[Federal Register Volume 86, Number 233 (Wednesday, December 8, 2021)]
[Notices]
[Pages 69687-69695]
[FR Doc No: 2021-26531]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93709; File No. SR-NSCC-2021-013]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change To Provide for a
Passive Acknowledgment Process, Codify Certain Settlement Processes and
Make Technical, Clarifying and Conforming Changes to the NSCC Rules &
Procedures

December 2, 2021.
    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 18, 2021, 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 by the clearing agency.
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 would amend NSCC's Rules & Procedures
(``Rules'') \3\ in order to (i) provide for a passive acknowledgment
process whereby any settling bank that does not timely acknowledge that
it will settle its settlement balance with NSCC (i.e., acknowledge its
intention to pay to or collect from NSCC), or refuse to settle for one
or more Members or Limited Members (collectively, ``NSCC Members'') or
AIP Non-Member Funds for which it is the designated Settling Bank or
AIP Settling Bank (collectively, ``NSCC Settling Banks'') and has not
otherwise been in contact with NSCC, would be deemed to have
acknowledged its settlement balances, (ii) amend the definition of
``AIP Settling Bank'' to correspond with the definition of ``Settling
Bank'' and remove AIP Settling Bank Only Member as a membership
category, (iii) codify certain settlement processes and (iv) make
certain technical, clarifying and conforming changes.
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    \3\ Capitalized terms not defined herein are defined in the
Rules, available at https://dtcc.com/~/media/Files/Downloads/legal/
rules/nscc_rules.pdf.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency 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. The clearing agency 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. Purpose
    The purpose of this proposed rule change is to (i) provide for a
passive acknowledgment process whereby any settling bank that does not
timely acknowledge that it will settle its settlement balance with NSCC
(i.e., acknowledge its intention to pay to or collect from NSCC), or
refuse to settle for one or more NSCC Members or AIP Non-Member Funds
for which it is the designated NSCC Settling Bank and has not otherwise
been in contact with NSCC, would be deemed to have acknowledged its
settlement balances, (ii) amend the definition of ``AIP Settling Bank''
to correspond with the definition of ``Settling Bank'' and remove AIP
Settling Bank Only Member as a membership category, (iii) codify
certain settlement processes and (iv) make certain technical,
clarifying and conforming changes.
Background
NSCC Membership; Settling Banks and AIP Settling Banks--Settlement
Processes
    NSCC membership consists of Members that have access to NSCC's
guaranteed central counterparty services and Limited Members that have
access to NSCC's non-guaranteed services, such as Mutual Fund Services
and Alternative Investment Product Services (``AIP'').\4\ Limited
Members that only have access to AIP are referred to as AIP Members.\5\
For purposes of this filing, all Members and Limited Members, including
AIP Members, are referred to collectively as NSCC Members. AIP Non-
Member Funds are entities that are not AIP Members but that NSCC has
approved to settle AIP Payments as described in Rule 53.\6\
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    \4\ See Section 2 of Rule 2, supra note 3.
    \5\ Id.
    \6\ Definition of ``AIP Non-Member Fund'' in Rule 1, supra note
3.
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    NSCC provides a standardized, automated method for money settlement
obligations, between NSCC and NSCC Settling Banks acting on behalf of
NSCC Members and AIP Non-Member Funds. NSCC's settlement services
eliminate manual processing and reduce costs by aggregating the money
settlement payments due to or from an NSCC Member or AIP Non-Member
Fund, and then, automatically debiting or crediting such NSCC Member's
account or AIP Non-Member Fund's account at its NSCC Settling Bank.
Money settlement is effected via the Federal Reserve Banks' (``FRB'')
National Settlement Service (``NSS'').\7\
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    \7\ Section D.2. of Procedure VIII of the Rules (``Procedure
VIII''), supra note 3.
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    NSCC provides two separate settlement processes--(i) end of day
settlement for Members and Limited Members other than AIP Members
(``EOD Settlement'') and (ii) daily settlement for AIP Members and AIP
Non-Member Funds (``AIP Settlement''). Both settlement processes
require each NSCC Member or AIP Non-Member Fund to designate a settling
bank to effect money settlement on its behalf at NSCC.\8\ Settling
Banks settle on behalf of Members and Limited Members with respect to
EOD Settlement and AIP Settling Banks settle on behalf of AIP Members
and AIP Non-Member Funds with respect to AIP Settlement. All AIP money
settlement is effected on a gross basis, where on the applicable
settlement date, AIP debits are collected first, and in the afternoon
all contra-side credits, where the corresponding debits have been
collected, are paid.\9\
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    \8\ See Section 1 of Rule 12, supra note 3 and Section 7(h) of
Rule 53.
    \9\ See Section 7 of Rule 53, supra, note 3.
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    Each NSCC Settling Bank is required by the NSCC Rules to enter into
a settling bank agreement with the NSCC Member or AIP Non-Member Fund
on whose behalf it settles and to abide by the Rules.\10\ The Rules
require Settling Banks to acknowledge to NSCC their settlement balances
and their intention to settle with NSCC or their refusal to settle by
the settlement deadline.\11\ The Rules do not explicitly require AIP
Settling Banks to affirmatively acknowledge or refuse to settle,
however, since the inception of AIP in 2008, NSCC's settlement
procedures have required AIP Settling Banks to affirmatively
acknowledge or refuse to settle in the same manner as required by
Settling Banks. On a daily basis, NSCC calculates settlement payment
amounts for EOD Settlement and for AIP Settlement and reports to NSCC
Members and their respective NSCC Settling Banks, a settlement
balance.\12\ Then, through the Fed Funds Settlement system
(``FFS''),\13\ the Settling Banks and AIP Settling Banks must submit
their acknowledgment of their intent to settle or refusal to settle
such amounts on behalf of their respective NSCC Members or AIP Non-
Member Funds by a deadline established by NSCC.\14\ EOD

Settlement occurs at the end of the day and, from an operational
perspective, is centralized with DTC's end-of-day money settlement
(``DTC Settlement'').\15\ For both EOD Settlement and AIP Settlement,
if all of the NSCC Settling Banks submit acknowledgments of their
intent to settle, then the Settlement Agent will submit the requisite
file to the FRB for processing through the NSS.
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    \10\ Section 1 of Rule 55, supra note 3.
    \11\ Section D of Procedure VIII, supra note 3. A Settling Bank
that is a Member and settles solely for its own accounts may opt to
not acknowledge its settlement balance. Id.
    \12\ For EOD Settlement, Settling Banks are provided a net-net
debit or net-net credit number. Section 2 of Rule 55, supra note 3.
For AIP Settlement, each AIP Settling Bank is provided an aggregate
gross debit number and an aggregate gross credit number with respect
to each AIP Member or AIP Non-Member Fund on whose behalf it settles
because for AIP Settlement, debits and credits are settled
separately. Section 7 of Rule 55, supra note 3. For AIP Settlement,
the net debts are paid first by AIP Settling Banks at approximately
11 a.m. and then net credits are paid to AIP Settling Banks at
approximately 2 p.m. AIP settlement times are posted on NSCC's
website.
    \13\ Section D of Procedure VIII requires Settling Banks to
acknowledge settlement balances via ``the terminal system'' which is
currently FFS. Section D of Procedure VIII, supra note 3.
    \14\ Section D.1 of Procedure VIII, supra note 3. The Rules do
not explicitly require AIP Settling Banks to affirmatively
acknowledge or refuse to settle, however, NSCC`s settlement
procedures have required AIP Settling Banks to affirmatively
acknowledge or refuse to settle in the same manner as required by
Settling Banks.
    \15\ DTC Settlement procedures and timing are set forth in the
Settlement Service Guide of DTC (``Settlement Service Guide'')
available at https://www.dtcc.com/~/media/Files/Downloads/legal/
service-guides/Settlement.pdf. Because EOD Settlement and DTC
Settlement are centralized, the timing and processes for NSCC
Settlement are the same as those set forth in the Settlement Service
Guide.
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    If an NSCC Settling Bank notifies the Settlement Agent that the
NSCC Settling Bank refuses to pay the settlement balance for an NSCC
Member or AIP Non-Member Fund, then NSCC will exclude that NSCC
Member's or AIP Non-Member Fund's amount and the Settlement Agent will
provide the NSCC Settling Bank with a new settlement balance that no
longer includes the excluded amount. The NSCC Settling Bank must then
immediately send a message to the Settlement Agent acknowledging the
new amount.\16\ The Settlement Agent will then submit the requisite
file to the FRB for processing through the NSS.
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    \16\ Section D.1 of Procedure VIII, supra note 3. The Rules do
not explicitly require acknowledgment of the new settlement balance
for AIP Settling Banks, however, since the inception of AIP in 2008,
NSCC's settlement procedures have required AIP Settling Banks to
affirmatively acknowledge or refuse to settle in the same manner as
required by Settling Banks.
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    If a Settling Bank does not acknowledge or refuse by the settlement
acknowledgment deadline, the Settlement Agent will use the most recent
contact information available to contact the NSCC Settling Bank. If the
Settlement Agent is unable to contact the NSCC Settling Bank or does
not receive a response from the NSCC Settling Bank as to the
acknowledgment or refusal, NSCC needs to determine whether to request
an NSS extension while also determining whether to remove the Settling
Bank's settlement balance from the NSS file.
    Today, failure of an NSCC Settling Bank to timely respond to the
Settlement Agent by the settlement acknowledgment deadline could create
uncertainty with respect to timely completion of settlement at NSCC.
This is because today, NSCC is not permitted under the Rules and its
settlement procedures \17\ to submit the NSS file (through the
Settlement Agent) unless all NSCC Settling Banks in the file that are
required to acknowledge,\18\ have acknowledged. NSCC must therefore
determine whether it should remove the settlement balance of the
unresponsive NSCC Settling Bank from the NSS file in order to allow the
processing of the rest of the NSS file for the other NSCC Settling
Banks that are part of the NSS file. If NSCC does not remove the
settlement balance of the unresponsive NSCC Settling Bank from the NSS
file, then the NSS file cannot be created and settlement cannot be
completed for the other NSCC Settling Banks that are part of the NSS
file. As such, today, NSCC may need to remove the settlement balance of
the unresponsive NSCC Settling Bank from the NSS file in order to
submit the NSS file and complete settlement for the other NSCC Settling
Banks that are part of the NSS file, thus potentially delaying
settlement of the NSS file. Such potential delay would arise from the
time needed to remove the figure of the unresponsive NSCC Settling Bank
and then re-establish the NSS file. Moreover, with respect to the NSCC
Members or AIP Non-Member Funds who were using the particular NSCC
Settling Bank, NSCC would need to settle individually with those NSCC
Members or AIP Non-Member Funds via the Fedwire Funds Service, which
also presents the possibility of a delay because of the time it may
take to complete this process individually with each affected NSCC
Member.
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    \17\ Id.
    \18\ A Settling Bank that is a Member and settles solely for its
own accounts may opt to not acknowledge its settlement balance.
Section D of Procedure VIII, supra note 3.
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    NSCC is proposing to implement a passive acknowledgment process for
EOD Settlement and AIP Settlement to address the situation discussed
above where an NSCC Settling Bank is unresponsive and cannot be
reached. This would allow NSCC to submit the NSS file (through the
Settlement Agent) for NSS processing more promptly, and thereby allow
settlement to be completed for the other NSCC Settling Banks that are
part of the NSS file.
    Until 2016, DTC's rules also required settling banks that settled
on behalf of DTC Participants for DTC Settlement to affirmatively
acknowledge or to refuse to settle. In 2016, DTC amended the Settlement
Service Guide to provide for a passive acknowledgment process, such
that a settling bank which does not timely affirmatively acknowledge
its settlement balance or refuse to settle would be deemed to have
acknowledged its settlement balance.\19\ In 2020, Fixed Income Clearing
Corporation (``FICC'') also filed a rule filing to provide for similar
passive acknowledgment process for FICC settling banks.\20\ The passive
acknowledgment process being proposed by NSCC is the same process that
DTC and FICC have put in place.
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    \19\ See Securities Exchange Act Release No. 76887 (January 13,
2016), 81 FR 3218 (January 20, 2016) (SR-DTC-2015-011).
    \20\ See Securities Exchange Act Release No. 89593 (August 18,
2020), 85 FR 52164 (August 24, 2020) (SR-FICC-2020-006).
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NSCC Passive Acknowledgment Process
    NSCC proposes to introduce a settling bank passive acknowledgment
process in the Rules for Settling Banks and for AIP Settling Banks to
manage the collection or payment of settlement amounts in the event
that any Settling Bank or AIP Settling Bank does not timely provide an
affirmative acknowledgment or refusal with respect to its settlement
payment amounts by the settlement acknowledgment deadline. If a
Settling Bank or an AIP Settling Bank does not acknowledge or refuse
its settlement amount by the settlement acknowledgment deadline and
NSCC is unable to establish contact with the Settling Bank or AIP
Settling Bank, NSCC proposes to deem the Settling Bank's or AIP
Settling Bank's final settlement balance as acknowledged. Through this
proposed passive acknowledgment process, NSCC will assume that the
Settling Bank or AIP Settling Bank that has failed to acknowledge its
figures or refused to settle by the settlement acknowledgment deadline,
intends to settle for its respective NSCC Members or AIP Non-Member
Funds. The Settling Bank's or AIP Settling Bank's final debit
settlement balance or final credit settlement balance would then be
debited from or credited to its account at the Federal Reserve Bank
through the NSS process.
    Even with the implementation of the proposed passive acknowledgment
process, NSCC must retain the discretion to remove the settlement
balance of an NSCC Settling Bank from the NSS file.\21\ In other words,
currently, NSCC may remove the NSCC Settling Bank's figure from the NSS
file in the situation where an NSCC Settling Bank is unresponsive and
cannot be reached. Under the proposal, the need for NSCC to do so would
arise in the event that an NSCC Settling Bank advises the Settlement
Agent that it cannot yet determine whether to acknowledge or refuse. In
such a circumstance, passive acknowledgment would not apply (as
described below); however, as it gets closer to the NSS processing
time, NSCC may need to remove the NSCC Settling Bank's settlement
balance from the NSS

file in order to allow settlement to be completed for the other NSCC
Settling Banks that are part of the NSS file and have affirmatively or
passively acknowledged their figure. NSCC is proposing to codify its
ability to remove the settlement balance of the NSCC Settling Bank from
the NSS file. As NSCC would be codifying this current practice with
this proposed rule change, this proposed rule change would not change
the current settlement process of NSCC Settling Banks that are excluded
from the NSS file. This proposed change is discussed below.
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    \21\ This practice is currently not codified in the Rules.
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(i) Proposed Change To Introduce Passive Acknowledgment Process for
NSCC Settling Banks
Proposed Passive Acknowledgment Process
    NSCC proposes to establish an ``Acknowledgment Cutoff Time'' for
EOD Settlement and an ``AIP Acknowledgment Cutoff Time'' for AIP
Settlement after which NSCC would apply the passive acknowledgment
process if it is unable to reach an NSCC Settling Bank. Since EOD
Settlement is centralized with DTC Settlement, the Acknowledgment
Cutoff Time will be the Acknowledgment Cutoff Time established in the
Settlement Service Guide for DTC Settlement.\22\ To conform with
current practice, the ``Acknowledgment Cutoff Time'' would be defined
in Rule 1 as the time set forth as the Acknowledgment Cutoff Time in
the DTC Settlement Service Guide which can be found on NSCC's website
at https://www.dtcc.com/legal/rules-and-procedures. The ``AIP
Acknowledgement Cutoff Time'' would be defined in Rule 1, with respect
to each AIP Settling Bank regarding AIP Settlement of AIP Debit
Balances and AIP Credit Balances, as the later of (i) 30 minutes after
the AIP Settling Bank has been notified of its AIP Debit Balance or AIP
Credit Balance (or, the new AIP Debit Balance or new AIP Credit
Balance, if readjusted as set forth herein), as applicable, and (ii) 30
minutes prior to the settlement deadline established by NSCC. NSCC
would add a statement that it would post the settlement deadlines for
AIP Settlement on the NSCC website which it currently does.
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    \22\ The Acknowledgment Cutoff Time established in the
Settlement Service Guide is currently the later of 4:15 p.m. and the
time that is 30 minutes after net-net settlement balances are first
made available. Page 19 of the Settlement Service Guide, supra note
15. For AIP, the current deadline for debit acknowledgment in NSCC's
settlement procedures is 9:30 a.m. and the current deadline for
credit acknowledgment is 12:30 p.m. Such times are posted on NSCC's
website.
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    If an NSCC Settling Bank does not submit either (1) an
acknowledgment that it will settle the settlement balance with NSCC or
(2) a refusal to pay the settlement balance by the Acknowledgment
Cutoff Time or the AIP Acknowledgment Cutoff Time, as applicable, and
has not been in contact with the Settlement Agent, then the Settlement
Agent would attempt to contact the NSCC Settling Bank. If the
Settlement Agent is able to contact the NSCC Settling Bank and it
notifies the Settlement Agent that the NSCC Settling Bank cannot, at
that time, submit its acknowledgment or refusal to pay its settlement
balance and that it needs more time, then the NSCC Settling Bank would
not be deemed to have acknowledged that it will settle such settlement
balance with NSCC. However, if the NSCC Settling Bank cannot be
reached, then the NSCC Settling Bank would be deemed to have
acknowledged that it will settle such settlement balance with NSCC.
    The passive acknowledgment process described herein would also
apply in situations where an NSCC Settling Bank is provided with a new
settlement balance after such NSCC Settling Bank's refusal to pay the
settlement balance for one or more NSCC Members or AIP Non-Member
Funds.
    NSCC would also revise the Rules to state that each NSCC Settling
Bank must ensure that it maintains accurate contact details with the
Settlement Agent so that the Settlement Agent may contact the NSCC
Settling Bank regarding this settlement process and any settlement
issues.
Proposed Changes to Rule 1, Rule 55 and Procedure VIII
    The proposed passive acknowledgment process will require changes to
Rule 1, Rule 55 with respect to AIP Settlement and Procedure VIII with
respect to EOD Settlement. Specifically, NSCC proposes to add proposed
new defined terms ``Acknowledgment Cutoff Time'' and ``AIP
Acknowledgment Cutoff Time'' in Rule 1 as discussed above. NSCC
proposes to add a phrase at the end of new subsection (b) of Section
D.1. of Procedure VIII that would apply to Settling Banks that settle
solely for their own accounts to state that if they choose to opt out
of having to acknowledge their settlement balance, new subsections (c)
and (e) (described below) of Section D.1. of Procedure VIII would not
apply to them.\23\
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    \23\ Proposed subsections (c) and (e) describe the proposed
passive acknowledgment process. As described above, if a Settling
Bank that is a Member settles solely for its own account opts to not
acknowledge its own settlement balance, the passive acknowledgment
process would not apply to such Settling Banks because such Settling
Banks cannot refuse to settle for their own accounts. For
operational convenience, Settling Banks that are Members may choose
to not acknowledge their own settlement balance because they cannot
refuse to settle for their own accounts. Members are also required
to be Participants at DTC and the Settlement Service Guide provides
that a DTC Participant that acts as its own Settling Bank may not
refuse to settle for itself. See p. 18 of the Settlement Service
Guide, supra, note 15. As set forth below, NSCC is proposing to
codify the practice in the Rules with respect to Members by adding a
statement that a Settling Bank that is a Member may not refuse to
settle for itself in Section D.1 of Procedure VIII. Therefore,
proposed subsections (c) and (e) would not apply to such Settling
Banks.
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    NSCC proposes to add a new subsection (c) in Section 9 of Rule 55
and in Section D.1 of Procedure VIII to provide that if the NSCC
Settling Bank does not acknowledge its settlement balance or notify the
Settlement Agent that it refuses to settle, then at the AIP
Acknowledgment Cutoff Time or Acknowledgment Cutoff Time, as
applicable, the NSCC Settling Bank is deemed to have acknowledged its
settlement balance.
    NSCC proposes to amend the language in new subsection (d) of
Section D.1 of Procedure VIII to delete the requirement that Settling
Banks must send a message immediately after sending a refusal message
acknowledging the new amount if it is a credit and its intention to
settle if it is debit and instead provide that if the Settling Bank
sends refusal messages, it must acknowledge to the Settlement Agent by
the Acknowledgment Cutoff Time, its new settlement balance and its
intention to settle by the settlement deadline. In addition, a sentence
would be added stating that the new subsection (c) would apply with
respect to the new settlement balances of the Settling Bank that sent
refusal messages. Similar language would be added as a new subsection
(d) of Section 9 in Rule 55 with respect to AIP Settling Banks and AIP
Settlement.
    NSCC proposes to amend Section 9 of Rule 55 and Section D.1 of
Procedure VIII to add new subsection (e) which would provide that the
Settlement Agent would attempt to contact the NSCC Settling Bank if no
acknowledgment or notice of refusal to settle on behalf of one or more
NSCC Member or AIP Non-Member Fund, as applicable, for which it is
designated as the NSCC Settling Bank is received by

the AIP Acknowledgment Cutoff Time or Acknowledgment Cutoff Time, as
applicable. The new subsections would provide that if (i) the
Settlement Agent is able to contact the NSCC Settling Bank and (ii) the
NSCC Settling Bank notifies the Settlement Agent that it cannot, at
that time, acknowledge or refuse their settlement balance, then the
NSCC Settling Bank will not be deemed to have acknowledged its
settlement balance. The new subsections would provide that if the NSCC
Settling Bank cannot be reached, the NSCC Settling Bank will be deemed
to have acknowledged its settlement balance. In the new subsection (e)
of Section D.1 of Procedure VIII, NSCC would also state that the new
proposed subsection (e) would not apply to a Settling Bank that settles
solely for its own account and opts not to acknowledge its settlement
balance.\24\ As discussed in more detail below, the new subsection (e)
of Section 9 of Rule 55 and Section D.1 of Procedure VIII would also
contain a provision relating to NSCC's ability to exclude an NSCC
Settling Bank's settlement balances from the NSS file if the NSCC
Settling Bank has not acknowledged or been deemed to have acknowledged
its settlement balance under certain circumstances.
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    \24\ Section D.1 of Procedure VIII provides that Settling Bank
that is a Member and settles solely for its own accounts may opt to
not acknowledge it settlement balance. Section D.1 of Procedure
VIII, supra, note 3.
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    NSCC proposes to add a new subsection (g) of Section 9 in Rule 55
and a new subsection (g) of Section D.1 of Procedure VIII which would
provide the Settlement Agent uses the most recent contact information
provided by the NSCC Settling Bank to the Settlement Agent. These
proposed subsections would also include a requirement that each NSCC
Settling Bank maintains up-to-date and accurate contact details with
the Settlement Agent on an ongoing basis.
    NSCC proposes to delete language in Section D.1 of Procedure VIII
that states that if NSCC has not received funds from the Settling Bank
with a net-net debit and the Settling Bank has not sent refusal
messages and/or an acknowledgment message to NSCC by the deadline, NSCC
begins failure to settle procedures in respect to the Settling Bank at
this time. NSCC is proposing to delete this language to reflect the new
passive acknowledgment process.
(ii) Amend the Definition of ``AIP Settling Bank'' To Correspond With
the Definition of ``Settling Bank'' and Remove AIP Settling Bank Only
Member as a Membership Category.
    The proposed change would amend the definition of AIP Settling Bank
to correspond with the definition of Settling Bank and remove AIP
Settling Bank Only Member as a membership category. AIP Settling Bank
is currently defined as either (i) an AIP Member which is a bank or
trust company meeting certain criteria or (ii) an AIP Settling Bank
Only Member meeting certain criteria and which have entered into an
effective Appointment of AIP Settling Bank and AIP Settling Bank
Agreement. Since the inception of AIP, AIP Members have used (a)
Members that are banks or trust companies meeting certain criteria and
(b) Settling Bank Only Members meeting certain criteria and which have
entered into Appointments of AIP Settling Bank and AIP Settling Bank
Agreements as AIP Settling Banks. Since the inception of AIP, there
have been no AIP Members that have acted as AIP Settling Banks and
there have been no entities that have become AIP Settling Bank Only
Members.
    The proposed change would amend the definition of AIP Settling Bank
in Rule 1 to provide that an AIP Settling Bank would be either (i) a
Member which is a bank or trust company meeting certain criteria or
(ii) a Settling Bank Only Member meeting certain criteria and which has
entered into an effective Settling Bank Agreement which would be
identical to the definition of Settling Bank. The definition of
Settling Bank Agreement distinguishes between Settling Banks and AIP
Settling Banks by indicating that in the Settling Bank Agreement
entered into by an AIP Settling Bank, the AIP Settling Bank undertakes
to perform settlement services for the AIP Member or the AIP Non-Member
Fund which is a party thereto whereas Settling Banks make such
undertakings with respect to Members and Limited Members that are not
AIP Members. In addition, NSCC would delete the definition of AIP
Settling Bank Only Member in Rule 1 and remove the term throughout the
Rules, including a description of AIP Settling Bank Only Members in
Section 2.(ii)(i) of Rule 2. NSCC would also change the reference to
2.(ii)(i) of Rule 2 in the definition of AIP Settling Bank to 2.(ii)(f)
of Rule 2 to reflect that is referring to a Member which would qualify
as a Settling Bank Only Member rather as an AIP Settling Bank Only
Member. In addition, NSCC would amend Section 5 of Rule 3 to provide
that NSCC shall maiCtain a list of Members and Settling Bank Only
Members that have agreed to act as AIP Settling Banks to reflect that
AIP Members would use Members and Settling Bank Only Members as AIP
Settling Banks, as discussed above. Section 1 of Rule 55 would also be
amended to reflect that an AIP Settling Bank shall be a Member or a
Settling Bank Only Member. Addendum B would be amended to remove the
references to AIP Settling Bank Only Members and to delete Section 11
which relates to membership requirements for AIP Settling Bank Only
Members.
(iii) Codify Certain Settlement Processes
    The proposed rule change would codify certain settlement processes
that are currently being used by NSCC.
    Proposed Change to Codify Certain Settlement Processes for AIP
Settlement
    Currently there are a number of settlement processes used in AIP
Settlement that are not explicitly set forth in the Rules. These
processes are the same processes that are set forth in the Section D.1
of Procedure VIII with respect to EOD Settlement and would be added in
Section 9 of Rule 55 as follows:

 A statement that DTC will act as Settlement Agent for NSCC and
the AIP Settling Banks in a new subsection (b)
 A requirement that AIP Settling Banks must acknowledge by the
AIP Acknowledgment Cutoff Time via the terminal system their AIP Debit
Balance and their AIP Credit Balance and their intention to settle or
refusal to settle by the AIP Acknowledgment Cutoff Time in a new
subsection (b); as proposed above, there would be an AIP Acknowledgment
Cutoff Time with respect to AIP Settlement for the AIP Debit Balances
and the AIP Credit Balances
 A statement that if the AIP Settling Bank has an AIP Debit
Balance, then the AIP Settling Bank's account at the Federal Reserve
Bank will be debited; if the AIP Settling Bank has an AIP Credit
Balance, then the AIP Settling Bank's Federal Reserve Bank account will
be credited in new subsection (c)
 A statement that if the AIP Settling Bank sends a refusal
message it must acknowledge its new AIP Debit Balance and AIP Credit
Balance by the AIP Acknowledgment Cutoff Time via the terminal system
and its intention to settle in new subsection (d)
 A statement that the AIP Settling Bank that cannot send an

acknowledgment or refusal message may contact the Settlement Agent and
instruct the Settlement Agent to act on its behalf in new subsection
(f)
Proposed Change To Allow NSCC To Exclude NSCC Settling Bank Balance
From NSS file
    The proposed rule change would provide that if (1) passive
acknowledgment does not apply because the NSCC Settling Bank has
notified the Settlement Agent that it cannot yet acknowledge or refuse
its settlement balance and (2) the payment deadline established by NSCC
is approaching, then NSCC would have the ability to exclude the NSCC
Settling Bank's settlement balance from the NSS file. This would allow
settlement to be completed for the other NSCC Settling Banks that are
part of the NSS file. As described above, as it gets closer to the
payment deadline, NSCC may need to remove the NSCC Member's balance
from the NSS file in order to allow settlement to be completed for the
other NSCC Settling Banks that are part of the NSS file. As NSCC would
be codifying its current practice with this proposed rule change, this
proposed change would not change the current settlement process of NSCC
Settling Banks that are excluded from the NSS file.
    This proposed change is reflected in the second paragraph of new
subsection (e) of Section 9 of Rule 55 and new subsection (e) of
Section D.1 of Procedure VIII.
(iv) Proposed Technical, Clarifying and Conforming Changes
    NSCC is proposing to make the following technical, clarifying and
conforming changes in the Rules to better clarify the meaning of
certain provisions and to be consistent with other provisions in the
Rules:

 Remove the space after ``Section 2.'' in the new proposed
reference to ``Section 2. (ii)(f)'' in two places in the definition of
AIP Settlement Bank in Rule 1 for clarity
 Add a definition of ``FRB'' as the Board of Governors of the
Federal Reserve System and each Federal Reserve Bank, as appropriate,
to reflect the usage of FRB in the Rules
 Add a definition of FRBNY as the Federal Reserve Bank of New
York, to reflect the usage of FRBNY in the Rules
 Change the reference of ``2. (ii)(j)'' to ``2.(ii)(i)'' in the
definition of Investment Manager/Agent Member in Rule 1 to reflect the
proposed renumbering of that section
 Add AIP Settling Banks in the definition of Settlement Agent
in Rule 1 to clarify that the Settlement Agent also acts on behalf of
AIP Settling Banks with respect to AIP Settlement
 Add quotation marks to TPP Member in the definition of Third
Party Provider Member to conform usage of quotation marks in other
defined terms in the Rules
 Change the reference of ``2. (ii)(k)'' to ``2.(ii)(j)'' in the
definition of Third Party Provider Member in Rule 1 to reflect the
proposed renumbering of that section
 Renumber Sections 2.(ii)(j) and 2.(ii)(k) to reflect the
deletion of AIP Settling Bank Only Member in Section 2.(ii)(i)
 Add ``Rule 55'' in Section 7(a) of Rule 53 to acknowledge that
certain AIP settling processes are set forth in Rule 55
 Add subsection references to Section 9 of Rule 55 for clarity
 Replace ``the Procedures'' with ``Section 9 above'' in Section
10 of Rule 55 to reflect that the manner and time specified for AIP
Refusal is set forth in Section 9 of Rule 55
 Change ``Refusal'' to ``AIP Refusal'' in Sections 10, 11 and
12 of Rule 55 to reflect the proper defined term for refusals with
respect to AIP Settlement
 Add ``or the Settlement Agent'' in two places in Section 10 of
Rule 55 to reflect that the bank used for settlement and the manner of
payment of settlement may be specified by NSCC or the Settlement Agent
 Remove ``provided in the Procedures'' and ``in the
Procedures'' and add ``specified in accordance with settlement
procedures adopted by the Corporation or the Settlement Agent'' in
Section 10 of Rule 55 to reflect that the bank account and manner of
payment may be specified in settlement procedures adopted by NSCC or
the Settlement Agent
 Replace ``net debit'' and ``debit balance'' with ``AIP Debit
Balance'' in Section 10 of Rule 55 to reflect the existing defined term
 Add ``settlement'' before ``procedures'' in Section 10 of Rule
55 to clarify that the reference is to settlement procedures
 Change ``Settling Bank'' to ``AIP Settling Bank'' in Section
11 of Rule 55 to reflect the proper defined term for settling banks
with respect to AIP Settlement
 Change ``Settling AIP Bank'' to ``AIP Settling Bank'' in
Section 12 of Rule 55 to reflect the proper defined term
 Add a defined term ``Settlement Member'' in new subsection (a)
in Section D.1 of Procedure VIII which would be a Member, Mutual Fund/
Insurance Service Member, Insurance Carrier/Retirement Service Member
or Fund Member for which a Settling Bank is the designated Settling
Bank to replace the reference to ``each of its participant's accounts''
 Add a defined term ``Settlement Balance'' in new subsection
(a) in Section D.1. of Procedure VIII which would be the Settling
Bank's final settlement balance and replace the phrase ``settlement
figure'' with ``settlement balance'' to reflect usage elsewhere when
referring to the settlement balance
 Replace ``NSCC'' with ``Settlement Agent'' in new subsection
(b) in D.1 of Procedure VIII to reflect that the Settling Banks
acknowledge to the Settlement Agent their intention to settle
 Replace ``settlement figures'' with ``Settlement Balances'' in
new subsection (b) in Section D.1. of Procedure VIII to reflect the new
defined term
 Replace the list of Members and Limited Members that may use a
Settling Bank with the new defined term ``Settlement Members'' in new
subsection (b) in Section D.1 of Procedure VIII to reflect the new
defined term.
 Remove the sentence in new subsection (b) in D.1 of Procedure
VIII that states that an acknowledgment must be sent even if the
Settling Bank has wired the amount of its net net debit prior to the
cut off time because the statement is unnecessary as it is unlikely
that situation would occur
 Add a statement in new subsection (b) in D.1 of Procedure VIII
to codify current practice set forth in the Settlement Service Guide
with respect to Participants that applies to Members that a Settling
Bank that is a Member may not refuse to settle for itself
 Revise new subsection (f) in Section D.1. of Procedure VIII to
remove outdated references to NSCC, the telephone as the only means of
contact and a number for Settlement Operations in the membership
directory to reflect the current procedures such that a Settling Bank
that cannot send an acknowledgment or refusal message may contact the
Settlement Agent and instruct the Settlement Agent act on its behalf
 Replace ``NSCC'' with ``Settlement Agent'' in two places in
new subsection (h) in Section D.1 of Procedure VIII to reflect that
Settling Banks send their acknowledgments to the Settlement Agent

 Replace ``this time'' with ``the settlement deadline'' in the
new subsection (h) in Section D.1 of Procedure VIII to clarify that it
is referring to the settlement deadline
 Replace the list of Members and Limited Members for which a
Settling Bank may send a refusal with ``Settlement Member'' to reflect
the proposed new defined term in the new subsection (i) in Section D.1
of Procedure VIII
 Replace ``Corporation'' with ``Settlement Agent'' in new
subsection (j) in Section D.1 of Procedure VIII to reflect that the
Settlement Agent will receive funds and initiate payments to Settling
Banks
 Replace ``Federal Reserve Bank's National Settlement Service''
with ``NSS'' in Section D.2. of Procedure VIII to reflect that NSCC is
proposing to move the defined term NSS earlier in the Rules
 Capitalize ``balance'' in Section D.2. of Procedure VIII to
reflect the new defined term Settlement Balance
 Make ``Settlement'' lowercase in Section D.3 of Procedure VIII
to reflect that Settlement is not a defined term
 Add the word ``operations'' before ``department'' in Section
D.3 of Procedure VIII to reflect that the name of the department is the
settlement operations department
 Capitalize ``settlement balance'' in Section D.3 of Procedure
VIII to reflect the new defined term
2. Statutory Basis
    NSCC believes this proposal is consistent with the requirements of
the Act, and the rules and regulations thereunder applicable to a
registered clearing agency. Specifically, NSCC believes this proposal
is consistent with Section 17A(b)(3)(F) of the Act.\25\
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules
be designed to promote the prompt and accurate clearance and settlement
of securities transactions.\26\ The EOD Settlement and AIP Settlement
processes at NSCC reflect cash debits and credits of payments that are
associated with securities transactions that will ultimately be subject
to securities settlement. NSCC believes that failure by an NSCC
Settling Bank to timely acknowledge that it will settle its settlement
balance with NSCC or to refuse to pay its settlement balance creates
uncertainty with respect to the timely completion of settlement at
NSCC. NSCC believes that the introduction of the proposed passive
acknowledgment process described in Item II.(A)1.(i) above would help
promote the prompt and accurate clearance and settlement of securities
transactions in circumstances where an NSCC Settling Bank has not
responded by the Acknowledgment Cutoff Time or the AIP Acknowledgment
Cutoff Time, as applicable, and cannot be reached by the Settlement
Agent. In such circumstances, as described above, NSCC would deem that
such NSCC Settling Bank has acknowledged that it will settle settlement
balances. This would enable NSCC to submit the NSS file (through the
Settlement Agent) as is for processing in a timely manner, and thereby
enhance certainty with respect to the timely completion of settlement.
Timely completion of such settlement at NSCC for as many members as
possible promotes the prompt and accurate clearance and settlement of
securities transactions as a general matter, because the EOD Settlement
and AIP Settlement processes at NSCC involve debits and credits that
will ultimately be subject to securities settlement. As such, NSCC
believes the proposed change to introduce the passive acknowledgment
process described in Item II.(A)1.(i) above is designed to promote the
prompt and accurate clearance and settlement of securities
transactions, consistent with Section 17A(b)(3)(F) of the Act.\27\
---------------------------------------------------------------------------

    \26\ Id.
    \27\ Id.
---------------------------------------------------------------------------

    NSCC also believes that the proposal to (a) amend the definition of
``AIP Settling Bank'' to correspond with the definition of ``Settling
Bank'' and remove AIP Settling Bank Only Member as a membership
category described in Item II.(A)1.(ii) above and (b) codify certain
settlement processes for AIP Settlement described in Item II.(A)1.(iii)
above are designed to promote the prompt and accurate clearance and
settlement of securities transactions.\28\ As discussed above settling
banks used for AIP Settlement have historically been Members or
Settling Bank Only Members and not AIP Members or AIP Settling Bank
Only Members. In addition, there have been no entities that have become
AIP Settling Bank Only Members. The existing processes related to AIP
Settlement that are being added as described in Item II.(A)1.(iii)
above are existing processes in AIP Settlement. NSCC believes that in
each case making such provisions explicit in the Rules is consistent
with Section 17(A)(b)(3)(F) of the Act \29\ because such changes would
enhance the clarity and transparency of the Rules with respect to AIP
Settlement. By enhancing the clarity and transparency of the Rules, the
proposed changes would allow AIP Members and AIP Non-Member Funds to
more efficiently and effectively conduct their business in accordance
with the Rules, which NSCC believes would promote the prompt and
accurate clearance and settlement of securities transactions. As such,
NSCC believes that the proposed changes would be consistent with
Section 17A(b)(3)(F) of the Act.\30\
---------------------------------------------------------------------------

    \28\ Id.
    \29\ Id.
    \30\ Id.
---------------------------------------------------------------------------

    NSCC also believes that the proposal to codify NSCC's ability to
exclude an NSCC Settling Bank's balance from the NSS file described in
Item II.(A)1.(iii) above is designed to promote the prompt and accurate
clearance and settlement of securities transactions.\31\ If an NSCC
Settling Bank notifies the Settlement Agent that it cannot yet
acknowledge or refuse, NSCC would not be able to submit the NSS file
(through the Settlement Agent) with that NSCC Settling Bank's
settlement balance included. If the NSCC Settling Bank does not
ultimately respond with either an acknowledgment or refusal, then NSCC
must have the ability to exclude such NSCC Settling Bank's settlement
balance from the NSS file. In this way, settlement can be completed for
all other NSCC Members. Therefore, NSCC believes the proposed changes
to codify NSCC's ability to exclude an NSCC Settling Bank's balance
from the NSS file described in in Item II.(A)1.(iii) above is designed
to promote the prompt and accurate clearance and settlement of
securities transactions, consistent with Section 17A(b)(3)(F) of the
Act.\32\
---------------------------------------------------------------------------

    \31\ Id.
    \32\ Id.
---------------------------------------------------------------------------

    NSCC also believes that the proposed rule changes to make the
technical, clarifying and conforming changes, as described in Item
II.(A)1.(iv) above, are designed to promote the prompt and accurate
clearance and settlement of securities transactions by ensuring that
the Rules remain clear and accurate to NSCC Members and that NSCC
Members understand EOD Settlement and AIP Settlement. Having clear and
accurate Rules would facilitate members' understanding of those Rules
and provide members with increased predictability and certainty
regarding their obligations. As such, NSCC believes these proposed
changes would promote the prompt and accurate clearance and settlement
of securities,

consistent with Section 17A(b)(3)(F) of the Act.\33\
---------------------------------------------------------------------------

    \33\ Id.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    NSCC does not believe that the proposed rule changes described in
Item II.(A)1.(i) above to introduce the passive acknowledgment process
for NSCC Settling Banks would have any impact on competition,\34\
because the proposed passive acknowledgment process would not have an
impact on the NSCC Settling Banks' current ability to timely
acknowledge their settlement balances, as it is intended to address
situations where an NSCC Settling Bank is not responding and cannot be
reached. If an NSCC Settling Bank notifies the Settlement Agent that
the NSCC Settling Bank cannot, at that time, submit its acknowledgment
that it will settle its settlement balances with NSCC or its refusal to
pay its settlement balances, then the NSCC Settling Bank would not be
deemed to have acknowledged that it will settle such settlement
balances with NSCC. Therefore, NSCC believes that the proposed passive
acknowledgment process described in Item II.(A)1.(i) above would not
have any impact on competition.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

    NSCC also does not believe that the proposal to amend the
definition of ``AIP Settling Bank'' to correspond with the definition
of ``Settling Bank'' and remove AIP Settling Bank Only Member as a
membership category described in Item II.(A)1.(ii) above would have any
impact on competition \35\ because settling banks used for AIP
Settlement have historically been Members or Settling Bank Only Members
and not AIP Members or AIP Settling Bank Only Members. In addition,
there have been no entities that have become AIP Settling Bank Only
Members. As such NSCC does not believe the proposed changes to (a)
amend the definition of ``AIP Settling Bank'' to correspond with the
definition of ``Settling Bank'' and remove AIP Settling Bank Only
Member as a membership category described in Item II.(A)1.(ii) above
would affect the rights or obligations of NSCC or NSCC Members or have
any impact on competition.
---------------------------------------------------------------------------

    \35\ Id.
---------------------------------------------------------------------------

    NSCC also does not believe that the proposed changes to exclude an
NSCC Settling Bank's balance from the NSS file, as described in Item
II.(A)1.(iii) above, would have any impact on competition \36\ because
this proposal, if invoked, would require the affected NSCC Settling
Bank to send payment to NSCC by wire, which is an alternate form of
payment already available to the NSCC Settling Banks. NSCC believes
that ready availability of a reasonable payment alternative would
result in the rights and obligations of the NSCC Settling Banks not
being adversely affected. As such, NSCC does not believe that the
proposed changes to exclude an NSCC Settling Bank's balance from the
NSS file, as described in Item II.(A)1.(iii) above, would have any
impact on competition.
---------------------------------------------------------------------------

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

    NSCC also does not believe that the proposed rule changes to codify
the AIP Settlement processes described in Item II.(A)1.(iii) or to make
the technical, clarifying and conforming changes described in Item
II.(A)1.(iv) above would have an impact on competition.\37\ These
changes would simply provide additional clarity within the Rules and
not affect NSCC Members' rights and obligations.
---------------------------------------------------------------------------

    \37\ Id.
---------------------------------------------------------------------------

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

    NSCC has not received or solicited any written comments relating to
this proposal. If any written comments are received, they will be
publicly filed as an Exhibit 2 to this filing, as required by Form 19b-
4 and the General Instructions thereto.
    Persons submitting comments are cautioned that, according to
Section IV (Solicitation of Comments) of the Exhibit 1A in the General
Instructions to Form 19b-4, the Commission does not edit personal
identifying information from comment submissions. Commenters should
submit only information that they wish to make available publicly,
including their name, email address, and any other identifying
information.
    All prospective commenters should follow the Commission's
instructions on how to submit comments, available at https://www.sec.gov/regulatory-actions/how-to-submit-comments. General
questions regarding the rule filing process or logistical questions
regarding this filing should be directed to the Main Office of the
Commission's Division of Trading and Markets at
[email protected] or<PHONE_NUMBER>.
    NSCC reserves the right not to respond to any comments received.

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 proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.
    The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.

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-2021-013 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-NSCC-2021-013. 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 website (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 website 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
DTCC's website (http://dtcc.com/legal/sec-rule-filings.aspx). All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NSCC-2021-013 and should be
submitted on or before December 29, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
---------------------------------------------------------------------------

    \38\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-26531 Filed 12-7-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Notices]
[Pages 72492-72493]
[FR Doc No: 2011-30193]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65770; File Nos. SR-BATS-2011-038; SR-BYX-2011-025; SR-
BX-2011-068; SR-CBOE-2011-087; SR-C2-2011-024; SR-CHX-2011-30; SR-EDGA-
2011-31; SR-EDGX-2011-30; SR-FINRA-2011-054; SR-ISE-2011-61; SR-NASDAQ-
2011-131; SR-NSX-2011-11; SR-NYSE-2011-48; SR-NYSEAmex-2011-73; SR-
NYSEArca-2011-68; SR-Phlx-2011-129]

Self-Regulatory Organizations; BATS Exchange, Inc.; BATS Y-
Exchange, Inc.; NASDAQ OMX BX, Inc.; Chicago Board Options Exchange,
Incorporated; C2 Options Exchange, Incorporated; Chicago Stock
Exchange, Inc.; EDGA Exchange, Inc.; EDGX Exchange, Inc.; Financial
Industry Regulatory Authority, Inc.; International Securities Exchange
LLC; The NASDAQ Stock Market LLC; New York Stock Exchange LLC; NYSE
Amex LLC; NYSE Arca, Inc.; National Stock Exchange, Inc.; NASDAX OMX
PHLX LLC; Notice of a Designation of a Longer Period for Commission
Action on Proposed Rule Changes Relating to Trading Halts Due to
Extraordinary Market Volatility

November 17, 2011.

I. Introduction

    On September 27, 2011, each of BATS Exchange, Inc. (``BATS''), BATS
Y-Exchange, Inc. (``BYX''), NASDAQ OMX BX, Inc. (``BX''), Chicago Board
Options Exchange, Incorporated (``CBOE''), C2 Options Exchange,
Incorporated (``C2''), Chicago Stock Exchange, Inc. (``CHX''), EDGA
Exchange, Inc (``EDGA''), EDGX Exchange, Inc. (``EDGX''), Financial
Industry Regulatory Authority, Inc. (``FINRA''), International
Securities Exchange LLC (``ISE''), The NASDAQ Stock Market LLC
(``Nasdaq''), National Stock Exchange, Inc. (``NSX''), New York Stock
Exchange LLC (``NYSE''), NYSE Amex LLC (``NYSE Amex''), NYSE Arca, Inc.
(``NYSE Arca''), and NASDAQ OMX PHLX LLC (``Phlx'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) \1\ of the Securities Exchange Act of 1934
(``Act''),\2\ and Rule 19b-4 thereunder,\3\ proposed rule changes to
amend certain of their respective rules relating to trading halts due
to extraordinary market volatility. The proposed rule changes were
published for comment in the Federal Register on October 4, 2011.\4\
The

Commission received seven comment letters on these proposals.\5\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release Nos. 65437 (September
28, 2011), 76 FR 61466 (October 4, 2011); 65428 (September 28,
2011), 76 FR 61453 (October 4, 2011); 65429 (September 28, 2011), 76
FR 61432 (October 4, 2011); 65433 (September 28, 2011), 76 FR 61453
(October 4, 2011); 65438 (September 28, 2011), 76 FR 61447 (October
4, 2011); 65426 (September 28, 2011), 76 FR 61460 (October 4, 2011);
65431 (September 28, 2011), 76 FR 61425 (May 12, 2011); 65440
(September 28, 2011), 76 FR 61444 (October 4, 2011); 65430
(September 28, 2011), 76 FR 61429 (October 4, 2011); 65425
(September 28, 2011), 76 FR 61438 (October 4, 2011); 65435 (May 6,
2011), 76 FR 61416 (October 4, 2011); 65436 (September 28, 2011), 76
FR 61450 (October 4, 2011); 65427 (September 28, 2011), 76 FR 61457
(October 4, 2011); 65432 (September 28, 2011), 76 FR 61422 (October
4, 2011); 65439 (September 28, 2011), 76 FR 61463 (October 4, 2011);
65434 (September 28, 2011), 76 FR 61419 (October 4, 2011).
    \5\ See Letter to Elizabeth M. Murphy, Secretary, Commission,
from Ann L. Vlcek, Managing Director and Associate General Counsel,
the Securities Industry and Financial Markets Association, dated
October 27, 2011; Letter to Commission, from James J. Angel, Ph.D.,
CFA, Associate Professor of Finance, Georgetown University,
McDonough School of Business, dated October 25, 2011; Letter to
Elizabeth M. Murphy, Secretary, Commission, from Craig S. Donohue,
CME Group, Inc., dated October 25, 2011; Letter to Elizabeth M.
Murphy, Secretary, Commission, from Commissioner Bart Chilton,
Commodity Futures Trading Commission, dated October 25, 2011; Letter
to Elizabeth M. Murphy, Secretary, Commission, from Richard H.
Baker, President and CEO, Managed Funds Association, dated October
25, 2011; Letter from Suzanne H. Shatto, dated October 20, 2011;
Letter from Mark Roszak, dated October 4, 2011.
---------------------------------------------------------------------------

    Section 19(b)(2) of the Act \6\ provides that within 45 days of the
publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether these proposed rule changes should be disapproved.
The 45th day from the publication of notice of filing of these proposed
rule changes is November 18, 2011. The Commission is extending this 45-
day time period.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    The Commission finds it appropriate to designate a longer period
within which to take action on these proposed rule changes so that it
has sufficient time to consider these proposed rule changes, which
would revise the rules relating to trading halts due to extraordinary
market volatility, and to consider the comment letters that have been
submitted in connection with them.
    Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\7\ designates December 30, 2011, as the date by which the
Commission should either approve or disapprove or institute proceedings
to determine whether to disapprove these proposed rule changes.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(31).
---------------------------------------------------------------------------

Kevin O'Neill,
Deputy Secretary.
[FR Doc. 2011-30193 Filed 11-22-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 122 (Monday, June 25, 2018)]
[Rules and Regulations]
[Pages 29438-29439]
[FR Doc No: 2018-13498]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2017-0273]

Drawbridge Operation Regulation; Atlantic Intracoastal Waterway,
West Palm Beach, FL

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation from regulations; request for
comments, extension.

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

SUMMARY: The Coast Guard has issued a temporary deviation from the
operating schedule that governs the Flagler Memorial (SR A1A) Bridge,
mile 1021.8, the Royal Park (SR 704) Bridge, mile 1022.6, and the
Southern Boulevard (SR 700/80) Bridge, mile 1024.7, across the

Atlantic Intracoastal Waterway, at West Palm Beach, Florida. This
deviation will extend the test to change the drawbridge operation
schedules to determine whether permanent changes to the schedules are
needed. This deviation allows the Flagler Memorial, Royal Park and
Southern Boulevard Bridges to operate on alternative schedules when the
President of the United States, members of the First Family, or other
persons under the protection of the Secret Service visit Mar-a-Lago.
This deviation is necessary to accommodate the increase in vehicular
traffic when the presidential motorcade is in transit.

DATES: This deviation is effective without actual notice from June 25,
2018 through 11:59 p.m. on August 29, 2018. For purposes of
enforcement, actual notice will be used from 12:01 a.m. on June 1,
2018, until June 25, 2018.
    Comments and relate material must reach the Coast Guard on or
before July 25, 2018.

ADDRESSES: You may submit comments identified by docket number USCG-
2017-0273 using Federal eRulemaking Portal at http://www.regulations.gov.
    See the ``Public Participation and Request for Comments'' portion
of the SUPPLEMENTARY INFORMATION section below for instructions on
submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions on this test
deviation, call or email CWO Robert Wooten, Coast Guard Sector Miami,
FL, Waterways Management Division, telephone<PHONE_NUMBER>, email
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background, Purpose and Legal Basis

    On August 17, 2017, the Coast Guard published a notice of deviation
from drawbridge regulation with request for comments in the Federal
Register (82 FR 39019) to test proposed changes. Three comments were
received, which were in favor of the regulation changes. Due to delays
in processing this proposed regulatory change, on March 6, 2018, the
Coast Guard published a notice of deviation from regulations with
request for comments extension in the Federal Register (82 FR 9431) to
allow for additional time for the public to comment. Two comments were
received; one in favor of the regulation change and one was not
relevant to the regulation. On May 21, 2018, the Coast Guard published
a notice of proposed rulemaking (NPRM) entitled Drawbridge Operation
Regulation; Atlantic Intracoastal Waterway, Palm Beach, FL in the
Federal Register (83 FR 23398). The submission deadline for public
comments related to that proposed rule is July 5, 2018. Due to
unanticipated delays in processing this regulatory change, the Coast
Guard finds it necessary to extend the test deviation to allow
additional time for public comment. The changes to the operating
schedules proposed in this deviation will coincide with the
establishment of the Presidential Security Zone (82 FR 17295).
    When the President of the United States, members of the First
Family, or other persons under the protection of the Secret Service
visit Mar-a-Lago, drawbridge openings have caused traffic backups in
the West Palm Beach area. The increase in traffic congestion occurs
when the presidential motorcade is in transit, which closes the
Southern Boulevard Bridge to vehicle and vessel traffic. This action
requires through traffic to use the Flagler Memorial and Royal Park
Bridges. The Mayor of Palm Beach has asked the Coast Guard and the
bridge owner, Florida Department of Transportation, to test a change to
the operating regulations of those bridges.
    During this temporary deviation, the Flagler Memorial Bridge is
allowed to remain closed to navigation from 2:15 p.m. to 5:30 p.m. with
the exception of a once an hour opening at 2:15 p.m., 3:15 p.m., 4:15
p.m. and 5:15 p.m., weekdays only, if vessels are requesting an
opening. The Royal Park Bridge is allowed to remain closed to
navigation from 2:15 p.m. to 5:30 p.m. with the exception of a once an
hour opening at 2:30 p.m., 3:30 p.m., 4:30 p.m. and 5:30 p.m., weekdays
only, if vessels are requesting an opening. At all other times the
bridges will operate per their normal schedules, published in 33 CFR
117.261(u) and (v), respectively.
    The operating schedule of the Southern Boulevard Bridge, which is
closest to Mar-a-Lago, will be allowed to remain closed to navigation
whenever the presidential motorcade is in transit. At all other times
the bridge shall open on the quarter and three-quarter hour, or as
directed by the on-scene designated representative.
    This test deviation will have an impact on marine traffic while
alleviating some vehicle traffic backups. Tugs with tows are not exempt
from this regulation. Vessels able to pass through the Flagler Memorial
and Royal Park Bridges in the closed position may do so at any time.
The bridges will be able to open for emergencies. The Southern
Boulevard Bridge will be under the control of the on-scene designated
representative.
    The Coast Guard will also inform the users of the waterways through
our Local and Broadcast Notices to Mariners of the change in operating
schedule for the bridge so that vessel operators can arrange their
transits to minimize any impact caused by the temporary deviation.
    In accordance with 33 CFR 117.35(e), the drawbridges must return to
their regular operating schedules immediately at the end of the
effective period of this temporary deviation. This deviation from the
operating regulations is authorized under 33 CFR 117.35.

II. Public Participation and Request for Comments

    We view public participation as essential to effective rulemaking,
and will consider all comments and material received during the comment
period. Your comment can help shape the outcome of this rulemaking. If
you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation.
    We encourage you to submit comments through the Federal eRulemaking
Portal at http://www.regulations.gov. If your material cannot be
submitted using http://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions.
    We accept anonymous comments. All comments received will be posted
without change to http://www.regulations.gov and will include any
personal information you have provided. For more about privacy and the
docket, visit http://www.regulations.gov/privacynotice.
    Documents mentioned in this notice as being available in this
docket and all public comments, will be in our online docket at http://www.regulations.gov and can be viewed by following that website's
instructions. Additionally, if you go to the online docket and sign up
for email alerts, you will be notified when comments are posted or a
final rule is published.

    Dated: June 18, 2018.
Barry L. Dragon,
Director, Bridge Branch, Seventh Coast Guard District.
[FR Doc. 2018-13498 Filed 6-22-18; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 82, Number 63 (Tuesday, April 4, 2017)]
[Notices]
[Page 16387]
[FR Doc No: 2017-06608]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER17-1316-000]

Quilt Block Wind Farm LLC; Supplemental Notice That Initial
Market-Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
Quilt Block Wind Farm LLC's application for market-based rate
authority, with an accompanying rate tariff, noting that such
application includes a request for blanket authorization, under 18 CFR
part 34, of future issuances of securities and assumptions of
liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214). Anyone filing a motion to intervene or protest must serve a
copy of that document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is April 18, 2017.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
5 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for electronic review in the
Commission's Public Reference Room in Washington, DC. There is an
eSubscription link on the Web site that enables subscribers to receive
email notification when a document is added to a subscribed docket(s).
For assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.

    Dated: March 29, 2017.
Kimberly D. Bose,
Secretary.
[FR Doc. 2017-06608 Filed 4-3-17; 8:45 am]
 BILLING CODE 6717-01-P


MEMORANDUM

DATE:		August 13, 2014

TO:		Clean Power Plan for Existing Power Plants; Docket Id: OAR - 2013-0602

FROM:	EPA Region 1

SUBJECT:	August 11, 2014, Meeting with Maine State Staff Regarding Proposed Carbon Power Plan for Existing Power Plants
--------------------------------------------------------------------------------

SUMMARY

      A meeting was held between EPA and the attendees listed below on August 11, 2014 to discuss the proposed Carbon Power Plan for Existing Power Plants. Discussion covered state goal calculations, crediting of renewable energy and energy efficiency, and accounting for imports and exports.

ATTENDEES (all by phone)

Maine Department of Environmental Protection:
Marc Cone, Eric Kennedy, Erle Townsend, Jaime Farrin

Maine Governor's Energy Office:
Lisa Smith

EPA:
Shutsu Wong
Dave Conroy
John Moskal
Bob McConnell
Joe Bryson
Matt Clouse
Michael Cohen
Colin Boswell
Jim Ketcham-Colwill
Julia Miller
Jeremy Mark
Denise Mulholland
Juan Santiago
David Solomon
Lora Strine
Erika Wilson

Questions provided by Maine are below:

      1.    We understand  that existing hydro power generation was not included in the baseline and the electricity generated from hydro is currently not being considered creditable in the future unless it is new. What constitutes "new"?   What does that mean?  We would like specific calculations as to how EPA arrived at Maine's baseline rate and then how EPA calculated our target rate.

      2.    How is existing wind powered generation considered in the baseline calculation? Would existing wind and future wind generations be considered similarly as hydro generation? What is the cut-off date to distinguish between existing and new? Can Maine use existing wind generation as an offset for compliance? In calculating the offset for RE generation, do we use the generation capacity, or the actual MWh of generation (capacity factor consideration)?

      3.    We think we have heard that RE generated outside of the country would not be creditable. Is that true?  In northern Maine the grid is connected to the Canadian grid and needs to rely on generation from out of the country.  In addition, some of the renewable electricity proposed to be generated in northern Maine will need to be transmitted through Canada and then back into Maine to connect with ISO New England.  Would that also not be considered creditable towards our compliance goal?

      4.    Who may take credit for carbon avoided by RE projects if the generation is created in Maine but is being used to meet RPS requirements in another state? Does the existence of a purchase power agreement with an out-of-state consumer for a particular RE project eliminate that project as a source for offset MWh for compliance? What circumstances allow Maine to retain credit for RE generated for out-of-state consumption, and what causes Maine to lose the credit?

      5.    In the TSD list of generating assets we see where industrial co-generation facilities are exempted.  Could you point us to where that exemption is in the proposed regulation?

      6.    RGGI considers biomass renewable, does the EPA proposal?  Is a >250 MMbtu/hr biomass facility that burns <10% fossil fuel exempt from 111d?

      7.    When the RE building block was calculated, the regional average RPS was used to establish the available RE potential in each individual state in a region. Because Maine's RPS is much higher than the regional average, applying the building block makes it appear that there is much more available carbon savings through RE in Maine than there really is. This penalizes Maine for having so much RE already on line, and this penalty is made worse by the exclusion of existing hydropower from the equation. In reality, approximately 2/3 of Maine's generation is already from renewable sources. Will EPA consider reassessing Maine's goal based on a more realistic analysis of our RPS and our existing fleet of renewable generation?

      8.    Maine's existing CC gas plant facilities are under-utilized. In EPA's proposal, these facilities would increase their production of electricity and resulting CO2.  Because Maine relies so heavily on renewable assets, the baseline and goal rates are below the CC plant rates, any increase use of these CC plants will only increase our final rate.  We are being penalized, whether we choose to comply on a regional basis or individual state basis  -  due to no hydro credit.  All of Maine's CC natural  gas plants meet the 111(b) proposed emission standards for a new plant.  If one of those facilities were to come on line after the applicability date it would not be considered an affected EGU. Why is it considered an affected under the proposed rule, if the identical plant would be exempt at a later time? What if that plant were to be decommissioned, and then re-commissioned after the rule takes effect?  Will EPA consider reassessing these plants as non-affected EGUs?

      9.    How should generating assets that were not listed in the TSDs be accounted for?