Order Scheduling Filing of Statements on Review; In the Matter of the Financial Industry Regulatory Authority, Inc. for an Order Granting the Approval of Proposed Rule Change, as Modified by Amendment No. 2, To Establish a Corporate Bond New Issue Reference Data Service (File No. SR-FINRA-2019-008), 79014-79015 [2022-27959]
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TKELLEY on DSK125TN23PROD with NOTICE
79014
Federal Register / Vol. 87, No. 246 / Friday, December 23, 2022 / Notices
Income Fund LP, PIMCO Tactical
Opportunities Master Fund Ltd., PIMCO
Horseshoe Fund, LP, PIMCO Red Stick
Fund, L.P., PIMCO Distressed Senior
Credit Opportunities Fund II, L.P.,
PIMCO Disco Fund III LP, PIMCO
Residential Opportunities Fund, L.P.,
PHFS Residential Opportunities
Offshore Fund, L.P., PIMCO OP Trust
Flexible Credit Fund, L.P., PIMCO
Flexible Credit Master Fund, L.P.,
PIMCO ILS Series SPC, on behalf of and
for the Account of PIMCO ILS Fund I,
PIMCO ILS Series SPC, on behalf of and
for the Account of PIMCO ILS Fund II,
PIMCO Global Credit Opportunity
Master Fund LDC, PIMCO Absolute
Return Strategy 3 Master Fund LDC,
PIMCO Absolute Return Strategy 3D
Offshore Fund LTD., PIMCO Absolute
Return Strategy 3E Master Fund LDC,
PIMCO Absolute Return Strategy IV
Master Fund LDC, PIMCO Absolute
Return Strategy IV IDF LLC, PIMCO
Absolute Return Strategy IV eFund,
PIMCO Absolute Return Strategy V
Master Fund LDC, PIMCO Mortgage
Investment Trust, INC., PIMCO Private
Diversified Lending Fund Private Sleeve
LP, PIF II Offshore I LTD, PAF LUX
SCA, SICAV–RAIF, PIMCO Disco
Contingent Capital Fund Series I LP,
PIMCO European Data Centre
Opportunity Fund, SCSP, PIMCO
Commercial Real Estate Lending Europe
Fund SCSP, PIMCO Corporate
Opportunities Fund IV LUX, SCSP,
DCCF SPV 1 Series 1 LP, DCCF SPV 1
Cayman Series 1 LTD, PIMCO Specialty
Finance Income Fund, L.P., SFI
Offshore 1 LTD, PIMCO Elysian Park
Fund, L.P., PIMCO CLO Opportunities
Fund II, L.P., PIMCO Investments LLC,
Pacific Investment Management
Company LLC.
FILING DATES: The application was filed
on July 20, 2021, and amended on
March 3, 2022, August 29, 2022 and
November 29, 2022.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing on any application by
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on January 13, 2023, and
should be accompanied by proof of
service on the Applicants, in the form
of an affidavit, or, for lawyers, a
certificate of service. Pursuant to rule 0–
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20:36 Dec 22, 2022
Jkt 259001
5 under the Act, hearing requests should
state the nature of the writer’s interest,
any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov.
The Commission:
Secretarys-Office@sec.gov. Applicants:
David C. Sullivan, Ropes & Gray LLP,
David.sullivan@ropesgray.com and
Michael G. Doherty, Ropes & Gray LLP,
Michael.doherty@ropesgray.com.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Barbara T. Heussler, Senior Counsel, or
Trace W. Rakestraw, Branch Chief, at
(202) 551–6825 (Division of Investment
Management, Chief Counsel’s Office).
For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ third amended and restated
application, dated November 29, 2022,
which may be obtained via the
Commission’s website by searching for
the file number at the top of this
document, or for an Applicant using the
Company name search field on the
SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at,
https://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Public Reference
Room at (202) 551–8090.
SUPPLEMENTARY INFORMATION:
For the Commission, by the Division of
Investment Management, under delegated
authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022–27913 Filed 12–22–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96541/December 20, 2022]
Order Scheduling Filing of Statements
on Review; In the Matter of the
Financial Industry Regulatory
Authority, Inc. for an Order Granting
the Approval of Proposed Rule
Change, as Modified by Amendment
No. 2, To Establish a Corporate Bond
New Issue Reference Data Service (File
No. SR–FINRA–2019–008)
On January 15, 2021, the Commission
issued an order (‘‘Approval Order’’)
approving a proposed rule change
(‘‘Proposal’’) by Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’) to
establish a new issue reference data
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
service for corporate bonds.1 Bloomberg
L.P. (‘‘Bloomberg’’) filed a petition for
review of the Approval Order in the
U.S. Court of Appeals for the District of
Columbia Circuit (‘‘D.C. Circuit’’),
challenging the Commission’s Approval
Order.
The D.C. Circuit found that all but one
of Bloomberg’s arguments lacked merit.
Specifically, the D.C. Circuit concluded
that the Approval Order failed to
sufficiently consider Bloomberg’s
‘‘concerns about the costs that FINRA,
as well as market participants, will
incur in connection to the creation and
maintenance of the data service.’’ 2 The
D.C. Circuit remanded to the
Commission for reconsideration of this
issue, but did not vacate the Approval
Order.3
The court stated that ‘‘on remand, ‘the
Commission can redress its failure of
explanation’ by analyzing the costs
FINRA will incur in building and
maintaining its data service and how the
costs of building the data service will be
remunerated if the fee proposal is
ultimately disapproved by the
Commission.’’ 4 The D.C. Circuit’s
mandate, which was issued on October
11, 2022, returned the matter to the
Commission for further proceedings.5
Accordingly, to facilitate the
Commission’s further review of the
Proposal, it is ordered, that by January
19, 2023, FINRA may submit any
additional statements or information
that it considers relevant to the
Commission’s analysis of the issue on
remand, including the costs FINRA
expects to incur in building and
maintaining its data service and how the
costs of building the data service would
be remunerated if the fee proposal is
ultimately disapproved by the
Commission.
Furthermore, the Commission is
providing other parties and persons 30
days to respond to any additional
statements or information FINRA may
submit.
Accordingly, it is ordered, that by
February 18, 2023, any party or other
person may submit any additional
statements or information such party or
other person considers relevant to the
issue on remand.
1 See Exchange Act Release No. 90939 (Jan. 15,
2021), 86 FR 6922 (Jan. 25, 2021) (Order Setting
Aside Action by Delegated Authority and
Approving a Proposed Rule Change, as Modified by
Amendment No. 2, To Establish a Corporate Bond
New Issue Reference Data Service).
2 Bloomberg L.P. v. SEC, 45 F.4th 462, 466 (D.C.
Cir. 2022).
3 Id. at 478.
4 Id. at 477.
5 Doc. No. 1968395, Case No. 21–1088 (D.C. Cir.
Oct. 11, 2022).
E:\FR\FM\23DEN1.SGM
23DEN1
Federal Register / Vol. 87, No. 246 / Friday, December 23, 2022 / Notices
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
[FR Doc. 2022–27959 Filed 12–22–22; 8:45 am]
In its filing with the Commission,
OCC 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. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–96533; File No. SR–OCC–
2022–012)]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Proposed Rule Change by
The Options Clearing Corporation
Concerning Collateral Haircuts and
Standards for Clearing Banks and
Letters of Credit
December 19, 2022.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule
19b–4 thereunder,2 notice is hereby
given that on December 5, 2022, The
Options Clearing Corporation (‘‘OCC’’ or
‘‘Corporation’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared primarily by OCC. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
TKELLEY on DSK125TN23PROD with NOTICE
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
This proposed rule change would
concern proposed changes to OCC’s
Rules, Collateral Risk Management
Policy (‘‘CRM Policy’’), Margin Policy,
and System for Theoretical Analysis and
Numerical Simulation (STANS)
Methodology Description (‘‘STANS
Methodology Description’’). The
proposed changes are designed to (i)
provide that OCC will value
Government securities and GSE debt
securities deposited as margin or
Clearing Fund collateral using a fixed
haircut schedule that OCC would set
and adjust pursuant to OCC’s CRM
Policy, rather than as codified in OCC’s
Rules as the schedule is today; (ii) adopt
new OCC Rules concerning minimum
standards for OCC’s Clearing Bank
relationships; and (iii) revise certain
OCC Rules regarding the acceptability of
letters of credit as margin assets.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
As the sole clearing agency for
standardized equity options listed on a
national securities exchange registered
with the Commission (‘‘listed options’’),
OCC is exposed to certain risks,
including credit risk arising from its
relationships with (i) the Clearing
Members for which OCC becomes the
buyer to every seller and the seller to
ever buyer with respect to listed
options, and (ii) other financial
institutions such as banks, including the
settlement banks (‘‘Clearing Banks’’)
that support OCC’s clearance and
settlement services. OCC manages these
risks through financial safeguards that
include rigorous admission standards,
member surveillance activities,
collection of high-quality margin
collateral and a mutualized Clearing
Fund. OCC also maintains standards for
third-party relationships, including for
Clearing Banks and banks that issue
letters of credit that Clearing Members
may deposit as margin collateral. One
aspect of OCC’s processes for managing
margin collateral is to acknowledge that
such collateral could be worth less in
the future than when it is pledged to
OCC (a ‘‘collateral haircut’’).
OCC has identified opportunities to
enhance its rules and risk management
processes concerning collateral haircuts
and concentration limits for specific
collateral types and third-party
standards for banks. First, OCC is
proposing to eliminate existing
authority to value Government
securities using Monte Carlo
simulations as part of its STANS margin
methodology (commonly referred to as
‘‘Collateral in Margin’’ or ‘‘CiM’’) in
favor of applying fixed collateral
haircuts that OCC would set and adjust
pursuant to OCC’s CRM Policy in order
to better incorporate stressed market
periods (the ‘‘procedure-based
approach’’), rather than according to the
fixed haircut schedule codified in OCC’s
Rules today. OCC does not expect these
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Fmt 4703
Sfmt 4703
79015
changes to have a significant impact on
Clearing Members based on an impact
assessment of eliminating the CiM
approach and because it expects the
fixed haircut schedule under the
procedure-based approach would
initially be the same as those currently
defined in OCC’s Rules. Second, OCC is
proposing to codify additional standards
for Clearing Banks in OCC’s Rules to
provide greater clarity and transparency
regarding minimum standards for
banking relationships that are critical to
OCC’s clearance and settlement
services. Third, OCC is proposing to
make conforming changes to the
standards for letter-of-credit issuers to
the proposed Clearing Bank standards to
ensure internal consistency within
OCC’s Rules and establish OCC’s
authority to set more restrictive
concentration limits for letters of credit
than those currently codified in OCC’s
Rules. These standard changes are not
expected to have a significant impact on
Clearing Members because the
institutions currently approved as
Clearing Banks and letter-of-credit
issuers meet these standards.
(1) Purpose
There are three primary components
of this proposed rule change. First, OCC
proposes to amend its Rules, CRM
Policy, Margin Policy, and STANS
Methodology Description to eliminate
existing authority to value Government
securities using Monte Carlo
simulations as part of its STANS margin
methodology in favor of applying fixed
collateral haircuts that OCC would set
and adjust pursuant to OCC’s CRM
Policy, rather than according to the
fixed haircut schedule codified in OCC’s
Rules today. Second, OCC proposes to
amend OCC Rules 101 and 203 to codify
minimum capital and operational
requirements and the governance
process for approving OCC’s Clearing
Banks, which the Rules do not currently
address. Third, OCC proposes to revise
OCC Rule 604 regarding the
acceptability of letters of credit as
margin assets to, among other things,
standardize requirements for letter-ofcredit issuers with the requirements for
OCC’s other banking relationships,
including the proposed standards for
Clearing Banks, and allow OCC to set
concentration limits with respect to
letters of credit that are more restrictive
than those currently codified in OCC’s
Rules, which would be retained as
minimum standards.
E:\FR\FM\23DEN1.SGM
23DEN1
]]>Agencies
[Federal Register Volume 87, Number 246 (Friday, December 23, 2022)]
[Notices]
[Pages 79014-79015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27959]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96541/December 20, 2022]
Order Scheduling Filing of Statements on Review; In the Matter of
the Financial Industry Regulatory Authority, Inc. for an Order Granting
the Approval of Proposed Rule Change, as Modified by Amendment No. 2,
To Establish a Corporate Bond New Issue Reference Data Service (File
No. SR-FINRA-2019-008)
On January 15, 2021, the Commission issued an order (``Approval
Order'') approving a proposed rule change (``Proposal'') by Financial
Industry Regulatory Authority, Inc. (``FINRA'') to establish a new
issue reference data service for corporate bonds.\1\ Bloomberg L.P.
(``Bloomberg'') filed a petition for review of the Approval Order in
the U.S. Court of Appeals for the District of Columbia Circuit (``D.C.
Circuit''), challenging the Commission's Approval Order.
---------------------------------------------------------------------------
\1\ See Exchange Act Release No. 90939 (Jan. 15, 2021), 86 FR
6922 (Jan. 25, 2021) (Order Setting Aside Action by Delegated
Authority and Approving a Proposed Rule Change, as Modified by
Amendment No. 2, To Establish a Corporate Bond New Issue Reference
Data Service).
---------------------------------------------------------------------------
The D.C. Circuit found that all but one of Bloomberg's arguments
lacked merit. Specifically, the D.C. Circuit concluded that the
Approval Order failed to sufficiently consider Bloomberg's ``concerns
about the costs that FINRA, as well as market participants, will incur
in connection to the creation and maintenance of the data service.''
\2\ The D.C. Circuit remanded to the Commission for reconsideration of
this issue, but did not vacate the Approval Order.\3\
---------------------------------------------------------------------------
\2\ Bloomberg L.P. v. SEC, 45 F.4th 462, 466 (D.C. Cir. 2022).
\3\ Id. at 478.
---------------------------------------------------------------------------
The court stated that ``on remand, `the Commission can redress its
failure of explanation' by analyzing the costs FINRA will incur in
building and maintaining its data service and how the costs of building
the data service will be remunerated if the fee proposal is ultimately
disapproved by the Commission.'' \4\ The D.C. Circuit's mandate, which
was issued on October 11, 2022, returned the matter to the Commission
for further proceedings.\5\
---------------------------------------------------------------------------
\4\ Id. at 477.
\5\ Doc. No. 1968395, Case No. 21-1088 (D.C. Cir. Oct. 11,
2022).
---------------------------------------------------------------------------
Accordingly, to facilitate the Commission's further review of the
Proposal, it is ordered, that by January 19, 2023, FINRA may submit any
additional statements or information that it considers relevant to the
Commission's analysis of the issue on remand, including the costs FINRA
expects to incur in building and maintaining its data service and how
the costs of building the data service would be remunerated if the fee
proposal is ultimately disapproved by the Commission.
Furthermore, the Commission is providing other parties and persons
30 days to respond to any additional statements or information FINRA
may submit.
Accordingly, it is ordered, that by February 18, 2023, any party or
other person may submit any additional statements or information such
party or other person considers relevant to the issue on remand.
[[Page 79015]]
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27959 Filed 12-22-22; 8:45 am]
BILLING CODE 8011-01-P
