[Federal Register Volume 80, Number 93 (Thursday, May 14, 2015)]
[Notices]
[Pages 27714-27716]
[FR Doc No: 2015-11602]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74906; File Nos. SR-DTC-2015-801; SR-NSCC-2015-801]

Self-Regulatory Organizations; The Depository Trust Company;
National Securities Clearing Corporation; Notice of Filing and No
Objection to Advance Notices Relating to the Renewal of Existing Line
of Credit

May 7, 2015.
    Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act entitled the Payment,
Clearing, and Settlement Supervision Act of 2010 \1\ (``Clearing
Supervision Act'') and Rule 19b-4(n)(1)(i) \2\ under the Securities
Exchange Act of 1934, notice is hereby given that on April 20, 2015,
The Depository Trust Company (``DTC'') and National Securities Clearing
Corporation (``NSCC,'' together with DTC, ``Clearing Agencies'') filed
with the Securities and Exchange Commission (``Commission'') the
advance notices SR-DTC-2015-801 and SR-NSCC-2015-801 (``Advance
Notices'') as described in Items I and II below, which Items have been
prepared primarily by the Clearing Agencies. The Commission is
publishing this notice to solicit comments on the Advance Notices from
interested persons and provide notice that the Commission does not
object to the Advance Notices.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
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I. Clearing Agencies' Statement of the Terms of Substance of the
Advance Notices

    The Advance Notices are being filed by the Clearing Agencies in
connection with the renewal of the Clearing Agencies' 364-day
syndicated revolving credit facility (``Renewal''), as more fully
described below.

II. Clearing Agencies' Statement of the Purpose of, and Statutory Basis
for, the Advance Notices

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

(A) Clearing Agencies' Statement on Comments on the Advance Notices
Received From Members, Participants, or Others

    Written comments on the Advance Notices have not yet been solicited
or received. The Clearing Agencies will notify the Commission of any
written comments received by the Clearing Agencies.

(B) Advance Notices Filed Pursuant to Section 806(e) of the Payment,
Clearing and Settlement Supervision Act

Description of the Change
    As part of their liquidity risk management regime, the Clearing
Agencies maintain a 364-day committed

revolving line of credit with a syndicate of commercial lenders which
is renewed every year. The terms and conditions of the current Renewal
will be specified in the Fourteenth Amended and Restated Revolving
Credit Agreement, to be dated as of May 12, 2015 (``Renewal
Agreement''), among the Clearing Agencies,\3\ the lenders party
thereto, the primary administrative agent and the other parties
thereto, and are substantially the same as the terms and conditions of
the existing credit agreement, dated as of May 13, 2014, among the same
parties, as heretofore amended (``Existing Agreement''),\4\ except that
pricing and the amount of the aggregate commitment will change. The
substantive terms of the Renewal are set forth in the Summary of
Indicative Principal Terms and Conditions, dated March 23, 2015, which
is not a public document. The aggregate commitments being sought under
the Renewal will be for an amount of approximately $15 billion for NSCC
and DTC together, with an aggregate commitment of $1.9 billion to DTC
as borrower, and all but $1.9 billion aggregate commitments would be
the commitments to NSCC as borrower, as provided in the Existing
Agreement.
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    \3\ The Renewal Agreement will provide for both DTC and NSCC as
borrowers, with an aggregate commitment of $1.9 billion for DTC and
the amount of any excess aggregate commitment for NSCC. The
borrowers are not jointly and severally liable and each lender has a
ratable commitment to each borrower. DTC and NSCC have separate
collateral to secure their separate borrowings.
    \4\ Last year, the Securities and Exchange Commission
(``Commission'') published Notice of Filing and No Objection to the
Clearing Agencies' advance notice filings with respect to the
Clearing Agencies' renewal beginning on May 13, 2014. See Securities
Exchange Act Release No. 72131 (May 8, 2014), 79 FR 27654 (May 14,
2014) (SR-NSCC-2014-805); Securities Exchange Act Release No. 72132
(May 8, 2014), 79 FR 27658 (May 14, 2014) (SR-DTC-2014-805).
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    This agreement and its substantially similar predecessor agreements
have been in place since the introduction of same day funds settlement
at the Clearing Agencies. The Clearing Agencies require same-day
liquidity resources to cover the failure-to-settle of NSCC's largest
Member or affiliated family of Members, or of the DTC Participant or
affiliated family of Participants with the largest net settlement
obligations. If a NSCC Member defaults on or a DTC Participant fails to
satisfy its end-of-day settlement obligations, each Clearing Agencies
may borrow under its line to enable it, if necessary, to fund
settlement among non-defaulting NSCC Members or DTC Participants.
    Any NSCC borrowing would be secured principally by (i) securities
deposited by Members in NSCC's Clearing Fund (i.e., the Eligible
Clearing Fund Securities, as defined in NSCC's Rule 4, pledged by
Members to NSCC in lieu of cash Clearing Fund deposits), and (ii)
securities cleared through NSCC's Continuous Net Settlement System
(CNS) that were intended for delivery to the defaulting Member upon
payment of its net settlement obligation. NSCC's Clearing Fund \5\
(which operates as its default fund) addresses potential exposure
through a number of risk-based component charges calculated and
assessed daily. As integral parts of NSCC's risk management structure,
the line of credit and the Clearing Fund, together, provide NSCC
liquidity to complete end-of-day money settlement.
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    \5\ NSCC's Clearing Fund includes additional liquidity deposits
by certain Members pursuant to NSCC's Supplemental Liquidity Deposit
rule (Rule 4(A)).
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    Any DTC borrowing would be secured principally by securities that
were intended to be delivered to the defaulting Participant upon
payment of its net settlement obligation and securities previously
designated by the defaulting Participant as collateral. The liquidity
facility is built into DTC's primary risk management controls, the net
debit cap and collateral monitor, which together require that the end-
of-day net funds settlement obligation of a Participant cannot exceed
DTC's liquidity resources and is fully collateralized.
Anticipated Effect on and Management of Risk
    As noted, the committed revolving line of credit is a cornerstone
of Clearing Agencies risk management and this Renewal is critical to
the Clearing Agencies risk management infrastructure. The Renewal does
not otherwise affect or alter the management of risk at the Clearing
Agencies. The Renewal is consistent with Section 805(b) of the Clearing
supervision Act \6\ and with Commission Rule 17Ad-22(d)(11) \7\
(regarding default procedures) because it mitigates liquidity risk.
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    \6\ 12 U.S.C. 5464(b). The Financial Stability Oversight Council
designated NSCC a systemically important financial market utility on
July 18, 2012. See Financial Stability Oversight Council 2012 Annual
Report, Appendix A, http://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf. Therefore, the Clearing
Agencies are required to comply with the Clearing Supervision Act.
    \7\ 17 CFR 240.17Ad-22(d)(11).
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III. Date of Effectiveness of the Advance Notices, and Timing for
Commission Action

    The proposed change may be implemented if the Commission does not
object to the proposed change within 60 days of the later of (i) the
date that the proposed change was filed with the Commission or (ii) the
date that any additional information requested by the Commission is
received. The Clearing Agencies shall not implement the proposed change
if the Commission has any objection to the proposed change.
    The Commission may extend the period for review by an additional 60
days if the proposed change raises novel or complex issues, subject to
the Commission providing the Clearing Agencies with prompt written
notice of the extension. The proposed change may be implemented in less
than 60 days from the date the Advance Notices are filed, or the date
further information requested by the Commission is received, if the
Commission notifies the Clearing Agencies in writing that it does not
object to the proposed change and authorizes the Clearing Agencies to
implement the proposed change on an earlier date, subject to any
conditions imposed by the Commission.
    The Clearing Agencies shall post notice on their Web site of
proposed changes that are implemented.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the Advance
Notices are consistent with the Clearing Supervision 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_ADDRESS>Please include
File Number SR-DTC-2015-801 or SR-NSCC-2015-801 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-DTC-2015-801 or SR-NSCC-
2015-801. One of these file numbers should be included on the subject
line if email is used. To help the Commission process and review your
comments more efficiently, please use only one method. The Commission
will

post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the Advance Notices
that are filed with the Commission, and all written communications
relating to the Advance Notices between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street NE., Washington, DC 20549, on official business days between the
hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Clearing Agencies and on DTCC's Web site at http://dtcc.com/legal/sec-rule-filings.aspx. All comments received will be posted without change;
the Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-DTC-
2015-801 or SR-NSCC-2015-801 and should be submitted on or before June
4, 2015.

V. Commission Findings and Notice of No Objection

    Although the Clearing Supervision Act does not specify a standard
of review for an advance notice, its stated purpose is instructive.\8\
The stated purpose is to mitigate systemic risk in the financial system
and promote financial stability by, among other things, promoting
uniform risk management standards for systemically important financial
market utilities (``FMUs'') and strengthening the liquidity of
systemically important FMUs.\9\ Section 805(a)(2) of the Clearing
Supervision Act \10\ authorizes the Commission to prescribe risk
management standards for the payment, clearing, and settlement
activities of designated clearing entities and financial institutions
engaged in designated activities for which it is the Supervisory Agency
or the appropriate financial regulator. Section 805(b) of the Clearing
Supervision Act \11\ states that the objectives and principles for the
risk management standards prescribed under Section 805(a) shall be to:
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    \8\ See 12 U.S.C. 5461(b).
    \9\ Id.
    \10\ 12 U.S.C. 5464(a)(2).
    \11\ 12 U.S.C. 5464(b).
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     Promote robust risk management;
     promote safety and soundness;
     reduce systemic risks; and
     support the stability of the broader financial system.
    The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act \12\ and the Exchange Act
(``Clearing Agency Standards'').\13\ The Clearing Agency Standards
require registered clearing agencies to establish, implement, maintain,
and enforce written policies and procedures that are reasonably
designed to meet certain minimum requirements for their operations and
risk management practices on an ongoing basis.\14\ Therefore, it is
appropriate for the Commission to review advance notices against these
Clearing Agency Standards and the objectives and principles of these
risk management standards as described in Section 805(b) of the
Clearing Supervision Act.\15\
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    \12\ 12 U.S.C. 5464(a)(2).
    \13\ See Exchange Act Rule 17Ad-22. 17 CFR 240.17Ad-22.
Securities Exchange Act Release No. 68080 (October 22, 2012), 77 FR
66220 (November 2, 2012) (S7-08-11).
    \14\ Id.
    \15\ 12 U.S.C. 5464(b).
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    The Commission believes that the proposal in the Advance Notices is
consistent with Clearing Agency Standards, in particular, Commission
Rule 17Ad-22(d)(11) for NSCC and DTC, and Rule 17Ad-22(b)(3) for NSCC.
Commission Rule 17Ad-22(d)(11) requires that registered clearing
agencies ``establish, implement, maintain and enforce written policies
and procedures reasonably designed to, as applicable . . . establish
default procedures that ensure that the clearing agency can take timely
action to contain losses and liquidity pressures and to continue
meeting its obligations in the event of a participant default.'' The
Commission believes that the proposal is consistent with Rule 17Ad-
22(d)(11) because the renewed credit facility will provide the Clearing
Agencies with a readily available liquidity resource that will enable
them to continue to meet their respective obligations in a timely
fashion, in the event of a member default, thereby helping to contain
losses and liquidity pressures from that default.
    Commission Rule 17Ad-22(b)(3) requires a central counterparty
(``CCP''), like NSCC,\16\ to ``establish, implement, maintain and
enforce written policies and procedures reasonably designed to . . .
[m]aintain sufficient financial resources to withstand, at a minimum, a
default by the participant family to which it has the largest exposure
in extreme but plausible market conditions. . . .'' The Commission
believes that the proposal is consistent with Rule 17Ad-22(b)(3)
because NSCC's proposal to enter into a renewed credit facility will
help it maintain sufficient financial resources to withstand, at a
minimum, a default by an NSCC member to which NSCC has the largest
exposure.
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    \16\ See FSOC 2012 Annual Report, supra note 4. DTC serves as a
central securities depository, not as a CCP, for almost all
corporate and municipal debt and equity securities available for
trading in the United States. Id.
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    For these reasons, the Commission believes the Advance Notices are
consistent with the objectives and principles described in Section
805(b) of the Clearing Supervision Act, including that they reduce
systemic risks and support the stability of the broader financial
system. As discussed above, the renewal of the credit facility will
provide the Clearing Agencies needed liquidity when experiencing severe
liquidity pressure from a member default. Given that the Clearing
Agencies have been designated as systemically important FMUs, the
Clearing Agencies' ability to provide their clearing services during
such an event contributes to reducing systemic risks and supporting the
stability of the broader financial system.
    For the reasons stated above, the Commission does not object to the
Advance Notices.

VI. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the
Clearing Supervision Act,\17\ that the Commission does not object to
the advance notices SR-DTC-2015-801 and SR-NSCC-2015-801 and that DTC
and NSCC be and hereby are authorized to implement the change as of the
date of this notice.
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    \17\ 12 U.S.C. 5465(e)(1)(I).

    By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2015-11602 Filed 5-13-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: March 19, 2010 (Volume 75, Number 53)]
[Notices]
[Page 13294-13295]
[DOCID:fr19mr10-86]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2010-0164]

National Boating Safety Advisory Council

AGENCY: Coast Guard, DHS.

ACTION: Committee management; Notice of meeting.

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SUMMARY: The National Boating Safety Advisory Council (NBSAC) and its
subcommittees will meet on April 15-17, 2010, in Arlington, VA. The
meetings will be open to the public.

DATES: NBSAC will meet April 15, 2010, from 8 a.m. to 3 p.m. and on
April 17, 2010, from 12 noon to 4 p.m. The Boats and Associated
Equipment Subcommittee will meet on April 15, from 3:15 p.m. to 5 p.m.
The Prevention through People Subcommittee will meet on April 16, 2010,
from 8:30 a.m. to 10:45 a.m., and the Recreational Boating Safety
Strategic Planning Subcommittee will meet on April 16, 2010, from 11
a.m. to 5 p.m. and on April 17, 2010, from 8:30 a.m. to 11:15 a.m.
Please note that the meetings may conclude early if the Council has
completed its business.
    All written materials, comments, and requests to make oral
presentations at the meetings should reach Mr. Jeff Ludwig by April 1,
2010, via one of the methods described in ADDRESSES. Requests to have a
copy of your material distributed to each member of the Council prior
to the meeting should reach Mr. Ludwig by April 1, 2010.

ADDRESSES: The meeting will be held at the Holiday Inn Arlington, 4610
N Fairfax Drive, Arlington, VA 22203.
    Please send written material, comments, and requests to make oral
presentations to Mr. Jeff Ludwig by one of the submission methods
described below. All materials, comments, and requests must be
identified by docket number [USCG-2010-0164].
    Submission Methods: Please use only one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
     E-mail<EMAIL_ADDRESS>Include the docket
number in the subject line of the message.
     Fax:<PHONE_NUMBER>.
     Mail: Mr. Jeff Ludwig, COMDT (CG-54221), 2100 2nd Street,
SW., Stop 7581, Washington, DC 20593.
    Instructions: All submissions received must include the words
``U.S. Coast Guard'' and docket number [USCG-2010-0164]. All
submissions received

will be posted without alteration at http://www.regulations.gov,
including any personal information provided. Anyone can search the
electronic form of comments received into any of our dockets by the
name of the individual submitting the comment (or signing the comment,
if submitted on behalf of an association, business, labor union, etc.)
You may review a Privacy Act notice regarding our public dockets in the
January 17, 2008 issue of the Federal Register (73 FR 3316).
    Docket: For access to the docket to read background documents or
submissions received by the NBSAC, go to http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Jeff Ludwig, COMDT (CG-54221),
2100 2nd Street, SW., Stop 7581, Washington, DC 20593;<PHONE_NUMBER>;
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Notice of this meeting is given under the
Federal Advisory Committee Act, 5 U.S.C. App. (Pub. L. 92-463). NBSAC
was established by the Federal Boat Safety Act of 1971. That law
requires the Secretary of Homeland Security, and the Commandant of the
Coast Guard by delegation, to consult with NBSAC in prescribing Federal
regulations, and on other major matters regarding boating safety. See
46 U.S.C. 4302(c) and 13110(c).
    NBSAC will meet for the purpose of discussing issues related to
recreational boating safety.

A. Tentative Agendas of Meetings

National Boating Safety Advisory Council (NBSAC)

    Thursday, April 15, 2010:
    (1) Remarks--Mr. James P. Muldoon, NBSAC Chairman;
    (2) Chief, Office of Auxiliary and Boating Safety Update on NBSAC
Resolutions and Recreational Boating Safety Program report.
    (3) Executive Secretary's report.
    (4) Chairman's session.
    (5) TSAC Liaison's report.
    (6) NAVSAC Liaison's report.
    (7) National Association of State Boating Law Administrators
report.
    (8) BIRMC Liaison's report.
    (9) Boats and Associated Equipment Subcommittee meeting.
    Friday, April 16, 2010:
    (10) Prevention through People Subcommittee meeting.
    (11) Recreational Boating Safety Strategic Planning Subcommittee
meeting.
    Saturday, April 17, 2010:
    (12) Recreational Boating Safety Strategic Planning Subcommittee
meeting (Cont.).
    (13) Prevention through People Subcommittee report.
    (14) Boats and Associated Equipment Subcommittee report.
    (15) Recreational Boating Safety Strategic Planning Subcommittee
report.
    (16) Chairman's session.
    A more detailed agenda can be found at: http://homeport.uscg.mil/
NBSAC, after April 9, 2010.

B. NBSAC Subcommittees

    Prevention Through People Subcommittee: Discuss current regulatory
projects, grants, contracts, and new issues affecting the prevention of
boating accidents through outreach and education of boaters.
    Boats and Associated Equipment Subcommittee: Discuss current
regulatory projects, grants, contracts, and new issues affecting boats
and associated equipment.
    Recreational Boating Safety Strategic Planning Subcommittee:
Discuss current status of the strategic planning process and any new
issues or factors that could impact, or contribute to, the development
of the strategic plan for the recreational boating safety program.

C. Meeting Procedure

    This meeting is open to the public. At the discretion of the Chair,
members of the public may make oral presentations during the meeting.
If you would like to make an oral presentation at the meeting, please
notify Mr. Jeff Ludwig as described in the ADDRESSES section above. If
you would like a copy of your material distributed to each member of
the Council in advance of the meeting, please submit thirty (30) copies
to Mr. Jeff Ludwig by April 1, 2010.
    Please note that the meeting may conclude early if all business is
finished.

D. Information on Services for Individuals With Disabilities

    For information on facilities or services for individuals with
disabilities or to request special assistance at the meeting, contact
Mr. Jeff Ludwig as described in the ADDRESSES section above as soon as
possible.

    Dated: March 15, 2010.
K.S. Cook,
Rear Admiral, U.S. Coast Guard, Director of Prevention Policy.
[FR Doc. 2010-6027 Filed 3-18-10; 8:45 am]
BILLING CODE 9110-04-P