70258 Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 

10 15 U.S.C. 78s(b)(3)(C). 

11 17 CFR 200.30–3(a)(12). 

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)(1). 

5MBSD Rules are available at http://dtcc.com/

legal/rules-and-procedures.aspx. 

6 GSD Rules are available at http://dtcc.com/

legal/rules-and-procedures.aspx. 

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.10

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 rulecomments@sec.gov. Please include File 

Number SR–BX–2014–056 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BX–2014–056. 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 the Exchange. 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–BX– 

2014–056 and should be submitted on 

or before December 16, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27844 Filed 11–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73642; File No. SR–FICC– 

2014–08] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Clarify That 

Federal Reserve Banks, Central 

Counterparties, and Central Securities 

Depositories Shall Not Be Considered 

Either ‘‘Mandatory Purchaser 

Participants’’ or ‘‘Voluntary Purchaser 

Participants’’ and Registered 

Investment Companies Shall Be 

Considered ‘‘Voluntary Purchaser 

Participants’’ 

November 19, 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 November 

12, 2014, 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 FICC. FICC filed the proposed rule 

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

of the Act 3 and Rule 19b–4(f)(1) 

thereunder.4 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 49 of the Rulebook 

of the Government Securities Division 

(‘‘GSD’’ and its Rulebook, ‘‘GSD Rules’’) 

of FICC, and Rule 39 of the Clearing 

Rules of the Mortgage-Backed Securities 

Division (‘‘MBSD’’ and its Clearing 

Rules, ‘‘MBSD Rules’’) of FICC in order 

to clarify that Federal Reserve Banks, 

central counterparties, and central 

securities depositories shall not be 

considered either ‘‘Mandatory Purchaser 

Participants’’ or ‘‘Voluntary Purchaser 

Participants,’’ and further to clarify that 

Registered Investment Companies shall 

be considered ‘‘Voluntary Purchaser 

Participants,’’ as more fully described 

below. 

II. Clearing Agency’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 such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

Pursuant to the Third Amended and 

Restated Shareholders Agreement, dated 

as of December 7, 2005 (‘‘Shareholders 

Agreement’’), by and among The 

Depository Trust & Clearing Corporation 

(‘‘DTCC’’), The Depository Trust 

Company (‘‘DTC’’), National Securities 

Clearing Corporation (‘‘NSCC’’), FICC, 

and the other parties thereto, and MBSD 

Rule 39, Clearing Members (as such 

term is defined in the MBSD Rules 5) 

other than non-U.S. based central 

securities depositories are required to be 

‘‘Mandatory Purchaser Participants’’ (as 

such term is defined in MBSD Rule 39) 

and be parties to the Shareholders 

Agreement, and all other users are not 

permitted to purchase and own shares 

of DTCC common stock (‘‘Common 

Shares’’) or be parties to the 

Shareholders Agreement. Further, 

pursuant to the Shareholders Agreement 

and GSD Rule 49: (1) Netting Members 

(as such term is defined in the GSD 

Rules 6) other than non-U.S. based 

central securities depositories are 

required to be ‘‘Mandatory Purchaser 

Participants’’ (as such term is defined in 

the GSD Rules) and be parties to the 

Shareholders Agreement; (2) 

Comparison-Only Members (as such 

term is defined in the GSD Rules) are 

permitted, but not required to purchase 

and own Common Shares and be parties 

to the Shareholders Agreement; and (3) 


wreier-aviles on DSK4TPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 227 / Tuesday, November 25, 2014 / Notices 70259 

7 15 U.S.C. 78q–1(b)(3)(C). 

8See Commission orders approving NSCC and 

DTC’s rule filings which implemented the current 

stock ownership structure that satisfies the fair 

representation requirements. Securities Exchange 

Act Release No. 41800 (August 27, 1999), 64 FR 

48694 (September 7, 1999) (SR–NSCC–1999–10); 

and Securities Exchange Act Release No. 41786 

(August 24, 1999), 64 FR 47882 (September 1, 1999) 

(SR–DTC–1999–17). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f). 11 17 CFR 200.30–3(a)(12). 

Sponsored Members (as such term is 

defined in the GSD Rules) are not 

permitted to purchase and own 

Common Shares or be parties to the 

Shareholders Agreement. 

FICC is proposing to amend MBSD 

Rule 39 and GSD Rule 49, as marked on 

Exhibit 5 hereto, in order to make clear 

Federal Reserve Banks, central 

counterparties, and central securities 

depositories shall not be considered 

either Mandatory Purchaser Participants 

or Voluntary Purchaser Participants. 

FICC has interpreted MBSD Rule 39 and 

GSD Rule 49 to exclude from their 

provisions: (1) Federal Reserve Banks, 

because it was never intended that such 

governmental authorities should be 

required to own shares in DTCC, 

notwithstanding that they may use 

certain services of FICC; and (2) central 

counterparties and central securities 

depositories, because link arrangements 

between FICC and these entities are for 

the purpose of extending clearing 

agency services across borders or among 

closely related activities and products, 

but not for ownership purposes. 

FICC is also proposing to amend 

MBSD Rule 39 and GSD Rule 49 in 

order to make clear Registered 

Investment Companies (as such term is 

defined in the MBSD Rules and the GSD 

Rules) (‘‘RICs’’) in any membership 

category shall be considered Voluntary 

Purchaser Participants. As Voluntary 

Purchaser Participants, RICs would be 

permitted, but not required, to purchase 

and own Common Shares and be parties 

to the Shareholders Agreement. 

Regulatory requirements applicable to 

RICs, including limitations on the 

amount of illiquid securities these 

entities are permitted to hold on an ongoing basis and requirements that stock 

purchases receive shareholder approval, 

significantly restrict the ability of RICs 

to participate in a mandatory stock 

purchase. These restrictions are unique 

to RICs. FICC would consider the 

applicability of the requirements in 

MBSD Rule 39 and GSD Rule 49 to any 

new members, as necessary. 

2. Statutory Basis 

The proposed rule change is 

consistent with the Act, and the rules 

and regulations thereunder, in 

particular Section 17A(b)(3)(C) which 

requires that the rules of FICC ‘‘assure 

a fair representation of its shareholders 

(or members) and participants in the 

selection of its directors and 

administration of its affairs . . . [and 

the Commission] may determine that 

the representation of participants is fair 

if they are afforded a reasonable 

opportunity to acquire voting stock of 

the clearing agency, directly or 

indirectly, in reasonable proportion to 

their use of such clearing agency.’’ 7

FICC implements and meets this 

requirement through MBSD Rule 39 and 

GSD Rule 49, which afford MBSD and 

GSD users a reasonable opportunity to 

acquire voting stock indirectly in the 

clearing agency in reasonable 

proportion to their use of the clearing 

agency.8 The proposed rule change 

constitutes a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of these existing rules. 

(B) Clearing Agency’s Statement on 

Burden on Competition 

The proposed rule change will not 

have any impact, or impose any burden, 

on competition. 

(C) Clearing Agency’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 foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A) 9 of the Act and paragraph (f) 

of Rule 19b–4 10 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 Number SR– 

FICC–2014–08 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–FICC–2014–08. 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 FICC and on FICC’s Web site 

(http://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 Number SR–FICC– 

2014–08 and should be submitted on or 

before December 16, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27840 Filed 11–24–14; 8:45 am] 

BILLING CODE 8011–01–P 


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