Self-Regulatory Organizations; The Options Clearing Corporation; Notice of No Objection To Advance Notice Related to Changes to the Options Clearing Corporation's Non-Bank Repo Facility Program as Part of Its Overall Liquidity Plan, 36444-36447 [2020-12900]

Download as PDF 36444 Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices and sufficiency of OCC’s Clearing Fund. Together, the improved accuracy and clarification of these proposed conforming edits would facilitate OCC’s ability to, among other things, effectively manage its credit exposures to participants. In this regard, OCC believes its proposed rule change is consistent with Rule 17Ad–22(e)(4).21 The proposed rule change is not inconsistent with the existing rules of OCC, including any other rules proposed to be amended. lotter on DSK30NT082PROD with NOTICES (B) Clearing Agency’s Statement on Burden on Competition Section 17A(b)(3)(I) of the Act 22 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. OCC does not believe that the proposed rule change would impact or impose any burden on competition.23 The proposed rule change would update OCC’s Risk Management Framework Policy, Default Management Policy and Clearing Fund Methodology Policy. The proposed changes to the Risk Management Framework Policy, Default Management Policy and Clearing Fund Methodology Policy would simply recognize the disapproval of OCC’s Capital Plan and its subsequent replacement with the adopted Capital Management Policy, and in the case of the Clearing Fund Methodology Policy, add a clarifying footnote. None of the proposed updates to the Risk Management Framework Policy, Default Management Policy or Clearing Fund Methodology Policy would affect Clearing Members’ access to OCC’s services or impose any direct burdens on clearing members. Accordingly, the proposed rule change would not unfairly inhibit access to OCC’s services or disadvantage or favor any particular user in relationship to another user. For the foregoing reasons, OCC believes that the proposed rule change is in the public interest, would be consistent with the requirements of the Act applicable to clearing agencies, and would not impact or impose a burden on competition. (C) Clearing Agency’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were not and are not intended to be solicited with respect to the proposed rule change and none have been received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Pursuant to Section 19(b)(3)(A)(iii) of the Act, 24 and Rule 19b–4(f)(6) 25 thereunder, the proposed rule change is filed for immediate effectiveness because it does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) by its terms would not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate. Additionally, OCC provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change or such shorter time as designated by the Commission. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 J. Matthew DeLesDernier, Assistant Secretary. 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– OCC–2020–006 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–OCC–2020–006. 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 21 Id. 22 15 U.S.C. 78q–1(b)(3)(I). 24 15 23 Id. VerDate Sep<11>2014 25 17 18:13 Jun 15, 2020 Jkt 250001 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 filing also will be available for inspection and copying at the principal office of OCC and on OCC’s website at https://www.theocc.com/about/ publications/bylaws.jsp. 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–OCC–2020–006 and should be submitted on or before July 7, 2020. PO 00000 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). Frm 00072 Fmt 4703 Sfmt 4703 [FR Doc. 2020–12893 Filed 6–15–20; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–89039; File No. SR–OCC– 2020–803] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of No Objection To Advance Notice Related to Changes to the Options Clearing Corporation’s Non-Bank Repo Facility Program as Part of Its Overall Liquidity Plan June 10, 2020. I. Introduction On April 15, 2020, the Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) advance notice SR–OCC–2020–803 (‘‘Advance Notice’’) pursuant to Section 806(e)(1) of 26 17 E:\FR\FM\16JNN1.SGM CFR 200.30–3(a)(12). 16JNN1 Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, entitled Payment, Clearing and Settlement Supervision Act of 2010 (‘‘Clearing Supervision Act’’) 1 and Rule 19b–4(n)(1)(i) 2 under the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 3 concerning OCC’s overall program and requirements for executing one or more committed repurchase arrangements with non-bank, nonclearing institutional investors.4 The Advance Notice was published for public comment in the Federal Register on May 22, 2020,5 and the Commission has received no comments regarding the changes proposed in the Advance Notice. The Commission is hereby providing notice of no objection to the Advance Notice. II. Background 6 Currently, OCC’s liquidity plan provides it with access to a diverse set of funding sources to help it manage its daily settlement obligations, including in the event of a default of a Clearing Member. Those sources include (i) a syndicated credit facility,7 (ii) a master repurchase agreement with a bank counterparty (‘‘Bank Repo Facility’’),8 and (iii) Clearing Members’ Cash Clearing Fund Requirement.9 In addition, as a fourth funding source, OCC’s liquidity plan also includes a program for executing one or more committed repurchase arrangements with non-bank, non-clearing institutional investors (i.e., no counterparty may be a Clearing Member or affiliated bank). Those arrangements, taken together, constitute OCC’s ‘‘NonBank Repo Facility.’’ 10 As noted, OCC relies on its funding sources, including the commitments 1 12 U.S.C. 5465(e)(1). CFR 240.19b–4(n)(1)(i). 3 15 U.S.C. 78a et seq. 4 See Notice of Filing infra note 5, at 85 FR 31235. 5 Securities Exchange Act Release No. 88906 (May 19, 2020), 85 FR 31235 (May 22, 2020) (File No. SR– OCC–2020–803) (‘‘Notice of Filing’’). 6 Capitalized terms used but not defined herein have the meanings specified in OCC’s Rules and ByLaws, available at https://www.theocc.com/about/ publications/bylaws.jsp. 7 See Exchange Act Release No. 85924 (May 23, 2019), 84 FR 25089 (May 30, 2019) (SR–OCC–2019– 803). 8 See Exchange Act Release No. 88317 (Mar. 4, 2020), 85 FR 13681 (Mar. 9, 2020) (SR–OCC–2020– 801). 9 See OCC Rule 1002 (requiring Clearing Members to collectively contribute $3 billion in cash to the Clearing Fund), available at https:// www.theocc.com/components/docs/legal/rules_ and_bylaws/occ_rules.pdf. 10 See Exchange Act Release No. 73979 (Jan. 2, 2015), 80 FR 1062 (Jan. 8, 2015) (SR–OCC–2014– 809) (‘‘Notice of No Objection to 2014 Advance Notice’’); Exchange Act Release No. 76821 (Jan. 4, 2016), 81 FR 3208 (Jan. 20, 2016) (SR–2015–805) (‘‘Notice of No Objection to 2015 Advance Notice’’). lotter on DSK30NT082PROD with NOTICES 2 17 VerDate Sep<11>2014 18:13 Jun 15, 2020 Jkt 250001 under the Non-Bank Repo Facility, as potential sources of liquidity to manage the default of a Clearing Member. In the event that one funding source changes, OCC has flexibility to adjust its other sources accordingly. For example, if one of OCC’s Non-Bank Repo Facility commitments expires, OCC would have several options to replace that commitment within OCC’s liquidity plan, including (i) executing one or more other commitments under the Non-Bank Repo Facility, (ii) exercising the accordion feature under the syndicated credit facility,11 (iii) temporarily increasing the Cash Clearing Fund Requirement, and (iv) executing a new master repurchase agreement with other bank counterparties, similar to the current Bank Repo Facility. Each counterparty that participates in OCC’s Non-Bank Repo Facility executes an industry standard master repurchase agreement (‘‘MRA’’) as well as an individual confirmation containing the tailored terms and conditions of transactions executed between OCC and that specific counterparty.12 The specific parameters that OCC may accept in an individual confirmation are limited as part of the Non-Bank Repo Facility program. As discussed in more detail below, OCC now proposes to modify those parameters so that the Non-Bank Repo Facility could encompass confirmations for committed repurchase transactions of different funding commitment amounts with a range of commitment term periods, something that is not permitted under the current Non-Bank Repo Facility program. Current Non-Bank Repo Facility program. Commitments under the current Non-Bank Repo Facility program reduce the concentration of OCC’s counterparty exposure by diversifying its lender base. OCC may only enter into confirmations with institutional investors that are not Clearing Members or affiliated banks, 11 An accordion is an uncommitted expansion of a credit facility generally on the same terms as the credit facility. See Securities Exchange Act Release No. 88690 (Apr. 20, 2020), 85 FR 23095, 23098 n. 12] (Apr. 24, 2020) (File No. SR–OCC–2020–003). For example, the existing master confirmations under OCC’s Non-Bank Repo Facility, totaling $1 billion, expired on January 2, 2020 and January 6, 2020. In anticipation of their expiration, OCC exercised an accordion feature under its syndicated credit facility to increase the amount from $2 billion to $2.5 billion. See Notice of Filing, 85 FR at 31236. 12 While the form and content of the MRAs signed by all counterparties would include the same terms, the individual confirmation signed by a specific counterparty would vary in that it would set forth the term and maximum dollar amounts of the transactions permitted under the relevant MRA. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 36445 such as pension funds or insurance companies, which commits OCC to obtaining funding without further concentrating its exposure to funding sources such as banks, broker/dealers, or futures commission merchants that are affiliated with Clearing Members. Further, commitments provided as part of the existing Non-Bank Repo Facility program are required to include certain terms and conditions. For example, an institutional investor participating in the Non-Bank Repo Facility is obligated to enter into repurchase transactions even if OCC experiences a material adverse change.13 Additionally, a counterparty is required to make funds available to OCC within 60 minutes of OCC’s delivering eligible securities, and the counterparty is not permitted to rehypothecate purchased securities.14 None of these existing requirements would change in connection with OCC’s proposed modifications to the Non-Bank Repo Facility program. The parameters of the current Non-Bank Repo Facility program also include the aggregate funding commitment amount that OCC may seek as well as the duration of commitments made under the Non-Bank Repo Facility.15 Currently, under the Non-Bank Repo Facility program, OCC may seek aggregate commitment amounts of no less than $1 billion and no greater than $1.5 billion.16 Confirmations under the current NonBank Repo Facility program are limited to a commitment term greater than or equal to 364-days. These parameters— aggregate commitment amount and commitment term –are the primary subject of the Advance Notice. Proposed changes. OCC has determined that it is necessary to amend the terms of the Non-Bank Repo Facility to give itself more flexibility in negotiating and obtaining a broader range of funding arrangements across a broader range of counterparties. Those amendments would result in two changes to the parameters of the Non13 When included in a contract, a ‘‘material adverse change’’ is typically defined as a change that would have a materially adverse effect on the business or financial condition of a company. 14 See Notice of No Objection to 2014 Advance Notice, 80 FR at 1064. 15 See Notice of No Objection to 2015 Advance Notice, 81 FR at 3208. 16 The parameter under the facility was initially $1 billion. OCC altered the parameters of the facility to allow it to seek aggregate commitment amounts between $1 billion and $1.5 billion. See Notice of No Objection to 2015 Advance Notice, 81 FR at 3208. The increase to the aggregate commitment amount was made as part of OCC’s plan to transition from a single $1 billion confirmation to two confirmations of $500 million with staggered expiration dates. See id. at 3209 (discussing the extension of the existing confirmation and the execution of a second confirmation). E:\FR\FM\16JNN1.SGM 16JNN1 36446 Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices lotter on DSK30NT082PROD with NOTICES Bank Repo Facility. First, OCC proposes to set the new aggregate commitment amount it may seek under the Non-Bank Repo Facility program at $1 billion, lowered from $1.5 billion, so that OCC may negotiate individual commitment amounts, each less than $1 billion, with multiple counterparties. OCC’s Board has consistently authorized OCC to seek commitment amounts up to an aggregate amount of $1 billion since 2016 even though the Non-Bank Repo Facility gives OCC discretion to seek aggregate commitment amounts of up to $1.5 billion. OCC proposes to modify the Non-Bank Repo Facility program to align the program’s parameters with the commitment amount approved by OCC’s Board (i.e., $1 billion). The proposal would allow OCC to seek commitments even if such commitments would not bring the aggregate commitment amount of the Non-Bank Repo Facility up to $1 billon. Second, OCC proposes to provide more flexibility in its ability to negotiate different terms for different individual commitments that make up the NonBank Repo Facility. Based on negotiations with potential institutional investors, OCC believes there would be an interest from OCC’s potential counterparties for committing to a term of less than one year.17 OCC proposes to provide itself flexibility to execute different commitments with different terms that could be less than 364 days, as opposed to the current uniform 364day term period, so that OCC can negotiate to obtain funding commitment from a given counterparty. For example, such a term could be for a fixed duration of less than one year or an open-ended term that allows for termination subject to a notice period. The proposal would require that, to execute or renew a transaction under the Non-Bank Repo Facility, the OCC Board would review the proposed commitment term and authorize OCC management to enter into or renew such transactions. The length of the term or notice period OCC would be willing to accept would be conditioned on factors including, but not limited to, the initial committed length of the term, market conditions, and OCC’s liquidity needs. OCC represented that it would be unlikely to accept a fixed term shorter than three months or a rolling term with a notice period shorter than six months.18 17 See Notice of Filing, 85 FR at 31237 n. 18. OCC provided information about the current status of negotiations with potential counterparties in a confidential Exhibit 3b to File No. SR–OCC–2020– 803. See id. 18 In 2019, OCC’s only counterparty under the Non-Bank Repo Facility decided not to renew its VerDate Sep<11>2014 18:13 Jun 15, 2020 Jkt 250001 Other than these two amendments OCC is not proposing changes to any other parameters or requirements of the Non-Bank Repo Facility. III. Commission Findings and Notice of No Objection Although the Clearing Supervision Act does not specify a standard of review for an advance notice, the stated purpose of the Clearing Supervision Act is instructive: To mitigate systemic risk in the financial system and promote financial stability by, among other things, promoting uniform risk management standards for SIFMUs and strengthening the liquidity of SIFMUs.19 Section 805(a)(2) of the Clearing Supervision Act authorizes the Commission to prescribe regulations containing risk management standards for the payment, clearing, and settlement activities of designated clearing entities engaged in designated activities for which the Commission is the supervisory agency.20 Section 805(b) of the Clearing Supervision Act provides the following objectives and principles for the Commission’s risk management standards prescribed under Section 805(a): 21 • To promote robust risk management; • to promote safety and soundness; • to reduce systemic risks; and • to support the stability of the broader financial system. Section 805(c) provides, in addition, that the Commission’s risk management standards may address such areas as risk management and default policies and procedures, among other areas.22 The Commission has adopted risk management standards under Section 805(a)(2) of the Clearing Supervision Act and Section 17A of the Exchange Act (the ‘‘Clearing Agency Rules’’).23 The Clearing Agency Rules require, among other things, each covered clearing agency to establish, implement, maintain, and enforce written policies commitments, and two master confirmations totaling $1 billion expired on January 2, 2020 and January 6, 2020. Based on this experience, OCC believes that a six-month notice period provides sufficient time to allow OCC to reallocate liquidity resources to address a confirmation’s termination. See Notice of Filing, 85 FR at 31237. 19 See 12 U.S.C. 5461(b). 20 12 U.S.C. 5464(a)(2). 21 12 U.S.C. 5464(b). 22 12 U.S.C. 5464(c). 23 17 CFR 240.17Ad–22. See Securities Exchange Act Release No. 68080 (Oct. 22, 2012), 77 FR 66220 (Nov. 2, 2012) (S7–08–11). See also Covered Clearing Agency Standards, 81 FR 70786. The Commission established an effective date of December 12, 2016 and a compliance date of April 11, 2017 for the Covered Clearing Agency Standards. OCC is a ‘‘covered clearing agency’’ as defined in Rule 17Ad–22(a)(5). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 and procedures that are reasonably designed to meet certain minimum requirements for its operations and risk management practices on an ongoing basis.24 As such, it is appropriate for the Commission to review advance notices against the Clearing Agency Rules and the objectives and principles of these risk management standards as described in Section 805(b) of the Clearing Supervision Act. As discussed below, the Commission believes the changes proposed in the Advance Notice are consistent with the objectives and principles described in Section 805(b) of the Clearing Supervision Act,25 and in the Clearing Agency Rules, in particular Rule 17Ad–22(e)(7).26 A. Consistency With Section 805(b) of the Clearing Supervision Act The Commission believes that the proposal contained in OCC’s Advance Notice is consistent with the stated objectives and principles of Section 805(b) of the Clearing Supervision Act. Specifically, as discussed below, the Commission believes that the changes proposed in the Advance Notice are consistent with promoting robust risk management in the area of liquidity risk, promoting safety and soundness, reducing systemic risks, and supporting the stability of the broader financial system.27 The Commission believes that the proposed changes are consistent with promoting robust risk management, in particular the management of liquidity risk presented to OCC. As a central counterparty and a SIFMU,28 it is imperative that OCC have adequate resources to be able to satisfy liquidity needs arising from its settlement obligations, including in the event of a Clearing Member default.29 To support this objective, OCC proposes to amend the existing provisions of the Non-Bank Repo Facility in two ways. First, OCC proposes to reduce the aggregate commitment amount it may seek under the Non-Bank Repo Facility program so that OCC may negotiate individual commitment amounts, each less than $1 billion, with multiple counterparties rather than being effectively required to coordinate negotiations to obtain one or more funding commitment amounts— all executed concurrently—totaling at 24 17 CFR 240.17Ad–22. U.S.C. 5464(b). 26 17 CFR 240.17Ad–22(e)(7). 27 12 U.S.C. 5464(b). 28 See Financial Stability Oversight Council (‘‘FSOC’’) 2012 Annual Report, Appendix A, available at https://www.treasury.gov/initiatives/ fsoc/Documents/2012%20Annual%20Report.pdf. 29 See Notice of No Objection to 2014 Advance Notice, 80 FR at 1065. 25 12 E:\FR\FM\16JNN1.SGM 16JNN1 Federal Register / Vol. 85, No. 116 / Tuesday, June 16, 2020 / Notices lotter on DSK30NT082PROD with NOTICES least $1 billion. Second, OCC proposes to expand the scope of the permissible commitment term for confirmations executed under the Non-Bank Repo Facility program to offset institutional investors’ reservations about committing liquidity for extended periods of time. The Commission believes that approving these two changes would give OCC greater flexibility under the NonBank Repo Facility to obtain additional liquidity resources in the form of commitments under the Non-Bank Repo Facility. Further, the Commission believes that the flexibility to obtain resources specifically through the NonBank Repo Facility would help OCC maintain diversity among its liquidity resources because a counterparty under the Non-Bank Repo Facility could not be a Clearing Member or affiliated bank. Therefore, the Commission believes that the Advance Notice enhances and further diversifies OCC’s access to liquidity resources, which in turn would strengthen OCC’s overall ability to manage its liquidity risk exposures. As such, the Commission believes that the proposal would promote robust liquidity risk management at OCC consistent with Section 805(b) of the Clearing Supervision Act.30 The Commission also believes that the changes proposed in the Advance Notice are consistent with promoting safety and soundness, reducing systemic risks, and promoting the stability of the broader financial system. As described above, the proposal would give OCC more flexibility to negotiate liquidity commitments across a range of potential counterparties that are not otherwise Clearing Members. As previously discussed, to address liquidity needs arising from a Clearing Member default, OCC maintains as liquidity resources the Bank Repo Facility (where the counterparty is an affiliate of two Clearing Members), the syndicated credit facility (where many of the lenders are Clearing Members), and the Cash Clearing Fund Requirement (which is funded exclusively by Clearing Members).31 Giving OCC more flexibility to diversify liquidity providers in the form of new funding commitments under the Non-Bank Repo Facility reduces the potential concentration of liquidity pressure that OCC, the Clearing Members and their clients could face in the event of a Clearing Member default. This reduced 30 12 U.S.C. 5464(b). Exchange Act Release No. 88120 (Feb. 5, 2020), 85 FR 7812, 7814 n. 19 (Feb. 11, 2020) (File No. SR–OCC–2020–801) (stating that OCC exercised an accordion feature under its syndicated credit facility in anticipation of the expiration of confirmations under the Non-Bank Repo Facility). 31 See VerDate Sep<11>2014 18:13 Jun 15, 2020 Jkt 250001 reliance upon the Clearing Members as the primary source of liquidity resources available to OCC to manage a Clearing Member default in turn enhances OCC’s overall ability to manage the liquidity needs arising from such an event or other events that could arise contemporaneously. Therefore, the Commission believes that the Advance Notice promotes the safety and soundness of OCC, enhances OCC’s ability to manage systemic risk that could arise in the event of a Clearing Member default, and thus supports the broader financial system. As such, the Commission believes it is consistent with promoting safety and soundness, reducing systemic risks, and promoting the stability of the broader financial system as contemplated in Section 805(b) of the Clearing Supervision Act.32 Accordingly, and for the reasons stated above, the Commission believes the changes proposed in the Advance Notice are consistent with Section 805(b) of the Clearing Supervision Act.33 B. Consistency With Rule 17Ad–22(e)(7) Under the Exchange Act Rule 17Ad–22(e)(7)(ii) under the Exchange Act requires that a 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 the covered clearing agency, including measuring, monitoring, and managing its settlement and funding flows on an ongoing and timely basis, and its use of intraday liquidity by, at a minimum, holding qualifying liquid resources sufficient to meet the minimum liquidity resource requirement under Rule 17Ad– 22(e)(7)(i) in each relevant currency for which the covered clearing agency has payment obligations owed to clearing members.34 The term ‘‘qualifying liquid resources’’ includes assets that are readily available and convertible into cash through prearranged funding arrangements, such as, committed arrangements without material adverse change provisions, including, among others, repurchase agreements.35 Because the Non-Bank Repo Facility provides OCC with prearranged commitments to convert assets into cash even if OCC experiences a material adverse change, the Commission believes that the Non-Bank Repo 32 12 U.S.C. 5464(b). U.S.C. 5464(b). 34 17 CFR 240.17Ad–22(e)(7)(ii). 35 17 CFR 240.17Ad–22(a)(14)(ii)(3). 33 12 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 36447 Facility provides OCC access to qualifying liquid resources to the extent that OCC has sufficient collateral to access the facility.36 The Commission believes, therefore, that the proposed changes to the aggregate commitment level of and potential term of commitments under the Non-Bank Repo Facility program are reasonably designed to support OCC’s ability to hold qualifying liquid resources to meet its liquidity resource requirements consistent with the requirements of Rule 17Ad–22(e)(7)(ii) under the Exchange Act.37 Accordingly, the Commission believes that implementation of the Non-Bank Repo Facility would be consistent with Rule 17Ad–22(e)(7) under the Exchange Act.38 IV. Conclusion It is therefore noticed, pursuant to Section 806(e)(1)(I) of the Clearing Supervision Act, that the Commission DOES NOT OBJECT to Advance Notice (SR–OCC–2020–803) and that OCC is AUTHORIZED to implement the proposed change as of the date of this notice. By the Commission. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–12900 Filed 6–15–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89038; File No. SR– NYSEArca–2020–52] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE Arca Options Fee Schedule June 10, 2020. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on June 1, 2020, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and 36 OCC would use U.S. government securities that are included in Clearing Fund contributions by Clearing Members and margin deposits of any Clearing Member that has been suspended by OCC for the repurchase arrangements. See Notice of Filing, 85 FR at 31235 n. 9. 37 17 CFR 240.17Ad–22(e)(7)(ii). 38 17 CFR 240.17Ad–22(e)(7). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. E:\FR\FM\16JNN1.SGM 16JNN1

Agencies

[Federal Register Volume 85, Number 116 (Tuesday, June 16, 2020)]
[Notices]
[Pages 36444-36447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-12900]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89039; File No. SR-OCC-2020-803]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of No Objection To Advance Notice Related to Changes to the 
Options Clearing Corporation's Non-Bank Repo Facility Program as Part 
of Its Overall Liquidity Plan

June 10, 2020.

I. Introduction

    On April 15, 2020, the Options Clearing Corporation (``OCC'') filed 
with the Securities and Exchange Commission (``Commission'') advance 
notice SR-OCC-2020-803 (``Advance Notice'') pursuant to Section 
806(e)(1) of

[[Page 36445]]

Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection 
Act, entitled Payment, Clearing and Settlement Supervision Act of 2010 
(``Clearing Supervision Act'') \1\ and Rule 19b-4(n)(1)(i) \2\ under 
the Securities Exchange Act of 1934 (``Exchange Act'') \3\ concerning 
OCC's overall program and requirements for executing one or more 
committed repurchase arrangements with non-bank, non-clearing 
institutional investors.\4\ The Advance Notice was published for public 
comment in the Federal Register on May 22, 2020,\5\ and the Commission 
has received no comments regarding the changes proposed in the Advance 
Notice. The Commission is hereby providing notice of no objection to 
the Advance Notice.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ 15 U.S.C. 78a et seq.
    \4\ See Notice of Filing infra note 5, at 85 FR 31235.
    \5\ Securities Exchange Act Release No. 88906 (May 19, 2020), 85 
FR 31235 (May 22, 2020) (File No. SR-OCC-2020-803) (``Notice of 
Filing'').
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II. Background \6\
---------------------------------------------------------------------------

    \6\ Capitalized terms used but not defined herein have the 
meanings specified in OCC's Rules and By-Laws, available at https://www.theocc.com/about/publications/bylaws.jsp.
---------------------------------------------------------------------------

    Currently, OCC's liquidity plan provides it with access to a 
diverse set of funding sources to help it manage its daily settlement 
obligations, including in the event of a default of a Clearing Member. 
Those sources include (i) a syndicated credit facility,\7\ (ii) a 
master repurchase agreement with a bank counterparty (``Bank Repo 
Facility''),\8\ and (iii) Clearing Members' Cash Clearing Fund 
Requirement.\9\ In addition, as a fourth funding source, OCC's 
liquidity plan also includes a program for executing one or more 
committed repurchase arrangements with non-bank, non-clearing 
institutional investors (i.e., no counterparty may be a Clearing Member 
or affiliated bank). Those arrangements, taken together, constitute 
OCC's ``Non-Bank Repo Facility.'' \10\
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    \7\ See Exchange Act Release No. 85924 (May 23, 2019), 84 FR 
25089 (May 30, 2019) (SR-OCC-2019-803).
    \8\ See Exchange Act Release No. 88317 (Mar. 4, 2020), 85 FR 
13681 (Mar. 9, 2020) (SR-OCC-2020-801).
    \9\ See OCC Rule 1002 (requiring Clearing Members to 
collectively contribute $3 billion in cash to the Clearing Fund), 
available at https://www.theocc.com/components/docs/legal/rules_and_bylaws/occ_rules.pdf.
    \10\ See Exchange Act Release No. 73979 (Jan. 2, 2015), 80 FR 
1062 (Jan. 8, 2015) (SR-OCC-2014-809) (``Notice of No Objection to 
2014 Advance Notice''); Exchange Act Release No. 76821 (Jan. 4, 
2016), 81 FR 3208 (Jan. 20, 2016) (SR-2015-805) (``Notice of No 
Objection to 2015 Advance Notice'').
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    As noted, OCC relies on its funding sources, including the 
commitments under the Non-Bank Repo Facility, as potential sources of 
liquidity to manage the default of a Clearing Member. In the event that 
one funding source changes, OCC has flexibility to adjust its other 
sources accordingly. For example, if one of OCC's Non-Bank Repo 
Facility commitments expires, OCC would have several options to replace 
that commitment within OCC's liquidity plan, including (i) executing 
one or more other commitments under the Non-Bank Repo Facility, (ii) 
exercising the accordion feature under the syndicated credit 
facility,\11\ (iii) temporarily increasing the Cash Clearing Fund 
Requirement, and (iv) executing a new master repurchase agreement with 
other bank counterparties, similar to the current Bank Repo Facility.
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    \11\ An accordion is an uncommitted expansion of a credit 
facility generally on the same terms as the credit facility. See 
Securities Exchange Act Release No. 88690 (Apr. 20, 2020), 85 FR 
23095, 23098 n. 12] (Apr. 24, 2020) (File No. SR-OCC-2020-003). For 
example, the existing master confirmations under OCC's Non-Bank Repo 
Facility, totaling $1 billion, expired on January 2, 2020 and 
January 6, 2020. In anticipation of their expiration, OCC exercised 
an accordion feature under its syndicated credit facility to 
increase the amount from $2 billion to $2.5 billion. See Notice of 
Filing, 85 FR at 31236.
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    Each counterparty that participates in OCC's Non-Bank Repo Facility 
executes an industry standard master repurchase agreement (``MRA'') as 
well as an individual confirmation containing the tailored terms and 
conditions of transactions executed between OCC and that specific 
counterparty.\12\ The specific parameters that OCC may accept in an 
individual confirmation are limited as part of the Non-Bank Repo 
Facility program. As discussed in more detail below, OCC now proposes 
to modify those parameters so that the Non-Bank Repo Facility could 
encompass confirmations for committed repurchase transactions of 
different funding commitment amounts with a range of commitment term 
periods, something that is not permitted under the current Non-Bank 
Repo Facility program.
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    \12\ While the form and content of the MRAs signed by all 
counterparties would include the same terms, the individual 
confirmation signed by a specific counterparty would vary in that it 
would set forth the term and maximum dollar amounts of the 
transactions permitted under the relevant MRA.
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    Current Non-Bank Repo Facility program. Commitments under the 
current Non-Bank Repo Facility program reduce the concentration of 
OCC's counterparty exposure by diversifying its lender base. OCC may 
only enter into confirmations with institutional investors that are not 
Clearing Members or affiliated banks, such as pension funds or 
insurance companies, which commits OCC to obtaining funding without 
further concentrating its exposure to funding sources such as banks, 
broker/dealers, or futures commission merchants that are affiliated 
with Clearing Members. Further, commitments provided as part of the 
existing Non-Bank Repo Facility program are required to include certain 
terms and conditions. For example, an institutional investor 
participating in the Non-Bank Repo Facility is obligated to enter into 
repurchase transactions even if OCC experiences a material adverse 
change.\13\ Additionally, a counterparty is required to make funds 
available to OCC within 60 minutes of OCC's delivering eligible 
securities, and the counterparty is not permitted to rehypothecate 
purchased securities.\14\ None of these existing requirements would 
change in connection with OCC's proposed modifications to the Non-Bank 
Repo Facility program. The parameters of the current Non-Bank Repo 
Facility program also include the aggregate funding commitment amount 
that OCC may seek as well as the duration of commitments made under the 
Non-Bank Repo Facility.\15\ Currently, under the Non-Bank Repo Facility 
program, OCC may seek aggregate commitment amounts of no less than $1 
billion and no greater than $1.5 billion.\16\ Confirmations under the 
current Non-Bank Repo Facility program are limited to a commitment term 
greater than or equal to 364-days. These parameters--aggregate 
commitment amount and commitment term -are the primary subject of the 
Advance Notice.
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    \13\ When included in a contract, a ``material adverse change'' 
is typically defined as a change that would have a materially 
adverse effect on the business or financial condition of a company.
    \14\ See Notice of No Objection to 2014 Advance Notice, 80 FR at 
1064.
    \15\ See Notice of No Objection to 2015 Advance Notice, 81 FR at 
3208.
    \16\ The parameter under the facility was initially $1 billion. 
OCC altered the parameters of the facility to allow it to seek 
aggregate commitment amounts between $1 billion and $1.5 billion. 
See Notice of No Objection to 2015 Advance Notice, 81 FR at 3208. 
The increase to the aggregate commitment amount was made as part of 
OCC's plan to transition from a single $1 billion confirmation to 
two confirmations of $500 million with staggered expiration dates. 
See id. at 3209 (discussing the extension of the existing 
confirmation and the execution of a second confirmation).
---------------------------------------------------------------------------

    Proposed changes. OCC has determined that it is necessary to amend 
the terms of the Non-Bank Repo Facility to give itself more flexibility 
in negotiating and obtaining a broader range of funding arrangements 
across a broader range of counterparties. Those amendments would result 
in two changes to the parameters of the Non-

[[Page 36446]]

Bank Repo Facility. First, OCC proposes to set the new aggregate 
commitment amount it may seek under the Non-Bank Repo Facility program 
at $1 billion, lowered from $1.5 billion, so that OCC may negotiate 
individual commitment amounts, each less than $1 billion, with multiple 
counterparties. OCC's Board has consistently authorized OCC to seek 
commitment amounts up to an aggregate amount of $1 billion since 2016 
even though the Non-Bank Repo Facility gives OCC discretion to seek 
aggregate commitment amounts of up to $1.5 billion. OCC proposes to 
modify the Non-Bank Repo Facility program to align the program's 
parameters with the commitment amount approved by OCC's Board (i.e., $1 
billion). The proposal would allow OCC to seek commitments even if such 
commitments would not bring the aggregate commitment amount of the Non-
Bank Repo Facility up to $1 billon.
    Second, OCC proposes to provide more flexibility in its ability to 
negotiate different terms for different individual commitments that 
make up the Non-Bank Repo Facility. Based on negotiations with 
potential institutional investors, OCC believes there would be an 
interest from OCC's potential counterparties for committing to a term 
of less than one year.\17\ OCC proposes to provide itself flexibility 
to execute different commitments with different terms that could be 
less than 364 days, as opposed to the current uniform 364-day term 
period, so that OCC can negotiate to obtain funding commitment from a 
given counterparty. For example, such a term could be for a fixed 
duration of less than one year or an open-ended term that allows for 
termination subject to a notice period.
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    \17\ See Notice of Filing, 85 FR at 31237 n. 18. OCC provided 
information about the current status of negotiations with potential 
counterparties in a confidential Exhibit 3b to File No. SR-OCC-2020-
803. See id.
---------------------------------------------------------------------------

    The proposal would require that, to execute or renew a transaction 
under the Non-Bank Repo Facility, the OCC Board would review the 
proposed commitment term and authorize OCC management to enter into or 
renew such transactions. The length of the term or notice period OCC 
would be willing to accept would be conditioned on factors including, 
but not limited to, the initial committed length of the term, market 
conditions, and OCC's liquidity needs. OCC represented that it would be 
unlikely to accept a fixed term shorter than three months or a rolling 
term with a notice period shorter than six months.\18\
---------------------------------------------------------------------------

    \18\ In 2019, OCC's only counterparty under the Non-Bank Repo 
Facility decided not to renew its commitments, and two master 
confirmations totaling $1 billion expired on January 2, 2020 and 
January 6, 2020. Based on this experience, OCC believes that a six-
month notice period provides sufficient time to allow OCC to 
reallocate liquidity resources to address a confirmation's 
termination. See Notice of Filing, 85 FR at 31237.
---------------------------------------------------------------------------

    Other than these two amendments OCC is not proposing changes to any 
other parameters or requirements of the Non-Bank Repo Facility.

III. Commission Findings and Notice of No Objection

    Although the Clearing Supervision Act does not specify a standard 
of review for an advance notice, the stated purpose of the Clearing 
Supervision Act is instructive: To mitigate systemic risk in the 
financial system and promote financial stability by, among other 
things, promoting uniform risk management standards for SIFMUs and 
strengthening the liquidity of SIFMUs.\19\
---------------------------------------------------------------------------

    \19\ See 12 U.S.C. 5461(b).
---------------------------------------------------------------------------

    Section 805(a)(2) of the Clearing Supervision Act authorizes the 
Commission to prescribe regulations containing risk management 
standards for the payment, clearing, and settlement activities of 
designated clearing entities engaged in designated activities for which 
the Commission is the supervisory agency.\20\ Section 805(b) of the 
Clearing Supervision Act provides the following objectives and 
principles for the Commission's risk management standards prescribed 
under Section 805(a): \21\
---------------------------------------------------------------------------

    \20\ 12 U.S.C. 5464(a)(2).
    \21\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

     To promote robust risk management;
     to promote safety and soundness;
     to reduce systemic risks; and
     to support the stability of the broader financial system.
    Section 805(c) provides, in addition, that the Commission's risk 
management standards may address such areas as risk management and 
default policies and procedures, among other areas.\22\
---------------------------------------------------------------------------

    \22\ 12 U.S.C. 5464(c).
---------------------------------------------------------------------------

    The Commission has adopted risk management standards under Section 
805(a)(2) of the Clearing Supervision Act and Section 17A of the 
Exchange Act (the ``Clearing Agency Rules'').\23\ The Clearing Agency 
Rules require, among other things, each covered clearing agency to 
establish, implement, maintain, and enforce written policies and 
procedures that are reasonably designed to meet certain minimum 
requirements for its operations and risk management practices on an 
ongoing basis.\24\ As such, it is appropriate for the Commission to 
review advance notices against the Clearing Agency Rules and the 
objectives and principles of these risk management standards as 
described in Section 805(b) of the Clearing Supervision Act. As 
discussed below, the Commission believes the changes proposed in the 
Advance Notice are consistent with the objectives and principles 
described in Section 805(b) of the Clearing Supervision Act,\25\ and in 
the Clearing Agency Rules, in particular Rule 17Ad-22(e)(7).\26\
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    \23\ 17 CFR 240.17Ad-22. See Securities Exchange Act Release No. 
68080 (Oct. 22, 2012), 77 FR 66220 (Nov. 2, 2012) (S7-08-11). See 
also Covered Clearing Agency Standards, 81 FR 70786. The Commission 
established an effective date of December 12, 2016 and a compliance 
date of April 11, 2017 for the Covered Clearing Agency Standards. 
OCC is a ``covered clearing agency'' as defined in Rule 17Ad-
22(a)(5).
    \24\ 17 CFR 240.17Ad-22.
    \25\ 12 U.S.C. 5464(b).
    \26\ 17 CFR 240.17Ad-22(e)(7).
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A. Consistency With Section 805(b) of the Clearing Supervision Act

    The Commission believes that the proposal contained in OCC's 
Advance Notice is consistent with the stated objectives and principles 
of Section 805(b) of the Clearing Supervision Act. Specifically, as 
discussed below, the Commission believes that the changes proposed in 
the Advance Notice are consistent with promoting robust risk management 
in the area of liquidity risk, promoting safety and soundness, reducing 
systemic risks, and supporting the stability of the broader financial 
system.\27\
---------------------------------------------------------------------------

    \27\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

    The Commission believes that the proposed changes are consistent 
with promoting robust risk management, in particular the management of 
liquidity risk presented to OCC. As a central counterparty and a 
SIFMU,\28\ it is imperative that OCC have adequate resources to be able 
to satisfy liquidity needs arising from its settlement obligations, 
including in the event of a Clearing Member default.\29\ To support 
this objective, OCC proposes to amend the existing provisions of the 
Non-Bank Repo Facility in two ways. First, OCC proposes to reduce the 
aggregate commitment amount it may seek under the Non-Bank Repo 
Facility program so that OCC may negotiate individual commitment 
amounts, each less than $1 billion, with multiple counterparties rather 
than being effectively required to coordinate negotiations to obtain 
one or more funding commitment amounts--all executed concurrently--
totaling at

[[Page 36447]]

least $1 billion. Second, OCC proposes to expand the scope of the 
permissible commitment term for confirmations executed under the Non-
Bank Repo Facility program to offset institutional investors' 
reservations about committing liquidity for extended periods of time. 
The Commission believes that approving these two changes would give OCC 
greater flexibility under the Non-Bank Repo Facility to obtain 
additional liquidity resources in the form of commitments under the 
Non-Bank Repo Facility. Further, the Commission believes that the 
flexibility to obtain resources specifically through the Non-Bank Repo 
Facility would help OCC maintain diversity among its liquidity 
resources because a counterparty under the Non-Bank Repo Facility could 
not be a Clearing Member or affiliated bank. Therefore, the Commission 
believes that the Advance Notice enhances and further diversifies OCC's 
access to liquidity resources, which in turn would strengthen OCC's 
overall ability to manage its liquidity risk exposures. As such, the 
Commission believes that the proposal would promote robust liquidity 
risk management at OCC consistent with Section 805(b) of the Clearing 
Supervision Act.\30\
---------------------------------------------------------------------------

    \28\ See Financial Stability Oversight Council (``FSOC'') 2012 
Annual Report, Appendix A, available at https://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf.
    \29\ See Notice of No Objection to 2014 Advance Notice, 80 FR at 
1065.
    \30\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

    The Commission also believes that the changes proposed in the 
Advance Notice are consistent with promoting safety and soundness, 
reducing systemic risks, and promoting the stability of the broader 
financial system. As described above, the proposal would give OCC more 
flexibility to negotiate liquidity commitments across a range of 
potential counterparties that are not otherwise Clearing Members. As 
previously discussed, to address liquidity needs arising from a 
Clearing Member default, OCC maintains as liquidity resources the Bank 
Repo Facility (where the counterparty is an affiliate of two Clearing 
Members), the syndicated credit facility (where many of the lenders are 
Clearing Members), and the Cash Clearing Fund Requirement (which is 
funded exclusively by Clearing Members).\31\ Giving OCC more 
flexibility to diversify liquidity providers in the form of new funding 
commitments under the Non-Bank Repo Facility reduces the potential 
concentration of liquidity pressure that OCC, the Clearing Members and 
their clients could face in the event of a Clearing Member default. 
This reduced reliance upon the Clearing Members as the primary source 
of liquidity resources available to OCC to manage a Clearing Member 
default in turn enhances OCC's overall ability to manage the liquidity 
needs arising from such an event or other events that could arise 
contemporaneously. Therefore, the Commission believes that the Advance 
Notice promotes the safety and soundness of OCC, enhances OCC's ability 
to manage systemic risk that could arise in the event of a Clearing 
Member default, and thus supports the broader financial system. As 
such, the Commission believes it is consistent with promoting safety 
and soundness, reducing systemic risks, and promoting the stability of 
the broader financial system as contemplated in Section 805(b) of the 
Clearing Supervision Act.\32\
---------------------------------------------------------------------------

    \31\ See Exchange Act Release No. 88120 (Feb. 5, 2020), 85 FR 
7812, 7814 n. 19 (Feb. 11, 2020) (File No. SR-OCC-2020-801) (stating 
that OCC exercised an accordion feature under its syndicated credit 
facility in anticipation of the expiration of confirmations under 
the Non-Bank Repo Facility).
    \32\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

    Accordingly, and for the reasons stated above, the Commission 
believes the changes proposed in the Advance Notice are consistent with 
Section 805(b) of the Clearing Supervision Act.\33\
---------------------------------------------------------------------------

    \33\ 12 U.S.C. 5464(b).
---------------------------------------------------------------------------

B. Consistency With Rule 17Ad-22(e)(7) Under the Exchange Act

    Rule 17Ad-22(e)(7)(ii) under the Exchange Act requires that a 
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 the covered clearing agency, including measuring, monitoring, 
and managing its settlement and funding flows on an ongoing and timely 
basis, and its use of intraday liquidity by, at a minimum, holding 
qualifying liquid resources sufficient to meet the minimum liquidity 
resource requirement under Rule 17Ad-22(e)(7)(i) in each relevant 
currency for which the covered clearing agency has payment obligations 
owed to clearing members.\34\ The term ``qualifying liquid resources'' 
includes assets that are readily available and convertible into cash 
through prearranged funding arrangements, such as, committed 
arrangements without material adverse change provisions, including, 
among others, repurchase agreements.\35\
---------------------------------------------------------------------------

    \34\ 17 CFR 240.17Ad-22(e)(7)(ii).
    \35\ 17 CFR 240.17Ad-22(a)(14)(ii)(3).
---------------------------------------------------------------------------

    Because the Non-Bank Repo Facility provides OCC with prearranged 
commitments to convert assets into cash even if OCC experiences a 
material adverse change, the Commission believes that the Non-Bank Repo 
Facility provides OCC access to qualifying liquid resources to the 
extent that OCC has sufficient collateral to access the facility.\36\ 
The Commission believes, therefore, that the proposed changes to the 
aggregate commitment level of and potential term of commitments under 
the Non-Bank Repo Facility program are reasonably designed to support 
OCC's ability to hold qualifying liquid resources to meet its liquidity 
resource requirements consistent with the requirements of Rule 17Ad-
22(e)(7)(ii) under the Exchange Act.\37\
---------------------------------------------------------------------------

    \36\ OCC would use U.S. government securities that are included 
in Clearing Fund contributions by Clearing Members and margin 
deposits of any Clearing Member that has been suspended by OCC for 
the repurchase arrangements. See Notice of Filing, 85 FR at 31235 n. 
9.
    \37\ 17 CFR 240.17Ad-22(e)(7)(ii).
---------------------------------------------------------------------------

    Accordingly, the Commission believes that implementation of the 
Non-Bank Repo Facility would be consistent with Rule 17Ad-22(e)(7) 
under the Exchange Act.\38\
---------------------------------------------------------------------------

    \38\ 17 CFR 240.17Ad-22(e)(7).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the 
Clearing Supervision Act, that the Commission DOES NOT OBJECT to 
Advance Notice (SR-OCC-2020-803) and that OCC is AUTHORIZED to 
implement the proposed change as of the date of this notice.

    By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-12900 Filed 6-15-20; 8:45 am]
BILLING CODE 8011-01-P
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