[Federal Register Volume 78, Number 124 (Thursday, June 27, 2013)]
[Notices]
[Pages 38743-38745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15349]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69824; File No. SR-NSCC-2013-08]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change, as Modified by Amendment No. 1, To Expand the Analytic 
Reporting Service To Permit Increased Source Data

June 21, 2013.
    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 June 7, 2013, 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 primarily by NSCC. On June 20, 2013, NSCC 
filed Amendment No. 1 to the proposed rule change.\3\ NSCC filed the 
proposed rule change pursuant to Section 19(b)(3)(A)(iii) \4\ of the 
Act and Rule 19b-4(f)(4) \5\ thereunder, so that the proposed rule 
change, as modified by Amendment No. 1, was effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as modified by Amendment No. 1, 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 modified Sections 12(d) and (e) of Exhibit 5 
to the original proposed rule change filing to (i) reflect the 
application of those sections to both NSCC Members and Limited 
Members, and (ii) correct a grammatical error.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 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 Rule 57 of the 
Rules & Procedures (``Rules'') of NSCC with respect to enhancements to 
the Analytic Reporting Service of the Insurance and Retirement 
Processing Services (``I&RS'').

II. Clearing Agency'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) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Background
    On December 10, 2010, NSCC filed with the Commission proposed rule 
change SR-NSCC-2010-18 \6\ to add a new I&RS service called the 
Analytic Reporting Service (``Service''). In that filing, NSCC 
described how the Service aggregates transaction data to produce 
monthly reports relating to the insurance industry markets (such 
reports, collectively, ``Analytics Data''). To create Analytics Data, a 
data feed from I&RS's Financial Activity Reporting (``FAR'') service is 
transmitted to the Service on a periodic basis. FAR is an NSCC I&RS 
service that provides I&RS members the ability to transmit insurance 
transaction data and information between themselves. I&RS members 
submitting transaction data through FAR can only do so where the 
counterparty to such transaction is also an I&RS member. By accessing 
and applying the FAR data feed, the Service uses as its source data 
actual transaction information, rather than survey results, which gives 
subscribers of the Service a more efficient, cost effective, and timely 
benchmarking and other relevant information mechanism, than other 
similar aggregating services.
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    \6\ Release No. 34-63604 (Dec. 23, 2010), 75 FR 82115 (Dec. 29, 
2010).
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    However, because the Service's source data is currently limited 
solely to transaction data transmitted through FAR, the benefits of the 
Service cannot be applied to other data sources. Subscribers of the 
Service, and prospective subscribers, have requested that NSCC enhance 
the Service to allow for submission of additional source data in order 
that the Service may provide a more complete view of subscribers' own 
business and of the insurance industry generally.
2. The Proposed Rule Change
    The proposed rule change will expand the Service to permit for 
increased source data. Under the proposed rule change, I&RS members may 
submit their transaction data to NSCC, even where the counterparty to a 
transaction is not an existing I&RS member, and the proposed rule 
change will also permit for submission of transaction data by parties 
that are not existing members of NSCC. Under the proposed rule change, 
in addition to

[[Page 38744]]

transactions submitted through FAR, the Service will contain a 
``storage data'' functionality that will permit I&RS members, and 
parties that are not existing members of NSCC, to submit transaction 
data directly to the Service.
    In connection with the proposed storage data functionality, the 
proposed rule change will specify that the Service is a service 
offering of NSCC to members on their behalf and that NSCC will not use 
or disclose the storage data received by NSCC other than for purposes 
of providing Analytics Data and other purposes permitted under 
applicable law. In addition, the proposed rule change will expand the 
data, to include all source data, which I&RS members may preclude from 
disclosure and attribution in connection with earnings reporting laws 
compliance. Similarly, the proposed rule change will permit I&RS 
members to prevent the attribution to them of all of their source data 
under the Service's existing ``Opting-Out'' provision.
    The proposed rule change will contain the following representations 
to be made by each I&RS member that submits storage data to NSCC:
     That the submitter of the storage data has the right to 
submit such storage data to NSCC;
     That either:
    [cir] no third party consents are required in connection with 
submission to NSCC of any storage data, or
    [cir] if any third party consents are required in connection with 
submission to NSCC of any storage data, the submitter has obtained all 
such third party consents;
     That the submitter has the right to allow NSCC to use such 
storage data in the creation of the Analytics Data that shall be 
reported to third parties; and
     That either:
    [cir] the submitter has made the notices, and offered the rights, 
to individuals with regard to the submitter's submission of such 
storage data to NSCC for use in preparing the Analytics Data that is 
reported to third parties, as required by applicable privacy 
regulations under the Gramm-Leach-Bliley Act; or
    [cir] if the submitter is not the appropriate party, the submitter 
has ensured that the appropriate party has made the notices, and 
offered the rights, to individuals with regard to such submitter's 
submission of such storage data to NSCC for use in preparing the 
Analytics Data that is reported to third parties, as required by 
applicable privacy regulations under Gramm-Leach-Bliley Act.
    The proposed rule change will also contain an indemnification 
provision to protect NSCC from any losses it may sustain in reliance 
upon the above representations. The proposed rule change will specify 
that because the Analytics Data is based solely upon source data 
provided to NSCC, NSCC makes no representation or warranty that any of 
the Analytics Data accurately reflects past, present or future market 
performance, nor does NSCC guarantee the adequacy, accuracy, timeliness 
or completeness of any Analytics Data or its fitness for any purpose, 
and that NSCC will not be subject to any damages or liabilities 
whatsoever with respect to any errors, omissions or delays in any 
Analytics Data nor for any party's use of or reliance upon any 
Analytics Data.
    As a result of these proposed rule changes, the Service will 
provide more complete information to subscribers about their own 
businesses and business relationships, and benchmarking information 
about the overall market.
3. Statutory Basis
    NSCC believes that the proposed rule change is consistent with the 
requirements of the Act, as amended, specifically Section 
17A(b)(3)(F),\7\ and the rules and regulations thereunder applicable to 
NSCC, because the change will permit I&RS members of NSCC to enhance 
their monitoring and analysis of their businesses, and accordingly, 
fosters [sic] cooperation and coordination with persons engaged in the 
clearance and settlement of securities transactions.
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    \7\ 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 will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change will 
result in more robust insurance market data, delivering a better 
understanding of performance relative to user peer groups and providing 
business decision support, which NSCC believes will enhance competition 
to the benefit of investors and beneficiaries.

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

    Written comments relating to the proposed rule changes [sic] have 
not yet 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 rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act and paragraph (f) 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as modified, 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 [email protected]. Please include 
File No. SR-NSCC-2013-08 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 No. SR-NSCC-2013-08. 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 business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filings will also be available 
for

[[Page 38745]]

inspection and copying at the principal office of NSCC and on NSCC's 
Web site at http://dtcc.com/legal/rule_filings/nscc/2013.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-2013-08 and 
should be submitted on or before July 18, 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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2013-15349 Filed 6-26-13; 8:45 am]
BILLING CODE 8011-01-P