Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Capital Policy and the Capital Replenishment Plan, 19761-19763 [2025-08119]

Download as PDF Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–NYSEAMER–2024–78 and should be submitted on or before May 30, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.35 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–08115 Filed 5–8–25; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–102994; File No. SR–FICC– 2025–011] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Capital Policy and the Capital Replenishment Plan May 5, 2025. lotter on DSK11XQN23PROD with NOTICES1 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, Fixed Income Clearing Corporation (‘‘FICC’’) 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. FICC 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 FICC and its affiliates, The Depository Trust Company (‘‘DTC’’) and National Securities Clearing Corporation CFR 200.30–3(a)(12). 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). 17:11 May 08, 2025 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 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 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. 35 17 VerDate Sep<11>2014 (‘‘NSCC,’’ and together with DTC and FICC, 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. Jkt 265001 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 19761 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 pursuant to the Capital Policy. The Capital Replenishment Plan identifies 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. E:\FR\FM\09MYN1.SGM 09MYN1 19762 Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices 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. lotter on DSK11XQN23PROD with NOTICES1 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 parties within Treasury tasked with providing any required authorizations. VerDate Sep<11>2014 17:11 May 08, 2025 Jkt 265001 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 identify, monitor, and manage their respective general business risk and 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. 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 change. If any written comments are received, the Clearing Agencies will 10 15 11 17 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 14 17 CFR 240.17ad–22(e)(15). supra note 5. 16 17 CFR 240.17ad–22(e)(15). 15 See E:\FR\FM\09MYN1.SGM 09MYN1 Federal Register / Vol. 90, No. 89 / Friday, May 9, 2025 / Notices 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: lotter on DSK11XQN23PROD with NOTICES1 Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– FICC–2025–011 on the subject line. 17 15 18 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). VerDate Sep<11>2014 17:11 May 08, 2025 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–FICC–2025–011. 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/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 FICC 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–FICC–2025–011 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. [FR Doc. 2025–08119 Filed 5–8–25; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 35569; File No. 812–15754] First Eagle Private Credit Fund, et al. May 5, 2025. Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’). AGENCY: 19 17 Jkt 265001 PO 00000 CFR 200.30–3(a)(12). Frm 00096 Fmt 4703 Sfmt 4703 ACTION: 19763 Notice. Notice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d–1 under the Act. Summary of Application: Applicants request an order to permit certain business development companies (‘‘BDCs’’) and closed-end management investment companies to co-invest in portfolio companies with each other and with certain affiliated investment entities. Applicants: First Eagle Private Credit Fund, First Eagle Private Credit Fund SPV, LLC, First Eagle Credit Opportunities Fund, First Eagle Credit Opportunities Fund SPV, LLC, First Eagle Real Estate Debt Fund, First Eagle Tactical Municipal Opportunities Fund, First Eagle Investment Management, LLC, First Eagle Alternative Credit, LLC, First Eagle Alternative Credit EU, LLC, Napier Park Global Capital (US) LP, and certain of their affiliated entities as described in Appendix A to the application. Filing Dates: The application was filed on April 11, 2025, and amended on May 1, 2025. Hearing or Notification of Hearing: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC’s Secretary at Secretarys-Office@sec.gov and serving the Applicants with a copy of the request by email, if an email address is listed for the relevant Applicant below, or personally or by mail, if a physical address is listed for the relevant Applicant below. Hearing requests should be received by the Commission by 5:30 p.m. on May 30, 2025, and should be accompanied by proof of service on the Applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0– 5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by emailing the Commission’s Secretary at Secretarys-Office@sec.gov. ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: Sabrina Rusnak-Carlson, Esq., First Eagle Alternative Credit, LLC, 500 Boylston Street, Suite 1200, Boston, MA E:\FR\FM\09MYN1.SGM 09MYN1

Agencies

[Federal Register Volume 90, Number 89 (Friday, May 9, 2025)]
[Notices]
[Pages 19761-19763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-08119]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-102994; File No. SR-FICC-2025-011]


Self-Regulatory Organizations; Fixed Income Clearing Corporation; 
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, Fixed Income Clearing Corporation (``FICC'') 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. FICC 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 FICC and its affiliates, The Depository Trust Company 
(``DTC'') and National Securities Clearing Corporation (``NSCC,'' and 
together with DTC and FICC, 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

[[Page 19762]]

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 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

[[Page 19763]]

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).
---------------------------------------------------------------------------

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
     Send an email to [email protected]. Please include 
File Number SR-FICC-2025-011 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-FICC-2025-011. 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/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 FICC 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-FICC-2025-011 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. 2025-08119 Filed 5-8-25; 8:45 am]
BILLING CODE 8011-01-P
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