Document ID: SEC-2013-1037-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp.
Posted Date: 2013-06-10T04:00Z

[Federal Register Volume 78, Number 111 (Monday, June 10, 2013)]
[Notices]
[Pages 34695-34697]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13665]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69694; File No. SR-NSCC-2013-07]

Self-Regulatory Organizations; The National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change That Consists of Technical Corrections To Reflect the 
Availability of Certain Functionality in the Obligation Warehouse 
Service

June 4, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 22, 2013, 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) \2\ of the Act and Rule 19b-4(f)(4)(i) \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)(4)(i).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change consists of technical corrections to 
reflect the availability of certain functionality in the Obligation 
Warehouse (``OW'') service.

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

[[Page 34696]]

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

(a) Proposal Overview
    The purpose of this filing is to make technical corrections to 
Procedure IIA (Obligation Warehouse) to reflect that certain 
functionalities that are described in that procedure have become 
available through the OW service. On December 29, 2010, the Commission 
approved proposed rule change filing SR-NSCC-2010-11,\5\ which modified 
NSCC's Reconfirmation and Pricing Service (``RECAPS'') through the 
creation of the OW service.
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    \5\ Securities Exchange Act Release No. 34-63588 (December 21, 
2010), 75 FR 82112 (December 29, 2010).
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    Since implementation of the OW, NSCC has continued to enhance the 
service through the addition of new functionalities. For example, all 
transactions in OW (or ``OW Obligations'') that are also eligible for 
NSCC's Continuous Net Settlement (``CNS'') system and that have reached 
the status of settlement date minus one (``SD-1'') or that have reached 
or passed their scheduled settlement date are now entered into the CNS 
Accounting Operation on a regular basis, unless otherwise excluded from 
CNS by an NSCC member (``Member'') that is party to that transaction. 
Additionally, NSCC now may automatically adjust any OW Obligations for 
certain mandatory reorganization events, including adjustments for 
forward splits, name changes, mergers (both cash and stock), and full 
calls with respect to bonds. However, following the implementation of 
the OW, it was determined that OW Obligations would not be 
automatically adjusted for redemptions.
    Further, information regarding the settlement of transactions that 
settle through NSCC's Envelope Settlement Service and that include an 
OW Control Number on the input screens and envelope credit slip of that 
service will automatically be forwarded to the OW upon completion of 
the delivery. If verified, that OW Obligation will be systemically 
closed in the OW. Finally, the indicators that allow Members to exclude 
OW Obligations from CNS and RECAPS have been de-coupled and now will 
work independently from one another. Procedure IIA will also be updated 
to make clear that certain securities, in addition to the securities 
currently listed in Procedure IIA, may not be netted and allotted in 
RECAPS processing.
    More information regarding each of these enhancements has been 
provided to Members through Important Notices, which are made available 
on NSCC's Web site at www.dtcc.com.

Proposed Rule Changes

    In order to make clear in NSCC's Rules that these enhancements have 
now been implemented into production, NSCC proposes to amend Procedure 
IIA by removing certain footnotes that state these functionalities will 
be available at a later date, as announced by Important Notice, and to 
remove a sentence from Section D.2.(a) to make clear that the CNS and 
RECAPS indicators operate independently of each other. Section D.2.(b) 
will also be updated to clarify that certain securities, in addition to 
the securities mentioned in the current Procedure IIA, may not be 
netted and allotted in the RECAPS processing. The proposed rule changes 
will also remove reference to redemptions from Section C.2 of Procedure 
IIA. Finally the proposed rule changes will correct typographical 
errors in Procedure IIA. These proposed rule changes are marked on 
Exhibit 5 to this proposed rule change.
(b) Statutory Basis
    NSCC believes the proposed rule changes are consistent with the 
requirements of Section 17A(b)(3)(vi) of the Act, and the rules and 
regulations thereunder, because they facilitate the prompt and accurate 
clearance and settlement of securities transactions by providing for 
greater efficiency and transparency with respect to obligations 
processed through the OW.

(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 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 proposed rule change has become effective upon filing 
pursuant to Section 19(b)(3)(A)(i) \6\ of the Act and Rule 19b-
4(f)(4)(i).\7\ 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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    \6\ 15 U.S.C. 78s(b)(3)(A)(i).
    \7\ 17 CFR 240.19b-4(f)(4)(i).
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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 email to rule-comments@sec.gov. Please include 
File Number SR-NSCC-2013-07 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-2013-07. 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 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

[[Page 34697]]

business days between the hours of 10:00 a.m. and 3:00 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/2013/nscc/SR-NSCC-2013-07.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-2013-07 
and should be submitted on or before July 1, 2013.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-13665 Filed 6-7-13; 8:45 am]
BILLING CODE 8011-01-P