Document ID: SEC-2011-0854-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp.
Posted Date: 2011-06-20T04:00Z

[Federal Register Volume 76, Number 118 (Monday, June 20, 2011)]
[Notices]
[Pages 35931-35933]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-15174]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64666; File No. SR-NSCC-2011-03]

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to the Analytic Reporting Service

June 14, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 2, 2011, the National 
Securities Clearing Corporation (``NSCC'') 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 
primarily by NSCC. NSCC filed the proposed rule change pursuant to 
Section 19(b)(3)(A)(iii) of the Act \2\ and Rule 19b-4(f)(4) thereunder 
\3\ so that the proposal was effective upon filing with the Commission. 
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\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \3\ 17 CFR 240.19b-4(f)(4).
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I. Self-Regulatory Organization's Statement of Terms of Substance of 
the Proposed Rule Change

    The proposed rule change clarifies provisions related to the 
Analytic Reporting Service.

II. Self-Regulatory Organization's Statement of 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 Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Under the proposed rule change, NSCC will amend Rule 57 (Insurance 
and Retirement Processing Services), Section 12 (Analytic Reporting 
Service) to clarify (i) the scope of information included within the 
Analytic Reporting Service and (ii) the opt-out provisions

[[Page 35932]]

applicable to the Analytic Reporting Service with the goal of providing 
greater transparency to NSCC Members and Limited Members.\4\ The rule 
change, which can be viewed as filed by NSCC on its Web site at http://www.dtcc.com/downloads/legal/rule_filings/2011/nscc/2011-03.pdf, 
include the following:
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    \4\ The Analytic Reporting Service provides NSCC Members and 
Limited Members with the ability to perform market analysis based on 
Insurance Processing Service (``IPS'') Data. This market analysis 
(commonly referred to as ``benchmarking data'') allows users of the 
service to obtain and compare aggregated data from different 
perspectives. Securities Exchange Act Release No. 63604 (Dec. 23, 
2010), 75 FR 82115 (Dec. 29, 2010).
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1. Change in Name
    The original name of the service was the ``Analytics Reporting 
Service.'' Based on further discussions, NSCC has determined that it 
will call the service the ``Analytic Reporting Service'' (i.e., 
Analytic will be singular and not plural).
2. Scope of the Release of Clearing Data
    ``Clearing Data,'' as defined in NSCC's Rule 49, includes data 
received by NSCC for inclusion in the clearance and settlement process 
of NSCC or such data, reports, or summaries produced as a result of 
NSCC processing such transaction data. In order to clarify the 
information that will be released as part of the Analytic Reporting 
Service, NSCC is revising Rule 57, Section 12, to define the term 
``Analytics Data'' to mean ``aggregated information related to the 
insurance products market, including benchmarking information and 
league tables.'' The intent of this change is to clarify the scope and 
extent of the data that will be released as part of the Analytic 
Reporting Service.
3. Opt-Out Provision
    NSCC Members and Limited Members are provided with the opportunity 
to opt-out of having information attributed to them as part of the 
league tables because certain NSCC Members and Limited Members may 
consider this to be a release of proprietary or confidential 
information. In order to clarify the relationship between the Analytic 
Reporting Service opt-out provisions and Rule 49, Section 12 of Rule 57 
is being amended to specifically state that those NSCC Members or 
Limited Members that do not opt-out in the manner described in section 
12 of Rule 57 are deemed to have consented to the release of their IPS 
Data as part of the Analytics Data for the purposes of Rule 49.
    In order for an IPS Member to opt-out of having information 
attributed to itself prior to the service becoming available, an IPS 
Member must notify NSCC in writing during the initial ninety (90) day 
opt-out period. NSCC will announce the beginning of this ninety (90) 
day period through an Important Notice. A new IPS Member may opt-out by 
providing NSCC with written notice of its election to opt-out at any 
time prior to activation of its account. Once the Analytic Reporting 
Service commences to include the information of an IPS Member, the IPS 
Member may elect to opt-out at any time by providing NSCC with thirty 
(30) days' written notice.
    By opting-out, an IPS Member is prohibiting NSCC from attributing 
Analytics Data in any discernable manner to that IPS Member. However, 
opting-out does not prohibit NSCC from including the IPS Member's 
information for purposes of benchmarking in a manner that does not 
identify the specific IPS Member. By opting-out, the IPS Member also 
permits NSCC to disclose that the specific Analytics Data attributable 
to the particular IPS Member is not included in certain types of data 
(e.g., in the production of league tables, NSCC will disclose which IPS 
Members have not been included in the league tables). This disclosure 
will provide transparency to all IPS Members and will assist in the 
usability of the Analytics Data.
    As stated in the original Analytic Reporting Service filing,\5\ an 
IPS Member that opts-out will forfeit any portion of NSCC's annual 
refund, if any, that is directly attributable to the revenue generated 
by the Analytic Reporting Service.
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    \5\ Supra note 4.
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    NSCC states that the proposed change is consistent with the 
requirements set forth under Section 17A of the Act \6\ because it will 
permit NSCC Members and Limited Members to enhance their monitoring and 
analysis of their respective businesses and is designed to foster 
cooperation and coordination with persons engaged in the clearance and 
settlement of securities transactions, to remove impediments to and 
perfect the mechanism of a national system for the prompt and accurate 
clearance and settlement of securities transactions, and, in general, 
to protect investors and the public interest.
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    \6\ 15 U.S.C. 78q-1.
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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

    NSCC has not solicited or received written comments relating to the 
proposed rule change. NSCC will notify the Commission of any written 
comments it receives.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(4) \8\ 
thereunder because the proposed rule change effects a change in an 
existing service of NSCC that (i) does not adversely affect the 
safeguarding of securities or funds in NSCC's custody or control or for 
which it is responsible and (ii) does not significantly affect the 
respective rights of NSCC or persons using the service. 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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    \7\ Supra note 2.
    \8\ Supra note 3.
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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 e-mail to rule-comments@sec.gov. Please include 
File No. SR-NSCC-2011-03 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-NSCC-2011-03. This file 
number should be included on the subject line if e-mail 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

[[Page 35933]]

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 a.m. and 3 
p.m. Copies of such filings also will be available for inspection and 
copying at NSCC's principal office and NSCC's Web site at http://www.dtcc.com/downloads/legal/rule_filings/2011/nscc/2011-03.pdf. 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-2011-03 and should be 
submitted on or before July 11, 2011.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-15174 Filed 6-17-11; 8:45 am]
BILLING CODE 8011-01-P