Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Amend the Clearing Agency Investment Policy, 102195-102199 [2024-29629]
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Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice:
December 17, 2024.
FOR FURTHER INFORMATION CONTACT:
Sean C. Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 5,
2024, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Express, Priority Mail &
USPS Ground Advantage® Contract 895
to Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2025–621, K2025–620.
Sean C. Robinson,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2024–29819 Filed 12–16–24; 8:45 am]
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Product Change—Priority Mail
Express, Priority Mail, and USPS
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The Postal Service gives
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Date of required notice:
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DATES:
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 4,
2024, it filed with the Postal Regulatory
Commission a USPS Request to Add
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Advantage® Contract 502 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2025–607, K2025–606.
SUPPLEMENTARY INFORMATION:
Sean Robinson,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2024–29777 Filed 12–16–24; 8:45 am]
BILLING CODE 7710–12–P
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice:
December 17, 2024.
FOR FURTHER INFORMATION CONTACT:
Sean C. Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 5,
2024, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Express, Priority Mail &
USPS Ground Advantage® Contract 894
to Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2025–620, K2025–619.
Sean C. Robinson,
Attorney, Corporate and Postal Business Law.
ddrumheller on DSK120RN23PROD with NOTICES1
[FR Doc. 2024–29814 Filed 12–16–24; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail and
USPS Ground Advantage® Negotiated
Service Agreement
AGENCY:
Postal ServiceTM.
VerDate Sep<11>2014
19:45 Dec 16, 2024
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Product Change—USPS Ground
Advantage® Negotiated Service
Agreement
AGENCY:
ACTION:
Product Change—Priority Mail and
USPS Ground Advantage® Negotiated
Service Agreement
Postal ServiceTM.
ACTION: Notice.
AGENCY:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice:
December 17, 2024.
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 2,
2024, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail & USPS Ground
Advantage® Contract 493 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2025–574, K2025–572.
SUMMARY:
Sean Robinson,
Attorney, Corporate and Postal Business Law.
POSTAL SERVICE
SUMMARY:
[FR Doc. 2024–29733 Filed 12–16–24; 8:45 am]
BILLING CODE 7710–12–P
Postal ServiceTM.
SECURITIES AND EXCHANGE
COMMISSION
Notice.
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
SUMMARY:
Date of required notice:
December 17, 2024.
DATES:
FOR FURTHER INFORMATION CONTACT:
Sean Robinson, 202–268–8405.
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on December 2,
2024, it filed with the Postal Regulatory
Commission a USPS Request to Add
USPS Ground Advantage® Contract 11
to Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2025–587, K2025–586.
SUPPLEMENTARY INFORMATION:
Sean Robinson,
Attorney, Corporate and Postal Business Law.
[Release No. 34–101883; File No. SR–DTC–
2024–011]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing of Proposed Rule Change To
Amend the Clearing Agency
Investment Policy
December 11, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
3, 2024, The Depository Trust Company
(‘‘DTC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below, which Items
have been prepared by the clearing
agency. The Commission is publishing
this notice to solicit comments on the
proposed rule change from interested
persons.
[FR Doc. 2024–29765 Filed 12–16–24; 8:45 am]
1 15
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices
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I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to the Clearing Agency
Investment Policy (‘‘Investment Policy’’,
or ‘‘Policy’’) of DTC and its affiliates,
Fixed Income Clearing Corporation
(‘‘FICC’’) and National Securities
Clearing Corporation (‘‘NSCC,’’ and
together with FICC and DTC, the
‘‘Clearing Agencies’’) 3 and would
facilitate changes to the FICC
Government Securities Division
Rulebook (‘‘GSD Rules’’) that will be
implemented by FICC.4
Specifically, as described in greater
detail in the Account Segregation Filing,
FICC will implement changes to the
GSD Rules that will, among other
things, provide for FICC to (1) hold
margin collected with respect to the
proprietary transactions of a Netting
Member separately and independently
from the margin collected with respect
to transactions that a Netting Member
submits to FICC on behalf of indirect
participants, (2) legally segregate certain
margin collected with respect to indirect
participant transactions from the margin
for a Netting Member’s proprietary
transactions (as well as those of other
indirect participants), and (3) limit
investments of certain margin collected
with respect to indirect participant
transactions to only U.S. Treasuries
with a maturity date of one year or less.
The Clearing Agencies are proposing to
amend the Policy to facilitate
implementation of these changes and
would also make other clean-up changes
to the Policy, as described in greater
detail below.
The changes that were proposed in
the Account Segregation Filing and the
changes proposed to the Investment
Policy herein are collectively designed
to comply with certain requirements of
Rule 17ad–22(e)(6)(i) under the Act,5
and to ensure that FICC has appropriate
rules to satisfy certain conditions of
Note H to Rule 15c3–3a under the Act
3 See Securities Exchange Act Release No. 79528
(Dec. 12, 2016), 81 FR 91232 (Dec. 16, 2016) (SR–
DTC–2016–007, SR–FICC–2016–005, SR–NSCC–
2016–003).
4 See Securities Exchange Act Release No. 101695
(Nov. 21, 2024), 89 FR 93763 (Nov. 27, 2024) (SR–
FICC–2024–007) (‘‘Account Segregation Filing’’).
The changes proposed in the Account Segregation
Filing are expected to be implemented by no later
than March 31, 2025, on a date to be announced by
an Important Notice posted to FICC’s website.
Terms not defined herein are defined in the GSD
Rules, available at www.dtcc.com/∼/media/Files/
Downloads/legal/rules/ficc_gov_rules.pdf.
5 17 CFR 240.17ad–22(e)(6)(i). See Securities
Exchange Act Release No. 99149 (Dec. 13, 2023), 89
FR 2714 (Jan. 16, 2024) (‘‘Adopting Release,’’ and
the rules adopted therein referred to herein as
‘‘Treasury Clearing Rules’’).
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for a broker-dealer to record a debit in
the customer and broker-dealer
proprietary account reserve formulas.6
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
The Investment Policy governs the
management, custody and investment of
cash deposited to the respective NSCC
and FICC Clearing Funds, and the DTC
Participants Fund,7 the proprietary
liquid net assets (cash and cash
equivalents) of the Clearing Agencies,
and other funds held by the Clearing
Agencies pursuant to their respective
rules. In doing this, the Investment
Policy identifies the guiding principles
for investments and defines the roles
and responsibilities of DTCC 8 staff in
administering the Investment Policy
pursuant to those principles. The
guiding principles for investments set
forth in Section 3 of the Investment
Policy address, among other things, how
the Clearing Agencies segregate and
separately hold cash deposited to the
NSCC Clearing Fund, the Clearing Fund
of FICC’s Government Securities
Division (‘‘GSD’’), the Clearing Fund of
FICC’s Mortgage-Backed Securities
Division (‘‘MBSD’’) and the DTC
Participants Fund. The Investment
Policy also identifies sources of funds
that may be invested, and the permitted
investments of those funds, including
6 17
CFR 240.15c3–3a, Note H. See id.
respective Clearing Funds of NSCC, FICC’s
GSD and FICC’s MBSD, and the DTC Participants
Fund are described further in the Rules &
Procedures of NSCC (‘‘NSCC Rules’’), the DTC
Rules, By-laws and Organization Certificate (‘‘DTC
Rules’’), the Clearing Rules of the Mortgage-Backed
Securities Division of FICC (‘‘MBSD Rules’’) or the
GSD Rules, respectively, available at https://
dtcc.com/legal/rules-and-procedures. See Rule 4
(Clearing Fund) of the NSCC Rules, Rule 4
(Participants Fund and Participants Investment) of
the DTC Rules, Rule 4 (Clearing Fund and Loss
Allocation) of the GSD Rules, and Rule 4 (Clearing
Fund and Loss Allocation) of the MBSD Rules.
8 The Depository Trust & Clearing Corporation
(‘‘DTCC’’) is the parent company of the Clearing
Agencies.
7 The
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the authority required to make such
investments and the parameters of, and
limitations on, each type of investment.
The Commission recently adopted
amendments to Rule 17ad–22(e)(6)(i)
under the Act that are applicable to
FICC as a covered clearing agency that
provides, through GSD, central
counterparty services for transactions in
U.S. Treasury securities.9 These
amendments require, among other
things, that FICC hold margin from a
direct participant for its proprietary
transactions separately and
independently from the margin
calculated and collected for the
transactions of an indirect participant
that relies on the services provided by
the direct participant to access FICC’s
payment, clearing, or settlement
facilities.10
In the Treasury Clearing Rules, the
Commission also amended its customer
protection rule (‘‘Rule 15c3–3’’) 11 and
the reserve formulas thereunder (‘‘Rule
15c3–3a’’),12 to permit broker-dealers to
include margin required and on deposit
at FICC as a debit item in the reserve
formula under certain conditions. One
of the conditions for the relief is that the
margin be collected in accordance with
the GSD Rules that impose certain
requirements, which include, among
other things, that FICC (i) only invest
cash margin in U.S. Treasuries with a
maturity of one year or less, and (ii)
must hold the margin itself or at an
account of a Federal Reserve Bank or an
FDIC-insured bank, which account must
be segregated from any other account of
FICC or any other person at a U.S.
Federal Reserve Bank or FDIC-insured
bank and used exclusively to hold
customer assets to meet the current
margin requirements of FICC resulting
from positions in U.S. Treasury
securities of the customers of the brokerdealer members of FICC.13
In the Account Segregation Filing,
FICC proposed changes to the GSD
Rules to comply with the requirements
of the Treasury Clearing Rules. Such
changes are expected to be implemented
in the GSD Rules by no later than March
31, 2025 and will, among other things,
(1) provide for FICC to calculate, collect,
and hold margin for the proprietary
transactions of a Netting Member
separately and independently from the
margin for transactions that the Netting
Member submits to FICC on behalf of
indirect participants, and (2) allow
Netting Members to elect for margin for
9 17
CFR 240.17ad–22(e)(6)(i).
10 Id.
11 17
12 17
CFR 240.15c3–3.
CFR 240.15c3–3a.
13 Id.
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indirect participant transactions to be
calculated on a gross basis (i.e., an
indirect participant-by-indirect
participant basis) and legally segregated
from the margin for the Netting
Member’s proprietary transactions (as
well as those of other indirect
participants).14
The proposed changes to the
Investment Policy would facilitate the
implementation of the changes that will
be made to the GSD Rules pursuant to
the Account Segregation Filing, as
described in greater detail below.
i. Separately Holding Indirect
Participant Margin
First, the proposed changes to the
Investment Policy would facilitate the
implementation of the changes to the
GSD Rules that will require FICC to
calculate, collect, and hold margin for
the proprietary transactions of a GSD
Netting Member separately and
independently from margin collected
with respect to transactions that a
Netting Member submits to FICC on
behalf of indirect participants.
The proposed changes to the Policy
would do this by first amending Section
2 to include a definition of Indirect
Participants Clearing Fund Deposits to
mean ‘‘the total amount deposited in the
GSD Clearing Fund to support activity
in Agent Clearing Member Omnibus
Accounts and Sponsoring Member
Omnibus Accounts, other than
Segregated Indirect Participants
Accounts, as such terms are defined in
the FICC Government Securities
Division (‘‘GSD’’) Rulebook (‘‘GSD
Rules’’).’’ Next, the proposed changes
would amend Section 3.2 (Section 3
describes the guiding principles that
underpin the Policy) regarding the
separation and segregation of cash
deposits to the NSCC, GSD and MBSD
Clearing Funds, and the DTC
Participants Fund. Within this section,
the proposed changes would specify
that Indirect Participants Clearing Fund
Deposits shall be held separately and
independently on FICC’s books and
records from all other deposits to the
GSD Clearing Fund.
In connection with this change, the
proposed changes to the Policy would
also amend Section 5, which describes
investable funds that are invested by the
Clearing Agencies pursuant to the
Policy. The changes to this section
would provide that Indirect Participants
Clearing Fund Deposits are included in
the GSD Clearing Fund. This proposed
change would clarify that these funds
are considered investable funds under
the Policy, to be invested similarly to
other cash deposits to the GSD Clearing
Fund.
ii. Legally Segregating and Limiting
Investments of Segregated Customer
Margin
Second, the proposed changes to the
Investment Policy would facilitate
implementation of the changes that will
be made to the GSD Rules pursuant to
the Account Segregation Filing that will
require FICC to legally segregate certain
Indirect Participants Clearing Fund
Deposits that have been designated by
GSD Netting Members for such
segregation (‘‘Segregated Customer
Margin’’), and to hold and invest such
funds in a manner that meets the
conditions set forth in the Commission’s
amendments to Rule 15c3–3 and Rule
15c3–3a.15
The GSD Rules will describe the
manner in which FICC will meet the
requirements of Rule 15c3–3 and Rule
15c3–3a with respect to Segregated
Customer Margin. The standards that
FICC must adhere to in holding,
investing and legally segregating
Segregated Customer Margin are critical
to its Netting Members’ ability to obtain
certain relief with respect to these
funds. Therefore, the Clearing Agencies
believe it is appropriate for these
provisions to be described publicly in
the GSD Rules, which are published to
the DTCC website.16
While the manner in which FICC
would hold and invest Segregated
Customer Margin will primarily be
described in the GSD Rules, the
proposed changes would incorporate
Segregated Customer Margin into the
Investment Policy such that the general
governance and investment philosophy
underpinning the Policy, described in
Section 3.1 as ‘‘a prudent and
conservative investment philosophy
that places highest priority on
maximizing liquidity and risk
avoidance,’’ would apply to these funds.
The proposed changes would amend
Section 2 to include a definition of
Segregated Customer Margin as having
‘‘the meaning given such term in the
GSD Rules.’’ The proposed changes
would also amend Section 3.2 to
include a separate statement that refers
to the provisions of the GSD Rules,
specifically, but not limited to, Section
1a of GSD Rule 4, which would,
following implementation of the
changes that were proposed by the
Account Segregation Filing, address
how FICC would segregate and hold
Segregated Customer Margin in
compliance with the applicable
15 17
14 Supra
note 4.
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note 7.
16 Supra
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conditions set forth in Rule 15c3–3 and
Rule 15c3–3a.
The proposed changes to the Policy
would amend Section 5 to identify
Segregated Customer Margin as a source
of investable funds and to state that
‘‘Segregated Customer Margin is
described in the GSD Rules, including,
but not limited to, Section 1a of GSD
Rule 4.’’ The proposed changes to
Section 5 would also clarify the
description of ‘‘Participants Fund and
Clearing Funds’’ to make clear that
Segregated Customer Margin is not
treated as general FICC Clearing Fund.
Finally, the proposed changes would
include ‘‘Segregated Customer Margin’’
as a separate category of ‘‘Allowable
Investments’’ in Section 6.1, showing
that these funds may only be invested
in bank deposits, including a Federal
Reserve Bank. Under Section 6.2.1,
which describes limits on bank deposit
investments, the proposed changes
would include a statement that refers
back to GSD Rule 4 as describing the
manner in which Segregated Customer
Margin may be invested and would also
provide that higher investment limits
may be applied to investments of
Segregated Customer Margin.
iii. Clean-Up Proposed Changes
The proposed changes to the Policy
would replace references to the
‘‘Management Committee’’ with the
‘‘senior most management committee,’’
which accurately describes this internal
governing body without referring to it
by formal name. The DTCC Management
Committee is comprised of the
executive members of DTCC’s
management team and is the senior
most management committee in the
organization. The Policy currently
requires that certain actions and
authorizations described therein be
taken by a member of this body. For
example, Section 4.3 of the Policy
requires that the establishment of any
new investment relationships be
authorized by specified persons, which
include a member of the Management
Committee.
The Management Committee has
recently changed its name to the
Executive Committee. Therefore, the
proposed change to replace the formal
name of this body would continue to
correctly refer to the group but would
ensure that the group continues to be
accurately described in the Policy in the
event of any future changes to its formal
name. The proposed changes would
include a new defined term for ‘‘senior
most management committee’’ in
Section 2 to provide clarity that this
term is intended to refer to the highestlevel committee of DTCC. Conforming
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changes would also be made to Section
4.3 (regarding authorization to establish
new investment relationships), Section
6.2.3 (regarding authorization of
investment transactions in U.S.
Treasury securities), Section 6.2.5
(regarding authorization of investment
transactions in high-grade corporate
debt) and Section 7.2 (regarding
authorization to exceed investment
limits).
ddrumheller on DSK120RN23PROD with NOTICES1
Implementation Timeframe
The Clearing Agencies expect to
implement the proposal by no later than
March 31, 2025, or such earlier date on
which the changes proposed by the
Account Segregation Filing are effective.
2. Statutory Basis
The Clearing Agencies believe that the
proposed changes are consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a registered clearing
agency, particularly, Section
17A(b)(3)(F) of the Act 17 and Rule
17ad–22(e)(6)(i) under the Act,18 for the
reasons described below.
Section 17A(b)(3)(F) of the Act
requires, in part, that the rules of a
registered clearing agency be designed
to assure the safeguarding of securities
and funds which are in their custody or
control or for which they are
responsible.19
The investment guidelines and
governance procedures set forth in the
Investment Policy are designed to
safeguard funds that are in the custody
or control of the Clearing Agencies or
for which they are responsible. Such
protections include, for example,
following a prudent and conservative
investment philosophy that places the
highest priority on maximizing liquidity
and risk avoidance. The Clearing
Agencies believe the proposed changes
would allow them to continue to adhere
to these guidelines by addressing the
segregation, separation and investment
of Indirect Participants Clearing Fund
Deposits and Segregated Customer
Margin, consistent with the changes that
were proposed in the Account
Segregation Filing. The proposed
changes would reflect a prudent and
conservative investment philosophy by
limiting FICC’s ability to hold
Segregated Customer Margin in either
an account of a Federal Reserve Bank or
an FDIC-insured bank. Therefore, the
Clearing Agencies believe the proposed
rule change would allow the Clearing
Agencies to continue to operate the
U.S.C. 78q–1(b)(3)(F).
CFR 240.17ad–22(e)(6)(i).
19 15 U.S.C. 78q–1(b)(3)(F).
Investment Policy pursuant to a prudent
and conservative investment philosophy
that assures the safeguarding of
securities and funds that are in their
custody and control, or for which they
are responsible, consistent with Section
17A(b)(3)(F) of the Act.20
The proposed changes to more
generally describe the senior most
management committee would ensure
that the Policy remains clear and
accurate in describing the governance
around important actions described
therein. By creating clearer descriptions,
the Clearing Agencies believe these
proposed changes would make the
Investment Policy more effective in
governing the management, custody,
and investment of funds of and held by
the Clearing Agencies. The Clearing
Agencies believe the proposed changes
would improve the effectiveness of the
Investment Policy and allow the
Investment Policy to continue to be
administered in alignment with the
investment guidelines and governance
procedures set forth therein. Given that
such guidelines and governance
procedures are designed to safeguard
funds which are in the custody or
control of the Clearing Agencies or for
which they are responsible, the Clearing
Agencies believe the proposed changes
are consistent with Section 17A(b)(3)(F)
of the Act.21
Rule 17ad–22(e)(6)(i) under the Act
requires, in part, FICC to establish
written policies and procedures
reasonably designed to calculate,
collect, and hold margin amounts from
a direct participant for its proprietary
positions in Treasury securities
separately and independently from
margin calculated and collected from
that direct participant in connection
with U.S. Treasury securities
transactions by an indirect participant
that relies on the services provided by
the direct participant to access FICC’s
payment, clearing, or settlement
facilities.22 As described above, the
proposed changes would amend Section
3.2, which describes the separation and
segregation of cash deposits to the
NSCC, GSD and MBSD Clearing Funds,
and the DTC Participants Fund. The
proposed changes would specify in this
section that Indirect Participants
Clearing Fund Deposits shall be held
separately and independently on FICC’s
books and records from all other
deposits to the GSD Clearing Fund.
Together with the changes to be
implemented to the GSD Rules pursuant
to the Account Segregation Filing, the
17 15
20 Id.
18 17
21 Id.
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proposed changes to the Policy would
support FICC’s compliance with the
requirements of Rule 17ad–22(e)(6)(i) by
providing that Indirect Participants
Clearing Fund Deposits shall be held
separately and independently from
margin held for GSD Netting Members’
proprietary activity.
(B) Clearing Agency’s Statement on
Burden on Competition
The Clearing Agencies believe that the
proposed revisions to the Investment
Policy would not have any impact, or
impose any burden, on competition.
The Investment Policy applies equally
to allowable investments of Clearing
Fund and Participants Fund deposits, as
applicable, of each member of the
Clearing Agencies, and establishes a
uniform policy at the Clearing Agencies.
The proposed changes to the Investment
Policy would not effect any changes on
the fundamental purpose or operation of
this document and, as such, would also
not have any impact, or impose any
burden, on competition.
The Clearing Agencies do not believe
the proposed rule changes to make
clean-up changes to the Policy would
impact competition. These changes
would ensure the clarity and accuracy
of the descriptions in the Policy and
would not affect participants’ rights and
obligations. As such, the Clearing
Agencies believe the proposed clean-up
changes would not have any impact on
competition.
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants, or Others
The Clearing Agencies have not
received or solicited any written
comments relating to this proposal. If
any written comments are received, they
will be publicly filed as an Exhibit 2 to
this filing, as required by Form 19b–4
and the General Instructions thereto.
Persons submitting comments are
cautioned that, according to Section IV
(Solicitation of Comments) of the
Exhibit 1A in the General Instructions to
Form 19b–4, the Commission does not
edit personal identifying information
from comment submissions.
Commenters should submit only
information that they wish to make
available publicly, including their
name, email address, and any other
identifying information.
All prospective commenters should
follow the Commission’s instructions on
how to submit comments, available at
www.sec.gov/regulatory-actions/how-tosubmit-comments. General questions
regarding the rule filing process or
logistical questions regarding this filing
E:\FR\FM\17DEN1.SGM
17DEN1
Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices
should be directed to the Main Office of
the Commission’s Division of Trading
and Markets at tradingandmarkets@
sec.gov or 202–551–5777.
The Clearing Agencies reserve the
right not to respond to any comments
received.
III. Date of Effectiveness of the
Proposed Rule Change, and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) by order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be 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:
ddrumheller on DSK120RN23PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules-regulations/self-regulatoryorganization-rulemaking); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
DTC–2024–011 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to File
Number SR–DTC–2024–011. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules-regulations/self-regulatoryorganization-rulemaking). 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
VerDate Sep<11>2014
19:45 Dec 16, 2024
Jkt 265001
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 DTC
and on DTCC’s website (www.dtcc.com/
legal/sec-rule-filings). 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–DTC–2024–011 and
should be submitted on or before
January 7, 2025.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–29629 Filed 12–16–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101878; File No. SR–BX–
2024–054]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Adopt a New
Approach to the Options Regulatory
Fee (ORF) in 2025
December 11, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
9, 2024, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
102199
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Pricing Schedule at Options 7, Section
5, Options Regulatory Fee.3
While the changes proposed herein
are effective upon filing, the Exchange
has designated the amendments to be
operative on January 1, 2025.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/bx/rules, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
BX proposes to amend its current ORF
in several respects. BX proposes to
amend its methodology of collection to:
(1) exclude options transactions in
proprietary products; and (2) assess ORF
in all clearing ranges except market
makers who clear as ‘‘M’’ at The
Options Clearing Corporation (‘‘OCC’’).
Additionally, BX will assess a different
rate for trades executed on BX (‘‘Local
ORF Rate’’) and trades executed on nonBX exchanges (‘‘Away ORF Rate’’).
Background on Current ORF
Today, BX assesses its ORF for each
Customer 4 option transaction that is
3 On October 31, 2024, SR–BX–2024–040 was
filed to amend ORF. On December 9, 2024, SR–BX–
2024–040 was withdrawn and this rule change was
filed. The current proposal amends the ORF Rate
for Local Customer ‘‘C’’ Origin Code transactions
executed on BX, Local Firm ‘‘F’’ Origin Code
transactions executed on BX, and Away ORF Rate
Firm ‘‘F’’ Origin Code multi-list transactions
executed on non-BX exchanges.
4 Today, ORF is collected from Customers,
Professionals and broker-dealers that are not
affiliated with a clearing member that clear in the
‘‘C’’ range at OCC. See supra notes 13 and 14 for
descriptions of Customers and Professionals.
E:\FR\FM\17DEN1.SGM
17DEN1
]]>Agencies
[Federal Register Volume 89, Number 242 (Tuesday, December 17, 2024)]
[Notices]
[Pages 102195-102199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29629]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101883; File No. SR-DTC-2024-011]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing of Proposed Rule Change To Amend the Clearing Agency
Investment Policy
December 11, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 3, 2024, The Depository Trust Company (``DTC'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II and III below, which Items have
been prepared by the clearing agency. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 102196]]
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change consists of amendments to the Clearing
Agency Investment Policy (``Investment Policy'', or ``Policy'') of DTC
and its affiliates, Fixed Income Clearing Corporation (``FICC'') and
National Securities Clearing Corporation (``NSCC,'' and together with
FICC and DTC, the ``Clearing Agencies'') \3\ and would facilitate
changes to the FICC Government Securities Division Rulebook (``GSD
Rules'') that will be implemented by FICC.\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 79528 (Dec. 12,
2016), 81 FR 91232 (Dec. 16, 2016) (SR-DTC-2016-007, SR-FICC-2016-
005, SR-NSCC-2016-003).
\4\ See Securities Exchange Act Release No. 101695 (Nov. 21,
2024), 89 FR 93763 (Nov. 27, 2024) (SR-FICC-2024-007) (``Account
Segregation Filing''). The changes proposed in the Account
Segregation Filing are expected to be implemented by no later than
March 31, 2025, on a date to be announced by an Important Notice
posted to FICC's website. Terms not defined herein are defined in
the GSD Rules, available at www.dtcc.com/~/media/Files/Downloads/
legal/rules/ficc_gov_rules.pdf.
---------------------------------------------------------------------------
Specifically, as described in greater detail in the Account
Segregation Filing, FICC will implement changes to the GSD Rules that
will, among other things, provide for FICC to (1) hold margin collected
with respect to the proprietary transactions of a Netting Member
separately and independently from the margin collected with respect to
transactions that a Netting Member submits to FICC on behalf of
indirect participants, (2) legally segregate certain margin collected
with respect to indirect participant transactions from the margin for a
Netting Member's proprietary transactions (as well as those of other
indirect participants), and (3) limit investments of certain margin
collected with respect to indirect participant transactions to only
U.S. Treasuries with a maturity date of one year or less. The Clearing
Agencies are proposing to amend the Policy to facilitate implementation
of these changes and would also make other clean-up changes to the
Policy, as described in greater detail below.
The changes that were proposed in the Account Segregation Filing
and the changes proposed to the Investment Policy herein are
collectively designed to comply with certain requirements of Rule 17ad-
22(e)(6)(i) under the Act,\5\ and to ensure that FICC has appropriate
rules to satisfy certain conditions of Note H to Rule 15c3-3a under the
Act for a broker-dealer to record a debit in the customer and broker-
dealer proprietary account reserve formulas.\6\
---------------------------------------------------------------------------
\5\ 17 CFR 240.17ad-22(e)(6)(i). See Securities Exchange Act
Release No. 99149 (Dec. 13, 2023), 89 FR 2714 (Jan. 16, 2024)
(``Adopting Release,'' and the rules adopted therein referred to
herein as ``Treasury Clearing Rules'').
\6\ 17 CFR 240.15c3-3a, Note H. See id.
---------------------------------------------------------------------------
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, the clearing agency included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. The clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
1. Purpose
The Investment Policy governs the management, custody and
investment of cash deposited to the respective NSCC and FICC Clearing
Funds, and the DTC Participants Fund,\7\ the proprietary liquid net
assets (cash and cash equivalents) of the Clearing Agencies, and other
funds held by the Clearing Agencies pursuant to their respective rules.
In doing this, the Investment Policy identifies the guiding principles
for investments and defines the roles and responsibilities of DTCC \8\
staff in administering the Investment Policy pursuant to those
principles. The guiding principles for investments set forth in Section
3 of the Investment Policy address, among other things, how the
Clearing Agencies segregate and separately hold cash deposited to the
NSCC Clearing Fund, the Clearing Fund of FICC's Government Securities
Division (``GSD''), the Clearing Fund of FICC's Mortgage-Backed
Securities Division (``MBSD'') and the DTC Participants Fund. The
Investment Policy also identifies sources of funds that may be
invested, and the permitted investments of those funds, including the
authority required to make such investments and the parameters of, and
limitations on, each type of investment.
---------------------------------------------------------------------------
\7\ The respective Clearing Funds of NSCC, FICC's GSD and FICC's
MBSD, and the DTC Participants Fund are described further in the
Rules & Procedures of NSCC (``NSCC Rules''), the DTC Rules, By-laws
and Organization Certificate (``DTC Rules''), the Clearing Rules of
the Mortgage-Backed Securities Division of FICC (``MBSD Rules'') or
the GSD Rules, respectively, available at https://dtcc.com/legal/rules-and-procedures. See Rule 4 (Clearing Fund) of the NSCC Rules,
Rule 4 (Participants Fund and Participants Investment) of the DTC
Rules, Rule 4 (Clearing Fund and Loss Allocation) of the GSD Rules,
and Rule 4 (Clearing Fund and Loss Allocation) of the MBSD Rules.
\8\ The Depository Trust & Clearing Corporation (``DTCC'') is
the parent company of the Clearing Agencies.
---------------------------------------------------------------------------
The Commission recently adopted amendments to Rule 17ad-22(e)(6)(i)
under the Act that are applicable to FICC as a covered clearing agency
that provides, through GSD, central counterparty services for
transactions in U.S. Treasury securities.\9\ These amendments require,
among other things, that FICC hold margin from a direct participant for
its proprietary transactions separately and independently from the
margin calculated and collected for the transactions of an indirect
participant that relies on the services provided by the direct
participant to access FICC's payment, clearing, or settlement
facilities.\10\
---------------------------------------------------------------------------
\9\ 17 CFR 240.17ad-22(e)(6)(i).
\10\ Id.
---------------------------------------------------------------------------
In the Treasury Clearing Rules, the Commission also amended its
customer protection rule (``Rule 15c3-3'') \11\ and the reserve
formulas thereunder (``Rule 15c3-3a''),\12\ to permit broker-dealers to
include margin required and on deposit at FICC as a debit item in the
reserve formula under certain conditions. One of the conditions for the
relief is that the margin be collected in accordance with the GSD Rules
that impose certain requirements, which include, among other things,
that FICC (i) only invest cash margin in U.S. Treasuries with a
maturity of one year or less, and (ii) must hold the margin itself or
at an account of a Federal Reserve Bank or an FDIC-insured bank, which
account must be segregated from any other account of FICC or any other
person at a U.S. Federal Reserve Bank or FDIC-insured bank and used
exclusively to hold customer assets to meet the current margin
requirements of FICC resulting from positions in U.S. Treasury
securities of the customers of the broker-dealer members of FICC.\13\
---------------------------------------------------------------------------
\11\ 17 CFR 240.15c3-3.
\12\ 17 CFR 240.15c3-3a.
\13\ Id.
---------------------------------------------------------------------------
In the Account Segregation Filing, FICC proposed changes to the GSD
Rules to comply with the requirements of the Treasury Clearing Rules.
Such changes are expected to be implemented in the GSD Rules by no
later than March 31, 2025 and will, among other things, (1) provide for
FICC to calculate, collect, and hold margin for the proprietary
transactions of a Netting Member separately and independently from the
margin for transactions that the Netting Member submits to FICC on
behalf of indirect participants, and (2) allow Netting Members to elect
for margin for
[[Page 102197]]
indirect participant transactions to be calculated on a gross basis
(i.e., an indirect participant-by-indirect participant basis) and
legally segregated from the margin for the Netting Member's proprietary
transactions (as well as those of other indirect participants).\14\
---------------------------------------------------------------------------
\14\ Supra note 4.
---------------------------------------------------------------------------
The proposed changes to the Investment Policy would facilitate the
implementation of the changes that will be made to the GSD Rules
pursuant to the Account Segregation Filing, as described in greater
detail below.
i. Separately Holding Indirect Participant Margin
First, the proposed changes to the Investment Policy would
facilitate the implementation of the changes to the GSD Rules that will
require FICC to calculate, collect, and hold margin for the proprietary
transactions of a GSD Netting Member separately and independently from
margin collected with respect to transactions that a Netting Member
submits to FICC on behalf of indirect participants.
The proposed changes to the Policy would do this by first amending
Section 2 to include a definition of Indirect Participants Clearing
Fund Deposits to mean ``the total amount deposited in the GSD Clearing
Fund to support activity in Agent Clearing Member Omnibus Accounts and
Sponsoring Member Omnibus Accounts, other than Segregated Indirect
Participants Accounts, as such terms are defined in the FICC Government
Securities Division (``GSD'') Rulebook (``GSD Rules'').'' Next, the
proposed changes would amend Section 3.2 (Section 3 describes the
guiding principles that underpin the Policy) regarding the separation
and segregation of cash deposits to the NSCC, GSD and MBSD Clearing
Funds, and the DTC Participants Fund. Within this section, the proposed
changes would specify that Indirect Participants Clearing Fund Deposits
shall be held separately and independently on FICC's books and records
from all other deposits to the GSD Clearing Fund.
In connection with this change, the proposed changes to the Policy
would also amend Section 5, which describes investable funds that are
invested by the Clearing Agencies pursuant to the Policy. The changes
to this section would provide that Indirect Participants Clearing Fund
Deposits are included in the GSD Clearing Fund. This proposed change
would clarify that these funds are considered investable funds under
the Policy, to be invested similarly to other cash deposits to the GSD
Clearing Fund.
ii. Legally Segregating and Limiting Investments of Segregated Customer
Margin
Second, the proposed changes to the Investment Policy would
facilitate implementation of the changes that will be made to the GSD
Rules pursuant to the Account Segregation Filing that will require FICC
to legally segregate certain Indirect Participants Clearing Fund
Deposits that have been designated by GSD Netting Members for such
segregation (``Segregated Customer Margin''), and to hold and invest
such funds in a manner that meets the conditions set forth in the
Commission's amendments to Rule 15c3-3 and Rule 15c3-3a.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 240.15c3-3 and 15c3-3a.
---------------------------------------------------------------------------
The GSD Rules will describe the manner in which FICC will meet the
requirements of Rule 15c3-3 and Rule 15c3-3a with respect to Segregated
Customer Margin. The standards that FICC must adhere to in holding,
investing and legally segregating Segregated Customer Margin are
critical to its Netting Members' ability to obtain certain relief with
respect to these funds. Therefore, the Clearing Agencies believe it is
appropriate for these provisions to be described publicly in the GSD
Rules, which are published to the DTCC website.\16\
---------------------------------------------------------------------------
\16\ Supra note 7.
---------------------------------------------------------------------------
While the manner in which FICC would hold and invest Segregated
Customer Margin will primarily be described in the GSD Rules, the
proposed changes would incorporate Segregated Customer Margin into the
Investment Policy such that the general governance and investment
philosophy underpinning the Policy, described in Section 3.1 as ``a
prudent and conservative investment philosophy that places highest
priority on maximizing liquidity and risk avoidance,'' would apply to
these funds.
The proposed changes would amend Section 2 to include a definition
of Segregated Customer Margin as having ``the meaning given such term
in the GSD Rules.'' The proposed changes would also amend Section 3.2
to include a separate statement that refers to the provisions of the
GSD Rules, specifically, but not limited to, Section 1a of GSD Rule 4,
which would, following implementation of the changes that were proposed
by the Account Segregation Filing, address how FICC would segregate and
hold Segregated Customer Margin in compliance with the applicable
conditions set forth in Rule 15c3-3 and Rule 15c3-3a.
The proposed changes to the Policy would amend Section 5 to
identify Segregated Customer Margin as a source of investable funds and
to state that ``Segregated Customer Margin is described in the GSD
Rules, including, but not limited to, Section 1a of GSD Rule 4.'' The
proposed changes to Section 5 would also clarify the description of
``Participants Fund and Clearing Funds'' to make clear that Segregated
Customer Margin is not treated as general FICC Clearing Fund. Finally,
the proposed changes would include ``Segregated Customer Margin'' as a
separate category of ``Allowable Investments'' in Section 6.1, showing
that these funds may only be invested in bank deposits, including a
Federal Reserve Bank. Under Section 6.2.1, which describes limits on
bank deposit investments, the proposed changes would include a
statement that refers back to GSD Rule 4 as describing the manner in
which Segregated Customer Margin may be invested and would also provide
that higher investment limits may be applied to investments of
Segregated Customer Margin.
iii. Clean-Up Proposed Changes
The proposed changes to the Policy would replace references to the
``Management Committee'' with the ``senior most management committee,''
which accurately describes this internal governing body without
referring to it by formal name. The DTCC Management Committee is
comprised of the executive members of DTCC's management team and is the
senior most management committee in the organization. The Policy
currently requires that certain actions and authorizations described
therein be taken by a member of this body. For example, Section 4.3 of
the Policy requires that the establishment of any new investment
relationships be authorized by specified persons, which include a
member of the Management Committee.
The Management Committee has recently changed its name to the
Executive Committee. Therefore, the proposed change to replace the
formal name of this body would continue to correctly refer to the group
but would ensure that the group continues to be accurately described in
the Policy in the event of any future changes to its formal name. The
proposed changes would include a new defined term for ``senior most
management committee'' in Section 2 to provide clarity that this term
is intended to refer to the highest-level committee of DTCC. Conforming
[[Page 102198]]
changes would also be made to Section 4.3 (regarding authorization to
establish new investment relationships), Section 6.2.3 (regarding
authorization of investment transactions in U.S. Treasury securities),
Section 6.2.5 (regarding authorization of investment transactions in
high-grade corporate debt) and Section 7.2 (regarding authorization to
exceed investment limits).
Implementation Timeframe
The Clearing Agencies expect to implement the proposal by no later
than March 31, 2025, or such earlier date on which the changes proposed
by the Account Segregation Filing are effective.
2. Statutory Basis
The Clearing Agencies believe that the proposed changes are
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a registered clearing agency,
particularly, Section 17A(b)(3)(F) of the Act \17\ and Rule 17ad-
22(e)(6)(i) under the Act,\18\ for the reasons described below.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78q-1(b)(3)(F).
\18\ 17 CFR 240.17ad-22(e)(6)(i).
---------------------------------------------------------------------------
Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of a registered clearing agency be designed to assure the safeguarding
of securities and funds which are in their custody or control or for
which they are responsible.\19\
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The investment guidelines and governance procedures set forth in
the Investment Policy are designed to safeguard funds that are in the
custody or control of the Clearing Agencies or for which they are
responsible. Such protections include, for example, following a prudent
and conservative investment philosophy that places the highest priority
on maximizing liquidity and risk avoidance. The Clearing Agencies
believe the proposed changes would allow them to continue to adhere to
these guidelines by addressing the segregation, separation and
investment of Indirect Participants Clearing Fund Deposits and
Segregated Customer Margin, consistent with the changes that were
proposed in the Account Segregation Filing. The proposed changes would
reflect a prudent and conservative investment philosophy by limiting
FICC's ability to hold Segregated Customer Margin in either an account
of a Federal Reserve Bank or an FDIC-insured bank. Therefore, the
Clearing Agencies believe the proposed rule change would allow the
Clearing Agencies to continue to operate the Investment Policy pursuant
to a prudent and conservative investment philosophy that assures the
safeguarding of securities and funds that are in their custody and
control, or for which they are responsible, consistent with Section
17A(b)(3)(F) of the Act.\20\
---------------------------------------------------------------------------
\20\ Id.
---------------------------------------------------------------------------
The proposed changes to more generally describe the senior most
management committee would ensure that the Policy remains clear and
accurate in describing the governance around important actions
described therein. By creating clearer descriptions, the Clearing
Agencies believe these proposed changes would make the Investment
Policy more effective in governing the management, custody, and
investment of funds of and held by the Clearing Agencies. The Clearing
Agencies believe the proposed changes would improve the effectiveness
of the Investment Policy and allow the Investment Policy to continue to
be administered in alignment with the investment guidelines and
governance procedures set forth therein. Given that such guidelines and
governance procedures are designed to safeguard funds which are in the
custody or control of the Clearing Agencies or for which they are
responsible, the Clearing Agencies believe the proposed changes are
consistent with Section 17A(b)(3)(F) of the Act.\21\
---------------------------------------------------------------------------
\21\ Id.
---------------------------------------------------------------------------
Rule 17ad-22(e)(6)(i) under the Act requires, in part, FICC to
establish written policies and procedures reasonably designed to
calculate, collect, and hold margin amounts from a direct participant
for its proprietary positions in Treasury securities separately and
independently from margin calculated and collected from that direct
participant in connection with U.S. Treasury securities transactions by
an indirect participant that relies on the services provided by the
direct participant to access FICC's payment, clearing, or settlement
facilities.\22\ As described above, the proposed changes would amend
Section 3.2, which describes the separation and segregation of cash
deposits to the NSCC, GSD and MBSD Clearing Funds, and the DTC
Participants Fund. The proposed changes would specify in this section
that Indirect Participants Clearing Fund Deposits shall be held
separately and independently on FICC's books and records from all other
deposits to the GSD Clearing Fund. Together with the changes to be
implemented to the GSD Rules pursuant to the Account Segregation
Filing, the proposed changes to the Policy would support FICC's
compliance with the requirements of Rule 17ad-22(e)(6)(i) by providing
that Indirect Participants Clearing Fund Deposits shall be held
separately and independently from margin held for GSD Netting Members'
proprietary activity.
---------------------------------------------------------------------------
\22\ 17 CFR 240.17ad-22(e)(6)(i).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
The Clearing Agencies believe that the proposed revisions to the
Investment Policy would not have any impact, or impose any burden, on
competition. The Investment Policy applies equally to allowable
investments of Clearing Fund and Participants Fund deposits, as
applicable, of each member of the Clearing Agencies, and establishes a
uniform policy at the Clearing Agencies. The proposed changes to the
Investment Policy would not effect any changes on the fundamental
purpose or operation of this document and, as such, would also not have
any impact, or impose any burden, on competition.
The Clearing Agencies do not believe the proposed rule changes to
make clean-up changes to the Policy would impact competition. These
changes would ensure the clarity and accuracy of the descriptions in
the Policy and would not affect participants' rights and obligations.
As such, the Clearing Agencies believe the proposed clean-up changes
would not have any impact on competition.
(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others
The Clearing Agencies have not received or solicited any written
comments relating to this proposal. If any written comments are
received, they will be publicly filed as an Exhibit 2 to this filing,
as required by Form 19b-4 and the General Instructions thereto.
Persons submitting comments are cautioned that, according to
Section IV (Solicitation of Comments) of the Exhibit 1A in the General
Instructions to Form 19b-4, the Commission does not edit personal
identifying information from comment submissions. Commenters should
submit only information that they wish to make available publicly,
including their name, email address, and any other identifying
information.
All prospective commenters should follow the Commission's
instructions on how to submit comments, available at www.sec.gov/regulatory-actions/how-to-submit-comments. General questions regarding
the rule filing process or logistical questions regarding this filing
[[Page 102199]]
should be directed to the Main Office of the Commission's Division of
Trading and Markets at [email protected] or 202-551-5777.
The Clearing Agencies reserve the right not to respond to any
comments received.
III. Date of Effectiveness of the Proposed Rule Change, and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be 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:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking);
or
Send an email to [email protected]. Please include
File Number SR-DTC-2024-011 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-DTC-2024-011. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking). 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 DTC and on DTCC's website (www.dtcc.com/legal/sec-rule-filings). 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-DTC-2024-011 and should be submitted on or before January 7, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29629 Filed 12-16-24; 8:45 am]
BILLING CODE 8011-01-P
