[Federal Register Volume 82, Number 78 (Tuesday, April 25, 2017)]
[Notices]
[Pages 19127-19131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08287]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80491; File No. SR-DTC-2017-003, SR-NSCC-2017-004, SR-
FICC-2017-007]


Self-Regulatory Organizations; The Depository Trust Company; 
National Securities Clearing Corporation; Fixed Income Clearing 
Corporation; Notice of Filings of Proposed Rule Changes, as Modified by 
Amendments No. 1, To Adopt the Clearing Agency Policy on Capital 
Requirements and the Clearing Agency Capital Replenishment Plan

April 19, 2017.
    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 April 6, 2017, The Depository Trust Company (``DTC''), National 
Securities Clearing Corporation (``NSCC''), and Fixed Income Clearing 
Corporation (``FICC'', and together with DTC and NSCC, the ``Clearing 
Agencies''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule changes. On April 13, 2017, the 
Clearing Agencies filed Amendments No. 1 to the proposed rule changes, 
which made technical corrections to the page numbers and the Table of 
Contents in the Exhibit 5s. The proposed rule changes, as modified by 
Amendments No. 1 (hereinafter collectively ``Proposed Rule Changes''), 
are described in Items I and II below, which Items have been prepared 
primarily by the Clearing Agencies. The Commission is publishing this 
notice to solicit comments on the Proposed Rule Changes 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 Agencies' Statements of the Terms of Substance of the 
Proposed Rule Changes

    The Proposed Rule Changes would adopt (1) the Clearing Agency 
Policy on Capital Requirements (``Capital Policy'' or ``Policy'') of 
the Clearing Agencies; and (2) the Clearing Agency Capital 
Replenishment Plan (``Capital Replenishment Plan'' or ``Plan'') of the 
Clearing Agencies, both described below. The Capital Policy and the 
Capital Replenishment Plan would be maintained by the Clearing Agencies 
in compliance with Rule 17Ad-22(e)(15), under the Act, as described 
below.\3\
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    \3\ 17 CFR 240.17Ad-22(e)(15). The Commission adopted amendments 
to Rule 17Ad-22, including the addition of new section 17Ad-22(e), 
on September 28, 2016. See Securities Exchange Act Release No. 78961 
(September 28, 2016), 81 FR 70786 (October 13, 2016) (S7-03-14). 
Each of the Clearing Agencies is a ``covered clearing agency'' as 
defined in Rule 17Ad-22(a)(5) and must comply with new section (e) 
of Rule 17Ad-22 by April 11, 2017.
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    Although the Clearing Agencies would consider the Capital Policy 
and the Capital Replenishment Plan to be rules, the Proposed Rule 
Changes do not require any changes to the Rules, By-laws and 
Organizational Certificate of DTC (``DTC Rules''), the Rulebook of the 
Government Securities Division of FICC (``GSD Rules''), the Clearing 
Rules of the Mortgage-Backed Securities Division of FICC (``MBSD 
Rules''), or the Rules & Procedures of NSCC (``NSCC Rules''), as the 
Policy and the Plan would be standalone documents.\4\
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    \4\ Capitalized terms not defined herein are defined in the DTC 
Rules, GSD Rules, MBSD Rules, or NSCC Rules, as applicable, 
available at http://dtcc.com/legal/rules-and-procedures.
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II. Clearing Agencies' Statements of the Purpose of, and Statutory 
Basis for, the Proposed Rule Changes

    In their filings with the Commission, the Clearing Agencies 
included statements concerning the purpose of and basis for the 
Proposed Rule Changes and discussed any comments they received on the 
Proposed Rule Changes. The text of these statements may be examined at 
the places specified in Item IV below. The Clearing Agencies have 
prepared summaries, set forth in sections A, B, and C below, of the 
most significant aspects of such statements.

(A) Clearing Agencies' Statements of the Purpose of, and Statutory 
Basis for, the Proposed Rule Changes

1. Purpose
    The Clearing Agencies are proposing to adopt the Capital Policy, 
which would set forth the manner in which each Clearing Agency 
identifies, monitors, and manages its general business risk with 
respect to the requirement to hold sufficient liquid net assets 
(``LNA'') funded by equity to cover potential general business losses 
so the Clearing Agencies can continue operations and services as a 
going concern if such losses materialize. The amount of LNA funded by 
equity to be held by each of the Clearing Agencies for this purpose 
would be defined in the Policy as the General Business Risk

[[Page 19128]]

Capital Requirement. The Capital Policy would also address how each 
Clearing Agency maintains a portion of retained earnings as LNA funded 
by equity as its Credit Risk Capital Requirement, in accordance with 
its rules and as a part of its management of credit risk.\5\
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    \5\ LNA funded by equity held as the Clearing Agencies' Credit 
Risk Capital Requirement is held in addition to resources held by 
the Clearing Agencies for credit risk in compliance with Rule 17Ad-
22(e)(4), and in addition to resources held by the Clearing Agencies 
for liquidity risk in compliance with Rule 17Ad-22(e)(7). 17 CFR 
240.17Ad-22(e)(4), (7). Supra note 3.
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    As described in greater detail below, the Capital Policy would 
describe how each Clearing Agency's General Business Risk Capital 
Requirement and Credit Risk Capital Requirement fit within the Clearing 
Agencies' Capital Framework. The Policy would describe how each 
Clearing Agency calculates the appropriate amount of LNA funded by 
equity to be held as its General Business Risk Capital Requirement. The 
Policy would also describe how each Clearing Agency maintains, 
monitors, and manages its total amount of LNA funded by equity. 
Finally, the Policy provides for a viable plan for the replenishment of 
capital through the Capital Replenishment Plan.
    The Clearing Agencies are also proposing to adopt the Capital 
Replenishment Plan as a viable plan for the replenishment of capital by 
each Clearing Agency, should its equity fall close to or below the 
amount being held as its Total Capital Requirement pursuant to the 
Capital Policy. As described in greater detail below, the Capital 
Replenishment Plan would identify the circumstances that would trigger 
implementation of the Plan; the roles, responsibilities, and guiding 
principles for implementation of the Plan; and an overview and 
description of each of the tools that may be used to replenish capital.
    Both the Capital Policy and the Capital Replenishment Plan would be 
owned and managed by the Treasury group (``Treasury'') of the Clearing 
Agencies.\6\ The Boards, or such committees as may be delegated 
authority by the Boards from time to time pursuant to their charter, 
would review and approve the Capital Policy and the Capital 
Replenishment Plan on an annual basis.
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    \6\ The parent company of the Clearing Agencies is The 
Depository Trust & Clearing Corporation (``DTCC''). DTCC operates on 
a shared services model with respect to the Clearing Agencies. Most 
corporate functions are established and managed on an enterprise-
wide basis pursuant to intercompany agreements under which it is 
generally DTCC that provides a relevant service to a Clearing 
Agency. Treasury is a part of the Finance Department and is 
responsible for carrying out the roles and responsibilities 
described in the Capital Policy and Capital Replenishment Plan.
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Overview of Capital Policy
    The Capital Policy would describe how the General Business Risk 
Capital Requirement and the Credit Risk Capital Requirement of each 
Clearing Agency, as both are defined in the Policy and described below, 
fit within the Clearing Agencies' Capital Framework. The Capital 
Framework would include the total amount of capital to be held by each 
of the Clearing Agencies in order to (1) comply with regulatory 
requirements for general business risk, as its General Business Risk 
Capital Requirement,\7\ and (2) maintain a portion of retained earnings 
to address credit risks, as its Credit Risk Capital Requirement, 
consistent with its rules.\8\ The Total Capital Requirement of each 
Clearing Agency would be calculated as the sum of its General Business 
Risk Capital Requirement and Credit Risk Capital Requirement.
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    \7\ 17 CFR 240.17Ad-22(e)(15). Supra note 3.
    \8\ See DTC Rule 4, GSD Rule 4, MBSD Rule 4, and NSCC Rule 4 and 
Addendum E. Supra note 4.
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    In addition to the Total Capital Requirement, the Clearing 
Agencies' Capital Framework would also include an additional, 
discretionary amount of LNA funded by equity, referred to as a 
``Buffer.'' The amount held as Buffer would be periodically reassessed 
by Treasury, and would generally equal approximately four to six (4-6) 
months of operating expenses for the respective Clearing Agency based 
on various factors, including historical fluctuations of LNA and 
estimates of potential losses from general business risk.
    Next, the Policy would describe how the Clearing Agencies each 
maintain a Credit Risk Capital Requirement, comprised of a portion of 
retained earnings, in accordance with their respective rules.\9\ Under 
the Policy, these resources would be maintained to address losses due 
to a participant default, and held in addition to the LNA funded by 
equity held by each of the Clearing Agencies as its General Business 
Risk Capital Requirement.
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    \9\ Id.
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    The Policy would also describe how each Clearing Agency would 
determine the appropriate amount of LNA funded by equity to be held as 
its General Business Risk Capital Requirement, which would be an amount 
sufficient to cover potential general business losses so that the 
Clearing Agency can continue operations and services as a going concern 
if those losses materialize.\10\ Under the Policy, this amount would be 
calculated for each Clearing Agency as the greatest of three separate 
calculations--an amount based on that Clearing Agency's general 
business risk profile (``Risk-Based Capital Requirement''), an amount 
based on the time estimated to execute a recovery or orderly wind-down 
of the critical operations of that Clearing Agency (``Recovery/Wind-
down Capital Requirement''), and an amount based on an analysis of that 
Clearing Agency's estimated operating expenses for a six (6) month 
period (``Operating Expense Capital Requirement''). On an annual basis, 
each of these three capital requirements would be measured, and the 
General Business Risk Capital Requirement for each Clearing Agency 
would be determined as the greatest of these calculations.
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    \10\ 17 CFR 240.17Ad-22(e)(15). Supra note 3.
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    Under the Policy, the Risk-Based Capital Requirement of each 
Clearing Agency would be calculated by identifying the general business 
risk profile of that Clearing Agency through analysis of the Clearing 
Agency's business performance, key performance indicators, and market 
environment and through comparison of financial performance versus the 
entity's budget and forecast.\11\ Treasury would then calculate the 
amount necessary to cover those potential general business losses so 
the Clearing Agency can continue operations and services if those 
losses materialize. The sum of these amounts would constitute that 
Clearing Agency's Risk-Based Capital Requirement.
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    \11\ Under the Policy, business risks that make up a Clearing 
Agency's general business risk profile would include, for example, 
the risk that revenues decline or expenses grow, the operational 
risks of deficiencies in its systems or disruptions to processing 
from internal or external events, or investment risk of loss of 
financial resources.
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    The Recovery/Wind-down Capital Requirement of each Clearing Agency 
would be determined by that Clearing Agency's Board as the amount it 
deems to be sufficient to ensure a recovery or wind-down of critical 
operations and services of that Clearing Agency. On an annual basis, 
and in order to assist each Board in making its determination, Treasury 
would calculate the greatest of (1) the estimated amount sufficient to 
ensure a recovery of critical operations and services of the Clearing 
Agency; and (2) the estimated amount sufficient to ensure an orderly 
wind-down of critical operations and services of the Clearing 
Agency.\12\
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    \12\ Under the Policy, Treasury would make these calculations in 
consultation with and reference to the plans maintained by the 
Clearing Agencies that are developed by the Clearing Agencies in 
compliance with Rule 17Ad-22(e)(3)(ii). 17 CFR 240.17Ad-22(e)(3). 
Supra note 3. The Commission granted the Clearing Agencies a 
temporary exemption from compliance with the Recovery and Wind-down 
plan requirements of the Standards until December 31, 2017. See 
Securities Exchange Act Release No. 80378 (April 5, 2017) (File No. 
S7-03-14). Until such time as the Clearing Agencies have Recovery 
and Wind-down plans that are approved by their Boards in 
anticipation of compliance with Rule 17Ad-22(e)(3)(ii), the 
Recovery/Wind-down Capital Requirement of each Clearing Agency would 
be assumed to be zero. The General Business Risk Capital Requirement 
would therefore be the greater of the Risk-Based Capital Requirement 
and the Operating Expense Capital Requirement.

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[[Page 19129]]

    Finally, the Operational Expense Capital Requirement of each 
Clearing Agency would be determined as the greatest of (i) six (6) 
times the average monthly operating expense for that Clearing Agency 
over the prior twelve (12) month period, and (ii) a prospective 
operating expense estimate based on forecasted expense data.
    As stated above, each of these capital requirements would be 
determined on at least an annual basis, and the General Business Risk 
Capital Requirement of each Clearing Agency would be the greatest of 
the three calculations.
    Finally, the Policy would describe how each Clearing Agency 
maintains, monitors and manages its LNA funded by equity held as its 
Total Capital Requirement. The Policy would provide that each Clearing 
Agency hold LNA funded by equity in an amount to meet its calculated 
General Business Risk Capital Requirement in cash and cash equivalents, 
which are highly liquid securities or bank deposits. The Policy would 
also make clear that LNA funded by equity held to meet each Clearing 
Agency's General Business Risk Capital Requirement would be held in 
addition to LNA funded by equity as its Credit Risk Capital 
Requirement, and also in addition to resources held by that Clearing 
Agency in compliance with its regulatory requirements with respect to 
credit risk and liquidity risk, as described above.
    The Policy would describe how Treasury would monitor and manage the 
LNA funded by equity held by each Clearing Agency so it continues to 
hold an amount equal to its Total Capital Requirement. Each Clearing 
Agency would manage its general business risks in order to maintain 
adequate LNA funded by equity in a number of ways, including (1) taking 
steps to maintain an appropriate and sustainable level of 
profitability; (2) maintaining the Buffer amount of LNA funded by 
equity in addition to its Total Capital Requirement; (3) taking steps 
to increase the amount of LNA funded by equity when necessary; and (4) 
maintaining a viable plan for the replenishment of equity through the 
Capital Replenishment Plan, described below. DTCC also maintains 
insurance policies that cover certain potential losses, which are 
another tool available to manage the general business risks of the 
Clearing Agencies, as described in the Policy.
Overview of Capital Replenishment Plan
    The Capital Replenishment Plan would describe the framework for 
each Clearing Agency to replenish LNA funded by equity through the 
utilization of one or more ``replenishment tools,'' as described 
further below. The circumstances that trigger the Plan would include 
(i) when equity being held by a Clearing Agency is at or below an 
amount equal to that Clearing Agency's Total Capital Requirement, plus 
the equivalent of one (1) month of operating expenses of that Clearing 
Agency, as also determined pursuant to the Policy; and (ii) the Board 
of a Clearing Agency determines that the Plan should be implemented. 
The Plan would identify certain risks that, if realized, may cause 
these triggers to occur, including, for example, unexpected declines in 
revenue, disruptions to systems or processes that lead to large losses, 
or investment risks.
    Treasury would be responsible for implementation of the Plan, in 
collaboration with other business areas, as necessary based on the 
replenishment tools that are chosen when the Plan is triggered. The 
Plan would outline the steps to be taken by Treasury once the Plan is 
triggered, which include identifying the total amount of equity that 
would be needed for the affected Clearing Agency to meet its Total 
Capital Requirement, analyzing that Clearing Agency's financial 
outlook, and selecting the appropriate replenishment tools to be 
utilized. The Board of the affected Clearing Agency, or such committee 
as may be delegated authority by that Board from time to time, would 
approve the proposal for implementation of the Plan once it is 
triggered, and review a report of each implementation of the Plan when 
it is complete. The Plan would also make clear that utilization of each 
replenishment tool would require involvement and coordination with 
other corporate functions and other policies and procedures, and must 
follow the process outlined in the operative documents related to each 
tool, as identified in the Plan.
    The Plan would provide Treasury with the necessary flexibility and 
discretion, as appropriate, in implementation of the Plan, including 
the ability to determine, based on appropriate analysis, the sequence 
and combination of replenishment tools to be used in the event the Plan 
is triggered. The Plan would also set forth certain guiding principles, 
including prioritization of replenishment tools that have sufficient 
capacity at the time the Plan is implemented and are able to restore 
the affected Clearing Agency's LNA funded by equity to an appropriate 
level above its Total Capital Requirement in the shortest possible 
timeframe.
    Finally, the Plan would identify the replenishment tools that may 
be utilized when the Plan is implemented and the estimated timeframe 
for executing each tool. These tools would serve as either (1) bridge 
financing, which would provide immediate financing, but should be 
considered only an initial step in implementation of the Plan; or (2) 
capital replenishment, which would provide the affected Clearing Agency 
with the required additional equity on a longer term basis. The 
replenishment tools would include either actions taken by DTCC to raise 
capital, which would then be contributed to the affected Clearing 
Agency, subject to the guiding principles, or actions taken by the 
Clearing Agencies to raise capital.
    With respect to those tools that involve actions taken by DTCC, the 
Plan would also set forth the conditions under which the Clearing 
Agencies would obtain capital through either a contribution or an 
intercompany loan. For example, intercompany loans would only be 
permitted from DTCC to an affected Clearing Agency if the Clearing 
Agency's equity exceeds its amount of LNA. Additionally, while some of 
the replenishment tools would involve the incurrence of debt by DTCC, 
such funds would be contributed to the affected Clearing Agency as 
either equity (as a capital contribution) or as LNA (as an intercompany 
loan).
    Actions that may be taken by DTCC would include, for example, (1) 
contributing existing prefunded resources to the affected Clearing 
Agency; (2) borrowing under an existing line of credit to which DTCC is 
a party; (3) making a claim for insurance proceeds, when applicable; 
(4) authorizing, issuing and selling shares of common stock of DTCC to 
certain DTCC shareholders pursuant to the terms and restrictions set 
forth in the DTCC Certificate of Incorporation and the DTCC Fourth 
Amended and Restated Shareholders Agreement; \13\ (5)

[[Page 19130]]

the issuance or sale of preferred stock by DTCC; or (6) the sale or 
divesture of assets or businesses. Actions each Clearing Agency can 
take to increase capital would include increasing fees for services, 
when appropriate, or decreasing expenses.
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    \13\ See Securities Exchange Act Release No. 74142 (January 27, 
2015), 80 FR 5188 (January 30, 2015); (File Nos. SR-FICC-2014-810; 
SR-NSCC-2014-811; SR-DTC-2014-812).
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2. Statutory Basis
    The Clearing Agencies believe that the Proposed Rule Changes are 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a registered clearing agency. In 
particular, the Clearing Agencies believe that the Capital Policy and 
the Capital Replenishment Plan are both consistent with Section 
17A(b)(3)(F) of the Act \14\ and Rule 17Ad-22(e)(15), under the 
Act,\15\ for the reasons described below.
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    \14\ 15 U.S.C. 78q-1(b)(3)(F).
    \15\ 17 CFR 240.17Ad-22(e)(15). Supra note 3.
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    Section 17A(b)(3)(F) of the Act requires, in part, that the rules 
of the Clearing Agencies be designed to promote the prompt and accurate 
clearance and settlement of securities transactions, and to assure the 
safeguarding of securities and funds which are in the custody or 
control of the Clearing Agencies or for which they are responsible.\16\ 
Together, the Capital Policy and the Capital Replenishment Plan would 
be designed to ensure that each of the Clearing Agencies hold 
sufficient LNA funded by equity to cover potential general business 
losses so that the Clearing Agencies can continue the prompt and 
accurate clearance and settlement of securities transactions and can 
continue to assure the safeguarding of securities and funds which are 
in their custody or control or for which they are responsible if those 
losses materialize. Therefore, the Clearing Agencies believe the 
Capital Policy and the Capital Replenishment Plan are consistent with 
the requirements of Section 17A(b)(3)(F) of the Act.\17\
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    \16\ 15 U.S.C. 78q-1(b)(3)(F).
    \17\ Id.
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    Rule 17Ad-22(e)(15), under the Act, requires the Clearing Agencies 
to establish, implement, maintain and enforce written policies and 
procedures reasonably designed to identify, monitor, and manage their 
respective general business risk and hold sufficient liquid net assets 
funded by equity to cover potential general business losses so that the 
Clearing Agencies can continue operations and services as a going 
concern if those losses materialize.\18\ The Clearing Agencies believe 
that the Capital Policy and the Capital Replenishment Plan are designed 
to meet requirements of Rule 17Ad-22(e)(15) for the reasons described 
below.
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    \18\ 17 CFR 240.17Ad-22(e)(15). Supra note 3.
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    Rule 17Ad-22(e)(15)(i), under the Act, requires the Clearing 
Agencies to determine the amount of LNA funded by equity based upon its 
general business risk profile and the length of time required to 
achieve a recovery or orderly wind-down, as appropriate, of its 
critical operations and services if such action is taken.\19\ Pursuant 
to the Policy, each Clearing Agency's General Business Risk Capital 
Requirement, or the amount of LNA funded by equity determined by the 
Clearing Agency to be sufficient to cover potential general business 
losses, would be calculated as the greatest of (1) an amount calculated 
based on the Clearing Agency's general business risk profile, defined 
as its Risk-Based Capital Requirement, (2) an amount based on the time 
estimated to execute a recovery or orderly wind-down of the critical 
operations of the Clearing Agency, defined as its Recovery/Wind-down 
Capital Requirement, and (3) an amount based on an analysis of the 
Clearing Agency's estimated operating expenses for a six (6) month 
period, defined as its Operating Expense Capital Requirement. By 
providing that each Clearing Agency calculate its General Business Risk 
Capital Requirement as the greatest of these three calculated amounts, 
the Clearing Agencies believe the Capital Policy is consistent with 
Rule 17Ad-22(e)(15)(i).\20\
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    \19\ 17 CFR 240.17Ad-22(e)(15)(i). Supra note 3.
    \20\ Id.
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    Rule 17Ad-22(e)(15)(ii), under the Act, requires, in part, that the 
Clearing Agencies hold LNA funded by equity equal to the greater of 
either (x) six months of the covered clearing agency's current 
operating expenses, or (y) the amount determined by the board of 
directors to be sufficient to ensure a recovery or orderly wind-down of 
critical operations and services of the covered clearing agency.\21\ As 
described above, the Policy would provide that each Clearing Agency 
hold LNA funded by equity in an amount that is the greatest of its 
Risk-Based Capital Requirement, its Recovery/Wind-down Capital 
Requirement, or its Operating Expense Capital Requirement. The 
Recovery/Wind-down Capital Requirement of each Clearing Agency would be 
defined in the Policy as an amount determined by that Clearing Agency's 
Board to be sufficient to ensure a recovery or orderly wind-down of 
critical operations and services of that Clearing Agency. Therefore, 
the Clearing Agencies believe the Capital Policy is consistent with 
Rule 17Ad-22(e)(15)(ii).\22\
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    \21\ 17 CFR 240.17Ad-22(e)(15)(ii). Supra note 3.
    \22\ Id.
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    Rule 17Ad-22(e)(15)(ii) further requires, in part, that the LNA 
funded by equity held by the Clearing Agencies pursuant to Rule 17Ad-
22(e)(15)(ii) shall be (A) in addition to resources held to cover 
participant defaults or other credits and liquidity risks; and (B) of 
high quality and sufficiently liquid to allow the covered clearing 
agency to meet its current and projected operating expenses under a 
range of scenarios, including in adverse market conditions.\23\ The 
Capital Policy would identify the General Business Risk Capital 
Requirement of each Clearing Agency as a separate component of that 
Clearing Agency's Capital Framework, and would provide that LNA funded 
by equity held by each Clearing Agency as its General Business Risk 
Capital Requirement be held in addition to (1) LNA funded by equity 
held as that Clearing Agency's Credit Risk Capital Requirement; (2) 
resources held by that Clearing Agency in compliance with Rule 17Ad-
22(e)(4) for credit risk (which resources are also held in addition to 
that Clearing Agency's Credit Risk Capital Requirement); \24\ and (3) 
resources held by that Clearing Agency in compliance with Rule 17Ad-
22(e)(7) for liquidity risk.\25\ Additionally, the Capital Policy would 
provide that the LNA funded by equity being held by each Clearing 
Agency to meet its Total Capital Requirement be held in cash and cash 
equivalents, which are highly liquid securities or bank deposits. 
Therefore, the Clearing Agencies believe the Capital Policy is 
consistent with Rule 17Ad-22(e)(15)(ii)(A) and (B).\26\
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    \23\ 17 CFR 240.17Ad-22(e)(15)(ii)(A), (B). Supra note 3.
    \24\ 17 CFR 240.17Ad-22(e)(4). Supra note 3.
    \25\ 17 CFR 240.17Ad-22(e)(7). Supra note 3.
    \26\ 17 CFR 240.17Ad-22(e)(15)(ii)(A), (B). Supra note 3.
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    Rule 17Ad-22(e)(15)(iii), under the Act, requires the Clearing 
Agencies to maintain a viable plan, approved by the Boards and updated 
at least annually, for raising additional equity should its equity fall 
close to or below the amount required under Rule 17Ad-
22(e)(15)(ii).\27\ As described above, the Capital Replenishment Plan 
would be a viable plan describing the procedures by which each of the 
Clearing Agencies would replenish capital, should its capital fall 
close to or below its Total Capital Requirement. Therefore, the 
Clearing Agencies believe the Capital

[[Page 19131]]

Replenishment Plan is consistent with Rule 17Ad-22(e)(15)(iii).\28\
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    \27\ 17 CFR 240.17Ad-22(e)(15)(iii). Supra note 3.
    \28\ Id.
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(B) Clearing Agencies' Statements on Burden on Competition

    Each of the Clearing Agencies believes that neither the Capital 
Policy nor the Capital Replenishment Plan would have any impact, or 
impose any burden, on competition because the Proposed Rule Changes 
would implement the Policy and the Plan as rules within the meaning of 
Rule 19b-4 under the Act.\29\ The Policy and the Plan have been 
developed and documented in order to satisfy the regulatory 
requirements set forth above, and they generally reflect existing tools 
and existing internal procedures. Existing tools that would have a 
direct impact on the rights, responsibilities or obligations of members 
or participants of the Clearing Agencies are reflected in the Clearing 
Agencies' existing rules.\30\ Accordingly, the Policy and the Plan 
themselves are documents intended to enhance the Clearing Agencies' 
internal management and regulatory compliance and therefore do not have 
any impact, or impose any burden, on competition.
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    \29\ 17 CFR 240.19b-4.
    \30\ Supra note 4.
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(C) Clearing Agencies' Statements on Comments on the Proposed Rule 
Changes Received From Members, Participants, or Others

    The Clearing Agencies have not solicited or received any written 
comments relating to this proposal. The Clearing Agencies will notify 
the Commission of any written comments received by the Clearing 
Agencies.

III. Date of Effectiveness of the Proposed Rule Changes, 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 clearing agency consents, the Commission will:
    (A) by order approve or disapprove such Proposed Rule Changes, or
    (B) institute proceedings to determine whether the Proposed Rule 
Changes 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 
Changes are 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-DTC-2017-003, SR-NSCC-2017-004 or SR-FICC-2017-007 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-DTC-2017-003, SR-NSCC-
2017-004 or SR-FICC-2017-007. One of these file numbers 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 Changes that are filed with the 
Commission, and all written communications relating to the Proposed 
Rule Changes 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 the Clearing Agencies, and on 
DTCC's Web site (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-DTC-2017-003, SR-NSCC-2017-
004 or SR-FICC-2017-007, and should be submitted on or before May 16, 
2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08287 Filed 4-24-17; 8:45 am]
 BILLING CODE 8011-01-P