30 Day Notice

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Federal Register / Vol. 87, No. 138 / Wednesday, July 20, 2022 / Notices

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 rule-comments@
sec.gov. Please include File Number SR–
CboeBZX–2022–039 on the subject line.
Paper Comments

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• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeBZX–2022–039. 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 the Exchange.
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–CboeBZX–2022–039
and should be submitted on or before
August 10, 2022.

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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.30
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–15453 Filed 7–19–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–0088, OMB Control No.
3235–0083]

Submission for OMB Review;
Comment Request: Extension: Rule
15Ba2–1 and Form MSD
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for extension of the
previously approved collection of
information provided for in Rule
15Ba2–1 (17 CFR 240.15Ba2–1) and
Form MSD (17 CFR 249.1100) under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) (15 U.S.C. 78a et seq.).
Rule 15Ba2–1 provides that an
application for registration with the
Commission by a bank municipal
securities dealer must be filed on Form
MSD. The Commission uses the
information obtained from Form MSD
filings to The Commission uses the
information obtained from Form MSD
filings to determine whether bank
municipal securities dealers meet the
standards for registration set forth in the
Exchange Act, to make information
about particular bank municipal
securities dealers available to customers
and members of the public, and to
develop risk assessment information
about bank municipal securities dealers.
Form MSD is a one-time registration
form that must be amended only if it
becomes inaccurate. Based upon past
submissions of zero initial filings and 14
amendments in 2019, zero initial filings
and three amendments in 2020, zero
initial filings and one amendment in
2021, and zero initial filings and zero
amendments so far in 2022, the
Commission estimates that on an annual
basis approximately one respondent
will use Form MSD for an initial
registration application, and that
approximately six respondents will

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30 17

CFR 200.30–3(a)(12).

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utilize Form MSD for an amendment,
for a total of seven respondents per year.
The time required to complete Form
MSD varies with the size and
complexity of the bank municipal
securities dealer’s proposed operations.
Bank personnel that prepare Form MSD
filings previously indicated that it can
take up to 15 hours for a bank with a
large operation and many employees to
complete the form, but that smaller
banks with fewer personnel can
complete the form in one to two hours.
We believe that most recent applications
have come from smaller banks. Also,
amendments to form MSD are likely to
require significantly less time. We
estimate that the total annual burden is
currently approximately 11 hours at an
average of 1.5 hours per respondent. (7
respondents/year × 1.5 hours/
respondent = 10.5 hours/year rounded
up to 11). The staff estimates that the
average internal compliance cost per
hour is approximately $406.1 Therefore,
the estimated total annual internal cost
of compliance is approximately $4,263
per year (10.5 hours/year × $406/hour =
$4,263/year).
Rule 15Ba2–1 does not contain an
explicit recordkeeping requirement, but
the rule does require the prompt
correction of any information on Form
MSD that becomes inaccurate, meaning
that bank municipal securities dealers
need to maintain a current copy of Form
MSD indefinitely. In addition, the
instructions for filing Form MSD state
that an exact copy should be retained by
the registrant. Providing the information
on the application is mandatory in order
to register with the Commission as a
bank municipal securities dealer. The
information contained in the
application will not be kept
confidential.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent by
1 The estimate of $406 per hour is for a
compliance attorney, based on the Securities
Industry and Financial Markets Association’s
Management & Professional Earnings in the
Securities Industry 2013, modified by Commission
staff to account for an 1800-hour work-year and
inflation, and multiplied by 5.35 to account for
bonuses, firm size, employee benefits and

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Federal Register / Vol. 87, No. 138 / Wednesday, July 20, 2022 / Notices
August 19, 2022 to (i) www.reginfo.gov/
public/do/PRAMain and (ii) David
Bottom, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o John Pezzullo, 100 F
Street NE, Washington, DC 20549, or by
sending an email to: PRA_Mailbox@
sec.gov.
Dated: July 14, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–15439 Filed 7–19–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION

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

[Release No. 34–95278; File No. SR–NSCC–
2022–010]

1. Purpose

Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Adopt Fees for the
Securities Financing Transaction
Clearing Service
July 14, 2022.

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 July 8,
2022, 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. NSCC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to Addendum A (Fee
Structure) (‘‘Addendum A’’) of NSCC’s
Rules & Procedures (‘‘Rules’’) to adopt
fees for NSCC’s securities financing
transaction (‘‘SFT’’) clearing service
(‘‘SFT Clearing Service’’), as described
below.5
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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.

1 15

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
5 Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to such
terms in the Rules, available at http://dtcc.com/∼/
media/Files/Downloads/legal/rules/nscc_rules.pdf.
2 17

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Overview of the Proposed Rule Change
The purpose of this proposed rule
change is to adopt fees for NSCC’s new
SFT Clearing Service.6 The SFT
Clearing Service provides central
clearing for SFTs, which are, broadly
speaking, transactions where the parties
exchange equity securities against cash
and simultaneously agree to exchange
the same securities and cash, plus or
minus a rate payment, on a future date.
The SFT Clearing Service established
new membership categories and
requirements for Sponsoring Members
and Sponsored Members whereby
existing Members would be permitted to
sponsor certain institutional firms into
membership.7 The SFT Clearing Service
also established a new membership
category and requirements for Agent
Clearing Members whereby existing
Members would be permitted to submit,
on behalf of their customers,
transactions to NSCC for novation.8 The
SFT Clearing Service is available for
SFTs entered into between (i) a Member
and another Member, (ii) a Sponsoring
Member and its Sponsored Member
(‘‘Sponsored Member Transaction’’),
and (iii) an Agent Clearing Member
acting on behalf of a Customer and
either (x) a Member or (y) the same or
another Agent Clearing Member acting
on behalf of a Customer.9
6 See Securities Exchange Act Release No. 95011
(May 31, 2022), 87 FR 34339 (June 6, 2022) (SR–
NSCC–2022–003) (Order Approving Proposed Rule
Change to Introduce Central Clearing for Securities
Financing Transaction Clearing Service). NSCC also
filed the proposal as advance notice SR–NSCC–
2022–801. See Securities Exchange Act Release No.
94998 (May 27, 2022), 87 FR 33528 (June 2, 2022)
(SR–NSCC–2022–801) (Notice of No Objection to
Advance Notice to Introduce Central Clearing for
Securities Financing Transaction Clearing Service).
7 See id. and Rule 2C, supra note 5.
8 See supra note 6 and Rule 2D, supra note 5.
9 See supra note 6 and Section 1 of Rule 56, supra
note 5.

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In connection with the SFT Clearing
Service, NSCC would establish two new
fees for the clearance of SFT
transactions: (i) a fee of $1.00 per side
of each new SFT submitted (excluding
any Linked SFT 10 and Sponsored
Member Transactions) and (ii) a fee of
$0.14 per million of outstanding SFT
notional balance.11 Under the proposed
fee structure, Sponsoring Members
would be liable for any fees and charges
arising from Sponsored Member
Transactions.
In general, fee levels for NSCC are set
by NSCC after periodic reviews of a
number of factors, including revenues,
operating costs, and potential service
enhancements. In the case of fees
associated with new services such as
SFT, however, there are no current or
historical data points to use in the
analysis. Fees for such services are
determined based on an evaluation of
the costs associated with developing the
service, the projected costs of operating
the service on an ongoing basis, and the
projected revenues for the service over
time under various assumptions.12 In
determining the proposed SFT Clearing
Service fees, NSCC attempted to balance
a combination of factors, which
included maintaining a competitive
market level price while also factoring
in the enhanced value that the SFT
Clearing Service offered to Members
(e.g., multiple models for clearing SFTs
for Members and their clients, and the
associated balance sheet and capital
efficiency opportunities) and the ability
to achieve the payback of NSCC’s
investment costs within an appropriate
timeframe. The proposed SFT Clearing
Service fees are designed to be riskbased in that open interest would be
charged to the lender and borrower at a
10 A ‘‘Linked SFT’’ is an SFT entered into by the
pre-novation SFT Member parties to an SFT that
has been previously novated by NSCC, the Final
Settlement of which is scheduled to occur on that
Business Day (‘‘Settling SFT’’), and has the same
Transferor, Transferee and subject SFT Securities
(including CUSIP) as the Settling SFT. See Rule 1,
supra note 5.
11 For purposes of determining the proposed
outstanding SFT notional balance fee, the
outstanding SFT notional balance would be
calculated using the settlement value of the SFT.
12 NSCC has in place procedures to control costs
and to regularly review pricing levels against costs
of operation. NSCC’s fees are generally cost-based
plus a markup as approved by its Board of
Directors. This markup is applied to recover
development costs and operating expenses and to
accumulate capital sufficient to meet regulatory and
economic requirements. The SFT Clearing Service
and proposed associated fees, once implemented,
would be reviewed and re-evaluated regularly
under this framework. See NSCC Disclosure
Framework for Covered Clearing Agencies and
Financial Market Infrastructures, available at
https://www.dtcc.com/-/media/Files/Downloads/
legal/policy-and-compliance/NSCC_Disclosure_
Framework.pdf, at 120.

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