78924 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 

20 15 U.S.C. 78k–1(c)(1)(C) and 17 CFR 

242.603(a)(2). 

21 15 U.S.C. 78f(b)(5) and (b)(8). 

22 15 U.S.C. 78s(b)(2). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This includes options overlying equities, ETFs, 

ETNs and indexes which are Multiply Listed. 

4A dividend strategy is defined as transactions 

done to achieve a dividend arbitrage involving the 

purchase, sale and exercise of in-the-money options 

of the same class, executed the first business day 

prior to the date on which the underlying stock goes 

ex-dividend. 

5A merger strategy is defined as transactions 

done to achieve a merger arbitrage involving the 

purchase, sale and exercise of options of the same 

class and expiration date, executed the first 

business day prior to the date on which 

thereunder,20 and sections 6(b)(5) and 

(b)(8) of the Act.21

V. Accelerated Approval of Proposed 

Rule Changes, as Modified by 

Amendments No. 2 

The Amendments No. 2 revised the 

proposed rule changes to: (i) Clarify 

how the BATS One Feed would be 

created, (ii) make additional clarifying 

statements with respect to the latency 

and cost of the BATS One Feed, and (iii) 

bring together the discussion of key 

aspects of the description of the 

proposal in the same section. 

Accordingly, the Commission does not 

believe that the Amendments No. 2 

raises any novel regulatory issues and 

therefore finds that good cause exists to 

approve the proposals, as modified by 

Amendments Nos. 1 and 2, on an 

accelerated basis. 

VI. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether Amendments No. 2 

to the proposed rule changes are 

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 Numbers 

SR–BATS–2014–055; SR–BYX–2014– 

030; SR–EDGA–2014–25; or SR–EDGX– 

2014–25 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 

Numbers SR–BATS–2014–055; SR– 

BYX–2014–030; SR–EDGA–2014–25; or 

SR–EDGX–2014–25. 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 Numbers SR–BATS– 

2014–055; SR–BYX–2014–030; SR– 

EDGA–2014–25; or SR–EDGX–2014–25 

and should be submitted on or before 

January 21, 2015. 

VII. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,22 that the 

proposed rule changes, as modified by 

Amendments Nos. 1 and 2, (SR–BATS– 

2014–055; SR–BYX–2014–030; SR– 

EDGA–2014–25; SR–EDGX–2014–25) 

be, and hereby are, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30586 Filed 12–30–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 73927; File No. SR–Phlx–2014– 

80] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Strategy Fee Caps 

December 23, 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 December 

18, 2014, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III, 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Strategy Fee Caps which are currently 

located in the Exchange Fee Schedule at 

Section II, entitled ‘‘Multiply Listed 

Options.’’ 

While changes to the Pricing 

Schedule pursuant to this proposal are 

effective upon filing, the Exchange has 

designated the proposed amendment to 

be operative on January 2, 2015. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqomxphlx.cchwall

street.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 

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 

Exchange 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. Purpose 

The purpose of this filing is to amend 

the Strategy Fee Caps which are 

currently located in Section II, entitled 

‘‘Multiply Listed Options.’’ 3 Today, the 

Exchange caps transaction fees for 

certain dividend,4 merger,5 short stock 

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Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 78925 

shareholders of record are required to elect their 

respective form of consideration, i.e., cash or stock. 

6A short stock interest strategy is defined as 

transactions done to achieve a short stock interest 

arbitrage involving the purchase, sale and exercise 

of in-the-money options of the same class. 

7Reversal and conversion strategies are 

transactions that employ calls and puts of the same 

strike price and the underlying stock. Reversals are 

established by combining a short stock position 

with a short put and a long call position that shares 

the same strike and expiration. Conversions employ 

long positions in the underlying stock that 

accompany long puts and short calls sharing the 

same strike and expiration. 

8A jelly roll strategy is defined as transactions 

created by entering into two separate positions 

simultaneously. One position involves buying a put 

and selling a call with the same strike price and 

expiration. The second position involves selling a 

put and buying a call, with the same strike price, 

but with a different expiration from the first 

position. 

9A box spread strategy is a strategy that 

synthesizes long and short stock positions to create 

a profit. Specifically, a long call and short put at 

one strike is combined with a short call and long 

put at a different strike to create synthetic long and 

synthetic short stock positions, respectively. 

10A ‘‘Specialist’’ is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

11A ‘‘Market Maker’’ includes Registered Options 

Traders (Rule 1014(b)(i) and (ii)), which includes 

Streaming Quote Traders (see Rule 1014(b)(ii)(A)) 

and Remote Streaming Quote Traders (see Rule 

1014(b)(ii)(B)). Directed Participants are also market 

makers. 

12The term ‘‘Professional’’ means any person or 

entity that (i) is not a broker or dealer in securities, 

and (ii) places more than 390 orders in listed 

options per day on average during a calendar month 

for its own beneficial account(s). See Rule 

1000(b)(14). 

13The term ‘‘Firm’’ applies to any transaction that 

is identified by a member or member organization 

for clearing in the Firm range at OCC. 

14The term ‘‘Broker-Dealer’’ applies to any 

transaction which is not subject to any of the other 

transaction fees applicable within a particular 

category. 

15Reversal and conversion, jelly roll and box 

spread strategy executions are not included in the 

Monthly Strategy Cap for a Firm. Reversal and 

conversion, jelly roll and box spread strategy 

executions (as defined in this Section II) are 

included in the Monthly Firm Fee Cap. All 

dividend, merger, short stock interest, reversal and 

conversion, jelly roll and box spread strategy 

executions (as defined in this Section II) are 

excluded from the Monthly Market Maker Cap. 

Firms are subject to a maximum fee of $75,000 

(‘‘Monthly Firm Fee Cap’’). Specialists and Market 

Makers are subject to a ‘‘Monthly Market Maker 

Cap’’ of $550,000 for: (i) Electronic and floor Option 

Transaction Charges; (ii) QCC Transaction Fees (as 

defined in Exchange Rule 1080(o) and Floor QCC 

Orders, as defined in 1064(e)); and (iii) fees related 

to an order or quote that is contra to a PIXL Order 

or specifically responding to a PIXL auction. 

16 15 U.S.C. 78f. 

17 15 U.S.C. 78f(b)(4) and (5). 18See Section II of the Pricing Schedule. 

interest,6 reversal and conversion,7 jelly 

roll 8 and box spread 9 floor option 

transaction strategies. 

Today, fees paid by Specialist,10

Market Maker,11 Professional,12 Firm 13

and Broker-Dealer 14 for floor option 

transaction in Multiply Listed Options 

are capped at $1,250 for dividend, 

merger and short stock interest 

strategies executed on the same trading 

day in the same options class when 

such members are trading in their own 

proprietary accounts. The Exchange 

proposes to increase this cap from 

$1,250 to $1,500. The Exchange will 

continue to cap at $700 the fees paid by 

Specialist, Market Maker, Professional, 

Firm and Broker-Dealer for reversal and 

conversion, jelly roll and box spread 

floor option transaction strategies that 

are executed on the same trading day in 

the same options class. 

Today, the Exchange further 

separately caps dividend, merger, short 

stock interest, reversal and conversion, 

jelly roll and box spread floor option 

transaction strategies in Multiply Listed 

Options, combined in a month when 

trading in their own proprietary 

accounts (‘‘Monthly Strategy Cap’’), at 

$50,000.15 The Exchange proposes to 

increase the Monthly Strategy Cap from 

$50,000 to $60,000. 

Despite the increased caps proposed 

herein, the Exchange believes that 

offering members and member 

organizations the opportunity to 

continue to cap transaction fees will 

benefit Phlx members and the Phlx 

market by encouraging members to 

transact greater liquidity. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,16

in general, and with Section 6(b)(4) and 

6(b)(5) of the Act,17 in particular, in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among members and issuers and 

other persons using any facility or 

system which the Exchange operates or 

controls, and is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that increasing 

the fee cap for dividend, merger and 

short stock interest strategies from 

$1,250 to $1,500 is reasonable because 

the Exchange desires to continue to 

incentivize market participants to 

transact dividend, merger and short 

stock interest floor option transactions 

in Multiply Listed Options and believes 

this proposal will continue to offer 

Specialists, Market Makers, 

Professionals, Firms and Broker-Dealers 

competitive fee caps. 

The Exchange believes that increasing 

the fee cap for dividend, merger and 

short stock interest strategies from 

$1,250 to $1,500 is equitable and not 

unfairly discriminatory because the 

Exchange is offering the fee cap for floor 

option transaction charges in Multiply 

Listed Options to all market participants 

that pay transaction fees for these 

strategies in a uniform manner. 

Customers are not assessed transaction 

fees for these types of strategies. 

The Exchange believes that 

continuing to offer a lower fee cap 

($700) for reversal and conversion, jelly 

roll and box spread strategies and not 

requiring that the transactions be 

executed in the member’s own 

proprietary account, as compared to 

other dividend, merger and short stock 

interest strategy executions, which have 

a higher cap ($1,500, as proposed) and 

require members execute transactions in 

their own proprietary accounts, is 

equitable and not unfairly 

discriminatory because the Exchange 

believes this incentive is necessary to 

create further trading opportunities for 

members on the Exchange’s trading 

floor and is being offered uniformly to 

all floor members. The Exchange 

believes a similar incentive is not 

necessary for dividend, merger and 

short stock interest strategies. Also, 

today, the cap is higher for dividend, 

merger and short stock interest 

strategies ($1,250 as compared to $700). 

In addition, the Exchange believes that 

it is equitable and not unfairly 

discriminatory to continue to require 

that all fee cap strategies, which 

combine executions for purposes of the 

Monthly Strategy Cap, must be traded in 

a member’s own proprietary account. 

The Exchange’s proposal to increase 

the Monthly Strategy Cap from $50,000 

to $60,000 is reasonable because the 

Exchange seeks to continue to 

incentivize members to transact a 

greater number of strategies on the 

Exchange to benefit from the fee cap, 

despite the increase to the cap. The 

Exchange’s proposal to increase the 

Monthly Strategy Cap from $50,000 to 

$60,000 is equitable and not unfairly 

discriminatory because the Exchange 

would offer members the opportunity to 

cap their floor equity options 

transaction in Multiply Listed Options 

fees for all strategies. Customers are 

excluded because they are not assessed 

a floor Options Transaction Charge.18

Excluding Firm floor options 

transaction in Multiply Listed Options 

related to reversal and conversion, jelly 

roll and box spread strategies are from 

the Monthly Strategy Cap is reasonable, 

equitable and not unfairly 

discriminatory because these fees would 

continue to be capped as part of the 

Monthly Firm Fee Cap, which applies 

only to Firms. The Exchange believes 

that the exclusion of Firm floor options 

transaction charges in Multiply Listed 

Options related to reversal and 

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78926 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 

19 Id. 

20Firms are eligible to cap floor options 

transactions charges and QCC Transaction Fees as 

part of the Monthly Firm Fee Cap. QCC Transaction 

Fees apply to QCC Orders as defined in Exchange 

Rule 1080(o) and Floor QCC Orders as defined in 

1064(e). See Section II of the Pricing Schedule. 

21The Exchange’s proposal would only apply the 

fee cap to options transaction charges where buy 

and sell sides originate from the Exchange floor. See 

proposed rule text in Section II of the Pricing 

Schedule. 

22Customers are not assessed options transaction 

charges in Section II of the Pricing Schedule. 

23 15 U.S.C. 78s(b)(3)(A)(ii). 

conversion, jelly roll and box spread 

strategies from the Monthly Strategy 

Cap is equitable and not unfairly 

discriminatory because Firms, unlike 

other market participants, have the 

ability to cap transaction fees up to 

$75,000 per month. The Exchange 

would include floor option transaction 

charges related to reversal and 

conversion, jelly roll and box spread 

strategies in the Monthly Strategy Cap 

for Professionals, and Broker Dealers, 

when such members are trading in their 

own proprietary accounts, because these 

market participants are not subject to 

the Monthly Firm Fee Cap or other 

similar cap. While Specialists and 

Market Makers are subject to a Monthly 

Market Maker Cap on both electronic 

and floor options transaction charges, 

reversal and conversion, jelly roll and 

box spread transactions are excluded 

from the Monthly Market Maker Cap.19

For the reasons described above, the 

Exchange believes continuing to include 

reversal and conversion, jelly roll and 

box spread strategies in the Monthly 

Firm Fee Cap is reasonable, equitable 

and not unfairly discriminatory because 

the cap provides an incentive for Firms 

to transact floor transactions on the 

Exchange, which brings increased 

liquidity and order flow to the floor for 

the benefit of all market participants.20

The Exchange believes that its 

proposal to continue to apply strategy 

fee caps to orders originating from the 

Exchange floor is reasonable because 

members pay floor brokers to execute 

trades on the Exchange floor. The 

Exchange believes that offering fee caps 

to members executing floor transactions 

would defray brokerage costs associated 

with executing strategy transactions and 

continue to incentivize members to 

utilize the floor for certain executions.21

The Exchange believes that its proposal 

to continue to apply the fee caps to 

orders originating from the Exchange 

floor is equitable and not unfairly 

discriminatory because today, the fee 

caps are only applicable for floor 

transactions. The Exchange believes that 

a requirement that both the buy and sell 

sides of the order originate from the 

floor to qualify for the fee cap 

constitutes equal treatment of members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act because the 

proposed changes apply uniformly to all 

members that incur transaction 

charges.22 The Exchange believes the 

proposal is consistent with robust 

competition and does not provide any 

unnecessary burden on competition. 

Further, floor members pay floor brokers 

to execute trades on the Exchange floor. 

The Exchange believes that offering fee 

caps to members executing floor 

transactions and not electronic 

executions does not create an 

unnecessary burden on competition 

because the fee caps defray brokerage 

costs associated with executing strategy 

transactions. Also, requiring that both 

the buy and sell sides of the order 

originate from the floor to qualify for the 

fee cap constitutes equal treatment of 

members. 

The Exchange operates in a highly 

competitive market, comprised of 

twelve exchanges, in which market 

participants can easily and readily 

direct order flow to competing venues if 

they deem fee levels at a particular 

venue to be excessive or rebates to be 

inadequate. Accordingly, the fees that 

are assessed and the rebates paid by the 

Exchange, as described in the proposal, 

are influenced by these robust market 

forces and therefore must remain 

competitive with fees charged and 

rebates paid by other venues and 

therefore must continue to be reasonable 

and equitably allocated to those 

members that opt to direct orders to the 

Exchange rather than competing venues. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

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)(ii) of the Act.23 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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or 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 email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2014–80 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–Phlx–2014–80. 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 such 

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–Phlx– 

2014–80, and should be submitted on or 

before January 21, 2015. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 78927 

24 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)(2). 

5The Commission notes that Exhibit 5 is attached 

to the filing, not to this Notice. 

6 15 U.S.C. 78q–1(b)(3)(D). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Kevin O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30588 Filed 12–30–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73929; File No. SR–NSCC– 

2014–13] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Addendum A 

(Fee Structure) With Respect to Fees 

Related to NSCC’s Obligation 

Warehouse Service 

December 23, 2014. 

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

Securities Exchange Act of 1934 (‘‘Act’’) 

and Rule 19b–4 2 thereunder, notice is 

hereby given that on December 17, 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 primarily 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 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 Addendum A of the 

Rules & Procedures (‘‘Rules’’) of NSCC 

in order to adjust certain fees related to 

NSCC’s Obligation Warehouse service, 

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, 

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) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The purpose of the proposed rule 

change is to revise NSCC’s fee schedule 

(as listed in Addendum A of the Rules) 

in order to adjust certain fees related to 

NSCC’s Obligation Warehouse (‘‘OW’’), 

a non-guaranteed, automated service 

that tracks, stores, and maintains 

unsettled ex-clearing and failed 

obligations, as well as obligations exited 

from NSCC’s Continuous Net Settlement 

(‘‘CNS’’) system, non-CNS Automated 

Customer Account Transfer Service 

(‘‘ACATS’’) Receive and Deliver 

Instructions, Balance Orders, and 

Special Trades, as such terms are 

defined in the Rules. The OW service 

provides transparency, serves as a 

central storage of open (i.e. failed or 

unsettled) broker-to-broker obligations, 

and allows users to manage and resolve 

exceptions in an efficient and timely 

manner. 

Currently, NSCC charges a fee to the 

recipient of a delivery notification 

request advisory, which informs the 

recipient that the submitting party has 

acknowledged that an OW obligation 

between those parties has settled, if that 

notification is aged two days or older 

(‘‘Aged Delivery Advisories’’); and also 

charges a fee to the recipient of a 

pending cancel request advisory, which 

requests that the recipient cancel a 

previously compared OW obligation, if 

that request is aged two days or older 

(‘‘Aged Cancel Advisories’’). NSCC is 

proposing to revise its fee schedule to 

increase the fees charged for Aged 

Delivery Advisories and Aged Cancel 

Advisories as marked on Exhibit 5 

hereto.5 The increase in these fees 

would encourage more timely action by 

the recipients of these advisories, and 

would align the fees associated with the 

OW service with the costs of delivering 

that service to NSCC’s Members. NSCC 

also proposes to remove notations in 

Addendum A related to the phased-in 

implementation for fees charged for 

each pending comparison advisory that 

are aged 5 days or older. 

The proposed rule change is marked 

on Exhibit 5 hereto as amendments to 

Addendum A to NSCC’s Rules. No other 

changes to the Rules are contemplated 

by this proposed rule change. The 

proposed fee change would take effect 

on January 1, 2015. 

2. Statutory Basis 

The proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder, in particular section 

17A(b)(3)(D) of the Act,6 which requires 

that the Rules provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its participants. 

The proposed rule change would align 

NSCC’s fees with the costs of delivering 

services to NSCC Members, and would 

allocate those fees equitably among the 

NSCC Members that use those services. 

(B) Clearing Agency’s Statement on 

Burden on Competition 

NSCC does not believe that the 

proposed rule change would have any 

impact, or impose any burden, on 

competition. As stated above, the 

proposed change would align NSCC’s 

fees with the costs of delivering services 

to its Members, and would not 

disproportionally impact any NSCC 

Members. 

(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. 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) 7 of the Act and paragraph (f) 

of Rule 19b–4 8 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: 

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