substitution. In the 

event that the T2 time stamp on the pool 

buyer’s Message is after 12:15 p.m., 

FICC is responsible for financing the 

mortgage pools associated with the 

Message until the delivery date so long 

as the T2 time stamp on the pool seller’s 

Message reflects a time that is at or 

before 12:15 p.m. As set forth in 

subsection (4) below, FICC is proposing 

to establish one good delivery T2 time 

stamp that reflects the same processing 

time on the pool seller’s Message and 

the pool buyer’s Message, respectively. 

This T2 time stamp would determine 

whether the pool seller’s cancel and 

correct Message has met the good 

delivery requirement. 

c. Article III—EPN Users 

Proposed Changes to EPN Rule 5—Use 

of EPN Service 

EPN Rule 5 states, in part, that all 

EPN Users will use the EPN Service for 

EPN Eligible Securities in a manner set 

forth in the EPN Procedures and that 

this shall be accomplished by providing 

(for each Message that an EPN User 

sends or receives) the pricing and other 

descriptive information, in the manner, 

and by the cut-off times, specified in the 

EPN Procedures. FICC is proposing to 

delete the references to EPN Procedures 

and amend this rule to state that the 

EPN User will use the EPN Service in 

a manner set forth in the EPN Rules and 

that this shall be accomplished by 

providing (for each Message that an EPN 

User sends or receives) the pricing and 

other descriptive information, in the 

manner, and by the times, specified on 

FICC’s website. This information is 

communicated to all approved 

applicants during the membership 

onboarding process. The information 

that an EPN User is required to include 

in a Message is available at http://

www.dtcc.com/clearing-services/ficcmbsd/ficc-mbsd-userdocumentation.aspx, and the 

timeframes are available at http://

www.dtcc.com/∼/media/Files/ 

Downloads/Clearing-Services/FICC/ 

MBSD/MBSD-Clearing-Schedules-andTimeframes.pdf. 

(4) Proposed Change to the EPN 

System’s Processing of the Good 

Delivery T2 Time Stamp for Pool 

Substitutions 

As described above in subsection 

(3)b.ii., if a pool seller decides to 

substitute a mortgage pool for which 

pool information has already been 

provided, the pool seller must submit a 

cancel and correct Message by 12:15 

p.m. on any Business Day prior to the 

delivery of the mortgage pool. Upon 

receipt of the pool seller’s Message, the 

EPN system applies a T2 time stamp to 

the pool seller’s Message to reflect the 

time that the EPN system received the 

pool seller’s Message. The EPN system 

also applies a T2 time stamp to the pool 

buyer’s Message to reflect the time that 

the pool buyer received the pool seller’s 

Message. The T2 time stamp on the pool 

buyer’s Message establishes whether 

good delivery has occurred for purposes 

of the pool seller’s pool substitution. In 

the event that the T2 time stamp on the 

pool buyer’s Message reflects a time that 

is after 12:15 p.m., FICC is responsible 

for financing the mortgage pools that are 

associated with the Message until the 

next Business Day.21

FICC is proposing to establish one 

good delivery T2 time stamp that 

reflects the same processing time on the 

pool seller’s Message and the pool 

buyer’s Message, respectively. This time 

stamp would determine whether the 

12:15 p.m. cut-off time has been met for 

purposes of establishing good delivery 

of the pool buyer’s pool substitution. As 

a result of this change, in the event that 

the T2 time stamp reflects a time that 

does not meet the 12:15 p.m. cut-off 

time, the financing of the mortgage 

pools, if any, would be the 

responsibility of the counterparties to 

the Message as determined by such 

parties in accordance with the SIFMA 

Guidelines. FICC is proposing this 

change because it would be consistent 

with the SIFMA Guidelines and FICC 

believes that the parties to the Message 

are best positioned to ensure that the 

Message meets the good delivery 

requirements. 

The proposed change would be 

consistent with FICC’s proposal to 

amend Section 5 (Good Delivery; Time 

Stamps) in EPN Rule 2 (Reports) of 

Article II (Messages Processed by the 

Corporation) (as referenced above in 

subsection (3)b.ii.) to state that the good 

delivery time stamp would be referred 

to as ‘‘T2’’ and the application of this 

time stamp would determine good 

delivery among EPN Users pursuant to 

the SIFMA Guidelines. 

The proposed change would not affect 

FICC’s guarantee and novation of 

transactions submitted by Clearing 

Members through MBSD’s Clearing 

System. 

(5) Implementation of the Proposed 

Rule Changes 

The proposed changes to (i) correct 

the EPN Rules (as described above in 


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22 15 U.S.C. 78q–1(b)(3)(F). 

23 Id. 

24 Id. 

25 17 CFR 240.17Ad–22(e)(23)(i). 

26 Id. 

27 15 U.S.C. 78q–1(b)(3)(I). 

28 Id. 

subsection (2)) and (ii) provide 

transparency to the EPN Rules (as 

described above in subsection (3)) 

would become operative on the date of 

the Commission’s approval of this 

proposed rule change. 

The proposed change to the EPN 

system’s processing of the good delivery 

T2 time stamp for pool substitutions (as 

described above in subsection (4)) 

would become operative within 45 

Business Days after the date of the 

Commission’s approval of this proposed 

rule change. FICC would add a legend 

to Article II (Messages Processed by the 

Corporation) that identifies the 

implementation date of the proposed 

change to Section 5 of EPN Rule 2. 

2. Statutory Basis 

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

Exchange Act of 1934 (‘‘Act’’) requires, 

in part, that the EPN Rules be designed 

to promote the prompt and accurate 

clearance and settlement of securities 

transactions.22

The proposed changes to (i) correct 

the EPN Rules (as described above in 

subsection (2) of Item II.(A)1) and (ii) 

provide transparency to the EPN Rules 

(as described above in subsection (3) of 

Item II (A)1) would help to ensure that 

the EPN Rules are accurate and clear to 

EPN Users. When EPN Users better 

understand their rights and obligations 

regarding the EPN Service, such EPN 

Users are more likely to act in 

accordance with the EPN Rules, which 

FICC believes would promote the 

prompt and accurate clearance and 

settlement of securities transactions. As 

such, FICC believes that the proposed 

changes to correct and provide 

transparency to the EPN Rules would be 

consistent with Section 17A(b)(3)(F) of 

the Act.23

The proposed change to established 

one good delivery T2 time stamp (as 

described above in subsection (4) of 

Item II (A)1) would be consistent with 

the SIFMA Guidelines and would 

further encourage EPN Users to adhere 

to the 12:15 p.m. deadline for 

substitutions. Because the proposed 

change would be consistent with the 

SIFMA Guidelines, which reflect 

industry best practices, FICC believes 

that the proposed change would help 

the seamless processing of transactions 

through the EPN Service. As a result, 

FICC believes the proposed change 

further promotes the prompt and 

accurate clearance and settlement of 

securities transactions. As such, FICC 

believes that the proposed change 

would be consistent with Section 

17A(b)(3)(F) of the Act.24

Rule 17Ad–22(e)(23)(i) under the Act 

requires, in part, that FICC establish, 

implement, maintain and enforce 

written policies and procedures 

reasonably designed to provide for 

publicly disclosing all relevant rules 

and material procedures.25 As described 

above, the proposed rule changes to (i) 

correct the EPN Rules (as described 

above in subsection (2) of Item II (A)1), 

(ii) provide transparency to the EPN 

Rules (as described above in subsection 

(3) Item II (A)1) and (iii) amend the EPN 

system’s processing of T2 time stamps 

for pool substitutions would better 

disclose all relevant and material 

aspects of the EPN Service. Therefore, 

FICC believes the proposed changes to 

correct and provide transparency to the 

EPN Rules are consistent with Rule 

17Ad–22(e)(23)(i).26

(B) Clearing Agency’s Statement on 

Burden on Competition 

FICC does not believe the proposed 

rule changes to (i) correct the EPN Rules 

(as described above in subsection (2) of 

Item II(A)1) and (ii) provide 

transparency to the EPN Rules (as 

described above in subsection (3) of 

Item II(A)1) would impact competition. 

The proposed rule changes would help 

to ensure that the EPN Rules remain 

clear and accurate. In addition, the 

changes would facilitate EPN Users’ 

understanding of the EPN Rules and 

their obligations thereunder. These 

changes would apply equally to all EPN 

Users and would not affect FICC’s 

operations or the rights and obligations 

of EPN membership. As such, FICC 

believes the proposed rule changes to 

correct and provide transparency to the 

EPN Rules would not have any impact 

on competition. 

FICC believes that the proposed 

change to establish one good delivery 

T2 time stamp (as described above in 

subsection (4) of Item II(A)1) could have 

an impact on competition among the 

parties to the Message because either the 

pool seller or the pool buyer (as 

determined by the parties in accordance 

with the SIFMA Guidelines) would be 

responsible for financing the substituted 

mortgage pools associated with a 

Message that does not meet the good 

delivery requirements. FICC does not 

believe that the burden on competition 

would be significant because it would 

similarly affect both counterparties to a 

cancel and correct Message that does 

not meet the good delivery requirements 

in accordance with the SIFMA 

Guidelines. 

FICC believes that any burden on 

competition that is created by the 

proposed change would be necessary 

and appropriate in furtherance of the 

purposes of the Act, as permitted by 

Section 17A(b)(3)(I) of the Act.27 FICC 

believes that the proposed change 

would be necessary in furtherance of the 

Act because it would be consistent with 

the SIFMA Guidelines, which reflect 

best practices. The SIFMA Guidelines 

require either the pool seller or the pool 

buyer to take responsibility of the 

mortgage pools in the event that a 

cancel and correct Message does not 

meet good delivery requirements. FICC 

believes the proposed change would be 

appropriate in furtherance of the Act 

because EPN Users are parties to each 

Message, aware of the good delivery 

requirements and best positioned to 

ensure that cancel and correct Messages 

meet the good delivery requirements. As 

a result, FICC believes any burden on 

competition that is created by the 

proposed rule change would be 

necessary and appropriate in 

furtherance of the purposes of the Act, 

as permitted by Section 17A(b)(3)(I) of 

the Act.28

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

FICC has not received or solicited any 

written comments relating to this 

proposal. FICC will notify the 

Commission of any written comments 

received by FICC. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 


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Federal Register / Vol. 83, No. 158 / Wednesday, August 15, 2018 / Notices 40617 

29 17 CFR 200.30–3(a)(12). 

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– 

FICC–2018–007 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–FICC–2018–007. 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 FICC 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–FICC– 

2018–007 and should be submitted on 

or before September 5, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–17489 Filed 8–14–18; 8:45 am] 

BILLING CODE 8011–01–P 

SELECTIVE SERVICE SYSTEM 

Forms Submitted to the Office of 

Management and Budget for Extension 

of Clearance 

AGENCY: Selective Service System. 

ACTION: Notice. 

The following form has been 

submitted to the Office of Management 

and Budget (OMB) for extension of 

clearance with change in compliance 

with the Paperwork Reduction Act: 

SSS Form 1 

Title: The Selective Service System 

Registration Form. 

Purpose: Is used to register men and 

establish a data base for use in 

identifying manpower to the military 

services during a national emergency. 

Respondents: All 18-year-old males 

who are United States citizens and those 

male immigrants residing in the United 

States at the time of their 18th birthday 

are required to register with the 

Selective Service System. 

Frequency: Registration with the 

Selective Service System is a one-time 

occurrence. 

Burden: A burden of two minutes or 

less on the individual respondent. 

Change: Collecting telephone 

numbers from respondents. 

Copies of the above identified form 

can be obtained upon written request to 

the Selective Service System, 

Operations Directorate, 1515 Wilson 

Boulevard, Arlington, Virginia 22209– 

2425. 

Written comments and 

recommendations for the proposed 

extension of clearance with change of 

the form should be sent within 30 days 

of the publication of this notice to the 

Selective Service System, Operations 

Directorate, 1515 Wilson Boulevard, 

Arlington, Virginia 22209–2425. 

A copy of the comments should be 

sent to the Office of Information and 

Regulatory Affairs, Attention: Desk 

Officer, Selective Service System, Office 

of Management and Budget, New 

Executive Office Building, Room 3235, 

Washington, DC 20503. 

Dated: August 7, 2018. 

Donald M. Benton, 

Director. 

[FR Doc. 2018–17625 Filed 8–14–18; 8:45 am] 

BILLING CODE 8015–01–P 

SMALL BUSINESS ADMINISTRATION 

Surrender of License of Small 

Business Investment Company 

Pursuant to the authority granted to 

the United States Small Business 

Administration under the Small 

Business Investment Act of 1958, as 

amended, under Section 309 of the Act 

and Section 107.1900 of the Small 

Business Administration Rules and 

Regulations (13 CFR 107.1900) to 

function as a small business investment 

company under the Small Business 

Investment Company License No. 09/ 

09–0465 issued to Levine Leichtman 

Capital Partners, LP, said license is 

hereby declared null and void. 

United States Small Business 

Administration. 

Dated: April 23, 2018. 

A. Joseph Shepard, 

Associate Administrator for Investment and 

Innovation. 

[FR Doc. 2018–17579 Filed 8–14–18; 8:45 am] 

BILLING CODE P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15626 and #15627; 

Nebraska Disaster Number NE–00071] 

Administrative Declaration of a 

Disaster for the State of Nebraska 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of Nebraska dated 08/07/ 

2018. 

Incident: Severe Storms and Flooding. 

Incident Period: 06/25/2018 through 

06/30/2018. 

DATES: Issued on 08/07/2018. 

Physical Loan Application Deadline 

Date: 10/09/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 05/07/2019. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

Administrator’s disaster declaration, 

applications for disaster loans may be 

filed at the address listed above or other 

locally announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: 

Iowa. 

Contiguous Counties: 


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