Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Addendum A (Fee Structure) of the NSCC Rules

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104376; File No. SR-NSCC-2025-017]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Addendum A (Fee Structure) of the NSCC Rules</SUBJECT> <DATE>December 12, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)  <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on December 9, 2025, 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  <SU>3</SU> <FTREF/> and Rule 19b-4(f)(2) thereunder. <SU>4</SU> <FTREF/> The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <FTNT> <SU>3</SU>  15 U.S.C. 78s(b)(3)(A). </FTNT> <FTNT> <SU>4</SU>  17 CFR 240.19b-4(f)(2). </FTNT> <HD SOURCE="HD1">I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change</HD> The proposed rule change consists of amendments to Addendum A (Fee Structure) (“Addendum A”) of NSCC's Rules & Procedures (“NSCC Rules”) to modify NSCC's “value into the net” fee, Clearing Fund Maintenance Fee, and Long Broker late protect instruction submission fee (“Long Broker Late Protect Submission Fee”). <SU>5</SU> <FTREF/> <FTNT> <SU>5</SU>  Capitalized terms not defined herein are defined in the NSCC Rules, <E T="03">available at www.dtcc.com/legal/rules-and-procedures.</E> </FTNT> <HD SOURCE="HD1">II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> 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. <HD SOURCE="HD2">(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The purpose of this proposed rule change is to modify Addendum A (Fee Structure) of the NSCC Rules to (i) reduce the “value into the net” fee; (ii) exclude Supplemental Liquidity Deposits (“SLD”) from the calculation of the Clearing Fund Maintenance Fee; and (iii) eliminate the Long Broker Late Protect Submission Fee. The proposed changes to the Clearing Fund Maintenance Fee would be implemented upon filing. The proposed changes to the “value into the net” fee and Long Broker Late Protect Submission Fee would be implemented on January 1, 2026. The proposed fee changes are discussed in detail below. <HD SOURCE="HD3">Background</HD> <HD SOURCE="HD3">Value Into the Net Fee</HD> Pursuant to Section II.A. of Addendum A, NSCC charges Clearance Activity Fees for Securities Financing Transactions (“SFT”) and non-SFT transactions. For transactions excluding SFTs, NSCC charges a (i) “value into the net” fee of $0.46 per million of processed value ( <E T="03">i.e.,</E> for CNS  <SU>6</SU> <FTREF/> and Balance Order netting, the sum of the contract amount and any CNS fail value) and (ii) “value out of the net” fee of $ 2.16 per million of settling value ( <E T="03">i.e.,</E> the absolute value of the CNS Long and Short Positions). The “value into the net” fee is the value of transactions for which a broker is buyer or seller (excluding non-DTCC settling trades, non-CNS municipal bond transactions, flip trades, and foreign security trades) and is calculated as the gross cleared value prior to netting. The “value into the net” fee also includes any fails re-entered into CNS. The into the net value reflects the aggregate of each opening CNS security position multiplied by the current market price for each security. <SU>7</SU> <FTREF/> <FTNT> <SU>6</SU>  CNS is NSCC's core netting, allotting and fail-control engine for securities transactions. <E T="03">See</E> NSCC Rule 11 and Procedure VII, <E T="03">supra</E> note 5. </FTNT> <FTNT> <SU>7</SU>  Additional details regarding NSCC's equity trade capture fees, including the “value into the net” and “value out of the net” fees, can be found on the DTCC Learning Center website, <E T="03">available at https://dtcclearning.com/products-and-services/equities-clearing/utc/utc-users.html.</E> </FTNT> <HD SOURCE="HD3">Clearing Fund Maintenance Fee</HD> Pursuant to Section V.F. of Addendum A, NSCC charges a Clearing Fund Maintenance Fee, which is a monthly fee calculated, in arrears, as the product of (A) 0.35% and (B) the average of each Member's cash deposit balance in the Clearing Fund (excluding cash deposit balances in any SFT Accounts), as of the end of each day, for the month, multiplied by the number of days for that month and divided by 360. The Clearing Fund Maintenance Fee was adopted in 2016  <SU>8</SU> <FTREF/> and has been amended several times since its adoption. <FTNT> <SU>8</SU>   <E T="03">See</E> Securities Exchange Act Release No. 78525 (Aug. 9, 2016), 81 FR 54146 (Aug. 15, 2016) (SR-NSCC-2016-002). </FTNT> NSCC's Clearing Fund Maintenance Fee is primarily designed to (i) diversify NSCC's revenue sources, mitigating NSCC's dependence on revenues driven by trading volumes, and (ii) add a stable revenue source that would contribute to NSCC's operating margin by offsetting increasing costs and expenses. <SU>9</SU> <FTREF/> The fee is charged to all NSCC Members that are required to make deposits to the NSCC Clearing Fund in proportion to the Member's average monthly cash deposit to the Clearing Fund. The calculation of the Clearing Fund Maintenance fee currently excludes any cash deposit balances in any SFT Accounts. <SU>10</SU> <FTREF/> <FTNT> <SU>9</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>10</SU>   <E T="03">See</E> Securities Exchange Act Release No. 101949 (Dec. 17, 2024), 89 FR 104582 (Dec. 23, 2024) (SR-NSCC-2024-011). </FTNT> NSCC collects Clearing Fund deposits from its Members using a risk-based margin methodology. <SU>11</SU> <FTREF/> These amounts operate, individually, as the Member's margin, and the aggregate of all such Members' deposits is referred to, collectively, as the Clearing Fund, which operates as NSCC's default fund. All full-service NSCC Members are required to maintain at least a minimum Required Fund Deposit to the Clearing Fund of $250,000 at all times. <SU>12</SU> <FTREF/> <FTNT> <SU>11</SU>   <E T="03">See</E> NSCC Rule 4 and Procedure XV, <E T="03">supra</E> note 5. </FTNT> <FTNT> <SU>12</SU>   <E T="03">See</E> NSCC Rule 4, Section 1, <E T="03">supra</E> note 5. </FTNT> Under NSCC Rule 4A, NSCC may also collect additional cash deposits to the Clearing Fund in the form of SLD  <SU>13</SU> <FTREF/> to cover the liquidity exposures presented by certain Members (whether individually or as part of an affiliated Member family) whose activity generates liquidity needs in excess of NSCC's qualifying liquid resources. <SU>14</SU> <FTREF/> Unlike Required Fund Deposits, SLD is only required from those certain Members that present heightened liquidity needs at NSCC, and only for the duration of such liquidity exposure. These heightened liquidity needs typically occur for a limited period, such as those associated with large options expiry periods or exchange-trade fund index rebalancing periods. There is no ongoing minimum requirement for SLD. <FTNT> <SU>13</SU>   <E T="03">See</E> NSCC Rule 4A, <E T="03">supra</E> note 5. </FTNT> <FTNT> <SU>14</SU>  “Qualifying liquid resources” is defined in Rule 17ad-22(a) under the Act. <E T="03">See</E> 17 CFR 240.17ad-22(a). NSCC's qualifying liquid resources include, for example: (1) the cash in the Clearing Fund; (2) the cash that would be obtained from NSCC's committed 364-day credit facility with a consortium of lenders; (3) cash proceeds from NSCC's commercial paper and extendable note program; and (4) cash proceeds from NSCC's Senior Unsecured Notes. </FTNT> <HD SOURCE="HD3">Long Broker Late Protect Submission Fee</HD> Pursuant to Section II.F.2. of Addendum A, NSCC charges fees to Members for submitting instructions in connection with voluntary reorganizations. NSCC Members holding long obligations in CNS for securities undergoing a voluntary corporate action may submit “protect” instructions to participate in an upcoming corporate action or to add shares to a voluntary corporate action. <SU>15</SU> <FTREF/> These protect instructions move the Member's long positions into a CNS Reorganization Sub-Account, which provides for a higher priority in NSCC's long position allocation algorithm. To be included in night cycle processing, long Members (or Long Brokers) must submit their instructions between 9:45 p.m. and 10:45 p.m. Eastern Time on the day prior to the cover protect date. <SU>16</SU> <FTREF/> This one-hour window ensures that instructions are prioritized for allocation at the highest level. The Long Broker fee for submitting instructions during this initial window is $15 per instruction submitted. <FTNT> <SU>15</SU>  Section H of Procedure VII describes the timeline of actions that must occur in connection with the processing of eligible corporate reorganization events. The processing of mandatory reorganizations occurs ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 31k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━