Document ID: SEC-2014-1101-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corporation
Posted Date: 2014-07-03T04:00Z

[Federal Register Volume 79, Number 128 (Thursday, July 3, 2014)]
[Notices]
[Pages 38098-38099]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-15604]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72488; File No. SR-NSCC-2014-08]

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Broaden the Scope of the Licensing and Appointments 
Service and To Amend NSCC's Fee Structure

June 27, 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 June 17, 2014, National Securities Clearing Corporation (``NSCC'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule changes 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\ 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 changes 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)(2).
    \5\ 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 changes consist of amendments to the Rules & 
Procedures (``Rules'') of NSCC to broaden the scope of the Licensing 
and Appointments (``L&A'') service of the Insurance & Retirement 
Processing Services (``I&RS'') of NSCC and to amend Addendum A of 
NSCC's Rules in connection therewith, 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 changes and 
discussed any comments it received on the proposed rule changes. 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. Proposed Rule Changes
    In 2001, NSCC established the L&A service \6\ as part of the I&RS 
suite of services. L&A allows users of the service to transmit data and 
information between themselves with respect to state licensing \7\ and 
appointment \8\ matters, which in general relate to insurance agents 
(``Producers''), and to settle payments between themselves in 
connection therewith.
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    \6\ Securities Exchange Act Release No. 44635 (August 1, 2001), 
66 FR 41287 (August 7, 2001) (SR-NSCC-2001-10).
    \7\ A license is an authorization from a state insurance 
department permitting the licensee to sell insurance under the 
guidelines established by the insurance laws of that state 
(``Licensing'').
    \8\ An appointment is an authorization from an insurance carrier 
permitting the appointee to sell the products of that particular 
carrier in a particular state (``Appointment'').
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    In light of recently implemented regulations pertaining to annuity 
product training for Producers under various state insurance laws,\9\ 
NSCC proposes to broaden L&A's scope to specify that Licensing and 
Appointment authorizations and activities includes, but is not limited 
to, insurance-related training of a licensee or appointee. The proposed 
rule change will also specify that, in addition to the exchange of 
Licensing and Appointment information between users of L&A, users may 
also supply and access Licensing and Appointment information directly 
to and directly from NSCC, as the case may be. For example, with the 
proposed rule change, users of the L&A service will have access to a 
new feature, the Producer Management Portal, which is a repository of 
Producer related information (including, but not limited to Producer 
training completions) stored by NSCC for direct access by those L&A 
users that subscribe to the new feature.
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    \9\ In 2010, the National Association of Insurance Commissioners 
adopted the 2010 Suitability in Annuity Transactions Model 
Regulation to set standards and procedures for suitable annuity 
recommendations of Producers, including among other standards, that 
Producers have adequate insurance carrier-product specific training 
prior to soliciting an annuity product for such insurance carrier, 
as well as a one time, minimum four credit hour, general annuity 
training course offered by an approved education provider and 
approved by the applicable insurance department in accordance with 
applicable insurance education training laws or regulations. See, 
http://www.naic.org/store/free/MDL-275.pdf.
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    In connection with the addition of the new Producer Management 
Portal feature of L&A, the proposed rule change will also amend 
Addendum A to include the Producer Management Portal fees as follows:
     For insurance carrier providers of Producer training 
completions:

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                                                     Number of active
                      Band                          producers managed                                       Monthly fee
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1..............................................                    0-999  $0.
2..............................................              1,000-9,999  1,000.
3..............................................            10,000-49,999  3,000.
4..............................................            50,000-99,999  4,000.

[[Page 38099]]

 
5..............................................          100,000-249,999  5,000.
6..............................................                250,000 +  $5,000, plus $0.018 per active Producer managed.
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     For inquiries:

$1.25 per inquiry into the portal
$6,000 per month for batch service (periodic file transmissions)
2. Statutory Basis
    NSCC believes that the proposed rule changes are consistent with 
the requirements of the Act, and the rules and regulations thereunder 
applicable to NSCC. In particular, the proposed rule changes are 
consistent with (i) Section 17A(b)(3)(F) \10\ of the Act because they 
enhance NSCC members' ability to access and retrieve Licensing and 
Appointment information in a standardized and automated form, fostering 
cooperation and coordination with persons engaged in the clearance and 
settlement of insurance transactions, and (ii) Section 17A(b)(3)(D) 
\11\ of the Act because they establish fees in connection with use of 
an added feature to an existing NSCC service, providing for the 
equitable allocation of reasonable dues, fees and other charges among 
NSCC members. The proposed rule changes relate solely to an information 
service of NSCC, and therefore, implementation of the rule changes will 
not affect the safeguarding of securities or funds in NSCC's custody or 
control or for which NSCC is responsible.
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    \10\ 15 U.S.C. 78q-1(b)(3)(F).
    \11\ 15 U.S.C. 78q-1(b)(3)(D).
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B. Clearing Agency's Statement on Burden on Competition

    NSCC does not believe that the proposed rule changes will 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 changes 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 changes have become effective pursuant to 
Section 19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4 
\13\ thereunder. At any time within 60 days of the filing of the 
proposed rule changes, the Commission summarily may temporarily suspend 
such rule changes 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 
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 Number SR-NSCC-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-NSCC-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 changes that are 
filed with the Commission, and all written communications relating to 
the proposed rule changes 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-rule-filings.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-NSCC-2014-08 
and should be submitted on or before July 24, 2014.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-15604 Filed 7-2-14; 8:45 am]
BILLING CODE 8011-01-P