Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Capital Policy and the Capital Replenishment Plan, 19738-19741 [2025-08117]
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19738
Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices
disclosures to agencies for law
enforcement purposes include
disclosures of information relating to
money orders, stored-value cards,
financial instruments, products, and
services as required or permitted by
BSA, OFAC and anti-money laundering
statutes, regulations and requirements.
POLICIES AND PRACTICES FOR STORAGE OF
RECORDS:
Automated database, computer
storage media, microfiche, and paper.
POLICIES AND PRACTICES FOR RETRIEVAL OF
RECORDS:
For online payment, information is
retrieved by customer name, customer
ID(s), transaction number, or address.
Claim information is retrieved by
name of purchaser or payee, claim
number, serial number, transaction
number, check number, customer ID(s),
or ZIP Code.
Information related to BSA, OFAC
and AML is retrieved by customer
name; SSN; alien registration, passport,
or driver’s license number; serial
number; transaction number; ZIP Code;
transaction date; data entry operator
number; and employee comments, and
individuals that appear on the Specially
Designated Nationals and Blocked
Persons List (SDNs) as defined and
mandated by the OFAC.
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POLICIES AND PRACTICES FOR RETENTION AND
DISPOSAL OF RECORDS:
1. Summary records, including bill
due date, bill amount, biller
information, biller representation of
account number, and the various status
indicators, are retained 2 years from the
date of processing.
2. Records related to claims are
retained up to 3 years from date of final
action on the claim.
3. Forms related to fulfillment of BSA,
anti-money laundering requirements are
retained for a 5-year and one-month
period.
4. Related automated records are
retained the same 5-year and one-month
period and purged from the system
quarterly after the date of creation.
5. Enrollment records related to
online payment services are retained 7
years after the subscriber’s account
ceases to be active or the service is
cancelled.
6. Account banking records, including
payment history, Demand Deposit
Account (DDA) number, and routing
number, are retained 7 years from the
date of processing.
7. Online user information may be
retained for 6 months.
Records existing on paper are
destroyed by burning, pulping, or
shredding. Records existing on
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computer storage media are destroyed
according to the applicable USPS media
sanitization practice.
ADMINISTRATIVE, TECHNICAL, AND PHYSICAL
SAFEGUARDS:
Paper records, computers, and
computer storage media are located in
controlled-access areas under
supervision of program personnel.
Access to these areas is limited to
authorized personnel, who must be
identified with a badge.
Access to records is limited to
individuals whose official duties require
such access. Contractors and licensees
are subject to contract controls and
unannounced on-site audits and
inspections. Computers are protected by
mechanical locks, card key systems, or
other physical access control methods.
The use of computer systems is
regulated with installed security
software, computer logon
identifications, and operating system
controls including access controls,
terminal and transaction logging, and
file management software. Online data
transmissions are protected by
encryption.
RECORD ACCESS PROCEDURES:
Requests for access must be made in
accordance with the Notification
Procedure above and USPS Privacy Act
regulations regarding access to records
and verification of identity under 39
CFR 266.5.
CONTESTING RECORD PROCEDURES:
See Notification Procedure below and
Record Access Procedures above.
NOTIFICATION PROCEDURES:
For online payment services, and
stored-value cards, individuals wanting
to know if information about them is
maintained in this system must address
inquiries in writing to the Chief
Marketing Officer and Executive Vice
President. Inquiries must contain name,
address, and other identifying
information.
For money order claims and claims
related to other financial instruments,
products, or services, or BSA, OFAC
and anti-money laundering
documentation, inquiries should be
addressed to the Chief Financial Officer
and Executive Vice President. Inquiries
must include name, address, or other
identifying information of the purchaser
(such as driver’s license, Alien
Registration Number, Passport Number,
etc.), and serial or transaction number.
Information collected for anti-money
laundering purposes will only be
provided in accordance with Federal
BSA, OFAC, anti-money laundering
laws, regulations and requirements.
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EXEMPTIONS PROMULGATED FOR THE SYSTEM:
Systems Exempted From Certain
Provisions of the Act: USPS has
established regulations at 39 CFR 266.9
that exempt information contained in
this system of records from various
provisions of the Privacy Act in order to
conform to the prohibition in the Bank
Secrecy Act, 31 U.S.C. 5318(g)(2),
against notification of the individual
that a suspicious transaction has been
reported.
HISTORY:
July 26, 2024, 89 FR 60666, January 4,
2023, 88 FR 374, December 15, 2021, 86
FR 71294; May 8, 2008, 73 FR 26155;
April 29, 2005, 70 FR 22516.
Helen E. Vecchione,
Attorney, Ethics & Legal Compliance.
[FR Doc. 2025–08214 Filed 5–8–25; 8:45 am]
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–102993; File No. SR–DTC–
2025–008]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
the Capital Policy and the Capital
Replenishment Plan
May 5, 2025.
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 April 25,
2025, 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. DTC filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(3)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to (i) the Clearing Agency
Policy on Capital Requirements
(‘‘Capital Policy’’ or ‘‘Policy’’) of DTC
and its affiliates, National Securities
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(3).
2 17
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Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices
Clearing Corporation (‘‘NSCC’’) and
Fixed Income Clearing Corporation
(‘‘FICC,’’ and together with DTC and
NSCC, the ‘‘Clearing Agencies’’); and (ii)
the Clearing Agency Capital
Replenishment Plan (‘‘Capital
Replenishment Plan’’ or ‘‘Plan’’) of the
Clearing Agencies. In particular, the
proposed revisions to the Capital Policy
and Capital Replenishment Plan would
(1) make technical revisions to update,
simplify, and clarify statements in the
Policy and Plan; and (2) update the Plan
to document alternate authorizations in
case an authorizing officer is not
available.
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
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1. Purpose
The Clearing Agencies are proposing
to revise the Capital Policy and Capital
Replenishment Plan, which were
adopted by the Clearing Agencies in
July 2017 5 and are maintained by the
Clearing Agencies in compliance with
Rule 17ad–22(e)(15) under the Act 6
Overview of the Capital Policy and
Capital Replenishment Plan
The Capital Policy sets forth the
manner in which each Clearing Agency
identifies, monitors, and manages its
general business risk with respect to the
requirement to hold sufficient liquid net
assets (‘‘LNA’’) funded by equity to
cover potential general business losses
so the Clearing Agency can continue
operations and services as a going
concern if such losses materialize.7 The
amount of LNA funded by equity to be
held by each of the Clearing Agencies
for this purpose is defined in the Policy
as the General Business Risk Capital
Requirement. The Policy provides that
5 See Securities Exchange Act Release No. 81105
(July 7, 2017), 82 FR 32399 (July 13, 2017) (SR–
DTC–2017–003, SR–FICC–2017–007, SR–NSCC–
2017–004).
6 17 CFR 240.17ad–22(e)(15).
7 Id.
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the General Business Risk Requirement
is calculated for each Clearing Agency
as the greatest of three separate
calculations—(1) an amount based on
that Clearing Agency’s general business
risk profile (‘‘Risk-Based Capital
Requirement’’), (2) an amount based on
the time estimated to execute a recovery
or orderly wind-down of the critical
operations of that Clearing Agency
(‘‘Recovery/Wind-down Capital
Requirement’’), and (3) an amount based
on an analysis of that Clearing Agency’s
estimated operating expenses for a sixmonth period (‘‘Operating Expense
Capital Requirement’’). On an annual
basis, each of these three capital
requirements are measured, and the
General Business Risk Capital
Requirement for each Clearing Agency
are determined as the greatest of these
calculations.
Currently, the Capital Policy also
addresses how each Clearing Agency
maintains a portion of retained earnings
as LNA funded by equity as its
Corporate Contribution, as a part of its
management of credit risk 8 and
pursuant to its respective rules.9 These
resources are maintained to address
losses due to a participant default, and
are held in addition to the LNA funded
by equity held by each of the Clearing
Agencies as its General Business Risk
Capital Requirement. The Capital Policy
describes how each Clearing Agency’s
General Business Risk Capital
Requirement and Corporate
Contribution fit within the Clearing
Agencies’ Capital Framework, where the
Total Capital Requirement of each
Clearing Agency is calculated as the
sum of its General Business Risk Capital
Requirement and Corporate
Contribution.
The Policy also provides a plan for
the replenishment of capital through the
Capital Replenishment Plan. The
Capital Replenishment Plan was
adopted by the Clearing Agencies as a
plan for the replenishment of capital by
each Clearing Agency should its equity
fall close to or below the amount being
held as its Total Capital Requirement
8 LNA funded by equity held as the Clearing
Agencies’ Corporate Contribution is held in
addition to resources held by the Clearing Agencies
for credit risk in compliance with Rule 17ad–
22(e)(4) under the Act and in addition to resources
held by the Clearing Agencies for liquidity risk in
compliance with Rule 17ad–22(e)(7). 17 CFR
240.17ad–22(e)(4), (7).
9 The Rules, By-laws and Organization Certificate
of DTC (‘‘DTC Rules’’), the Rulebook of the
Government Securities Division of FICC (‘‘GSD
Rules’’), the Clearing Rules of the Mortgage-Backed
Securities Division of FICC (‘‘MBSD Rules’’), or the
Rules & Procedures of NSCC (‘‘NSCC Rules,’’ and
together with the DTC Rules, GSD Rules and MBSD
Rules, the ‘‘Clearing Agencies’ Rules’’), available at
www.dtcc.com/legal/rules-and-procedures.
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19739
pursuant to the Capital Policy. The
Capital Replenishment Plan identifies
the circumstances that would trigger
implementation of the Plan; the roles,
responsibilities, and guiding principles
for implementation of the Plan; and an
overview and description of each of the
tools that may be used to replenish
capital.
Proposed Revisions to the Capital Policy
and Capital Replenishment Plan
As described in greater detail herein,
the Clearing Agencies are proposing to
make certain revisions to the Capital
Policy and Capital Replenishment Plan.
First, the proposal would make
technical revisions to update, simplify,
and clarify statements in the Policy and
Plan. Second, the proposed revisions
would update the Plan to document
alternate authorizations in case an
authorizing officer is not available.
These proposed revisions are designed
to enhance the clarity of the Policy and
Plan and help ensure that they continue
to operate as intended.
1. Technical Revisions
The Clearing Agencies are proposing
technical revisions to the descriptions
within the Capital Policy and Capital
Replenishment Plan that would update,
simplify, and clarify statements,
including, for example, removing in the
Policy the unnecessary reference to the
Plan as an Addendum to the Policy,
rephrasing certain sentences for clarity
without changing the meaning, and
relocating language from one sentence
or section to another.
Such revisions would also update the
documents. For example, in the Policy,
the proposed changes would more
accurately refer to the Policy as a policy
instead of a framework, and refer to the
senior most management committee,
which reflects the term now used by the
Clearing Agencies to refer to the highestlevel committee of the Clearing
Agencies. In the Plan, these revisions
would include removing references to
credit risk from the risk scenarios that
may trigger the Plan to reflect the
Clearing Agencies’ current rules and
procedures allowing the Corporate
Contribution to be used for both
participant default as well as nonparticipant default losses.
2. Alternate Authorizations
Section 3.2 of the Plan describes the
role and responsibilities of the Treasury
group (‘‘Treasury’’) in the
implementation of the Plan in the event
the Plan is triggered pursuant to the
Policy. This section lists the steps to be
taken by Treasury in implementing the
plan as well as the relevant internal
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Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices
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parties within Treasury tasked with
providing any required authorizations.
The proposed changes would provide
alternate stakeholders that may provide
any required authorizations in the
absence of those already outlined in the
steps referenced above. This change
would allow for business continuity and
timely implementation of the plan in
the absence of any specific authorizing
party.
2. Statutory Basis
The Clearing Agencies believe that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a registered clearing
agency. In particular, the Clearing
Agencies believe that the proposed
changes to the Capital Policy and
Capital Replenishment Plan are both
consistent with Section 17A(b)(3)(F) of
the Act 10 and Rule 17ad–22(e)(15)
under the Act,11 for the reasons
described below.
Section 17A(b)(3)(F) of the Act
requires, in part, that the rules of the
Clearing Agencies be designed to
promote the prompt and accurate
clearance and settlement of securities
transactions, and to assure the
safeguarding of securities and funds
which are in the custody or control of
the Clearing Agency or for which it is
responsible.12 Together, the Capital
Policy and Capital Replenishment Plan
are designed to ensure that each of the
Clearing Agencies hold sufficient LNA
funded by equity to cover potential
general business losses so that it can
continue the prompt and accurate
clearance and settlement of securities
transactions, and can continue to assure
the safeguarding of securities and funds
which are in its custody or control or for
which it is responsible if those losses
materialize. By making technical
revisions to update, simplify, and clarify
statements in the Policy and Plan, and
updating the Plan to document alternate
authorizing parties, the proposed
revisions would allow the Clearing
Agencies to maintain these documents
to operate in the way they were
intended. Therefore, such proposed
revisions would be consistent with the
requirements of Section 17A(b)(3)(F) of
the Act.13
Rule 17ad–22(e)(15) under the Act
requires, in part, that the Clearing
Agencies establish, implement,
maintain and enforce written policies
and procedures reasonably designed to
U.S.C. 78q–1(b)(3)(F).
CFR 240.17ad–22(e)(15).
12 15 U.S.C. 78q–1(b)(3)(F).
13 Id.
identify, monitor, and manage their
respective general business risk and
hold sufficient liquid net assets funded
by equity to cover potential general
business losses so that the Clearing
Agencies can continue operations and
services as a going concern if those
losses materialize.14 As originally
implemented, the Capital Policy and
Capital Replenishment Plan were
designed to meet the requirements of
Rule 17ad–22(e)(15).15 As stated above,
the proposal would make technical
revisions to update, simplify, and clarify
statements in the Policy and Plan, and
would update the Plan to document
alternate authorizing parties. In this
way, the proposed changes would allow
the Clearing Agencies to maintain these
documents in a way that meets these
requirements. Therefore, such proposed
revisions would be consistent with the
requirements of Rule 17ad–22(e)(15)
under the Act.16
(B) Clearing Agency’s Statement on
Burden on Competition
The Clearing Agencies believe that the
proposed revisions to the Capital Policy
and the Capital Replenishment Plan
would not have any impact, or impose
any burden, on competition. The Policy
and the Plan are maintained by the
Clearing Agencies in order to satisfy
their regulatory requirements and
generally reflect internal tools and
procedures. Tools and procedures that
have a direct impact on the rights,
responsibilities or obligations of
members or participants of the Clearing
Agencies are reflected in the Clearing
Agencies’ Rules. Accordingly, the
Capital Policy and Capital
Replenishment Plan themselves are
documents that enhance the Clearing
Agencies’ regulatory compliance and
internal management and do not have
any impact, or impose any burden, on
competition.
The proposed revisions to update the
Capital Policy and Capital
Replenishment Plan would not effect
any changes on the fundamental
purpose or operation of these
documents and, as such, would also not
have any impact, or impose any burden,
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 proposed rule
10 15
11 17
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CFR 240.17ad–22(e)(15).
supra note 5.
16 17 CFR 240.17ad–22(e)(15).
change. If any written comments are
received, the Clearing Agencies will
amend their respective filings to
publicly file such comments as an
Exhibit 2 to the filing, as required by
Form 19b–4 and the General
Instructions thereto.
Persons submitting written 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
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 to not respond to any comments
received.
III. Date of Effectiveness of the
Proposed Rule Change, and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A) 17 of the Act and paragraph
(f) 18 of Rule 19b–4 thereunder. 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.
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/sro.shtml); or
14 17
15 See
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18 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
09MYN1
Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
DTC–2025–008 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–2025–008. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of 10
a.m. and 3 p.m. Copies of 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–2025–008 and
should be submitted on or before May
30, 2025.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Sherry R. Haywood,
Assistant Secretary.
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[FR Doc. 2025–08117 Filed 5–8–25; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–102991; File No. SR–
CboeBZX–2025–059]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing of
a Proposed Rule Change Related to
the 2x Long VIX Futures ETF (‘‘UVIX’’)
and the –1x Short VIX Futures ETF
(‘‘SVIX’’)
May 5, 2025.
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 March 21,
2025, Cboe BZX Exchange, Inc.
(‘‘Exchange’’) 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 Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Cboe BZX Exchange, Inc. (‘‘BZX’’ or
the ‘‘Exchange’’) is filing with the
Securities and Exchange Commission
(‘‘Commission’’ or ‘‘SEC’’) a proposed
rule change related to the 2x Long VIX
Futures ETF (‘‘UVIX’’) and the –1x
Short VIX Futures ETF (‘‘SVIX’’) (each
a ‘‘Fund’’ and, collectively, the
‘‘Funds’’), shares of which have been
approved by the Commission to list and
trade on the Exchange as Trust Issued
Receipts pursuant to BZX Rule
14.11(f)(4), in order to amend certain
representations from the original filings.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
equities/regulation/rule_filings/bzx/), at
the Exchange’s Office of the Secretary,
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
1 15
19 17
CFR 200.30–3(a)(12).
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2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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19741
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
The Commission issued final
approval of the rule filings proposing to
list and trade shares of SVIX (the ‘‘SVIX
Filing’’) 3 and UVIX (the ‘‘UVIX
Filing,’’ 4 and collectively with the SVIX
Filing, the ‘‘Filings’’) on the Exchange
pursuant to Exchange Rule 14.11(f)(4),
Trust Issued Receipts, on October 1,
2021.5
Both Filings include representations
that limit the Funds participation in
Cboe Volatility Index (‘‘VIX’’) futures
contracts traded on the Cboe Futures
Exchange, Inc. (‘‘CFE’’) (hereinafter
referred to as ‘‘VIX Futures Contracts’’)
to no more than ten percent (10%)
during any ‘‘Rebalance Period,’’ defined
as any fifteen minute period of
continuous market trading.6 The
Exchange is not aware of any existing
comparable restrictions on market
participation for: (i) any other single
exchange-traded investment product not
registered under the Investment
Company Act of 1940 (the ‘‘Investment
Company Act’’) (‘‘ETP’’); (ii) any
exchange-traded note (‘‘ETN’’); or (iii)
3 See Securities Exchange Act Release Nos 91264
(March 5, 2021) 86 FR 13939 (March 11, 2021) (SR–
CboeBZX–2020–070) (Notice of Filing of
Amendment Nos. 1 and 3 and Order Granting
Accelerated Approval of a Proposed Rule Change,
as Modified by Amendment Nos. 1 and 3, To List
and Trade Shares of the ¥1x Short VIX Futures
ETF Under BZX Rule 14.11(f)(4) (Trust Issued
Receipts)) (the ‘‘SVIX Notice and Approval Order’’).
4 See Securities Exchange Act Release Nos 91265
(March 5, 2021) 86 FR 13922 (March 11, 2021) (SR–
CboeBZX–2020–053) (Notice of Filing of
Amendment Nos. 2 and 4 and Order Granting
Accelerated Approval of a Proposed Rule Change,
as Modified by Amendment Nos. 2 and 4, To List
and Trade Shares of the 2x Long VIX Futures ETF
Under BZX Rule 14.11(f)(4) (Trust Issued Receipts))
(the ‘‘UVIX Notice and Approval Order’’).
5 See Securities Exchange Act Release Nos. 93230
(October 1, 2021) 89 FR 2387 (January 12, 2024)
(SR–CboeBZX–2020–070) (Order Setting Aside
Action by Delegated Authority and Approving a
Proposed Rule Change, as Modified by Amendment
Nos. 1 and 3, To List and Trade Shares of the –1x
Short VIX Futures ETF Under BZX Rule 14.11(f)(4)
(Trust Issued Receipts)) (the ‘‘SVIX Order Setting
Aside Action’’); and 93229 (October 1, 2021) 89 FR
3008 (January 17, 2024) (SR–CboeBZX–2020–053)
(Order Setting Aside Action by Delegated Authority
and Approving a Proposed Rule Change, as
Modified by Amendment Nos. 2 and 4, To List and
Trade Shares of the 2x Long VIX Futures ETF Under
BZX Rule 14.11(f)(4) (Trust Issued Receipts)) (the
‘‘UVIX Order Setting Aside Action’’).
6 This restriction applies ‘‘across all exchange
traded products based on VIX Futures Contracts
(‘‘VIX ETPs’’) that Volatility Shares LLC (the
‘‘Sponsor’’) sponsors.’’ See note 21 and
accompanying text of the Approval Orders.
E:\FR\FM\09MYN1.SGM
09MYN1
]]>Agencies
[Federal Register Volume 90, Number 89 (Friday, May 9, 2025)]
[Notices]
[Pages 19738-19741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-08117]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102993; File No. SR-DTC-2025-008]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend the Capital Policy and the Capital Replenishment Plan
May 5, 2025.
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 April 25, 2025, 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. DTC filed the proposed rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(3) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(3).
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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 (i) the Clearing
Agency Policy on Capital Requirements (``Capital Policy'' or
``Policy'') of DTC and its affiliates, National Securities
[[Page 19739]]
Clearing Corporation (``NSCC'') and Fixed Income Clearing Corporation
(``FICC,'' and together with DTC and NSCC, the ``Clearing Agencies'');
and (ii) the Clearing Agency Capital Replenishment Plan (``Capital
Replenishment Plan'' or ``Plan'') of the Clearing Agencies. In
particular, the proposed revisions to the Capital Policy and Capital
Replenishment Plan would (1) make technical revisions to update,
simplify, and clarify statements in the Policy and Plan; and (2) update
the Plan to document alternate authorizations in case an authorizing
officer is not available.
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 Clearing Agencies are proposing to revise the Capital Policy
and Capital Replenishment Plan, which were adopted by the Clearing
Agencies in July 2017 \5\ and are maintained by the Clearing Agencies
in compliance with Rule 17ad-22(e)(15) under the Act \6\
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\5\ See Securities Exchange Act Release No. 81105 (July 7,
2017), 82 FR 32399 (July 13, 2017) (SR-DTC-2017-003, SR-FICC-2017-
007, SR-NSCC-2017-004).
\6\ 17 CFR 240.17ad-22(e)(15).
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Overview of the Capital Policy and Capital Replenishment Plan
The Capital Policy sets forth the manner in which each Clearing
Agency identifies, monitors, and manages its general business risk with
respect to the requirement to hold sufficient liquid net assets
(``LNA'') funded by equity to cover potential general business losses
so the Clearing Agency can continue operations and services as a going
concern if such losses materialize.\7\ The amount of LNA funded by
equity to be held by each of the Clearing Agencies for this purpose is
defined in the Policy as the General Business Risk Capital Requirement.
The Policy provides that the General Business Risk Requirement is
calculated for each Clearing Agency as the greatest of three separate
calculations--(1) an amount based on that Clearing Agency's general
business risk profile (``Risk-Based Capital Requirement''), (2) an
amount based on the time estimated to execute a recovery or orderly
wind-down of the critical operations of that Clearing Agency
(``Recovery/Wind-down Capital Requirement''), and (3) an amount based
on an analysis of that Clearing Agency's estimated operating expenses
for a six-month period (``Operating Expense Capital Requirement''). On
an annual basis, each of these three capital requirements are measured,
and the General Business Risk Capital Requirement for each Clearing
Agency are determined as the greatest of these calculations.
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\7\ Id.
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Currently, the Capital Policy also addresses how each Clearing
Agency maintains a portion of retained earnings as LNA funded by equity
as its Corporate Contribution, as a part of its management of credit
risk \8\ and pursuant to its respective rules.\9\ These resources are
maintained to address losses due to a participant default, and are held
in addition to the LNA funded by equity held by each of the Clearing
Agencies as its General Business Risk Capital Requirement. The Capital
Policy describes how each Clearing Agency's General Business Risk
Capital Requirement and Corporate Contribution fit within the Clearing
Agencies' Capital Framework, where the Total Capital Requirement of
each Clearing Agency is calculated as the sum of its General Business
Risk Capital Requirement and Corporate Contribution.
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\8\ LNA funded by equity held as the Clearing Agencies'
Corporate Contribution is held in addition to resources held by the
Clearing Agencies for credit risk in compliance with Rule 17ad-
22(e)(4) under the Act and in addition to resources held by the
Clearing Agencies for liquidity risk in compliance with Rule 17ad-
22(e)(7). 17 CFR 240.17ad-22(e)(4), (7).
\9\ The Rules, By-laws and Organization Certificate of DTC
(``DTC Rules''), the Rulebook of the Government Securities Division
of FICC (``GSD Rules''), the Clearing Rules of the Mortgage-Backed
Securities Division of FICC (``MBSD Rules''), or the Rules &
Procedures of NSCC (``NSCC Rules,'' and together with the DTC Rules,
GSD Rules and MBSD Rules, the ``Clearing Agencies' Rules''),
available at www.dtcc.com/legal/rules-and-procedures.
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The Policy also provides a plan for the replenishment of capital
through the Capital Replenishment Plan. The Capital Replenishment Plan
was adopted by the Clearing Agencies as a plan for the replenishment of
capital by each Clearing Agency should its equity fall close to or
below the amount being held as its Total Capital Requirement pursuant
to the Capital Policy. The Capital Replenishment Plan identifies the
circumstances that would trigger implementation of the Plan; the roles,
responsibilities, and guiding principles for implementation of the
Plan; and an overview and description of each of the tools that may be
used to replenish capital.
Proposed Revisions to the Capital Policy and Capital Replenishment Plan
As described in greater detail herein, the Clearing Agencies are
proposing to make certain revisions to the Capital Policy and Capital
Replenishment Plan. First, the proposal would make technical revisions
to update, simplify, and clarify statements in the Policy and Plan.
Second, the proposed revisions would update the Plan to document
alternate authorizations in case an authorizing officer is not
available. These proposed revisions are designed to enhance the clarity
of the Policy and Plan and help ensure that they continue to operate as
intended.
1. Technical Revisions
The Clearing Agencies are proposing technical revisions to the
descriptions within the Capital Policy and Capital Replenishment Plan
that would update, simplify, and clarify statements, including, for
example, removing in the Policy the unnecessary reference to the Plan
as an Addendum to the Policy, rephrasing certain sentences for clarity
without changing the meaning, and relocating language from one sentence
or section to another.
Such revisions would also update the documents. For example, in the
Policy, the proposed changes would more accurately refer to the Policy
as a policy instead of a framework, and refer to the senior most
management committee, which reflects the term now used by the Clearing
Agencies to refer to the highest-level committee of the Clearing
Agencies. In the Plan, these revisions would include removing
references to credit risk from the risk scenarios that may trigger the
Plan to reflect the Clearing Agencies' current rules and procedures
allowing the Corporate Contribution to be used for both participant
default as well as non-participant default losses.
2. Alternate Authorizations
Section 3.2 of the Plan describes the role and responsibilities of
the Treasury group (``Treasury'') in the implementation of the Plan in
the event the Plan is triggered pursuant to the Policy. This section
lists the steps to be taken by Treasury in implementing the plan as
well as the relevant internal
[[Page 19740]]
parties within Treasury tasked with providing any required
authorizations. The proposed changes would provide alternate
stakeholders that may provide any required authorizations in the
absence of those already outlined in the steps referenced above. This
change would allow for business continuity and timely implementation of
the plan in the absence of any specific authorizing party.
2. Statutory Basis
The Clearing Agencies believe that the proposed rule change is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a registered clearing agency. In
particular, the Clearing Agencies believe that the proposed changes to
the Capital Policy and Capital Replenishment Plan are both consistent
with Section 17A(b)(3)(F) of the Act \10\ and Rule 17ad-22(e)(15) under
the Act,\11\ for the reasons described below.
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\10\ 15 U.S.C. 78q-1(b)(3)(F).
\11\ 17 CFR 240.17ad-22(e)(15).
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Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of the Clearing Agencies be designed to promote the prompt and accurate
clearance and settlement of securities transactions, and to assure the
safeguarding of securities and funds which are in the custody or
control of the Clearing Agency or for which it is responsible.\12\
Together, the Capital Policy and Capital Replenishment Plan are
designed to ensure that each of the Clearing Agencies hold sufficient
LNA funded by equity to cover potential general business losses so that
it can continue the prompt and accurate clearance and settlement of
securities transactions, and can continue to assure the safeguarding of
securities and funds which are in its custody or control or for which
it is responsible if those losses materialize. By making technical
revisions to update, simplify, and clarify statements in the Policy and
Plan, and updating the Plan to document alternate authorizing parties,
the proposed revisions would allow the Clearing Agencies to maintain
these documents to operate in the way they were intended. Therefore,
such proposed revisions would be consistent with the requirements of
Section 17A(b)(3)(F) of the Act.\13\
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
\13\ Id.
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Rule 17ad-22(e)(15) under the Act requires, in part, that the
Clearing Agencies establish, implement, maintain and enforce written
policies and procedures reasonably designed to identify, monitor, and
manage their respective general business risk and hold sufficient
liquid net assets funded by equity to cover potential general business
losses so that the Clearing Agencies can continue operations and
services as a going concern if those losses materialize.\14\ As
originally implemented, the Capital Policy and Capital Replenishment
Plan were designed to meet the requirements of Rule 17ad-22(e)(15).\15\
As stated above, the proposal would make technical revisions to update,
simplify, and clarify statements in the Policy and Plan, and would
update the Plan to document alternate authorizing parties. In this way,
the proposed changes would allow the Clearing Agencies to maintain
these documents in a way that meets these requirements. Therefore, such
proposed revisions would be consistent with the requirements of Rule
17ad-22(e)(15) under the Act.\16\
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\14\ 17 CFR 240.17ad-22(e)(15).
\15\ See supra note 5.
\16\ 17 CFR 240.17ad-22(e)(15).
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(B) Clearing Agency's Statement on Burden on Competition
The Clearing Agencies believe that the proposed revisions to the
Capital Policy and the Capital Replenishment Plan would not have any
impact, or impose any burden, on competition. The Policy and the Plan
are maintained by the Clearing Agencies in order to satisfy their
regulatory requirements and generally reflect internal tools and
procedures. Tools and procedures that have a direct impact on the
rights, responsibilities or obligations of members or participants of
the Clearing Agencies are reflected in the Clearing Agencies' Rules.
Accordingly, the Capital Policy and Capital Replenishment Plan
themselves are documents that enhance the Clearing Agencies' regulatory
compliance and internal management and do not have any impact, or
impose any burden, on competition.
The proposed revisions to update the Capital Policy and Capital
Replenishment Plan would not effect any changes on the fundamental
purpose or operation of these documents and, as such, would also not
have any impact, or impose any burden, 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 proposed rule change. If any written comments
are received, the Clearing Agencies will amend their respective filings
to publicly file such comments as an Exhibit 2 to the filing, as
required by Form 19b-4 and the General Instructions thereto.
Persons submitting written 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
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 to not respond to any
comments received.
III. Date of Effectiveness of the Proposed Rule Change, and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) \17\ of the Act and paragraph (f) \18\ of Rule 19b-4
thereunder. 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.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f).
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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/sro.shtml); or
[[Page 19741]]
Send an email to [email protected]. Please include
File Number SR-DTC-2025-008 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-2025-008. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of 10
a.m. and 3 p.m. Copies of 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-2025-008 and should be submitted on or
before May 30, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-08117 Filed 5-8-25; 8:45 am]
BILLING CODE 8011-01-P
