Self-Regulatory Organizations; LCH SA; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change Relating to the CDS Select Membership Model, 53685-53686 [2024-14066]
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Federal Register / Vol. 89, No. 124 / Thursday, June 27, 2024 / Notices
Pezzullo, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
Dated: June 21, 2024.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14081 Filed 6–26–24; 8:45 am]
BILLING CODE 8011–01–P
information collection should be sent
within 30 days of publication of this
notice by July 29, 2024 to (i)
www.reginfo.gov/public/do/PRAMain
and (ii) David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
Dated: June 21, 2024.
Vanessa A. Countryman,
Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–125, OMB Control No.
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[FR Doc. 2024–14078 Filed 6–26–24; 8:45 am]
BILLING CODE 8011–01–P
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SECURITIES AND EXCHANGE
COMMISSION
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From: Securities and Exchange
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100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget this
request for extension of the previously
approved collection of information
discussed below.
Under Section 16(a) of the Securities
Exchange Act of 1934 (‘‘Exchange Act’’)
(15 U.S.C. 78a et seq.), every person
who owns more than ten percent of any
class of equity security (other than an
exempted security) which is requested
under Section 12 of the Exchange Act,
or who is a director or an officer of the
issuer of such security (collectively
‘‘reporting persons’’) are required to file
statements disclosing their ownership of
the issuer’s equity securities. Form 3
must be filed within ten days after the
event by which the person becomes a
reporting person. Approximately 16,520
insiders file Form 3 annually and it
takes approximately 0.50 hours to
prepare for a total of 8,260 annual
burden hours (0.50 hours per response
× 16,520 responses).
An agency may not conduct or
sponsor, and a person is not required to
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‘‘Currently under 30-day Review—Open
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search function. Written comments and
recommendations for the proposed
VerDate Sep<11>2014
20:13 Jun 26, 2024
Jkt 262001
[Release No. 34–100394; File No. SR–LCH
SA–2024–002]
Self-Regulatory Organizations; LCH
SA; Order Instituting Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Rule Change
Relating to the CDS Select
Membership Model
June 21, 2024.
I. Introduction
On March 13, 2024, Banque Centrale
de Compensation, which conducts
business under the name LCH SA (‘‘LCH
SA’’), filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change SR–LCH SA–
2024–002 (‘‘Proposed Rule Change’’)
pursuant to section 19(b) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) 1 and Rule 19b–4 2
thereunder to amend its CDS Clearing
Rule Book (the ‘‘Rule Book’’) and CDS
Clearing Procedures (‘‘Procedures’’) to
incorporate new terms and to make
conforming, clarifying and clean-up
changes to implement a new model of
CDSClear select membership. The
Proposed Rule Change was published
for public comment in the Federal
Register on March 28, 2024.3 The
Commission has received no comments
regarding the Proposed Rule Change.
On May 9, 2024, pursuant to section
19(b)(2) of the Exchange 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, until June 26,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Exchange Act Release No. 99847 (Mar. 22,
2024), 89 FR 21579 (Mar. 28, 2024) (File No. SR–
LCH SA–2024–002) (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
2 17
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
53685
2024.5 The Commission is instituting
proceedings, pursuant to section
19(b)(2)(B) of the Exchange Act,6 to
determine whether to approve or
disapprove the Proposed Rule Change.
II. Summary of the Proposed Rule
Change
LCH SA is a clearing agency
registered with the Commission.7
Through its CDSClear business unit,
LCH SA provides central counterparty
services for security-based swaps,
including credit default swaps, and
options on credit default swaps.8 LCH
SA provides these central counterparty
services to its Clearing Members. Some
of these Clearing Members provide
clearing services for clients.
LCH SA has two types of Clearing
Members, General Members and Select
Members. General Members may
provide client clearing services to
affiliates and non-affiliates, must
participate in Competitive Bidding for
auction packages, and must submit
prices to LCH SA.9 On the other hand,
Select Members may only provide client
clearing services to their affiliates, must
participate in competitive bidding only
for a subset of auction packages, and
may choose whether to submit prices.10
Select Members and General Members
must nominate representatives for the
CDS Default Management Committee
and CDS Default Management Group.11
The Proposed Rule Change would
alter LCH SA’s select membership. It
would allow Select Members to provide
client clearing services to non-affiliated
firms and choose whether to participate
in Competitive Bidding. LCH SA also
proposes to allow Select Members to
choose whether to nominate
representatives for both the CDS Default
Management Committee and CDS
Default Management Group. Although
LCH SA proposes changes related to
Select Members’ submission of end-ofday prices, as currently, the Proposed
Rule Change would still allow Select
Members to choose whether to submit
prices. LCH SA also proposes a new
form through which Select Members
may make certain elections.
5 Exchange Act Release No. 100094 (May 9, 2024),
89 FR 42515 (May 15, 2024) (File No. SR–LCH SA–
2024–002).
6 15 U.S.C. 78s(b)(2)(B).
7 Capitalized terms used but not defined herein
have the meanings specified in the LCH SA Rule
Book or Framework as applicable.
8 What We Clear, https://www.lch.com/services/
cdsclear/what-we-clear (last visited Apr. 30, 2024).
9 Notice, 89 FR at 21579.
10 Id. at 21579, 81.
11 Id. at 21581.
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53686
Federal Register / Vol. 89, No. 124 / Thursday, June 27, 2024 / Notices
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 Exchange Act to
determine whether the Proposed Rule
Change should be approved or
disapproved.12 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, which would
provide 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
Exchange Act,13 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 Exchange Act 14
and the rules thereunder, including the
following provisions:
• Section 17A(b)(3)(F) of the
Exchange Act,15 which requires, among
other things, that the rules of a clearing
agency are designed to promote the
prompt and accurate clearance and
settlement of securities transactions and
derivative agreements, contracts, and
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; to foster
cooperation and coordination with
persons engaged in the clearance and
settlement of securities transactions;
and, in general, to protect investors and
the public interest;
• Rule 17Ad–22(e)(13) under the
Exchange Act,16 which requires that a
covered clearing agency establish,
implement, maintain, and enforce
written policies and procedures
reasonably designed to ensure the
covered clearing agency has the
authority and operational capacity to
take timely action to contain losses and
liquidity demands and continue to meet
its obligations by, at minimum,
requiring the covered clearing agency’s
12 15
U.S.C. 78s(b)(2)(B).
13 Id.
14 15
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
16 17 CFR 240.17Ad–22(e)(13).
15 15
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20:13 Jun 26, 2024
Jkt 262001
participants and, when practicable,
other stakeholders to participate in the
testing and review of its default
procedures, including any close-out
procedures, at least annually and
following material changes thereto.
• Rule 17Ad–22(e)(18) under the
Exchange Act,17 which requires, in part,
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 open access by
direct and, where relevant, indirect
participants and other financial market
utilities.
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) 18 and Rules
17Ad–22(e)(13) 19 and (e)(18) 20 of the
Exchange Act, or any other provision of
the Exchange Act, or the rules and
regulations thereunder. Although there
do not appear to be any issues relevant
to approval or disapproval that would
be facilitated by an oral presentation of
views, data, and arguments, the
Commission will consider, pursuant to
Rule 19b–4(g) under the Exchange
Act,21 any request for an opportunity to
make an oral presentation.22
The Commission asks that
commenters address the sufficiency of
LCH SA’s statements in support of the
Proposed Rule Change, which are set
forth in the Notice, 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:
17 17
CFR 240.17Ad–22(e)(13).
U.S.C. 78q–1(b)(3)(F).
19 17 CFR 240.17Ad–22(e)(13).
20 17 CFR 240.17Ad–22(e)(18).
21 17 CFR 240.19b–4(g).
22 Section 19(b)(2) of the Exchange Act grants to
the Commission flexibility to determine what type
of proceeding—either oral or notice and
opportunity for written comments—is appropriate
for consideration of a particular proposal by a selfregulatory organization. See Securities Act
Amendments of 1975, Senate Comm. on Banking,
Housing & Urban Affairs, S. Rep. No. 75, 94th
Cong., 1st Sess. 30 (1975).
18 15
PO 00000
Frm 00102
Fmt 4703
Sfmt 9990
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
LCH SA–2024–002 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–LCH SA–2024–002. 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
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of LCH
SA and on LCH SA’s website at https://
www.lch.com/resources/rulebooks/
proposed-rule-changes.
Do not include personal identifiable
information in submissions; you should
submit only information that you wish
to make available publicly. We may
redact in part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection.
All submissions should refer to file
number SR–LCH SA–2024–002 and
should be submitted on or before July
18, 2024. Rebuttal comments should be
submitted by August 1, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024–14066 Filed 6–26–24; 8:45 am]
BILLING CODE 8011–01–P
23 17
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CFR 200.30–3(a)(31).
27JNN1
]]>Agencies
[Federal Register Volume 89, Number 124 (Thursday, June 27, 2024)]
[Notices]
[Pages 53685-53686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14066]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100394; File No. SR-LCH SA-2024-002]
Self-Regulatory Organizations; LCH SA; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change Relating to the CDS Select Membership Model
June 21, 2024.
I. Introduction
On March 13, 2024, Banque Centrale de Compensation, which conducts
business under the name LCH SA (``LCH SA''), filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change SR-
LCH SA-2024-002 (``Proposed Rule Change'') pursuant to section 19(b) of
the Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule
19b-4 \2\ thereunder to amend its CDS Clearing Rule Book (the ``Rule
Book'') and CDS Clearing Procedures (``Procedures'') to incorporate new
terms and to make conforming, clarifying and clean-up changes to
implement a new model of CDSClear select membership. The Proposed Rule
Change was published for public comment in the Federal Register on
March 28, 2024.\3\ The Commission has received no comments regarding
the Proposed Rule Change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Exchange Act Release No. 99847 (Mar. 22, 2024), 89 FR 21579
(Mar. 28, 2024) (File No. SR-LCH SA-2024-002) (``Notice'').
---------------------------------------------------------------------------
On May 9, 2024, pursuant to section 19(b)(2) of the Exchange
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, until June 26, 2024.\5\
The Commission is instituting proceedings, pursuant to section
19(b)(2)(B) of the Exchange Act,\6\ to determine whether to approve or
disapprove the Proposed Rule Change.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(2).
\5\ Exchange Act Release No. 100094 (May 9, 2024), 89 FR 42515
(May 15, 2024) (File No. SR-LCH SA-2024-002).
\6\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
II. Summary of the Proposed Rule Change
LCH SA is a clearing agency registered with the Commission.\7\
Through its CDSClear business unit, LCH SA provides central
counterparty services for security-based swaps, including credit
default swaps, and options on credit default swaps.\8\ LCH SA provides
these central counterparty services to its Clearing Members. Some of
these Clearing Members provide clearing services for clients.
---------------------------------------------------------------------------
\7\ Capitalized terms used but not defined herein have the
meanings specified in the LCH SA Rule Book or Framework as
applicable.
\8\ What We Clear, https://www.lch.com/services/cdsclear/what-we-clear (last visited Apr. 30, 2024).
---------------------------------------------------------------------------
LCH SA has two types of Clearing Members, General Members and
Select Members. General Members may provide client clearing services to
affiliates and non-affiliates, must participate in Competitive Bidding
for auction packages, and must submit prices to LCH SA.\9\ On the other
hand, Select Members may only provide client clearing services to their
affiliates, must participate in competitive bidding only for a subset
of auction packages, and may choose whether to submit prices.\10\
Select Members and General Members must nominate representatives for
the CDS Default Management Committee and CDS Default Management
Group.\11\
---------------------------------------------------------------------------
\9\ Notice, 89 FR at 21579.
\10\ Id. at 21579, 81.
\11\ Id. at 21581.
---------------------------------------------------------------------------
The Proposed Rule Change would alter LCH SA's select membership. It
would allow Select Members to provide client clearing services to non-
affiliated firms and choose whether to participate in Competitive
Bidding. LCH SA also proposes to allow Select Members to choose whether
to nominate representatives for both the CDS Default Management
Committee and CDS Default Management Group. Although LCH SA proposes
changes related to Select Members' submission of end-of-day prices, as
currently, the Proposed Rule Change would still allow Select Members to
choose whether to submit prices. LCH SA also proposes a new form
through which Select Members may make certain elections.
[[Page 53686]]
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 Exchange Act to determine whether the Proposed Rule
Change should be approved or disapproved.\12\ 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,
which would provide the Commission with arguments to support the
Commission's analysis as to whether to approve or disapprove the
Proposed Rule Change.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
Pursuant to section 19(b)(2)(B) of the Exchange Act,\13\ 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 Exchange Act
\14\ and the rules thereunder, including the following provisions:
---------------------------------------------------------------------------
\13\ Id.
\14\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
Section 17A(b)(3)(F) of the Exchange Act,\15\ which
requires, among other things, that the rules of a clearing agency are
designed to promote the prompt and accurate clearance and settlement of
securities transactions and derivative agreements, contracts, and
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; to foster cooperation and coordination with persons
engaged in the clearance and settlement of securities transactions;
and, in general, to protect investors and the public interest;
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
Rule 17Ad-22(e)(13) under the Exchange Act,\16\ which
requires that a covered clearing agency establish, implement, maintain,
and enforce written policies and procedures reasonably designed to
ensure the covered clearing agency has the authority and operational
capacity to take timely action to contain losses and liquidity demands
and continue to meet its obligations by, at minimum, requiring the
covered clearing agency's participants and, when practicable, other
stakeholders to participate in the testing and review of its default
procedures, including any close-out procedures, at least annually and
following material changes thereto.
---------------------------------------------------------------------------
\16\ 17 CFR 240.17Ad-22(e)(13).
---------------------------------------------------------------------------
Rule 17Ad-22(e)(18) under the Exchange Act,\17\ which
requires, in part, 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 open access by direct
and, where relevant, indirect participants and other financial market
utilities.
---------------------------------------------------------------------------
\17\ 17 CFR 240.17Ad-22(e)(13).
---------------------------------------------------------------------------
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) \18\ and Rules
17Ad-22(e)(13) \19\ and (e)(18) \20\ of the Exchange Act, or any other
provision of the Exchange Act, or the rules and regulations thereunder.
Although there do not appear to be any issues relevant to approval or
disapproval that would be facilitated by an oral presentation of views,
data, and arguments, the Commission will consider, pursuant to Rule
19b-4(g) under the Exchange Act,\21\ any request for an opportunity to
make an oral presentation.\22\
---------------------------------------------------------------------------
\18\ 15 U.S.C. 78q-1(b)(3)(F).
\19\ 17 CFR 240.17Ad-22(e)(13).
\20\ 17 CFR 240.17Ad-22(e)(18).
\21\ 17 CFR 240.19b-4(g).
\22\ Section 19(b)(2) of the Exchange Act grants to the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Act Amendments of 1975, Senate Comm. on
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------
The Commission asks that commenters address the sufficiency of LCH
SA's statements in support of the Proposed Rule Change, which are set
forth in the Notice, 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:
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-LCH SA-2024-002 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-LCH SA-2024-002. 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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of LCH SA and on LCH
SA's website at https://www.lch.com/resources/rulebooks/proposed-rule-changes.
Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to file number SR-LCH SA-2024-002 and
should be submitted on or before July 18, 2024. Rebuttal comments
should be submitted by August 1, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------
\23\ 17 CFR 200.30-3(a)(31).
---------------------------------------------------------------------------
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-14066 Filed 6-26-24; 8:45 am]
BILLING CODE 8011-01-P
