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Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices
Clearing Service and would be comprised of 18 sections, each of which is described below.
In connection with the proposed SFT
Clearing Service, NSCC is proposing to add the following terms and definitions, as described below.
The term Aggregate Net SFT Closeout Value would mean, with respect to an SFT Member, the sum of the SFT
Close-out Value as defined below and in the proposed rule change for each SFT Position to which the SFT Member is a party.
The term Approved SFT Submitter would mean a provider of transaction data on an SFT that the parties to the SFT have selected and NSCC has approved, subject to such terms and conditions as to which the Approved SFT Submitter and NSCC may agree.
The term Bilaterally Initiated SFT
would mean an SFT, the Initial Settlement of which occurred prior to the submission of such SFT to NSCC.
The term Buy-In Amount would mean a net amount equal to x the BuyIn Costs or Deemed Buy-In Costs as defined below and in the proposed rule change of the SFT Securities in respect of which a Transferor has effected a Buy-In, less y the amount of the SFT
Cash for the relevant SFT unless the Transferor effected a Buy-In in respect of some, but not all, of the SFT
Securities that are the subject of the SFT, in which case y shall be the amount of the Corresponding SFT Cash as defined below and in the proposed rule change.
The term Contract Price would mean, with respect to SFT Securities subject to an SFT, the price of such securities at the time the SFT is submitted to NSCC for novation, which price shall be determined by the SFT
Member parties to the relevant SFT and provided by an Approved SFT
Submitter to NSCC in accordance with the communication links, formats, timeframes and deadlines established by NSCC for such purpose; provided that if no such price is provided by the time required by NSCC, the Contract Price shall be the Current Market Price of the SFT Securities.
The term Corresponding SFT Cash would mean a in respect of a Recalled SFT as defined below and in the proposed rule change for which a Transferor has effected a Buy-In in respect of some, but not all, of the SFT
Securities that are the subject of the SFT, the portion of the SFT Cash for such SFT equal to the product of i the percentage of the SFT Securities in respect of which the Transferor effected a Buy-In and ii the SFT Cash of the SFT; and b in respect of a Settling SFT

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which has a greater quantity of SFT
Securities as its subject than the corresponding Linked SFT, the portion of the SFT Cash of the Settling SFT
equal to the product of i the percentage of the SFT Securities of the Settling SFT
that the Linked SFT has as its subject and ii the SFT Cash of the Settling SFT.
The term Deemed Buy-In Costs would mean the product of the number of SFT Securities subject to the relevant Buy-In and the per-share price therefor on the date of the Buy-In obtained from a generally recognized source or the last bid quotation from such a source at the most recent close of trading for the SFT
Security.
The term Defaulting SFT Member would mean an SFT Member for which NSCC has declined or ceased to act in accordance with Section 14 of proposed Rule 56, as described below.
The term Distribution would mean, with respect to any SFT Security at any time, any cash payment of amounts equivalent to dividends and other distributions on the SFT Security.
The term Distribution Amount would mean, in respect of an SFT, an amount of cash equal to the product of:
a The amount per security in respect of x a cash dividend on the SFT
Securities that are the subject of the SFT
or y an exchange of the SFT Securities that are the subject of the SFT for cash;
and b the number of the relevant SFT
Securities subject to the SFT.
The term Distribution Payment would mean an amount payable by one party to an SFT to the other party to the SFT during the term of the SFT in respect of a Distribution on the SFT
Securities subject to the SFT.
The term Existing Master Agreement would mean, in respect of an SFT, a written agreement that i exists at the time transaction data for the SFT is submitted to NSCC by an Approved SFT Submitter, ii provides for, among other things, terms governing the payment and delivery obligations of the parties and iii the parties have established by written agreement, oral agreement, course of conduct or otherwise would govern such SFT.
The term Final Settlement would mean the exchange of SFT Securities for SFT Cash described in clause b of the proposed definition of Securities Financing Transaction.
The term Final Settlement Date would mean the Business Day on which the final settlement of a transaction is scheduled to occur. If the transaction is an SFT, the Final Settlement Date means the Business Day on which the Final Settlement of the SFT is scheduled to occur in accordance with
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proposed Rule 56 or, if the SFT is accelerated in accordance with proposed Rule 56, the date to which the Final Settlement obligations have been accelerated.
The term Incremental Additional Independent Amount SFT Cash would mean, a in respect of a Linked SFT, the excess, if any, of the Independent Amount SFT Cash of the Linked SFT
over the Independent Amount SFT Cash of the Settling SFT; b in respect of a Non-Returned SFT, the portion of the Price Differential payable by the Transferee, if any, that is attributable to the Independent Amount SFT Cash of the SFT which shall be calculated by multiplying such Priced Differential by the excess, if any, of the Independent Amount Percentage as defined below and in the proposed rule change over 100%; and c in respect of any other SFT, the Independent Amount SFT
Cash of such SFT.
The term Independent Amount Percentage would mean, in respect of an SFT, a percentage obtained by dividing the SFT Cash of such SFT by the Market Value SFT Cash as defined below and in the proposed rule change of such SFT.
The term Independent Amount SFT
Cash would mean the portion, if any, of the SFT Cash for an SFT equal to the amount by which the SFT Cash for such SFT at the time of the Initial Settlement exceeds the Contract Price of the SFT
Securities that are the subject of such SFT.
The term Ineligibility Date would mean, with respect to an SFT, the date on which the SFT Security that is the subject of the SFT becomes an Ineligible SFT Security as defined below and in the proposed rule change.
The term Ineligible SFT would mean an SFT that has, as its subject, SFT Securities that have become Ineligible SFT Securities.
The term Ineligible SFT Security would mean an SFT Security that is not eligible to be the subject of a novated SFT.
The term Initial Settlement would mean the exchange of SFT Securities for SFT Cash described in clause a of the proposed definition of Securities Financing Transaction.
The term Linked SFT would mean an SFT entered into by the pre-novation SFT Member parties to a Settling SFT
that has the same Transferor, Transferee and subject SFT Securities including CUSIP as the Settling SFT. As proposed, a Linked SFT would include an SFT that has as its subject fewer SFT
Securities than the corresponding Settling SFT but would not include an SFT that has as its subject more SFT

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