[Federal Register Volume 79, Number 239 (Friday, December 12, 2014)]
[Notices]
[Pages 73938-73940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29105]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73779; File No. SR-NSCC-2014-12]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing of Proposed Rule Change to Amend NSCC's 
Rules and Procedures in Connection with the Discontinuance of the 
Analytic Reporting Service

December 8, 2014.
    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 November 25, 2014, National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Item I, II 
and III below, which Items have been prepared by NSCC. 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.
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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 
(Insurance and Retirement Processing Services) and Addendum A (Fee 
Structure) of NSCC's Rules & Procedures in connection with the 
discontinuance of the Analytic Reporting Service, as more fully 
described below. The text of the proposed rule change is available on 
NSCC's Web site at http://www.dtcc.com/legal/sec-rule-filings.aspx, at 
the principal office of NSCC, and at the Commission's Public Reference 
Room.

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.

[[Page 73939]]

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

1. Statement of Purpose
    Background. In 2011, NSCC launched the Analytic Reporting Service 
(``Service'') as part of NSCC's suite of insurance and retirement 
services.\3\ The Service gives subscribing NSCC members access to 
aggregated insurance products information, including benchmarking 
information and league tables (such aggregated information, 
collectively, ``Analytics Data''). The Analytics Data produced by the 
Service is primarily sourced from data and information transmitted to 
NSCC by its members in connection with NSCC's other insurance and 
retirement service (``IPS Data''). In 2013, at members' requests, NSCC 
enhanced the Service to among other things include, as source data for 
the Service, insurance transaction data processed outside of NSCC but 
submitted to NSCC for inclusion in the Service by its members and other 
third parties (``Storage Data'').\4\
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    \3\ Securities Exchange Act Release No. 63604 (December 23, 
2010), 75 FR 82115 (December 29, 2010) (SR-NSCC-2010-18).
    \4\ Securities Exchange Act Release No. 69824 (June 21, 2013), 
78 FR 38743 (June 27, 2013) (SR-NSCC-2013-08).
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    Prior to implementation of the Service, the suite of insurance and 
retirement services consisted of transmission and receipt of IPS Data 
from one member to another, with NSCC merely serving as a conduit for 
such exchanges of information. With the implementation of the Service, 
NSCC began maintaining and storing IPS Data for purposes of creating 
Analytics Data.
    Proposed Rule Change. Since its launch, subscribers to the Service 
have been few, and presently, there are only 12 members subscribing. As 
a result, NSCC is not recovering the costs of maintaining the Service. 
For this reason, NSCC proposes to amend Rule 57, Section 12 to 
eliminate the Service. All 12 members have been notified of NSCC's 
intention to discontinue the Service, and though some of the members 
have expressed disappointment that the Service is being discontinued, 
none have objected. Accordingly, NSCC will discontinue the Service 
effective the close of business on December 31, 2014, or if Commission 
approval is later than such date, immediately upon Commission approval.
    In addition, NSCC will amend Addendum A, to remove the fee 
structure applicable to the Service.
    As noted above, prior to implementation of the Service, NSCC did 
not maintain or store any IPS Data; it merely transmitted such data 
from one member to another. In connection with elimination of the 
Service, NSCC proposes to amend Rule 57, Section 1, to explicitly state 
that NSCC will maintain and store IPS Data transmitted to it by and 
between its members, which IPS Data has not otherwise been rejected, 
withdrawn or deleted pursuant to the provisions of Rule 57.\5\ NSCC 
shall also retain the right to evaluate the usefulness of such IPS 
Data, including by providing such IPS Data to third parties under 
appropriate agreements of confidentiality and to prohibit such third 
parties from using such IPS Data other than for evaluation of such IPS 
Data's potential usefulness. Any proposed future use by NSCC of such 
stored and maintained IPS Data shall be subject to a proposed rule 
change filing with the Commission. With respect to Storage Data 
supplied to NSCC for inclusion in the Service, NSCC shall only retain 
such Storage Data in compliance with its data retention policy and 
shall dispose of all Storage Data in accordance with such policy. 
Storage Data shall not be stored or maintained for purposes of 
evaluation for future use by NSCC.
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    \5\ NSCC notes that IPS Data that constitutes ``Clearing Data'' 
is and will be subject to the prohibitions, limitations and 
exceptions set forth in Rule 49 (Release of Clearing Data and 
Clearing Fund Data). In general, Rule 49 limits NSCC's ability to 
release Clearing Data relating to transactions of a particular 
participant. Rule 49 defines ``Clearing Data'' as transaction data 
which is received by NSCC for inclusion in the clearance and/or 
settlement process of NSCC, or such data, reports or summaries 
thereof, which may be produced as a result of processing such 
transaction data.
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 2. Statutory Basis
    NSCC believes that the proposed rule change is consistent with the 
requirements of the Act, and the rules and regulations thereunder 
applicable to NSCC, in particular Section 17A(b)(3)(F) of the Act,\6\ 
which requires that NSCC's Rules be designed to promote the prompt and 
accurate clearance and settlement of securities transactions. Given the 
limited number of subscribers to the Service, NSCC has determined that 
it is not economically efficient to maintain the Service. As such, by 
identifying and eliminating a Service [sic] that is not economically 
efficient, NSCC can better apply its economic resources, which promotes 
the prompt and accurate clearance and settlement of securities 
transactions. Further, discontinuance of the Service will be 
implemented consistently with the safeguarding of securities and funds 
in NSCC's custody or control or for which NSCC is responsible because 
the Service is strictly an information service; accordingly, 
discontinuance of the Service will neither directly nor indirectly 
affect NSCC's safeguarding of securities or funds in its custody or 
control or for which it is responsible.
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    \6\ 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 have any 
impact, or impose any burden on competition.

(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 change have not yet 
been solicited or received. NSCC will notify the Commission of any 
written comments when received by NSCC.

III. Date of Effectiveness of the Proposed Rule Change, and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such a proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 [email protected]. Please include 
File Number SR-NSCC-2014-12 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NSCC-2014-12. This file

[[Page 73940]]

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 the filing also will be available 
for inspection and copying at the principal office of NSCC and on 
NSCC's Web site at 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-2014-12 and should be 
submitted on or before January 2, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29105 Filed 12-11-14; 8:45 am]
BILLING CODE 8011-01-P