Document ID: SEC-2010-0500-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp.
Posted Date: 2010-04-02T04:00Z

[Federal Register: April 2, 2010 (Volume 75, Number 63)]
[Notices]               
[Page 16886-16887]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ap10-130]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61798; File No. SR-NSCC-2010-04]

 
Self-Regulatory Organizations; The National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Set the Effective Date for the Elimination of the 
Guaranty of Payment With Respect to Its Envelope Settlement Service

March 29, 2010.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 8, 2010, the 
National Securities Clearing Corporation (``NSCC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change described in Items I, II, and III below, which items have been 
prepared primarily by NSCC. NSCC filed the proposal pursuant to section 
19(b)(3)(A)(i) of the Act \2\ and Rule 19b-4(f)(1) \3\ thereunder so 
that the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the rule 
change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78s(b)(3)(A)(i).
    \3\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change will set the effective date for the 
elimination of a guarantee of payment (and associated rule changes) 
with respect to NSCC's Envelope Settlement Service (``ESS'') as of 
April 1, 2010.

II. Self-Regulatory Organization'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 these 
statements.\4\
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    \4\ The Commission has modified the text of the summaries 
prepared by NSCC.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    On March 1, 2010, the Commission approved rule filing SR-NSCC-2010-
01 (``Approved Filing'') relating to NSCC's elimination of the 
guarantee of payment in connection with ESS.\5\ Specifically, the 
approval will give effect to specified changes to Rule 9, Addendum D, 
Addendum K, and Procedure XV of NSCC's rules and procedures as set 
forth in Exhibit 5 of the Approved Filing, to: (1) Eliminate NSCC's 
guaranty of the payment to the receiving NSCC member in an ESS 
delivery, (2) provide that the credits and debits of the payment amount 
of an envelope may be reversed, and (3) eliminate clearing fund 
deposits allocated to ESS. In order to afford members a transitional 
period to prepare for these changes, NSCC is proposing to implement the 
changes on April 1, 2010.
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    \5\ See Securities Exchange Act Release No. 61618 (March 1, 
2010), 75 FR 10542 (March 8, 2010) (SR-NSCC-2010-01).
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    The proposed rule change is consistent with Section 17A of the 
Act,\6\ as amended, and the rules and regulations thereunder applicable 
to NSCC. The proposed rule change will protect NSCC's net settlement 
process while continuing to provide a central delivery point for 
physical deliveries of envelopes with constrained payment processing. 
The changes will reduce NSCC's exposure to potential losses from member 
defaults, insolvencies, mistakes, and fraud and will appropriately 
shift the risk outside NSCC to the contracting members in an ESS 
transaction. The interim period for implementation will permit members 
to adjust their processes and systems as necessary to accommodate the 
changes.
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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

    Written comments relating to the proposed rule change were not and 
are not intended to be 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 proposed rule change has become effective upon filing 
pursuant to Section 19(b)(3)(A)(i) of the Act \7\ and Rule 19b-4(f)(1) 
\8\ thereunder because the proposed rule change constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration or enforcement of an existing rule. At any time within 
sixty days of the filing of the proposed rule change, the Commission 
may summarily abrogate 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\ 15 U.S.C. 78s(b)(3)(A)(i).
    \8\ 17 CFR 240.19b-4(f)(1).
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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 Number SR-NSCC-2010-04 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 Number SR-NSCC-2010-04. This file

[[Page 16887]]

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 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 the principal office of NSCC and on NSCC's 
Web site at http://www.dtcc.com/downloads/legal/rule_filings/2010/
nscc/2010-04.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 Number SR-
NSCC-2010-04 and should be submitted on or before April 23, 2010.

    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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7465 Filed 4-1-10; 8:45 am]
BILLING CODE 8011-01-P