[Federal Register Volume 85, Number 39 (Thursday, February 27, 2020)]
[Notices]
[Pages 11425-11426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03918]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88260; File No. SR-NSCC-2020-004]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change To Establish Implementation Date of National Securities 
Clearing Corporation's Enhancements to the Haircut-Based Volatility 
Charge Applicable to Municipal Bonds

February 21, 2020.
    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 20, 2020, 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 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)(4).
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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 the NSCC Rules & 
Procedures (the ``Rules'') \5\ in order to establish February 28, 2020 
as the implementation date of rule changes submitted pursuant to rule 
filing SR-NSCC-2019-004 (``Rule Filing'') \6\ and advance notice SR-
NSCC-2019-801 (``Advance Notice'').\7\
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    \5\ Capitalized terms not defined herein are defined in the 
Rules, available at http://dtcc.com/~/media/Files/Downloads/legal/
rules/nscc_rules.pdf.
    \6\ See Securities Exchange Act Release No. 87858 (December 26, 
2019), 85 FR 149 (January 2, 2020) (SR-NSCC-2019-004).
    \7\ See Securities Exchange Act Release No. 87911 (January 8, 
2020), 85 FR 2197 (January 14, 2020) (File No. SR-NSCC-2019-801).
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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
    On February 13, 2020, the Commission issued an order approving the 
Rule Filing,\8\ which was filed by NSCC pursuant to Section 19(b)(2) of 
the Act.\9\ The Commission also issued a notice of no objection to the 
Advance Notice,\10\ which was filed with the Commission pursuant to 
Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act entitled the Payment, Clearing, and 
Settlement Supervision Act of 2010 \11\ and Rule 19b-4(n)(1)(i) of the 
Act.\12\
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    \8\ See Securities Exchange Act Release No. 88191 (February 13, 
2020) (SR-NSCC-2019-004).]
    \9\ 15 U.S.C. 78s(b)(2).
    \10\ See Securities Exchange Act Release No. 88162 (February 11, 
2020) (SR-NSCC-2019-801).
    \11\ 12 U.S.C. 5465(e)(1).
    \12\ 17 CFR 240.19b-4(n)(1)(i).
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    The purpose of the Rule Filing and the Advance Notice is to amend 
the Rules to enhance the methodology NSCC uses for calculating the 
haircut-based margin charge applicable to municipal bonds.
    NSCC is filing this proposed rule change to establish February 28, 
2020 as the implementation date of the rule changes submitted pursuant 
to the Rule Filing and the Advance Notice. Specifically, NSCC would add 
a legend to Procedure XV (Clearing Fund Formula and Other Matters) of 
the Rules (``Procedure XV'') \13\ to state that the rule changes 
submitted pursuant to the Rule Filing and the Advance Notice have been 
approved and not objected to, respectively, but are not yet 
implemented. The legend would provide February 28, 2020 as the date on 
which these rule changes would be implemented and include the file 
numbers of the Rule Filing and the Advance Notice. The legend would 
also state that when the rule changes are implemented the legend would 
automatically be removed from Procedure XV.
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    \13\ Procedure XV, supra note 5.
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2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules 
be designed to (i) promote the prompt and accurate clearance and 
settlement of securities transactions and (ii) remove impediments to 
and perfect the mechanism of a national system for the prompt and 
accurate clearance and settlement of securities transactions, and, in 
general, to protect investors and the public interest.\14\ The proposed 
rule change would establish the implementation date of rule changes 
described above and provide Members with an understanding of when these 
rule changes will begin to affect them. Knowing when the rule changes 
will begin to affect Members would enable them to timely fulfill their 
obligations to NSCC, which would in turn ensure NSCC's processes work 
as intended. Therefore, NSCC believes that the proposed rule change 
would promote

[[Page 11426]]

the prompt and accurate clearance and settlement of securities 
transactions as well as remove impediments to and perfect the mechanism 
of a national system for the prompt and accurate clearance and 
settlement of securities transactions, consistent with Section 
17A(b)(3)(F) of the Act cited above.
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    \14\ 15 U.S.C. 78q-1(b)(3)(F).
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(B) Clearing Agency's Statement on Burden on Competition

    NSCC does not believe that the proposed rule change to establish an 
implementation date for the rule changes described above would have any 
impact, or impose any burden, on competition because the proposed rule 
change is intended to provide additional clarity in the Rules with 
respect to when these rule changes would be implemented. As such, the 
proposed rule change would not affect the rights or obligations of the 
Members or NSCC other than establishing when the rule changes described 
above would begin to impact the 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) \15\ of the Act and paragraph (f) \16\ 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 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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    \15\ 15 U.S.C 78s(b)(3)(A).
    \16\ 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:

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-2020-004 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-2020-004. 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; 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-2020-004 
and should be submitted on or before March 19, 2020.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2020-03918 Filed 2-26-20; 8:45 am]
 BILLING CODE 8011-01-P


