Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices 62977 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5 17 CFR 240.19b–4(f)(4). 

6The Service was formerly known as ‘‘Mutual 

Fund Commission Settlement’’. 

7Securities Exchange Act Release No. 31579 

(December 9, 1992), 57 FR 60017 (December 17, 

1992) (SR–NSCC–1992–13). 

8See Securities Exchange Act Release No. 52458 

(September 16, 2005), 70 FR 56200 (September 26, 

2005) (SR–NSCC–2005–10). 

9Securities Exchange Act Release No. 68159 

(November 5, 2012), 77 FR 67410 (November 9, 

2012) (SR–NSCC–2012–08). 

10The 2012 Rule Filing also (i) renamed the 

Service from ‘‘Mutual Fund Commission 

Settlement’’ to the current ‘‘DTCC Payment aXis’’, 

Continued 

of the information collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

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: Thomas Bayer, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, 

DC 20549, or send an email to: PRA_

Mailbox@sec.gov. 

Dated: October 15, 2014. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24955 Filed 10–20–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, October 23, 2014 at 2:00 

p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or her designee, has 

certified that, in her opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matter at the Closed Meeting. 

Commissioner Gallagher, as duty 

officer, voted to consider the items 

listed for the Closed Meeting in closed 

session. 

The subject matter of the Closed 

Meeting will be: 

Institution and settlement of 

injunctive actions; 

Institution settlement of 

administrative proceedings; 

Adjudicatory matter; 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact the Office of the Secretary at 

(202) 551–5400. 

Dated: October 16, 2014. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–25084 Filed 10–17–14; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73358; File No. SR–NSCC– 

2014–09] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 52 

(Mutual Fund Services) and Addendum 

A (Fee Structure) With Respect to the 

DTCC Payment aXis Service, and To 

Make Certain Technical Changes 

October 15, 2014. 

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 October 

2, 2014, National Securities Clearing 

Corporation (‘‘NSCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by NSCC. NSCC filed the proposed rule 

change pursuant to Section 19(b)(3)(A) 3

of the Act and Rule 19b-4(f)(2) 4 and (4) 5

thereunder. The proposed rule change 

was effective upon filing with the 

Commission. 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 Rule 52 (Mutual Fund 

Services) and Addendum A (Fee 

Structure) of NSCC’s Rules & Procedures 

with respect to the DTCC Payment aXis 

service, and certain technical changes in 

connection therewith, as more fully 

described below. The text of the 

proposed rule change is available on 

NSCC’s Web site at http://www.dtcc.

com/legal/sec-rule-filings.aspx, at the 

principal office of NSCC, and at the 

Commission’s Public Reference Room. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, 

NSCC included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. NSCC has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

(1) Statement of Purpose 

Background. NSCC’s DTCC Payment 

aXis service (‘‘Service’’) 6 was initially 

approved by the Commission on 

December 9, 1992 (‘‘1992 Rule Filing’’).7

In the 1992 Rule Filing, NSCC described 

that the new service would provide for 

the automation of payments of 

commissions owed in respect of mutual 

fund transactions between fund 

companies (‘‘Funds’’) and their retail 

broker-dealers (‘‘Distributors’’) and that 

NSCC’s role in this new commission 

service would be to transmit data 

between the Funds (i.e., the commission 

payers) and the Distributors (i.e., the 

commission receivers). In 2005, NSCC 

expanded the scope of the Service to 

permit Distributors to transmit fee data 

through NSCC to other Distributors, and 

to settle the fee payments in respect 

thereof, expanding the Service to allow 

for more than the exchange of 

commission-related information from 

Funds to Distributors.8

On October 22, 2012, NSCC filed a 

proposed rule change (‘‘2012 Rule 

Filing’’),9 which, in particular and 

relevant to the current proposed rule 

change, introduced a unique data 

processing flow to the Service.10 In the 

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62978 Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices 

(ii) specified that the Service permits for the flow 

of commission and other fee data, and the 

settlement of payments thereof, among users of the 

Service without regard to whether the flow of funds 

is from the Fund to the Distributor, from the 

Distributor to the Fund, from a Distributor to 

another Distributor, or otherwise, (iii) specified that 

transmission of commission and other fee data with 

regard to investor accounts held on an omnibus 

account basis was included within the suite of 

functionalities offered by the Service and (iv) 

amended the fee structure with respect to the fees 

charged by NSCC with regard to the Service. 

11Networking Service Fees may also be processed 

using the traditional process flow, at the paying 

Fund’s discretion. 

12For DTCC Payment aXis Non-Omnibus 

transactions, NSCC charges its members $.30 per 

hundred records for the first 500,000 records 

submitted each month, with a minimum charge of 

$50. This $50 minimum charge will not apply to 

detail records transactions. 

13 15 U.S.C. 78q–1(b)(3)(F). 

14 15 U.S.C. 78q–1(b)(3)(D). 

2012 Rule Filing, NSCC explained that 

unlike the processing flow applicable to 

all other commission and fee payment 

types processed through the Service, 

instructions for the payment of 12b–1 

fees to a Distributor with regard to 

investor accounts held on an omnibus 

account basis at the Fund (‘‘12b–1 

Omnibus Fees’’) must in all events be 

initiated by the Distributor seeking 

payment. Having received the payment 

instruction in proper form from the 

Distributor, NSCC would then transmit 

such payment instruction to the contraside Fund. The contra-side Fund could 

then either (i) confirm or reject the 

payment instruction, or (ii) release 

payment (either with or without 

confirmation). 

Currently, NSCC is preparing to add 

three additional fee types to the list of 

commission and fee payments that may 

be processed through DTCC Payment 

aXis. The three fee types are known in 

the Funds industry as Sub-Accounting 

Service Fees, Retirement/Bank Trust 

Service Fees and Networking Service 

Fees. All three fee types will be subject 

to the same processing flow as 12b-1 

Omnibus Fees, where the party seeking 

payment must initiate the transaction 

(‘‘Payee Initiated Processing Flow’’).11

The Proposed Rule Change 

Commission and Other Fee Payments 

between DTCC Payment aXis Users. 

Because the 2012 Rule Filing described 

the newly introduced Payee Initiated 

Processing Flow as having applicability 

only with regard to 12b-1 Omnibus 

Fees, NSCC proposes to amend Rule 52 

to remove the 12b-1 Omnibus Fee 

limitation. In connection with this 

amendment, NSCC will also specify that 

the Payee Initiated Processing Flow may 

also apply to fee types where any party, 

including a Fund, is the recipient of the 

payment. Upon effectiveness of this 

proposed rule change, going forward 

NSCC will issue an Important Notice to 

its DTCC Payment aXis users regarding 

which commission and other fee types 

will be subject to the Payee Initiated 

Processing Flow. These rule changes 

will be effective immediately, with 

implementation for the processing of the 

three additional fee types named above 

to begin November 24, 2014, or 

otherwise, at such later date thereafter 

as NSCC may announce through 

Important Notice. 

NSCC Charges. NSCC is also 

amending Addendum A (NSCC’s Fee 

Structure) with regard to DTCC Payment 

aXis. Addendum A will be amended as 

follows: the DTCC Payment aXis fee 

category currently entitled ‘‘NonOmnibus’’ will be renamed 

‘‘Commission & Fee Settlement’’, and 

the DTCC Payment aXis fee category 

currently entitled ‘‘Omnibus’’ will be 

renamed ‘‘Invoicing & Fee Settlement’’, 

to better conform to the industry naming 

convention. 

In addition, ‘‘detail records’’ 

transaction charges, currently charged 

within the ‘‘Omnibus’’ fee category 

(being renamed ‘‘Invoicing & Fee 

Settlement’’), are being reduced by 

NSCC and will be charged under a 

separate fee structure to match the fee 

structure applicable to ‘‘Commission & 

Fee Settlement’’ (currently named, 

‘‘Non-Omnibus’’), except that there will 

be no minimum charge applicable to 

detail records transactions.12 These rule 

changes will be effective immediately, 

with NSCC’s implementation of the new 

detail records transaction fee structure 

to begin November 24, 2014, or at such 

later date thereafter as NSCC may 

announce through Important Notice. 

Technical Changes. In connection 

with the above changes to NSCC’s Rules 

& Procedures, NSCC is also making four 

technical changes as follows: First, in 

Rule 52, to remove the footnote in the 

heading explaining that the ‘‘Mutual 

Fund Services’’ were formerly known as 

the ‘‘Mutual Fund Settlement, Entry and 

Registration Verification Service’’ (the 

name change occurred several years ago, 

and NSCC does not believe that the 

explanation is required any longer); 

second, in Rule 52, to revise the 

phrasing for the term ‘‘Omnibus’’ for 

purposes of clarity; third, in Rule 52, to 

merge Subsections 3 and 4 of Section C 

(DTCC Payment aXis) into one 

Subsection as the two Subsections are 

substantially related; and four, in 

Addendum A, to add the subheading 

‘‘Transaction Fees’’ under the current 

‘‘Non-Omnibus’’ heading (being 

renamed ‘‘Commission & Fee 

Settlement), which subheading was 

inadvertently omitted in the 2012 Rule 

Filing. There are no new NSCC charges 

associated with this technical change to 

Addendum A. These rule changes will 

be effective immediately. 

(2) Statutory Basis 

NSCC believes that the proposed rule 

change is consistent with the 

requirements of the Act, and the rules 

and regulations thereunder applicable to 

NSCC. In particular, the proposed rule 

change is consistent with (i) Section 

17A(b)(3)(F) 13 of the Act because it 

provides a mechanism for members to 

communicate commission and fee 

payment instructions and to settle 

payments between themselves in a 

standardized and automated form, 

fostering cooperation and coordination 

with persons engaged in the clearance 

and settlement of securities 

transactions, and (ii) Section 

17A(b)(3)(D) 14 of the Act because it 

amends the service fees NSCC charges 

in connection with use of the Service, 

which helps to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among members in 

connection with use of the Service. In 

addition, the proposed rule change will 

be implemented consistently with the 

safeguarding of securities and funds in 

NSCC’s custody or control or for which 

NSCC is responsible because the 

proposed rule change applies solely to 

non-guaranteed services and also solely 

with respect commission and fee 

payments between or among Funds and 

their distribution partners. Accordingly, 

the proposed rule change does not affect 

the safeguarding of securities or funds 

in NSCC’s custody or control or for 

which NSCC is responsible. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NSCC 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. NSCC will notify 

the Commission of any written 

comments received by NSCC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

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Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices 62979 

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

16 17 CFR 240.19b–4(f). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer that has been admitted 

to membership in the Exchange. A Member will 

have the status of a ‘‘member’’ of the Exchange as 

that term is defined in Section 3(a)(3) of the Act. 

Membership may be granted to a sole proprietor, 

partnership, corporation, limited liability company 

or other organization which is a registered broker 

or dealer pursuant to Section 15 of the Act, and 

which has been approved by the Exchange.’’ See 

Exchange Rule 1.5(n). 

4Rule 600(b)(78) of Regulation NMS, 17 CFR 

242.600(b)(78), defines a ‘‘Trading Center’’ as ‘‘a 

national securities exchange or national securities 

association that operates an SRO trading facility, an 

alternative trading system, an exchange market 

maker, an OTC market maker, or any other broker 

or dealer that executes orders internally by trading 

as principal or crossing orders as agent.’’ See also 

Exchange Rule 2.11(a). 

5See EDGA Rules 11.12(d)(3) and (e); EDGX 

Rules 11.12(d)(3) and (e). See also Securities 

Exchange Act Release Nos. 71061 (December 12, 

2013), 78 FR 76685 (December 18, 2013) (SR– 

EDGA–2013–36) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change To Amend 

EDGX Rule 11.12, Limitations of Liability); and 

71062 (December 12, 2013), 78 FR 76693 (December 

18, 2013) (SR–EDGX–2013–45) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To Amend EDGX Rule 11.12, Limitations of 

Liability). The Exchange notes that proposed Rule 

11.16(g)(4) refers the liability limits under BATS 

Rule 11.16(d)(1)–(3), which differ from the existing 

EDGA and EDGX monthly liability limit of $500,00 

referenced under EDGA and EDGX Rules 11.12(e)(4) 

and set forth under EDGA and EDGX Rules 

11.12(d)(1). The Exchange understands that both 

EDGA and EDGX intend to submit a proposed rule 

change to harmonize its liability limits with those 

of BATS and BYX. 

6 17 CFR 240.19b–4(f)(6)(iii). 

of the Act 15 and paragraph (f) of Rule 

19b–4 16 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File No. SR– 

NSCC–2014–09 on the subject line. 

Paper Comments 

• Send in triplicate to Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File No. 

SR–NSCC–2014–09. 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 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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of NSCC and on NSCC’s Web site 

at (http://www.dtcc.com/legal/sec-rulefilings.aspx). 

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 No. 

SR–NSCC–2014–09 and should be 

submitted on or before November 12, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24946 Filed 10–20–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73357; File No. SR–BYX– 

2014–027] 

Self-Regulatory Organizations; BATS 

Y-Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 11.16 of 

BATS Y-Exchange, Inc. 

October 15, 2014. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on October 

7, 2014, BATS Y-Exchange, Inc. (the 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposed rule 

change to amend paragraph (f) of Rule 

11.16 to provide Members 3 with 

additional time within which to submit 

a written claim for compensation for 

‘‘losses resulting directly from the 

malfunction of the Exchange’s physical 

equipment, devices and/or 

programming or the negligent acts or 

omissions of its employees’’ (‘‘Exchange 

Systems Issues’’). In addition, the 

Exchange proposes to add a new 

paragraph (g) to Rule 11.16 to permit the 

Exchange, subject to certain conditions 

and limitations, to compensate Members 

for certain losses incurred in connection 

with orders or portions of orders routed 

by the Exchange through its affiliated 

routing broker-dealer, BATS Trading, 

Inc. (‘‘BATS Trading’’), to Trading 

Centers 4 where such losses are claimed 

by the Member to have resulted directly 

from a malfunction of the physical 

equipment, devices and/or 

programming, or the negligent acts or 

omissions of the employees, of such 

Trading Centers (‘‘Trading Center 

Systems Issue’’). 

The proposed rule change is 

substantially similar to the existing 

functionality on EDGX Exchange, Inc. 

(‘‘EDGX’’) and EDGA Exchange, Inc. 

(‘‘EDGA’’).5 The Exchange has 

designated the proposed rule change as 

non-controversial and provided the 

Commission with the notice required by 

Rule 19b–4(f)(6)(iii) under the Act.6

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

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