Document ID: SEC-2021-0348-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp.
Posted Date: 2021-03-11T05:00Z

[Federal Register Volume 86, Number 46 (Thursday, March 11, 2021)]
[Notices]
[Pages 13944-13946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05024]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91261; File No. SR-NSCC-2021-001]

Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change To Remove the InsurExpress and Replacements Services From 
Rule 57 of the NSCC Rules

March 5, 2021.
    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 February 25, 2021, 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) \3\ 
of the Act and subparagraph (f)(4) \4\ of Rule 19b-4 thereunder. The 
Commission is publishing this notice to solicit

[[Page 13945]]

comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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)(4).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    (a) The proposed rule change of NSCC is annexed hereto as Exhibit 5 
and consists of modifications to NSCC's Rules & Procedures (``Rules'') 
in order to remove the InsurExpress and Replacements services from Rule 
57 of the Rules, as described in greater detail below.\5\
---------------------------------------------------------------------------

    \5\ Terms not defined herein are defined in the Rules, available 
at https://dtcc.com/~/media/Files/Downloads/legal/rules/
nscc_rules.pdf.
---------------------------------------------------------------------------

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 consists of modifications to the Rules in 
order to remove the InsurExpress and Replacements services from Rule 57 
of the Rules, as described in greater detail below.
Background
InsurExpress
    In 2003, NSCC established a service (``InsurExpress'') to allow 
Members, Mutual Fund/Insurance Services Members, Insurance Carrier/
Retirement Services Members and Data Services Only Members 
(collectively, ``I&RS Members'') to submit application information and 
to settle premium payments with respect to life insurance products that 
it, at that time, called ``Portal.'' \6\ In 2006, NSCC modified the 
Rules to, among other things, add a provision in the Rules specific to 
the service, rename the service ``InsurExpress'' and provide that 
InsurExpress would allow I&RS Members to transmit I&RS Data relating to 
the initiation, processing and completion of applications for life 
insurance contracts and other insurance products among themselves.\7\ 
The provision relating to InsurExpress is set forth in Section 10 of 
Rule 57 of the Rules.\8\ The 2003 Filing introducing the service 
indicated that the proposed fee schedule was being developed and would 
be filed with the Commission at a later date.\9\
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 48896 (December 9, 
2003), 68 FR 70553 (December 18, 2003) (SR-NSCC-2003-18) (``2003 
Filing'').
    \7\ Securities Exchange Act Release No. 54921 (December 12, 
2006), 71 FR 76415 (December 20, 2006) (SR-NSCC-2006-14).
    \8\ Section 10 of Rule 57, supra note 5.
    \9\ See Footnote 3 of the 2003 Filing, supra note 6.
---------------------------------------------------------------------------

    No I&RS Members signed up for or used InsurExpress, and fees for 
InsurExpress were never developed or filed with the Commission. In 
addition, there were no system developments made to the NSCC system in 
connection with InsurExpress. NSCC has no current plans to develop fees 
or build anything in the NSCC system relating to InsurExpress. As a 
result, NSCC would like to remove InsurExpress from the Rules.
Replacements
    In 2010, NSCC established a service (``Replacements'') intended to 
support the transmission of I&RS Data regarding the transfer, exchange 
or replacement of an existing insurance contract and settlement of 
payments in conjunction to these replacement transactions. System 
developments to the NSCC system were made to support Replacements and a 
fee schedule for the service was added in Section IV.K.3 of Addendum A 
of the Rules. In addition, NSCC believes that at least one I&RS Member 
signed up to use Replacements and possibly tested the service. However, 
the service was never used in production and no fees have been charged 
for the service. There are currently no I&RS Members signed up for 
Replacements and NSCC does not believe that any I&RS Members will use 
the service. As a result, NSCC would like to remove Replacements from 
the Rules.
Proposed Rule Change
    In order to implement the proposal above, NSCC would delete Section 
10 of Rule 57,\10\ which is the section relating to InsurExpress. In 
addition, NSCC would delete Section 11 of Rule 57,\11\ which is the 
section relating to Replacements. NSCC would re-number Section 12 and 
Section 13 of Rule 57 to reflect the deletions of Sections 10 and 11 of 
Rule 57. NSCC would also remove the fees listed for Replacements in 
Section IV.K.3 of Addendum A of the Rules.\12\
---------------------------------------------------------------------------

    \10\ Section 10 of Rule 57, supra note 5.
    \11\ Section 11 of Rule 57, supra note 5.
    \12\ Section IV.K.3 of Addendum A of the Rules, supra note 5.
---------------------------------------------------------------------------

2. Statutory Basis
    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.\13\ NSCC believes that the proposed rule 
change is consistent with this provision because it would provide 
enhanced clarity and transparency for participants with respect to 
services offered by NSCC by updating the Rules to remove the ability to 
access services that I&RS Members did not utilize and are unlikely to 
utilize in the future.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Therefore, by providing enhanced clarity and transparency in the 
Rules regarding the services provided by NSCC, NSCC believes the 
proposed rule change would promote the prompt and accurate clearance 
and settlement of securities transactions, consistent with the 
requirements of the Act, in particular Section 17A(b)(3)(F), cited 
above.

(B) Clearing Agency's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change would have any 
impact on competition. I&RS Members have not used InsurExpress or 
Replacements and are unlikely to use either service in the future. 
Therefore, the proposed rule change should have no effect on I&RS 
Members, other than to remove InsurExpress and Replacements from the 
Rules which are unlikely to be utilized by I&RS Members.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    NSCC has not received or solicited any written comments relating to 
this proposal. 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) \14\ of the Act and paragraph (f) \15\ of Rule 19b-4 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend

[[Page 13946]]

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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-2021-001 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-2021-001. 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 
(https://dtcc.com/legal/sec-rule-filings.aspx). 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-2021-001 and should be submitted on 
or before April 1, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-05024 Filed 3-10-21; 8:45 am]
BILLING CODE 8011-01-P