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lotter on DSK11XQN23PROD with NOTICES3

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Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices
subject of the SFT 78 or elect to be deemed to have purchased the SFT
Securities, in each case in accordance with such timeframes and deadlines as established by NSCC for such purpose a Buy-In. Following such purchase or deemed purchase, the Transferor shall x give written notice to NSCC of the Transferors costs to purchase the relevant SFT Securities including the price paid by the Transferor and any brokers fees and commissions and reasonable out-of-pocket transaction costs, fees or interest expenses incurred in connection with such purchase such costs, the Buy-In Costs or, if the Transferor elects to be deemed to have purchased the SFT Securities, the Deemed Buy-In Costs, and y indemnify NSCC, and its employees, officers, directors, shareholders, agents and Members collectively the Buy-In Indemnified Parties, for any and all losses, liability or expenses of a Buy-In Indemnified Party arising from any claim disputing the calculation of the Buy-In Costs, the Deemed Buy-In Costs or the method or manner of effecting the Buy-In. Section 9b would further provide that each SFT Member acknowledges and agrees that each SFT
Security is of a type traded in a recognized market and that, in the absence of a generally recognized source for prices or bid or offer quotations for any SFT Security, the Transferor may, for purposes of a Buy-In, establish the source therefor in its commercially reasonable discretion. In addition, Section 9b would provide that each SFT Member further acknowledges and agrees that NSCC would not calculate any Buy-In Costs or Deemed Buy-In Costs and shall have no liability for any such calculation. Section 9b would also provide that NSCC would assign to any Transferee whose SFT is subject to a Buy-In any rights it may have against the Transferor to dispute the Transferors calculation of the Buy-In Costs or Deemed Buy-In Costs.
Section 9c of proposed Rule 56
would provide that on the Business Day following NSCCs receipt of written notice of the Transferors Buy-In Costs, NSCC shall debit and credit the Buy-In Amount from and to the SFT Accounts of the SFT Member parties to the SFT
as part of its end of day final money settlement process in accordance with Rule 12 Settlement and Procedure VIII
Money Settlement Service. Section 9c would provide that if the Buy-In Amount is positive, NSCC would x credit the value of the Buy-In Amount to the Transferors SFT Account and y 78 The Transferor would purchase these securities from one or more third parties.

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debit the value of the Buy-In Amount from the Transferees SFT Account.
Section 9c would further provide that if the Buy-In Amount is negative, NSCC
would x credit the value of the BuyIn Amount to the Transferees SFT
Account and y debit the value of the Buy-In Amount from the Transferors SFT Account.
Section 9d of proposed Rule 56
would provide that following the application of such Buy-In Amount, the Final Settlement obligations under the SFT shall be discharged; provided that if the Transferor effected a Buy-In in respect of some but not all of the SFT
Securities that are the subject of an SFT, then only the following obligations shall be discharged: i The Transferees and NSCCs Final Settlement obligations in respect of the SFT Securities for which the Transferor effected the Buy-In and ii the Transferors and NSCCs Final Settlement obligations in respect of the Corresponding SFT Cash.
Section 9e of proposed Rule 56
would provide that a Recalled SFT shall be treated as a Non-Returned SFT by NSCC until the earlier of the time that the SFT settles or a Buy-In is processed by NSCC in accordance with Section 9
of proposed Rule 56, except that the additional SFT Deposit required for Non-Returned SFTs under Section 12c of proposed Rule 56, as described below, shall not apply. Section 9e would further provide that if the Transferor effects the Buy-In in respect of some, but not all, of the SFT
Securities that are the subject of a Recalled SFT, the Final Settlement obligations of the Recalled SFT that are not discharged in accordance with Section 9d of proposed Rule 56 shall be treated as a Non-Returned SFT until the SFT settles or a Buy-In is processed by NSCC in accordance with Section 9
of proposed Rule 56, and the additional SFT Deposit required under Section 12c of proposed Rule 56, as described below, for Non-Returned SFTs shall apply.
Proposed Rule 56, Section 10
Cancellation, Modification and Termination of Securities Financing Transactions Section 10 of proposed Rule 56 would govern the process for cancellations, modifications and terminations of SFTs in NSCCs systems.
Section 10a of proposed Rule 56
would provide that transaction data on an SFT that has not been novated to NSCC may be cancelled upon receipt by NSCC of appropriate instructions from the Approved SFT Submitter with respect to such SFT on behalf of both SFT Member parties thereto, submitted
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in accordance with the communication links, formats, timeframes and deadlines established by NSCC for such purpose.
Section 10a would further provide that an SFT that is so cancelled by NSCC
would be deemed to be void ab initio.
Section 10b of proposed Rule 56
would provide the Rate Payment on an SFT that has been novated to NSCC may be modified upon receipt by NSCC of appropriate instructions from the Approved SFT Submitter with respect to such SFT, submitted in accordance with the communication links, formats, timeframes and deadlines established by NSCC for such purpose. Section 10b would further provide that any instructions submitted by an Approved SFT Submitter to modify the Rate Payment of an SFT must be submitted on behalf of both SFT Member parties to the SFT.
Section 10c of proposed Rule 56
would provide an SFT that has been novated to NSCC in accordance with Section 5 of proposed Rule 56, as described above, may be terminated upon receipt by NSCC of appropriate instructions from the Approved SFT
Submitter with respect to such SFT on behalf of both SFT Member parties thereto, submitted in accordance with the communication links, formats, timeframes and deadlines established by NSCC for such purposes. Section 10c would further provide that following any such termination, no amounts or further obligations shall be owing in respect of the SFT between NSCC and Transferor or NSCC and the Transferee.
Proposed Rule 56, Section 11
Accelerated Final Settlement Section 11 of proposed Rule 56 would allow a Transferee i.e., the borrower to do a same day return of borrowed securities, if necessary, to satisfy its regulatory purpose requirements by accelerating the Final Settlement of an SFT that has been novated to NSCC.
Specifically, Section 11 would provide that the Transferee may accelerate the scheduled Final Settlement of an SFT
that has been novated to NSCC upon receipt by NSCC of appropriate instruction from the Approved SFT
Submitter with respect to such SFT, submitted in accordance with the communication links, formats, timeframes and deadlines established by NSCC for such purpose. Section 11
would further provide that such accelerated Final Settlement shall be effected by NSCC in accordance with the provisions of Section 7 of proposed Rule 56, as described above.

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