SIFMA Submits Comments to the SEC on Instituting Supplemental Liquidity Deposits to National Securities Clearing Corporation's Clearing Fund

SIFMA submitted comments to the SEC regarding a National Securities Clearing Corporation ("NSCC") proposal to institute supplemental liquidity deposits to NSCC's clearing fund (see SR-NSCC-2013-02 and SR-NSCC-2013-802). This "SLD Proposal" is designed to increase liquidity resources to meet NSCC's liquidity needs.

SIFMA voiced concern over particular parts of the proposal due to its complexity and potentially far-reaching implications. SIFMA anticipates that this will affect not only business and capital models of a broad range of market participants, but also the broader financial system. SIFMA believes that the "threshold matter" lies with NSCC's failure to show a "substantive basis for the SLD Proposal," and that the proposal is "fundamentally flawed" because (i) it "lacks an adequate risk-based justification," and (ii) NSCC's member firms would have supplemental liquidity deposit obligations that were dependent on the NSCC's year-to-year success in receiving commitments under its revolving credit facility.

For the reasons mentioned, SIFMA finds the SLD Proposal "premature" and asks the SEC to ensure that it does not become effective.

See: SIFMA Comment Letter.