ETF Important Notices

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NSCC Submission of Rule Filing (SR-NSCC-2017-019) – Enhancements to the Process for Submitting and Accepting ETF Creations and Redemptions (November 21, 2017 A-8480) New #

On November 20, 2017, National Securities Clearing Corporation (NSCC) filed a proposed rule change (SR-NSCC-2017-019) (Rule Filing) with the Securities and Exchange Commission (SEC) pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934, as amended.  The purpose of the Rule Filing is to enhance the process for submitting and accepting ETF creations and redemptions.


ETF Near Real-Time Create & Redeem Enhancements & Controls Client Testing Schedule (October 24, 2017 - #A-8467) Popular #

On Friday, October 20, 2017, a detailed test plan document was published to the ETF section of the DTCC Equity Clearing Learning Center under the title, “Test Plan Guidelines for Agents & Authorized Participants.” ETF Agent and AP testing will be available in the Participant Service Environment (PSE) otherwise known as the PSE/U region beginning Monday, November 6, 2017 and continue through January 18, 2018.


ETF Near Real-Time Create & Redeem Enhancements and Controls (June 13, 2017 - #A-8413) Popular #

NSCC is amending the language in the Important Notice A-8346, dated March 9, 2017 specific to changes applicable to ETF Create/Redeem processing. In that notice, it was stated that, “Client testing is scheduled in the ETF PSE region in August of 2017 with implementation, subject to regulatory approval, in the 4th quarter of 2017.” Based upon client feedback and taking into consideration holiday development schedules, NSCC will now extend the scheduled implementation date for these enhancements.


NSCC Accelerated Trade Guarantee Changes for ETF Create/Redeem Processing (May 1, 2017 - #A-8382) Popular #

NSCC is amending the language included in the Important Notice A-8346, dated March 31, 2017 specific to changes applicable to ETF Create/Redeem processing. In that notice, it was stated that post-activation of the NSCC Accelerated Trade Guarantee (ATG), “Next day settling ETF Create/Redeem activity will be processed upon receipt and reported on CTS Cycle 1 on the date of receipt. These transactions may be settled in the CNS Night Cycle.”


ETF Near Real-Time Create & Redeem Enhancements and Controls (03/09/2017 - #A8346) Popular #

Since 2014, NSCC has engaged with business and technology representatives from ETF Index Receipt Agents (Agents) and Authorized Participants (AP’s) in several forums, including DTCC’s trade capture working groups, to solicit feedback and develop requirements to mitigate existing operational, technology, and financial risks associated with ETF clearing. As published in the December 2015 edition of the DTCC Development Agenda and subject to regulatory approval, NSCC now intends to introduce expanded functionality and automated controls to support its existing ETF primary market clearing process.


ETF Near Real-Time Supplemental File and Enhancements Deployment (02/10/2016 #A8162) Popular #

As per the NSCC Important Notice A#8129−P&S#7704, issued December 7, 2015, “…effective Friday, February 12, 2016, NSCC will introduce a suite of industry-requested enhancements, including expanded capacity to deliver updated ETF PCF’s during its current Supplemental processing period through the introduction of the ETF Near-Real-time Supplemental Portfolio Composition Output MRO.”


ETF Near Real-Time Supplement File and Enhancements (12/07/2015 - #A8129) Popular #

In response to feedback provided by ETF industry participants, NSCC is pleased to announce its intent to introduce expanded near real-time processing to support the ETF primary marketplace. Building upon the existing Enhanced Consolidated Portfolio Composition File (PCF) product, effective Friday, February 12, 2016, NSCC will introduce a suite of industry-requested enhancements, including expanded capacity to deliver updated ETF PCF’s during its current Supplemental processing period through the introduction of the ETF Near-Real-time Supplemental Portfolio Composition Output MRO.


ETF Browser Compatibility Enhancements (11/12/2015 #A8083) Popular #

As per the NSCC Important Notice A#8086−P&S#7661 issued September 18, 2015, “Effective Friday, November 13, 2015, National Securities Clearing Corporation (NSCC) will implement enhancements to the ETF Browser into production. The ETF Browser will provide native support for Internet Explorer (11.0.96). Migration of enhancements into production will take place after 5:00 PM Eastern on Thursday, November 12, 2015.”


ETF Browser Compatibility Enhancements and Testing (09/18/2015 #A8086) Popular #

Effective Friday, November 13, 2015, National Securities Clearing Corporation (NSCC) will implement enhancements to the ETF Browser into production. The ETF Browser will provide native support for Internet Explorer (11.0.96). Migration of enhancements into production will take place after 5:00 PM Eastern on Thursday, November 12, 2015.


Exchange Traded Fund Input and Output Time Frames (1/3/2015 #A7962) Popular #

NSCC would like to clarify the ETF time frames for submitting Portfolio Composition Files (PCFs), Creation and Redemption Instructions and their expected output times. The following table identifies the input cut-off time, which applies to ETF Agents only, and the expected output timeframe, which applies to Authorized Participants and ETF Agents.


Sales Tax Collected for Purchase of ETF Portfolio Composition Data File Output (10/23/2014 #A7195) Popular #

NSCC Members located in New York and New Jersey that subscribe for the ETF Portfolio Composition Data file service (identified on NSCC monthly invoice under Fee ID 2564), will be charged sales tax for this service effective on the November 2014 NSCC Invoice for October 2014 subscriptions. Sales tax amount will be reflected on the Tax Section of your NSCC invoice.


ETF Rewrite Implementation Deadline - Extended to October 31, 2014 (9/17/2014 #A7901) Popular #

The deadline for members converting to the new ETF output is extended to Friday, October 31, 2014 after considerable discussion with ETF agents, sponsors and data vendors.


Reminder: ETF Rewrite Implementation Deadline (8/05/2014 #A7881) Popular #

As previously announced in Important Notice A7808 dated March 25, 2014, NSCC plans to require full utilization of the enhanced Exchange Traded Funds (ETF) system on the evening of processing date September 30, 2014. I


ETF Rewrite Implementation Deadline (3/24/2014 #A7808) Popular #

As previously announced, NSCC plans to require full utilization of the enhanced Exchange Traded Funds (ETF) system on the evening of processing date September 30, 2014. On this date, the legacy input and output formats shown in this important notice will no longer be available.


Exchange Traded Funds Impact on May 9, 2013 (4/2/2013 #A7609) Popular #

As announced in Important Notice #A7429-P&S6999, dated May 24, 2012 and Important Notice #A7573-P&S7143 dated January 25, 2013, NSCC plans to implement a new Exchange Traded Funds (ETF) system on the evening of processing date May 9, 2013 along with below listed enhancements to legacy functionality and print image output from NSCC. Legacy MachineReadable input and output formats will not be impacted. These enhancements apply to all ETF participants, including those that have not converted to the new ETF input and output format by May 9th .


Exchange Traded Funds Participant Testing - March 2013 (1/25/2013 #A7573) Popular #

As announced in Important Notice #A7429-P&S6999, dated May 24, 2012, NSCC plans to implement a new Exchange Traded Funds (ETF) system on the evening of processing date May 9, 2013. This enhancement was originally scheduled for implementation in Q1 2013, but was delayed due to Hurricane Sandy. The new system will enhance NSCC’s Portfolio Composition File (PCF) reporting and the ETF Create / Redeem processes. NSCC will continue to support the legacy input and output file formats until the end of Q3 2014 after which, with prior notice, NSCC will retire the legacy application and support enhanced ETF formats and functionality only.


Rule Filing SR-NSCC-2012-07 - Elimination of the Exchange Traded Funds Creation and Redemption Unit Pre-Net and Technical Changes to the Rules (05/09/2012 #A7482) Popular #

On September 4, 2012, National Securities Clearing Corporation (“NSCC”), submitted a proposed rule filing, SR-NSCC-2012-07, to the U.S. Securities and Exchange Commission pursuant to Rule 19(b)(3)(A) of the Securities Exchange Act of 1934. The proposed rule change amends NSCC’s Rules and Procedures (the “Rules”) to: (a) eliminate the pre-netting by NSCC of Exchange-Traded Fund (“ETF”) creation and redemption instructions (a.k.a. creation unit netting) prior to the multi-lateral netting process used for Continuous Net Settlement (“CNS”) and non-CNS (balance order) processing, and (b) effect certain technical changes. The proposed rule change will become effective with processing date September 20, 2012.


Rewrite of Exchange Traded Fund System (5/24/2017 #A7429) Popular #

Subject to SEC approval, NSCC is enhancing its Exchange Traded Fund (ETF) system in order to meet the needs of the changing marketplace and to accommodate future growth. These enhancements will be available in early Q1 2013. This notice provides members with early notification of the changes NSCC plans to implement.


Exchange Traded Funds Web Interactive Guide & Other User Documentation (01/23/2012 #A7361) Popular #

DTCC has updated its Clearance Services Learning Center to include information on NSCC’s processing of Exchange Traded Funds. The important notice contains an ETF web interactive guide as well as additional documentation on how NSCC processes ETFs. The Learning Center ETF segment contains information on ETF Fundamentals and a segment on NSCC’s Creation and Redemption process.


Exchange Traded Funds Cash Amount Processing & Mark-to-Market Clearing Fund Modifications (01/05/2012 #A7348) Popular #

Effective with processing date Friday, February 24, 2012, NSCC will modify the processing of cash amounts for component based Exchange Traded Funds created or redeemed (bursted) through the NSCC Clearing process. In order to more closely reflect the value of the ETF to its closing price on trade date, the create / redeem process for standard and custom based portfolios will be modified to include the cash amount (excluding the transaction fee) in the contractual value of the created or redeemed ETF.