Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Enhance Capital Requirements and Make Other Changes, 18409-18410 [2022-06515]

Download as PDF Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices 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–NASDAQ–2022–020, and should be submitted on or before April 20, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2022–06511 Filed 3–29–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–94497; File No. SR–FICC– 2021–009] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Enhance Capital Requirements and Make Other Changes March 23, 2022. I. Introduction On December 13, 2021, Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) proposed rule change SR–FICC–2021–009 (the ‘‘Proposed Rule Change’’) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The Proposed Rule Change was published for comment in the Federal Register on December 29, 2021,3 and the Commission received no comment letters regarding the changes proposed in the Proposed Rule Change. On January 26, 2022, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to approve, disapprove, or institute proceedings to determine whether to approve or disapprove the Proposed Rule Change.5 This order institutes proceedings, pursuant to Section 19(b)(2)(B) of the Act,6 to khammond on DSKJM1Z7X2PROD with NOTICES 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 93857 (December 22, 2021), 86 FR 74130 (December 29, 2021) (SR–FICC–2021–009) (‘‘Notice’’). 4 15 U.S.C. 78s(b)(2). 5 Securities Exchange Act Release No. 94066 (January 26, 2022), 87 FR 5523 (February 1, 2022) (SR–FICC–2021–009). 6 15 U.S.C. 78s(b)(2)(B). 1 15 VerDate Sep<11>2014 17:14 Mar 29, 2022 Jkt 256001 18409 determine whether to approve or disapprove the Proposed Rule Change. order to improve the accessibility and transparency of the Rules. II. Summary of the Proposed Rule Change As described in the Notice, FICC proposes to amend the Government Securities Division (‘‘GSD’’) Rulebook (the ‘‘GSD Rules’’) and the MortgageBacked Securities Division (‘‘MBSD’’) Clearing Rules (the ‘‘MBSD Rules,’’ and together with the GSD Rules, the ‘‘Rules’’) of FICC in order to (1) revise its capital requirements for GSD members and MBSD members (collectively, ‘‘members’’), (2) streamline its two credit risk monitoring systems, Watch List and enhanced surveillance list, and (3) make certain other clarifying, technical, and supplementary changes to implement items (1) and (2).7 First, FICC proposes to revise various aspects of its capital requirements for several types of members. FICC proposes to increase minimum capital requirements for certain members. FICC also proposes to revise how it measures certain members’ capital by incorporating common equity tier 1 capital and the standards established in the capital adequacy rules and regulations of the Federal Deposit Insurance Corporation. FICC would revise the reporting requirements concerning the capital requirements for certain members. In addition, for certain types of members who currently do not have specific amounts for their minimum capital requirements, the proposal would establish such a requirement. Second, FICC proposes to revise its Watch List and enhanced surveillance list, which are both currently used to identify participants who would receive additional or enhanced credit risk monitoring. FICC proposes to revise its Watch List and delete its enhanced surveillance list. FICC also proposes to clarify that members on the Watch List are reported to FICC’s management committees and regularly reviewed by FICC’s senior management. Third, FICC proposes to (1) revise or add headings and sub-headings and renumbering sections as appropriate, (2) revise defined terms and add appropriate defined terms to facilitate the proposed changes, (3) rearrange and consolidate paragraphs to promote readability, (4) fix typographical and other errors, and (5) other changes in III. Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Change and Grounds for Disapproval Under Consideration 7 The description of the Proposed Rule Change is based on the statements prepared by FICC in the Notice. See Notice, supra note 3. Capitalized terms used herein and not otherwise defined herein are defined in the Rules, available at https:// www.dtcc.com/legal/rules-and-procedures. PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act 8 to determine whether the Proposed Rule Change should be approved or disapproved. Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the Proposed Rule Change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to comment on the Proposed Rule Change, providing the Commission with arguments to support the Commission’s analysis as to whether to approve or disapprove the Proposed Rule Change. Pursuant to Section 19(b)(2)(B) of the Act,9 the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of, and input from commenters with respect to, the Proposed Rule Change’s consistency with Section 17A of the Act,10 and the rules thereunder, including the following provisions: • Section 17A(b)(3)(F) of the Act,11 which requires, among other things, that the rules of a clearing agency must be designed to promote the prompt and accurate clearance and settlement of securities transactions, to assure the safeguarding of securities and funds which are in the custody or control of the clearing agency or for which it is responsible, and to protect investors and the public interest; • Section 17A(b)(3)(I) of the Act,12 which requires that the rules of a clearing agency do not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act; • Rule 17Ad–22(e)(18) under the Act,13 which requires that a covered clearing agency establish, implement, maintain, and enforce written policies and procedures reasonably designed to establish objective, risk-based, and publicly disclosed criteria for participation, which permit fair and 8 15 U.S.C. 78s(b)(2)(B). 9 Id. 10 15 U.S.C. 78q–1. U.S.C. 78q–1(b)(3)(F). 12 15 U.S.C. 78q–1(b)(3)(I). 13 17 CFR 240.17Ad–22(e)(18). 11 15 E:\FR\FM\30MRN1.SGM 30MRN1 18410 Federal Register / Vol. 87, No. 61 / Wednesday, March 30, 2022 / Notices open access by direct and, where relevant, indirect participants and other financial market utilities, require participants to have sufficient financial resources and robust operational capacity to meet obligations arising from participation in the clearing agency, and monitor compliance with such participation requirements on an ongoing basis. IV. Procedure: Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the Proposed Rule Change. In particular, the Commission invites the written views of interested persons concerning whether the Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the Act,14 Section 17A(b)(3)(I) of the Act,15 Rule 17Ad–22(e)(18) under the Act,16 or any other provision of the Act, or the rules and regulations thereunder. Interested persons are invited to submit written data, views, and arguments regarding whether the Proposed Rule Change should be approved or disapproved by April 20, 2022. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by May 4, 2022. The Commission asks that commenters address the sufficiency of FICC’s statements in support of the Proposed Rule Change, which are set forth in the Notice,17 in addition to any other comments they may wish to submit about the Proposed Rule Change. Comments may be submitted by any of the following methods: khammond on DSKJM1Z7X2PROD 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– FICC–2021–009 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–FICC–2021–009. This file number should be included on the subject line if email is used. To help the 6 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The Exchange initially filed the proposed fee 1 15 VerDate Sep<11>2014 17:14 Mar 29, 2022 Jkt 256001 Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the Proposed Rule Change that are filed with the Commission, and all written communications relating to the Proposed Rule Change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of FICC and on DTCC’s website (https://dtcc.com/legal/sec-rulefilings.aspx). 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–FICC– 2021–009 and should be submitted on or before April 20, 2022. Rebuttal comments should be submitted by May 4, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2022–06515 Filed 3–29–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–94496; File No. SR– CboeEDGX–2022–004] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To Codify Certain Practices and Requirements Related to the Exchange’s Port Message Rate Thresholds On January 21, 2022, Cboe EDGX Exchange, Inc. (‘‘Exchange’’) filed with PO 00000 CFR 200.30–3(a)(31). Frm 00061 Fmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2022–06514 Filed 3–29–22; 8:45 am] BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 94144 (February 3, 2022), 87 FR 7519. 4 15 U.S.C. 78s(b)(2). 5 Id. 6 17 CFR 200.30–3(a)(31). 2 17 March 23, 2022. 18 17 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 codify certain practices and requirements related to the Exchange’s port message rate thresholds. The proposed rule change was published for comment in the Federal Register on February 9, 2022.3 The Commission has received no comment letters on the proposed rule change. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding, or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day after publication of the notice for this proposed rule change is March 26, 2022. The Commission is extending this 45day time period. The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates May 10, 2022 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–CboeEDGX–2022–004). Sfmt 4703 E:\FR\FM\30MRN1.SGM 30MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 87, Number 61 (Wednesday, March 30, 2022)]
[Notices]
[Pages 18409-18410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06515]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94497; File No. SR-FICC-2021-009]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
Order Instituting Proceedings To Determine Whether To Approve or 
Disapprove a Proposed Rule Change To Enhance Capital Requirements and 
Make Other Changes

March 23, 2022.

I. Introduction

    On December 13, 2021, Fixed Income Clearing Corporation (``FICC'') 
filed with the Securities and Exchange Commission (``Commission'') 
proposed rule change SR-FICC-2021-009 (the ``Proposed Rule Change'') 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder.\2\ The Proposed Rule Change 
was published for comment in the Federal Register on December 29, 
2021,\3\ and the Commission received no comment letters regarding the 
changes proposed in the Proposed Rule Change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 93857 (December 22, 
2021), 86 FR 74130 (December 29, 2021) (SR-FICC-2021-009) 
(``Notice'').
---------------------------------------------------------------------------

    On January 26, 2022, pursuant to Section 19(b)(2) of the Act,\4\ 
the Commission designated a longer period within which to approve, 
disapprove, or institute proceedings to determine whether to approve or 
disapprove the Proposed Rule Change.\5\ This order institutes 
proceedings, pursuant to Section 19(b)(2)(B) of the Act,\6\ to 
determine whether to approve or disapprove the Proposed Rule Change.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(2).
    \5\ Securities Exchange Act Release No. 94066 (January 26, 
2022), 87 FR 5523 (February 1, 2022) (SR-FICC-2021-009).
    \6\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

II. Summary of the Proposed Rule Change

    As described in the Notice, FICC proposes to amend the Government 
Securities Division (``GSD'') Rulebook (the ``GSD Rules'') and the 
Mortgage-Backed Securities Division (``MBSD'') Clearing Rules (the 
``MBSD Rules,'' and together with the GSD Rules, the ``Rules'') of FICC 
in order to (1) revise its capital requirements for GSD members and 
MBSD members (collectively, ``members''), (2) streamline its two credit 
risk monitoring systems, Watch List and enhanced surveillance list, and 
(3) make certain other clarifying, technical, and supplementary changes 
to implement items (1) and (2).\7\
---------------------------------------------------------------------------

    \7\ The description of the Proposed Rule Change is based on the 
statements prepared by FICC in the Notice. See Notice, supra note 3. 
Capitalized terms used herein and not otherwise defined herein are 
defined in the Rules, available at https://www.dtcc.com/legal/rules-and-procedures.
---------------------------------------------------------------------------

    First, FICC proposes to revise various aspects of its capital 
requirements for several types of members. FICC proposes to increase 
minimum capital requirements for certain members. FICC also proposes to 
revise how it measures certain members' capital by incorporating common 
equity tier 1 capital and the standards established in the capital 
adequacy rules and regulations of the Federal Deposit Insurance 
Corporation. FICC would revise the reporting requirements concerning 
the capital requirements for certain members. In addition, for certain 
types of members who currently do not have specific amounts for their 
minimum capital requirements, the proposal would establish such a 
requirement.
    Second, FICC proposes to revise its Watch List and enhanced 
surveillance list, which are both currently used to identify 
participants who would receive additional or enhanced credit risk 
monitoring. FICC proposes to revise its Watch List and delete its 
enhanced surveillance list. FICC also proposes to clarify that members 
on the Watch List are reported to FICC's management committees and 
regularly reviewed by FICC's senior management.
    Third, FICC proposes to (1) revise or add headings and sub-headings 
and renumbering sections as appropriate, (2) revise defined terms and 
add appropriate defined terms to facilitate the proposed changes, (3) 
rearrange and consolidate paragraphs to promote readability, (4) fix 
typographical and other errors, and (5) other changes in order to 
improve the accessibility and transparency of the Rules.

III. Proceedings To Determine Whether To Approve or Disapprove the 
Proposed Rule Change and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Act \8\ to determine whether the Proposed Rule 
Change should be approved or disapproved. Institution of proceedings is 
appropriate at this time in view of the legal and policy issues raised 
by the Proposed Rule Change. Institution of proceedings does not 
indicate that the Commission has reached any conclusions with respect 
to any of the issues involved. Rather, the Commission seeks and 
encourages interested persons to comment on the Proposed Rule Change, 
providing the Commission with arguments to support the Commission's 
analysis as to whether to approve or disapprove the Proposed Rule 
Change.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\9\ the Commission is 
providing notice of the grounds for disapproval under consideration. 
The Commission is instituting proceedings to allow for additional 
analysis of, and input from commenters with respect to, the Proposed 
Rule Change's consistency with Section 17A of the Act,\10\ and the 
rules thereunder, including the following provisions:
---------------------------------------------------------------------------

    \9\ Id.
    \10\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

     Section 17A(b)(3)(F) of the Act,\11\ which requires, among 
other things, that the rules of a clearing agency must be designed to 
promote the prompt and accurate clearance and settlement of securities 
transactions, to assure the safeguarding of securities and funds which 
are in the custody or control of the clearing agency or for which it is 
responsible, and to protect investors and the public interest;
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

     Section 17A(b)(3)(I) of the Act,\12\ which requires that 
the rules of a clearing agency do not impose any burden on competition 
not necessary or appropriate in furtherance of the purposes of the Act;
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

     Rule 17Ad-22(e)(18) under the Act,\13\ which requires that 
a covered clearing agency establish, implement, maintain, and enforce 
written policies and procedures reasonably designed to establish 
objective, risk-based, and publicly disclosed criteria for 
participation, which permit fair and

[[Page 18410]]

open access by direct and, where relevant, indirect participants and 
other financial market utilities, require participants to have 
sufficient financial resources and robust operational capacity to meet 
obligations arising from participation in the clearing agency, and 
monitor compliance with such participation requirements on an ongoing 
basis.
---------------------------------------------------------------------------

    \13\ 17 CFR 240.17Ad-22(e)(18).
---------------------------------------------------------------------------

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the Proposed Rule Change. In particular, the Commission invites 
the written views of interested persons concerning whether the Proposed 
Rule Change is consistent with Section 17A(b)(3)(F) of the Act,\14\ 
Section 17A(b)(3)(I) of the Act,\15\ Rule 17Ad-22(e)(18) under the 
Act,\16\ or any other provision of the Act, or the rules and 
regulations thereunder.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78q-1(b)(3)(F).
    \15\ 15 U.S.C. 78q-1(b)(3)(I).
    \16\ 17 CFR 240.17Ad-22(e)(18).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the Proposed Rule Change should be approved 
or disapproved by April 20, 2022. Any person who wishes to file a 
rebuttal to any other person's submission must file that rebuttal by 
May 4, 2022.
    The Commission asks that commenters address the sufficiency of 
FICC's statements in support of the Proposed Rule Change, which are set 
forth in the Notice,\17\ in addition to any other comments they may 
wish to submit about the Proposed Rule Change.
---------------------------------------------------------------------------

    \17\ See Notice, supra note 3.
---------------------------------------------------------------------------

    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-FICC-2021-009 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-FICC-2021-009. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the Proposed Rule Change that are filed with 
the Commission, and all written communications relating to the Proposed 
Rule Change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of FICC and on DTCC's website 
(https://dtcc.com/legal/sec-rule-filings.aspx). 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-FICC-2021-009 and should be submitted on 
or before April 20, 2022. Rebuttal comments should be submitted by May 
4, 2022.
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(31).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06515 Filed 3-29-22; 8:45 am]
BILLING CODE 8011-01-P

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