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Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Revise Fee Schedule

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Start Preamble January 25, 2010.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on December 31, 2009, 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 primarily by NSCC. NSCC filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the Act [2] and Rule 19b-4(f)(2) [3] thereunder so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The purpose of the proposed rule change is to revise certain fees for NSCC services and make other technical changes to the NSCC Fee Schedule.

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A), (B) and (C) below, of the most significant aspects of such statements.[4]

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(A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

NSCC proposes revising certain service fees and making other technical changes to its Fee Schedule. Increased fees are proposed for Fund/SERV transactions and certain clearance activity.[5] There will also be an increase in the monthly fee for the mutual fund Profile Phase II Service; [6] however, NSCC is introducing a corresponding credit for users of the service with twenty-five or fewer funds in their fund family.

NSCC also proposes eliminating or reducing certain fees. The monthly fee charged to members that act on behalf of brokers or dealers will be eliminated, and the Flip Trades fee will be reduced.

Fee structure changes and other technical Fee Schedule modifications are proposed. The fee structure for trade processing accounts will be revised from a tiered structure to a flat monthly charge per account. A change reflecting that flat fee will remove monthly maximum cumulative charges associated with Trade Input, the Trade Processing System, and the Global Clearance Network Service.[7] Provisions in the Fee Schedule stating that Trade Recording Fees are charged for all Online Comparison System and Intra-day Comparison System trades placed in NSCC's comparison system will be removed.[8] This is because those systems no longer submit locked-in bond or foreign security trades to NSCC. Additional Fee Schedule changes will remove monthly maximum cumulative membership fees for Fund/SERV, Networking, and Mutual Fund Commission Settlement, relocate the Clearance Activity Fee to demonstrate its position in NSCC's processing flow,[9] and provide a technical adjustment to the number of Participant Fees.

These proposed fee revisions are consistent with NSCC's overall pricing philosophy of aligning service fees with underlying costs. The effective date for these fee adjustments was January 4, 2010. The changes to NSCC's Fee Schedule can be found in Exhibit 5 to proposed rule change SR-NSCC-2009-12 at​downloads/​legal/​rule_​filings/​2009/​nscc/​2009-12.pdf.

NSCC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act [10] and the rules and regulations thereunder because it updates NSCC's fee schedule to provide an equitable allocation of fees among its members.

(B) Self-Regulatory Organization's Statement on Burden on Competition

NSCC does not believe that the proposed rule change will have any impact or impose any burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

Written comments relating to the proposed rule change have not yet been solicited or received. NSCC will notify the Commission of any written comments received by NSCC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act [11] and Rule 19b-4(f)(2) [12] thereunder because the proposed rule change is establishing or changing a due, fee, or other charge applicable only to a member. At any time within sixty days of the filing of such rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.

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

Paper Comments

  • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington DC 20549-1090.

All submissions should refer to File Number SR-NSCC-2009-12. This file number should be included on the subject line if e-mail 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 (​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 inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filings also will be available for inspection and copying at the principal office of NSCC and on NSCC's Web site at​downloads/​legal/​rule_​filings/​2009/​nscc/​2009-12.pdf. 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-NSCC-2009-12 and should be submitted on or before February 19, 2010.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[13]

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble


2.  15 U.S.C. 78s(b)(3)(A)(ii).

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4.  The Commission has modified the text of the summaries prepared by NSCC.

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5.  The Clearance Activity Fee formerly appeared on the NSCC Fee Schedule as the Trade Netting Fee. NSCC proposes changing the name to Clearance Activity Fee to reflect that the fee covers trade recording as well as netting services. The fee uses a tiered structure graduated to the number of sides submitted monthly for trade recording and netting. It also includes a value into the net fee and a value out of the net fee.

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6.  NSCC offers two levels of the Profile service. Profile Phase I transmits mutual fund price and rate information. Profile Phase II stores data elements such as accumulation, breakpoints, and commission eligibility that relate to mutual fund processing rules.

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7.  This charge will no longer apply to Municipal Comparison-Only Members.

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8.  These changes are reflected in a footnote to section I. C. of the Fee Schedule.

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9.  The introductory paragraph of the Trade Clearance Fees section will also be revised to reflect that the fee includes trade recording services.

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11.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 2010-1854 Filed 1-28-10; 8:45 am]