Self-Regulatory Organizations; LCH SA; Notice of Proposed Rule Change, Security-Based Swap Submission, or Advance Notice Relating to LCH SA's Wind Down Plan, 60238-60242 [2017-27236]
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Federal Register / Vol. 82, No. 242 / Tuesday, December 19, 2017 / Notices
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Participant that was not a Participant
prior to September 1, 2017.
Limiting eligibility for the fee waiver,
as described, will ensure that the waiver
is tailored to and effective in its purpose
of attracting new Participants. Waiving
the fees for new Participants will ease
the burden of participating on PSX,
which may be a significant reason that
such market participants have
historically declined to become
Participants. Thus, to the extent this
waiver is successful, the proposed
change will broaden participation on
PSX, which will benefit all Participants
by providing more liquidity.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. In terms of
inter-market competition, the Exchange
notes that it operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. In such an
environment, the Exchange must
continually adjust its fees to remain
competitive with other exchanges and
with alternative trading systems that
have been exempted from compliance
with the statutory standards applicable
to exchanges. Because competitors are
free to modify their own fees in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited.
In this instance, the proposed changes
generally reduce the fee burdens on
Participants in an effort to attract and
retain Participants, which benefits all
market participants on PSX to the extent
the incentives are effective.
The Exchange notes that participation
on PSX is completely voluntary and
subject to extensive competition both
from other exchanges and from offexchange venues. Thus, to the extent
that the proposed changes to the
connectivity fees proposed herein are
unattractive to market participants, it is
likely that the Exchange will lose
market share and Participants as a
result. Accordingly, the Exchange does
not believe that the proposed changes
will impair the ability of members or
competing order execution venues to
maintain their competitive standing in
the financial markets.
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.6
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
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–
Phlx–2017–100 on the subject line.
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–Phlx–2017–100. 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 website (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 website 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–Phlx–2017–100 and should
be submitted on or before January 9,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–27233 Filed 12–18–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82317; File No. SR–LCH
SA–2017–013]
Self-Regulatory Organizations; LCH
SA; Notice of Proposed Rule Change,
Security-Based Swap Submission, or
Advance Notice Relating to LCH SA’s
Wind Down Plan
December 13, 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 December
7, 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, II, and III below, which Items
have been prepared primarily by LCH
SA. The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
7 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
6 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 82, No. 242 / Tuesday, December 19, 2017 / Notices
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
LCH SA is proposing to adopt an
updated wind down plan (the ‘‘WDP’’)
in accordance with Rule 17Ad–
22(e)(3)(ii). The text of the proposed
rule change has been annexed as Exhibit
5. LCH SA has requested confidential
treatment of the material submitted as
Exhibit 5.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
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 these statements.
A. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change.
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1. Purpose
On September 28, 2016, the Securities
and Exchange Commission (the
‘‘Commission’’) adopted amendments to
Rule 17Ad–22 3 pursuant to Section 17A
of the Securities Exchange Act of 1934
(the ‘‘Act’’) 4 and the Payment, Clearing
and Settlement Supervision Act of 2010
(‘‘Clearing Supervision Act’’) 5 to
establish enhanced standards for the
operation and governance of those
clearing agencies registered with the
Commission that meet the definition of
a ‘‘covered clearing agency,’’ as defined
by Rule 17Ad–22(a)(5) 6 (collectively,
the new and amended rules are herein
referred to as ‘‘CCA rules’’).
LCH SA is a covered clearing agency
under the CCA rules and therefore is
subject to the requirements of the CCA
rules, including Rule 17Ad–22(e)(3).
The CCA rules require that covered
clearing agencies, among other things:
‘‘establish, implement, maintain and
enforce written policies and procedures
reasonably designed to . . . maintain a
sound risk management framework for
comprehensively managing legal, credit,
liquidity, operational, general business,
investment, custody, and other risks
that arise in or are borne by the covered
clearing agency, which . . . includes
plans for the recovery and orderly wind3 17
CFR 240.17Ad–22.
U.S.C. 78q–1.
5 12 U.S.C. 5461 et seq.
6 17 CFR 240.17Ad–22(a)(5).
7 17
CFR 240.17Ad–22(e)(3)(ii).
(EU) No. 152/2013 of 19 December
2012, Article 2.
9 See Filing N° SR–LCH SA–2017–012.
4 15
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down of the covered clearing agency
necessitated by credit losses, liquidity
shortfalls, losses from general business
risk, or any other losses.’’ 7
As a central counterparty recognized
under the European Market
Infrastructure Regulation (‘‘EMIR’’),
LCH SA is also required to have in place
relevant recovery and wind down
mechanisms required under EMIR.8
As a credit institution based in the
European Union, LCH SA is also subject
to Directive 2014/59/EU, as
supplemented, requiring institutions to
draw up and maintain recovery plans
setting forth options for measures to be
taken by the institution to restore its
financial position following a significant
deterioration of its financial position.
Accordingly, as described in more
detailed below, the purpose of the WDP
is to ensure an orderly wind down of
the CCP under extreme circumstances
and to limit market impact as much as
possible, should the recovery plan (the
‘‘RP’’) 9 has failed.
The WDP sets out the steps that LCH
SA would follow to close its clearing
services and shut down the company.
The plan demonstrates how LCH SA, as
it exists today, can achieve this orderly
wind down within six (6) months.
In addition, LCH SA holds capital,
funded by equity, equal to the operating
expenses for a six (6) month period. The
WDP demonstrates that the wind down
cost remains inferior to the necessary
amount.
The WDP would first determine the
triggers for winding down and the
relationship between Recovery,
Resolution and Wind down. In these
extreme circumstances, the CCP would
first trigger the recovery plan. The WDP
would be triggered by LCH SA if, the
recovery tools having been exhausted
and having failed, the only solutions left
for LCH SA would be to wind down its
clearing services and close the
company.
The triggers are only briefly presented
in the WDP since they are described in
detail in the RP. They consider Clearing
Member Defaults losses well above the
CCPs financial resources; Clearing
Member Defaults creating large liquidity
shortfalls and Non Clearing Members
Defaults impacting capital adequacy or
creating liquidity shortfalls. This could
be caused by large risks such as
operational events, custody and
investment risks or large business risks.
The WDP would be triggered by LCH SA
if, the recovery tools having been
8 Regulation
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60239
exhausted and having failed, the only
solution for LCH SA would be to wind
down its clearing services and close the
company.
The WDP would not consider any
other case such as a voluntary wind
down not being triggered by one of the
above extreme circumstances.
The WDP would then describe the
governance for triggering the plan. The
decision to wind down would be taken
by the Board and ultimately the
shareholders’ meeting upon advice of
the Executive Risk Committee (‘‘ERCo’’)
and Local Management Committee
(‘‘LMC’’). The implementation of the
WDP would be monitored by the LCH
SA LMC or Default Crisis Management
Team (‘‘DCMT’’), the executive
committee in charge of the coordination
of defaults.
The regulatory authorities would be
consulted before such a decision is
´
taken and the French Autorite de
ˆ
Controle Prudentiel et de Resolution
(the ‘‘ACPR’’) would have to approve
such a decision, unless all the clearing
service have already been closed. They
would be subsequently regularly
informed of the implementation of the
plan.
LCH SA being a credit institution, it
could be subject to a resolution regime
decided by the ACPR whilst conducting
its recovery plan and before a wind
down would be decided by the
company. In that case, the decision to
wind down as well the process to be
followed would be decided by the
resolution authority.
The plan would then define a certain
number of assumptions. It would firstly
assume that the CCP as it stands today
would be wound down until its full
closure, although it is likely that in the
phases preceding the plan, some
businesses would have been either
closed or scaled down. It also makes
other assumptions that allows
continuation of business for some time
and proper closing such as the fact that
LCH SA would keep its banking license
and continue to have full access to the
central bank or that suppliers, which
would continue to be paid, would
continue to offer a service.
In line with the RP, the WDP would
present a mapping of the functions and
particularly distinguishes between the
clearing functions, which are all
considered as critical, the critical
supporting functions and the other noncritical functions.
The plan would then describe the
closure of the clearing services. The
closure of CDSClear is covered in
Article 2.4.3.1 of CDS Clearing Rule
book and in the Clause 8 of Appendix
1. It specifies that LCH SA would
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publish a notice to clearing members
notifying that a wind down event has
occurred and to the extent possible the
date on which transactions shall cease
to be accepted on the CDS Clearing
service. LCH SA would publish the
clearing notice as far in advance of the
Early Termination Trigger Date as it is
reasonably possible. The plan would
indicated that, in a non-default situation
and more generally in a situation where
the corresponding business line is not
suffering, LCH would give some time for
a maximum of trades to settle naturally
and for the clearing members to close
their longer positions and switch to
another CCP.
The closing of the business would be
done through cash settlement and the
repayments amounts would be paid by
LCH SA and the clearing members on
the business following notification.
The WDP would then describe how
critical supporting functions would be
closed. The treasury function would
close once all clearing services have
been terminated and all monies paid by
LCH SA and/or the clearing members.
Once wind down is decided, cash
would not be invested anymore but
deposited at the central bank or possibly
invested in same day repos. Operations,
IT production, and Risk teams would be
kept until all positions are closed. At
that moment, the majority of staff in
these areas would not be required any
more.
It has to be noted that the WDP would
list all contracts with external providers,
including venues and IT companies to
which LCH SA has outsourced services.
They contain wind down provisions,
enabling LCH SA to exit these contracts
under specific conditions.
Non critical support functions such as
Finance, Compliance, Audit etc. would
start being scaled down immediately
after the decision is taken to wind
down. The path at which each
department is expected to reduce its
workforce is specified in the plan.
Consultation with the LCH SA’s staff
representatives (works council) would
start immediately in order to ensure a
proper departure of permanent staff in
line with French law and regulations
and those of the countries in which LCH
SA has branches/representative offices.
Staff approach for winding down would
be described in more detail in the WDP.
The WDP would contain an overall
timeline of the full wind down process.
This plan shows that LCH SA would be
in a position to close the company
within six (6) months as required by
applicable regulations.
The WDP would also contain an
appendix describing into more details
the communication processes that
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would be followed both internal and
external. It specifies that the wind down
notice would be published on the LCH
SA website and the teams within LCH
SA and the LSEG group that would be
responsible for each type of
communications.
Separately from the WDP, but in line
with the processes and timeline
described in the WDP, LCH SA
calculates the costs required for a wind
down. It encompasses staff salaries,
indemnities for staff departure, cost to
be paid to suppliers during notice
periods and more generally all
foreseeable costs that would be due in
case of a wind down event. The final
figure is reported in the WDP and shows
that overall costs is significantly below
the liquid assets held by LCH SA for
that purpose and corresponding to six
(6) months of operational expenses.
The first version of the WDP was
adopted in 2014 and is reviewed on an
annual basis. It is approved by the LCH
SA Risk Committee, LMC and the
Board.
The WDP, which was approved by the
Board on November 22nd 2017, has
been annexed as Exhibit 5. LCH SA has
requested confidential treatment of the
plan as Exhibit 5, however the main
characteristics are described above and
a self comprehensive disclosure, as
required by SEC Rule 17AD–22(e)(23),
has been published on the LCH website
in April 2017.
2. Statutory Basis
LCH SA believes that the proposed
rule change is consistent with the
requirements of Section 17A of the
Securities Exchange Act of 1934 10 (the
‘‘Act’’) and the regulations thereunder.
Specifically, in accordance with the
requirement in Rule 17Ad–22(e)(3)(ii),
LCH SA has established a WDP which
describes the scenarios and events that
may threaten its ability to continue to
provide critical 11 clearing services and
the processes that LCH SA would follow
to manage an orderly wind down of the
CCP.
LCH SA has an obligation to
guarantee the continuous performance
of critical service towards the market
and, as such, will not request to enact
a wind down without an important
triggering event that would cause a
failed recovery or a resolution situation.
Scenarios have been categorised into the
following for the purposes of assessing
10 15
U.S.C. 78q–1.
CPSS–IOSCO Report states that ‘Critical’
refers to the importance of the services to the
Financial Market Infrastructures (FMIs)
participants, other FMIs, and to the smooth
functioning of the markets the FMI serves and in
particular, the maintenance of financial stability.
11 The
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the effectiveness of the recovery tools
and to identify the actions required for
the WDP:
• Member default losses resulting in
uncovered credit losses or liquidity
shortfalls;
• Non-default losses that threaten
LCH SA’s solvency, arising from general
business risks, custody and investment
risks, any other large operational risks
caused by caused by a human or system
failure and
• Uncovered liquidity shortfall
associated to these risks.
LCH SA has adopted a Recovery Plan
(‘‘RP’’) with an updated version
submitted separately to the SEC.12 The
WDP assumes that all recovery and
resolution tools have been exhausted,
have failed, and thus require LCH SA to
wind down its clearing services. The
reasons for these losses are described in
more detail in the RP.
The plan describes the governance for
triggering the wind down and the
approval steps required. The triggering
of the plan will have to be decided by
LCH SA and LCH Group Boards as well
as by a shareholders’ meeting. It will
have to be approved by ACPR unless
LCH SA has already closed down all its
clearing activities.
It is to be noted that the plan could
be also triggered by the resolution
authorities as part of the resolution
toolkit if LCH SA has been put into
resolution.
From a legal point of view, the WDP
would be supported by the Article
2.4.3.1 of the CDS Clearing Rule Book,
clause 8 and 8.7 of Appendix 1 of the
CDS Clearing Rule Book. It is also
supported by similar clauses in the
Fixed Income and Cash and Derivatives
RuleBook for these business lines. All
agreements concluded by LCH SA,
particularly with its suppliers and
trading venue include wind down
clauses.
From an operational point of view,
the WDP is supported by detailed
procedures where required. They have
however not been attached to the plan
as they are not specific to wind down.
They are tested during default fire drills,
to verify their applicability and ensure
regular training of staff.
From a financial point of view, the
WDP is supported by highly liquid
assets equivalent to 6 months’ worth of
Operational expenses. The plan would
show that the cost of closure is inferior
to that amount.
The plan would take into account the
fact that a closure of the CCP could be
very disruptive for the market, therefore,
in a non member default situation and
12 See
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more generally in a situation where the
Business line is not suffering clearing
losses, a notice will be given to clearing
members in order to give them time to
terminate their trades before reaching
the early termination trigger.
Moreover, Rule 17Ad–22(e)(15)(i)
requires a covered clearing agency to
establish, implement, maintain and
enforce written policies and procedures
reasonably designed to determine the
amount of liquid net assets funded by
equity based upon its general business
risk profile and the length of time
required to achieve a recovery or orderly
wind-down, as appropriate, of its
critical operations and services if such
action is taken.
LCH SA believes that the proposed
rule change is consistent with this
requirement as the plan demonstrates
how LCH can achieve an orderly wind
down within six (6) months. LCH holds
capital, funded by equity, equal to the
operating expenses for the six month
period required to wind down. The
capital is invested in cash or highly
liquid securities which could be easily
mobilised, even in extreme
circumstances. LCH bases its calculation
on the latest audited expenses.
The cost to wind down is inferior to
this amount. It would take into account
the salaries to be paid to staff until they
leave the company and include
termination costs. Similarly, it takes
into account the costs that would have
to be paid to external service providers
until the service is no longer required.
Each contract contains wind down
clauses which limit the exit costs that
SA would have to pay. Where they
exist, they are included in the overall
wind down costs. Legal costs that LCH
would face in such extreme
circumstances cannot be evaluated and
have not been included. However, the
current overall cost of winding down is
very significantly under the 6 months
equivalent of Operational Expenses and
therefore could accommodate
unforeseen costs.
Rule 17Ad–22(e)(15)(ii) requires a
clearing agency to establish, implement,
maintain and enforce written policies
and procedures reasonably designed to
provide for holding liquid net assets
funded by equity equal to the greater of
either six months of its current
operating expenses or the amount
determined by the board of directors to
be sufficient to ensure a recovery or
orderly wind-down of critical
operations and services of the covered
clearing agency, as contemplated by the
plans established under Rule 17Ad–
22(e)(3)(ii).
LCH SA believes that its proposed
WDP meet this requirement given the
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demonstration that LCH SA can achieve
an orderly wind down within six (6)
months and at a cost lower than the six
(6) months of Operational expenses that
it holds in cash or highly liquid
securities.
Reviews of the WDP take place
annually and where appropriate are
aligned to existing annual market
exercise regimes (e.g., annual firedrills)
in order to simulate the implications of
executing the Recovery and/or Wind
Down Plans to ensure they remain
relevant. Additionally, where the
underlying business model of LCH SA
is amended, the change framework in
place ensures the implication of the
change to the business model is
considered with reference to the WDP
and the necessary updates made. The
WDP is approved by LCH SA ERCo,
Risk Committee and Board.
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.13 LCH SA does not
believe that the proposed rule change
would impose burdens on competition.
The proposed rule change would
establish and maintain LCH SA’s WDP
in accordance with and for the purposes
of the CCA rules. The Plan would not
affect clearing member’s access to
services offered by LCH SA or impose
any direct burden on clearing members.
In the extreme case in which LCH SA
would have to wind down, and the
business line is not suffering clearing
losses, the same amount of time would
be given to all the Clearing Members to
close their positions at LCH SA. In
addition, the plan determines that the
clearing services would be closed
globally, all members being treated
identically.
Accordingly, the proposed rule
change would not unfairly inhibit
market participant’s access to LCH SA’s
services or disadvantage or favor any
particular user in relationship to
another user.
Therefore, LCH SA does not believe
that the proposed rule change imposes
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
13 15
PO 00000
U.S.C. 78q–1(b)(3)(I).
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60241
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 by LCH SA.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
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–2017–013 on the subject line.
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–2017–013. 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 website (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
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those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website 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 the
filing also will be available for
inspection and copying at the principal
office of LCH SA and on LCH SA’s
website at https://www.lch.com/assetclasses/cdsclear.
All comments received will be posted
without change. Persons submitting
comments are cautioned that we do not
redact or edit personal identifying
information from comment submissions.
You should submit only information
that you wish to make available
publicly. All submissions should refer
to File Number SR–LCH SA–2017–013
and should be submitted on or before
January 9, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–27236 Filed 12–18–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82312; File No. SR–OCC–
2017–009]
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Approving Proposed Rule Change
Relating to The Options Clearing
Corporation’s Counterparty Credit Risk
Management Policy
sradovich on DSK3GMQ082PROD with NOTICES
December 13, 2017.
On October 12, 2017, The Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) proposed
rule change SR–OCC–2017–009
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder.2
The proposed rule change was
published for comment in the Federal
Register on November 1, 2017.3 The
Commission did not receive any
comment letters on the proposed rule
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 34–
81949 (Oct. 26, 2017), 82 FR 50719 (Nov. 1, 2017)
(File No. SR–OCC–2017–009).
1 15
VerDate Sep<11>2014
17:47 Dec 18, 2017
Jkt 244001
change. This order approves the
proposed rule change.
I. Description of the Proposed Rule
Change
This proposed rule change by OCC
will formalize OCC’s Counterparty
Credit Risk Management Policy (‘‘CCRM
Policy’’). The proposed rule change does
not require any changes to the text of
OCC’s By-Laws or Rules.4
OCC stated that, as a central
counterparty (‘‘CCP’’) providing
clearance, settlement, and risk
management services, it is exposed to
and must manage a range of risks,
including credit risk. According to OCC,
the purpose of the CCRM Policy is to
outline OCC’s overall approach to
identify, measure, monitor, and manage
its exposures to direct and indirect
participants, Liquidity Providers,5 asset
custodians, settlement banks, letter of
credit issuers, investment
counterparties, other clearing agencies,
and financial market utilities
(‘‘FMUs’’) 6 (each a ‘‘Counterparty’’)
arising from its payment, clearing, and
settlement processes. OCC noted that
the CCRM Policy is part of a broader
framework used by OCC to manage
credit risk, including OCC’s By-Laws,
Rules, and other policies and
procedures that are designed
collectively to ensure that OCC
appropriately manages counterparty
credit risk.
The CCRM Policy outlines the key
components of OCC’s framework for
identifying, measuring, monitoring, and
managing OCC’s exposures to its
Counterparties. This framework
includes: (1) The identification of credit
risk, (2) Counterparty access and
participation standards, (3) the
measurement of Counterparty
exposures, (4) the monitoring and
managing of Counterparty exposures,
and (5) voluntary termination of
Counterparty relationships. Each of
these components is described in more
detail below.
A. Identification of Credit Risk
The CCRM Policy identifies various
ways in which credit risk originates
4 All terms with initial capitalization that are not
otherwise defined herein have the same meaning as
set forth in the OCC By-Laws and Rules.
5 Under the CCRM Policy, ‘‘Liquidity Provider’’ is
defined as a Commercial Bank or a non-banking
institution—generally a pension fund—that
provides a committed liquidity facility to OCC.
6 Under the CCRM Policy, ‘‘Financial Market
Utility’’ is defined as a derivatives clearing
organization partnering with OCC to provide a
cross-margin program; a clearing agency providing
settlement services of securities arising from the
exercise, assignment or maturity of options or
futures; or the Depository providing book-entry
securities transfers and asset custodian services.
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
from the failure of a Counterparty to
perform. With respect to a Clearing
Member, the CCRM Policy details a
number of different ways in which OCC
may be exposed to credit risk. This
includes the potential failure of a
Clearing Member to pay for purchased
options, to meet expiration-related
settlement obligations, or to make
certain mark-to-market variation
payments or initial margin deposits. It
also includes the potential insufficiency
of a defaulting Clearing Member’s
margin and Clearing Fund deposits in a
liquidation scenario. Other sources of
credit risk identified in the CCRM
Policy include the inability of OCC to
access collateral (e.g., cash or securities)
from a custodian or investment
counterparty that is needed to facilitate
a liquidation, or a failure by an issuer
of a letter of credit to honor its
corresponding obligations. The CCRM
Policy also identifies that certain
relationships with other FMUs, such as
cross-margining programs and cash
market settlement services, represent
critical linkages that may present certain
degrees of credit exposure based on the
terms and design of the linkage. The
CCRM Policy also notes that OCC may
face additional risks from
Counterparties, such as the potential
failure of a Liquidity Provider to honor
a borrowing request.
B. Counterparty Access and
Participation Standards
Under the CCRM Policy, OCC’s
management of Counterparty credit
risks begins with an initial evaluation
process intended to ascertain that
Counterparties meet certain minimum
financial and operational standards and
are considered as having a low
probability of defaulting on their
obligations prior to engaging or effecting
any new transactions or expansion of
business with OCC. To accomplish this
objective, OCC evaluates each
Counterparty against established
minimum standards of
creditworthiness, overall financial
condition, and operational capabilities.
Pursuant to the Policy, the standards
used to evaluate Counterparties shall be
objective, risk-based, and publiclydisclosed to permit fair and open access.
These standards shall be developed
independently for Clearing Members,
Commercial and Central Banks,
investment counterparties, Liquidity
Providers and FMUs, accounting for
differences in their regulatory reporting
and overall business operations.
Clearing Membership Standards
OCC’s minimum participation
standards for Clearing Member are
E:\FR\FM\19DEN1.SGM
19DEN1
]]>Agencies
[Federal Register Volume 82, Number 242 (Tuesday, December 19, 2017)]
[Notices]
[Pages 60238-60242]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27236]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82317; File No. SR-LCH SA-2017-013]
Self-Regulatory Organizations; LCH SA; Notice of Proposed Rule
Change, Security-Based Swap Submission, or Advance Notice Relating to
LCH SA's Wind Down Plan
December 13, 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 December 7, 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, II, and III below, which Items have been prepared
primarily by LCH SA. 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.
---------------------------------------------------------------------------
[[Page 60239]]
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
LCH SA is proposing to adopt an updated wind down plan (the
``WDP'') in accordance with Rule 17Ad-22(e)(3)(ii). The text of the
proposed rule change has been annexed as Exhibit 5. LCH SA has
requested confidential treatment of the material submitted as Exhibit
5.
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
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 these statements.
A. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change.
1. Purpose
On September 28, 2016, the Securities and Exchange Commission (the
``Commission'') adopted amendments to Rule 17Ad-22 \3\ pursuant to
Section 17A of the Securities Exchange Act of 1934 (the ``Act'') \4\
and the Payment, Clearing and Settlement Supervision Act of 2010
(``Clearing Supervision Act'') \5\ to establish enhanced standards for
the operation and governance of those clearing agencies registered with
the Commission that meet the definition of a ``covered clearing
agency,'' as defined by Rule 17Ad-22(a)(5) \6\ (collectively, the new
and amended rules are herein referred to as ``CCA rules'').
---------------------------------------------------------------------------
\3\ 17 CFR 240.17Ad-22.
\4\ 15 U.S.C. 78q-1.
\5\ 12 U.S.C. 5461 et seq.
\6\ 17 CFR 240.17Ad-22(a)(5).
---------------------------------------------------------------------------
LCH SA is a covered clearing agency under the CCA rules and
therefore is subject to the requirements of the CCA rules, including
Rule 17Ad-22(e)(3). The CCA rules require that covered clearing
agencies, among other things: ``establish, implement, maintain and
enforce written policies and procedures reasonably designed to . . .
maintain a sound risk management framework for comprehensively managing
legal, credit, liquidity, operational, general business, investment,
custody, and other risks that arise in or are borne by the covered
clearing agency, which . . . includes plans for the recovery and
orderly wind-down of the covered clearing agency necessitated by credit
losses, liquidity shortfalls, losses from general business risk, or any
other losses.'' \7\
---------------------------------------------------------------------------
\7\ 17 CFR 240.17Ad-22(e)(3)(ii).
---------------------------------------------------------------------------
As a central counterparty recognized under the European Market
Infrastructure Regulation (``EMIR''), LCH SA is also required to have
in place relevant recovery and wind down mechanisms required under
EMIR.\8\
---------------------------------------------------------------------------
\8\ Regulation (EU) No. 152/2013 of 19 December 2012, Article 2.
---------------------------------------------------------------------------
As a credit institution based in the European Union, LCH SA is also
subject to Directive 2014/59/EU, as supplemented, requiring
institutions to draw up and maintain recovery plans setting forth
options for measures to be taken by the institution to restore its
financial position following a significant deterioration of its
financial position.
Accordingly, as described in more detailed below, the purpose of
the WDP is to ensure an orderly wind down of the CCP under extreme
circumstances and to limit market impact as much as possible, should
the recovery plan (the ``RP'') \9\ has failed.
---------------------------------------------------------------------------
\9\ See Filing N[deg] SR-LCH SA-2017-012.
---------------------------------------------------------------------------
The WDP sets out the steps that LCH SA would follow to close its
clearing services and shut down the company. The plan demonstrates how
LCH SA, as it exists today, can achieve this orderly wind down within
six (6) months.
In addition, LCH SA holds capital, funded by equity, equal to the
operating expenses for a six (6) month period. The WDP demonstrates
that the wind down cost remains inferior to the necessary amount.
The WDP would first determine the triggers for winding down and the
relationship between Recovery, Resolution and Wind down. In these
extreme circumstances, the CCP would first trigger the recovery plan.
The WDP would be triggered by LCH SA if, the recovery tools having been
exhausted and having failed, the only solutions left for LCH SA would
be to wind down its clearing services and close the company.
The triggers are only briefly presented in the WDP since they are
described in detail in the RP. They consider Clearing Member Defaults
losses well above the CCPs financial resources; Clearing Member
Defaults creating large liquidity shortfalls and Non Clearing Members
Defaults impacting capital adequacy or creating liquidity shortfalls.
This could be caused by large risks such as operational events, custody
and investment risks or large business risks. The WDP would be
triggered by LCH SA if, the recovery tools having been exhausted and
having failed, the only solution for LCH SA would be to wind down its
clearing services and close the company.
The WDP would not consider any other case such as a voluntary wind
down not being triggered by one of the above extreme circumstances.
The WDP would then describe the governance for triggering the plan.
The decision to wind down would be taken by the Board and ultimately
the shareholders' meeting upon advice of the Executive Risk Committee
(``ERCo'') and Local Management Committee (``LMC''). The implementation
of the WDP would be monitored by the LCH SA LMC or Default Crisis
Management Team (``DCMT''), the executive committee in charge of the
coordination of defaults.
The regulatory authorities would be consulted before such a
decision is taken and the French Autorit[eacute] de Contr[ocirc]le
Prudentiel et de Resolution (the ``ACPR'') would have to approve such a
decision, unless all the clearing service have already been closed.
They would be subsequently regularly informed of the implementation of
the plan.
LCH SA being a credit institution, it could be subject to a
resolution regime decided by the ACPR whilst conducting its recovery
plan and before a wind down would be decided by the company. In that
case, the decision to wind down as well the process to be followed
would be decided by the resolution authority.
The plan would then define a certain number of assumptions. It
would firstly assume that the CCP as it stands today would be wound
down until its full closure, although it is likely that in the phases
preceding the plan, some businesses would have been either closed or
scaled down. It also makes other assumptions that allows continuation
of business for some time and proper closing such as the fact that LCH
SA would keep its banking license and continue to have full access to
the central bank or that suppliers, which would continue to be paid,
would continue to offer a service.
In line with the RP, the WDP would present a mapping of the
functions and particularly distinguishes between the clearing
functions, which are all considered as critical, the critical
supporting functions and the other non-critical functions.
The plan would then describe the closure of the clearing services.
The closure of CDSClear is covered in Article 2.4.3.1 of CDS Clearing
Rule book and in the Clause 8 of Appendix 1. It specifies that LCH SA
would
[[Page 60240]]
publish a notice to clearing members notifying that a wind down event
has occurred and to the extent possible the date on which transactions
shall cease to be accepted on the CDS Clearing service. LCH SA would
publish the clearing notice as far in advance of the Early Termination
Trigger Date as it is reasonably possible. The plan would indicated
that, in a non-default situation and more generally in a situation
where the corresponding business line is not suffering, LCH would give
some time for a maximum of trades to settle naturally and for the
clearing members to close their longer positions and switch to another
CCP.
The closing of the business would be done through cash settlement
and the repayments amounts would be paid by LCH SA and the clearing
members on the business following notification.
The WDP would then describe how critical supporting functions would
be closed. The treasury function would close once all clearing services
have been terminated and all monies paid by LCH SA and/or the clearing
members. Once wind down is decided, cash would not be invested anymore
but deposited at the central bank or possibly invested in same day
repos. Operations, IT production, and Risk teams would be kept until
all positions are closed. At that moment, the majority of staff in
these areas would not be required any more.
It has to be noted that the WDP would list all contracts with
external providers, including venues and IT companies to which LCH SA
has outsourced services. They contain wind down provisions, enabling
LCH SA to exit these contracts under specific conditions.
Non critical support functions such as Finance, Compliance, Audit
etc. would start being scaled down immediately after the decision is
taken to wind down. The path at which each department is expected to
reduce its workforce is specified in the plan. Consultation with the
LCH SA's staff representatives (works council) would start immediately
in order to ensure a proper departure of permanent staff in line with
French law and regulations and those of the countries in which LCH SA
has branches/representative offices. Staff approach for winding down
would be described in more detail in the WDP.
The WDP would contain an overall timeline of the full wind down
process. This plan shows that LCH SA would be in a position to close
the company within six (6) months as required by applicable
regulations.
The WDP would also contain an appendix describing into more details
the communication processes that would be followed both internal and
external. It specifies that the wind down notice would be published on
the LCH SA website and the teams within LCH SA and the LSEG group that
would be responsible for each type of communications.
Separately from the WDP, but in line with the processes and
timeline described in the WDP, LCH SA calculates the costs required for
a wind down. It encompasses staff salaries, indemnities for staff
departure, cost to be paid to suppliers during notice periods and more
generally all foreseeable costs that would be due in case of a wind
down event. The final figure is reported in the WDP and shows that
overall costs is significantly below the liquid assets held by LCH SA
for that purpose and corresponding to six (6) months of operational
expenses.
The first version of the WDP was adopted in 2014 and is reviewed on
an annual basis. It is approved by the LCH SA Risk Committee, LMC and
the Board.
The WDP, which was approved by the Board on November 22nd 2017, has
been annexed as Exhibit 5. LCH SA has requested confidential treatment
of the plan as Exhibit 5, however the main characteristics are
described above and a self comprehensive disclosure, as required by SEC
Rule 17AD-22(e)(23), has been published on the LCH website in April
2017.
2. Statutory Basis
LCH SA believes that the proposed rule change is consistent with
the requirements of Section 17A of the Securities Exchange Act of 1934
\10\ (the ``Act'') and the regulations thereunder.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
Specifically, in accordance with the requirement in Rule 17Ad-
22(e)(3)(ii), LCH SA has established a WDP which describes the
scenarios and events that may threaten its ability to continue to
provide critical \11\ clearing services and the processes that LCH SA
would follow to manage an orderly wind down of the CCP.
---------------------------------------------------------------------------
\11\ The CPSS-IOSCO Report states that `Critical' refers to the
importance of the services to the Financial Market Infrastructures
(FMIs) participants, other FMIs, and to the smooth functioning of
the markets the FMI serves and in particular, the maintenance of
financial stability.
---------------------------------------------------------------------------
LCH SA has an obligation to guarantee the continuous performance of
critical service towards the market and, as such, will not request to
enact a wind down without an important triggering event that would
cause a failed recovery or a resolution situation. Scenarios have been
categorised into the following for the purposes of assessing the
effectiveness of the recovery tools and to identify the actions
required for the WDP:
Member default losses resulting in uncovered credit losses
or liquidity shortfalls;
Non-default losses that threaten LCH SA's solvency,
arising from general business risks, custody and investment risks, any
other large operational risks caused by caused by a human or system
failure and
Uncovered liquidity shortfall associated to these risks.
LCH SA has adopted a Recovery Plan (``RP'') with an updated version
submitted separately to the SEC.\12\ The WDP assumes that all recovery
and resolution tools have been exhausted, have failed, and thus require
LCH SA to wind down its clearing services. The reasons for these losses
are described in more detail in the RP.
---------------------------------------------------------------------------
\12\ See Supra note 9.
---------------------------------------------------------------------------
The plan describes the governance for triggering the wind down and
the approval steps required. The triggering of the plan will have to be
decided by LCH SA and LCH Group Boards as well as by a shareholders'
meeting. It will have to be approved by ACPR unless LCH SA has already
closed down all its clearing activities.
It is to be noted that the plan could be also triggered by the
resolution authorities as part of the resolution toolkit if LCH SA has
been put into resolution.
From a legal point of view, the WDP would be supported by the
Article 2.4.3.1 of the CDS Clearing Rule Book, clause 8 and 8.7 of
Appendix 1 of the CDS Clearing Rule Book. It is also supported by
similar clauses in the Fixed Income and Cash and Derivatives RuleBook
for these business lines. All agreements concluded by LCH SA,
particularly with its suppliers and trading venue include wind down
clauses.
From an operational point of view, the WDP is supported by detailed
procedures where required. They have however not been attached to the
plan as they are not specific to wind down. They are tested during
default fire drills, to verify their applicability and ensure regular
training of staff.
From a financial point of view, the WDP is supported by highly
liquid assets equivalent to 6 months' worth of Operational expenses.
The plan would show that the cost of closure is inferior to that
amount.
The plan would take into account the fact that a closure of the CCP
could be very disruptive for the market, therefore, in a non member
default situation and
[[Page 60241]]
more generally in a situation where the Business line is not suffering
clearing losses, a notice will be given to clearing members in order to
give them time to terminate their trades before reaching the early
termination trigger.
Moreover, Rule 17Ad-22(e)(15)(i) requires a covered clearing agency
to establish, implement, maintain and enforce written policies and
procedures reasonably designed to determine the amount of liquid net
assets funded by equity based upon its general business risk profile
and the length of time required to achieve a recovery or orderly wind-
down, as appropriate, of its critical operations and services if such
action is taken.
LCH SA believes that the proposed rule change is consistent with
this requirement as the plan demonstrates how LCH can achieve an
orderly wind down within six (6) months. LCH holds capital, funded by
equity, equal to the operating expenses for the six month period
required to wind down. The capital is invested in cash or highly liquid
securities which could be easily mobilised, even in extreme
circumstances. LCH bases its calculation on the latest audited
expenses.
The cost to wind down is inferior to this amount. It would take
into account the salaries to be paid to staff until they leave the
company and include termination costs. Similarly, it takes into account
the costs that would have to be paid to external service providers
until the service is no longer required. Each contract contains wind
down clauses which limit the exit costs that SA would have to pay.
Where they exist, they are included in the overall wind down costs.
Legal costs that LCH would face in such extreme circumstances cannot be
evaluated and have not been included. However, the current overall cost
of winding down is very significantly under the 6 months equivalent of
Operational Expenses and therefore could accommodate unforeseen costs.
Rule 17Ad-22(e)(15)(ii) requires a clearing agency to establish,
implement, maintain and enforce written policies and procedures
reasonably designed to provide for holding liquid net assets funded by
equity equal to the greater of either six months of its current
operating expenses or the amount determined by the board of directors
to be sufficient to ensure a recovery or orderly wind-down of critical
operations and services of the covered clearing agency, as contemplated
by the plans established under Rule 17Ad-22(e)(3)(ii).
LCH SA believes that its proposed WDP meet this requirement given
the demonstration that LCH SA can achieve an orderly wind down within
six (6) months and at a cost lower than the six (6) months of
Operational expenses that it holds in cash or highly liquid securities.
Reviews of the WDP take place annually and where appropriate are
aligned to existing annual market exercise regimes (e.g., annual
firedrills) in order to simulate the implications of executing the
Recovery and/or Wind Down Plans to ensure they remain relevant.
Additionally, where the underlying business model of LCH SA is amended,
the change framework in place ensures the implication of the change to
the business model is considered with reference to the WDP and the
necessary updates made. The WDP is approved by LCH SA ERCo, Risk
Committee and Board.
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.\13\ LCH SA does
not believe that the proposed rule change would impose burdens on
competition.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------
The proposed rule change would establish and maintain LCH SA's WDP
in accordance with and for the purposes of the CCA rules. The Plan
would not affect clearing member's access to services offered by LCH SA
or impose any direct burden on clearing members.
In the extreme case in which LCH SA would have to wind down, and
the business line is not suffering clearing losses, the same amount of
time would be given to all the Clearing Members to close their
positions at LCH SA. In addition, the plan determines that the clearing
services would be closed globally, all members being treated
identically.
Accordingly, the proposed rule change would not unfairly inhibit
market participant's access to LCH SA's services or disadvantage or
favor any particular user in relationship to another user.
Therefore, LCH SA does not believe that the proposed rule change
imposes any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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 by LCH SA.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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 [email protected]. Please include
File Number SR-LCH SA-2017-013 on the subject line.
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-2017-013. 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 website (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
[[Page 60242]]
those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website 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 the filing also will be available
for inspection and copying at the principal office of LCH SA and on LCH
SA's website at https://www.lch.com/asset-classes/cdsclear.
All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-LCH SA-2017-013 and should
be submitted on or before January 9, 2018.
---------------------------------------------------------------------------
\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. 2017-27236 Filed 12-18-17; 8:45 am]
BILLING CODE 8011-01-P
