Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Retroactively Apply Recently-Revised Fee Schedule, 17492-17494 [2017-07178]
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17492
Federal Register / Vol. 82, No. 68 / Tuesday, April 11, 2017 / Notices
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–NASDAQ–
2017–030, and should be submitted on
or before May 2, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Eduardo A. Aleman,
Assistant Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80379; File No. SR–LCH
SA–2017–002]
Self-Regulatory Organizations; LCH
SA; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Retroactively Apply
Recently-Revised Fee Schedule
srobinson on DSK5SPTVN1PROD with NOTICES
April 5, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b-4 thereunder,2
notice is hereby given that on March 30,
2017, Banque Centrale de
Compensation, which conducts
business under the name LCH SA (‘‘LCH
SA’’), filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change described in
Items I and II below, which Items have
been primarily prepared by LCH SA.
LCH SA filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act,3 and Rule 19b–4(f)(6) thereunder.4
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1 15
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II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change, Security-Based
Swap Submission, or Advance Notice
In its filing with the Commission,
LCH SA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. LCH SA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change, Security-Based
Swap Submission, or Advance Notice
[FR Doc. 2017–07179 Filed 4–10–17; 8:45 am]
8 17
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change, Security-Based Swap
Submission, or Advance Notice
The proposed rule change will
retroactively apply LCH SA’s recentlyrevised fee schedule 5 from January 1,
2017 through February 17, 2017, the
date that the revised schedule became
effective.
1. Purpose
The purpose of the proposed rule
change is to retroactively apply LCH
SA’s recently-revised fee schedule
beginning January 1, 2017.
The purpose of the CDSClear fee grid
revisions was to: (1) Modify the annual
fixed fee that covers all self-clearing
activity for a Clearing Member and its
affiliates under the Unlimited Tariff, (2)
establish an annual fixed fee for all
General Members that participate in the
CDS Clearing Services under the
Introductory Tariff, and (3) remove the
volume-based discounts previously in
effect for the client clearing activities of
the CDS Clearing Service.
LCH SA was registered on December
29, 2016 but had long-standing plans to
revise the fee schedule with an intended
effective date of January 1, 2017.
The need to apply the fees
retroactively results from being granted
registration on December 29, 2016, only
one (1) full business day prior to the
expected effective date on January 1,
which, when coupled with
5 Changes to the fee schedule included (1) a
modification of the annual fixed fee that covers all
self-clearing activity for a Clearing Member and its
affiliates under the Unlimited Tariff, (2) addition of
an annual fixed fee for all General Members that
participate in the CDS Clearing Services under the
Introductory Tariff, and (3) removal of the volumebased discounts previously in effect for the client
clearing activities of the CDS Clearing Service. See
Securities Exchange Act Release No. 34–80114
(February 27, 2017), 82 FR 12481 (March 3, 2017).
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Sfmt 4703
technological difficulties (including
purchase of a digital certificate)
associated with the filing process,
resulted in LCH SA not being able to
submit the filing on December 30, 2016,
as LCH SA initially anticipated.
Because LCH SA had also intended
the fee change to become effective by
January 1, 2017 it had already gone
through the member consultation
process, meaning that members were
aware of the pending change in fee
structure, including the proposed
effective date of January 1, 2017.
Additionally, LCH SA’s national
competent authorities had been advised
of the proposed fee change that had
already gone through the regulatory
review process with the Commodity
Futures Trading Commission (‘‘CFTC’’)
in a manner that would have permitted
the fee change to take effect on January
1, 2017.6
In that way, the proposed fee change
was published on LCH SA’s Web site no
later than December 14, 2016, when it
was self-certified to the CFTC pursuant
to CFTC Rule 40.6.
2. Statutory Basis
LCH SA believes that the proposal is
consistent with the provisions of
Section 17A of the Act, in general and
in particular with Section 17A(b)(3)(D)
of the Act requiring the equitable
allocation of reasonable dues, fees and
other charges.7
LCH believes that applying the fees
retroactively is reasonable. The fees
would have been applicable absent the
year end Commission registration as
well as the technological difficulties
LCH SA encountered with the
submission of the filing. The members
of LCH SA were consulted in advance
and were fully aware that such fees
were intended to be applicable by
January 1, 2017.
Section 17A(b)(3)(D) of the Act
requires that the rules of a clearing
agency provide for the equitable
allocation of reasonable dues, fees, and
other charges.8 With respect to the
Unlimited Tariff, LCH SA has
determined that the reduction in the
Unlimited Tariff fixed fee for General
Members with respect to self-clearing
activity on behalf of the Clearing
Member and its affiliates is reasonable
and appropriate given the costs and
expenses to LCH SA. With CDSClear
now reaching a maturity stage in its
development and the introduction of
mandatory clearing of OTC derivatives
6 See https://www.cftc.gov/filings/orgrules/
rule121516lchsadco001.pdf.
7 15 U.S.C. 78q–1(b)(3)(D).
8 15 U.S.C. 78q–1(b)(3)(D).
E:\FR\FM\11APN1.SGM
11APN1
srobinson on DSK5SPTVN1PROD with NOTICES
Federal Register / Vol. 82, No. 68 / Tuesday, April 11, 2017 / Notices
in 2017, which will result in an increase
in CDS client clearing activities, it is
appropriate that the costs and expenses
that LCH SA will incur in providing the
CDS Clearing Service are shared more
broadly among General Members and
their clients that participate in the
service. For the same reasons, LCH SA
has determined that the cap on selfclearing fees, inclusive of the annual
fixed fee, applicable to General
Members electing the Introductory
Tariff, should be lowered to the same
amount as the revised Unlimited Tariff.
With respect to the annual fixed fee
for General Members under the
Introductory Tariff, LCH SA has
determined that implementing an
annual fixed fee for all General
Members that participate in the CDS
Clearing Service under the Introductory
Tariff (which fee is separate from and in
addition to the self-clearing and client
clearing variable fees currently
assessed), is reasonable and appropriate
given the costs and expenses to LCH SA
in providing the services to General
Members. The fee assures that all
General Members that benefit from the
CDS Clearing Service pay an
appropriate fee for such services, such
as being consulted on potential rules,
product and service changes, as well as
benefiting from unlimited support for
product and system training and testing,
without regard to whether such General
Members engage in CDS clearing
activities. The proposed rule changes,
therefore, are consistent with the
requirements of Section 17A of the Act 9
and regulations thereunder applicable to
it, because they provide for the
equitable allocation of reasonable fees,
dues, and other charges among clearing
members and market participants by
ensuring that General Members and
their clients pay reasonable fees and
dues for the services that LCH SA
provides.
With respect to the removal of
volume-based discounts, LCH SA has
determined that removing the volumebased discounts for CDS client clearing
activities is reasonable and appropriate
given the costs and expenses to LCH SA
in providing such services. The
elimination of volume-based discounts
will assure that clients pay an
appropriate proportionate share of the
costs and expenses that LCH SA will
incur in providing the CDS Clearing
Service.
B. Clearing Agency’s Statement on
Burden on Competition
Section 17A(b)(3)(I) of the Act
requires that the rules of a clearing
agency not impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.10
LCH SA does not believe that the
proposed retroactive application of the
fee changes from January 1, 2017 would
impose any burden on competition.
LCH SA believes that the reduction in
the annual Tariffs assessed on General
Members with respect to self-clearing
activity are reasonable and appropriate,
as the Tariffs will apply equally to all
General Members that self-clear CDS
under the Unlimited Tariff.
Additionally, LCH SA believes that an
annual fixed fee for all General
Members that participate in the CDS
Clearing Service under the Introductory
Tariff, which fee is separate from and in
addition to the self-clearing and client
clearing variable fees currently assessed,
is appropriate in light of the expenses
incurred by LCH SA in providing its
services. Further, LCH SA believes that
removing the volume-based discounts
for CDS client clearing activities is
reasonable and appropriate, as the
clearing fees will apply equally to all
clients that participate in the CDS
Clearing Service.
The retroactive application of the fee
changes will apply to all CDSClear
members and will not adversely affect
their ability to engage in cleared
transactions or to access clearing
services.
C. Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants or Others
Written comments relating to the
proposed rule change have not been
solicited or received. LCH SA will
notify the Commission of any written
comments received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section
19(b)(3)(A) 11 of the Act and Rule 19b–
4(f)(6) thereunder.12
10 15
U.S.C. 78q–1(b)(3)(I).
U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6).
11 15
9 15
U.S.C. 78q–1.
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17493
LCH SA has asked the Commission to
waive the 30-day operative delay so that
the proposed rule change may become
operative immediately upon filing.
According to LCH SA, the proposed
retroactive application of the recentlyrevised fee schedule does not
significantly affect the protection of
investors or the public interest because
LCH SA, its members, and its other
regulators all expected that the revised
fee schedule would apply starting on
January 1, 2017.
After careful consideration, the
Commission agrees that a waiver of the
30-day operative delay is appropriate
under the particular facts and
circumstances concerning this proposed
rule change. The only reason LCH SA
could not implement its revised fee
schedule as planned was the
Commission’s approval of its
registration on December 29, 2016,
which did not leave LCH SA sufficient
time to satisfy all of the technical
requirements to file proposed rule
changes with the Commission.
Moreover, the Commission notes that
the retroactive fee change will have no
impact on U.S. customers or members,
further lessening any investor protection
or public interest concerns associated
with the retroactive application of a fee
schedule to the date all parties expected
it would become effective. Accordingly,
the Commission designates the
proposed rule change to be operative
upon filing.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml) or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
LCH SA–2017–002 on the subject line.
13 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
E:\FR\FM\11APN1.SGM
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17494
Federal Register / Vol. 82, No. 68 / Tuesday, April 11, 2017 / Notices
100 F Street NE., Washington, DC
20549–27363
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–LCH SA–2017–002. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filings will also be available for
inspection and copying at the principal
office of LCH SA and on LCH SA’s Web
site at https://www.lch.com/assetclasses/cdsclear. All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
All submissions should refer to File
Number SR–LCH SA–2017–002 and
should be submitted on or before May
2, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–07178 Filed 4–10–17; 8:45 am]
BILLING CODE 8011–01–P
srobinson on DSK5SPTVN1PROD with NOTICES
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
14 17
CFR 200.30–3(a)(12).
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20:18 Apr 10, 2017
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Extension:
Rule 17a–2, SEC File No. 270–189, OMB
Control No. 3235–0201
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 17a–2 (17 CFR
240.17a–2), under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.). The Commission plans to submit
this existing collection of information to
the Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rule 17a–2—Recordkeeping
Requirements Relating to Stabilizing
Activities—requires underwriters to
maintain information regarding
stabilizing activities conducted in
accordance with Rule 104 of Regulation
M. The collections of information under
Regulation M and Rule 17a–2 are
necessary for covered persons to obtain
certain benefits or to comply with
certain requirements. The collections of
information are necessary to provide the
Commission with information regarding
syndicate covering transactions and
penalty bids. The Commission may
review this information during periodic
examinations or with respect to
investigations. Except for the
information required to be kept under
Rule 104(i) (17 CFR 242.104(i)) and Rule
17a–2(c), none of the information
required to be collected or disclosed for
PRA purposes will be kept confidential.
The recordkeeping requirement of Rule
17a–2 requires the information be
maintained in a separate file, or in a
separately retrievable format, for a
period of three years, the first two years
in an easily accessible place, consistent
with the requirements of Exchange Act
Rule 17a–4(f) (17 CFR 240.17a–4(f)).
There are approximately 716
respondents per year that require an
aggregate total of 3,580 hours to comply
with this rule. Each respondent makes
an estimated 1 annual response. Each
response takes approximately 5 hours to
complete. Thus, the total compliance
burden per year is 3,580 burden hours.
The total estimated internal compliance
cost for the respondents is
approximately $232,700, resulting in an
internal cost of compliance for each
respondent per response of
approximately $325.00 (i.e.,
$232,700.00/716 responses).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
PO 00000
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Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid OMB
control number.
Please direct your written comments
to: Pamela Dyson, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington,
DC 20549 or send an email to:
PRA_Mailbox@sec.gov.
Dated: April 6, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–07250 Filed 4–10–17; 8:45 am]
BILLING CODE 8011–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No: SSA–2017–0017]
Agency Information Collection
Activities: Proposed Request
The Social Security Administration
(SSA) publishes a list of information
collection packages requiring clearance
by the Office of Management and
Budget (OMB) in compliance with
Public Law 104–13, the Paperwork
Reduction Act of 1995, effective October
1, 1995. This notice includes revisions
of OMB-approved information
collections.
SSA is soliciting comments on the
accuracy of the agency’s burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility, and clarity; and ways to
minimize burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Mail, email, or
fax your comments and
recommendations on the information
collection(s) to the OMB Desk Officer
and SSA Reports Clearance Officer at
the following addresses or fax numbers.
E:\FR\FM\11APN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 68 (Tuesday, April 11, 2017)]
[Notices]
[Pages 17492-17494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07178]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80379; File No. SR-LCH SA-2017-002]
Self-Regulatory Organizations; LCH SA; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Retroactively Apply
Recently-Revised Fee Schedule
April 5, 2017.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 30, 2017, Banque Centrale de Compensation, which conducts
business under the name LCH SA (``LCH SA''), filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change
described in Items I and II below, which Items have been primarily
prepared by LCH SA. LCH SA filed the proposed rule change pursuant to
Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) thereunder.\4\
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change, Security-Based Swap Submission, or Advance Notice
The proposed rule change will retroactively apply LCH SA's
recently-revised fee schedule \5\ from January 1, 2017 through February
17, 2017, the date that the revised schedule became effective.
---------------------------------------------------------------------------
\5\ Changes to the fee schedule included (1) a modification of
the annual fixed fee that covers all self-clearing activity for a
Clearing Member and its affiliates under the Unlimited Tariff, (2)
addition of an annual fixed fee for all General Members that
participate in the CDS Clearing Services under the Introductory
Tariff, and (3) removal of the volume-based discounts previously in
effect for the client clearing activities of the CDS Clearing
Service. See Securities Exchange Act Release No. 34-80114 (February
27, 2017), 82 FR 12481 (March 3, 2017).
---------------------------------------------------------------------------
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change, Security-Based Swap Submission, or
Advance Notice
In its filing with the Commission, LCH SA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. LCH SA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change, Security-Based Swap Submission, or
Advance Notice
1. Purpose
The purpose of the proposed rule change is to retroactively apply
LCH SA's recently-revised fee schedule beginning January 1, 2017.
The purpose of the CDSClear fee grid revisions was to: (1) Modify
the annual fixed fee that covers all self-clearing activity for a
Clearing Member and its affiliates under the Unlimited Tariff, (2)
establish an annual fixed fee for all General Members that participate
in the CDS Clearing Services under the Introductory Tariff, and (3)
remove the volume-based discounts previously in effect for the client
clearing activities of the CDS Clearing Service.
LCH SA was registered on December 29, 2016 but had long-standing
plans to revise the fee schedule with an intended effective date of
January 1, 2017.
The need to apply the fees retroactively results from being granted
registration on December 29, 2016, only one (1) full business day prior
to the expected effective date on January 1, which, when coupled with
technological difficulties (including purchase of a digital
certificate) associated with the filing process, resulted in LCH SA not
being able to submit the filing on December 30, 2016, as LCH SA
initially anticipated.
Because LCH SA had also intended the fee change to become effective
by January 1, 2017 it had already gone through the member consultation
process, meaning that members were aware of the pending change in fee
structure, including the proposed effective date of January 1, 2017.
Additionally, LCH SA's national competent authorities had been
advised of the proposed fee change that had already gone through the
regulatory review process with the Commodity Futures Trading Commission
(``CFTC'') in a manner that would have permitted the fee change to take
effect on January 1, 2017.\6\
---------------------------------------------------------------------------
\6\ See https://www.cftc.gov/filings/orgrules/rule121516lchsadco001.pdf.
---------------------------------------------------------------------------
In that way, the proposed fee change was published on LCH SA's Web
site no later than December 14, 2016, when it was self-certified to the
CFTC pursuant to CFTC Rule 40.6.
2. Statutory Basis
LCH SA believes that the proposal is consistent with the provisions
of Section 17A of the Act, in general and in particular with Section
17A(b)(3)(D) of the Act requiring the equitable allocation of
reasonable dues, fees and other charges.\7\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q-1(b)(3)(D).
---------------------------------------------------------------------------
LCH believes that applying the fees retroactively is reasonable.
The fees would have been applicable absent the year end Commission
registration as well as the technological difficulties LCH SA
encountered with the submission of the filing. The members of LCH SA
were consulted in advance and were fully aware that such fees were
intended to be applicable by January 1, 2017.
Section 17A(b)(3)(D) of the Act requires that the rules of a
clearing agency provide for the equitable allocation of reasonable
dues, fees, and other charges.\8\ With respect to the Unlimited Tariff,
LCH SA has determined that the reduction in the Unlimited Tariff fixed
fee for General Members with respect to self-clearing activity on
behalf of the Clearing Member and its affiliates is reasonable and
appropriate given the costs and expenses to LCH SA. With CDSClear now
reaching a maturity stage in its development and the introduction of
mandatory clearing of OTC derivatives
[[Page 17493]]
in 2017, which will result in an increase in CDS client clearing
activities, it is appropriate that the costs and expenses that LCH SA
will incur in providing the CDS Clearing Service are shared more
broadly among General Members and their clients that participate in the
service. For the same reasons, LCH SA has determined that the cap on
self-clearing fees, inclusive of the annual fixed fee, applicable to
General Members electing the Introductory Tariff, should be lowered to
the same amount as the revised Unlimited Tariff.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q-1(b)(3)(D).
---------------------------------------------------------------------------
With respect to the annual fixed fee for General Members under the
Introductory Tariff, LCH SA has determined that implementing an annual
fixed fee for all General Members that participate in the CDS Clearing
Service under the Introductory Tariff (which fee is separate from and
in addition to the self-clearing and client clearing variable fees
currently assessed), is reasonable and appropriate given the costs and
expenses to LCH SA in providing the services to General Members. The
fee assures that all General Members that benefit from the CDS Clearing
Service pay an appropriate fee for such services, such as being
consulted on potential rules, product and service changes, as well as
benefiting from unlimited support for product and system training and
testing, without regard to whether such General Members engage in CDS
clearing activities. The proposed rule changes, therefore, are
consistent with the requirements of Section 17A of the Act \9\ and
regulations thereunder applicable to it, because they provide for the
equitable allocation of reasonable fees, dues, and other charges among
clearing members and market participants by ensuring that General
Members and their clients pay reasonable fees and dues for the services
that LCH SA provides.
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\9\ 15 U.S.C. 78q-1.
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With respect to the removal of volume-based discounts, LCH SA has
determined that removing the volume-based discounts for CDS client
clearing activities is reasonable and appropriate given the costs and
expenses to LCH SA in providing such services. The elimination of
volume-based discounts will assure that clients pay an appropriate
proportionate share of the costs and expenses that LCH SA will incur in
providing the CDS Clearing Service.
B. Clearing Agency's Statement on Burden on Competition
Section 17A(b)(3)(I) of the Act requires that the rules of a
clearing agency not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.\10\
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\10\ 15 U.S.C. 78q-1(b)(3)(I).
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LCH SA does not believe that the proposed retroactive application
of the fee changes from January 1, 2017 would impose any burden on
competition. LCH SA believes that the reduction in the annual Tariffs
assessed on General Members with respect to self-clearing activity are
reasonable and appropriate, as the Tariffs will apply equally to all
General Members that self-clear CDS under the Unlimited Tariff.
Additionally, LCH SA believes that an annual fixed fee for all General
Members that participate in the CDS Clearing Service under the
Introductory Tariff, which fee is separate from and in addition to the
self-clearing and client clearing variable fees currently assessed, is
appropriate in light of the expenses incurred by LCH SA in providing
its services. Further, LCH SA believes that removing the volume-based
discounts for CDS client clearing activities is reasonable and
appropriate, as the clearing fees will apply equally to all clients
that participate in the CDS Clearing Service.
The retroactive application of the fee changes will apply to all
CDSClear members and will not adversely affect their ability to engage
in cleared transactions or to access clearing services.
C. Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others
Written comments relating to the proposed rule change have not been
solicited or received. LCH SA will notify the Commission of any written
comments received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, if consistent with
the protection of investors and the public interest, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) \11\ of the
Act and Rule 19b-4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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LCH SA has asked the Commission to waive the 30-day operative delay
so that the proposed rule change may become operative immediately upon
filing. According to LCH SA, the proposed retroactive application of
the recently-revised fee schedule does not significantly affect the
protection of investors or the public interest because LCH SA, its
members, and its other regulators all expected that the revised fee
schedule would apply starting on January 1, 2017.
After careful consideration, the Commission agrees that a waiver of
the 30-day operative delay is appropriate under the particular facts
and circumstances concerning this proposed rule change. The only reason
LCH SA could not implement its revised fee schedule as planned was the
Commission's approval of its registration on December 29, 2016, which
did not leave LCH SA sufficient time to satisfy all of the technical
requirements to file proposed rule changes with the Commission.
Moreover, the Commission notes that the retroactive fee change will
have no impact on U.S. customers or members, further lessening any
investor protection or public interest concerns associated with the
retroactive application of a fee schedule to the date all parties
expected it would become effective. Accordingly, the Commission
designates the proposed rule change to be operative upon filing.\13\
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\13\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml) or
Send an email to rule-comments@sec.gov. Please include
File Number SR-LCH SA-2017-002 on the subject line.
[[Page 17494]]
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-LCH SA-2017-002. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filings will also be available
for inspection and copying at the principal office of LCH SA and on LCH
SA's Web site at https://www.lch.com/asset-classes/cdsclear. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-LCH SA-2017-002 and
should be submitted on or before May 2, 2017.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07178 Filed 4-10-17; 8:45 am]
BILLING CODE 8011-01-P
