60 Day Notice

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Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices

FINRA stated that proposed
Supplementary Material .08 is not
intended to alter the substantive terms
or existing guidance pertaining to the
current NYSE requirements governing
the use of summary statements.107
Accordingly, proposed Supplementary
Material .08 would not impact how
firms currently comply with the
supplemental obligations.108 FINRA
also stated that its description of
proposed Supplementary Material .08 in
the Notice does not change the proposed
requirements of that supplementary
material.109 Accordingly, FINRA stated
that similar to NYSE Rule Interpretation
409T(a)/06, under proposed
Supplementary Material .08, a ‘‘clearing
firm’’ must be a party to a written
agreement with each other person
jointly providing its respective customer
account statements.110
Proposed Supplementary Material .08
would establish summary statement
disclosure requirements for all FINRA
members (rather than just NYSE
members). These summary statement
disclosure requirements (e.g., that the
summary statement is provided for the
customer’s convenience, does not
replace other statements, identifies
where assets are held, and which
entities are SIPC members) would
protect investors by clarifying key
information about the investors’ assets
to help them evaluate their investments.
Accordingly, for the reasons set forth
above, the Commission finds that
proposed Supplementary Material .08 is
designed to protect investors and is in
the public interest.
I. Proposed Deletion of NYSE Rule 409T
and NYSE Rule Interpretation 409T
FINRA stated that the proposed rule
change would delete the NYSE
107 See

FINRA Response Letter, at 6.
see also Paragraph 4 of NYSE Rule
Interpretation 409T(a)/06.
109 See FINRA Response Letter, at 7.
110 Id.
111 For example, NYSE Rule 409T(b) and
Supplementary Material .10 to NYSE Rule 409T
allow for the suppression of trade confirmations,
and NYSE Rule 409T(g) provides that members
organizations carrying margin accounts for
customers should send duplicate copies of monthly
statements of guaranteed accounts to the respective
guarantors unless the guarantors have specifically
declared in writing that they do not want such
statements sent to them. Because the delivery
requirements of confirmations are governed by
Exchange Act Rule 10b–10 (Confirmation of
Transactions) and FINRA Rule 2232 (Customer
Confirmations), and the general requirements of
proposed Supplementary Material .02 cover
duplicate delivery issues, FINRA is not
incorporating these provisions into Supplementary
Material .02. Moreover, NYSE Rule 409T(e)(1)
requires a legend on account statements notifying
customers that this member organization’s financial
statements are available for inspection upon

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108 Id.;

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Provisions in their entirety on the basis
that they are duplicative of other
existing rules,111 are outdated,112 or the
underlying concepts in these provisions
will have been included in the proposed
Supplementary Materials to Rule
2231.113 As discussed more fully above,
the Commission finds that maintaining
two versions of substantially similar
rules could cause confusion and
undermine firm compliance with their
obligations regarding providing account
statements to their customers, which
could erode investor protections. For
the reasons set forth above, the
Commission finds that the proposed
deletion of the NYSE Provisions is
designed to protect investors and is in
the public interest.
IV. Conclusion
It is therefore ordered pursuant to
Section 19(b)(2) of the Exchange Act 114
that the proposed rule change (SR–
FINRA–2021–024), as modified by
Amendment No. 1, be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.115
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–12169 Filed 6–6–22; 8:45 am]
BILLING CODE 8011–01–P

request. Because Exchange Act Rule 17a–5(c)
(Reports to be Made by Certain Brokers and Dealers)
and FINRA Rule 2261 (Disclosure of Financial
Condition) contain similar provisions, FINRA is not
incorporating these provisions. Additionally,
Supplementary Material .01(7) to NYSE Rule 409T
states that upon the written instructions of a
customer and with the written approval of a
member or supervisor of a member organization, a
member organization may, under certain
circumstances, hold mail for a customer who will
not be at his usual address for the period of his
absence, and NYSE Rule Interpretation 409T(b)/01
provides guidelines for holding confirmations,
statements, and broker-dealer financial statements
for foreign customers. FINRA members’ obligations
concerning these activities are addressed in FINRA
Rule 3150 (Holding of Customer Mail) and, thus,
FINRA would not incorporate these provisions.
NYSE Rule Interpretation 409T(a)/03 addresses the
allocation of responsibilities when using third
parties to prepare and transmit account to
customers statements. These arrangements are
addressed in FINRA Rule 4311 (Carrying
Agreements) and other FINRA guidance, and, thus,
would also not be incorporated. See Notice, 86 FR
at 55646.
112 For example, NYSE Rule 409T.10(1) through
(6) provide exceptions to the requirements of NYSE
Rule 409T(b) for persons having powers of attorney.
As described above, proposed Supplementary
Material .02 would provide a narrower exception
for court-appointed fiduciaries. FINRA is therefore
not incorporating these NYSE terms into
Supplementary Material .02. See Notice, 86 FR at
55646.
113 See Notice, 86 FR at 55646.
114 15 U.S.C. 78s(b)(2).
115 17 CFR 200.30–3(a)(12).

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SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–447, OMB Control No.
3235–0504]

Proposed Collection; Comment
Request; Extension: Rule 19b–4(e) and
Form 19b–4(e)
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’’) is soliciting comments
on the existing collection of information
provided for in Rule 19b–4(e) (17 CFR
240.19b–4(e)) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.) (the ‘‘Act’’). The Commission plans
to submit this existing collection of
information to the Office of
Management and Budget (‘‘OMB’’) for
extension and approval.
Rule 19b–4(e) permits a selfregulatory organization (‘‘SRO’’) to list
and trade a new derivative securities
product without submitting a proposed
rule change pursuant to Section 19(b) of
the Act (15 U.S.C. 78s(b)), so long as
such product meets the criteria of Rule
19b–4(e) under the Act. However, in
order for the Commission to maintain an
accurate record of all new derivative
securities products traded on the SROs,
Rule 19b–4(e) requires an SRO to file a
summary form, Form 19b–4(e), to notify
the Commission when the SRO begins
trading a new derivative securities
product that is not required to be
submitted as a proposed rule change to
the Commission. Form 19b–4(e) should
be submitted within five business days
after an SRO begins trading a new
derivative securities product that is not
required to be submitted as a proposed
rule change. In addition, Rule 19b–4(e)
requires an SRO to maintain, on-site, a
copy of Form 19b–4(e) for a prescribed
period of time.
This collection of information is
designed to allow the Commission to
maintain an accurate record of all new
derivative securities products traded on
the SROs that are not deemed to be
proposed rule changes and to determine
whether an SRO has properly availed
itself of the permission granted by Rule
19b–4(e). The Commission reviews SRO
compliance with Rule 19b–4(e) through
its routine inspections of the SROs.
The respondents to the collection of
information are SROs (as defined by the
Act), all of which are national securities

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Federal Register / Vol. 87, No. 109 / Tuesday, June 7, 2022 / Notices
exchanges. As of April 8, 2022 there
were 24 entities registered as national
securities exchanges with the
Commission. The Commission receives
an average total of 2,331 responses per
year, which corresponds to an estimated
annual hour burden of approximately
2,331 hours (2,331 responses × 1 hour
per response). At an average hourly cost
of $72, the aggregate related internal
cost of compliance for Rule 19b–4(e) is
approximately $167,832 per year (2,331
burden hours multiplied by $72/hour).
Compliance with Rule 19b–4(e) is
mandatory. Information received in
response to Rule 19b–4(e) shall not be
kept confidential; the information
collected is public information.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
by August 8, 2022.
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.
Please direct your written comments
to: David Bottom, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: June 1, 2022.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022–12158 Filed 6–6–22; 8:45 am]

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BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95021; File No. SR–NSCC–
2022–007]

Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Revise the Voluntary
Termination Provisions of the NSCC
Rules for Limited Members
June 1, 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 May 27,
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) 3 of the Act and
subparagraph (f)(6) 4 of Rule 19b–4
thereunder. 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 of NSCC
consists of modifications to NSCC’s
Rules & Procedures (the ‘‘Rules’’) 5 to
revise the voluntary termination
provisions of the Rules in order to
provide that a Limited Member may be
deemed to have voluntarily terminated
its membership if NSCC is unable to
contact the Limited Member’s
authorized representatives, and the
Limited Member has not used NSCC’s
services for at least 6 months. The
proposed changes are described in
greater detail below.
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
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)(6).
5 Capitalized terms not defined herein are defined
in the Rules, available at https://dtcc.com/∼/media/
Files/Downloads/legal/rules/nscc_rules.pdf.
2 17

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34737

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 proposed rule change consists of
modifications to the voluntary
termination provisions of the Rules in
order to provide that a Limited Member
may be deemed to have voluntarily
terminated its membership if NSCC is
unable to contact an authorized
representative of the Limited Member,
as designated by the participant
pursuant to Rule 5,6 and there has been
no activity in the account by the
participant for at least 6 months. The
proposed changes are described in
greater detail below.
(i) NSCC Membership Types/Limited
Members
NSCC has several types of
membership with different access levels
to services.7 Generally, such
membership types can be categorized
into ‘‘Members’’ which are full-service
participants that have access to NSCC’s
central counterparty services and
‘‘Limited Members’’ whose access to
services is limited to certain services by
membership type specified by NSCC.8
The services available for Limited
Members are ‘‘non-guaranteed’’
services—meaning that NSCC does not
act as a central counterparty or
guarantee payments for transactions
conducted through these services.9 If a
Limited Member using non-guaranteed
services fails to pay for a transaction at
settlement, NSCC does not guarantee the
payment and may reverse in whole or in
part any credit previously given to the
contra side.10 As a result, NSCC bears
less risk for payments relating to nonguaranteed services than it does for
payments relating to its guaranteed
services.
(ii) NSCC Termination Provisions
NSCC has several Rules relating to the
termination of a Limited Member’s
membership. Those Rules include
6 See Rule 5, Section 2, supra note 5, which
requires that a Limited Member appoint a
representative that is duly authorized in the name
and on behalf of the Limited Member to sign all
instruments, correct errors and to perform such
other duties as may be required under the Rules and
the Procedures and to transact all business requisite
in connection with the operations of NSCC.
7 See Rule 2, supra note 5, which describes
various NSCC membership types.
8 Id.
9 See Addendum D of the Rules, supra note 5.
10 See Addendum D of the Rules, supra note 5.

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