Document ID: SEC-2011-0034-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Securities Clearing Corp.
Posted Date: 2011-01-10T05:00Z

[Federal Register Volume 76, Number 6 (Monday, January 10, 2011)]
[Notices]
[Pages 1475-1476]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-160]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63634; File No. SR-NSCC-2010-19]

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

January 3, 2011.
    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 
National Securities Clearing Corporation (``NSCC'') 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 NSCC. NSCC 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change amends Addendum A of NSCC's Rules & 
Procedures to modify NSCC's fee schedule.

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 such statements.

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

    The purpose of the proposed rule change is to revise Addendum A to 
NSCC's Rules and Procedures to align

[[Page 1476]]

fees with the costs of delivering services.\4\
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    \4\ The changes to NSCC's Fee Structure, which are attached as 
Exhibit 5 to NSCC's proposed rule change, can be viewed at http://www.dtcc.com/downloads/legal/rule_filings/2010/nscc/2010-19.pdf.
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    Fee increases will be implemented for the following:
    (1) Clearance Activity fees, which includes: (i) A tiered fee 
structure for the number of sides submitted for trade recording and 
netting and (ii) ``value into the net'' and ``value out of the net'' 
fees;
    (2) Trade Comparison fees for bonds;
    (3) Automated Customer Account Transfer Service fees for asset 
delivers, asset receives, and asset additions, deletions, or changes; 
and
    (4) Per envelope receive and deliver charges for the Envelope 
Settlement Service, Funds Only Settlement Service, and Dividend 
Settlement Service.
    Separately, the existing fee structure for the Alternative 
Investment Products Service will be replaced with: (i) A tiered fee 
structure with a fee cap for broker-dealers \5\ with respect to 
processing of Non-Traded REITs and Managed Futures and (ii) increased 
charges for processing of hedge funds and other activity (other than 
Non-Traded REITs and Managed Futures).\6\
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    \5\ The incentive of an annual fee cap is expected to encourage 
broker-dealers to use the service and expand coverage of these 
products and increase the value of the overall market.
    \6\ The difference in pricing between (i) and (ii) reflects 
differing average transaction volumes. Non-Traded REITs and Managed 
Futures funds are typically low value transactions but have 
proportionally high transaction volume. These funds typically 
process over 10,000 trades per month and over 50,000 records per 
month. Conversely, Hedge Funds, Funds of Funds, and Private Equity 
trades have low volume but have large transaction value. Hedge Fund 
monthly trading is usually under 1,000 transactions with a monthly 
record count under 5,000 records per month.
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    Additionally, a new flat monthly fee will be implemented for 
transmission of Networking Omnibus Activity/Position Files (Omni/
SERV).\7\
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    \7\ These files are used for the transmission of: (i) Omnibus 
activity files which are transmitted from firms to fund companies 
detailing activity within subaccounts and (ii) omnibus position 
files, which are transmitted from firms to fund companies detailing 
positions within the subaccounts. These files supplement other 
Networking functionality, which facilitates file transmission from 
funds to firms. For additional information on Networking Omni/SERV 
files, please see NSCC Important Notices A6968, 
P&S6538, dated March 15, 2010, and A6948, 
P&S6518, dated February 18, 2010. A separate fee is not 
currently charged for this file type.
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    Finally, NSCC is making a technical change to reflect current 
practice whereby all Fund/SERV transactions are subject to the same 
fee.
    The above fee changes will take effect on January 3, 2011.
    NSCC states that the proposed rule change is consistent with the 
requirements of Section 17A of the Act \8\ and the rules and 
regulations thereunder because it updates NSCC's fee schedule to align 
fees with the costs of delivering services. As such, it provides for 
the equitable allocation of fees among NSCC's members.
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    \8\ 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

    NSCC has not solicited or received written comments relating to the 
proposed rule change. NSCC 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 \9\ and Rule 19b-4(f)(2) \10\ 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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    \9\ Supra note 2.
    \10\ 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-NSCC-2010-19 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-NSCC-2010-19. 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 NSCC's principal office and on NSCC's Web 
site at http://www.dtcc.com/legal/rule_filings/nscc/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 
submissions should refer to File No. SR-NSCC-2010-19 and should be 
submitted on or before January 31, 2011.

    For the Commission by the Division of Trading and Markets 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-160 Filed 1-7-11; 8:45 am]
BILLING CODE 8011-01-P