Document ID: SEC-2019-0791-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp.
Posted Date: 2019-06-06T04:00Z

[Federal Register Volume 84, Number 109 (Thursday, June 6, 2019)]
[Notices]
[Pages 26457-26459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11803]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85984; File No. SR-NSCC-2019-001]

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change To Make a Clarification and Technical Changes to Addendum K

May 31, 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 May 29, 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)(1) 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)(1).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change consists of amendments to Addendum K of 
NSCC's Rules & Procedures (``Rules'') in order to make a clarification 
and technical

[[Page 26458]]

changes, as described in greater detail below.\5\
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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.
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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 Addendum K to make a 
clarification and technical changes, as described in greater detail 
below. The proposed rule change is only clarifying the language of the 
NSCC guaranty and, therefore, would not change any of the rights and 
obligations of NSCC's Members.
    Addendum K describes NSCC's trade guaranty to Members regarding 
their CNS and balance order transactions. The proposed rule change 
would clarify Addendum K by adding language that was inadvertently 
deleted from the Rules in connection with the approval by the 
Commission of rule filing SR-NSCC-2016-005 \6\ and notice of no 
objection to advance notice SR-NSCC-2016-803.\7\ Specifically, the 
proposed rule change would add ``, and, in either case,'' after clause 
(ii) in the third sentence to make it clear that NSCC is guaranteeing 
balance order transactions through the close of business on T+2, 
whether submitted bilaterally or locked-in.
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    \6\ Securities Exchange Act Release No. 79598 (December 19, 
2016), 81 FR 94462 (December 23, 2016) (SR-NSCC-2016-005).
    \7\ Securities Exchange Act Release No. 79592 (December 19, 
2016), 81 FR 94448 (December 23, 2016) (SR-NSCC-2016-803).
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    NSCC is also proposing to make the following technical changes to 
Addendum K:
    (1) Delete the word ``orders'' in the first sentence and replace it 
with ``order'' to be consistent with the use of this phrase in the 
Rules.
    (2) Replace the word ``guarantee'' with ``guaranty'' in footnote 1 
as well as in the fourth sentence to be consistent with the use of this 
term in the Rules.
    (3) Replace the reference to ``NSCC'' in footnote 1 with ``the 
Corporation'' to be consistent with the use of this term in the Rules.
    (4) Replace the reference to ``Options Clearing Corporation'' in 
footnote 1 with ``The Options Clearing Corporation'' to reflect the 
proper legal name of the entity referenced.
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) \8\ of the Act and Rule 17Ad-
22(e)(23)(i),\9\ as promulgated under the Act, for the reasons 
described below.
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    \8\ 15 U.S.C. 78q-1(b)(3)(F).
    \9\ 17 CFR 240.17Ad-22(e)(23)(i).
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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 the proposed rule 
change would promote prompt and accurate clearance and settlement of 
securities transactions. This is because the proposed rule change 
would: (i) Clarify the provision regarding the NSCC guaranty by adding 
language that reflects how the guaranty works and that was 
inadvertently deleted in a previous rule filing and (ii) make technical 
changes that would promote consistency in terminology usage and reflect 
a proper legal entity name, all of which would ensure that the Rules 
are clear and consistent. Having clear and consistent Rules would help 
Members to better understand their rights and obligations regarding 
NSCC's clearance and settlement services. NSCC believes that when 
Members better understand their rights and obligations regarding NSCC's 
clearance and settlement services, they can better act in accordance 
with the Rules. NSCC believes that better enabling Members to comply 
with the Rules would promote the prompt and accurate clearance and 
settlement of securities transactions by NSCC. As such, NSCC believes 
the proposed rule changes are consistent with Section 17A(b)(3)(F) of 
the Act.
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    \10\ 15 U.S.C. 78q-1(b)(3)(F).
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    Rule 17Ad-22(e)(23)(i) under the Act requires NSCC to establish, 
implement, maintain and enforce written policies and procedures 
reasonably designed to publicly disclose all relevant rules and 
material procedures.\11\ NSCC believes that the proposed rule change 
would improve the clarity and the transparency of the Rules by 
clarifying language and making the technical changes described in 
detail above. NSCC believes that by enhancing the clarity and 
transparency of the Rules (here in particular, the provisions 
associated with the NSCC guaranty), NSCC would ensure that the Rules 
disclose all relevant and material aspects of NSCC's guaranty. As such, 
NSCC believes these proposed rule changes are consistent with Rule 
17Ad-22(e)(23)(i) under the Act.
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    \11\ 17 CFR 240.17Ad-22(e)(23)(i).
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(B) Clearing Agency's Statement on Burden on Competition

    NSCC does not believe the proposed rule changes would impact 
competition. These changes are a clarification and technical changes 
that would not change NSCC's current practices or affect Members' 
rights and obligations. As such, NSCC believes these proposed rule 
changes would not have any impact on competition.

(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:

[[Page 26459]]

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-2019-001 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-2019-001. 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-2019-001 and should be submitted on 
or before June 27, 2019.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11803 Filed 6-5-19; 8:45 am]
BILLING CODE 8011-01-P