63180 Federal Register / Vol. 88, No. 177 / Thursday, September 14, 2023 / Notices 

18 Id. 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change at least five business 

days prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

21 17 CFR 240.19b–4(f)(6). 

22 17 CFR 240.19b–4(f)(6)(iii). 

23See supra note 6. 

24For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

25 17 CFR 200.30–3(a)(12), (59). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

with the rules of other options 

exchanges.18

While this proposal continues to limit 

the intervals of strikes listed on the 

Exchange, the Exchange continues to 

balance the needs of market participants 

by continuing to offer a number of 

strikes to meet a market participant’s 

investment objective. The Exchange’s 

Strike Interval Proposal does not impose 

an undue burden on intermarket 

competition as this Strike Interval 

Proposal does not impact the listings 

available at another self-regulatory 

organization. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to section 

19(b)(3)(A) of the Act 19 and Rule 19b– 

4(f)(6) thereunder.20

A proposed rule change filed under 

Rule 19b–4(f)(6) 21 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),22 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has requested 

that the Commission waive the 30-day 

operative delay so that the proposed 

rule change may become operative upon 

filing. The proposed rule change is 

substantially similar to those of other 

currently operating options 

exchanges.23 The Exchange states that it 

intends to launch MEMX Options on 

September 13, 2023 and that waiver of 

the 30-day operative delay would allow 

the Exchange to implement the 

proposed change to amend its rules as 

set forth above prior to launch, thus 

ensuring consistency of strike rules 

between the Exchange and other options 

exchanges. For these reasons, and 

because the proposed rule change does 

not raise any novel legal or regulatory 

issues, the Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Therefore, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.24

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

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– 

MEMX–2023–18 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–MEMX–2023–18. 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 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–MEMX–2023–18 and should be 

submitted on or before October 5, 2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–19846 Filed 9–13–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98328; File No. SR–NSCC– 

2023–008] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Recovery 

and Wind-Down Plan 

September 8, 2023. 

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 

September 1, 2023, National Securities 

Clearing Corporation (‘‘NSCC’’) 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. NSCC filed the proposed rule 

change pursuant to section 19(b)(3)(A) 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 88, No. 177 / Thursday, September 14, 2023 / Notices 63181 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(4). 

5Capitalized terms not defined herein are defined 

in the Rules and Procedures of NSCC (the ‘‘Rules’’), 

available at www.dtcc.com/∼/media/Files/ 

Downloads/legal/rules/nscc_rules.pdf, or in the 

Recovery & Wind-down Plan of NSCC (the ‘‘R&W 

Plan’’ or ‘‘Plan’’). 

6See Securities Exchange Act Release Nos. 83974 

(Aug. 28, 2018), 83 FR 44988 (Sep. 4, 2018), (SR– 

NSCC–2017–017); and 83955 (Aug. 27, 2018), 83 FR 

44340 (Aug. 30, 2018) (SR–NSCC–2017–805). 

7 17 CFR 240.17Ad–22(e)(3)(ii). NSCC is a 

‘‘covered clearing agency’’ as defined in Rule 

17Ad–22(a)(5) under the Act and must comply with 

paragraph (e) of Rule 17Ad–22. 

8See Securities Exchange Act Release No. 91428 

(Mar. 29, 2021), 86 FR 17440 Apr. 2, 2021 (SR– 

NSCC–2021–004). 

9 DTCC operates on a shared service model with 

respect to NSCC and its other affiliated clearing 

agencies, Fixed Income Clearing Corporation 

(‘‘FICC’’) and The Depository Trust Company 

(‘‘DTC’’). Most corporate functions are established 

and managed on an enterprise-wide basis pursuant 

to intercompany agreements under which it is 

generally DTCC that provides relevant services to 

NSCC, FICC and DTC (collectively, the ‘‘Clearing 

Agencies’’). 

10Supra note 6. 

11Supra note 8. 12See Securities Exchange Act Release No. 95011 

(May 31, 2022), 87 FR 34339 (Jun. 6, 2022) (SR– 

NSCC–2022–003) (Order Approving Proposed Rule 

Change to Introduce Central Clearing for Securities 

Financing Transaction Clearing Service). NSCC also 

filed the proposal as advance notice SR–NSCC– 

2022–801. See Securities Exchange Act Release No. 

94998 (May 27, 2022), 87 FR 33528 (Jun. 2, 2022) 

(SR–NSCC–2022–801) (Notice of No Objection to 

Advance Notice to Introduce Central Clearing for 

Securities Financing Transaction Clearing Service). 

(Securities Exchange Release No. 34–95011 (May 

31, 2022), 87 FR 34339 (Jun. 6, 2022) (SR–NSCC– 

2022–003). 

of the Act 3 and Rule 19b–4(f)(4) 

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 the Recovery and Winddown Plan to reflect business and 

product developments that have taken 

place since the time it was last 

amended, and make certain changes to 

improve the clarity of the Plan and 

make other updates and technical 

revisions, as described in greater detail 

below.5

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 

Executive Summary 

The R&W Plan was adopted in August 

2018 6 and is maintained by NSCC for 

compliance with Rule 17Ad–22(e)(3)(ii) 

under the Act.7 This section of the Act 

requires registered clearing agencies to, 

in short, establish, implement and 

maintain plans for the recovery and 

orderly wind-down of the covered 

clearing agency necessitated by credit 

losses, liquidity shortfalls, losses from 

general business risk, or any other 

losses. The Plan is intended to be used 

by the Board and NSCC management in 

the event NSCC encounters scenarios 

that could potentially prevent it from 

being able to provide its critical services 

to the marketplace as a going concern. 

The R&W Plan is comprised of two 

primary sections: (i) the ‘‘Recovery 

Plan,’’ that sets out the tools and 

strategies to enable NSCC to recover, in 

the event it experiences losses that 

exceed its prefunded resources, and (ii) 

the ‘‘Wind-down Plan,’’ that describes 

the tools and strategies to be used to 

conduct an orderly wind-down of 

NSCC’s business in a manner designed 

to permit the continuation of NSCC’s 

critical services in the event that its 

recovery efforts are not successful. 

The purpose of the rule proposal is to 

amend the R&W Plan to reflect business 

and product developments that have 

taken place since the time it was last 

amended,8 make certain changes to 

improve the clarity of the Plan and 

make other updates and technical 

revisions. 

NSCC believes that by helping to 

ensure that the R&W Plan reflects 

current business and product 

developments, providing additional 

clarity, and making necessary 

grammatical corrections, that the 

proposed rule change would help it 

continue to maintain the Plan in a 

manner that supports the continuity of 

NSCC’s critical services and enables its 

Members and Limited Members to 

maintain access to NSCC’s services 

through the transfer of its membership 

in the event NSCC defaults or the Winddown Plan is ever triggered by the 

Board. 

Background 

The R&W Plan is managed by the 

Office of Recovery & Resolution 

Planning (referred to in the Plan as the 

‘‘R&R Team’’) of NSCC’s parent 

company, the Depository Trust & 

Clearing Corporation (‘‘DTCC’’),9 on 

behalf of NSCC, with review and 

oversight by the DTCC Management 

Committee and the Board. In accordance 

with the SEC’s Approval Order covering 

the Plan,10 the Board, or such 

committees as may be delegated 

authority by the Board from time to 

time, is required to review and approve 

the R&W Plan biennially and would also 

review and approve any changes that 

are proposed to the R&W Plan outside 

of the biennial review. NSCC completed 

its most recent biennial review in 2022. 

The proposed rule change reflects 

amendments proposed to the Plans 

resulting from that review, which are 

described in greater detail below. None 

of the proposed changes modify NSCC’s 

general objectives and approach with 

respect to its recovery and wind-down 

strategy as set forth under the current 

Plan. 

A. Proposed Amendments to the R&W 

Plan 

NSCC is proposing the changes to the 

following sections of the Plan based 

upon business updates and product 

developments that have occurred since 

the Plan was last amended.11

Section 2.2 (NSCC Guaranteed 

Services Summary) describes those 

services in which NSCC in its role as a 

clearing agency and a central 

counterparty, provides clearing, netting, 

and settlement service and a guarantee 

of completion for broker-to-broker 

equity, corporate and municipal debt, 

exchange-traded products and unit 

investment trust transactions executed 

on exchanges and other trading venues 

in the U.S. NSCC proposes to update 

this section to add a description of a 

new service, the Securities Financing 

Transaction (‘‘SFT’’) clearing service, 

which was approved by the Commission 

in 2022.12 The SFT service is a central 

clearing and settlement infrastructure 

for overnight borrows and loans of 

equity securities (collectively, securities 

financing transactions or ‘‘SFTs’’). The 

SFT clearing service supports the 

central clearing of clients’ SFTs 

intermediated by Sponsoring Members 

or Agent Clearing Members as well as 

the central clearing of SFTs between 

NSCC full-service Members. The SFT 

clearing service also allows lenders and 

borrowers to submit pre-established 

bilaterally-settled SFTs for clearing. 

Section 2.4 (Intercompany 

Arrangements) describes how corporate 

support services are provided to NSCC 


lotter on DSK11XQN23PROD with NOTICES1
63182 Federal Register / Vol. 88, No. 177 / Thursday, September 14, 2023 / Notices 

13For purposes of consistency, under the 

proposed rule change all references to ‘‘FMI Links’’ 

would be revised to refer to these as ‘‘Clearing 

Agency Links.’’ 

14As defined in Rule 17Ad–22(a)(8) under the 

Act, a link ‘‘means, for purposes of paragraph 

(e)(20) of Rule 17Ad–22, a set of contractual and 

operational arrangements between two or more 

clearing agencies, financial market utilities, or 

trading markets that connect them directly or 

indirectly for the purposes of participating in 

settlement, cross margining, expanding their 

services to additional instruments or participants, 

or for any other purposes material to their 

business.’’ 17 CFR 240.17Ad–22(a)(8). 

15The criteria that is used to identify an NSCC 

service or function as critical includes 

consideration as to whether (1) there is a lack of 

alternative providers or products; (2) failure of the 

service could impact NSCC’s ability to perform its 

central counterparty services; (3) failure of the 

service could impact NSCC’s ability to perform its 

netting services, and, as such, the availability of 

market liquidity; and (4) the service is 

interconnected with other participants and 

processes within the U.S. financial system (for 

example, with other FMIs, settlement banks, brokerdealers, and exchanges). 

16As set forth in NSCC Rule 59 (Account 

Information Transmission Service), AIT enables 

Members to transmit account related information 

between themselves on an automated basis in 

respect of the movement of correspondent accounts 

between Members, or other material events that 

result in the bulk movement of accounts between 

Members. 

17The majority of the Corridor Indicators, as 

identified in the Recovery Plan, relate directly to 

conditions that may require NSCC to adjust its 

strategy for hedging and liquidating a defaulting 

Member’s portfolio, and any such changes would 

include an assessment of the status of the Corridor 

Indicators. 

18Hedging is a risk management strategy that 

would be employed when executing the liquidation 

of a defaulting Member’s portfolio to potentially 

help reduce the risk of loss of an existing position. 

19The Commercial Paper/Extendible Notes 

indicator measures the ability of NSCC to roll-over 

and potentially increase issuance of its commercial 

paper. 

from DTCC and DTCC’s other 

subsidiaries, through intercompany 

agreements under a shared services 

model. This section includes a table, 

(Facilities, Table 2–B), that lists each of 

the DTCC facilities utilized by the 

Clearing Agencies and indicates 

whether the facility is owned or leased. 

NSCC proposes to update this table to 

add Washington DC, London, UK, and 

McLean, Virginia as additional DTCC 

facility locations. 

Section 2.5 (FMI Links) 13 describes 

some of the key financial market 

infrastructures (‘‘FMIs’’), both domestic 

and foreign, that NSCC has identified as 

critical ‘‘links.’’ 14 As set out in this 

section of the Plan, the inventory of 

NSCC’s links is maintained by DTCC’s 

Systemic Risk Office (‘‘SRO’’) and the 

SRO has set forth a set of practices and 

protocols for managing and reviewing 

the various risks and controls associated 

with clearing agency links. Based on a 

change to the SRO Clearing Agency 

Links-Risk Review Procedures, the 

proposal would clarify that in addition 

to approval by the Chief Systemic Risk 

Officer, the inventory of clearing agency 

links is also subject to the approval of 

a Deputy General Counsel of the General 

Counsel’s Office. In addition, for 

purposes of completeness, the proposed 

rule change would add a footnote to the 

table included in this section of the 

Plan, (Table 2–C, Links), making clear 

that under SRO’s Clearing Agency 

Links-Risk Review Procedures, trading 

market links, such as equity alternative 

trading systems and regulated securities 

exchanges are also subject to the links 

risk review process; however, given the 

large number of these links, they have 

not been separately delineated in Table 

2–C, Links. 

Section 3 (Critical Services) defines 

the criteria for classifying certain of 

NSCC’s services as ‘‘critical,’’ 15 and 

identifies such critical services and the 

rationale for their classification. The 

identification of NSCC’s critical services 

is important for evaluating how the 

recovery tools and the wind-down 

strategy would facilitate and provide for 

the continuation of NSCC’s critical 

services to the markets it serves. There 

is also a table (Table 3–B: NSCC Critical 

Services) that lists each of the services, 

functions or activities that NSCC has 

identified as ‘‘critical’’ based on the 

applicability of the criteria. In addition, 

there is a table (Table 3–C: Indicative 

Non-Critical NSCC Services) that 

identifies indicative non-critical 

services of NSCC, which list is not 

exhaustive. The proposed rule change 

would clarify the description of the 

Account Information Transmission 

(‘‘AIT’’) service 16 by making clear that 

AIT can support transmissions for the 

bulk account transfer initiative, which is 

an industry effort to prepare carrying 

broker-dealers for an emergency mass 

transfer of large quantities of customer 

accounts and assets from a distressed 

broker to a financially secure brokerdealer and that in the absence of this 

service, Members/Limited Members can 

process and settle their investments 

manually, as transaction volumes are 

currently low enough to handle 

manually, or outside of AIP. 

Section 5.2.4 (Recovery Corridor and 

Recovery Phase) outlines the early 

warning indicators to be used by NSCC 

to evaluate its options and potentially 

prepare to enter the ‘‘Recovery Phase,’’ 

which phase refers to the actions to be 

taken by NSCC to restore its financial 

resources and avoid a wind-down of its 

business. This section contains 

descriptions of potential stress events 

that could lead to recovery, and several 

early warning indicators and metrics 

that NSCC has established to evaluate 

its options and potentially prepare to 

enter the Recovery Phase. These 

indicators, which are referred to in the 

Recovery Plan as recovery corridor 

indicators (‘‘Corridor Indicators’’ or 

‘‘Indicator(s)’’),17 are calibrated against 

NSCC’s financial resources and are 

designed to give NSCC the ability to 

replenish financial resources, typically 

through business-as-usual tools applied 

prior to entering the Recovery Phase. 

Included in this section is a table (Table 

5–A: Corridor Indicators) that identifies 

for each Indicator (i) how it is measured, 

(ii) the basis for the evaluation of the 

status of the Indicator, (iii) the type of 

metrics used for determining the status 

of the deterioration or improvement of 

the Indicator, and (iv) ‘‘Corridor Actions 

& Escalation,’’ which are those steps 

that may be taken to improve the status 

of the Indicator and the management 

escalations required to authorize those 

steps. The proposed rule change would 

provide the following clarifications to 

Table 5–A. 

First, for purposes of providing 

additional context on the applicable 

measurement, the proposed rule change 

would clarify the entry for the ‘‘Hedge 

Effectiveness’’ Indicator 18 set out in 

Table 5–A. Specifically, the language in 

the measurement column for this 

Indicator would be revised to clarify 

that if the hedge effectiveness measures 

are outside of the designated metrics 

due to certain types of factors (e.g., 

mismatch in portfolio profit and loss 

(‘‘P&L’’) and hedge P&L due to timing of 

initiating the hedge or the portfolio), 

management would document the 

performance and only escalate to the 

Board Risk Committee and Management 

Risk Committee if the measurement 

status deteriorates in a material respect. 

Second, regarding ‘‘Commercial 

Paper/Extendible Notes,’’ 19 the 

description of when the applicable 

metrics for this Indicator reflect a 

deterioration would be revised to 

remove the specific dollar threshold 

(currently, the inability to source at least 

$1.0 billion) and replace it with a 

general statement regarding NSCC’s 

inability to source additional funding 

via issuance of commercial paper when 

needed. The description of the 

improvement metric would be revised 

similarly to remove the specific dollar 

threshold (currently, an ability to source 

at least $2.5 billion) and replace it with 

a general statement of NSCC’s ability to 

source additional funding via issuance 

of commercial paper. The dollar 

thresholds would be removed to provide 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 88, No. 177 / Thursday, September 14, 2023 / Notices 63183 

20The Retirements/Transaction Reductions 

indicator measures Member terminations or 

curtailment of transactions that impact the financial 

viability of NSCC. 

21Table 5–C lists the following NSCC liquidity 

tools: Utilize short-settling liquidating trades, 

Increase the speed of portfolio asset sales, Credit 

Facility, Unissued Commercial Paper, NonQualifying Liquid Resources, and Uncommitted 

stock loan and equity repos. 

22The Embedded Risk Management group 

supports the R&R Team. For example, they may 

assist in the identification of new initiatives, 

processes, or product developments that may 

impact NSCC’s R&W Plan. 

23 15 U.S.C. 78q–1(b)(3)(F). 

24 17 CFR 240.17Ad–22(e)(3)(ii). 

25 Id. 

discretion and flexibility to evaluate this 

indicator and take actions, as needed. 

Additionally, under ‘‘Corridor Actions’’ 

for purposes of consistency with the 

language formulation used for the other 

Indicators, the statement that currently 

reads ‘‘If this indicator has been 

triggered, and if less than 50% of overall 

liquidity resources are available, NSCC 

would evaluate the liquidation speeds 

and potential price impacts of increased 

liquidation speeds—particularly for 

large positions,’’ would be revised to 

remove the phrase, ‘‘and if less than 

50% of overall liquidity resources are 

available.’’ 

Third, for the ‘‘Retirements/Trade 

Volume Reductions’’ Indicator,20 a 

clarification would be made to identify 

Client Account Management and NSCC 

Global Business Operations as the 

internal groups responsible for 

measurement of the applicable 

deterioration and improvement 

Indicator metrics. 

Section 5.3 (Liquidity Shortfalls) 

identifies tools that may be used to 

address foreseeable shortfalls in NSCC’s 

liquidity resources following a Member 

default. The goal in managing NSCC’s 

qualifying liquidity resources is to 

maximize resource availability in an 

evolving stress situation, to maintain 

flexibility in the order and use of 

sources of liquidity, and to repay any 

third-party lenders of liquidity in a 

timely manner. This section includes a 

table (Table 5–C) that lists NSCC 

liquidity tools and resources.21 The 

proposed rule change would make the 

following clarifications to Table 5–C: (i) 

under the entry for the ‘‘Unissued 

Commercial Paper’’ liquidity resource, 

the language would be revised to clarify 

that unissued commercial paper 

capacity could be deployed, but remove 

the existing language that it could be 

increased within 2 weeks depending on 

market conditions, since this timeframe 

could be adjusted depending on the 

overall circumstances, and (ii) under the 

description of the NSCC’s ‘‘NonQualifying Liquid Resources,’’ for the 

current language specifying a one-to two 

week timeframe for NSCC to enter into 

new Master Repurchase Agreements 

would be removed because more 

flexibility of time is needed for NSCC to 

establish new agreements. Thus, the 

updated language would state that 

‘‘NSCC would utilize existing Master 

Repurchase Agreements or establish 

new Master Repurchase Agreements 

utilizing standard agreements.’’ 

B. Other Updates, Clarifications and 

Technical Revisions 

NSCC is also proposing to make other 

updates and technical revisions to the 

Plan. These technical revisions would, 

for example, make grammatical 

corrections, update the names of certain 

NSCC internal groups, and clarify the 

description of internal organizations, 

without changing the substantive 

statements being revised. 

For example, in Section 2.4, Table 2– 

A (SIFMU Legal Entity Structure and 

Intercompany Agreements), for 

purposes of clarifying the full scope of 

services provided by NSCC’s affiliate, 

DTC, the description of DTC’s services 

would be revised from ‘‘Underwriting, 

Securities Processing, Corporate 

Actions,’’ to ‘‘Asset Services.’’ Some 

other examples include: (i) a revision 

would be made throughout the Plan to 

reflect an internal name change from 

DTCC’s ‘‘Operational Risk 

Management’’ to ‘‘Operational Risk,’’ 

and add a new internal organization, 

‘‘Embedded Risk Management,’’ 22 (ii) 

all references to ‘‘FMI Links’’ would be 

revised to refer to these as ‘‘Clearing 

Agency Links,’’ (iii) in the table listing 

NSCC’s liquidity tools (Table 5–C) 

replacing the terms ‘‘medium-term 

notes’’ and ‘‘term debt’’ with ‘‘senior 

debt’’ to more accurately identify the 

instrument consistent with how DTCC 

Treasury identifies these, and (iv) in the 

section covering DTCC facilities, the 

name of the DTCC legal entity that is the 

holder of the lease for the Manila 

location would be changed from 

‘‘DTCC’’ to ‘‘DTCC Manila.’’ 

NSCC believes the proposed updates 

and technical revisions would improve 

the clarity and accuracy of the Plan and, 

therefore, would help facilitate the 

execution of Plan, if necessary. 

2. Statutory Basis 

NSCC believes that the proposal is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a registered 

clearing agency. In particular, NSCC 

believes that the amendments to the 

R&W Plan are consistent with section 

17A(b)(3)(F) of the Act 23 and Rule 

17Ad–22(e)(3)(ii) under the Act,24 for 

the reasons described below. 

Section 17A(b)(3)(F) of the Act 

requires, in part, that the rules of NSCC 

be designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions. As described 

above, the proposed rule change would 

update the R&W Plan to reflect business 

and product developments and make 

certain technical corrections. By helping 

to ensure that the R&W Plan reflects 

current business and product 

developments, and providing additional 

clarity, NSCC believes that the proposed 

rule change would help it continue to 

maintain the Plan in a manner that 

supports the continuity of NSCC’s 

critical services and enables its 

Members and Limited Members to 

maintain access to NSCC’s services 

through the transfer of its membership 

in the event NSCC defaults or the Winddown Plan is ever triggered by the 

Board. Further, by facilitating the 

continuity of its critical clearance and 

settlement services, NSCC believes the 

Plan and the proposed rule change 

would continue to promote the prompt 

and accurate clearance and settlement of 

securities transactions. Therefore, NSCC 

believes the proposed amendments to 

the R&W Plan are consistent with the 

requirements of section 17A(b)(3)(F) of 

the Act. 

Rule 17Ad–22(e)(3)(ii) under the Act 

requires NSCC to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

maintain a sound risk management 

framework for comprehensively 

managing legal, credit, liquidity, 

operational, general business, 

investment, custody, and other risks 

that arise in or are borne by the covered 

clearing agency, which includes plans 

for the recovery and orderly wind-down 

of the covered clearing agency 

necessitated by credit losses, liquidity 

shortfalls, losses from general business 

risk, or any other losses.25

Specifically, the Recovery Plan 

defines the risk management activities, 

stress conditions and indicators, and 

tools that NSCC may use to address 

stress scenarios that could eventually 

prevent it from being able to provide its 

critical services as a going concern. 

Through the framework of the Crisis 

Continuum, the Recovery Plan 

addresses measures that NSCC may take 

to address risks of credit losses and 

liquidity shortfalls, and other losses that 

could arise from a Participant default. 

The Recovery Plan also addresses the 

management of general business risks 


lotter on DSK11XQN23PROD with NOTICES1
63184 Federal Register / Vol. 88, No. 177 / Thursday, September 14, 2023 / Notices 

26 Id. 

27 15 U.S.C. 78s(b)(3)(A). 

28 17 CFR 240.19b–4(f). 29 17 CFR 200.30–3(a)(12). 

and other non-default risks that could 

lead to losses. The Wind-down Plan 

would be triggered by a determination 

by the Board that recovery efforts have 

not been, or are unlikely to be, 

successful in returning NSCC to 

viability as a going concern. Once 

triggered, the Wind-down Plan sets forth 

clear mechanisms for the transfer of 

NSCC’s membership and business and 

is designed to facilitate continued 

access to NSCC’s critical services and to 

minimize market impact of the transfer. 

By establishing the framework and 

strategy for the execution of the transfer 

and wind-down of NSCC in order to 

facilitate continuous access to its critical 

services, the Wind-down Plan 

establishes a plan for the orderly winddown of NSCC. 

As described above, the proposed rule 

change would update the R&W Plan to 

reflect business and product 

developments and make certain 

technical corrections. By ensuring that 

material provisions of the Plan are 

current, clear, and technically correct, 

NSCC believes that the proposed 

amendments are designed to support the 

maintenance of the Plan for the recovery 

and orderly wind-down of the covered 

clearing agency necessitated by credit 

losses, liquidity shortfalls, losses from 

general business risk, or any other 

losses, and, as such, meets the 

requirements of Rule 17Ad–22(e)(3)(ii) 

under the Act.26 Therefore, the 

proposed changes would help NSCC to 

maintain the Plan in a way that 

continues to be consistent with the 

requirements of Rule 17Ad–22(e)(3)(ii). 

(B) Clearing Agency’s Statement on 

Burden on Competition 

NSCC does not believe that the 

proposed rule change would have any 

impact, or impose any burden, on 

competition. NSCC does not anticipate 

that the proposal would affect its dayto-day operations under normal 

circumstances, or in the management of 

a typical Member default scenario or 

non-default event. The R&W Plan was 

developed and documented to satisfy 

applicable regulatory requirements, as 

discussed above. The proposal is 

intended to enhance and update the 

Plan to ensure it is clear and remains 

current in the event it is ever necessary 

to be implemented. The proposed 

revisions would not affect any changes 

to the overall structure or operation of 

the Plan or NSCC’s recovery and winddown strategy as set forth under the 

current Plan. As such, NSCC believes 

the proposal would 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 

NSCC has not received or solicited 

any written comments relating to this 

proposal. If any written comments are 

received, NSCC will amend this filing to 

publicly file such comments as an 

Exhibit 2 to this 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. 

NSCC reserves 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) 27 of the Act and paragraph 

(f) 28 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 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NSCC–2023–008 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–NSCC–2023–008. 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 

and 3 p.m. Copies of the filing also will 

be available for inspection and copying 

at the principal office of NSCC and on 

DTCC’s website (http://dtcc.com/legal/ 

sec-rule-filings.aspx). 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–NSCC–2023–008 

and should be submitted on or before 

October 5, 2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–19840 Filed 9–13–23; 8:45 am] 

BILLING CODE 8011–01–P 


lotter on DSK11XQN23PROD with NOTICES1