Document ID: SEC-2011-0011-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Fixed Income Clearing Corp.
Posted Date: 2011-01-05T05:00Z

[Federal Register Volume 76, Number 3 (Wednesday, January 5, 2011)]
[Notices]
[Pages 596-598]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-33252]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63612; File No. SR-FICC-2010-10]

Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Modifications to the Fee Schedule

December 29, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 21, 2010, the 
Fixed Income Clearing Corporation (``FICC'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II, which Items have been prepared primarily 
by FICC. FICC filed the proposed rule change pursuant to Section 
19(b)(3)(A)(ii) of the Act \2\ and Rule 19b-4(f)(2) \3\ thereunder 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)(ii).
    \3\ 17 CFR 240.19b-4(f)(2).

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[[Page 597]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of this filing is to modify participant fees. The fee 
changes are effective as of January 1, 2011.

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

    In its filing with the Commission, FICC 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. FICC 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. Government Securities Division (``GSD'')
    (a) The fee structure for submission of a side of a trade and 
submission of a Repo Transaction is revised to reflect the following:

------------------------------------------------------------------------
                                      Current fee      2011 proposed fee
------------------------------------------------------------------------
Up to 50,000 submissions per      $0.21 per item....  $0.27 per item.
 month.
50,001 to 100,000 submissions     $0.12 per item....  $0.15 per item.
 per month.
------------------------------------------------------------------------

     (b) The following Netting Fee and Charges have been revised as 
follows:

------------------------------------------------------------------------
                                      Current fee      2011 proposed fee
------------------------------------------------------------------------
1. For each side of a Compared    (i) $0.16; and      (i) $0.18; and
 Trade, other than a Repo         (ii) $0.016 per $1  (ii) $0.018 per $1
 Transaction, that is netted, a    million of par      million of par
 fee equaling the sum (in          value..             value.
 addition to the comparison fee)
 of:
2. For each Start Leg or Close    (i) $0.16; and      (i) $0.18; and
 Leg of a Repo Transaction other  (ii) $0.016 per $1  (ii) $0.018 per $1
 than a GCF Repo Transaction       million of par      million of par
 that is netted, a fee equaling    value..             value.
 the sum (in addition to the
 comparison fee) of:
------------------------------------------------------------------------

     (c) Currently, the charge to a member for the processing and 
reporting by the GSD of a GCF Repo[supreg] transaction is $.05 per 
million gross dollar amount of such transaction with a minimum charge 
of $2.50. The current charge makes no distinction between inter-dealer 
broker members and non-inter-dealer broker members. The proposed new 
charge will apply different charges to inter-dealer broker members and 
non-inter-dealer broker members. Specifically, the charge for non-
inter-dealer broker members will remain unchanged at $.05 per million 
with a minimum charge of $2.50. The charge for inter-dealer brokers 
will be $.025 per million with a minimum charge of $1.25.
    (d) The charge for each Deliver Obligation and Receive Obligation 
created as a result of the netting process is a fee of $0.10 per $1 
million of par value. This fee is being increased to $0.15 per $1 
million.
    (e) Repo Transaction Processing Fee.
    a. For a term Repo Transaction other than a GCF Repo Transaction 
that has been compared and netted, but which has not yet settled, a fee 
calculated as follows:
    i. For Repo Brokers (as defined in subsection III.H of the GSD Fee 
Structure) with respect to their brokered Repo Transaction activity, a 
.010 basis point charge (i.e., one hundredth of a basis point) applied 
to the gross dollar amount of each such Repo Transaction is currently 
in effect. This will be increased to 0.0175 basis point charge (i.e. 
one and three quarter hundredth of a basis point) and
    ii. For all other Netting Members, as well as Repo Brokers with 
respect to their non-brokered Repo Transaction activity, a .020 basis 
point charge (i.e., two hundredths of a basis point) applied to the 
gross dollar amount of each such Repo Transaction is currently in 
effect. This will be increased to a 0.025 basis point charge (i.e. two 
and a half hundredth of a basis point).
    b. For a GCF Repo Transaction that has been compared and netted, 
but which has not yet settled, a fee calculated as follows:
    i. For Repo Brokers acting as GCF-Authorized-Inter-Dealer Brokers, 
a .010 basis point charge (i.e., one hundredth of a basis point) 
applied to the gross dollar amount of such GCF Repo Transaction. This 
will be increased to 0.0175 basis point charge (i.e., one and three 
quarter hundredths of a basis point) applied to the gross dollar amount 
of such GCF Repo Transaction and
    ii. For all other Netting Members, a .020 basis point charge (i.e., 
two hundredths of a basis point) applied to the gross dollar amount of 
such GCF Repo Transaction. This will be increased to 0.025 basis point 
charge (i.e., two and one half hundredths of a basis point) applied to 
the gross dollar amount of such GCF Repo Transaction.
2. Mortgage Backed Securities Division (``MBSC'') Fee Changes
    The MBSD fee structure is revised to reflect the following:

 
------------------------------------------------------------------------
                                    Current old fee    2011 proposed fee
                                 ---------------------------------------
                                       Par value           Par value
                                       millions            millions
------------------------------------------------------------------------
Up to 2,500 trades per month....               $1.44               $1.68
2,501 to 5,000 trades per month.                1.32                1.54

[[Page 598]]

 
5,001 to 7,500 trades per month.                1.19                1.39
7,501 to 10,000 trades per month                1.11                1.30
10,001 to 12,500 trades per                     0.98                1.15
 month..........................
12,501 and over trades per month                0.85                0.99
------------------------------------------------------------------------

    FICC states that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \4\ and the rules and 
regulations thereunder because it updates FICC's fee schedule and 
provides for the equitable allocation of fees among its participants.
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    \4\ 15 U.S.C. 78q-1.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FICC 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

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

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 \5\ and Rule 19b-4(f)(2) \6\ because the 
proposed rule change establishes or changes a due, fee, or other charge 
applicable only to a member. 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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    \5\ Supra note 2.
    \6\ 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-FICC-2010-10 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-FICC-2010-10. 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 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 FICC's principal office and on FICC's Web 
site at http://www.dtcc.com/legal/rule_filings/ficc/2010.php. 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 
submission should refer to File No. SR-FICC-2010-10 and should be 
submitted on or before January 26, 2011.

    For the Commission by the Division of Trading and Markets 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-33252 Filed 1-4-11; 8:45 am]
BILLING CODE 8011-01-P