Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of Proposed Rule Change, as Modified by Amendment No. 1, Relating to a New Fee Incentive Scheme, 58798-58800 [2018-25342]

Download as PDF 58798 Federal Register / Vol. 83, No. 225 / Wednesday, November 21, 2018 / Notices satisfy the tier and thus receive a discounted rate. The Exchange also believes notwithstanding the proposed change, RMPL/RMPT Tier 1 still attracts additional midpoint liquidity to the Exchange, resulting in increased price improvement opportunities for orders seeking an execution at the midpoint of the NBBO on the Exchange or elsewhere. The Exchange notes that routing through the Exchange is voluntary. The Exchange also believes that the proposed routing tier change is non-discriminatory because it applies uniformly to all members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Particularly, the proposed rates and rebates would apply uniformly to all members, and members may opt to disfavor the Exchange’s pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing venues to maintain their competitive standing in the financial markets. Further, excessive fees would serve to impair an exchange’s ability to compete for order flow and members rather than burdening competition. Moreover, the proposed fee changes are designed to incentivize liquidity, which the Exchange believes will benefit all market participants by encouraging a transparent and competitive market. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment. khammond on DSK30JT082PROD with NOTICES 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) VerDate Sep<11>2014 16:08 Nov 20, 2018 Jkt 247001 of the Act 16 and paragraph (f) of Rule 19b–4 thereunder.17 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– CboeEDGA–2018–017 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–CboeEDGA–2018–017. 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 this filing will also 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 16 15 17 17 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). Frm 00044 Fmt 4703 Sfmt 4703 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–CboeEDGA–2018–017 and should be submitted on or before December 12, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–25340 Filed 11–20–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84602; File No. SR–LCH SA–2018–005] Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of Proposed Rule Change, as Modified by Amendment No. 1, Relating to a New Fee Incentive Scheme November 15, 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 October 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 by LCH SA. On November 15, 2018, LCH SA filed Amendment No. 1 to the proposed rule change.3 LCH SA filed the proposal pursuant to Section 19(b)(3)(A) of the Act,4 and Rule 19b–4(f)(2) 5 thereunder, so that the proposal was effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons. I. Clearing Agency’s Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change will introduce a new fee incentive scheme 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 In Amendment No. 1, LCH SA added to Item II an additional description of the proposed fees. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(2). 1 15 E:\FR\FM\21NON1.SGM 21NON1 58799 Federal Register / Vol. 83, No. 225 / Wednesday, November 21, 2018 / Notices for CDSClear client clearing activities applicable from October 31st, 2018. 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 such statements. A. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is for LCH SA to introduce and specify a clearing fees incentive scheme for clients of CDSClear members, including volume based discounts, in order to encourage the growth of the CDSClear client clearing franchise. Currently, CDSClear clearing members are charged a fee on their client clearing flows per EUR/USD million of gross notional cleared defined as follows: VARIABLE FEE Client Clearing (Per million gross notional cleared) EUR indices EUR single names Credit index options— EUR indices US indices US single names Credit index option— US indices * Ö4 Ö12 Ö20 $5 $17 [$20] * Subject to regulatory approval. The proposed incentive scheme defines a fee rebate based on volumes in order to make it more attractive for new buy side clients to select CDSClear services and/or CDSClear existing clients to clear more by reducing the marginal cost of clearing past predefined volumes thresholds as detailed hereinafter and below in Exhibit 5. 1. QUARTERLY CREDIT INDEX OPTION THRESHOLDS Notional cleared (quarterly) Fees From Ö0 to Ö2bn ....... Full published variable fees apply. 20% discount on published variable fees (applicable only above ×2bn). No further fees apply. From over Ö2bn to Ö10bn. Over Ö10bn ............... 2. QUARTERLY CREDIT INDEX THRESHOLDS Notional cleared (quarterly) Fees From Ö0 to Ö30bn ..... Full published variable fees apply. No further fees apply. khammond on DSK30JT082PROD with NOTICES Over Ö30bn ............... 3. QUARTERLY CORPORATE SINGLE NAME THRESHOLDS Notional cleared (quarterly) Fees From Ö0 to Ö4bn ....... Full published fees variable apply. No further fees apply. Over Ö4bn ................. The thresholds apply to quarterly notional cleared and the potential resulting rebate will be applied on the bill for the last month of the quarter. The first quarterly notionals to be reviewed will be the Q4 2018 ones. The proposed fee discount scheme will be effective until 31st December 2020. Finally, the proposed incentive scheme will also exempt from clearing fees the registration of clients’ positions at CDSClear resulting from the transfer of such positions from another CCP. 2. Statutory Basis 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.6 LCH SA has determined that the proposed fees are reasonable and appropriate to charge to offer and maintain CDSClear client clearing services. In particular, LCH SA believes that the volume-based discounts for CDSClear client clearing activities have been set up at an appropriate level given the costs and expenses to LCH SA in providing such services. LCH SA believes that imposing such clearing fees is consistent with the requirements of Section 17A of the Act 7 and the regulations thereunder applicable to it and in particular provides for the equitable allocation of reasonable fees, dues, and other charges among clearing members and market participants by ensuring that Members pay reasonable fees and dues for the 6 15 7 15 VerDate Sep<11>2014 16:08 Nov 20, 2018 Jkt 247001 PO 00000 U.S.C. 78q–1(b)(3)(D). U.S.C. 78q–1. Frm 00045 Fmt 4703 Sfmt 4703 services provided by LCH SA, within the meaning of Section 17A(b)(3)(D) of the Act. 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.8 LCH SA does not believe that the proposed rule change would impose any burden on competition. As noted above, LCH SA believes that the fees and related discounts have been set up at an appropriate level given the costs and expenses to LCH SA in offering and maintaining the relevant client clearing services. Additionally, the fees and related discounts will apply equally to all clients of all clearing members of CDSClear. Further, LCH SA does not believe that the proposed rule change would have a burden on competition because it does not adversely affect the ability of such Clearing Members or other market participants generally 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 by LCH SA. 8 15 U.S.C. 78q–1(b)(3)(I). E:\FR\FM\21NON1.SGM 21NON1 58800 Federal Register / Vol. 83, No. 225 / Wednesday, November 21, 2018 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective upon filing pursuant to Section 19(b)(3)(A) 9 of the Act and Rule 19b–4(f)(2) 10 thereunder because it establishes a fee or other charge imposed by LCH SA on its Clearing Members. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such proposed 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, as modified by Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods: khammond on DSK30JT082PROD with NOTICES 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–2018–005 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–2018–005. 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 such filings will also be available for inspection and copying at the principal office of LCH SA and on LCH SA’s website at https://www.lch.com/ resources/rules-and-regulations/ proposed-rule-changes-0. 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–2018–005 and should be submitted on or before December 12, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–25342 Filed 11–20–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84601; File No. SR–CFE– 2018–001] Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice of Filing of a Proposed Rule Change Regarding Minor Rule Violations November 15, 2018. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on October 31, 2018 Cboe Futures Exchange, LLC (‘‘CFE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change described in Items I, II, and III below, which Items have been prepared by CFE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. CFE also has filed this proposed rule change with the Commodity Futures Trading Commission (‘‘CFTC’’). CFE filed a written certification with the CFTC under Section 5c(c) of the Commodity Exchange Act (‘‘CEA’’) 2 on October 31, 2018. 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(7). 2 7 U.S.C. 7a–2(c). 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b–4(f)(2). VerDate Sep<11>2014 16:08 Nov 20, 2018 1 15 Jkt 247001 PO 00000 Frm 00046 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Description of the Proposed Rule Change The Exchange proposes to amend its rules regarding the processing of minor rule violations. The scope of this filing is limited solely to the application of the proposed rule amendments to security futures that may be traded on CFE. Although no security futures are currently listed for trading on CFE, CFE may list security futures for trading in the future. The text of the proposed rule change is attached as Exhibit 4 to the filing but is not attached to the publication of this notice. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CFE 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. CFE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CFE Rule 714 (Imposition of Fines for Minor Rule Violations) provides for the issuance of letters of caution or summary fines for specified types of minor CFE rule violations instead of addressing these violations through formal disciplinary proceedings. Each violation type under Rule 714 has a summary fine schedule that includes increasing monetary fines for subsequent violations by a party during a specified rolling time period and a referral of that party to the CFE Business Conduct Committee once that party has committed a certain number of violations within that rolling time period. The referral to the BCC is so that a panel of the BCC (‘‘BCC Panel’’) may determine whether or not to authorize the issuance of a statement of charges against the party and proceed with a formal disciplinary proceeding with regard to the matter. CFE is making amendments to Rule 714 in conjunction with other rule amendments being made by CFE to its disciplinary rules, including to Rule 714, that are not required to be submitted to the Commission pursuant E:\FR\FM\21NON1.SGM 21NON1

Agencies

[Federal Register Volume 83, Number 225 (Wednesday, November 21, 2018)]
[Notices]
[Pages 58798-58800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25342]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84602; File No. SR-LCH SA-2018-005]


Self-Regulatory Organizations; LCH SA; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change, as Modified by 
Amendment No. 1, Relating to a New Fee Incentive Scheme

November 15, 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 October 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 
by LCH SA. On November 15, 2018, LCH SA filed Amendment No. 1 to the 
proposed rule change.\3\ LCH SA filed the proposal pursuant to Section 
19(b)(3)(A) of the Act,\4\ and Rule 19b-4(f)(2) \5\ thereunder, so that 
the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as modified by Amendment No. 1, from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, LCH SA added to Item II an additional 
description of the proposed fees.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change will introduce a new fee incentive scheme

[[Page 58799]]

for CDSClear client clearing activities applicable from October 31st, 
2018.

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 such statements.

A. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is for LCH SA to introduce 
and specify a clearing fees incentive scheme for clients of CDSClear 
members, including volume based discounts, in order to encourage the 
growth of the CDSClear client clearing franchise.
    Currently, CDSClear clearing members are charged a fee on their 
client clearing flows per EUR/USD million of gross notional cleared 
defined as follows:

                                                  Variable Fee
----------------------------------------------------------------------------------------------------------------
                              Client Clearing (Per million gross notional cleared)
-----------------------------------------------------------------------------------------------------------------
                                         Credit index                                             Credit index
   EUR indices      EUR single names    options-- EUR        US indices      US single names      option-- US
                                           indices                                                 indices *
----------------------------------------------------------------------------------------------------------------
        [euro]4           [euro]12           [euro]20                 $5                $17              [$20]
----------------------------------------------------------------------------------------------------------------
* Subject to regulatory approval.

    The proposed incentive scheme defines a fee rebate based on volumes 
in order to make it more attractive for new buy side clients to select 
CDSClear services and/or CDSClear existing clients to clear more by 
reducing the marginal cost of clearing past pre-defined volumes 
thresholds as detailed hereinafter and below in Exhibit 5.

               1. Quarterly Credit Index Option Thresholds
------------------------------------------------------------------------
       Notional cleared (quarterly)                     Fees
------------------------------------------------------------------------
From [euro]0 to [euro]2bn.................  Full published variable fees
                                             apply.
From over [euro]2bn to [euro]10bn.........  20% discount on published
                                             variable fees (applicable
                                             only above [ 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-2018-005 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-2018-005. 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 such filings will also be available for inspection 
and copying at the principal office of LCH SA and on LCH SA's website 
at https://www.lch.com/resources/rules-and-regulations/proposed-rule-changes-0.
    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-2018-005 and should 
be submitted on or before December 12, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25342 Filed 11-20-18; 8:45 am]
BILLING CODE 8011-01-P
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