Qualified Special Representative (QSR) and Correspondent Clearing Services

NSCC has begun implementing Universal Trade Capture (“UTC”), the most comprehensive redesign of its trade capture system in decades, during the first quarter of 2011. For more details about UTC and the overall testing and implementation schedule, see Important Notice A#7030, P&S#6601, dated July 21, 2010.

In connection with the implementation of UTC, NSCC plans to implement a self-service Trading Relationship Management System that will replace the current manual paper-based process used to manage Qualified Special Representative (“QSR”) and Correspondent Clearing Relationships used in UTC trade editing. NSCC uses these relationships to manage broker submitted, locked-in trade data by ensuring a correspondent broker (9B) allows a QSR or Special Representative to submit locked-in data on its behalf.

The current agreements below used by NSCC Members to request the set up or termination of QSR and Correspondent Clearing relationships will be replaced by a self service online system effective in April, 2011, on a date to be announced by subsequent Important Notice.

For more information about the new Trading Relationship Management System, please see Important Notice A#7145, P&S#6715, dated January 19, 2011.

The Qualified Special Representative is an NSCC Rule 2 full service member who has been granted status for the purpose of locking-in trades for other NSCC members and/or their correspondent. The Correspondent Clearing Service is a trade reporting service that process equity and corporate bond executed by the Special Representative. The Correspondent Clearing (Special Representative) transfers settlement obligations to the correspondents.

The forms below are requirements for an NSCC member to establish a QSR or Correspondent Clearing Services relationship:

Establishing Domestic QSRs and Correspondent Clearing Services Relationships

The Qualified Special Representative (QSR) is required to fill out the 9-A form, the Correspondent is required to fill out the 9-B and the Attachment #1 forms. Note that there are two types of Attachment #1. One type is a dual agreement between the Qualified Special Representative which owns and operates the execution system, and the Correspondent. The second type is a tri-party agreement between the Qualified Special Representative, the Correspondent and the Broker/Dealer which owns and operates the execution system.

For a Correspondent Clearing Services relationship, the Special Representative is required to fill out the 9-A form, the Correspondent is required to fill out the 9-B form. Attachment #1 is not required in this relationship.

Establishing QSRs and Correspondent Clearing Services Relationships with CDS

The CDS Clearing and Depository Services Inc. have the same requirements mentioned above, however, the forms are specially designated for the Canadian members (CDS 9-A, CDS 9-B and Attachment #1 forms). These forms are required when a domestic firm is going to establish a relationship with members of CDS or vice versa, or members of the CDS are establishing relationships among themselves.

Establishing Domestic QSRs and Correspondent Clearing Services Relationships 

• Frequently Asked Questions (FAQs)
  (MS-Word .doc, 43KB, Current Version)
• Form 9A (for QSRs and Special Representatives), Form 9B (for Correspondents) and Attachment #1
  (MS-Word .doc, 35KB, Current Version)
• Attachment #1 - Dual Agreement
  (MS-Word .doc, 27KB, Current Version)
• Attachment #1 - Tri-Party Agreement
  (MS-Word .doc, 30KB, Current Version)

Establishing QSRs and Correspondent Clearing Services Relationships with CDS 

• Special Representative Form 9A (for Canadian members)
  (MS-Word .doc, 28KB, Current Version)
• Special Representative Consent Form 9B (for Canadian members)
  (MS-Word .doc, 27KB, Current Version)
• Attachment #1 - Dual Agreement - CDS
  (MS-Word .doc, 27KB, Current Version)
• Attachment #1 - Tri-Party Agreement - CDS
  (MS-Word .doc, 28KB, Current Version)