[Federal Register Volume 83, Number 58 (Monday, March 26, 2018)]
[Notices]
[Pages 12974-12978]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06030]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82916; File No. SR-NSCC-2018-001]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Order Approving Proposed Rule Change To Amend the By-Laws

March 20, 2018.
    On February 2, 2018, National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') proposed rule change SR-NSCC-2018-001, pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ 
and Rule 19b-4 thereunder.\2\ The proposed rule change was published 
for comment in the Federal Register on February 14, 2018.\3\ The 
Commission did not receive any comment letters on the proposed rule 
change. For the reasons discussed below, the Commission approves the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 82674 (February 8, 
2018), 83 FR 6633 (February 14, 2018) (SR-NSCC-2018-001) 
(``Notice'').
---------------------------------------------------------------------------

I. Description of the Proposed Rule Change

    The proposed rule change would amend the NSCC By-Laws (``By-Laws'') 
\4\ to (1) change certain NSCC Board of Directors (``Board'') titles, 
officer titles, and offices (and their respective powers and duties), 
(2) update the compensation section for officers, and (3) make 
technical changes and corrections, each discussed more fully below. The 
proposed rule change would amend the Rules to incorporate, by 
reference, the By-Laws and the Certificate of Incorporation.
---------------------------------------------------------------------------

    \4\ As discussed below, the By-Laws and NSCC's Certificate of 
Incorporation (``Certificate of Incorporation'') would each be 
incorporated by reference into NSCC's Rules and Procedures 
(``Rules''), available at http://www.dtcc.com/legal/rules-and-procedures.
---------------------------------------------------------------------------

A. Changes to Certain Titles, Offices, and Related Powers and Duties

    NSCC proposes changes to the titles, offices, and related powers 
and duties of

[[Page 12975]]

certain Board and officer personnel, as further described below.
1. Non-Executive Chairman of the Board
    NSCC proposes to replace the title of ``Chairman of the Board'' 
with the title of ``Non-Executive Chairman of the Board.'' \5\ NSCC 
proposes to change its By-Laws to reflect that this position is held by 
a non-executive.\6\ Therefore, NSCC would change relevant references in 
the By-Laws from ``Chairman'' and ``Chairman of the Board'' to ``Non-
Executive Chairman of the Board.'' \7\ NSCC also would delete certain 
references in the By-Laws to the Non-Executive Chairman of the Board as 
a member of NSCC management because the position is no longer in 
management.\8\
---------------------------------------------------------------------------

    \5\ Notice, 83 FR at 6634.
    \6\ Id.
    \7\ Id.
    \8\ Id.
---------------------------------------------------------------------------

    In the proposed Section 2.8 (Non-Executive Chairman of the Board), 
NSCC would identify the powers and duties of the Non-Executive Chairman 
of the Board, including (1) general responsibility for carrying out the 
policies of the Board, (2) general supervision of the Board and its 
activities and general leadership of the Board, (3) presiding over 
stockholders' meetings (when present), and (4) such other powers and 
duties as the Board may designate.\9\ Proposed Section 2.8 (Non-
Executive Chairman of the Board) also would include a provision stating 
that a presiding director (as elected by the Board) shall preside at 
all stockholders and Board meetings when the Non-Executive Chairman of 
the Board is absent.\10\ Additionally, Proposed Section 2.8 (Non-
Executive Chairman of the Board) would provide that the Non-Executive 
Chairman of the Board's performance of any enumerated duty shall be 
conclusive evidence of his power to act.\11\
---------------------------------------------------------------------------

    \9\ Id.
    \10\ Id. This provision is designed to correct an inaccuracy in 
current By-Laws Section 3.3 (Powers and Duties of the President), 
which gives presiding authority over stockholder meetings to the 
President when the Chairman of the Board is absent. Proposed Section 
2.8 (Non-Executive Chairman of the Board) would be consistent with 
the Mission Statement and Charter of the Depository Trust 
Corporation (``DTC''), Fixed Income Clearing Corporation (``FICC''), 
NSCC, and the Depository Trust and Clearing Corporation (``DTCC''), 
which gives presiding authority over stockholder meetings to a 
presiding director when the Non-Executive Chairman of the Board is 
absent. DTC, FICC, and NSCC are subsidiaries of DTCC, each having 
the same Board of Directors as DTCC. See Securities Exchange Act 
Release No. 74142 (January 27, 2015), 80 FR 5188 (January 30, 2015) 
(SR-FICC-2014-810, SR-NSCC-2014-811, SR-DTC-2014-812).
    \11\ Notice, 83 FR at 6634.
---------------------------------------------------------------------------

    The proposal also identifies the individuals to whom the Non-
Executive Chairman may assign duties. In proposed Section 3.2 (Powers 
and Duties of the President and Chief Executive Officer), the Non-
Executive Chairman of the Board would have the authority to designate 
powers and duties to the President and Chief Executive Officer 
(``CEO'').\12\ In proposed Section 3.2 (Powers and Duties of Managing 
Directors), NSCC also would add the Non-Executive Chairman of the Board 
to the list of individuals who have the ability to assign powers and 
duties to Managing Directors.\13\ Finally, in proposed Section 3.4 
(Powers and Duties of the Secretary), the Non-Executive Chairman of the 
Board (i.e., not the President and CEO) would have the authority to 
assign additional powers and duties to the Secretary.\14\
---------------------------------------------------------------------------

    \12\ Notice, 83 FR at 6635.
    \13\ Id.
    \14\ Id.
---------------------------------------------------------------------------

2. Office of the CEO
    NSCC proposes to revise the By-Laws to reflect that one individual 
holds the office of the President and CEO. As such, the proposal would 
change the By-Laws to add the office of the CEO and combine the office 
of the President and the office of the CEO into one office (President 
and CEO).\15\ While current Section 3.3 (Powers and Duties of the 
President) provides that the President shall be the CEO, current 
Section 3.1 (General Provisions) does not include CEO in the list of 
designated officer positions, though President is currently included in 
this list.\16\ Therefore, NSCC proposes to revise the relevant 
references in the By-Laws from President to President and CEO.\17\
---------------------------------------------------------------------------

    \15\ Id.
    \16\ Id.
    \17\ Id.
---------------------------------------------------------------------------

    Additionally, NSCC proposes to make several By-Laws revisions to 
reflect the responsibilities for the consolidated role of President and 
CEO.\18\ First, NSCC would delete and replace current Section 3.3 
(Powers and Duties of the President) with proposed Section 3.2 (Powers 
and Duties of the President and CEO).\19\ Proposed Section 3.2 (Powers 
and Duties of the President and CEO) would clarify the powers and 
duties associated with the role of President and CEO.\20\ For example, 
in proposed Section 3.2 (Powers and Duties of the President and CEO) 
the President and CEO would have general supervision over the overall 
business strategy, business operations, systems, customer outreach, as 
well as risk management, control, and staff functions, subject to the 
direction of the Board and the Non-Executive Chairman of the Board.\21\ 
In addition, because the office of the Chief Operating Officer 
(``COO'') would be eliminated (as described further below), the current 
COO responsibility of general supervision over NSCC's operations in 
current Section 3.4 (Powers and Duties of the Chief Operating Officer) 
would be assigned to the President and CEO.\22\ Proposed Section 3.2 
(Powers and Duties of the President and CEO) would also delineate the 
authority that the Non-Executive Chairman of the Board has over the 
President and CEO by stating that the latter would have such other 
powers and perform such other duties as the Board or the Non-Executive 
Chairman of the Board may designate.\23\
---------------------------------------------------------------------------

    \18\ Id.
    \19\ Id.
    \20\ Id.
    \21\ Id.
    \22\ Id.
    \23\ Id.
---------------------------------------------------------------------------

    NSCC also proposes to reassign or reclassify several 
responsibilities currently assigned to the President.\24\ Specifically, 
the responsibility for executing the Board's policies would be assigned 
to the Non-Executive Chairman of the Board rather than to the President 
and CEO.\25\ Additionally, NSCC would remove the statement 
``performance of any such duty by the President shall be conclusive 
evidence of his power to act'' in current Section 3.3 (Powers and 
Duties of the President).\26\
---------------------------------------------------------------------------

    \24\ Id.
    \25\ Id.
    \26\ Id.
---------------------------------------------------------------------------

    As mentioned above, NSCC would delete language from the By-Laws 
stating that, in the absence of the Chairman of the Board, the 
President shall preside at all meetings of shareholders and all Board 
meetings (when present).\27\ Similarly, NSCC would delete language from 
the By-Laws stating that the President and Board currently have the 
authority to assign powers and duties to the Comptroller in current 
Section 3.8 (Powers and Duties of the Comptroller), as discussed 
below.\28\ In proposed Section 3.5 (Powers and Duties of the Chief 
Financial Officer) the President and CEO and Board would have the 
authority to assign duties to the Chief Financial Officer 
(``CFO'').\29\
---------------------------------------------------------------------------

    \27\ Id. As stated above, that power resides with the presiding 
director who is elected annually by the Board. See supra note 20.
    \28\ Notice, 83 FR at 6642.
    \29\ Id.
---------------------------------------------------------------------------

    The proposal also removes certain responsibilities from the 
President. In proposed Section 3.4 (Powers and

[[Page 12976]]

Duties of the Secretary), the power to assign additional powers and 
duties to the Secretary would be removed from the President and granted 
to the Non-Executive Chairman of the Board.\30\
---------------------------------------------------------------------------

    \30\ Id.
---------------------------------------------------------------------------

3. Office of the CFO; Office of the Comptroller
    The proposal would add the office of the CFO and assign to the CFO 
general supervision of the financial operations of NSCC.\31\ References 
in the By-Laws to the Comptroller would be deleted because NSCC states 
that it neither has a Comptroller nor plans to appoint one.\32\ In 
proposed Section 3.5 (Powers and Duties of the Chief Financial Officer) 
the CFO would be granted overall supervision authority over the 
financial operations of NSCC, and upon request, the CFO would counsel 
and advise other officers of NSCC and perform other duties as agreed 
with the President and CEO (or as determined by the Board).\33\ The 
proposal also provides that the CFO would report directly to the 
President and CEO.\34\ Furthermore, because the Treasurer would 
directly report to the CFO, proposed Section 3.6 (Powers and Duties of 
the Treasurer) would provide that the Treasurer would have all such 
powers and duties as generally are incident to the position of 
Treasurer or as the CFO (in addition to the President and CEO and the 
Board) may assign.\35\
---------------------------------------------------------------------------

    \31\ Notice, 83 FR at 6636.
    \32\ Id.
    \33\ Id.
    \34\ Id.
    \35\ Id.
---------------------------------------------------------------------------

4. Office of the COO
    In this proposal, NSCC would delete references in the By-Laws to 
the COO because NSCC states that it no longer has a COO and has no 
plans to appoint one.\36\
---------------------------------------------------------------------------

    \36\ Id.
---------------------------------------------------------------------------

5. Executive Director; Vice President
    In this proposal, NSCC would change the title of Vice President to 
Executive Director, and update the Executive Director position's 
related powers and duties to reflect the position's seniority 
level.\37\ In NSCC's organizational structure, Executive Directors 
report to Managing Directors.\38\ Due to this level of seniority, NSCC 
proposes to remove provisions in the By-Laws that previously allowed 
Vice Presidents (now, Executive Directors) to call special meetings of 
shareholders, to sign share certificates, or to preside over 
shareholder meetings unless specifically designated to do so by the 
Board.\39\
---------------------------------------------------------------------------

    \37\ Id.
    \38\ Id.
    \39\ Id.
---------------------------------------------------------------------------

6. Other Changes to the Powers and Duties of the Board and Certain 
Other Designated Officers
    In proposed Section 3.1 (General Provisions), NSCC proposes to add 
a parenthetical phrase to clarify that the Board's power to appoint 
other officers includes, but is not limited to, the power to appoint a 
Vice Chairman of the Corporation and one or more Executive 
Directors.\40\ Additionally, in current Section 3.1 (General 
Provisions), NSCC proposes to clarify that neither the Secretary nor 
any Assistant Secretary can hold the following offices (1) Vice 
Chairman of the Corporation or (2) President and CEO.\41\
---------------------------------------------------------------------------

    \40\ Id.
    \41\ Id.
---------------------------------------------------------------------------

    The proposal also enumerates the responsibilities of NSCC's 
Managing Directors.\42\ In proposed Section 1.8 (Presiding Officer and 
Secretary), Managing Directors would be removed from the list of 
officers authorized to preside over a stockholders' meeting unless 
specifically authorized by the Board.\43\ Similarly, in proposed 
Section 2.6 (Meetings), Managing Directors would be added to the list 
of officers authorized to call special meetings of the Board.\44\
---------------------------------------------------------------------------

    \42\ Id.
    \43\ Id.
    \44\ Id.
---------------------------------------------------------------------------

    NSCC also proposes to amend the By-Laws to remove specific powers 
from the Treasurer and Assistant Treasurer.\45\ In current Section 5.1 
(Certificates of Shares), NSCC proposes to delete the reference to 
Treasurer and Assistant Treasurer from the list of authorized 
signatories because NSCC expects the Secretary or Assistant Secretary 
(who are each currently listed as authorized signatories) to sign any 
share certificates.\46\
---------------------------------------------------------------------------

    \45\ Notice, 83 FR at 6637.
    \46\ Id.
---------------------------------------------------------------------------

B. Compensation of the President and CEO

    Proposed Section 3.10 (Compensation of the President and CEO) would 
reflect NSCC's current compensation-setting practices. Current Section 
3.12 (Compensation of Officers) states that (1) the compensation, if 
any, of the Chairman of the Board, and the President shall be fixed by 
a majority (which shall not include the Chairman of the Board or the 
President) of the entire Board of Directors, and (2) salaries of all 
other officers shall be fixed by the President with the approval of the 
Board and no officer shall be precluded from receiving a salary because 
he is also a director.\47\ NSCC proposes to state that the Compensation 
Committee of the Corporation will recommend the compensation for the 
President and CEO to the Board of Directors for approval.\48\ In 
addition, NSCC also proposes to delete the language stating that (1) 
salaries of all other officers shall be fixed by the President with 
approval of the Board, and (2) no officer shall be precluded from 
receiving a salary because he is also a director.\49\ NSCC proposes to 
delete compensation-related references to the Chairman of the Board 
because the Non-Executive Chairman of the Board does not receive 
compensation.\50\ Finally, NSCC proposes to change the title of 
proposed Section 3.10 from ``Compensation of Officers'' to 
``Compensation of the President and Chief Executive Officer'' because 
this section would no longer address the compensation of officers other 
than the President and CEO.\51\
---------------------------------------------------------------------------

    \47\ Id.
    \48\ Notice, 83 FR at 6637. NSCC states that it proposes this 
change for consistency with the DTCC/DTC/FICC/NSCC Compensation and 
Human Resources Committee Charter. Id.
    \49\ Id.
    \50\ Id.
    \51\ Notice, 83 FR at 6644.
---------------------------------------------------------------------------

C. Technical Changes and Corrections

    NSCC proposes technical changes and/or corrections to the By-Laws 
for clarity and readability, as described below.\52\
---------------------------------------------------------------------------

    \52\ Id.
---------------------------------------------------------------------------

1. Statutory References and Requirements
    NSCC would delete direct statutory references from the By-Laws.\53\ 
NSCC states that it would make this change to have the By-Laws remain 
consistent and accurate despite any changes to a specifically cited 
statute.\54\
---------------------------------------------------------------------------

    \53\ Id.
    \54\ Id.
---------------------------------------------------------------------------

2. Audit Committee
    NSCC proposes to revise proposed Section 2.11 (Audit Committee) to 
have the description of its Audit Committee conform to the description 
of the Audit Committee in the by-laws of FICC.\55\
---------------------------------------------------------------------------

    \55\ Id.
---------------------------------------------------------------------------

3. Other Technical Changes and Corrections
    NSCC proposes to make additional technical and grammatical changes 
to address (1) typographical errors, (2) section numbering, (3) 
grammatical

[[Page 12977]]

errors, (4) heading consistency, and (5) gender references.\56\
---------------------------------------------------------------------------

    \56\ Notice, 83 FR at 6637-38.
---------------------------------------------------------------------------

D. Proposed Changes to the Rules

    NSCC proposes to add an addendum (``Addendum V'') to the Rules.\57\ 
NSCC proposes that Addendum V would be entitled ``By-Laws and Restated 
Certificate of Incorporation'' and would indicate that the By-Laws and 
Certificate of Incorporation are incorporated into the Rules by 
reference.\58\
---------------------------------------------------------------------------

    \57\ Notice, 83 FR at 6638.
    \58\ Id.
---------------------------------------------------------------------------

II. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and rules and regulations thereunder applicable to such 
organization.\59\ The Commission believes the proposal is consistent 
with Act, specifically Section 17A(b)(3)(F) of the Act and Rules 17Ad-
22(e)(1) and, in part, (2) under the Act.\60\
---------------------------------------------------------------------------

    \59\ 15 U.S.C. 78s(b)(2)(C).
    \60\ 15 U.S.C. 78q-1(b)(3)(F); 17 CFR 240.17Ad-22(e)(1) and (2).
---------------------------------------------------------------------------

A. Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) of the Act requires, in part, that the rules 
of a clearing agency, such as NSCC, be designed to protect the public 
interest.\61\ As discussed above, the proposed rule change would make a 
number of updates to the By-Laws.
---------------------------------------------------------------------------

    \61\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    First, NSCC proposes to revise NSCC's description of the titles and 
responsibilities of its Board and senior management to match NSCC's 
current corporate structure. These changes would help the Board, as 
well as NSCC's management, employees, and members, understand which 
officer or office is responsible for each of NSCC's executive-level 
functions.
    Second, the proposal would update the compensation-setting section 
of the By-Laws to reflect the Compensation Committee Charter practice, 
as well as to reflect that the Non-Executive Chairman of the Board 
would not receive compensation. The proposal's increased clarity around 
compensation-setting would better inform NSCC stakeholders and the 
general public about how NSCC sets the level of compensation for its 
highest-level executive (the President and CEO) and that the Non-
Executive Chairman does not draw a salary.
    Third, NSCC's proposed technical changes and corrections to its By-
Laws would enhance the clarity, transparency, and readability of NSCC's 
organizational documents. In this way, the proposal would better enable 
the Board, as well as NSCC's management, employees, and members, to 
understand their respective authorities, rights, and obligations 
regarding NSCC's clearance and settlement of securities transactions.
    Finally, NSCC's proposed addendum would incorporate the By-Laws and 
Certificate of Incorporation into the Rules. This change would increase 
the clarity and transparency of NSCC's organizational documents by 
integrating the By-Laws and the Certificate of Incorporation into the 
Rules, to which all NSCC members are subject and have access.
    Governance arrangements are critical to the sound operation of 
clearing agencies.\62\ Specifically, clear and transparent governance 
documents promote accountability and reliability in the decisions, 
rules, and procedures of a clearing agency.\63\ Clear and transparent 
governance documents also provide interested parties, including owners, 
members, and general members of the public, with information about how 
a clearing agency's decisions are made and what the rules and 
procedures are designed to accomplish.\64\ Further, the decisions, 
rules, and procedures of a clearing agency are important, as they can 
have widespread impact, affecting multiple market members, financial 
institutions, markets, and jurisdictions.\65\
---------------------------------------------------------------------------

    \62\ Securities Exchange Act Release No. 71699 (May 21, 2014), 
79 FR 29508 (May 22, 2014) (``Covered Clearing Agency Standards 
Proposing Release'') at 29521.
    \63\ Securities Exchange Act Release No. 64017 (March 3, 2011), 
76 FR 14472 (March 16, 2011) at 14488.
    \64\ Id.
    \65\ Covered Clearing Agency Standards Proposing Release, 79 FR 
at 29521.
---------------------------------------------------------------------------

    As stated above, the proposed rule change would provide NSCC 
stakeholders with a better understanding of how NSCC makes decisions 
that could ultimately affect the financial system. Such transparency 
helps ensure that NSCC reliably makes decisions and follows clearly 
articulated policies and procedures. Accordingly, the Commission finds 
that the proposed rule change is designed to enhance the clarity and 
transparency of NSCC's organizational documents, which would help 
protect the public interest, consistent with Section 17A(b)(3)(F) of 
the Act.\66\
---------------------------------------------------------------------------

    \66\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

B. Rule 17Ad-22(e)(1) Under the Act

    Rule 17Ad-22(e)(1) under the Act requires a covered clearing agency 
\67\ to establish, implement, maintain, and enforce written policies 
and procedures reasonably designed to provide for a well-founded, 
transparent, and enforceable legal basis for each aspect of its 
activities in all relevant jurisdictions.\68\
---------------------------------------------------------------------------

    \67\ A ``covered clearing agency'' means, among other things, a 
clearing agency registered with the Commission under Section 17A of 
the Exchange Act (15 U.S.C. 78q-1 et seq.) that is designated 
systemically important by the Financial Stability Oversight Counsel 
(``FSOC'') pursuant to the Payment, Clearing, and Settlement 
Supervision Act of 2010 (12 U.S.C. 5461 et seq.). See 17 CFR 
240.17Ad-22(a)(5)-(6). On July 18, 2012, FSOC designated NSCC as 
systemically important. U.S. Department of the Treasury, ``FSOC 
Makes First Designations in Effort to Protect Against Future 
Financial Crises,'' available at https://www.treasury.gov/press-center/press-releases/Pages/tg1645.asp. Therefore, NSCC is a covered 
clearing agency.
    \68\ 17 CFR 240.17Ad-22(e)(1).
---------------------------------------------------------------------------

    As discussed above, the proposed rule change would update the By-
Laws by (1) updating NSCC's description of the titles and 
responsibilities of its Board and senior management to match NSCC's 
current corporate structure, (2) documenting NSCC's current 
compensation-setting process, and (3) enacting technical corrections to 
increase readability. The proposed rule change would also add an 
addendum to the Rules to incorporate the By-Laws and the Certificate of 
Incorporation by reference.
    The proposed changes are designed to help ensure that the By-Laws 
better reflect NSCC's governance practices, as well as to organize 
NSCC's organizational documents, in a clear, transparent, and 
consistent manner. This increased transparency would help convey to 
NSCC's stakeholders, and the public generally, a key legal basis for 
the activities of the highest levels of NSCC's leadership described in 
the By-Laws. Therefore, the Commission finds that the proposed rule 
change is designed to help ensure that NSCC's organizational documents 
remain well-founded, transparent, and legally enforceable in all 
relevant jurisdictions, consistent with Rule 17Ad-22(e)(1) under the 
Act.\69\
---------------------------------------------------------------------------

    \69\ Id.
---------------------------------------------------------------------------

C. Rule 17Ad-22(e)(2)(i) and (v) Under the Act

    Rule 17Ad-22(e)(2)(i) and (v) under the Act requires that NSCC 
establish, implement, maintain and enforce written policies and 
procedures reasonably designed to provide for governance arrangements 
that, among other things, (1) are clear and

[[Page 12978]]

transparent and (2) specify clear and direct lines of 
responsibility.\70\
---------------------------------------------------------------------------

    \70\ 17 CFR 240.17Ad-22(e)(2)(i) and (v).
---------------------------------------------------------------------------

    As described above, NSCC proposes a number of changes that would 
provide clarity and transparency. NSCC proposes to revise By-Laws 
provisions that were outdated or incorrect. Specifically, the proposed 
changes to the titles and offices (and their related powers and duties) 
would provide clarity and transparency because they would clearly set 
forth NSCC's current organizational structure, including the lines of 
responsibility of various officers and the Board. The proposed changes 
relating to compensation-setting would also give clarity and 
transparency by (1) accurately reflecting the process that is followed 
pursuant to the Compensation Committee Charter, and (2) clarifying that 
the Non-Executive Chairman of the Board does not receive compensation. 
Finally, the proposed technical changes and corrections would raise the 
clarity and transparency of the By-Laws by removing grammatical and 
typographical errors. Additionally, NSCC also proposes changes to its 
Rules to provide clarity and transparency. Specifically, the proposed 
changes would create clarity and transparency by integrating the By-
Laws and the Certificate of Incorporation into one document, the Rules 
(to which all NSCC members are subject and have access).
    For these reasons, the Commission finds that the proposed rule 
change is designed to enhance clarity and transparency in NSCC's 
governance arrangements, as well as to specify clear and direct lines 
of responsibility for various officer positions and the Board within 
NSCC's organizational structure, consistent with Rule 17Ad-22(e)(2)(i) 
and (v) under the Act.\71\
---------------------------------------------------------------------------

    \71\ Id.
---------------------------------------------------------------------------

III. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposal is consistent with the requirements of the Act, in particular 
the requirements of Section 17A of the Act \72\ and the rules and 
regulations thereunder.
---------------------------------------------------------------------------

    \72\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that proposed rule change SR-NSCC-2018-001 be, and hereby is, 
approved.\73\
---------------------------------------------------------------------------

    \73\ In approving the proposed rule change, the Commission 
considered the proposals' impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\74\
---------------------------------------------------------------------------

    \74\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-06030 Filed 3-23-18; 8:45 am]
 BILLING CODE 8011-01-P