Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Designation of Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade Shares of ProShares QuadPro Funds Under NYSE Arca Rule 8.200-E, 6914-6915 [2018-03113]
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6914
Federal Register / Vol. 83, No. 32 / Thursday, February 15, 2018 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
the defaulting member’s behalf).
Reducing the risk of loss contagion
during a member default, in turn,
enhances the ability of NSCC and its
clearing members to continue to provide
stability and safety to the financial
markets that they serve. Therefore, by
enhancing NSCC’s ability to address
losses and liquidity pressures that
otherwise might cause financial distress
to NSCC or its clearing members, the
Advance Notice promotes safety and
soundness.
Consistent with the conclusions
discussed above, the Commission also
believes that NSCC’s proposal is
consistent with reducing systemic risks
and supporting the stability of the
broader financial system. Reducing the
risk of loss contagion would attenuate
the transmission of financial shocks
from defaulting members to nondefaulting members. Accordingly, the
proposed changes would support the
stability of the broader financial system.
Thus, the Commission believes that the
proposal contained in the Advance
Notice is consistent with the stated
objectives and principles of Section
805(b) of the Clearing Supervision Act.
B. Consistency With Rules 17Ad–
22(e)(7)(i) and (ii)
The Commission believes that the
changes proposed in the Advance
Notice are consistent with the
requirements of Rules 17Ad–22(e)(7)
under the Exchange Act. Rule 17Ad–
22(e)(7) requires NSCC to establish,
implement, maintain and enforce
written policies and procedures
reasonably designed to effectively
measure, monitor, and manage liquidity
risk that arises in or is borne by NSCC,
including measuring, monitoring, and
managing its settlement and funding
flows on an ongoing and timely basis,
and its use of intraday liquidity, as
specified in the rule.
In particular, Rule 17Ad–22(e)(7)(i)
under the Exchange Act requires that
each covered clearing agency establish,
implement, maintain and enforce
written policies and procedures
reasonably designed to ‘‘effectively
measure, monitor, and manage the
liquidity risk that arises in or is borne
by [it], including measuring,
monitoring, and managing its settlement
and funding flows on an ongoing and
timely basis, and its use of intraday
liquidity by . . . [m]aintaining
sufficient liquid resources at the
minimum in all relevant currencies to
effect same-day . . . settlement of
payment obligations with a high degree
of confidence under a wide range of
foreseeable stress scenarios that
includes, but is not limited to, the
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19:01 Feb 14, 2018
Jkt 244001
default of the participant family that
would generate the largest aggregate
payment of obligation for the covered
clearing agency in extreme but plausible
conditions.’’
As described above, the proposed
expansion of the authorized amount
under NSCC’s Prefunded Liquidity
Program would increase the readilyavailable liquidity resources available to
NSCC to continue to meet its liquidity
obligations in a timely fashion in the
event of a member default. The
increased funds could thereby help
maintain sufficient liquidity resources
to effect same-day settlement of
payment obligations with a high degree
of confidence under a wide range of
foreseeable stress scenarios.
Additionally, the increased size of the
Prefunded Liquidity Program is
designed to help ensure that NSCC has
sufficient, readily-available qualifying
liquid resources to meet the cash
settlement obligations of its largest
family of affiliated members. Therefore,
the Commission finds that the proposal
is consistent with Rule 17Ad–22(e)(7)(i).
Rule 17Ad–22(e)(7)(ii) under the
Exchange Act requires each covered
clearing agency to establish, implement,
maintain and enforce written policies
and procedures reasonably designed to
‘‘effectively measure, monitor, and
manage the liquidity risk that arises in
or is borne by [it], including measuring,
monitoring, and managing its settlement
and funding flows on an ongoing and
timely basis, and its use of intraday
liquidity by . . . holding qualifying
liquid resources sufficient’’ to satisfy
payment obligations owed to clearing
members. Rule 17Ad–22(a)(14) under
the Exchange Act defines ‘‘qualifying
liquid resources’’ to include, among
other things, cash held either at the
central bank of issue or at creditworthy
commercial banks.
As described above, the proposed
expansion of the authorized amount
under NSCC’s Prefunded Liquidity
Program would enable NSCC to hold
additional cash proceeds from the
issuance of the Notes in a cash deposit
account at the Federal Reserve Bank of
New York or a bank counterparty that
has been approved pursuant to the
Clearing Agency Investment Policy.
Because the funds would be held at the
Federal Reserve Bank of New York or a
bank counterparty, they would qualify
as qualifying liquid resource. Therefore,
the Commission believes that the
proposal is consistent with Rule 17Ad–
22(e)(7)(ii).
III. Conclusion
It is therefore noticed, pursuant to
Section 806(e)(1)(I) of the Clearing
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
Supervision Act,28 that the Commission
does not object to the Advance Notice
(SR–NSCC–2017–807) and that NSCC is
authorized to implement the proposed
change as of the date of this notice.
By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–03094 Filed 2–14–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82684; File No. SR–
NYSEArca–2017–69]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Designation of
Longer Period for Commission Action
on Proceedings To Determine Whether
To Approve or Disapprove a Proposed
Rule Change, as Modified by
Amendment No. 2, To List and Trade
Shares of ProShares QuadPro Funds
Under NYSE Arca Rule 8.200–E
February 9, 2018.
On July 31, 2017, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to list and trade shares of
ProShares QuadPro U.S. Large Cap,
ProShares QuadPro Short U.S. Large
Cap, ProShares QuadPro U.S. Small
Cap, and ProShares QuadPro Short U.S.
Small Cap under NYSE Arca Rule
8.200–E. The proposed rule change was
published for comment in the Federal
Register on August 18, 2017.3 On
September 28, 2017, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change.5 On September 29, 2017,
the Exchange filed Amendment No. 1 to
the proposed rule change, which
amended and superseded the proposed
rule change as originally filed. On
November 14, 2017, the Exchange filed
28 12
U.S.C. 5465(e)(1)(I).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 81388
(August 14, 2017), 82 FR 39477.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 81746,
82 FR 46315 (October 4, 2017). The Commission
designated November 16, 2017, as the date by
which the Commission shall either approve or
disapprove, or institute proceedings to determine
whether to disapprove, the proposed rule change.
1 15
E:\FR\FM\15FEN1.SGM
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Federal Register / Vol. 83, No. 32 / Thursday, February 15, 2018 / Notices
Amendment No. 2 to the proposed rule
change, which amended and superseded
the proposed rule change as modified by
Amendment No. 1.6 On November 16,
2017, the Commission published notice
of Amendment No. 2 and instituted
proceedings under Section 19(b)(2)(B) of
the Act 7 to determine whether to
approve or disapprove the proposed
rule change, as modified by Amendment
No. 2.8 The Commission has received no
comments on the proposed rule change.
Section 19(b)(2) of the Act 9 provides
that, after initiating disapproval
proceedings, the Commission shall issue
an order approving or disapproving the
proposed rule change not later than 180
days after the date of publication of
notice of filing of the proposed rule
change. The Commission may extend
the period for issuing an order
approving or disapproving the proposed
rule change by not more than 60 days
if the Commission determines that a
longer period is appropriate and
publishes the reasons for such
determination. The proposed rule
change was published for notice and
comment in the Federal Register on
August 18, 2017. February 14, 2018 is
180 days from that date, and April 15,
2018 is 240 days from that date.
The Commission finds it appropriate
to designate a longer period within
which to issue an order approving or
disapproving the proposed rule change
so that it has sufficient time to consider
the proposed rule change, as modified
by Amendment No. 2. Accordingly, the
Commission, pursuant to Section
19(b)(2) of the Act,10 designates April
15, 2018 as the date by which the
Commission shall either approve or
disapprove the proposed rule change
(File No. SR–NYSEArca–2017–69), as
modified by Amendment No. 2.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–03113 Filed 2–14–18; 8:45 am]
sradovich on DSK3GMQ082PROD with NOTICES
6 Amendment
No. 2 is available at https://
www.sec.gov/comments/sr-nysearca-2017-69/
nysearca201769-2688277-161489.pdf.
7 15 U.S.C. 78s(b)(2)(B).
8 See Securities Exchange Act Release No. 82105,
82 FR 55699 (November 22, 2017).
9 15 U.S.C. 78s(b)(2).
10 Id.
11 17 CFR 200.30–3(a)(57).
19:01 Feb 14, 2018
[Release No. 34–82675; File No. SR–LCH
SA–2018–001]
Self-Regulatory Organizations; LCH
SA; Notice of Filing of Proposed Rule
Change, Security-Based Swap
Submission, or Advance Notice
Relating to Self-Referencing
Transactions
February 9, 2018.
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 January
31, 2018, 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.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
LCH SA is proposing to amend its
CDS Clearing Supplement and Section 4
of the CDS Clearing Procedures in order
to allow acceptation of client’s selfreferencing transactions on their
clearing broker. The text of the proposed
rule change has been annexed 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
BILLING CODE 8011–01–P
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SECURITIES AND EXCHANGE
COMMISSION
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1. Purpose
In connection with the clearing of
single name CDS referencing banks
which are clearing members of
CDSClear, LCH SA proposes to modify
its eligibility requirements to allow for
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00082
Fmt 4703
Sfmt 4703
6915
the clearing of clients ‘‘self-referencing
transactions’’ on their clearing broker.
A ‘‘self-referencing transaction’’ refers
to a single name CDS referencing a
reference entity which is:
—In the case of a house transaction,
either the clearing member itself or an
affiliate of the clearing member;
—In the case of a client transaction,
either the client itself or an affiliate of
the client, or the clearing broker of the
client or an affiliate of the clearing
broker.
Currently, clearing of both house and
client self-referencing transactions are
prohibited by LCH SA whereas clients
commonly trade single name CDS
referencing banks in the uncleared
world (as they face directly their
counterparty). Not allowing for the
clearing of those transactions as a
consequence of the intermediation of a
clearing member required for clients to
clear would thus impact their ability to
continue trading the financial CDS
single name market, as well as restrict
their choice for clearing brokers.
LCH SA is proposing to allow clients
self-referencing transactions when the
reference entity referenced by the single
name CDS is either the client’s clearing
broker or an affiliate of the client’s
clearing broker.
The risk arising from clients selfreferencing transactions on their
clearing broker would be captured by
the existing framework and more
specifically by the Self-Referencing
Margin which charges the minimum
between zero and the net Profit and Loss
resulting from a credit event of the selfreferenced name across all index, single
name and index swaption transactions
using a Recovery Rate of 0%. The net
Profit and Loss calculation allows for
netting of the exposures arising from
index, index swaption and single name
CDS transactions if they reference the
same contractual definition and
transaction type.
The proposed rule change will consist
in amending the following provisions of
the CDS Clearing Supplement and
Section 4 of the Procedures:
—The eligibility requirement in respect
of single names in Section 4 of the
Procedures (paragraph
4.1(c)(iii)(B)(11)) to make the
distinction between house and clients
self-referencing transactions so as to
allow clients to clear single name CDS
transactions referencing their clearing
broker or one of their affiliates but
neither clients self-referencing
transactions referencing the client
itself nor house self-referencing
transactions; and
E:\FR\FM\15FEN1.SGM
15FEN1
]]>Agencies
[Federal Register Volume 83, Number 32 (Thursday, February 15, 2018)]
[Notices]
[Pages 6914-6915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-03113]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82684; File No. SR-NYSEArca-2017-69]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of
Designation of Longer Period for Commission Action on Proceedings To
Determine Whether To Approve or Disapprove a Proposed Rule Change, as
Modified by Amendment No. 2, To List and Trade Shares of ProShares
QuadPro Funds Under NYSE Arca Rule 8.200-E
February 9, 2018.
On July 31, 2017, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
list and trade shares of ProShares QuadPro U.S. Large Cap, ProShares
QuadPro Short U.S. Large Cap, ProShares QuadPro U.S. Small Cap, and
ProShares QuadPro Short U.S. Small Cap under NYSE Arca Rule 8.200-E.
The proposed rule change was published for comment in the Federal
Register on August 18, 2017.\3\ On September 28, 2017, pursuant to
Section 19(b)(2) of the Act,\4\ the Commission designated a longer
period within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\5\ On September 29, 2017, the
Exchange filed Amendment No. 1 to the proposed rule change, which
amended and superseded the proposed rule change as originally filed. On
November 14, 2017, the Exchange filed
[[Page 6915]]
Amendment No. 2 to the proposed rule change, which amended and
superseded the proposed rule change as modified by Amendment No. 1.\6\
On November 16, 2017, the Commission published notice of Amendment No.
2 and instituted proceedings under Section 19(b)(2)(B) of the Act \7\
to determine whether to approve or disapprove the proposed rule change,
as modified by Amendment No. 2.\8\ The Commission has received no
comments on the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 81388 (August 14,
2017), 82 FR 39477.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 81746, 82 FR 46315
(October 4, 2017). The Commission designated November 16, 2017, as
the date by which the Commission shall either approve or disapprove,
or institute proceedings to determine whether to disapprove, the
proposed rule change.
\6\ Amendment No. 2 is available at https://www.sec.gov/comments/sr-nysearca-2017-69/nysearca201769-2688277-161489.pdf.
\7\ 15 U.S.C. 78s(b)(2)(B).
\8\ See Securities Exchange Act Release No. 82105, 82 FR 55699
(November 22, 2017).
---------------------------------------------------------------------------
Section 19(b)(2) of the Act \9\ provides that, after initiating
disapproval proceedings, the Commission shall issue an order approving
or disapproving the proposed rule change not later than 180 days after
the date of publication of notice of filing of the proposed rule
change. The Commission may extend the period for issuing an order
approving or disapproving the proposed rule change by not more than 60
days if the Commission determines that a longer period is appropriate
and publishes the reasons for such determination. The proposed rule
change was published for notice and comment in the Federal Register on
August 18, 2017. February 14, 2018 is 180 days from that date, and
April 15, 2018 is 240 days from that date.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
The Commission finds it appropriate to designate a longer period
within which to issue an order approving or disapproving the proposed
rule change so that it has sufficient time to consider the proposed
rule change, as modified by Amendment No. 2. Accordingly, the
Commission, pursuant to Section 19(b)(2) of the Act,\10\ designates
April 15, 2018 as the date by which the Commission shall either approve
or disapprove the proposed rule change (File No. SR-NYSEArca-2017-69),
as modified by Amendment No. 2.
---------------------------------------------------------------------------
\10\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-03113 Filed 2-14-18; 8:45 am]
BILLING CODE 8011-01-P
