52576 Federal Register / Vol. 75, No. 165 / Thursday, August 26, 2010 / Notices 

13 15 U.S.C. 78o–3(b)(6). 14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3FICC withdrew a substantively identical 

proposed rule change filed on August 4, 2010, that 

sought approval without requesting that the 

approval would be temporary. 

4Securities Exchange Act Release No. 60510 

(August 17, 2009), 74 FR 42716 (August 24, 2009). 

information from the reporting side 

perspective (and the contra side will 

provide information from the contra 

side perspective). 

The implementation date will be 

November 10, 2010. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,13 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade and, in 

general, to protect investors and the 

public interest. FINRA believes that 

adopting the proposed rule change will 

aid in FINRA’s surveillance for member 

compliance, including with SEC 

Regulation SHO. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

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 (i) 

as the Commission may designate up to 

90 days of such date 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 

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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–FINRA–2010–043 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2010–043. This file 

number should be included on the 

subject line if e-mail 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 Web site (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 Web site 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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of 

FINRA. All comments received will be 

posted without change; the Commission 

does not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–FINRA–2010–043 and 

should be submitted on or before 

September 16, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21201 Filed 8–25–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62743; File No. SR–FICC– 

2010–05] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Order Granting Accelerated 

Approval on a Temporary Basis of 

Proposed Rule Change To Modify the 

Rules of the Government Securities 

Division Regarding the Calculation of 

Clearing Fund Deposits Relating to 

Inter-Dealer Broker Positions 

August 19, 2010. 

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 

18, 2010, the Fixed Income Clearing 

Corporation (‘‘FICC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I and II 

below, which items have been prepared 

primarily by FICC.3 The Commission 

previously approved the proposal on a 

temporary basis.4 The Commission is 

publishing this notice and order to 

solicit comments on the proposed rule 

change from interested parties and to 

grant accelerated approval through 

February 18, 2011. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change seeks to 

modify the rules of FICC’s Government 

Securities Division (‘‘GSD’’) regarding 

the calculation of clearing fund 

requirements relating to inter-dealer 

broker (‘‘IDB’’) positions. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FICC 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. FICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 165 / Thursday, August 26, 2010 / Notices 52577 

5 VaR is defined as the maximum amount of 

money that may be lost on a given portfolio over 

a given period of time within a given confidence 

level. 

6Under the GSD clearing fund procedures, CC is 

not calculated with respect to IDB repo 

transactions. The GSD has recently adjusted the CC 

charge with respect to certain IDB cash transactions. 

7See note 4. 

8 15 U.S.C. 78q–1. 9 15 U.S.C. 78q–1(b)(3)(F). 

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The GSD maintains a clearing fund 

comprised of deposits of cash and 

eligible securities from its members to 

provide liquidity and to satisfy any 

losses that might otherwise be incurred 

as a result of a member’s default and the 

subsequent close-out of its positions. 

The GSD uses a Value-at-Risk (‘‘VaR’’) 

methodology to calculate clearing fund 

requirements.5 The clearing fund 

methodology used by GSD analyzes risk 

by reference to three factors: (1) End-ofday VaR charge assessing market 

volatility for observed open positions at 

end-of-day after giving effect to 

offsetting positions within the portfolio; 

(2) ‘‘margin requirement differential’’ 

(‘‘MRD’’) to address intraday risk; and (3) 

‘‘coverage component’’ (‘‘CC’’) to adjust 

the calculation if necessary to reach a 

given confidence level.6 The margin 

calculation is predicated upon an 

assumption that the open positions of a 

defaulting member would be liquidated 

at the end of a three-day period. 

IDBs function as intermediaries 

trading with multiple contraparties, 

allowing anonymity between trading 

parties, and providing liquidity for the 

market. IDBs handle large transactions 

and operate on small spreads. They 

perform a critical function in the 

government securities market in the 

absence of a centralized trading 

exchange. 

IDBs submit affirmed trades from 

their systems to the GSD with each trade 

matched to the contraparty that will 

ultimately deliver or receive the 

securities. Although IDBs do not 

generally hold positions, they may incur 

positions at the GSD when their 

contraparties are not GSD members. 

Because these trades are matched by the 

IDB to a contraparty prior to submission 

to the GSD, FICC represents that the risk 

to FICC in the case of an IDB’s default 

is different from that presented when a 

dealer member submits a trade that may 

not have been already matched to a 

contraside. 

The clearing fund requirement 

applicable to IDB transactions has 

increased significantly because of recent 

market volatility to the point where 

FICC believes it is disproportionate to 

the risk that IDB activity presents to the 

GSD. Given the importance of IDB 

transactions in the government 

securities marketplace, undue and 

unsustainable margin requirements on 

GSD IDB activity may be harmful and 

may introduce systemic risk in the event 

members are motivated to avoid 

imposition of disproportionate changes 

by netting outside of the GSD or by 

delaying trade submission until later in 

the day. Accordingly, the GSD adjusted 

the calculation of the CC charge for IDB 

transactions in November 2008 and 

conducted a review of the current 

margin methodology as applied to IDB 

activity. 

As a result of this review, the GSD 

proposed and the Commission approved 

the use of a one-day liquidation 

assumption when calculating clearing 

fund requirements applicable to IDB 

activity.7 Since IDB trades are matched 

prior to submission, the GSD believes 

that the one-day liquidation period as 

opposed to a three-day liquidation 

period is a more reasonable assumption 

in this context. The assumption of a 

three-day liquidation period will 

continue to apply to non-IDB activity. 

The GSD will continue to monitor the 

IDB activity of its members and to 

periodically reassess whether the oneday liquidation period provides 

adequate coverage. In this regard, FICC 

will provide the Commission with data 

to allow the Commission to track the 

magnitudes and behaviors of the VaR 

calculations using a one-day liquidation 

horizon and using a three-day 

liquidation horizon and with such other 

information that the Commission may 

request. FICC further notes its ability 

under GSD Rule 4 to impose special 

charges in response to market 

circumstances or other risk factors with 

respect to a particular member. 

FICC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 8

and the rules and regulations 

thereunder because the proposed 

change will modify the calculation of 

clearing fund requirements for IDB 

positions so that the clearing fund 

requirements is correlated more closely 

with the level of risk associated with 

IDB positions. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received from 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change have not yet been 

solicited or received. 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 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder and 

particularly with the requirements of 

Section 17A(b)(3)(F).9 Section 

17A(b)(3)(F) requires that the rules of a 

clearing agency remove impediments to 

and perfect the mechanism of a national 

system for the prompt and accurate 

clearance and settlement of securities 

transactions and to assure the 

safeguarding of securities and funds in 

the custody or control of the clearing 

agency or for which it is responsible. 

The Commission finds that the approval 

of FICC’s rule change on a temporary 

basis through February 18, 2011 is 

consistent with this section because by 

allowing FICC to temporarily modify its 

rules regarding the calculation of 

clearing fund requirements for IDB 

positions to what it believes correlates 

more closely with the level of risk 

associated with such positions, FICC 

will be taking steps toward potentially 

improving the national clearance and 

settlement system while still actively 

monitoring its ability to fulfill its 

safeguarding obligations. 

FICC has requested that the 

Commission approve the proposed rule 

prior to the thirtieth day after 

publication of the notice of the filing. 

The Commission finds good cause for 

approving the proposed rule change 

prior to the thirtieth day after the 

publication of notice because such 

approval will allow FICC to continue to 

attempt to correlate IDBs’ clearing fund 

requirements with the level of risk 

associated with their positions. 

The Commission is approving the 

proposed rule filing on a temporary 

basis through February 18, 2011, so that 

FICC will have time to further evaluate 

the modified calculation of clearing 

fund requirements for IDB positions and 

to report its findings and conclusions to 

the Commission and so that the 

Commission will have time to evaluate 

FICC’s findings and conclusions before 

a final determination is made regarding 

mstockstill on DSKH9S0YB1PROD with NOTICES

52578 Federal Register / Vol. 75, No. 165 / Thursday, August 26, 2010 / Notices 

10 15 U.S.C. 78s(b)(2). 

11 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). 

12 17 CFR 200.30–3(a)(12). 

adoption of any rule on a permanent 

basis. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml) or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–FICC–2010–05 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–FICC–2010–05. This file 

number should be included on the 

subject line if e-mail 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 Web site (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 Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filings 

also will be available for inspection and 

copying at the principal office of FICC 

and on FICC’s Web site at http:// 

dtcc.com/downloads/legal/rule_filings/ 

2010/ficc/2010-05.pdf. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–FICC– 

2010–05 and should be submitted on or 

before September 16, 2010. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (File No. SR– 

FICC–2010–05) be and hereby is 

approved on an accelerated basis 

through February 18, 2011.11

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21200 Filed 8–25–10; 8:45 am] 

BILLING CODE 8010–01–P 

SOCIAL SECURITY ADMINISTRATION 

Agency Information Collection 

Activities: Proposed Request and 

Comment Request 

The Social Security Administration 

(SSA) publishes a list of information 

collection packages requiring clearance 

by the Office of Management and 

Budget (OMB) in compliance with 

Public Law (Pub. L.) 104–13, the 

Paperwork Reduction Act of 1995, 

effective October 1, 1995. This notice 

includes revisions and extensions of 

OMB-approved information collections 

and a new information collection. 

SSA is soliciting comments on the 

accuracy of the agency’s burden 

estimate; the need for the information; 

its practical utility; ways to enhance its 

quality, utility, and clarity; and ways to 

minimize burden on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. Mail, e-mail, or 

fax your comments and 

recommendations on the information 

collection(s) to the OMB Desk Officer 

and SSA Reports Clearance Officer to 

the following addresses or fax numbers. 

(OMB), Office of Management and 

Budget, Attn: Desk Officer for SSA, 

Fax: 202–395–6974, E-mail address: 

OIRA_Submission@omb.eop.gov. 

(SSA), Social Security Administration, 

DCBFM, Attn: Reports Clearance 

Officer, 1333 Annex Building, 6401 

Security Blvd., Baltimore, MD 21235, 

Fax: 410–965–6400, E-mail address: 

OPLM.RCO@ssa.gov. 

I. The information collections below 

are pending at SSA. SSA will submit 

them to OMB within 60 days from the 

date of this notice. To be sure we 

consider your comments, we must 

receive them no later than October 25, 

2010. Individuals can obtain copies of 

the collection instruments by calling the 

SSA Reports Clearance Officer at 410– 

965–8783 or by writing to the above email address. 

1. Statement of Agricultural Employer 

(Year Prior to 1988; and 1988 and 

later)—20 CFR 404.702, 404.802, 

404.1056—0960–0036. SSA collects the 

information on Forms SSA–1002–F3 

and SSA–1003–F3 to resolve 

discrepancies when farm workers allege 

their employers did not report their 

wages, or reported their wages 

incorrectly. If an agricultural employer 

incorrectly reported wages, or failed to 

report any wages for an employee, SSA 

must attempt to correct its records by 

contacting the employer to obtain 

convincing evidence of the wages paid. 

The respondents are agricultural 

employers having knowledge of wages 

paid to agricultural employees. 

Type of Request: Revision of an OMBapproved information collection. 

Form No. Number of 

respondents 

Frequency of 

response 

Average Burden 

per Response 

(minutes) 

Total Annual 

Burden 

(hours) 

SSA–1002 ........................................................................................ 7,500 1 30 3,750 

SSA–1003 ........................................................................................ 25,000 1 30 12,500 

Total .......................................................................................... 32,500 ............................ ............................ 16,250 

mstockstill on DSKH9S0YB1PROD with NOTICES