46530 Federal Register / Vol. 83, No. 178 / Thursday, September 13, 2018 / Notices 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No.83682 (July 

20, 2018), 83 FR 35513 (July 26, 2018) (SR–FICC– 

2018–005) (‘‘Notice’’). 

4MBSD maintains two sets of rulebooks: The EPN 

Rules and the MSBD rules (‘‘MBSD Rules’’). Notice, 

83 FR at 35513. The EPN Rules govern MBSD’s EPN 

Service, while the MBSD Rules govern MBSD’s 

clearance and settlement service. Id. The EPN Rules 

are available at http://www.dtcc.com/∼/media/Files/ 

Downloads/legal/rules/ficc_mbsd_epnrules.pdf. 

The MBSD Rules are available at http://

www.dtcc.com/∼/media/Files/Downloads/legal/ 

rules/ficc_mbsd_rules.pdf. 

5Notice, 83 FR at 33513. See also ‘‘EPN 

Overview,’’ available at http://www.dtcc.com/ 

clearing-services/ficc-mbsd/epn. 

6Notice, 83 FR at 33513. 

7 Id. 

8 Id. 

9Notice, 83 FR at 35514. 

10These membership standards are set forth in 

EPN Rules, Article III, Rule 1, Sections 2–3, supra 

note 4. 

11Notice, 83 FR at 35514. 

12 Id. 

13 Id. 

14As part of the proposal, FICC would include 

‘‘Reportable Event’’ as a new defined term in the 

‘‘Definitions and General Provisions’’ section of the 

EPN Rules. ‘‘Reportable Event’’ would be defined as 

‘‘an event that would effect a change in control of 

an EPN User or could have a substantial impact on 

such EPN User’s business and/or financial 

condition, including, but not limited to: (a) Material 

organizational changes including mergers, 

acquisitions, changes in corporate form, name 

changes, changes in the ownership of an EPN User 

or its affiliates, and material changes in 

management; and (b) status as a defendant in 

litigation, which could reasonably impact the EPN 

User’s financial condition or ability to conduct 

business.’’ Id. Distinct from any other notification 

obligations, an EPN User would be required to 

submit to FICC written notice of any Reportable 

Event at least 90 calendar days prior to the effective 

date of such Reportable Event unless the EPN User 

demonstrates that (i) the EPN User could not have 

reasonably done so, and (ii) the EPN User provided 

written notice and oral notice to FICC as soon as 

possible. Id. 

15Such requirements may include, but are not 

limited to, operational testing and related reporting 

requirements that FICC may imposed from time to 

time. Notice, 83 FR at 35514. 

16 Id. 

17 Id. 

18 Id. 

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: September 7, 2018. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19882 Filed 9–12–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84057; File No. SR–FICC– 

2018–005] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Order 

Granting Approval of Proposed Rule 

Change To Correct Certain References 

and Provide Transparency to Existing 

Processes in the Mortgage-Backed 

Securities Division Electronic Pool 

Notification Rules 

September 7, 2018. 

On July 13, 2018, Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the U.S. Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–FICC–2018–005 

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

Securities Exchange Act of 1934 

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

The proposed rule change was 

published for comment in the Federal 

Register on July 26, 2018.3 The 

Commission did not receive any 

comment letters on the proposed rule 

change. For the reasons discussed 

below, the Commission approves the 

proposed rule change. 

I. Description of the Proposed Rule 

Change 

The proposed rule change would 

amend FICC’s Mortgage-Backed 

Securities Division (‘‘MSBD’’) electronic 

pool notification (‘‘EPN’’) service (‘‘EPN 

Service’’) rules (‘‘EPN Rules’’).4

A. Background 

FICC states that the EPN Service 

provides an automated manner for 

market participants with an obligation 

to deliver pools of mortgages to transmit 

mortgage pool information efficiently 

and reliably to their counterparties in 

real time.5 Market participants that wish 

to use the EPN Service (i.e., become 

‘‘EPN Users’’) are required to submit an 

application to MBSD.6 The application 

process and the use of the EPN Service 

are governed by the EPN Rules.7

MBSD’s clearing members (‘‘Clearing 

Members’’) are required to be EPN 

Users; however, one can be an EPN User 

and not a Clearing Member.8

B. Proposed Amendments to the EPN 

Rules To Include an EPN User’s 

Ongoing Reporting Obligations 

FICC proposes to amend the EPN 

Rules by adding a ‘‘General Continuance 

Standards’’ section. The proposed 

section would describe two existing 

MBSD practices with respect to 

reporting obligations of EPN Users.9

First, the proposed section would state 

that an EPN User shall promptly inform 

FICC, both orally and in writing, if such 

EPN User no longer complies with any 

of the EPN Rules’ requirements for 

admission to membership.10 This 

notification must occur within two 

business days from the date on which 

the EPN User first learns of its noncompliance.11 Second, the proposed 

section would state that an EPN User 

shall notify FICC of certain 

investigations or proceedings. 

Specifically, an EPN User must notify 

FICC within two business days after 

learning (i) that the EPN User is or will 

become the subject of an investigation 

or a proceeding, and (ii) that said 

investigation or proceeding would cause 

the EPN User to fall out of compliance 

with any of the requirements for 

membership set forth in the EPN 

Rules.12 However, the EPN User would 

not be required to provide such a 

notification to FICC if doing so would 

cause the EPN User to violate an 

applicable law, rule, or regulation.13

C. Proposed Changes To Amend the 

EPN Rules To Define Circumstances 

Under Which FICC May Determine an 

EPN User’s Compliance With EPN Rules 

The proposed ‘‘General Continuance 

Standards’’ section would identify when 

FICC may review an EPN User’s access 

to the EPN Service. The proposed 

‘‘General Continuance Standards’’ 

section also would identify when FICC 

may seek written assurances from EPN 

Users. 

First, the proposal would identify five 

circumstances when FICC would assess 

if an EPN User should retain access to 

the EPN Service: (i) If an EPN User 

experiences a Reportable Event; 14 (ii) if 

an EPN User fails to maintain the 

requirements for admission to 

membership; 15 (iii) if an EPN User 

violates any EPN Rule or other 

agreement with FICC; (iv) if an EPN 

User fails to satisfy any obligation to 

FICC in a timely manner; or (v) if FICC 

otherwise deems it necessary or 

advisable, in order to protect FICC, its 

other EPN Users, or its creditors or 

investors, to safeguard securities and 

funds in the custody or control of FICC, 

or to promote the prompt and accurate 

processing, clearance or settlement of 

securities transactions.16

Second, the proposed ‘‘General 

Continuance Standards’’ section would 

state that FICC may require an EPN User 

to provide written assurances to FICC.17

The proposal would authorize FICC to 

require written assurances from an EPN 

User if FICC has reason to believe that 

an EPN User may fail to comply with 

any of the EPN Rules.18 Specifically, 

FICC could require an EPN User to 


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Federal Register / Vol. 83, No. 178 / Thursday, September 13, 2018 / Notices 46531 

19FICC has discretion to request that the EPN 

User’s written assurance references specific 

timeframes and details. Id. 20 Id. 21Notice, 83 FR at 35513. 22 Id. 23 Id. 24Notice, 83 FR at 35514. 25 15 U.S.C. 78s(b)(2)(C). 26 15 U.S.C. 78q–1(b)(3)(F); 17 CFR 240.17Ad– 

22(20). 27 15 U.S.C. 78q–1(b)(3)(F). 

28A ‘‘covered clearing agency’’ means, among 

other things, a clearing agency registered with the 

Commission under Section 17A of the Exchange 

Act (15 U.S.C. 78q–1 et seq.) that is designated 

systemically important by the Financial Stability 

Oversight Counsel (‘‘FSOC’’) pursuant to the 

Payment, Clearing, and Settlement Supervision Act 

of 2010 (12 U.S.C. 5461 et seq.). See 17 CFR 

240.17Ad–22(a)(5)–(6). On July 18, 2012, FSOC 

designated FICC as systemically important. U.S. 

Department of the Treasury, ‘‘FSOC Makes First 

Designations in Effort to Protect Against Future 

Financial Crises,’’ available at https://

www.treasury.gov/press-center/press-releases/ 

Pages/tg1645.asp. Therefore, FICC is a covered 

clearing agency. 

29 17 CFR 240.17Ad–22(e)(18). 

provide written assurances of a credible 

nature that the EPN User shall not 

violate any of the EPN Rules.19 These 

written assurances could take the 

specific format of, but would not be 

limited to such specific formats, 

notarized statements, affidavits, and/or 

officers’ certificates.20

D. Proposed Clarifying Changes to the 

EPN Rules 

FICC also proposes clarifying 

corrections to the EPN Rules. 

Specifically, the proposal would replace 

references to ‘‘FICC’’ with ‘‘the 

Corporation’’ in the section entitled 

‘‘FICC Mortgage-Backed Securities 

Division (‘MBSD’) EPN Schedule of 

Charges.’’ 21 FICC states that it proposes 

this change because ‘‘FICC’’ is not a 

term that is defined in the EPN Rules.22

In addition, FICC proposes to replace 

the reference to ‘‘The Depository Trust 

Corporation’’ with ‘‘The Depository 

Trust & Clearing Corporation,’’ which 

FICC states is an erroneous reference.23

Additionally, FICC states that to 

accommodate the introduction of the 

new ‘‘General Continuance Standards’’ 

section, FICC proposes to change the 

numbering of the existing 

‘‘Confidentiality’’ provision in EPN Rule 

1 (Requirements Applicable to EPN 

Users) of Article III (EPN Users) from 

‘‘Sec. 8’’ to ‘‘Sec. 9.’’ 24

II. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act 25

directs the Commission to approve a 

proposed rule change of a selfregulatory organization if it finds that 

such proposed rule change is consistent 

with the requirements of the Act and 

rules and regulations thereunder 

applicable to such organization. The 

Commission believes the proposal is 

consistent with the Act, specifically 

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

17Ad–22(e)(18) under the Act, and Rule 

17Ad–22(e)(23)(i) under the Act, as 

discussed below.26

A. Consistency With Section 

17A(b)(3)(F) 

Section 17A(b)(3)(F) of the Act 27

requires, inter alia, that the rules of the 

clearing agency be designed to promote 

the prompt and accurate clearance and 

settlement of securities transactions. 

As described above, FICC proposes to 

make three changes to the EPN Rules. 

First, FICC proposes to add ongoing 

reporting obligations on EPN Users. 

These obligations would require an EPN 

User to notify FICC within two business 

days after the EPN User has, or could, 

fail to comply with EPN Service 

membership requirements. The 

Commission believes that codifying an 

affirmative duty to notify FICC would 

afford FICC a better opportunity to take 

timely action, once notified, to preserve 

the EPN Service’s functionality, as FICC 

deemed necessary. By providing 

additional means to preserve the 

functionality of the EPN Service—a 

critical component of MBSD’s 

settlement of mortgage-backed 

securities—the proposal is designed to 

promote the prompt and accurate 

clearance and settlement of such 

securities transactions. 

Second, as described above, the 

proposal would identify circumstances 

when FICC could reassess an EPN 

User’s access to the EPN Service. By 

including a ‘‘Reportable Event,’’ as 

defined by the proposal, as one of these 

circumstances, the proposal would 

allow FICC to review an EPN User’s 

fitness after learning (i) of an EPN User’s 

significant corporate event or (ii) an 

EPN User becoming the subject of an 

investigation or proceeding. The 

proposal also would allow FICC to 

require an EPN User to provide written 

assurances that the EPN User remains in 

compliance with the EPN Rules. The 

Commission believes that these 

proposed changes would codify existing 

practices that help ensure that FICC can, 

on its own accord, determine if an EPN 

User’s access to the EPN Service should 

be reassessed due to possible threats to 

the EPN Service’s functionality. By 

enabling FICC to better protect the EPN 

Service, which is essential for MBSD’s 

settlement of mortgage-backed 

securities, the proposal is designed to 

promote the prompt and accurate 

clearance and settlement of such 

securities transactions. 

Third, as described above, FICC 

proposes clarifying changes to the EPN 

Rules. The proposed corrections to 

references in the ‘‘EPN Schedule of 

Charges’’ and ‘‘Requirements Applicable 

to EPN Users’’ sections of the EPN Rules 

would help clarify the EPN Rules for 

EPN Users. Similarly, FICC’s 

renumbering of the Rules to 

accommodate the proposed ‘‘General 

Continuance Standards’’ also would 

help maintain the clarity of the EPN 

Rules for EPN Users. By proposing 

changes to the EPN Rules to improve 

clarity, the Commission believes that 

the proposed changes are designed to 

help EPN Users better understand and 

remain compliant with the EPN Rules; 

thus promoting the prompt and accurate 

clearance and settlement of securities 

transactions. 

As each of the aforementioned 

changes is designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions, the 

Commission finds that the proposal is 

consistent with the requirements of 

Section 17A(b)(3)(F). 

B. Consistency With Rule 17Ad– 

22(e)(18) 

Rule 17Ad–22(e)(18) under the Act 

requires, inter alia, a covered clearing 

agency 28 to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

monitor compliance with participation 

requirements on an ongoing basis.29

As described above, FICC proposes to 

amend the EPN Rules to (1) include an 

EPN User’s ongoing reporting 

obligations, and (2) define 

circumstances under which FICC may 

determine an EPN User’s compliance 

with the EPN Rules. The Commission 

believes that these changes would help 

ensure that FICC is promptly made 

aware of the potential need to reassess 

an EPN User’s access to the EPN Service 

due to the EPN User’s possible violation 

of the EPN Rules. As such, the proposed 

changes are designed to give FICC the 

ability to timely monitor an EPN User’s 

compliance with the EPN Rules. 

Therefore, the Commission finds that 

proposed changes are consistent with 

Rule 17Ad–22(e)(18). 

C. Consistency With Rule 17Ad– 

22(e)(23) 

Rule 17Ad–22(e)(23) under the Act 

requires, inter alia, a covered clearing 

agency to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

provide for publicly disclosing all 


daltland on DSKBBV9HB2PROD with NOTICES
46532 Federal Register / Vol. 83, No. 178 / Thursday, September 13, 2018 / Notices 

30 17 CFR 240.17Ad–22(e)(23)(i). 

31 15 U.S.C. 78q–1. 

32 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

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

33 17 CFR 200.30–3(a)(12). 

relevant rules and material 

procedures.30

As described above, the proposed rule 

changes would amend the EPN Rules to 

reflect existing FICC practices. 

Specifically, the proposed changes 

would (1) include an EPN User’s 

ongoing reporting obligations, (2) define 

circumstances under which FICC may 

determine an EPN User’s compliance 

with the EPN Rules, and (3) make 

corrections to the EPN Rules for clarity. 

As such, the Commission believes these 

proposed changes to codify and correct 

FICC’s existing practices in the EPN 

Rules would assist in publicly 

disclosing all relevant and material 

procedures regarding the EPN Service. 

Therefore, the Commission finds that 

the proposal is designed to provide for 

publicly disclosing all relevant rules 

and material procedures, consistent 

Rule 17Ad–22(e)(23)(i) under the Act. 

III. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act, in particular the requirements of 

Section 17A of the Act 31 and the rules 

and regulations thereunder. 

It is therefore ordered, pursuant to 

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

proposed rule change SR–FICC–2018– 

005 be, and hereby is, approved.32

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19872 Filed 9–12–18; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15680 and #15681; 

Montana Disaster Number MT–00116] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of Montana 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of Montana (FEMA–4388–DR), 

dated 08/30/2018. 

Incident: Flooding. 

Incident Period: 04/12/2018 through 

05/06/2018. 

DATES: Issued on 08/30/2018. 

Physical Loan Application Deadline 

Date: 10/29/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 05/30/2019. 

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 

President’s major disaster declaration on 

08/30/2018, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications 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: Blaine, Hill, Liberty, 

Pondera, Toole, Valley. 

The Interest Rates are: 

Percent 

For Physical Damage: 

Non-Profit Organizations with 

Credit Available Elsewhere ... 2.500 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

For Economic Injury: 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

The number assigned to this disaster 

for physical damage is 156806 and for 

economic injury is 156810. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

James Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2018–19937 Filed 9–12–18; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15684 and #15685; 

Havasupai Tribe Disaster Number AZ– 

00056] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the Havasupai Tribe 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the Havasupai Tribe (FEMA—4389— 

DR), dated 08/31/2018. 

Incident: Severe Storms, Flooding, 

and Landslides. 

Incident Period: 07/11/2018 through 

07/12/2018. 

DATES: Issued on 08/31/2018. 

Physical Loan Application Deadline 

Date: 10/30/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 05/31/2019. 

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 

President’s major disaster declaration on 

08/31/2018, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Area: Havasupai Tribe 

The Interest Rates are: 

Percent 

For Physical Damage: 

Non-Profit Organizations with 

Credit Available Elsewhere ... 2.500 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

For Economic Injury: 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

The number assigned to this disaster 

for physical damage is 156846 and for 

economic injury is 156850. 


daltland on DSKBBV9HB2PROD with NOTICES