Document ID: SEC-2019-1928-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp.
Posted Date: 2019-12-20T05:00Z

[Federal Register Volume 84, Number 245 (Friday, December 20, 2019)]
[Notices]
[Pages 70258-70260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27451]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87755; File No. SR-NSCC-2019-005]

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change To Extend the Implementation Timeframe for an Approved Rule 
Change To Amend Procedure VII With Respect to the Receipt of CNS 
Securities and Make Other Changes

December 16, 2019.
    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 11, 2019, 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 the clearing agency. 
NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(4) thereunder.\4\ The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \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)(4).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change would amend NSCC Rules & Procedures 
(``Rules'') \5\ to extend the implementation timeframe for a rule 
change (``Approved Rule Change'') that became effective pursuant to 
rule filing SR-NSCC-2019-002, as amended (``Original Rule Filing'') \6\ 
upon approval by the Commission. In this regard, pursuant to the 
proposed rule change, the Rules would be amended to state that the 
Approved Rule Change will be implemented by March 6, 2020, rather than 
being implemented by December 6, 2019, as stated in the Rules, as 
discussed below.
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    \5\ Capitalized terms not defined herein are defined in the 
Rules, available at http://www.dtcc.com/~/media/Files/Downloads/
legal/rules/nscc_rules.pdf.
    \6\ Available at http://www.dtcc.com/legal/sec-rule-filings?subsidiary=NSCC&pgs=1.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency 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 clearing agency 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 proposed rule change would amend the Rules to extend the 
implementation timeframe for the Approved Rule Change. In this regard, 
pursuant to the proposed rule change, the Rules would be amended to 
state that the Approved Rule Change will be implemented by March 6, 
2020, rather than being implemented by December 6, 2019, as stated in 
the Rules, as discussed below.
(i) Background
    Pursuant to the Approved Rule Change, NSCC (i) amended Procedure 
VII (CNS Accounting Operation) in the Rules with respect to the receipt 
of securities from NSCC's Continuous Net Settlement (``CNS'') System in 
order to reflect a change in the allocation algorithm used during the 
night cycle and (ii) made certain other technical changes to the Rules. 
Pursuant to the Rules, the changes set forth in the Approved Rule 
Change are to take effect by December 6, 2019. NSCC proposes to extend 
the implementation timeframe for the Approved Rule Change to allow 
additional time to facilitate finalization of operational testing of 
NSCC system changes related to the implementation of the Approved Rule 
Change.
    In this regard, pursuant to the proposed rule change, NSCC proposes 
to amend the Rules with respect to the implementation timeframe setting 
forth the date by which the Approved Rule Change will become effective, 
as described below.
(ii) Proposed Rule Change
    Procedure VII of the Rules contains the following legend 
(``Original Procedure VII Legend'') \7\ regarding the implementation 
timeframe for the Approved Rule Change.
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    \7\ See Rules, supra note 5 at 248.

    [Changes to this Procedure VII, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the 
Securities and Exchange Commission but have not yet been

[[Page 70259]]

implemented. By December 6, 2019, these changes will be implemented, 
and this legend will automatically be removed from this Procedure 
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VII.]

    Pursuant to the proposed rule change, the Original Procedure VII 
Legend would be deleted and replaced with the following revised legend 
(``Revised Procedure VII Legend'').
    [Changes to this Procedure VII, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the 
Securities and Exchange Commission but have not yet been implemented. 
By March 6, 2020, these changes will be implemented, and this legend 
will automatically be removed from this Procedure VII.]
    Addendum G of the Rules contains the following legend (``Original 
Addendum G Legend'') \8\ regarding the implementation timeframe for the 
Approved Rule Change.

    \8\ See Rules, supra note 5 at 349.
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    [Changes to this Addendum G, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the 
Securities and Exchange Commission but have not yet been 
implemented. By December 6, 2019, these changes will be implemented, 
and this legend will automatically be removed from this Addendum G.]

    Pursuant to the proposed rule change, the Original Addendum G 
Legend would be deleted and replaced with the following revised legend 
(``Revised Addendum G Legend'').

    [Changes to this Addendum G, as amended by File No. SR-NSCC-
2019-002, are available at dtcc.com/legal/sec-rule-filings?subsidiary=NSCC. These changes have been approved by the 
Securities and Exchange Commission but have not yet been 
implemented. By March 6, 2020, these changes will be implemented, 
and this legend will automatically be removed from this Addendum G.]
(iii) Implementation Timeframe
    The proposed rule change would become effective upon filing with 
the Commission such that the text of the Rules would be revised to 
delete the Original Procedure VII Legend and Original Addendum G Legend 
and replace them with the Revised Procedure VII Legend and Revised 
Addendum G Legend, respectively, as discussed above.
2. Statutory Basis
    NSCC believes this proposal is consistent with the requirements of 
the Act and the rules and regulations thereunder applicable to a 
registered clearing agency. Specifically, NSCC believes this proposal 
is consistent with Section 17A(b)(3)(F) of the Act \9\ for the reason 
described below.
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    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules 
be designed to promote the prompt and accurate clearance and settlement 
of securities transactions.\10\ NSCC believes that by allowing 
additional time to finalize operational testing of NSCC system changes 
related to the implementation of the Approved Rule Change, the proposed 
rule change would facilitate the ability of NSCC to implement the 
Approved Rule Change in a manner that minimizes the possibility of 
disruptions to NSCC systems, including the CNS System.\11\ Therefore, 
NSCC believes that the proposed rule change to extend the 
implementation timeframe, which would allow additional time for NSCC to 
complete operational testing relating to the Approved Rule Change, 
would promote the prompt and accurate clearance and settlement of 
securities transactions, consistent with Section 17A(b)(3)(F) of the 
Act.
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    \10\ Id.
    \11\ The CNS System and its operation are described in Rule 11 
(CNS System) and Procedure VII (CNS Accounting Operation) of the 
Rules, supra note 5.
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(B) Clearing Agency's Statement on Burden on Competition

    NSCC does not believe the proposed rule change will have any impact 
on competition. The proposed rule change would extend the 
implementation timeframe for the Approved Rule Change and not affect 
existing processing of securities transactions at NSCC.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    Written comments relating to this proposed rule change have not 
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) of the Act \12\ and paragraph (f) of Rule 19b-4 
thereunder.\13\ 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
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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-NSCC-2019-005 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-NSCC-2019-005. 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 website (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 website 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 DTCC's website 
(http://dtcc.com/legal/sec-rule-filings.aspx). All comments received 
will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NSCC-

[[Page 70260]]

2019-005 and should be submitted on or before January 10, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019-27451 Filed 12-19-19; 8:45 am]
BILLING CODE 8011-01-P