Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68777 

53 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3Capitalized terms not defined herein are defined 

in the Rules, available at www.dtcc.com/∼/media/ 

Files/Downloads/legal/rules/nscc_rules.pdf. 

4See Rule 4 (Clearing Fund) and Procedure XV 

(Clearing Fund Formula and Other Matters), supra 

note 3. NSCC’s market risk management strategy is 

designed to comply with Rule 17Ad–22(e)(4) under 

the Act, where these risks are referred to as ‘‘credit 

risks.’’ 17 CFR 240.17Ad–22(e)(4). 

5The Rules identify when NSCC may cease to act 

for a member and the types of actions NSCC may 

take. For example, NSCC may suspend a firm’s 

membership with NSCC or prohibit or limit a 

member’s access to NSCC’s services in the event 

that member defaults on a financial or other 

obligation to NSCC. See Rule 46 (Restrictions on 

Access to Services), supra note 3. 

6See Rule 4, Section 1, supra note 3. 

7See Rule 1 (Definitions) for applicable 

definitions, including Eligible Clearing Fund 

Securities and its components, which are Eligible 

Clearing Fund Agency Securities, Eligible Clearing 

Fund Mortgage-Backed Securities, and Eligible 

Clearing Fund Treasury Securities. Supra note 3. 

8See Section III.(A) of Procedure XV, supra note 

3. Section III.(A) was last modified in 2011 in order 

to conform the haircuts to requirements of NSCC’s 

lenders under its credit facilities. See Securities 

Exchange Act Release No. 64487 (May 13, 2011), 76 

FR 29019 (May 19, 2011) (SR–NSCC–2011–02). 

suspended. In addition, the Commission 

is instituting proceedings to determine 

whether the proposed rule change 

should be approved or disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.53

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22031 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98589; File No. SR–NSCC– 

2023–009] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing of 

Proposed Rule Change Relating to the 

Schedule of Haircuts for Eligible 

Clearing Fund Securities 

September 28, 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 22, 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 primarily prepared by the 

clearing agency. 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 

modifications to NSCC’s Rules & 

Procedures (‘‘Rules’’) 3 in order to 

modify the schedule of haircuts for 

Eligible Clearing Fund Securities and 

remove it from Procedure XV of the 

Rules (‘‘Procedure XV’’), and make other 

clarifying changes, as described in 

greater detail below. 

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 

NSCC is proposing to modify the 

schedule of haircuts for Eligible 

Clearing Fund Securities, and to remove 

it and the related concentration limits 

from Procedure XV, and make other 

clarifying changes, as described in 

greater detail below. 

Background 

As part of its market risk management 

strategy, NSCC manages its credit 

exposure to members by determining 

the appropriate Required Fund Deposits 

to the Clearing Fund and monitoring its 

sufficiency, as provided for in the 

Rules.4 The Required Fund Deposit 

serves as each member’s margin. 

The objective of a member’s Required 

Fund Deposit is to mitigate potential 

losses to NSCC associated with 

liquidating a member’s portfolio in the 

event NSCC ceases to act for that 

member (hereinafter referred to as a 

‘‘default’’).5 The aggregate of all 

members’ Required Fund Deposits 

constitutes the Clearing Fund of NSCC. 

NSCC would access its Clearing Fund 

should a defaulting member’s own 

Required Fund Deposit be insufficient 

to satisfy losses to NSCC caused by the 

liquidation of that member’s portfolio. 

The Clearing Fund reduces the risk that 

NSCC would need to mutualize any 

losses among non-defaulting members 

during the liquidation process. 

Under Rule 4 (Clearing Fund), 

members are required to make deposits 

to the Clearing Fund, with the amount 

of each member’s Required Fund 

Deposit being determined by NSCC in 

accordance with Rule 4. A member may 

satisfy its Required Fund Deposit with 

cash or an open account indebtedness 

secured by Eligible Clearing Fund 

Securities.6 Eligible Clearing Fund 

Securities, comprised of certain agency, 

mortgage-backed, and Treasury 

securities, are valued based on the prior 

Business Day’s closing market price, 

less a haircut, and may be subject to a 

concentration limit.7 Haircuts are used 

to protect NSCC and its members from 

price fluctuations, i.e., if NSCC is 

required to liquidate collateral of an 

insolvent member and such collateral is 

worth less at the time of liquidation 

than when it is pledged to NSCC. 

Concentration limits are intended to 

reduce NSCC’s risk by limiting the 

percentage of certain types of Eligible 

Clearing Fund Securities pledged by 

members to secure the Clearing Fund 

deposits. This is because when a 

member’s portfolio contains large net 

unsettled positions in a particular group 

of securities with a similar risk profile 

or in a particular asset type, such 

securities could present additional risk 

to NSCC. 

Currently, collateral haircuts 

applicable to relevant security types and 

remaining maturity terms are specified 

as fixed percentages in Section III.(A) of 

Procedure XV (‘‘Section III.(A)’’).8 The 

sufficiency of collateral haircuts is 

evaluated through use of back-tests, 

stress-tests and market observations. To 

ensure the sufficiency of the collateral 

haircuts, a backtesting analysis of 

members’ collateral deposits is 

conducted daily, and summary reviews 

are completed quarterly, each by the 

NSCC market risk group pursuant to 

NSCC’s internal market risk 

management policies and procedures. 

NSCC performs daily backtesting of 

collateral by comparing the collateral 

haircut for each member in simulated 

liquidations with the member’s actual 

collateral held on deposit at NSCC. Any 

exceptions noted are escalated to 

management daily to assess the root 

cause and determine whether further 

analysis and/or review would be 

appropriate. Specifically, if NSCC 

determines that a particular security 

may present inherent volatility and/or 

liquidity risks that could likely result in 

an erosion in the value of the security 

exceeding the applicable collateral 


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68778 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

9See Section II.(A)1. of Procedure XV, supra note 

3. 

haircut, ad hoc reviews may be 

conducted by risk management 

pursuant to NSCC’s internal market risk 

management procedures. On a quarterly 

basis, NSCC reviews and identifies 

instances where the simulated losses 

from available historical stress testing 

scenario dates have exceeded the 

collateral haircut values. In addition, 

each quarter, NSCC reviews the 

composition of the Eligible Clearing 

Fund Securities that members have 

pledged to secure their Required Fund 

Deposits in order to assess the 

sufficiency of the collateral haircuts 

applied and whether any haircut 

changes would be needed. 

In addition to collateral haircuts, 

NSCC applies concentration limits to 

certain Eligible Clearing Fund 

Securities. Currently, the concentration 

limits applicable to certain Eligible 

Clearing Fund Securities are specified 

in subsections (a) and (b) of Section 

II.(A)1. of Procedure XV (‘‘Section 

II.(A)1.’’).9 Specifically, subsection (a) 

provides any deposits of Eligible 

Clearing Fund Agency Securities or 

Eligible Clearing Fund Mortgage-Backed 

Securities in excess of 25 percent of a 

member’s Required Fund Deposit will 

be subject to a haircut that is twice the 

amount of the percentage noted in 

Section III.(A). In addition, footnote 7 of 

subsection (a) of Section II.(A)1. 

provides that a member that is an 

Agency may not pledge Eligible Clearing 

Fund Agency Securities of which it is 

the issuer. Footnote 8 of subsection (a) 

provides that with regard to a member 

that pledges Eligible Clearing Fund 

Mortgage-Backed Securities of which it 

is the issuer, such collateral will be 

subject to a premium haircut as 

specified in Section III.(A). Subsection 

(b) of Section II.(A)1. provides that no 

more than 20 percent of a member’s 

Required Fund Deposit may be in the 

form of Eligible Clearing Fund Agency 

Securities that are of a single issuer. 

Changes to the collateral haircuts and 

concentration limits are currently 

subject to NSCC’s internal governance 

process and would remain so with 

respect to the haircut schedule changes 

made in accordance with this proposal. 

If NSCC determines that, based on the 

analyses that it performs, there is 

insufficient/excessive collateral haircut/ 

concentration due to an identifiable 

cause that affected multiple members 

and such cause would likely persist 

based on NSCC’s assessment of market 

conditions, such outcome or result 

could cause NSCC to amend the 

haircuts/concentration limits in the 

haircut schedule. If NSCC determines 

that a change to the haircut schedule is 

warranted, its market risk group would 

document the recommendation and 

rationale for the change at the time of 

such determination and obtain approval 

from an executive director or above with 

a notice to the risk management 

committee, in accordance with NSCC’s 

internal market risk management 

policies and procedures. Before making 

adjustments to the haircut schedule, 

NSCC measures the potential impact of 

such adjustments to ensure any impact 

is both necessary and appropriate. 

Through its review, NSCC has 

observed that under volatile market 

conditions with elevated frequency and 

magnitude of securities price 

movements, the collateral value of 

Eligible Clearing Fund Securities may 

shift in a relatively short period of time 

and the current haircuts may not 

sufficiently account for the change in 

value. When the erosion in the value of 

the Eligible Clearing Fund Securities 

exceeds the relevant haircuts, NSCC is 

exposed to increased risk of potential 

losses associated with liquidating a 

member’s portfolio in the event of a 

member default when the defaulting 

member’s own margin is insufficient to 

satisfy losses to NSCC caused by the 

liquidation of that member’s portfolio. 

Similarly, when a member’s portfolio 

contains large net unsettled positions in 

a particular group of securities with a 

similar risk profile or in a particular 

asset type, such securities could present 

additional risk to NSCC. The additional 

risk exposures associated with 

liquidating a member’s portfolio in the 

event of a member default could lead to 

an increase in the likelihood that NSCC 

would need to mutualize losses among 

non-defaulting members during the 

liquidation process. However, any 

changes to the haircuts and/or 

concentration limits currently requires a 

proposed rule change to be filed with 

the Commission. In order to provide 

NSCC with more flexibility in adjusting 

the haircuts and concentration limits so 

NSCC can respond to changing market 

conditions more promptly in order to 

mitigate the additional risk exposure, 

NSCC is proposing to remove Section 

III.(A) and concentration limits from the 

Rules, and to publish the haircuts and 

concentration limits in a haircut 

schedule on NSCC’s website. 

Specifically, NSCC is proposing to 

delete subsections (a) and (b) of Section 

II.(A)1., and delete Section III of 

Procedure XV. Currently, subsections (a) 

and (b) of Section II.(A)1. set out certain 

concentration limits for Eligible 

Clearing Fund Agency Securities and 

Eligible Clearing Fund Mortgage-Backed 

Securities. Subsection (a) provides that 

any deposits of Eligible Clearing Fund 

Agency Securities or Eligible Clearing 

Fund Mortgage-Backed Securities, 

respectively, in excess of 25 percent of 

a member’s Required Fund Deposit will 

be subject to an additional haircut equal 

to twice the percentage as specified in 

Section III.(A). In addition, footnote 8 of 

subsection (a) provides that with regard 

to a member that pledges Eligible 

Clearing Fund Mortgage-Backed 

Securities of which it is the issuer, such 

collateral will be subject to a premium 

haircut as specified in Section III.(A). 

The same language from subsection (a) 

and footnote 8 of Section II.(A)1. is in 

Section III.(A). Having this language in 

both the Rules and the proposed haircut 

schedule is unnecessary and could 

potentially create confusion for 

members. As such, NSCC is proposing 

to eliminate this duplication by deleting 

subsection (a) and footnote 8 of Section 

II.(A)1., and including this language in 

the proposed haircut schedule. 

Subsection (b) of Section II.(A)1. 

currently sets out an additional 

concentration limit with respect to 

Eligible Clearing Fund Agency 

Securities. Specifically, subsection (b) 

provides that no more than 20 percent 

of the Required Fund Deposit may be in 

the form of Eligible Clearing Fund 

Agency Securities that are of a single 

issuer. In addition, footnote 7 of 

subsection (a) provides that a member 

that is an Agency may not pledge 

Eligible Agency Securities of which it is 

the issuer. NSCC is proposing to delete 

subsection (b) and footnote 7 of Section 

II.(A)1., and move this language to the 

proposed haircut schedule. For clarity, 

NSCC is also proposing to revise the 

language currently in footnote 7 of 

Section II.(A)1. to provide that no 

member may pledge Eligible Clearing 

Fund Agency Securities of which it is 

the issuer to secure its Required Fund 

Deposit. NSCC would also add 

‘‘Clearing Fund’’ in the reference to 

‘‘Eligible Agency Securities’’ currently 

in the language in subsection (b) of 

Section II.(A)1. to reflect the correct 

defined term for Eligible Clearing Fund 

Agency Securities, and move ‘‘may be’’ 

earlier in the first sentence for clarity. 

Furthermore, NSCC is proposing to 

add language in Section II.(A)1. that 

makes it clear that all Eligible Clearing 

Fund Securities pledged to secure 

Clearing Fund deposits shall, for 

collateral valuation purposes, be subject 

to a haircut and may be subject to a 

concentration limit. The proposed 

language would provide that NSCC shall 

determine the applicable haircuts and 

any concentration limits from time to 

time in accordance with its internal 


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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68779 

10See Securities Exchange Act Release No. 93722 

(Dec. 6, 2021), 86 FR 70548 (Dec. 10, 2021) (SR– 

NSCC–2021–015). 11Pursuant to Section 806(e)(1) of Title VIII of the 

Dodd-Frank Wall Street Reform and Consumer 

Protection Act and Rule 19b–4(n)(1)(i) under the 

Act, if a change materially affects the nature or level 

of risks presented by NSCC, then NSCC is required 

to file an advance notice. 12 U.S.C. 5465(e)(1) and 

17 CFR 240.19b–4(n)(1)(i). 12 DTC also allows its participants to pledge 

eligible collateral as a portion of the participant 

fund; however, instead of being in the DTC 

rulebook, the collateral haircut schedules are 

published periodically by Important Notice to DTC 

participants. 

policy and governance process, based 

on factors determined to be relevant by 

NSCC, which may include, for example, 

backtesting results and NSCC’s 

assessment of market conditions, in 

order to set appropriately conservative 

haircuts and/or concentration limits for 

the Eligible Clearing Fund Securities 

and minimize backtesting deficiency 

occurrences. The proposed language 

would also provide that the haircuts and 

any concentration limits prescribed by 

NSCC shall be set forth in a haircut 

schedule that is published on NSCC’s 

website and that it shall be the 

member’s responsibility to retrieve the 

haircut schedule. Section II.(A)1. would 

also indicate that NSCC will provide 

members with at a minimum one 

Business Day’s advance notice of any 

change in the haircut schedule. 

NSCC is proposing to delete Section 

III of Procedure XV, which contains the 

haircut schedule. In addition, NSCC is 

proposing to (i) remove references to 

Section III of Procedure XV in two 

places in Rule 4, and replace them with 

a reference to Section II.(A) of Procedure 

XV in each case, (ii) remove references 

to subsections 1(a) and (b) of Section 

II.(A) of Procedure XV and references to 

Section III of Procedure XV in Rule 56 

and (iii) remove a reference to Section 

III of Procedure XV in Section II.(A) of 

Procedure XV, and replace it with a 

reference to the proposed haircut 

schedule, to reflect the proposed 

changes described above. NSCC is also 

proposing to make some punctuation 

and grammar changes and add a 

reference to Procedure XV in Section 

12(c) of Rule 56 to clarify the language. 

Finally, NSCC is proposing to clarify 

some language in Sections I.(B)(1), 

II.(A), II.(B), II.(C) and II.(D) of 

Procedure XV to reflect that Mutual 

Fund/Insurance Services Members and 

other Limited Members are no longer 

required to make deposits into the 

Clearing Fund. In 2022, NSCC removed 

the requirement that any Limited 

Members, including Mutual Fund/ 

Insurance Services Members, make any 

deposits to the Clearing Fund.10

Sections I.(B)(1), II.(A), II.(B), II.(C) and 

II.(D) of Procedure XV still contain 

references to Mutual Fund/Insurance 

Service Members and/or Limited 

Members making deposits into the 

Clearing Fund, and NSCC is proposing 

to remove those references for clarity. 

NSCC believes that the proposed 

change to move the haircuts and 

concentration limits from the Rules to 

the website would enable NSCC to 

adjust the haircuts and concentration 

limits without undergoing a rule filing 

process.11 By being able to make 

appropriate and timely adjustments to 

the haircuts and concentration limits, 

NSCC would have the flexibility to 

respond to changing market conditions 

more promptly. Having the flexibility to 

respond to changing market conditions 

more promptly would in turn help 

better ensure that NSCC collects 

sufficient margin from members as well 

as risk manages its credit exposures to 

its members. The proposed change 

would also align NSCC with the manner 

in which its affiliate, The Depository 

Trust Company (‘‘DTC’’), provides 

haircut schedules to participants.12

Concurrent with moving the haircuts 

and concentration limits from the Rules 

to the website, NSCC is also proposing 

to reconfigure the categories relating to 

Treasury securities haircuts by moving 

the Treasury Inflation-Protected 

Securities (‘‘TIPS’’) to a separate 

category and increasing the haircut 

levels for TIPS. The proposed change to 

TIPS is reflected in Exhibit 3c to this 

filing. TIPS are a type of Treasury 

security issued by the U.S. government 

that are indexed to inflation such that 

the principal value of the security rises 

as inflation rises. 

In connection with NSCC’s 

assessments of its collateral haircuts, 

NSCC employs daily backtesting to 

determine the adequacy of each 

member’s collateral haircuts. NSCC 

compares the collateral haircuts for each 

member with the simulated liquidation 

gains/losses using the actual positions 

in the member’s portfolio, and the 

actual historical security returns. A 

backtesting deficiency occurs when a 

member’s collateral haircuts would not 

have been adequate to cover the 

simulated liquidation losses. 

In connection with such assessments, 

NSCC has determined that in periods 

where the inflation rate fluctuates, the 

current haircut levels for TIPS may be 

inadequate to address the fluctuations 

from time to time. This is because TIPS 

are indexed to the inflation rate, and 

prices on TIPS move inversely to their 

yields, e.g., when the inflation rate 

increases, prices on TIPS decrease. 

When the decline in market value of 

TIPS exceeds the haircut for TIPS, 

NSCC would be exposed to potential 

liquidation losses. Accordingly, NSCC is 

proposing to reconfigure and modify the 

haircut information that would be 

posted on NSCC’s website to ensure that 

the haircut levels would be 

commensurate with the particular risk 

attributes of TIPS. 

Specifically, NSCC would list TIPS of 

various maturity groupings in a separate 

category from Treasury bills, notes and 

bonds. In addition, NSCC would change 

the haircut level applicable for TIPS as 

follows: 

Maturity Current 

% 

Proposed 

% 

TIPS .................. Zero to 1 year ............................................................................................................... 2.0 2.0 

1 year to 2 years .......................................................................................................... 2.0 3.0 

2 years to 5 years ........................................................................................................ 3.0 5.0 

5 years to 10 years ...................................................................................................... 4.0 7.0 

10 years to 15 years .................................................................................................... 6.0 7.0

15 years or greater ....................................................................................................... 6.0 10.0 

In determining the appropriate 

haircut levels for TIPS, NSCC conducted 

a review of TIPS haircuts at other 

registered clearing agencies and foreign 

central counterparty clearing houses 

(‘‘CCPs’’) to compare NSCC’s current 

TIPS haircuts with that required by 

registered clearing agencies and foreign 

CCPs when TIPS are deposited to their 

clearing funds, or the equivalent thereof. 

The results of the review and 

comparison indicated that NSCC’s 

current haircut levels for TIPS are 

generally lower than the TIPS haircuts 

required by other clearing agencies and 


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68780 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

13See ICE Clear U.S. Acceptable Collateral and 

Haircuts, available at www.theice.com/publicdocs/ 

clear_us/ICUS_Collateral_Information.pdf. 

14See LCH LTD-Margin Collateral Haircut 

Schedule, available at www.lch.com/system/files/ 

media_root/Collateral/Acceptable%

20Collateral%20Haircuts%20LCH%20Ltd_0.pdf. 

15See CME Group Acceptable Performance Bond 

Collateral for Base Guaranty Fund Products, 

available at www.cmegroup.com/clearing/files/ 

acceptable-collateral-futures-options-selectforwards.pdf. 

16See OCC Collateral Haircut Schedule, available 

at www.theocc.com/clearance-and-settlement/ 

acceptable-collateral-haircuts. 

17 15 U.S.C. 78q–1(b)(3)(F). 

18 17 CFR 240.17Ad–22(e)(4)(i), (e)(5), (e)(6)(i), 

and (e)(6)(v). 

19 15 U.S.C. 78q–1(b)(3)(F). 

foreign CCPs, particularly with respect 

to maturity ranges of 10 years or longer. 

While the TIPS haircut requirement at 

such other entities is not dispositive as 

to the risk borne by NSCC or the proper 

TIPS haircut levels to offset such risk, 

it is indicative of the TIPS haircuts 

being applied to users of other similarly 

situated entities in order to use the 

services of the clearing agencies and 

foreign CCPs and the impact to such 

users. The chart below shows the 

haircuts that participants of other 

clearing agencies and foreign CCPs are 

currently subject to when using TIPS to 

meet their margin requirements, as 

compared with the existing TIPS 

haircuts required at NSCC. 

NSCC is not proposing any changes to 

the concentration limits at this time. 

Impact Study 

NSCC conducted an impact study for 

the period from September 1, 2021 

through August 31, 2022 (‘‘Impact 

Study’’). If the proposed haircut 

adjustments had been in place during 

the Impact Study period, the changes 

would have resulted in an average daily 

increase of $197,000 in the Clearing 

Fund assuming TIPS were deposited. 

Two members would have been 

impacted with a daily average dollar 

increase of approximately $123,000 (or 

0.10% of their average Clearing Fund 

deposit) and $74,000 (or 0.31% of their 

average Clearing Fund deposit), 

respectively, had the proposed changes 

been in place. 

Implementation Timeframe 

Subject to approval by the 

Commission, NSCC expects to 

implement this proposal by no later 

than 60 Business Days after such 

approval and would announce the 

effective date of the proposed changes 

by an Important Notice posted to 

NSCC’s website. 

2. Statutory Basis 

NSCC believes this proposal is 

consistent with the requirements of the 

Act, and the rules and regulations 

thereunder applicable to a registered 

clearing agency. Specifically, NSCC 

believes that the proposed changes 

described above are consistent with 

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

Rules 17Ad–22(e)(4)(i), (e)(5), (e)(6)(i), 

and (e)(6)(v), each promulgated under 

the Act,18 for the reasons described 

below. 

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

requires, in part, that the rules of a 

clearing agency 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.19 As 

described above, NSCC believes the 

proposed changes to move the collateral 

haircuts and concentration limits from 

the Rules to the website would provide 

NSCC with more flexibility to respond 

to changing market conditions because 

adjustments to the haircuts and 

concentration limits would no longer 

require a rule change. By being able to 

make appropriate and timely 

adjustments to the haircuts and 

concentration limits, NSCC would have 

the flexibility to respond to changing 

market conditions more promptly. 

NSCC believes that having this 

additional flexibility to respond to 

changing market conditions more 

promptly would help better ensure that 

NSCC (i) collects sufficient margin from 

members to cover the risk exposures 

that NSCC may face in liquidating 

members’ portfolios and (ii) minimizes 

exposures from members with large 

collateral positions in a particular group 

of securities with a similar risk profile 

or in a particular asset type, such that, 

in the event of a member default, 

NSCC’s operations would not be 

disrupted, and non-defaulting members 

would not be exposed to losses they 

cannot anticipate or control. In this way, 

the proposed rule change to move the 

collateral haircuts and concentration 

limits from the Rules to the website 

would assure the safeguarding of 

securities and funds which are in the 

custody and control of NSCC or for 


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TIPS Remaining NSCC Current ICE13 LCH14 CMEts occ16 

Maturity (Years) Collateral Haircut 

<1 2.00% 2.00% 1.00% 

0.63% 0.50% 

1 

2.00% 

2 3.50% 2.00% 

2.38% 

3 2.00% 

3.00% 

5 5.00% 3.00% 

3.00% 

7 

4.00% 6.75% 4.50% 3.50% 

10 4.75% 

15 

11.25% 

20 6.00% 10.75% 8.00% 5.00% 

30 16.00% 
Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68781 

20 Id. 

21 Id. 

22 Id. 

23 17 CFR 240.17Ad–22(e)(4)(i). 

24 Id. 

25 Id. 

26 17 CFR 240.17Ad–22(e)(5). 

27 Id. 

which it is responsible, consistent with 

Section 17A(b)(3)(F) of the Act.20

NSCC also believes the proposed 

changes to move TIPS haircuts into a 

separate category and raise the haircut 

levels for TIPS would help ensure that 

the haircut levels for TIPS would be 

commensurate with the particular risk 

attributes of TIPS. NSCC has determined 

that in periods where the inflation rate 

fluctuates, the current haircut levels for 

TIPS have been inadequate to address 

the fluctuations from time to time, and 

more conservative haircuts for TIPS are 

warranted. Having haircut levels for 

TIPS that are commensurate with the 

particular risk attributes of TIPS would 

enable NSCC to collect sufficient margin 

from members to cover the risk 

exposures that NSCC may face in 

liquidating members’ portfolios such 

that, in the event of a member default, 

NSCC’s operations would not be 

disrupted, and non-defaulting members 

would not be exposed to losses they 

cannot anticipate or control. In this way, 

the proposed rule change to move TIPS 

haircuts into a separate category and 

raise the haircut levels for TIPS would 

assure the safeguarding of securities and 

funds which are in the custody and 

control of NSCC or for which it is 

responsible, consistent with Section 

17A(b)(3)(F) of the Act.21

NSCC believes that the proposed 

clarifying changes would help to ensure 

that the Rules are clear to members. 

When members better understand their 

rights and obligations regarding the 

Rules, members are more likely to act in 

accordance with the Rules, which NSCC 

believes would promote the prompt and 

accurate clearance and settlement of 

securities transactions. As such, NSCC 

believes that the proposed clarifying 

changes would be consistent with 

Section 17A(b)(3)(F) of the Act.22

Rule 17Ad–22(e)(4)(i) under the Act 23

requires a covered clearing agency to 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to effectively 

identify, measure, monitor, and manage 

its credit exposures to participants and 

those exposures arising from its 

payment, clearing, and settlement 

processes by maintaining sufficient 

financial resources to cover its credit 

exposure to each participant fully with 

a high degree of confidence. As 

described above, NSCC believes the 

proposed changes to move the collateral 

haircuts and concentration limits from 

the Rules to the website would provide 

NSCC with more flexibility to respond 

to changing market conditions because 

adjustments to the haircuts and 

concentration limits would no longer 

require a rule change. By being able to 

make appropriate and timely 

adjustments to the haircuts and 

concentration limits, NSCC would have 

the flexibility to respond to changing 

market conditions more promptly. 

NSCC believes that having this 

additional flexibility to respond to 

changing market conditions more 

promptly would help ensure that NSCC 

(i) collects sufficient margin from 

members to cover the risk exposures 

that NSCC may face in liquidating 

members’ portfolios and (ii) minimizes 

exposures from members with large 

collateral positions in a particular group 

of securities with a similar risk profile 

or in a particular asset type, such that, 

in the event of a member default, 

NSCC’s operations would not be 

disrupted, and non-defaulting members 

would not be exposed to losses they 

cannot anticipate or control. In this way, 

the proposed rule change to move the 

collateral haircuts and concentration 

limits from the Rules to the website 

would help ensure that NSCC maintains 

sufficient financial resources to cover its 

credit exposure to each participant fully 

with a high degree of confidence, 

consistent with the requirements of Rule 

17Ad–22(e)(4)(i) under the Act.24

NSCC also believes the proposed 

changes to move TIPS haircuts into a 

separate category and raise the haircut 

levels for TIPS would help ensure that 

the haircut levels for TIPS would be 

commensurate with the particular risk 

attributes of TIPS. NSCC has determined 

that in periods where the inflation rate 

fluctuates, the current haircut levels for 

TIPS may be inadequate to address the 

fluctuations from time to time, and more 

conservative haircuts for TIPS are 

warranted. Ensuring that the haircut 

levels for TIPS are commensurate with 

the particular risk attributes of TIPS 

would in turn help ensure that NSCC 

requires members to maintain sufficient 

margin to cover the credit exposures 

that NSCC may face related to its ability 

to liquidate members’ portfolios in the 

event of a member default. In this way, 

the proposed rule change to move TIPS 

haircuts into a separate category and 

raise the haircut levels for TIPS would 

help ensure that NSCC maintains 

sufficient financial resources to cover its 

credit exposure to each participant fully 

with a high degree of confidence, 

consistent with the requirements of Rule 

17Ad–22(e)(4)(i) under the Act.25

Rule 17Ad–22(e)(5) under the Act 26

requires, in part, a covered clearing 

agency to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

set and enforce appropriately 

conservative haircuts and concentration 

limits if the covered clearing agency 

requires collateral to manage its or its 

participants’ credit exposure. As 

described above, NSCC believes the 

proposed changes to move the collateral 

haircuts and concentration limits from 

the Rules to the website would provide 

NSCC with more flexibility to respond 

to changing market conditions because 

adjustments to the haircuts and 

concentration limits would no longer 

require a rule change. By being able to 

make appropriate and timely 

adjustments to the haircuts and 

concentration limits, NSCC would have 

the flexibility to respond to changing 

market conditions more promptly. 

NSCC believes that having this 

additional flexibility to respond to 

changing market conditions more 

promptly would help better ensure that 

NSCC (i) collects sufficient margin from 

members to cover the risk exposures 

that NSCC may face in liquidating 

members’ portfolios and (ii) minimizes 

exposures from members with large 

collateral positions in a particular group 

of securities with a similar risk profile 

or in a particular asset type, such that, 

in the event of a member default, 

NSCC’s operations would not be 

disrupted, and non-defaulting members 

would not be exposed to losses they 

cannot anticipate or control. 

Specifically, NSCC would have the 

ability to promptly set and enforce 

conservative collateral haircuts and 

concentration limits that are reflective 

of the current market conditions. In this 

way, the proposed changes to move the 

collateral haircuts and concentration 

limits from the Rules to the website 

would help NSCC set and enforce 

appropriately conservative collateral 

haircuts and concentration limits, 

consistent with the requirements of Rule 

17Ad–22(e)(5) under the Act.27

NSCC also believes the proposed 

changes to move TIPS haircuts into a 

separate category and raise the haircut 

levels for TIPS would help ensure that 

the haircut levels for TIPS would be 

commensurate with the particular risk 

attributes of TIPS. NSCC has determined 

that in periods where the inflation rate 

fluctuates, the current haircut levels for 

TIPS have been inadequate to address 

the fluctuations from time to time, and 

more conservative haircuts for TIPS are 


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68782 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

28 Id. 

29 17 CFR 240.17Ad–22(e)(6)(i). 

30 Id. 

31 Id. 

32 17 CFR 240.17Ad–22(e)(6)(v). 

33 Id. 

34 Id. 

35 15 U.S.C. 78q–1(b)(3)(I). 

warranted. Specifically, NSCC would 

have the ability to set and enforce 

conservative collateral haircuts that are 

commensurate with the particular risk 

attributes of TIPS. In this way, the 

proposed changes to move TIPS haircuts 

into a separate category and raise the 

haircut levels for TIPS would help 

NSCC set and enforce appropriately 

conservative collateral haircuts, 

consistent with the requirements of Rule 

17Ad–22(e)(5) under the Act.28

Rule 17Ad–22(e)(6)(i) under the Act 29

requires a covered clearing agency to 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to cover, if the 

covered clearing agency provides 

central counterparty services, its credit 

exposures to its participants by 

establishing a risk-based margin system 

that, at a minimum, considers, and 

produces margin levels commensurate 

with, the risks and particular attributes 

of each relevant product, portfolio, and 

market. NSCC believes that the 

proposed changes to move the collateral 

haircuts and concentration limits from 

the Rules to the website would provide 

NSCC with more flexibility to respond 

to changing market conditions because 

NSCC would be able to make 

appropriate adjustments to the haircuts 

and concentration limits without a rule 

change. By being able to make 

appropriate and timely adjustments to 

the haircuts and concentration limits, 

NSCC would have the flexibility to 

respond to changing market conditions 

more promptly. NSCC believes that 

having this additional flexibility to 

respond to changing market conditions 

more promptly would enable NSCC to 

better risk manage its credit exposure to 

its members by (i) collecting sufficient 

margin from members to cover the risk 

exposures that NSCC may face in 

liquidating members’ portfolios and (ii) 

minimizing exposures from members 

with large collateral positions in a 

particular group of securities with a 

similar risk profile or in a particular 

asset type, thus allowing NSCC to 

produce margin levels commensurate 

with the risks and particular attributes 

of each relevant product, portfolio, and 

market. Therefore, NSCC believes this 

proposed change is consistent with Rule 

17Ad–22(e)(6)(i) under the Act.30

NSCC also believes the proposed 

changes to move TIPS haircuts into a 

separate category and raise the haircut 

levels for TIPS would help ensure that 

the haircut levels for TIPS would be 

commensurate with the particular risk 

attributes of TIPS. NSCC has determined 

that in periods where the inflation rate 

fluctuates, the current haircut levels for 

TIPS may be inadequate to address the 

fluctuations from time to time, and more 

conservative haircuts for TIPS are 

warranted. Ensuring that the haircut 

levels for TIPS are commensurate with 

the particular risk attributes of TIPS 

would allow NSCC to produce margin 

levels commensurate with the risks and 

particular attributes of each relevant 

product, portfolio, and market. 

Therefore, NSCC believes this proposed 

change is consistent with Rule 17Ad– 

22(e)(6)(i) under the Act.31

Rule 17Ad–22(e)(6)(v) under the 

Act 32 requires a covered clearing 

agency to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

cover, if the covered clearing agency 

provides central counterparty services, 

its credit exposures to its participants by 

establishing a risk-based margin system 

that, at a minimum, uses an appropriate 

method for measuring credit exposure 

that accounts for relevant product risk 

factors and portfolio effects across 

products. NSCC believes that the 

proposed changes to move the collateral 

haircuts and concentration limits from 

the Rules to the website would provide 

NSCC with more flexibility to respond 

to changing market conditions more 

promptly because NSCC would be able 

to make appropriate adjustments to the 

haircuts and concentration limits 

without a rule change. Having this 

additional flexibility would enable 

NSCC to better risk manage its credit 

exposure to its members because NSCC 

would then be able to make appropriate 

and timely adjustments to the haircuts 

and concentration limits, as described 

above. Being able to adjust the haircuts 

and concentration limits appropriately 

and timely would allow NSCC to better 

risk manage its credit exposure to its 

members by (i) collecting sufficient 

margin from members to cover the risk 

exposures that NSCC may face in 

liquidating members’ portfolios and (ii) 

minimizing exposures from members 

with large collateral positions in a 

particular group of securities with a 

similar risk profile or in a particular 

asset type, thus producing margin levels 

commensurate with relevant product 

risk factors and portfolio effects across 

products. Therefore, NSCC believes this 

proposed change is consistent with Rule 

17Ad–22(e)(6)(v) under the Act.33

NSCC also believes the proposed 

changes to move TIPS haircuts into a 

separate category and raise the haircut 

levels for TIPS would help ensure that 

the haircut levels for TIPS would be 

commensurate with the particular risk 

attributes of TIPS. Specifically, as 

proposed, NSCC would have collateral 

haircuts that are commensurate with the 

particular risk attributes of TIPS. 

Ensuring that the haircut levels for TIPS 

are commensurate with the particular 

risk attributes of TIPS would allow 

NSCC to produce margin levels 

commensurate with relevant product 

risk factors and portfolio effects across 

products. Therefore, NSCC believes this 

proposed change is consistent with Rule 

17Ad–22(e)(6)(v) under the Act.34

(B) Clearing Agency’s Statement on 

Burden on Competition 

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

requires that the rules of NSCC do not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act.35 NSCC does 

not believe the proposed rule changes to 

move the haircuts and concentration 

limits from the Rules to the website 

would impose a burden on competition. 

These proposed changes are designed to 

enable NSCC to timely respond to 

increases in market volatility with 

haircut requirements and concentration 

limits that are more reflective of the 

current credit exposures to NSCC. As 

discussed above, these proposed 

changes would allow NSCC to better 

risk manage its credit exposure to its 

members by (i) collecting sufficient 

margin from members to cover the risk 

exposures that NSCC may face in 

liquidating members’ portfolios and (ii) 

minimizing exposures from members 

with large collateral positions in a 

particular group of securities with a 

similar risk profile or in a particular 

asset type, such that, in the event of a 

member default, NSCC’s operations 

would not be disrupted, and nondefaulting members would not be 

exposed to losses they cannot anticipate 

or control. These proposed changes 

would not unfairly inhibit access to 

NSCC’s services, or disadvantage or 

favor any particular member in 

relationship to another member. The 

proposed changes would allow NSCC to 

adjust the haircuts and concentration 

limits more promptly and would not 

otherwise affect members’ access to 

NSCC’s services. In addition, any 

changes to the haircuts or concentration 

limits would be directly related to the 

perceived risk related to members’ 

collateral based on back-tests, stresstests and market observations, and 


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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68783 

36 Id. 

37 15 U.S.C. 78q–1(b)(3)(F). 

38 17 CFR 240.17Ad–22(e)(4)(i). 

39 17 CFR 240.17Ad–22(e)(5). 

40 17 CFR 240.17Ad–22(e)(6)(i) and (e)(6)(v). 

41 15 U.S.C. 78q–1(b)(3)(F). 

would be applied uniformly to all 

members. Accordingly, NSCC believes 

that these proposed changes would not 

impose any burden or have any impact 

on competition. 

Similarly, NSCC does not believe the 

proposed rule changes to move TIPS 

haircuts into a separate category would 

impose a burden on competition. These 

proposed changes are designed to 

improve the clarity and presentation of 

the haircut information. These proposed 

changes would not unfairly inhibit 

access to NSCC’s services, or 

disadvantage or favor any particular 

member in relationship to another 

member, and the changes would be 

applied uniformly to all members. 

Accordingly, NSCC believes that these 

proposed changes would not impose 

any burden or have any impact on 

competition. 

NSCC believes the proposed changes 

to raise certain TIPS haircut levels may 

have an impact on competition because 

these changes could result in members’ 

Eligible Clearing Fund Securities being 

subject to higher haircuts than they 

would have been under the current 

haircut schedule. NSCC believes that 

the proposed change could burden 

competition by potentially increasing 

these members’ operating costs by 

requiring members who are using TIPS 

as collateral to pledge additional 

collateral. Nonetheless, NSCC believes 

any burden on competition imposed by 

the proposed changes would not be 

significant and, regardless of whether 

such burden on competition could be 

deemed significant, would be necessary 

and appropriate, as permitted by 

Section 17A(b)(3)(I) of the Act for the 

reasons described in this filing and 

further below.36

NSCC believes any burden on 

competition presented by the proposed 

changes to the TIPS haircut levels 

would not be significant. As discussed 

above, if the proposed changes to the 

TIPS haircut levels had been in place 

during the Impact Study period, two 

members would have been impacted 

with an daily average dollar increase of 

approximately $123,000 (or 0.10% of 

their average Clearing Fund deposit) 

and $74,000 (or 0.31% of their average 

Clearing Fund deposit), respectively. In 

addition, NSCC believes that the 

proposed changes to the TIPS haircut 

levels are comparable with what is 

being required of users of other similar 

registered clearing agencies and foreign 

CCPs when posting TIPS as collateral. 

NSCC believes any burden on 

competition that may be imposed by the 

proposed changes to the TIPS haircut 

levels would be necessary because, as 

described above, the proposed changes 

would help ensure that the collateral 

values attributed to TIPS would be 

commensurate with the particular risk 

attributes of TIPS. Making sure proper 

collateral values are attributed to TIPS 

that are used as margin would thus help 

better ensure that NSCC collects 

sufficient margin from members and 

thereby assure the safeguarding of 

securities and funds which are in the 

custody and control of NSCC or for 

which it is responsible, consistent with 

Section 17A(b)(3)(F) of the Act.37

In addition, NSCC believes the 

proposed changes to the TIPS haircut 

levels are necessary to support NSCC’s 

compliance with Rules 17Ad–22(e)(4)(i), 

(e)(5), (e)(6)(i), and (e)(6)(v) under the 

Act. Specifically, as described above, 

NSCC believes these proposed changes 

would ensure that the haircut levels for 

TIPS are commensurate with the 

particular risk attributes of TIPS. Having 

haircut levels for TIPS that are 

commensurate with the particular risk 

attributes of TIPS would ensure proper 

collateral valuation for TIPS used as 

margin. Ensuring proper collateral 

valuation for TIPS used as margin 

would help NSCC better measure, 

monitor, and manage its credit 

exposures to participants and those 

exposures arising from its payment, 

clearing, and settlement processes, 

consistent with the requirements of Rule 

17Ad–22(e)(4)(i) under the Act.38

Ensuring proper collateral valuation for 

TIPS used as margin would also allow 

NSCC to set and enforce appropriately 

conservative collateral haircuts, 

consistent with the requirements of Rule 

17Ad–22(e)(5) under the Act.39 It would 

also help NSCC cover its credit 

exposures to its participants, consistent 

with the requirements of Rules 17Ad– 

22(e)(6)(i) and (e)(6)(v) under the Act.40

NSCC also believes that any burden 

on competition that may be imposed by 

the proposed changes to the TIPS 

haircut levels would be appropriate in 

furtherance of the Act because these 

proposed changes have been specifically 

designed to assure the safeguarding of 

securities and funds which are in the 

custody and control of NSCC or for 

which it is responsible, as required by 

Section 17A(b)(3)(F) of the Act.41 As 

described above, NSCC believes these 

proposed changes would help better 

ensure that NSCC collects sufficient 

margin from members, thus enabling 

NSCC to produce margin levels more 

commensurate with the risks it faces as 

a central counterparty. Accordingly, 

NSCC believes these proposed changes 

are appropriately designed to meet its 

risk management goals and regulatory 

obligations. 

NSCC does not believe the proposed 

clarifying changes to the Rules would 

impact competition. These changes 

would help to ensure that the Rules 

remain clear. In addition, the changes 

would facilitate members’ 

understanding of the Rules and their 

obligations thereunder. These changes 

would not affect NSCC’s operations or 

the rights and obligations of the 

membership. As such, NSCC believes 

the proposed clarifying changes would 

not have any impact on competition. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

NSCC has not received or solicited 

any written comments relating to this 

proposal. If any additional written 

comments are received, they will be 

publicly filed as an Exhibit 2 to this 

filing, as required by Form 19b–4 and 

the General Instructions thereto. 

Persons submitting comments are 

cautioned that, according to Section IV 

(Solicitation of Comments) of the 

Exhibit 1A in the General Instructions to 

Form 19b–4, the Commission does not 

edit personal identifying information 

from comment submissions. 

Commenters should submit only 

information that they wish to make 

available publicly, including their 

name, email address, and any other 

identifying information. 

All prospective commenters should 

follow the Commission’s instructions on 

how to submit comments, available at 

https://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 SEC’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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 


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68784 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

42 17 CFR 200.30–3(a)(12). 

the self-regulatory organization 

consents, the Commission will: 

(A) by order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NSCC–2023–009 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–2023–009. 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 (http://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 

10:00 a.m. and 3:00 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 

(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–NSCC–2023–009 

and should be submitted on or before 

October 25, 2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21936 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–558, OMB Control No. 

3235–0617] 

Proposed Collection; Comment 

Request; Extension: Rule 433 Under 

the Securities Act of 1933—Conditions 

to Permissible Post-Filing Free Writing 

Prospectuses 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collections of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Rule 433 (17 CFR 230.433) governs 

the use and filing of free writing 

prospectuses under the Securities Act of 

1933 (15 U.S.C. 77a et seq.). The 

purpose of Rule 433 is to reduce the 

restrictions on communications that a 

company can make to investors during 

a registered offering of its securities, 

while maintaining a high level of 

investor protection. A free writing 

prospectus meeting the conditions of 

Rule 433(d)(1) must be filed with the 

Commission and is publicly available. 

We estimate that it takes approximately 

9.79057 burden hours per response to 

prepare a free writing prospectus and 

that the information is filed by 20,179 

responses. We estimate that 25% of the 

9.79052 burden hours per response 

(2.44764 hours) is prepared by the 

company for total annual reporting 

burden of 49,391 hours (2.4476 hours × 

20,179 responses). 

Written comments are invited on: (a) 

whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden imposed by the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication by December 4, 2023. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

control number. 

Please direct your written comment to 

David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: September 28, 2023. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21925 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–114, OMB Control No. 

3235–0102] 

Proposed Collection; Comment 

Request; Extension: Tender Offer— 

Regulation 14D and Regulation 14E, 

Schedule 14D–9 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Regulation 14D (17 CFR 240.14d–1— 

240.14d–11) and Regulation 14E (17 

CFR 240.14e–1—240.14e–8) and related 

Schedule 14D–9 (17 CFR 240.14d–101) 

require information important to 

security holders in deciding how to 

respond to tender offers. Schedule 14D– 

9 takes approximately 260.56 hours per 


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