Self-Regulatory Organization Rule Alert! NSCC Notice of Filing of a Proposed Rule Change to Remove ID Net Transactions from the Required Fund Deposit Calculations and Make Other Changes to the Rules.
NSCC: Notice of Filing of a Proposed Rule Change to Remove ID Net Transactions from the Required Fund Deposit Calculations and Make Other Changes to the Rules (Release No. 34-92566; File No. SR-NSCC-2021-011); see also Exhibit 5
https://www.sec.gov/rules/sro/nscc/2021/34-92566.pdf
tl:dr for the section: The proposed new rules aiming to tackle two things:
- Members' Required Fund Deposits is the money members have to keep on hand with the NSCC (If this is a poker game, this is the buy-in price for a seat at the table). I believe they are saying that transactions processed through the ID Net Service would not be included in the calculation for Members' Required Fund Deposits
- They are laying out the rules of the road for processing transactions through the ID Net Service following a member default.
tl:dr for the section: It appears the NSCC is pointing out how things have gone rotten and have gotten things so out of whack, and this new change will allow them to better insight to assess and collect fees to better cover and represent the risk of the member sitting at the table.
tl:dr for the section: Lays out the players:
Institutional Investor - (mutual fund, hedge fund, pension, etc)
Investment manager - enters trade on behalf of institutional invester
Buying broker, selling broker, custodian bank
tl:dr for the section: NSCC Risk Management gets a report each day of the doings between Institutional Investor, Investment manager, and Buying broker, selling broker, custodian bank.
Then I believe describes how transactions are processed that ultimately end up reflecting on members' Continuous Net Settlement obligations.
tl:dr for the section: Again talking about how the buy-in is for protection in case members go boom... Then gets to if the member has paid and still owes, NSCC would access its Clearing Fund should the deposit not be enough.
EDIT: PHEW! I think that is all the relevant sections highlighted. I plan to go back and try to create tl:dr for each one, then attempt to tie that to an overall tl:dr.
Please keep checking back, I am attempting to work as quickly as possible but may get sidetracked. Thanks for dropping by and I hope everyone has a terrific afternoon!
