Security-Based Swap Data Repositories; KOR Reporting, Inc.; Notice of Filing of Application for Registration as a Security-Based Swap Data Repository, 64526-64532 [2024-17423]

Download as PDF 64526 Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices the date of this filing. The Exchange believes the proposed change would provide member organizations with greater certainty regarding the amount of price improvement their Aggressing MPL–ALO Orders would receive, thereby promoting higher-quality executions and encouraging increased order flow to the Exchange for the benefit of all market participants. For these reasons, and because the proposed rule change does not raise any novel legal or regulatory issues, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.17 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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: 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– NYSENAT–2024–22 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–NYSENAT–2024–22. 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 17 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 17:07 Aug 06, 2024 Jkt 262001 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 the filing also will be available for inspection and copying at the principal office of the Exchange. 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–NYSENAT–2024–22 and should be submitted on or before August 28, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–17385 Filed 8–6–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100638; File No. SBSDR– 2023–01] Security-Based Swap Data Repositories; KOR Reporting, Inc.; Notice of Filing of Application for Registration as a Security-Based Swap Data Repository August 2, 2024. I. Introduction On January 26, 2023, KOR Reporting, Inc. (‘‘KOR’’) filed with the Securities and Exchange Commission (‘‘Commission’’) an application on Form SDR to register as a security-based swap data repository (‘‘SDR’’) pursuant to section 13(n)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) and 17 CFR 240.13n–1 (‘‘Rule 13n–1’’) thereunder,1 and as a securities 18 17 CFR 200.30–3(a)(12). U.S.C. 78m(n)(1); 17 CFR 240.13n–1. A copy of KOR’s application on Form SDR and non1 15 PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 information processor (‘‘SIP’’) under section 11A(b) of the Exchange Act.2 KOR intends to operate as a registered SDR for security-based swap (‘‘SBS’’) transactions in the equity, credit, and interest rate derivatives asset classes. KOR subsequently filed amendments to its application on the following dates: August 11, 2023, and February 23, 2024.3 The Commission is publishing this notice to solicit comments from interested persons regarding KOR’s application,4 and the Commission will consider any comments it receives in making its determination whether to approve KOR’s application for registration as an SDR and as a SIP. II. Background A. SDR Registration, Duties, and Core Principles Section 13(n) of the Exchange Act makes it unlawful for any person, unless registered with the Commission, directly or indirectly, to make use of the mails or any means or instrumentality of interstate commerce to perform the functions of an SDR.5 To be registered and maintain registration, an SDR must comply with certain requirements and core principles described in section 13(n), as well as any requirements that the Commission may impose by rule or regulation.6 In 2015, the Commission adopted 17 CFR 240.13n–1 to 13n–12 under the Exchange Act to establish Form SDR, the procedures for registration as an SDR, and the duties and core principles applicable to an SDR (‘‘SDR Rules’’).7 The Commission provided a temporary exemption from compliance with the SDR Rules and also extended exemptions from the provisions of the Dodd-Frank Act set forth in a Commission order providing temporary exemptions and other temporary relief from compliance with certain provisions of the Exchange Act concerning security-based swaps, and confidential exhibits thereto are available for public viewing on the Commission’s website. 2 15 U.S.C. 78k–1(b). 3 The amendments to KOR’s application were filed to update certain exhibits, including those addressing the disclosure document, financial statements, and fee schedule. 4 The descriptions set forth in this notice regarding the structure and operations of KOR have been derived, excerpted, or summarized from KOR’s application on Form SDR. 5 15 U.S.C. 78m(n). 6 See id. 7 See Release No. 34–74246 (Feb. 11, 2015), 80 FR 14438, 14438 (Mar. 19, 2015) (‘‘SDR Adopting Release’’). In 2016, the Commission subsequently amended 17 CFR 240.13n–4 to address third-party regulatory access to SBS data obtained by an SDR. See Release No. 34–78716 (Aug. 29, 2016), 81 FR 60585 (Sept. 2, 2016). E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices these temporary exemptions expired in 2017.8 The Commission also has adopted 17 CFR 242.900 to 909 under the Exchange Act (collectively, ‘‘Regulation SBSR’’), which governs regulatory reporting and public dissemination of security-based swap transactions.9 Among other things, Regulation SBSR requires each registered SDR to register with the Commission as a SIP,10 and the Form SDR constitutes an application for registration as a SIP, as well as an SDR.11 In 2019, the Commission stated that implementation of the SBS Reporting Rules can and should be done in a manner that carries out the fundamental policy goals of the SBS Reporting Rules while minimizing burdens as much as practicable.12 Noting ongoing concerns among market participants about incurring unnecessary burdens and the Commission’s efforts to promote harmonization between the SBS Reporting Rules and swap reporting rules, the Commission took the position that, for four years following Regulation SBSR’s Compliance Date 1 in each asset class,13 certain actions with respect to the SBS Reporting Rules would not provide a basis for a Commission enforcement action.14 The no-action statement’s relevance to KOR’s application for registration as an SDR and SIP is discussed further below. khammond on DSKJM1Z7X2PROD with NOTICES B. Standard for Registration As noted above, to be registered with the Commission as an SDR and maintain such registration, an SDR is required to comply with the requirements and core principles described in section 13(n) of the Exchange Act, as well as with any requirement that the Commission may 8 See Release No. 34–80359 (Mar. 31, 2017), 82 FR 16867 (Apr. 6, 2017). 9 Release No. 34–74244 (Feb. 11, 2015), 80 FR 14563 (Mar. 19, 2015); Release No. 34–78321 (July 14, 2016), 81 FR 53546 (Aug. 12, 2016). Regulation SBSR and the SDR Rules are referred to collectively as the ‘‘SBS Reporting Rules.’’ 10 See 17 CFR 242.909. 11 See Form SDR, Instruction 2. 12 Release No. 34–87780 (Dec. 18, 2019), 85 FR 6270, 6347 (Feb. 4, 2020) (‘‘ANE Adopting Release’’). 13 See id. Under Regulation SBSR, the first compliance date (‘‘Compliance Date 1’’) for affected persons with respect to an SBS asset class is the first Monday that is the later of: (i) six months after the date on which the first SDR that can accept transaction reports in that asset class registers with the Commission; or (ii) one month after the compliance date for registration of SBS dealers and major SBS participants (‘‘SBS entities’’). Id. at 6346. The compliance date for registration of SBS entities is Oct. 6, 2021. See id. at 6270, 6345. 14 See id. The specific rule provisions of the SBS Reporting Rules affected by the no-action statement are discussed in Part II.B. VerDate Sep<11>2014 17:07 Aug 06, 2024 Jkt 262001 impose by rule or regulation.15 In addition, Rule 13n–1(c)(3) under the Exchange Act provides that the Commission shall grant the registration of an SDR if it finds that the SDR is so organized, and has the capacity, to be able to: (i) assure the prompt, accurate, and reliable performance of its functions as an SDR; (ii) comply with any applicable provisions of the securities laws and the rules and regulations thereunder; and (iii) carry out its functions in a manner consistent with the purposes of section 13(n) of the Exchange Act and the rules and regulations thereunder.16 The Commission shall deny the registration of an SDR if it does not make any such finding.17 Similarly, to be registered with the Commission as a SIP, the Commission must find that such applicant is so organized, and has the capacity, to be able to assure the prompt, accurate, and reliable performance of its functions as a SIP, comply with the provisions of the Exchange Act and the rules and regulations thereunder, carry out its functions in a manner consistent with the purposes of the Exchange Act, and, insofar as it is acting as an exclusive processor, operate fairly and efficiently.18 In determining whether an applicant meets the criteria set forth in Rule 13n– 1(c), the Commission will consider the information reflected by the applicant on its Form SDR, as well as any additional information obtained from the applicant. For example, Form SDR requires an applicant to provide a list of the asset classes for which the applicant is collecting and maintaining data or for which it proposes to collect and maintain data, a description of the functions that it performs or proposes to perform, general information regarding its business organization, and contact information.19 Obtaining this information and other information reflected on Form SDR and the exhibits thereto—including the applicant’s overall business structure, financial condition, track record in providing access to its services and data, technological reliability, and policies and procedures to comply with its statutory and regulatory obligations— will enable the Commission to determine whether to grant or deny an application for registration.20 15 See 15 U.S.C. 78m(n)(3). CFR 240.13n–1(c)(3). 17 See id. 18 See 15 U.S.C. 78k–1(b)(3). 19 See SDR Adopting Release, supra note 7, at 14459. 20 See id. at 14458. 16 17 PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 64527 Furthermore, the information requested in Form SDR will enable the Commission to assess whether the applicant is so organized and has the capacity to comply and carry out its functions in a manner consistent with the Federal securities laws and the rules and regulations thereunder, including the SBS Reporting Rules.21 Consistent with the Commission’s noaction statement in the ANE Adopting Release,22 an entity wishing to register with the Commission as an SDR must still submit an application on Form SDR but can address the rule provisions included in the no-action statement by discussing how the SDR complies with comparable Commodity Futures Trading Commission (‘‘CFTC’’) requirements.23 Accordingly, in such instances the Commission will not assess an SDR application for consistency or compliance with the rule provisions included in the Commission’s no-action statement. Specifically, the Commission identified the following provisions as not providing a basis for an enforcement action against a registered SDR for the duration of the relief provided in the Commission statement: under Regulation SBSR, aspects of 17 CFR 242.901(a), 901(c)(2) through (7), 901(d), 901(e), 902, 903(b), 906(a) and (b), and 907(a)(1), (a)(3), and (a)(4) through (6); under the SDR Rules, aspects of section 13(n)(5)(B) of the Exchange Act and 17 CFR 240.13n–4(b)(3) thereunder, and aspects of 17 CFR 240.13n–5(b)(1)(iii); and under section 11A(b) of the Exchange Act, any provision pertaining to SIPs.24 Thus, an SDR applicant will not need to include materials in its application explaining how it would comply with the provisions noted above, and could instead rely on its discussion about how it complies with comparable CFTC requirements.25 The applicant may instead represent in its application that it: (i) is registered with the CFTC as a swap data repository; (ii) is in compliance with applicable requirements under the swap reporting rules; (iii) satisfies the standard for Commission registration of an SDR under Rule 13n–1(c); and (iv) intends to rely on the no-action statement included in the ANE Adopting Release for the period set forth in the ANE Adopting Release with respect to any SBS asset 21 See id. at 14458–59. supra notes 12–14 and accompanying text. 23 See supra note 14. 24 The ANE Adopting Release provides additional discussion of the particular aspects of the affected rules that would not provide a basis for an enforcement action. See ANE Adopting Release, supra note 12, at 6347–48. 25 See id. at 6348. 22 See E:\FR\FM\07AUN1.SGM 07AUN1 64528 Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices class or classes for which it intends to accept transaction reports.26 III. Summary of KOR’s Application on Form SDR As noted above, KOR intends to operate as a registered SDR for the equity, credit, and interest rate derivatives asset classes.27 In its application, KOR represents that it is provisionally registered with the CFTC as a swap data repository,28 is in compliance with applicable requirements under the CFTC reporting rules applicable to a registered swap data repository, and intends to rely on the Commission’s position outlined in the ANE Adopting Release for applicable reporting rules and SDR duties for the period set forth therein.29 Below is an overview of the representations made in the application materials regarding the KOR securitybased swap data repository (‘‘KOR SBSDR’’). khammond on DSKJM1Z7X2PROD with NOTICES A. Organization and Governance KOR is a Delaware corporation and along with its affiliate, KOR Financial Inc. (‘‘KOR Financial’’), is a wholly owned subsidiary of KOR US Holdings, Inc. (‘‘KOR Holdings’’).30 KOR is governed by a board of directors (‘‘KOR Board’’).31 The KOR Board is comprised of at least three Directors with a majority being independent Directors and at least one director being a ‘‘Public Director’’ as defined in applicable CFTC regulations.32 According to the KOR Rulebook, KOR board members should have the characteristics essential for effectiveness as a member of the Board, including but not limited to: (a) integrity, objectivity, sound judgment and leadership; (b) the relevant expertise and experience required to offer advice and guidance to the Chief Executive Officer and other members of senior management; (c) the ability to 26 See id. For example, an applicant need not describe in Exhibit S its functions as a SIP. 27 See Rulebook, Ex. HH, sec. 0.1; see also Form SDR. 28 See 17 CFR 49.3(b) (providing that the CFTC may grant provisional registration of a swap data repository if such applicant is in substantial compliance with the standards set forth in 17 CFR 49.3(a)(4) and is able to demonstrate operational capability, real-time processing, multiple redundancy and robust security controls); 17 CFR 49.3(a)(4) (setting forth the standard for approval for granting registration to a swap data repository). 29 See Form SDR, cover letter from Tara Collier Manuel, Chief Compliance Officer and Head of Regulatory Products, KOR Reporting, Inc. 30 See Rulebook, Ex, HH, sec 0.1; see also Form SDR; KOR Reporting Inc Certificate of Incorporation, Ex. E–1, sec. 1.0. 31 See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 9.0. 32 See Rulebook, Ex. HH, sec. 3.2.2; see also Bylaws for KOR Reporting, Inc., Ex. E–2, sec. 1.6. VerDate Sep<11>2014 17:07 Aug 06, 2024 Jkt 262001 make independent analytical inquiries; (d) the ability to collaborate effectively and contribute productively to the Board’s discussions and deliberations; (e) an understanding of the company’s business, strategy and challenges; (f) the willingness and ability to devote adequate time and effort to Board responsibilities and to serve on Committees at the request of the Board; and (g) not being a disqualified person.33 The KOR Board is composed of individuals selected from the following groups: employees of KOR, clients with derivatives industry experience, independents, and members of senior management.34 The KOR Board will review annually the relationships that each Director has with KOR (either directly or as a partner, equity holder or officer of an organization that has a relationship with KOR).35 According to KOR, following such annual review, only those Directors who the KOR Board affirmatively determines have no material relationship with KOR (either directly or as a partner, equity holder or officer of an organization that has a relationship with KOR) will be considered Independent Directors, subject to additional qualifications prescribed by applicable law.36 According to KOR, the KOR Board’s principal oversight functions are to: (a) review, approve, and monitor KOR’s major strategic financial business activities and opportunities, including declarations of dividends and major transactions; (b) review, approve and monitor the KOR’s annual budget; (c) review, monitor and take reasonable actions with respect to KOR’s financial performance; (d) review, assess, and provide oversight of KOR’s risk management practices, the integrity and adequacy of its enterprise risk management program, which is designed to identify, manage, and plan for its Security-based Swap Data Repository, compliance, financial, operational, reputational, and strategic and commercial risks; (e) select, evaluate and compensate the Chief Compliance Officer and, if necessary, 33 See Rulebook, Ex. HH, sec. 3.2.3; see also Governance Principles, Ex. D–1, sec. 3.4.1; KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 9.1.2.3. 34 See Rulebook, Ex. HH, sec. 3.2.2; see also Governance Principles, Ex. D–1, sec. 3.2. 35 See Rulebook, Ex. HH, sec. 3.2.4; see also Governance Principles, Ex. D–1, sec. 3.5; KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 9.1.2.4. 36 See Rulebook, Ex. HH, sec. 3.2.4; see also Governance Principles, Ex. D–1, sec. 3.5; Narrative explaining fitness standards of the Board, Ex. D–3, sec. 3.0; KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 9.1.2.4. PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 appoint a replacement; and (f) review and monitor plans for the succession of the Chief Executive Officer and other members of senior management.37 In addition, the application provides that the KOR Board is responsible for the appointment and removal of the chief compliance officer (‘‘CCO’’) and approval of CCO compensation, which is at the discretion of the Board and effected by a majority vote.38 The CCO is responsible for overseeing the KOR SBSDR Compliance Department and ensuring compliance with the applicable rules.39 The CCO consults with the CEO on the adequacy of resources and makes recommendations where needed.40 The CCO has supervisory authority to inspect books and records and interview KOR SBSDR employees. Upon identification of a potential violation of any regulatory requirement or internal policy or procedure, the CCO is responsible for taking steps to investigate and remediate any such matter.41 According to KOR, the KOR Board has adopted a Conflict of Interest Policy that incorporates various provisions of applicable corporate law and other standards adopted by KOR to ensure that KOR Board and committee decisions are not impacted by conflicts of interests.42 With regard to director conflicts of interest, the application provides that a director conflict is present whenever the interests of KOR compete with the interests of a director or any party associated with a director and interfere with the director’s ability to impartially vote on the matter pending before the KOR Board.43 A director’s interest may be direct or indirect through business investment or on ‘‘immediate family member’’ (defined as a person’s spouse, domestic partner, parents, stepparents, children, stepchildren, siblings, mothers and fathers-in-law, sons and daughter-in-law and brothers and sisters-in-law and anyone residing in such person’s home 37 See Rulebook, Ex. HH, sec. 3.1.1; see also Governance Principles, Ex. D–1, sec. 2.0; KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 9.1.1.1. 38 See Rulebook, Ex. HH, sec. 12.1; see also Governance Principles, Ex. D–1, sec. 14.2. 39 See Rulebook, Ex. HH, sec. 12.2; see also Personnel Qualification, Ex. P, sec. 2.2. 40 See Rulebook, Ex. HH, sec. 12.2. 41 See Rulebook, Ex. HH, sec. 12.2. 42 See Rulebook, Ex. HH, sec 3.2.5; see also Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 1.0; Governance Principles, Ex. D–1, sec. 4.0; KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 9.1.2.5. 43 See Rulebook, Ex. HH, sec. 11.2; see also Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 2.0. E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices (other than a tenant or employee)).44 The application also provides that any director who believes he or she may have a conflict of interest relating to a matter pending before the KOR Board or any Committee must provide written notification to the CCO, General Counsel, the Board Chairman, and the CEO prior to consideration of the matter by the KOR Board or Committee.45 The notice should include all relevant material facts to enable the KOR Board or Board Committee, in consultation with the CCO, General Counsel and outside legal counsel, if necessary, to determine whether a conflict of interest exists.46 The application further provides that in the event the KOR Board or Committee determines the director has a conflict of interest or the appearance of a conflict of interest, the KOR Board or Committee, after consultation with the General Counsel and outside legal counsel, if necessary, shall determine the appropriate action to be taken.47 As a general matter, KOR believes it is appropriate for a director to abstain from voting on a matter in which he or she has an actual conflict of interest or the appearance of a conflict of interest.48 The recusal from voting shall be mandatory when it is deemed appropriate.49 In the event a director abstains because of a conflict of interest, the abstention shall be noted in the minutes of the meeting.50 In addition to this policy, directors who serve on any committee established under KOR’s rules must also follow the procedure set forth in the applicable Rulebook.51 khammond on DSKJM1Z7X2PROD with NOTICES B. Access and Information Security According to KOR, access to and usage of its SDR service will be available to all market participants on a fair, open, and equal basis.52 The application provides that KOR does not and will not bundle or tie the offering of mandated regulatory services with ancillary services offered by KOR or a 44 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 45 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 46 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 47 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 48 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 49 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 50 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 51 See Board of Directors Conflicts of Interest Policy, Ex. J–2, sec. 3.0. 52 See Rulebook, Ex. HH, sec. 4.1; see also Access Limiting Criteria, Ex. V, sec. 1.0; Client Access Requirements, Ex. W, sec. 2.1; Client Onboarding and Access Guide, Ex. X, sec. 1.0. VerDate Sep<11>2014 17:07 Aug 06, 2024 Jkt 262001 KOR affiliate.53 Further, KOR imposes the following qualification on clients of its services: (i) a valid Legal Entity Identifier (‘‘LEI’’), (ii) execution of membership documents, such as the KOR Universal Services Agreement (‘‘KOR SA’’) 54 and applicable Addendums, (iii) compliance with the KOR SBSDR Rulebook and KOR Technical Specifications as published by KOR, and (iv) successful passing of KOR Know Your Customer (KYC) procedures, which include compliance with Applicable Law, specifically those related to sanctions administered and enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury (‘‘OFAC’’).55 To be granted access to the KOR system, receive trade information, confirm or verify transactions, submit messages, or receive reports, a market participant must be an onboarded user.56 Users are required to maintain at least two Administrative Users on the KOR System; Administrative Users are responsible for creating, managing, and removing access to their company’s Users and to other Clients who are eligible to access the KOR System on behalf of the Client including firms that have Third-party Client access.57 To participate in the SDR services offered by KOR, each client will be required to enter into a KOR SA; by entering into the KOR SA each client agrees to be bound by the terms of the KOR SA, the KOR Rulebook, and any published policies and guides.58 In addition, the KOR Rulebook provides that where a client has authorized (i) a Delegated Reporter (a Third-Party Reporter or Related Entity Client under the same Parent) to submit on its behalf and access its data or (ii) a Third-Party Client to access its data, but not submit on its behalf, KOR will provide access to the Delegated Reporter or Third-Party Client so long as it has executed the appropriate KOR SA and applicable addendums and the client has granted 53 See Rulebook, Ex. HH, sec. 4.1; see also Access Limiting Criteria, Ex. V, sec. 1.0; Client Access Requirements, Ex. W, sec. 2.1; Client Onboarding and Access Guide, Ex. X, sec. 1.0. 54 See KOR Universal Services Agreement, Ex. I– 2. 55 See Rulebook, Ex. HH, sec. 4.1; see also Access Limiting Criteria, Ex. V, sec. 1.0; Client Access Requirements, Ex. W, sec. 2.1; Client Onboarding and Access Guide, Ex. X, sec. 1.0; KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 1.1. 56 See Rulebook, Ex. HH, sec. 4.0; see also Client Onboarding and Access Guide, Ex. X, sec. 2.0. 57 See Rulebook, Ex. HH, sec. 4.5.1; see also Client Onboarding and Access Guide, Ex. X, sec. 3.1; KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 1.5.1. 58 See Rulebook, Ex. HH, sec. 4.2; see also Client Access Requirements, Ex. W, sec. 2.2; Client Onboarding and Access Guide, Ex. X, sec. 3.0. PO 00000 Frm 00129 Fmt 4703 Sfmt 4703 64529 permission through the Client Portal.59 Any market participant that has executed a Client Agreement may access SBSDR Data to which they are a party or for which they have been granted access on behalf of a client.60 Access to the KOR System is strictly limited to active Users with valid permissions created by their Client’s Administrative User.61 Once set up, Users will be provided logins and the ability to access data in the KOR System.62 Access is driven off the Client’s LEIs for which the User has been associated.63 Users may be granted access to multiple LEIs under the same Parent as related entities.64 Client’s designated Administrative Users are expected to maintain correct User access at all times.65 In addition, following the end of each calendar quarter, all Clients will have access to a report on current User access levels and a list of all Clients to which they have granted access to their data.66 At least one of the designated Administrative Users assigned to each Client must review the listing of Users and other party access and confirm whether access should be maintained, removed or changed and make the appropriate updates.67 The KOR Rulebook also states that records of all User access are maintained and available for review by the Client and KOR Compliance at all time.68 With respect to prohibiting or limiting a person’s access to SDR services, the KOR Rulebook outlines the process required for KOR to decline, revoke, or suspend a user of SDR services.69 For example, KOR’s CCO may deny a client’s access to the KOR system if required pursuant to applicable law (e.g., OFAC or the direction of a regulator), violation of KOR SBSDR Rules, or improper use of the system.70 The KOR Rulebook provides that KOR 59 See Rulebook, Ex. HH, sec. 4.3, 4.4; see also Client Access Requirements, Ex. W, sec. 2.3, 2.4. 60 See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting Criteria, Ex. V, sec. 1.0. 61 See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting Criteria, Ex. V, sec. 1.0. 62 See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting Criteria, Ex. V, sec. 1.0. 63 See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting Criteria, Ex. V, sec. 1.0. 64 See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting Criteria, Ex. V, sec. 1.0. 65 See Rulebook, Ex. HH, sec. 4.5.4; see also Client Onboarding and Access Guide, Ex. X, sec. 3.1. 66 See Rulebook, Ex. HH, sec. 4.5.4. 67 See Rulebook, Ex. HH, sec. 4.5.4. 68 See Rulebook, Ex. HH, sec. 4.5.4. 69 See Rulebook, Ex. HH, sec. 14.2; see also Denial, Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2. 70 See Rulebook, Ex. HH, sec. 14.2; see also Denial, Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2. E:\FR\FM\07AUN1.SGM 07AUN1 64530 Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices will notify the applicable regulator of such action.71 In addition, any such clients would receive written notice containing the grounds for determination and an opportunity to appeal the decision to the CCO and KOR Board by written request.72 KOR may restore access to a Client following approval from the CCO and/or KOR Board.73 The CCO will consider the applicable law, regulatory requirements, and the Market Participant’s response to the cause of denial, revocation, or suspension.74 In addition, all decisions will be documented when determining whether to restore Client’s access.75 The KOR Rulebook provides that KOR SBSDR will conduct regular, periodic, objective testing and review of its automated systems to ensure that they are reliable, secure, and have adequate scalable capacity.76 It also provides that KOR will conduct regular, periodic testing and review of its business continuity-disaster recovery capabilities.77 It also provides that KOR will, to the extent practicable: (a) coordinate with Clients and service providers to participate in synchronized testing in a manner adequate to enable effective resumption of KOR SBSDR’s fulfillment of its duties and obligations following a disruption causing activation of KOR SBSDR’s Business Continuity and Disaster Recovery (BCDR) plan; (b) participate in periodic, synchronized testing of its BCDR Plan and the BCDR plans of its Clients, and the BCDR plans required, as appliable, by each appropriate prudential regulator, the Financial Stability Oversight Council, the Securities and Exchange Commission, the Department of Justice or any other person deemed appropriate by the SEC; and (c) ensure that its BCDR plan take into account the BCDR plans of its telecommunications, power, water, and other essential service providers.78 C. Acceptance and Use of SBS Data According to KOR, data accepted and maintained by the SBSDR may not be used for commercial or business purposes by the SBSDR or any of its khammond on DSKJM1Z7X2PROD with NOTICES 71 See Rulebook, Ex. HH, sec. 14.2; see also Denial, Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2. 72 See Rulebook, Ex. HH, sec. 14.2; see also Denial, Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2. 73 See Denial, Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.3. 74 See Denial, Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.3. 75 See Denial, Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.3. 76 See Rulebook, Ex. HH, sec. 13.3.1. 77 See Rulebook, Ex. HH, sec. 13.3.1. 78 See Rulebook, Ex. HH, sec. 13.3.2. VerDate Sep<11>2014 17:07 Aug 06, 2024 Jkt 262001 affiliated entities.79 KOR SBSDR has implemented adequate ‘‘firewalls’’ or controls to protect the reported SBSDR data required to be maintained under SEC regulations from any improper commercial use.80 The application provides that a Client that submits SBSDR data maintained by the SBSDR may permit the commercial use by providing express written consent. Such consent will not be a requirement to report to the SBSDR.81 If such Client consent is given, KOR may not make such consented data available for commercial use prior to its public dissemination.82 KOR states that, in accordance with Exchange Act Rule 13n–5(b)(5), it has established systems and User access restrictions reasonably designed to prevent any provision in a valid swap from being invalidated or modified through its verification or recording process.83 KOR SBSDR uses the LEI and the Unique Trade Identifier (‘‘UTI’’).84 Pursuant to KOR’s rulebook, individuals not eligible for an LEI should be reported using a Natural Person Identifier.85 KOR states that if a security-based swap counterparty is not eligible to receive an LEI as determined by the Global Legal Entity Identifier System, such counterparty will be identified in all recordkeeping and all Security-Based Swap Data reporting with a Natural Person Identifier.86 KOR further provides that it is the duty of the Reporting Side to always submit a unique and consistent Natural Person Identifier.87 Pursuant to KOR’s rulebook, to ensure that the Reporting Side consistently submits a unique value for the identifier, the Reporting Side must combine the LEI of the Reporting Side with the natural person’s email address associated with the National Person Identifier.88 Each Client must maintain and renew its legal identity identifier in accordance with the standards set by the Global Legal Entity Identifier System.89 The application provides that each swap will be identified in all recordkeeping and all Security-Based 79 See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 5.0. 80 See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 5.0. 81 See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 5.0. 82 See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 5.0. 83 See Rulebook, Ex. HH, sec. 9.2; see also Data Invalidation Policy, Ex. EE, sec. 1.0. 84 See Rulebook, Ex. HH, sec. 5.1.1, 5.1.2. 85 See Rulebook, Ex. HH, sec. 5.1.1. 86 See Rulebook, Ex. HH, sec. 5.3.1. 87 See Rulebook, Ex. HH, sec. 5.3.1. 88 See Rulebook, Ex. HH, sec. 5.3.1. 89 See Rulebook, Ex. HH, sec. 5.3.1. PO 00000 Frm 00130 Fmt 4703 Sfmt 4703 Swap Data reporting by the use of a UTI, which will be created, transmitted, and used for each swap.90 Each registered entity and swap counterparty will include the UTI for a swap in all of its records and all of its Security-Based Swap Data reporting concerning that swap, from the time it creates or receives the UTI throughout the existence of the security-based swap and for as long as any records are required by applicable law or regulation.91 Every submission to KOR SBSDR must contain the appropriate UTI, otherwise the submission will be rejected. KOR SBSDR will validate the format and uniqueness of every UTI.92 If a party submits the incorrect UTI, pursuant to KOR’s rulebook, they must ‘‘error’’ that UTI and resubmit the swap as a new message with the correct UTI.93 When the correct UTI is submitted it will be considered a new trade and, if it is submitted after the required reporting timelines, it will be classified as a late report.94 The application provides that KOR has established procedures and provides facilities for effectively resolving disputes over the accuracy of the SBSDR Transaction Data and positions that are recorded in the KOR SBSDR.95 When the Reporting Side does not agree with the accuracy of the reporting of a swap in KOR Trade Repository, but is prevented from amending the swap to what they believe to accurate, the Client must (a) enter a ticket with KOR SBSDR support with the details of the issue and (b) submit an allowed value per the KOR Technical Specifications for the KOR SBSDR field that reflects the dispute.96 D. Fees The application includes KOR’s fee schedules.97 According to KOR, fees are assessed in a consistent, nonpreferential manner and are not permitted to be used as a barrier to entry.98 KOR offers a subscription model fee schedule which treats all submissions equally regardless of reporting counterparty, asset class, 90 See Rulebook, Ex. HH, sec. 5.2. Rulebook, Ex. HH, sec. 5.2. 92 See Rulebook, Ex. HH, sec. 5.2. 93 See Rulebook, Ex. HH, sec. 5.2. 94 See Rulebook, Ex. HH, sec. 5.2. 95 See Rulebook, Ex. HH, sec. 11.0; see also Dispute Policy, Ex. CC, sec. 2.0. 96 See Rulebook, Ex. HH, sec. 11.0; see also Dispute Policy, Ex. CC, sec. 2.0. 97 See KOR SEC SBSDR Fee Schedule, Ex. M–1. Additionally, KOR provides a fee schedule for KOR Users on its website at https:// www.korfinancial.com/pricing. 98 See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 8.0. 91 See E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices clearing status or execution.99 The application provides that KOR will not offer preferential pricing arrangements to any Client on any basis, including volume discounts or reductions unless such discounts or reductions apply to all Clients uniformly and are not otherwise established in a manner that would effectively limit the application of such discount or reduction to a select number of Clients.100 In addition, KOR represents in its rulebook that it ensures any dues, fees, or other charges imposed by, and any discounts or rebates offered by, its SBSDR are fair and reasonable and not unreasonably discriminatory.101 KOR states that such dues, fees, other charges, discounts, or rebates will be applied consistently across all similarlysituated users of such SBSDR services, including, but not limited to, market participants, market infrastructures (including central counterparties), venues from which data can be submitted to the SBSDR (including exchanges, security-based swap execution facilities, electronic trading venues, and matching and confirmation platforms), and third party service providers.102 All fees are fully disclosed and available on the KOR SBSDR website.103 The fee schedule applies until such time as the KOR Board determines otherwise and provides clients at least one (1) month’s notice for significant changes to existing pricing or policy.104 In the application, KOR states that, as a real-time messaging-based service, KOR assesses fees on a per message basis to align SBSDR services and the expense to offer.105 All Reporting Clients are assessed the same fee structure regardless of their pathway to KOR SBSDR to ensure a competitive and level playing field.106 A ‘‘Reporting Client’’ means the reporting counterparty that has in place a fully executed agreement and is liable for the fees incurred for the use of KOR khammond on DSKJM1Z7X2PROD with NOTICES 99 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 1.0; see also Fee Schedule Rational and Differentiation, Ex. M–2, sec. 1.3. 100 See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 8.0. 101 See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 8.0. 102 See Rulebook, Ex. HH, sec. 13.4. 103 See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 8.0. 104 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 1.0. 105 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 1.0. 106 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 1.0. VerDate Sep<11>2014 17:07 Aug 06, 2024 Jkt 262001 Services.107 The Reporting Client may delegate billing and payments to another Client by authorizing either a Related Entity or their Third-Party Reporter.108 The ‘‘Related Entity’’ refers to other clients of KOR (i.e., KOR Counterparty Clients) within the same corporate structure as the Reporting Client, creating a Client Group.109 KOR will aggregate the fee liable activity for Related Entities under a Client Group and provide a single invoice.110 A ‘‘Third-Party Reporter’’ refers to an entity that has a fully executed Agreement with KOR and is facilitating reporting for a KOR Counterparty Client.111 A Third-Party Reporter is not charged fees for the activity of their customers, who are also KOR Counterparty Clients, but may be assigned billing (receipt of invoices and payment responsibilities) by KOR Counterparty Clients.112 When a Counterparty Client makes a billing assignment to a Third-Party Reporter it is for all billable activity related to use of KOR Services of that Counterparty Client (including activity beyond what is associated to the Third-Party Reporter) and Counterparty Clients may only assign billing to a single ThirdParty Reporter.113 The application provides that reporting by Platforms which are Security-Based Swap Execution Facilities or National Securities Exchanges are treated as messages under a Third-Party Reporter whereby the Reporting Counterparty is assessed KOR reporting fees and the Platform, by default, is not.114 A Platform may elect to assume direct billing responsibility for any Reporting Counterparty that is a KOR Counterparty Client.115 If the Reporting Counterparty on a Platform reported transaction is not a KOR Counterparty Client, the Platform reporter will be billed for the message activity which will be aggregated with all other Platform billable message activity.116 107 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.1. 108 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.1, 2.2. 109 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.1, 2.2. 110 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.1, 2.2. 111 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.3. 112 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.3. 113 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.3. 114 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.4. 115 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.4. 116 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 2.4. PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 64531 KOR SBSDR offers simplified subscription plans where each tier plan limits the maximum number of messages a Reporting Client may report per month.117 To calculate the calendar monthly fee, KOR totals all eligible messages submitted in the prior month for each Counterparty Client or Client Group. KOR provides a 10% monthly overage allowance across all tiers for any given month per Counterparty Client or Client Group.118 KOR’s subscription plan is organized into ten (10) tiers. Tier 1 allows for 100 monthly messages produced with a monthly fee of $100; Tier 2 allows for 1,000 monthly messages produced with a monthly fee of $500; Tier 3 allows for 10,000 monthly messages produced with a monthly fee of $2,000; Tier 4 allows for 100,000 monthly messages produced with a monthly fee of $6,000; Tier 5 allows for 1,000,000 monthly messages produced with a monthly fee of $15,000; Tier 6 allows for 4,000,000 monthly messages produced with a monthly fee of $36,000; Tier 7 allows for 9,000,000 monthly messages produced with a monthly fee of $60,000; Tier 8 allows for 14,000,000 monthly messages produced with a monthly fee of $95,000; Tier 9 allows for 19,000,000 monthly messages produced with a monthly fee of $150,000; and Tier 10 allows for 24,000,000 monthly messages produced with a monthly fee of $220,000.119 KOR SBSDR is a 100% cloud service leveraging the performance and scale available through the cloud infrastructure.120 KOR incurs costs through the accessing of its Clients’ data hosted and used to generate trade reports requested by Clients.121 The application states that the KOR SBSDR Fee Schedule is designed for simplicity and flexibility, modeling an expected mix of scheduled access to standard reports in addition to reasonable use of ad-hoc reporting.122 KOR will monitor the generation of reports across each Client and KOR will provide advice when it observes use that exceeds standard fair allowances.123 KOR states that should a Client need continued reports at a sustained activity level higher than expected, a move to a higher 117 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.0. 118 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.0. 119 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.0. 120 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.2. 121 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.2. 122 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.2. 123 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.2. E:\FR\FM\07AUN1.SGM 07AUN1 64532 Federal Register / Vol. 89, No. 152 / Wednesday, August 7, 2024 / Notices fee tier may be deemed appropriate.124 KOR will generate invoices by the fifth (5th) day of every calendar month for the prior month’s activity.125 The billing currency is USD ($) and invoices must be paid in USD.126 Invoices are payable within 45 days upon receipt.127 Accounts not paid within terms are subject to a 1.5% monthly finance charge.128 KOR SBSDR will accept and process billing adjustments up to 45 days after the invoice date.129 Adjustment requests received after the 45-day period will not be accepted by KOR SBSDR.130 Approved adjustments will be applied as credits and appear on the next billing cycle as a separate line item.131 E. Recordkeeping The KOR Rulebook provides that KOR will maintain transaction data and related identifying information for not less than five years after the applicable security-based swap expires and historical positions for not less than five years: (a) in a place and format that is readily accessible and usable to the Commission and other persons with authority to access or view such information, and (b) in an electronic format that is non-rewriteable and nonerasable.132 F. Disclosure KOR publishes a disclosure document to provide a summary of information regarding its service offerings and the SBS data it maintains.133 Specifically, the disclosure document sets forth a description of the following: (i) criteria for providing access to KOR SBSBR; (ii) criteria for market participants seeking to connect to the SBSDR; (iii) policies and procedures regarding the SBSDR’s safeguarding of SBSDR data and operational reliability to protect the confidentiality and security of SBSDR data; (iv) policies and procedures to protect the privacy of SBSDR data; (v) khammond on DSKJM1Z7X2PROD with NOTICES 124 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 3.2. 125 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 5.0. 126 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 5.0. 127 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 5.0. 128 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 5.0. 129 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 5.0. 130 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 5.0. 131 See KOR SEC SBSDR Fee Schedule, Ex. M–1, sec. 5.0. 132 See Rulebook, Ex. HH, sec. 9.4; see also KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2, sec. 7.4.4. 133 See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2. VerDate Sep<11>2014 17:07 Aug 06, 2024 Jkt 262001 policies and procedures regarding the SBSDR’s non-commercial and/or commercial use of SBSDR data; (vi) dispute resolution procedures; (vii) description of SBSDR services; (viii) the SBSDR fee schedule; and (ix) the SBSDR’s governance arrangements.134 G. Regulatory Reporting and Public Dissemination As a registered SDR, KOR would carry out an important role in the regulatory reporting and public dissemination of SBS transactions. As noted above, KOR has stated that it intends to rely on the no-action statement included in the ANE Adopting Release for the period set forth in the ANE Adopting Release with respect to any SBS asset class or classes for which it intends to accept transaction reports.135 Therefore, KOR does not need to include materials in its application explaining how it would comply with the provisions of the SBS Reporting Rules described in the noaction statement.136 Instead, KOR may rely on its discussion about how it complies with comparable CFTC requirements pertaining to regulatory reporting and public dissemination of swap transactions. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning KOR’s Form SDR, including whether KOR has satisfied the requirements for registration as an SDR and as a SIP. Commenters are requested, to the extent possible, to provide empirical data and other factual support for their views. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules-regulations/how-submitcomment); or • Send an email to rule-comments@ sec.gov. Please include File Number SBSDR–2023–01 on the subject line. Paper Comments • Send paper comments to Secretary, Securities and Exchange Commission, 134 See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG–2. 135 See supra notes 28–29 and accompanying text. 136 However, the KOR application includes provisions explaining how KOR would require users to identify SBS, as required by Rule 901(c)(1) of Regulation SBSR. See Rulebook, Ex. HH, sec. 5.4 (regarding Unique Product Identifiers). The KOR application also includes provisions explaining how KOR would comply with the conditions to the no-action statement included in the ANE Adopting Release. PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SBSDR–2023–01. To help the Commission process and review your comments more efficiently, please use only one method of submission. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/rules/other.shtml). Copies of the Form SDR, all subsequent amendments, all written statements with respect to the Form SDR that are filed with the Commission, and all written communications relating to the Form SDR 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 Section, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. 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 SBSDR–2023–01 and should be submitted on or before August 28, 2024. By the Commission. Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–17423 Filed 8–6–24; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Federal Motor Carrier Safety Administration [Docket No. FMCSA–2013–0109; FMCSA– 2013–044; FMCSA–2022–0044] Qualification of Drivers; Exemption Applications; Epilepsy and Seizure Disorders Federal Motor Carrier Safety Administration (FMCSA), Department of Transportation (DOT). ACTION: Notice of renewal of exemptions; request for comments. AGENCY: FMCSA announces its decision to renew exemptions for seven individuals from the requirement in the Federal Motor Carrier Safety Regulations (FMCSRs) that interstate commercial motor vehicle (CMV) drivers have ‘‘no established medical SUMMARY: E:\FR\FM\07AUN1.SGM 07AUN1

Agencies

[Federal Register Volume 89, Number 152 (Wednesday, August 7, 2024)]
[Notices]
[Pages 64526-64532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17423]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100638; File No. SBSDR-2023-01]


Security-Based Swap Data Repositories; KOR Reporting, Inc.; 
Notice of Filing of Application for Registration as a Security-Based 
Swap Data Repository

August 2, 2024.

I. Introduction

    On January 26, 2023, KOR Reporting, Inc. (``KOR'') filed with the 
Securities and Exchange Commission (``Commission'') an application on 
Form SDR to register as a security-based swap data repository (``SDR'') 
pursuant to section 13(n)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') and 17 CFR 240.13n-1 (``Rule 13n-1'') thereunder,\1\ 
and as a securities information processor (``SIP'') under section 
11A(b) of the Exchange Act.\2\ KOR intends to operate as a registered 
SDR for security-based swap (``SBS'') transactions in the equity, 
credit, and interest rate derivatives asset classes. KOR subsequently 
filed amendments to its application on the following dates: August 11, 
2023, and February 23, 2024.\3\ The Commission is publishing this 
notice to solicit comments from interested persons regarding KOR's 
application,\4\ and the Commission will consider any comments it 
receives in making its determination whether to approve KOR's 
application for registration as an SDR and as a SIP.
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    \1\ 15 U.S.C. 78m(n)(1); 17 CFR 240.13n-1. A copy of KOR's 
application on Form SDR and non-confidential exhibits thereto are 
available for public viewing on the Commission's website.
    \2\ 15 U.S.C. 78k-1(b).
    \3\ The amendments to KOR's application were filed to update 
certain exhibits, including those addressing the disclosure 
document, financial statements, and fee schedule.
    \4\ The descriptions set forth in this notice regarding the 
structure and operations of KOR have been derived, excerpted, or 
summarized from KOR's application on Form SDR.
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II. Background

A. SDR Registration, Duties, and Core Principles

    Section 13(n) of the Exchange Act makes it unlawful for any person, 
unless registered with the Commission, directly or indirectly, to make 
use of the mails or any means or instrumentality of interstate commerce 
to perform the functions of an SDR.\5\ To be registered and maintain 
registration, an SDR must comply with certain requirements and core 
principles described in section 13(n), as well as any requirements that 
the Commission may impose by rule or regulation.\6\ In 2015, the 
Commission adopted 17 CFR 240.13n-1 to 13n-12 under the Exchange Act to 
establish Form SDR, the procedures for registration as an SDR, and the 
duties and core principles applicable to an SDR (``SDR Rules'').\7\ The 
Commission provided a temporary exemption from compliance with the SDR 
Rules and also extended exemptions from the provisions of the Dodd-
Frank Act set forth in a Commission order providing temporary 
exemptions and other temporary relief from compliance with certain 
provisions of the Exchange Act concerning security-based swaps, and

[[Page 64527]]

these temporary exemptions expired in 2017.\8\
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    \5\ 15 U.S.C. 78m(n).
    \6\ See id.
    \7\ See Release No. 34-74246 (Feb. 11, 2015), 80 FR 14438, 14438 
(Mar. 19, 2015) (``SDR Adopting Release''). In 2016, the Commission 
subsequently amended 17 CFR 240.13n-4 to address third-party 
regulatory access to SBS data obtained by an SDR. See Release No. 
34-78716 (Aug. 29, 2016), 81 FR 60585 (Sept. 2, 2016).
    \8\ See Release No. 34-80359 (Mar. 31, 2017), 82 FR 16867 (Apr. 
6, 2017).
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    The Commission also has adopted 17 CFR 242.900 to 909 under the 
Exchange Act (collectively, ``Regulation SBSR''), which governs 
regulatory reporting and public dissemination of security-based swap 
transactions.\9\ Among other things, Regulation SBSR requires each 
registered SDR to register with the Commission as a SIP,\10\ and the 
Form SDR constitutes an application for registration as a SIP, as well 
as an SDR.\11\
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    \9\ Release No. 34-74244 (Feb. 11, 2015), 80 FR 14563 (Mar. 19, 
2015); Release No. 34-78321 (July 14, 2016), 81 FR 53546 (Aug. 12, 
2016). Regulation SBSR and the SDR Rules are referred to 
collectively as the ``SBS Reporting Rules.''
    \10\ See 17 CFR 242.909.
    \11\ See Form SDR, Instruction 2.
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    In 2019, the Commission stated that implementation of the SBS 
Reporting Rules can and should be done in a manner that carries out the 
fundamental policy goals of the SBS Reporting Rules while minimizing 
burdens as much as practicable.\12\ Noting ongoing concerns among 
market participants about incurring unnecessary burdens and the 
Commission's efforts to promote harmonization between the SBS Reporting 
Rules and swap reporting rules, the Commission took the position that, 
for four years following Regulation SBSR's Compliance Date 1 in each 
asset class,\13\ certain actions with respect to the SBS Reporting 
Rules would not provide a basis for a Commission enforcement 
action.\14\ The no-action statement's relevance to KOR's application 
for registration as an SDR and SIP is discussed further below.
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    \12\ Release No. 34-87780 (Dec. 18, 2019), 85 FR 6270, 6347 
(Feb. 4, 2020) (``ANE Adopting Release'').
    \13\ See id. Under Regulation SBSR, the first compliance date 
(``Compliance Date 1'') for affected persons with respect to an SBS 
asset class is the first Monday that is the later of: (i) six months 
after the date on which the first SDR that can accept transaction 
reports in that asset class registers with the Commission; or (ii) 
one month after the compliance date for registration of SBS dealers 
and major SBS participants (``SBS entities''). Id. at 6346. The 
compliance date for registration of SBS entities is Oct. 6, 2021. 
See id. at 6270, 6345.
    \14\ See id. The specific rule provisions of the SBS Reporting 
Rules affected by the no-action statement are discussed in Part 
II.B.
---------------------------------------------------------------------------

B. Standard for Registration

    As noted above, to be registered with the Commission as an SDR and 
maintain such registration, an SDR is required to comply with the 
requirements and core principles described in section 13(n) of the 
Exchange Act, as well as with any requirement that the Commission may 
impose by rule or regulation.\15\ In addition, Rule 13n-1(c)(3) under 
the Exchange Act provides that the Commission shall grant the 
registration of an SDR if it finds that the SDR is so organized, and 
has the capacity, to be able to: (i) assure the prompt, accurate, and 
reliable performance of its functions as an SDR; (ii) comply with any 
applicable provisions of the securities laws and the rules and 
regulations thereunder; and (iii) carry out its functions in a manner 
consistent with the purposes of section 13(n) of the Exchange Act and 
the rules and regulations thereunder.\16\ The Commission shall deny the 
registration of an SDR if it does not make any such finding.\17\ 
Similarly, to be registered with the Commission as a SIP, the 
Commission must find that such applicant is so organized, and has the 
capacity, to be able to assure the prompt, accurate, and reliable 
performance of its functions as a SIP, comply with the provisions of 
the Exchange Act and the rules and regulations thereunder, carry out 
its functions in a manner consistent with the purposes of the Exchange 
Act, and, insofar as it is acting as an exclusive processor, operate 
fairly and efficiently.\18\
---------------------------------------------------------------------------

    \15\ See 15 U.S.C. 78m(n)(3).
    \16\ 17 CFR 240.13n-1(c)(3).
    \17\ See id.
    \18\ See 15 U.S.C. 78k-1(b)(3).
---------------------------------------------------------------------------

    In determining whether an applicant meets the criteria set forth in 
Rule 13n-1(c), the Commission will consider the information reflected 
by the applicant on its Form SDR, as well as any additional information 
obtained from the applicant. For example, Form SDR requires an 
applicant to provide a list of the asset classes for which the 
applicant is collecting and maintaining data or for which it proposes 
to collect and maintain data, a description of the functions that it 
performs or proposes to perform, general information regarding its 
business organization, and contact information.\19\ Obtaining this 
information and other information reflected on Form SDR and the 
exhibits thereto--including the applicant's overall business structure, 
financial condition, track record in providing access to its services 
and data, technological reliability, and policies and procedures to 
comply with its statutory and regulatory obligations--will enable the 
Commission to determine whether to grant or deny an application for 
registration.\20\ Furthermore, the information requested in Form SDR 
will enable the Commission to assess whether the applicant is so 
organized and has the capacity to comply and carry out its functions in 
a manner consistent with the Federal securities laws and the rules and 
regulations thereunder, including the SBS Reporting Rules.\21\
---------------------------------------------------------------------------

    \19\ See SDR Adopting Release, supra note 7, at 14459.
    \20\ See id. at 14458.
    \21\ See id. at 14458-59.
---------------------------------------------------------------------------

    Consistent with the Commission's no-action statement in the ANE 
Adopting Release,\22\ an entity wishing to register with the Commission 
as an SDR must still submit an application on Form SDR but can address 
the rule provisions included in the no-action statement by discussing 
how the SDR complies with comparable Commodity Futures Trading 
Commission (``CFTC'') requirements.\23\ Accordingly, in such instances 
the Commission will not assess an SDR application for consistency or 
compliance with the rule provisions included in the Commission's no-
action statement. Specifically, the Commission identified the following 
provisions as not providing a basis for an enforcement action against a 
registered SDR for the duration of the relief provided in the 
Commission statement: under Regulation SBSR, aspects of 17 CFR 
242.901(a), 901(c)(2) through (7), 901(d), 901(e), 902, 903(b), 906(a) 
and (b), and 907(a)(1), (a)(3), and (a)(4) through (6); under the SDR 
Rules, aspects of section 13(n)(5)(B) of the Exchange Act and 17 CFR 
240.13n-4(b)(3) thereunder, and aspects of 17 CFR 240.13n-5(b)(1)(iii); 
and under section 11A(b) of the Exchange Act, any provision pertaining 
to SIPs.\24\ Thus, an SDR applicant will not need to include materials 
in its application explaining how it would comply with the provisions 
noted above, and could instead rely on its discussion about how it 
complies with comparable CFTC requirements.\25\ The applicant may 
instead represent in its application that it: (i) is registered with 
the CFTC as a swap data repository; (ii) is in compliance with 
applicable requirements under the swap reporting rules; (iii) satisfies 
the standard for Commission registration of an SDR under Rule 13n-1(c); 
and (iv) intends to rely on the no-action statement included in the ANE 
Adopting Release for the period set forth in the ANE Adopting Release 
with respect to any SBS asset

[[Page 64528]]

class or classes for which it intends to accept transaction 
reports.\26\
---------------------------------------------------------------------------

    \22\ See supra notes 12-14 and accompanying text.
    \23\ See supra note 14.
    \24\ The ANE Adopting Release provides additional discussion of 
the particular aspects of the affected rules that would not provide 
a basis for an enforcement action. See ANE Adopting Release, supra 
note 12, at 6347-48.
    \25\ See id. at 6348.
    \26\ See id. For example, an applicant need not describe in 
Exhibit S its functions as a SIP.
---------------------------------------------------------------------------

III. Summary of KOR's Application on Form SDR

    As noted above, KOR intends to operate as a registered SDR for the 
equity, credit, and interest rate derivatives asset classes.\27\ In its 
application, KOR represents that it is provisionally registered with 
the CFTC as a swap data repository,\28\ is in compliance with 
applicable requirements under the CFTC reporting rules applicable to a 
registered swap data repository, and intends to rely on the 
Commission's position outlined in the ANE Adopting Release for 
applicable reporting rules and SDR duties for the period set forth 
therein.\29\ Below is an overview of the representations made in the 
application materials regarding the KOR security-based swap data 
repository (``KOR SBSDR'').
---------------------------------------------------------------------------

    \27\ See Rulebook, Ex. HH, sec. 0.1; see also Form SDR.
    \28\ See 17 CFR 49.3(b) (providing that the CFTC may grant 
provisional registration of a swap data repository if such applicant 
is in substantial compliance with the standards set forth in 17 CFR 
49.3(a)(4) and is able to demonstrate operational capability, real-
time processing, multiple redundancy and robust security controls); 
17 CFR 49.3(a)(4) (setting forth the standard for approval for 
granting registration to a swap data repository).
    \29\ See Form SDR, cover letter from Tara Collier Manuel, Chief 
Compliance Officer and Head of Regulatory Products, KOR Reporting, 
Inc.
---------------------------------------------------------------------------

A. Organization and Governance

    KOR is a Delaware corporation and along with its affiliate, KOR 
Financial Inc. (``KOR Financial''), is a wholly owned subsidiary of KOR 
US Holdings, Inc. (``KOR Holdings'').\30\ KOR is governed by a board of 
directors (``KOR Board'').\31\ The KOR Board is comprised of at least 
three Directors with a majority being independent Directors and at 
least one director being a ``Public Director'' as defined in applicable 
CFTC regulations.\32\ According to the KOR Rulebook, KOR board members 
should have the characteristics essential for effectiveness as a member 
of the Board, including but not limited to: (a) integrity, objectivity, 
sound judgment and leadership; (b) the relevant expertise and 
experience required to offer advice and guidance to the Chief Executive 
Officer and other members of senior management; (c) the ability to make 
independent analytical inquiries; (d) the ability to collaborate 
effectively and contribute productively to the Board's discussions and 
deliberations; (e) an understanding of the company's business, strategy 
and challenges; (f) the willingness and ability to devote adequate time 
and effort to Board responsibilities and to serve on Committees at the 
request of the Board; and (g) not being a disqualified person.\33\ The 
KOR Board is composed of individuals selected from the following 
groups: employees of KOR, clients with derivatives industry experience, 
independents, and members of senior management.\34\ The KOR Board will 
review annually the relationships that each Director has with KOR 
(either directly or as a partner, equity holder or officer of an 
organization that has a relationship with KOR).\35\ According to KOR, 
following such annual review, only those Directors who the KOR Board 
affirmatively determines have no material relationship with KOR (either 
directly or as a partner, equity holder or officer of an organization 
that has a relationship with KOR) will be considered Independent 
Directors, subject to additional qualifications prescribed by 
applicable law.\36\
---------------------------------------------------------------------------

    \30\ See Rulebook, Ex, HH, sec 0.1; see also Form SDR; KOR 
Reporting Inc Certificate of Incorporation, Ex. E-1, sec. 1.0.
    \31\ See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG-2, sec. 
9.0.
    \32\ See Rulebook, Ex. HH, sec. 3.2.2; see also Bylaws for KOR 
Reporting, Inc., Ex. E-2, sec. 1.6.
    \33\ See Rulebook, Ex. HH, sec. 3.2.3; see also Governance 
Principles, Ex. D-1, sec. 3.4.1; KOR SEC SBSDR Disclosure Document 
v1.2, Ex. GG-2, sec. 9.1.2.3.
    \34\ See Rulebook, Ex. HH, sec. 3.2.2; see also Governance 
Principles, Ex. D-1, sec. 3.2.
    \35\ See Rulebook, Ex. HH, sec. 3.2.4; see also Governance 
Principles, Ex. D-1, sec. 3.5; KOR SEC SBSDR Disclosure Document 
v1.2, Ex. GG-2, sec. 9.1.2.4.
    \36\ See Rulebook, Ex. HH, sec. 3.2.4; see also Governance 
Principles, Ex. D-1, sec. 3.5; Narrative explaining fitness 
standards of the Board, Ex. D-3, sec. 3.0; KOR SEC SBSDR Disclosure 
Document v1.2, Ex. GG-2, sec. 9.1.2.4.
---------------------------------------------------------------------------

    According to KOR, the KOR Board's principal oversight functions are 
to: (a) review, approve, and monitor KOR's major strategic financial 
business activities and opportunities, including declarations of 
dividends and major transactions; (b) review, approve and monitor the 
KOR's annual budget; (c) review, monitor and take reasonable actions 
with respect to KOR's financial performance; (d) review, assess, and 
provide oversight of KOR's risk management practices, the integrity and 
adequacy of its enterprise risk management program, which is designed 
to identify, manage, and plan for its Security-based Swap Data 
Repository, compliance, financial, operational, reputational, and 
strategic and commercial risks; (e) select, evaluate and compensate the 
Chief Compliance Officer and, if necessary, appoint a replacement; and 
(f) review and monitor plans for the succession of the Chief Executive 
Officer and other members of senior management.\37\
---------------------------------------------------------------------------

    \37\ See Rulebook, Ex. HH, sec. 3.1.1; see also Governance 
Principles, Ex. D-1, sec. 2.0; KOR SEC SBSDR Disclosure Document 
v1.2, Ex. GG-2, sec. 9.1.1.1.
---------------------------------------------------------------------------

    In addition, the application provides that the KOR Board is 
responsible for the appointment and removal of the chief compliance 
officer (``CCO'') and approval of CCO compensation, which is at the 
discretion of the Board and effected by a majority vote.\38\ The CCO is 
responsible for overseeing the KOR SBSDR Compliance Department and 
ensuring compliance with the applicable rules.\39\ The CCO consults 
with the CEO on the adequacy of resources and makes recommendations 
where needed.\40\ The CCO has supervisory authority to inspect books 
and records and interview KOR SBSDR employees. Upon identification of a 
potential violation of any regulatory requirement or internal policy or 
procedure, the CCO is responsible for taking steps to investigate and 
remediate any such matter.\41\
---------------------------------------------------------------------------

    \38\ See Rulebook, Ex. HH, sec. 12.1; see also Governance 
Principles, Ex. D-1, sec. 14.2.
    \39\ See Rulebook, Ex. HH, sec. 12.2; see also Personnel 
Qualification, Ex. P, sec. 2.2.
    \40\ See Rulebook, Ex. HH, sec. 12.2.
    \41\ See Rulebook, Ex. HH, sec. 12.2.
---------------------------------------------------------------------------

    According to KOR, the KOR Board has adopted a Conflict of Interest 
Policy that incorporates various provisions of applicable corporate law 
and other standards adopted by KOR to ensure that KOR Board and 
committee decisions are not impacted by conflicts of interests.\42\ 
With regard to director conflicts of interest, the application provides 
that a director conflict is present whenever the interests of KOR 
compete with the interests of a director or any party associated with a 
director and interfere with the director's ability to impartially vote 
on the matter pending before the KOR Board.\43\ A director's interest 
may be direct or indirect through business investment or on ``immediate 
family member'' (defined as a person's spouse, domestic partner, 
parents, stepparents, children, stepchildren, siblings, mothers and 
fathers-in-law, sons and daughter-in-law and brothers and sisters-in-
law and anyone residing in such person's home

[[Page 64529]]

(other than a tenant or employee)).\44\ The application also provides 
that any director who believes he or she may have a conflict of 
interest relating to a matter pending before the KOR Board or any 
Committee must provide written notification to the CCO, General 
Counsel, the Board Chairman, and the CEO prior to consideration of the 
matter by the KOR Board or Committee.\45\ The notice should include all 
relevant material facts to enable the KOR Board or Board Committee, in 
consultation with the CCO, General Counsel and outside legal counsel, 
if necessary, to determine whether a conflict of interest exists.\46\
---------------------------------------------------------------------------

    \42\ See Rulebook, Ex. HH, sec 3.2.5; see also Board of 
Directors Conflicts of Interest Policy, Ex. J-2, sec. 1.0; 
Governance Principles, Ex. D-1, sec. 4.0; KOR SEC SBSDR Disclosure 
Document v1.2, Ex. GG-2, sec. 9.1.2.5.
    \43\ See Rulebook, Ex. HH, sec. 11.2; see also Board of 
Directors Conflicts of Interest Policy, Ex. J-2, sec. 2.0.
    \44\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
    \45\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
    \46\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
---------------------------------------------------------------------------

    The application further provides that in the event the KOR Board or 
Committee determines the director has a conflict of interest or the 
appearance of a conflict of interest, the KOR Board or Committee, after 
consultation with the General Counsel and outside legal counsel, if 
necessary, shall determine the appropriate action to be taken.\47\ As a 
general matter, KOR believes it is appropriate for a director to 
abstain from voting on a matter in which he or she has an actual 
conflict of interest or the appearance of a conflict of interest.\48\ 
The recusal from voting shall be mandatory when it is deemed 
appropriate.\49\ In the event a director abstains because of a conflict 
of interest, the abstention shall be noted in the minutes of the 
meeting.\50\ In addition to this policy, directors who serve on any 
committee established under KOR's rules must also follow the procedure 
set forth in the applicable Rulebook.\51\
---------------------------------------------------------------------------

    \47\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
    \48\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
    \49\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
    \50\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
    \51\ See Board of Directors Conflicts of Interest Policy, Ex. J-
2, sec. 3.0.
---------------------------------------------------------------------------

B. Access and Information Security

    According to KOR, access to and usage of its SDR service will be 
available to all market participants on a fair, open, and equal 
basis.\52\ The application provides that KOR does not and will not 
bundle or tie the offering of mandated regulatory services with 
ancillary services offered by KOR or a KOR affiliate.\53\ Further, KOR 
imposes the following qualification on clients of its services: (i) a 
valid Legal Entity Identifier (``LEI''), (ii) execution of membership 
documents, such as the KOR Universal Services Agreement (``KOR SA'') 
\54\ and applicable Addendums, (iii) compliance with the KOR SBSDR 
Rulebook and KOR Technical Specifications as published by KOR, and (iv) 
successful passing of KOR Know Your Customer (KYC) procedures, which 
include compliance with Applicable Law, specifically those related to 
sanctions administered and enforced by the Office of Foreign Assets 
Control of the U.S. Department of the Treasury (``OFAC'').\55\
---------------------------------------------------------------------------

    \52\ See Rulebook, Ex. HH, sec. 4.1; see also Access Limiting 
Criteria, Ex. V, sec. 1.0; Client Access Requirements, Ex. W, sec. 
2.1; Client Onboarding and Access Guide, Ex. X, sec. 1.0.
    \53\ See Rulebook, Ex. HH, sec. 4.1; see also Access Limiting 
Criteria, Ex. V, sec. 1.0; Client Access Requirements, Ex. W, sec. 
2.1; Client Onboarding and Access Guide, Ex. X, sec. 1.0.
    \54\ See KOR Universal Services Agreement, Ex. I-2.
    \55\ See Rulebook, Ex. HH, sec. 4.1; see also Access Limiting 
Criteria, Ex. V, sec. 1.0; Client Access Requirements, Ex. W, sec. 
2.1; Client Onboarding and Access Guide, Ex. X, sec. 1.0; KOR SEC 
SBSDR Disclosure Document v1.2, Ex. GG-2, sec. 1.1.
---------------------------------------------------------------------------

    To be granted access to the KOR system, receive trade information, 
confirm or verify transactions, submit messages, or receive reports, a 
market participant must be an onboarded user.\56\ Users are required to 
maintain at least two Administrative Users on the KOR System; 
Administrative Users are responsible for creating, managing, and 
removing access to their company's Users and to other Clients who are 
eligible to access the KOR System on behalf of the Client including 
firms that have Third-party Client access.\57\
---------------------------------------------------------------------------

    \56\ See Rulebook, Ex. HH, sec. 4.0; see also Client Onboarding 
and Access Guide, Ex. X, sec. 2.0.
    \57\ See Rulebook, Ex. HH, sec. 4.5.1; see also Client 
Onboarding and Access Guide, Ex. X, sec. 3.1; KOR SEC SBSDR 
Disclosure Document v1.2, Ex. GG-2, sec. 1.5.1.
---------------------------------------------------------------------------

    To participate in the SDR services offered by KOR, each client will 
be required to enter into a KOR SA; by entering into the KOR SA each 
client agrees to be bound by the terms of the KOR SA, the KOR Rulebook, 
and any published policies and guides.\58\ In addition, the KOR 
Rulebook provides that where a client has authorized (i) a Delegated 
Reporter (a Third-Party Reporter or Related Entity Client under the 
same Parent) to submit on its behalf and access its data or (ii) a 
Third-Party Client to access its data, but not submit on its behalf, 
KOR will provide access to the Delegated Reporter or Third-Party Client 
so long as it has executed the appropriate KOR SA and applicable 
addendums and the client has granted permission through the Client 
Portal.\59\ Any market participant that has executed a Client Agreement 
may access SBSDR Data to which they are a party or for which they have 
been granted access on behalf of a client.\60\ Access to the KOR System 
is strictly limited to active Users with valid permissions created by 
their Client's Administrative User.\61\ Once set up, Users will be 
provided logins and the ability to access data in the KOR System.\62\ 
Access is driven off the Client's LEIs for which the User has been 
associated.\63\ Users may be granted access to multiple LEIs under the 
same Parent as related entities.\64\ Client's designated Administrative 
Users are expected to maintain correct User access at all times.\65\ In 
addition, following the end of each calendar quarter, all Clients will 
have access to a report on current User access levels and a list of all 
Clients to which they have granted access to their data.\66\ At least 
one of the designated Administrative Users assigned to each Client must 
review the listing of Users and other party access and confirm whether 
access should be maintained, removed or changed and make the 
appropriate updates.\67\ The KOR Rulebook also states that records of 
all User access are maintained and available for review by the Client 
and KOR Compliance at all time.\68\
---------------------------------------------------------------------------

    \58\ See Rulebook, Ex. HH, sec. 4.2; see also Client Access 
Requirements, Ex. W, sec. 2.2; Client Onboarding and Access Guide, 
Ex. X, sec. 3.0.
    \59\ See Rulebook, Ex. HH, sec. 4.3, 4.4; see also Client Access 
Requirements, Ex. W, sec. 2.3, 2.4.
    \60\ See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting 
Criteria, Ex. V, sec. 1.0.
    \61\ See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting 
Criteria, Ex. V, sec. 1.0.
    \62\ See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting 
Criteria, Ex. V, sec. 1.0.
    \63\ See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting 
Criteria, Ex. V, sec. 1.0.
    \64\ See Rulebook, Ex. HH, sec. 4.5.2; see also Access Limiting 
Criteria, Ex. V, sec. 1.0.
    \65\ See Rulebook, Ex. HH, sec. 4.5.4; see also Client 
Onboarding and Access Guide, Ex. X, sec. 3.1.
    \66\ See Rulebook, Ex. HH, sec. 4.5.4.
    \67\ See Rulebook, Ex. HH, sec. 4.5.4.
    \68\ See Rulebook, Ex. HH, sec. 4.5.4.
---------------------------------------------------------------------------

    With respect to prohibiting or limiting a person's access to SDR 
services, the KOR Rulebook outlines the process required for KOR to 
decline, revoke, or suspend a user of SDR services.\69\ For example, 
KOR's CCO may deny a client's access to the KOR system if required 
pursuant to applicable law (e.g., OFAC or the direction of a 
regulator), violation of KOR SBSDR Rules, or improper use of the 
system.\70\ The KOR Rulebook provides that KOR

[[Page 64530]]

will notify the applicable regulator of such action.\71\ In addition, 
any such clients would receive written notice containing the grounds 
for determination and an opportunity to appeal the decision to the CCO 
and KOR Board by written request.\72\ KOR may restore access to a 
Client following approval from the CCO and/or KOR Board.\73\ The CCO 
will consider the applicable law, regulatory requirements, and the 
Market Participant's response to the cause of denial, revocation, or 
suspension.\74\ In addition, all decisions will be documented when 
determining whether to restore Client's access.\75\
---------------------------------------------------------------------------

    \69\ See Rulebook, Ex. HH, sec. 14.2; see also Denial, 
Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2.
    \70\ See Rulebook, Ex. HH, sec. 14.2; see also Denial, 
Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2.
    \71\ See Rulebook, Ex. HH, sec. 14.2; see also Denial, 
Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2.
    \72\ See Rulebook, Ex. HH, sec. 14.2; see also Denial, 
Revocation, or Suspension of Client Access Policy, Ex. Y, sec. 2.2.
    \73\ See Denial, Revocation, or Suspension of Client Access 
Policy, Ex. Y, sec. 2.3.
    \74\ See Denial, Revocation, or Suspension of Client Access 
Policy, Ex. Y, sec. 2.3.
    \75\ See Denial, Revocation, or Suspension of Client Access 
Policy, Ex. Y, sec. 2.3.
---------------------------------------------------------------------------

    The KOR Rulebook provides that KOR SBSDR will conduct regular, 
periodic, objective testing and review of its automated systems to 
ensure that they are reliable, secure, and have adequate scalable 
capacity.\76\ It also provides that KOR will conduct regular, periodic 
testing and review of its business continuity-disaster recovery 
capabilities.\77\ It also provides that KOR will, to the extent 
practicable: (a) coordinate with Clients and service providers to 
participate in synchronized testing in a manner adequate to enable 
effective resumption of KOR SBSDR's fulfillment of its duties and 
obligations following a disruption causing activation of KOR SBSDR's 
Business Continuity and Disaster Recovery (BCDR) plan; (b) participate 
in periodic, synchronized testing of its BCDR Plan and the BCDR plans 
of its Clients, and the BCDR plans required, as appliable, by each 
appropriate prudential regulator, the Financial Stability Oversight 
Council, the Securities and Exchange Commission, the Department of 
Justice or any other person deemed appropriate by the SEC; and (c) 
ensure that its BCDR plan take into account the BCDR plans of its 
telecommunications, power, water, and other essential service 
providers.\78\
---------------------------------------------------------------------------

    \76\ See Rulebook, Ex. HH, sec. 13.3.1.
    \77\ See Rulebook, Ex. HH, sec. 13.3.1.
    \78\ See Rulebook, Ex. HH, sec. 13.3.2.
---------------------------------------------------------------------------

C. Acceptance and Use of SBS Data

    According to KOR, data accepted and maintained by the SBSDR may not 
be used for commercial or business purposes by the SBSDR or any of its 
affiliated entities.\79\ KOR SBSDR has implemented adequate 
``firewalls'' or controls to protect the reported SBSDR data required 
to be maintained under SEC regulations from any improper commercial 
use.\80\ The application provides that a Client that submits SBSDR data 
maintained by the SBSDR may permit the commercial use by providing 
express written consent. Such consent will not be a requirement to 
report to the SBSDR.\81\ If such Client consent is given, KOR may not 
make such consented data available for commercial use prior to its 
public dissemination.\82\ KOR states that, in accordance with Exchange 
Act Rule 13n-5(b)(5), it has established systems and User access 
restrictions reasonably designed to prevent any provision in a valid 
swap from being invalidated or modified through its verification or 
recording process.\83\
---------------------------------------------------------------------------

    \79\ See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG-2, sec. 
5.0.
    \80\ See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG-2, sec. 
5.0.
    \81\ See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG-2, sec. 
5.0.
    \82\ See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG-2, sec. 
5.0.
    \83\ See Rulebook, Ex. HH, sec. 9.2; see also Data Invalidation 
Policy, Ex. EE, sec. 1.0.
---------------------------------------------------------------------------

    KOR SBSDR uses the LEI and the Unique Trade Identifier 
(``UTI'').\84\ Pursuant to KOR's rulebook, individuals not eligible for 
an LEI should be reported using a Natural Person Identifier.\85\ KOR 
states that if a security-based swap counterparty is not eligible to 
receive an LEI as determined by the Global Legal Entity Identifier 
System, such counterparty will be identified in all recordkeeping and 
all Security-Based Swap Data reporting with a Natural Person 
Identifier.\86\ KOR further provides that it is the duty of the 
Reporting Side to always submit a unique and consistent Natural Person 
Identifier.\87\ Pursuant to KOR's rulebook, to ensure that the 
Reporting Side consistently submits a unique value for the identifier, 
the Reporting Side must combine the LEI of the Reporting Side with the 
natural person's email address associated with the National Person 
Identifier.\88\ Each Client must maintain and renew its legal identity 
identifier in accordance with the standards set by the Global Legal 
Entity Identifier System.\89\
---------------------------------------------------------------------------

    \84\ See Rulebook, Ex. HH, sec. 5.1.1, 5.1.2.
    \85\ See Rulebook, Ex. HH, sec. 5.1.1.
    \86\ See Rulebook, Ex. HH, sec. 5.3.1.
    \87\ See Rulebook, Ex. HH, sec. 5.3.1.
    \88\ See Rulebook, Ex. HH, sec. 5.3.1.
    \89\ See Rulebook, Ex. HH, sec. 5.3.1.
---------------------------------------------------------------------------

    The application provides that each swap will be identified in all 
recordkeeping and all Security-Based Swap Data reporting by the use of 
a UTI, which will be created, transmitted, and used for each swap.\90\ 
Each registered entity and swap counterparty will include the UTI for a 
swap in all of its records and all of its Security-Based Swap Data 
reporting concerning that swap, from the time it creates or receives 
the UTI throughout the existence of the security-based swap and for as 
long as any records are required by applicable law or regulation.\91\ 
Every submission to KOR SBSDR must contain the appropriate UTI, 
otherwise the submission will be rejected. KOR SBSDR will validate the 
format and uniqueness of every UTI.\92\ If a party submits the 
incorrect UTI, pursuant to KOR's rulebook, they must ``error'' that UTI 
and resubmit the swap as a new message with the correct UTI.\93\ When 
the correct UTI is submitted it will be considered a new trade and, if 
it is submitted after the required reporting timelines, it will be 
classified as a late report.\94\
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    \90\ See Rulebook, Ex. HH, sec. 5.2.
    \91\ See Rulebook, Ex. HH, sec. 5.2.
    \92\ See Rulebook, Ex. HH, sec. 5.2.
    \93\ See Rulebook, Ex. HH, sec. 5.2.
    \94\ See Rulebook, Ex. HH, sec. 5.2.
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    The application provides that KOR has established procedures and 
provides facilities for effectively resolving disputes over the 
accuracy of the SBSDR Transaction Data and positions that are recorded 
in the KOR SBSDR.\95\ When the Reporting Side does not agree with the 
accuracy of the reporting of a swap in KOR Trade Repository, but is 
prevented from amending the swap to what they believe to accurate, the 
Client must (a) enter a ticket with KOR SBSDR support with the details 
of the issue and (b) submit an allowed value per the KOR Technical 
Specifications for the KOR SBSDR field that reflects the dispute.\96\
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    \95\ See Rulebook, Ex. HH, sec. 11.0; see also Dispute Policy, 
Ex. CC, sec. 2.0.
    \96\ See Rulebook, Ex. HH, sec. 11.0; see also Dispute Policy, 
Ex. CC, sec. 2.0.
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D. Fees

    The application includes KOR's fee schedules.\97\ According to KOR, 
fees are assessed in a consistent, non-preferential manner and are not 
permitted to be used as a barrier to entry.\98\ KOR offers a 
subscription model fee schedule which treats all submissions equally 
regardless of reporting counterparty, asset class,

[[Page 64531]]

clearing status or execution.\99\ The application provides that KOR 
will not offer preferential pricing arrangements to any Client on any 
basis, including volume discounts or reductions unless such discounts 
or reductions apply to all Clients uniformly and are not otherwise 
established in a manner that would effectively limit the application of 
such discount or reduction to a select number of Clients.\100\ In 
addition, KOR represents in its rulebook that it ensures any dues, 
fees, or other charges imposed by, and any discounts or rebates offered 
by, its SBSDR are fair and reasonable and not unreasonably 
discriminatory.\101\ KOR states that such dues, fees, other charges, 
discounts, or rebates will be applied consistently across all 
similarly-situated users of such SBSDR services, including, but not 
limited to, market participants, market infrastructures (including 
central counterparties), venues from which data can be submitted to the 
SBSDR (including exchanges, security-based swap execution facilities, 
electronic trading venues, and matching and confirmation platforms), 
and third party service providers.\102\ All fees are fully disclosed 
and available on the KOR SBSDR website.\103\ The fee schedule applies 
until such time as the KOR Board determines otherwise and provides 
clients at least one (1) month's notice for significant changes to 
existing pricing or policy.\104\
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    \97\ See KOR SEC SBSDR Fee Schedule, Ex. M-1. Additionally, KOR 
provides a fee schedule for KOR Users on its website at https://www.korfinancial.com/pricing.
    \98\ See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR 
Disclosure Document v1.2, Ex. GG-2, sec. 8.0.
    \99\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 1.0; see also 
Fee Schedule Rational and Differentiation, Ex. M-2, sec. 1.3.
    \100\ See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR 
Disclosure Document v1.2, Ex. GG-2, sec. 8.0.
    \101\ See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR 
Disclosure Document v1.2, Ex. GG-2, sec. 8.0.
    \102\ See Rulebook, Ex. HH, sec. 13.4.
    \103\ See Rulebook, Ex. HH, sec. 13.4; see also KOR SEC SBSDR 
Disclosure Document v1.2, Ex. GG-2, sec. 8.0.
    \104\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 1.0.
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    In the application, KOR states that, as a real-time messaging-based 
service, KOR assesses fees on a per message basis to align SBSDR 
services and the expense to offer.\105\ All Reporting Clients are 
assessed the same fee structure regardless of their pathway to KOR 
SBSDR to ensure a competitive and level playing field.\106\ A 
``Reporting Client'' means the reporting counterparty that has in place 
a fully executed agreement and is liable for the fees incurred for the 
use of KOR Services.\107\ The Reporting Client may delegate billing and 
payments to another Client by authorizing either a Related Entity or 
their Third-Party Reporter.\108\ The ``Related Entity'' refers to other 
clients of KOR (i.e., KOR Counterparty Clients) within the same 
corporate structure as the Reporting Client, creating a Client 
Group.\109\ KOR will aggregate the fee liable activity for Related 
Entities under a Client Group and provide a single invoice.\110\ A 
``Third-Party Reporter'' refers to an entity that has a fully executed 
Agreement with KOR and is facilitating reporting for a KOR Counterparty 
Client.\111\ A Third-Party Reporter is not charged fees for the 
activity of their customers, who are also KOR Counterparty Clients, but 
may be assigned billing (receipt of invoices and payment 
responsibilities) by KOR Counterparty Clients.\112\ When a Counterparty 
Client makes a billing assignment to a Third-Party Reporter it is for 
all billable activity related to use of KOR Services of that 
Counterparty Client (including activity beyond what is associated to 
the Third-Party Reporter) and Counterparty Clients may only assign 
billing to a single Third-Party Reporter.\113\ The application provides 
that reporting by Platforms which are Security-Based Swap Execution 
Facilities or National Securities Exchanges are treated as messages 
under a Third-Party Reporter whereby the Reporting Counterparty is 
assessed KOR reporting fees and the Platform, by default, is not.\114\ 
A Platform may elect to assume direct billing responsibility for any 
Reporting Counterparty that is a KOR Counterparty Client.\115\ If the 
Reporting Counterparty on a Platform reported transaction is not a KOR 
Counterparty Client, the Platform reporter will be billed for the 
message activity which will be aggregated with all other Platform 
billable message activity.\116\
---------------------------------------------------------------------------

    \105\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 1.0.
    \106\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 1.0.
    \107\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.1.
    \108\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.1, 2.2.
    \109\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.1, 2.2.
    \110\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.1, 2.2.
    \111\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.3.
    \112\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.3.
    \113\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.3.
    \114\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.4.
    \115\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.4.
    \116\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 2.4.
---------------------------------------------------------------------------

    KOR SBSDR offers simplified subscription plans where each tier plan 
limits the maximum number of messages a Reporting Client may report per 
month.\117\ To calculate the calendar monthly fee, KOR totals all 
eligible messages submitted in the prior month for each Counterparty 
Client or Client Group. KOR provides a 10% monthly overage allowance 
across all tiers for any given month per Counterparty Client or Client 
Group.\118\ KOR's subscription plan is organized into ten (10) tiers. 
Tier 1 allows for 100 monthly messages produced with a monthly fee of 
$100; Tier 2 allows for 1,000 monthly messages produced with a monthly 
fee of $500; Tier 3 allows for 10,000 monthly messages produced with a 
monthly fee of $2,000; Tier 4 allows for 100,000 monthly messages 
produced with a monthly fee of $6,000; Tier 5 allows for 1,000,000 
monthly messages produced with a monthly fee of $15,000; Tier 6 allows 
for 4,000,000 monthly messages produced with a monthly fee of $36,000; 
Tier 7 allows for 9,000,000 monthly messages produced with a monthly 
fee of $60,000; Tier 8 allows for 14,000,000 monthly messages produced 
with a monthly fee of $95,000; Tier 9 allows for 19,000,000 monthly 
messages produced with a monthly fee of $150,000; and Tier 10 allows 
for 24,000,000 monthly messages produced with a monthly fee of 
$220,000.\119\
---------------------------------------------------------------------------

    \117\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.0.
    \118\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.0.
    \119\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.0.
---------------------------------------------------------------------------

    KOR SBSDR is a 100% cloud service leveraging the performance and 
scale available through the cloud infrastructure.\120\ KOR incurs costs 
through the accessing of its Clients' data hosted and used to generate 
trade reports requested by Clients.\121\ The application states that 
the KOR SBSDR Fee Schedule is designed for simplicity and flexibility, 
modeling an expected mix of scheduled access to standard reports in 
addition to reasonable use of ad-hoc reporting.\122\ KOR will monitor 
the generation of reports across each Client and KOR will provide 
advice when it observes use that exceeds standard fair allowances.\123\ 
KOR states that should a Client need continued reports at a sustained 
activity level higher than expected, a move to a higher

[[Page 64532]]

fee tier may be deemed appropriate.\124\ KOR will generate invoices by 
the fifth (5th) day of every calendar month for the prior month's 
activity.\125\ The billing currency is USD ($) and invoices must be 
paid in USD.\126\ Invoices are payable within 45 days upon 
receipt.\127\ Accounts not paid within terms are subject to a 1.5% 
monthly finance charge.\128\ KOR SBSDR will accept and process billing 
adjustments up to 45 days after the invoice date.\129\ Adjustment 
requests received after the 45-day period will not be accepted by KOR 
SBSDR.\130\ Approved adjustments will be applied as credits and appear 
on the next billing cycle as a separate line item.\131\
---------------------------------------------------------------------------

    \120\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.2.
    \121\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.2.
    \122\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.2.
    \123\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.2.
    \124\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 3.2.
    \125\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 5.0.
    \126\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 5.0.
    \127\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 5.0.
    \128\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 5.0.
    \129\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 5.0.
    \130\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 5.0.
    \131\ See KOR SEC SBSDR Fee Schedule, Ex. M-1, sec. 5.0.
---------------------------------------------------------------------------

E. Recordkeeping

    The KOR Rulebook provides that KOR will maintain transaction data 
and related identifying information for not less than five years after 
the applicable security-based swap expires and historical positions for 
not less than five years: (a) in a place and format that is readily 
accessible and usable to the Commission and other persons with 
authority to access or view such information, and (b) in an electronic 
format that is non-rewriteable and non-erasable.\132\
---------------------------------------------------------------------------

    \132\ See Rulebook, Ex. HH, sec. 9.4; see also KOR SEC SBSDR 
Disclosure Document v1.2, Ex. GG-2, sec. 7.4.4.
---------------------------------------------------------------------------

F. Disclosure

    KOR publishes a disclosure document to provide a summary of 
information regarding its service offerings and the SBS data it 
maintains.\133\ Specifically, the disclosure document sets forth a 
description of the following: (i) criteria for providing access to KOR 
SBSBR; (ii) criteria for market participants seeking to connect to the 
SBSDR; (iii) policies and procedures regarding the SBSDR's safeguarding 
of SBSDR data and operational reliability to protect the 
confidentiality and security of SBSDR data; (iv) policies and 
procedures to protect the privacy of SBSDR data; (v) policies and 
procedures regarding the SBSDR's non-commercial and/or commercial use 
of SBSDR data; (vi) dispute resolution procedures; (vii) description of 
SBSDR services; (viii) the SBSDR fee schedule; and (ix) the SBSDR's 
governance arrangements.\134\
---------------------------------------------------------------------------

    \133\ See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG-2.
    \134\ See KOR SEC SBSDR Disclosure Document v1.2, Ex. GG-2.
---------------------------------------------------------------------------

G. Regulatory Reporting and Public Dissemination

    As a registered SDR, KOR would carry out an important role in the 
regulatory reporting and public dissemination of SBS transactions. As 
noted above, KOR has stated that it intends to rely on the no-action 
statement included in the ANE Adopting Release for the period set forth 
in the ANE Adopting Release with respect to any SBS asset class or 
classes for which it intends to accept transaction reports.\135\ 
Therefore, KOR does not need to include materials in its application 
explaining how it would comply with the provisions of the SBS Reporting 
Rules described in the no-action statement.\136\ Instead, KOR may rely 
on its discussion about how it complies with comparable CFTC 
requirements pertaining to regulatory reporting and public 
dissemination of swap transactions.
---------------------------------------------------------------------------

    \135\ See supra notes 28-29 and accompanying text.
    \136\ However, the KOR application includes provisions 
explaining how KOR would require users to identify SBS, as required 
by Rule 901(c)(1) of Regulation SBSR. See Rulebook, Ex. HH, sec. 5.4 
(regarding Unique Product Identifiers). The KOR application also 
includes provisions explaining how KOR would comply with the 
conditions to the no-action statement included in the ANE Adopting 
Release.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning KOR's Form SDR, including whether KOR has 
satisfied the requirements for registration as an SDR and as a SIP. 
Commenters are requested, to the extent possible, to provide empirical 
data and other factual support for their views. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules-regulations/how-submit-comment); or
     Send an email to [email protected]. Please include 
File Number SBSDR-2023-01 on the subject line.

Paper Comments

     Send paper comments to Secretary, Securities and Exchange 
Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SBSDR-2023-01. To help the 
Commission process and review your comments more efficiently, please 
use only one method of submission. The Commission will post all 
comments on the Commission's internet website (https://www.sec.gov/rules/other.shtml).

    Copies of the Form SDR, all subsequent amendments, all written 
statements with respect to the Form SDR that are filed with the 
Commission, and all written communications relating to the Form SDR 
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 Section, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10 a.m. and 3 
p.m.
    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 SBSDR-2023-01 and should be 
submitted on or before August 28, 2024.

    By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17423 Filed 8-6-24; 8:45 am]
BILLING CODE 8011-01-P
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