[Federal Register Volume 76, Number 6 (Monday, January 10, 2011)]
[Notices]
[Pages 1475-1476]
From the Federal Register Online via the Government Publishing 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
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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 [email protected]. 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