84972 Federal Register / Vol. 89, No. 206 / Thursday, October 24, 2024 / Notices 

120See Amendment No. 3 at 11–12. 

121The Commission recognizes that position 

limits should not be established at levels that are 

so low as to discourage participation in the options 

market by institutions and other investors with 

substantial hedging needs or to prevent specialists 

and market makers from adequately meeting their 

obligations to maintain a fair and orderly market. 

See, e.g., Securities Exchange Act Release Nos. 

21907 (Mar. 29, 1985), 50 FR 13440 (Apr. 4, 1985) 

(order approving File Nos. SR–CBOE–84–21, SR– 

Amex–84–30, SR–Phlx–84–25, and SR–PSE–85–1); 

40875 (Dec. 31, 1998), 64 FR 1842, 1843 (Jan. 12, 

1999) (order approving File Nos. SR–CBOE–98–25; 

Amex–98–22; PCX–98–33; and Phlx–98–36). The 

Commission finds that the proposed position and 

exercise limits are consistent with these objectives. 

122 15 U.S.C. 78s(b)(2). 

123 15 U.S.C. 78f(b)(5). 

124 15 U.S.C. 78s(b)(2) 

125 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

IV. Solicitation of Comments on 

Amendment No. 3 to the Proposed Rule 

Change 

Interested persons are invited to 

submit written data, views, and 

arguments concerning whether 

Amendment No. 3 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– 

NYSEAMER–2024–49 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–NYSEAMER–2024–49. 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–NYSEAMER–2024–49 and should 

be submitted on or before November 14, 

2024. 

V. Accelerated Approval of 

Amendment No. 3 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the Act, 

for approving Amendment No. 3 prior to 

the 30th day after the date of 

publication of notice of Amendment No. 

3 in the Federal Register. As described 

more fully above, Amendment No. 3 

narrows the scope of the proposal to 

provide for the listing of options on 

GBTC, BTC, and BITB; provides 

additional information and analysis of 

trading data for the Bitcoin Funds in 

support of the proposal, including the 

proposed position and exercise limits of 

25,000 contracts; provides additional 

information related to the Exchange’s 

surveillance program, including the 

manner in which the Exchange would 

surveil suspicious trading activity in the 

underlying Bitcoin Funds and where the 

Exchange would obtain information 

about the bitcoin market; and provides 

that the Exchange will not list FLEX 

options on the Bitcoin Funds. 

Amendment No. 3 provides data and 

analysis supporting the proposed 

position and exercise limits and states, 

among other things, that the proposed 

position and exercise limits would 

represent approximately 0.9% of the 

outstanding shares of GBTC, 0.7% of the 

outstanding shares of BTC, and 3.6% of 

the outstanding shares of BITB.120 The 

Commission concludes that proposed 

position and exercise limits are 

designed to minimize the potential for 

manipulations or disruptions of the 

underlying market.121 Amendment No. 

3 also describes in greater detail the 

surveillance procedures that will apply 

to the proposed Bitcoin Fund options. 

The additional information regarding 

these procedures assists the 

Commission in evaluating the proposal 

and determining that the proposal is 

consistent with the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange, as 

discussed above. In addition, 

Amendment No. 3 revises the proposal 

to exclude Bitcoin Fund options from 

FLEX trading. Excluding Bitcoin Fund 

options from FLEX trading will allow 

the Commission to consider the listing 

of FLEX options on the Bitcoin Funds 

in the context of any separate proposal 

to list such options. Accordingly, the 

Commission finds good cause, pursuant 

to Section 19(b)(2) of the Act,122 to 

approve the proposed rule change, as 

modified by Amendment No. 3 on an 

accelerated basis. 

VI. Conclusion 

For the reasons set forth above, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 3, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange and, in 

particular, the requirements of Section 

6(b)(5) of the Act.123

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,124 that the 

proposed rule change (SR–NYSEAMER– 

2024–49), as modified by Amendment 

No. 3, is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.125

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–24640 Filed 10–23–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101383; File No. SR–LCH 

SA–2024–002] 

Self-Regulatory Organizations; LCH 

SA; Notice of Filing of Amendment No. 

1 and Partial Amendment No. 1 to 

Proposed Rule Change Relating to the 

CDSClear Select Membership Model 

October 18, 2024. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4,2 notice is 

hereby given that on March 13, 2024, 

Banque Centrale de Compensation, 

which conducts business under the 

name LCH SA (‘‘LCH SA’’), filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change (‘‘Proposed Rule 

Change’’), as described in Items I, II and 

III below, which Items have been 

primarily prepared by the clearing 

agency. The Proposed Rule Change was 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 206 / Thursday, October 24, 2024 / Notices 84973 

3Self-Regulatory Organizations; LCH SA; Notice 

of Filing of Proposed Rule Change Relating to the 

CDSClear Select Membership Model, Exchange Act 

Release No. 34–99847 (Mar. 22, 2024); 89 FR 21579 

(Mar. 28, 2024) (SR–LCH SA–2024–002) (‘‘Notice’’). 

4 15 U.S.C. 78s(b)(2). 

5Exchange Act Release No. 100094 (May 9, 2024), 

89 FR 42515 (May 15, 2024) (File No. SR–LCH SA– 

2024–002). 

6 15 U.S.C. 78s(b)(2)(B). 

7Exchange Act Release No. 100394 (June 21, 

2024), 89 FR 53685 (June 27, 2024) (File No. SR– 

LCH SA–2024–002). 

8Exchange Act Release No. 101094 (Sept. 18, 

2024), 89 FR 77919 (Sept. 24, 2024) (File No. SR– 

LCH SA–2024–002). 

9Amendment No. 1 amends the narrative, Exhibit 

1A, and Exhibit 5.1 [sic] to address additional 

proposed changes to LCH SA’s Select Membership 

model. Amendment No. 1 also provides an Exhibit 

3.3 [sic] containing LCH SA’s responses to an SEC 

request for information related to the Select 

Membership model. 

10Partial Amendment No. 1 replaces the Statutory 

Basis and Burden on Competition sections of the 

Exhibit 1A [sic] from Amendment No. 1 with the 

text of the Statutory Basis and Burden on 

Competition sections of the narrative description 

from Amendment No. 1. Partial Amendment No. 1 

does not propose any additional changes. 

11The CDSClear fee grid is available on LCH SA’s 

website at the following link: https://www.lch.com/ 

services/cdsclear/fees. 

published for public comment in the 

Federal Register on March 28, 2024.3

On May 9, 2024, pursuant to Section 

19(b)(2) of the Exchange Act,4 the 

Commission designated a longer period 

within which to approve, disapprove, or 

institute proceedings to determine 

whether to approve or disapprove the 

Proposed Rule Change, until June 26, 

2024.5 On June 21, 2024, the 

Commission instituted proceedings, 

pursuant to Section 19(b)(2)(B) of the 

Exchange Act,6 to determine whether to 

approve or disapprove the Proposed 

Rule Change.7 On September 18, 2024, 

the Commission designated a longer 

period for Commission action on the 

proceedings to determine whether to 

approve or disapprove the Proposed 

Rule Change, until November 23, 2024.8

The Commission has not received 

comments regarding the Proposed Rule 

Change. 

On October 11, 2024, LCH SA filed 

Amendment No. 1 to the Proposed Rule 

Change to make certain changes to the 

narrative description and exhibits.9 On 

October 17, 2024, LCH SA filed Partial 

Amendment No. 1 to the Proposed Rule 

Change to correct certain errors in the 

Exhibit 1A as amended [sic].10 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change, as modified by Amendment No. 

1 and Partial Amendment No. 1, from 

interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

LCH SA is filing with the Commission 

an amendment to its CDS Clearing Rule 

Book (‘‘Rule Book’’) and CDS Clearing 

Procedures (‘‘Procedures’’) to 

incorporate new terms and to make 

conforming, clarifying and clean-up 

changes to implement the new model of 

CDSClear select membership. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, 

LCH SA 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. LCH 

SA has prepared summaries, set forth in 

sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

LCH SA is proposing this Amendment 

No. 1 to SEC filing SR–LCH SA–2024– 

002 primarily to revise the Rule Book to 

add an obligation for a Select Member 

to contribute to end-of-day prices and 

participate in competitive bidding 

should its margins exceed a 

predetermined threshold over a 

designated period of time. In addition, 

LCH SA is revising the Rule Book to 

clarify that a Select Member’s obligation 

to contribute to end-of-day prices and 

participate in competitive bidding shall 

be removed if the Select Member’s 

margins fall below the predetermined 

threshold over a designated period of 

time. 

In accordance with the current Rule 

Book, Select Members can provide 

clearing services in respect of credit 

default swaps (‘‘CDS’’) and options on 

CDS (collectively, the ‘‘CDSClear 

Clearing Services’’) to Affiliates only. 

LCH SA is proposing to extend the 

possibility for Select Members to 

provide CDSClear Clearing Services to 

any client, including Affiliates (the 

‘‘New Select Membership’’) to allow 

some prospective clearing members that 

wish to provide clearing services to nonaffiliated clients without becoming 

General Members. General Members 

must participate in Competitive Bidding 

for Auction Packages and submit prices 

to LCH SA, and thus the New Select 

Membership would allow some clearing 

members to provide clearing services to 

non-affiliated clients even if they do not 

have the capacity to participate in 

competitive bidding or to submit prices 

to LCH SA. 

Pursuant to the New Select 

Membership, LCH SA is proposing to 

change the conditions in which the 

requirement for Select Members to 

participate in Competitive Bidding for 

Auction Packages will apply. Indeed, as 

part of the competitive auction process 

applicable in the context of the default 

management process implemented in 

respect of the default of a Clearing 

Member, each non-defaulting Clearing 

Member is required to submit bids in 

respect of any portfolio of trades 

reflecting the Cleared Transactions of 

the Defaulting Clearing Member, subject 

to exceptions provided for in the Rule 

Book; among them, a non-defaulting 

Clearing Member which is a Select 

Member shall submit bids only in 

respect of a portfolio of trades that does 

not include any trade which does not 

belong to the relevant Select Member’s 

Products Families, currently defined as 

the categories of credit default swaps 

(‘‘CDS’’) and options on CDS in respect 

of which LCH SA provides clearing 

services and that may be selected by a 

Select Member in the relevant form (the 

‘‘Product Family Form’’). Instead, LCH 

SA is proposing to add the option for 

any Select Member to elect to 

participate in Competitive Bidding for 

Auction Packages at its own discretion, 

unless the amount of the total Margins 

associated with its group’s house and 

client clearing activity exceeds a 

specific threshold as further described 

below under sub-paragraph (iv) (New 

elections and amended requirements to 

participate in Competitive Bidding and 

contribute to prices). Unlike Clearing 

Members admitted as General Members, 

Select Members will not benefit from 

the possibility to subscribe to the 

unlimited tariff allowing them to clear 

an unlimited number of trades for their 

own account for an annual fixed fee set 

out in the CDSClear fee grid.11

Pursuant to the New Select 

Membership, LCH SA also is proposing 

to change the method by which Select 

Members submit prices to LCH SA. 

Currently, Select Members may opt to 

submit prices to LCH SA in respect of 

its open positions belonging to the 

Product Families elected by the relevant 

Select Member. Select Members would 

be able to choose whether to submit 

prices under the New Select 

Membership in respect of the relevant 

Trading Cities they have selected in the 

new ‘‘Select Member Form,’’ unless the 

amount of the total Margins associated 

with its group’s house and client 


lotter on DSK11XQN23PROD with NOTICES1
84974 Federal Register / Vol. 89, No. 206 / Thursday, October 24, 2024 / Notices 

clearing activity exceeds a specific 

threshold, as discussed below. 

Besides, LCH SA is proposing to add 

the option for Select Members to elect 

to participate in the CDS Default 

Management Group and CDS Default 

Management Committee. 

At this time, LCH SA is not proposing 

to amend the Risk Management 

Framework or its free grid as a result of 

providing the New Select Membership. 

General Members will continue to have 

an unlimited fee tariff option, unlike 

Select Members, and General Members 

on variable tariff pay will have both 

lower fixed fee and lower variable fees 

than Select Members. General Members 

who clear for clients may also be able 

to give their clients the same liquidity 

margin as other General Members, 

unlike Select Members, who may incur 

a higher liquidity margin, including a 

liquidity concentration charge, for large 

positions, including large client 

positions. 

In order to implement the Proposed 

Rule Change, LCH SA is proposing to 

amend the Rule Book and Section 1 and 

Section 5 of the Procedures to reflect the 

amended terms and conditions of the 

New Select Membership model. 

Proposed Revisions to the Rule Book 

and Procedures 

(i) CDSClear Client Clearing Services 

LCH SA is proposing to extend the 

possibility for Select Members to 

provide CDSClear clearing services to 

any client, in addition to Affiliates. 

LCH SA is proposing to delete the 

defined term, ‘‘Affiliated Firm’’ since it 

was used only in respect of the current 

Select Member model pursuant to 

which a Select Member may provide 

client clearing services to Affiliated 

Firms, which include their Affiliates 

and any entity that is otherwise a 

member to the same institutional 

protection scheme as the Clearing 

Member. Since Select Members will be 

permitted to provide clearing services to 

any client, regardless of whether it is an 

Affiliated Firm, there is no need to keep 

such defined term and therefore any 

reference to ‘‘Affiliated Firm(s)’’ or to 

the provision of client clearing services 

to Affiliated Firm(s) is proposed to be 

deleted from the definitions of ‘‘CCM’’, 

‘‘FCM/BD Clearing Member’’ and 

‘‘Select Member’’, as well as from 

Article 2.2.1.1(iv) and (v), Article 

2.2.2.1(iv), Article 4.2.7.2(ii), and 

Article 5.1.1.1. Indent (i) of Articles 

5.1.1.2 and 6.1.1.2 of the Rule Book will 

be also removed since such indent is 

currently providing for the condition 

pursuant to which a Select Member may 

provide client clearing services to an 

Affiliated Firm only. 

As a result of the removal of the 

condition that a Select Member may 

provide client clearing services to 

Affiliated Firms only, the term 

‘‘Affiliated Firm’’ will be revised to 

‘‘Affiliate’’ (as that term is defined in the 

Rule Book) in the definition of the 

following defined terms: ‘‘CCM Indirect 

Gross Segregated Account Client’’, 

‘‘CCM Indirect Net Segregated Account 

Client’’, ‘‘CCM Individual Segregated 

Account Client’’ and ‘‘FCM/BD Client’’ 

and in Article 6.1.1.2. 

The definition of ‘‘Select Member’’ 

would also be revised to clarify that 

Select Members may offer CDSClear 

Clearing Services to any client, 

including Affiliates. 

LCH SA is proposing to revise Article 

4.2.7.2(ii) by deleting reference to 

‘‘General Member’’ and ‘‘Select 

Member’’ as well as ‘‘Affiliated Firms’’, 

as this distinction would no longer be 

relevant with Select Members, under 

certain circumstances, having the option 

to be a Price Contribution Participant 

and providing CDS Client Clearing 

Services to any client. 

(ii) Removal of the Defined Terms 

‘‘Product Family’’ and ‘‘Product Family 

Form’’ 

LCH SA is proposing to delete the 

defined terms, ‘‘Product Family’’ and 

‘‘Product Family Form’’, as these 

defined terms are only applicable when 

participation in Competitive Bidding is 

mandatory for all Select Members in 

respect of the Product Families they 

have selected in the Product Family 

Form. Because of the new options Select 

Members will have, there is no longer a 

need to use the Product Family Form. 

As a result, LCH SA is proposing to 

delete any reference to ‘‘Product Family 

Form’’ and ‘‘Product Family’’ in Section 

1.1.1, Article 2.2.0.4, Article 3.1.6.2(ii), 

Article 3.1.6.5, and Clause 5.4.1(ii) and 

Clause 6.1 of Appendix 1 (CDS Default 

Management Process), and replace these 

terms with the new defined term of 

‘‘Select Member Form’’ (as further 

explained in sub-paragraph (iii) below), 

where relevant (e.g., in the definition of 

‘‘CDS Clearing Documentation’’). 

LCH SA is also proposing to delete 

Article 3.1.6.8 related to ‘‘Product 

Family Form’’ in its entirety as it is no 

longer relevant as a result of the changes 

made pursuant to this subparagraph (ii). 

Finally, any reference to a General 

Member or a Select Member will be 

removed from current Clause 6.1.2(ii)(a) 

of Appendix 1 (CDS Default 

Management Process) because of the 

removal of the ‘‘Product Family Form’’. 

Specifically, there is no longer a need to 

make a distinction between both 

memberships for the purposes of the 

registration process for the Index 

Swaption service in the context of the 

transfer of positions resulting from the 

auction process. 

(iii) Select Member Form 

LCH SA is proposing to add a new 

defined term, ‘‘Select Member Form’’, in 

Section 1.1.1 of the Rule Book, to define 

the form by which the Select Member 

could make the elections (including the 

option to participate in Competitive 

Bidding)—as further elaborated in 

renumbered Article 2.2.0.4 of the Rule 

Book and Section 1 and Section 5 of the 

Procedures. 

LCH SA is proposing to revise Section 

1.1 (Application Procedure), indent (c), 

entitled ‘‘CDSClear Application Form’’ 

in the Procedures to replace the term 

‘‘Product Family Form’’, which is no 

longer relevant, by the term ‘‘Select 

Member Form’’. LCH SA is also 

proposing to clarify that the Select 

Member Form will be made available by 

LCH SA’s CDSClear Business 

Development & Relationship 

Management team. 

This Select Member Form would be 

used by Select Members to elect to 

participate in Competitive Bidding for 

selected Trading Cities. Proposed Clause 

5.4.1(ii) would provide that all NonDefaulting Clearing Members are 

required to participate in Competitive 

Bidding save where a Non-Defaulting 

Clearing Member is a Select Member 

provided that: (a) it is not required to 

participate in Competitive Bidding 

pursuant to Article 2.2.0.4; and (b) it has 

(y) not elected to participate in 

Competitive Bidding within 1 hour of 

the declaration of an Event of Default by 

LCH SA and (z) not complied with its 

obligations under Article 2.2.1.1(xi), in 

accordance with the conditions set out 

in Article 2.2.0.4. LCH SA would 

interpret this provision to mean that 

Select Members wishing to participate 

in Competitive Bidding would have to 

make such election in the Select 

Member Form and submit to LCH SA 

within 1 hour of the declaration of an 

Event of Default, and the Select Member 

must comply with the membership 

criteria set forth in Article 2.2.1.1(xi). 

Notwithstanding the foregoing, LCH SA 

also interprets Clause 5.4.1(ii) of 

Appendix 1 to clarify that a Select 

Member would have to participate in 

Competitive Bidding if it is required to 

do so in accordance with Article 2.2.0.4 

of the Rule Book (as further described in 

paragraph (iv)), irrespective of a Select 

Member’s elections in respect of its 

participation in Competitive Bidding or 

compliance with the membership 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 206 / Thursday, October 24, 2024 / Notices 84975 

12To be clear, a Select Member may only elect to 

participate in Competitive Bidding by doing so on 

the Select Member Form. LCH SA would not 

require a Select Member to participate in 

Competitive Bidding that has not elected to 

participate in Competitive Bidding by the 

appropriate deadline but has complied with any 

obligations under Article 2.2.1.1(xi). Further, LCH 

SA would not require a Select Member to 

participate in Competitive Bidding that has elected 

to participate in Competitive Bidding after the 

relevant deadline and has complied with its 

obligations under Article 2.2.1.1(xi). 

13 ‘‘Group Total Margin Percentage’’ will mean in 

respect of a Financial Group to which one or more 

Clearing Members belong and in respect of any 

Clearing Day, the ratio of its Average Group Total 

Margin divided by the Average CDSClear Total 

Margin. The ‘‘Average Group Total Margin’’ will 

mean, in respect of any Clearing Day, the average 

over the last sixty Clearing Days of the sum of all 

the Margins (excluding Variation Margins) 

calculated by LCH SA in respect of the Account 

Structure(s) of the Clearing Members belonging to 

the same Financial Group and the ‘‘Average 

CDSClear Total Margin’’ will mean, in respect of 

any Clearing Day, the average over the last sixty 

Clearing Days of the sum of all the Margins 

(excluding Variation Margins) calculated by LCH 

SA in respect of the Account Structures of all the 

Clearing Members. 

criteria set forth in Article 2.2.1.1(xi) of 

the Rule Book.12

(iv) New Elections and Amended 

Requirements To Participate in 

Competitive Bidding and Contribute to 

Prices 

LCH SA is proposing to revise 

renumbered Article 2.2.0.4 of the Rule 

Book to add the possibility for Select 

Members to elect to participate in 

Competitive Bidding subject to the 

conditions set forth in Article 2.2.1.1 of 

the Rule Book (Membership 

Requirements). 

Article 2.2.1.1 of the Rule Book sets 

forth the conditions that any Applicant 

wishing to be admitted as a Clearing 

Member by LCH SA must satisfy. As 

such conditions apply to both General 

Members and Select Members, LCH SA 

is proposing to remove reference to 

‘‘Select Member’’ and ‘‘General 

Member’’ from Article 2.2.1.1(iv) and (v) 

and Article 2.2.2.1(iv) of the Rule Book. 

In addition, LCH SA is proposing to 

specify in Article 2.2.1.1(xi) that Select 

Members wishing to elect to participate 

in Competitive Bidding would have to 

demonstrate being able to successfully 

participate in the implementation of the 

CDS Default Management Process and 

in regular fire drills run by LCH SA in 

accordance with the Rule Book. 

Provided that Select Members comply 

with the conditions referenced in 

Article 2.2.1.1 of the Rule Book, LCH SA 

is proposing to revise Article 2.2.0.5 

(now renumbered as Article 2.2.0.4) of 

the Rule Book to include the possibility 

for Select Members to: 

(i) submit Market Data pursuant to 

Section 5 of the Procedures in respect of 

one or more Trading City(ies); if a Select 

Member is a Price Contribution 

Participant, and therefore will receive 

the Price Requirements Files in respect 

of the relevant Trading Cities, it will be 

bound by all obligations of any Price 

Contribution Participant as set out in 

the Rule Book and Section 5 of the 

Procedures. Under current Article 

2.2.05, the Select Member has the 

possibility to contribute to prices by 

submitting Market Data (and therefore to 

be a Price Contribution Participant) in 

accordance with Section 5 of the 

Procedures but is under no obligation to 

do so, which would be no longer the 

case under the New Select Membership 

model; indeed, once a Select Member 

will elect to be a Price Contribution 

Participant for one or more Trading 

Cities, or its Group Total Margin 

Percentage has exceeded a certain 

threshold as discussed below, it will be 

subject to the obligation to provide the 

Market Data for the Trading Cities in 

respect of which it has Open Positions; 

(ii) participate in Competitive Bidding 

as further detailed in Clause 5 of the 

CDS Default Management Process, 

subject to Article 2.2.1.1(xi); it will be 

also clarified that a Select Member 

which has elected or is required to 

participate in Competitive Bidding will 

be subject to the provisions of the 

clearing rules which apply to any nondefaulting Clearing Member which is 

required to participate in Competitive 

Bidding for each Auction Package; 

(iii) nominate DMG Representatives in 

accordance with Clause 11.2.2 of the 

CDS Default Management Process, 

whereas, in accordance with the current 

version of Clause 11.2.2 of the CDS 

Default Management Process, each 

Clearing Member, including any Select 

Member, shall nominate DMG 

Representatives. Since the participation 

to the Competitive Bidding process will 

be no longer required in respect of 

Product Families for a Select Member, 

the obligation to participate in the CDS 

Default Management Group will become 

optional for consistency purposes. LCH 

SA would expect that Select Members 

that have elected to participate in 

Competitive Bidding will be interested 

in participating in the CDS Default 

Management Group and therefore 

nominate DMG Representatives for that 

purpose; and/or 

(iv) nominate representatives to be 

appointed as members of the CDS 

Default Management Committee in 

accordance with Clause 10.2 of the CDS 

Default Management Process. Similarly 

to the nomination of DMG 

Representatives as described in previous 

indent (iii), each Clearing Member, 

including any Select Member, shall 

nominate representatives to be 

appointed as members of the CDS 

Default Management Committee in 

accordance with current Clause 10.2 of 

the CDS Default Management Process 

and for the same reasons, this will 

become only an option for the Select 

Member which might be interested in 

participating in the CDS Default 

Management Committee if they were to 

select the possibility to participate in 

Competitive Bidding. 

Since a Select Member will need to 

make the above listed elections under 

the New Select Membership model, the 

possibility to change its election in 

respect of its contribution to prices as 

currently provided for in Article 2.2.0.5 

has been extended to all the new 

elections to be made as well; hence, the 

Select Member will be able to change 

any of its elections by providing LCH 

SA with a copy of a duly signed 

updated Select Member Form, in 

accordance with the conditions set out 

in Section 5 of the Procedures pursuant 

to the revised Article 2.2.0.5 (now 

renumbered as Article 2.2.0.4). 

New Article 2.2.0.4 will be also 

amended to provide that, irrespective of 

a Select Member’s elections in respect of 

its participation in Competitive Bidding 

and its contribution to prices in 

accordance with sub-paragraphs (i) and 

(ii) of Article 2.2.0.4, a Select Member 

will still be required to contribute to 

prices by submitting Market Data for all 

the Trading Cities and participate in 

Competitive Bidding provided the 

percentage of its total Margins for the 

house and client clearing activities of its 

group (such percentage being referred to 

in as the ‘‘Group Total Margin 

Percentage’’ which, together with 

‘‘Average Group Total Margin’’ and 

‘‘Average CDSClear Total Margin’’,13 are 

new defined terms that have been added 

to Section 1.1.1 of the Rule Book) has 

exceeded a participation threshold for 

sixty consecutive Clearing Days. Such 

participation threshold will be referred 

to in the CDS Clearing Rule Book as the 

‘‘Participation Threshold’’ which will 

mean the percentage as determined by 

LCH SA, which is equal to the lower of 

5% and the sixth largest Group Total 

Margin Percentage among all the Group 

Total Margin Percentages calculated in 

respect of each Financial Group to 

which one or more Clearing Members 

belong. The obligation to contribute to 

prices and participate in Competitive 

Bidding will apply until the Clearing 

Day on which the Group Total Margin 

Percentage has remained 1 percentage 

point below the Participation Threshold 

for sixty consecutive Clearing Days. In 


lotter on DSK11XQN23PROD with NOTICES1
84976 Federal Register / Vol. 89, No. 206 / Thursday, October 24, 2024 / Notices 

14 15 U.S.C. 78q–1(b)(3)(B). 

15 15 U.S.C. 78q–1(b)(3)(F). 

16 Id. 

17 Id. 

18See Section 1.1.1. (‘‘Terms defined in the CDS 

Clearing Rule Book’’) of the CDSClear Rule Book. 

https://www.lch.com/system/files/media_root/ 

CDSClear_Rule_Book_26.09.2023.pdf. 

19A ‘‘CCM’’ is defined in the current CDS 

Clearing Rule Book as any legal entity admitted as 

a clearing member in accordance with the CDS 

Clearing Rules and party to the CDS Admission 

Agreement, provided that if such entity wishes to 

provide CDS CCM Client Clearing Services 

described in TITLE V, it shall either (i) be a General 

Member or (ii) provide such CDS CCM Client 

Clearing Services to its Affiliated Firms only. If 

such entity is an FCM/BD, it must satisfy LCH SA 

that it is able to provide the CDS Client Clearing 

Services in accordance with Title V prior to offering 

such services. 

20A ‘‘FCM/BD Clearing Member’’ is defined in 

the current CDS Clearing Rule Book as any FCM, 

BD or a legal entity that is both FCM and BD that 

has been admitted as a clearing member in 

accordance with the CDS Clearing Rules and is a 

party to the CDS Admission Agreement and which 

has not elected to become a CCM, provided that if 

such FCM/BD Clearing Member wishes to provide 

CDS Client Clearing Services described in TITLE VI, 

it shall either (i) be a General Member or (ii) 

provide such CDS Client Clearing Services to its 

Affiliated Firms only. 

the event that LCH SA reasonably 

believe that such circumstance will 

occur, LCH SA may request the Select 

Member to carry out such tests as LCH 

SA may reasonably require to assess its 

ability to participate in Competitive 

Bidding. The purpose of these 

requirements is to ensure that, 

irrespective of the membership category 

of the Clearing Members, there will be 

a sufficient number of participants in 

Competitive Bidding and in the price 

contribution process. Because under the 

proposed rule change Select Members 

may be required to submit Market Data 

and participate in Competitive Bidding, 

LCH SA proposes removing language 

from proposed Article 2.2.0.4 suggesting 

that Select Members do not ever have 

any obligation to submit Market Data. 

In addition, LCH SA is proposing to 

revise the definition of ‘‘Price 

Contribution Participant’’ in Section 

1.1.1 of the Rule Book to clarify that it 

includes Select Members that have 

opted for submitting, or is required to 

submit, Market Data in accordance with 

Article 2.2.0.4, rather than Section 5 of 

the Procedures. LCH SA proposes to add 

the text ‘‘or is required to submit’’ to the 

Price Contribution Participant definition 

to account for the possibility that a 

Select Member may be required to 

submit Market Data under the proposed 

rule change. 

In addition, LCH SA is proposing to 

revise Section 5.18.1 (Market Data 

submission) of the Procedures to delete 

a paragraph that notes that a Select 

Member may decide to receive or stop 

receiving Price Requirement Files and 

provides instructions for how a such 

Select Member can choose to receive or 

stop receiving Price Requirement Files. 

Indeed, the election to be a Price 

Contribution Participant will be made 

by the Select Member by using the new 

Select Member Form and this election 

can be updated by updating such form 

in the conditions set out in amended 

paragraph (c) of Section 5.11 of the 

Procedures. 

Furthermore, Clauses 10.2.1 and 

11.2.2 of Appendix 1 (CDS Default 

Management Process) would be revised 

to include representatives nominated by 

Select Members to the CDS Default 

Management Group and CDS Default 

Management Committee since the Select 

Members will be permitted to opt for the 

possibility to participate in the CDS 

Default Management Group and/or the 

CDS Default Management Committee in 

accordance with amended Article 

2.2.0.4 (currently Article 2.2.0.5) as 

further explained in page 11 above. 

LCH SA is also proposing to amend 

indent (d) entitled ‘‘Due diligence and 

review process’’ of Section 1.1 

(Application Procedure) of the 

Procedures to include the obligation for 

Select Members to successful carry out 

tests as referenced in Article 2.2.1.1 (xi) 

of the Rule Book. 

Finally, LCH SA is proposing to revise 

Section 5.11(c) (Update of the Select 

Member Form) of the Procedures to also 

specify that the Select Member, having 

elected to participate in Competitive 

Bidding, will be required to participate 

in Competitive Bidding for each 

Auction Package. 

(v) Updated Select Member Form 

LCH SA is proposing to revise Article 

2.2.0.5 to enable Select Members to elect 

to opt out of Competitive Bidding and 

all other elections in sub-paragraphs (i) 

to (iv) of Article 2.2.0.5, under 

conditions set forth in Section 5 of the 

Procedures as this is currently the case 

but in respect of the contribution to 

prices only. The Select Member Form 

will allow the Select Member to notify 

its elections to LCH SA and also to 

update it should it wish to change any 

of its elections, in accordance with the 

amended provisions of Section 5.11 of 

the Procedures, as further described 

below. 

LCH SA would revise Section 5.11(c), 

‘‘Update of the Select Member Form’’, 

(formerly, ‘‘Update of the Product 

Family Form’’) of the Procedures to 

cover the update process of the Select 

Member Form, as the Product Family 

Form, and any reference thereto, is no 

longer relevant. Any update to the 

Select Member Form may be subject to 

passing requisite tests prescribed by 

LCH SA and if the update pertains to 

the Select Member no longer 

participating in the Competitive Bidding 

Process, such update will be effective on 

the eighth Clearing Day following the 

Clearing Day on which the updated 

Select Member Form is received, in 

order to ensure that the Select Member 

will still be required to participate in 

Competitive Bidding if an Event of 

Default is declared in respect of another 

Clearing Member at the same time the 

updated Select Member Form of such 

Select Member is received by LCH SA. 

LCH SA is also proposing to specify 

that Select Members should be able to 

change any of its election(s) via 

provision of an updated Select Member 

Form to the CDSClear Business 

Development & Relationship 

Management team via email. 

(vi) Additional Amendments 

LCH SA also proposes to make other 

revisions to the Rule Book and Section 

1 and Section 5 of the Procedures to 

correct certain cross-references, 

grammar and/or typographical errors, 

and to provide additional clarification. 

For example, Article 1.2.2.4 of the Rule 

Book will be amended to clarify that the 

reference to ‘‘days’’ means ‘‘calendar 

days’’ for the avoidance of doubt. 

2. Statutory Basis 

LCH SA believes the Proposed Rule 

Change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

registered clearing agencies, including 

with Section 17A(b)(3)(B) 14 and Section 

17A(b)(3)(F) of the Act.15 Section 

17A(b)(3)(B) of the Act requires, inter 

alia, that the rules of a clearing agency 

provide that any registered broker or 

dealer, bank or other person or class of 

persons may become a participant in 

such clearing agency.16 Section 

17A(b)(3)(F) of the Act requires, inter 

alia, that a clearing agency’s rules are 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions, to assure the 

safeguarding of securities and funds in 

the custody or control of LCH SA, and 

are not designed to permit the unfair 

discrimination in the admission of 

participants or among participants in 

the use of the clearing agency.17

Per LCH SA’s current CDSClear Rule 

Book, a Clearing Member may either be 

designated as a General Member or a 

Select Member.18 A General Member is 

either a CCM 19 or an FCM/BD Clearing 

Member 20 that has been admitted by 

LCH SA as a General Member in 

accordance with Section 1 of the 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 206 / Thursday, October 24, 2024 / Notices 84977 

21See Section 1 (‘‘Membership’’) of the CDS 

Clearing Procedures. CDSClear_Section_1_

Procedures__18.07.2019.pdf (lch.com). 

22 Id. 

23 15 U.S.C. 78q–1(b)(3)(B). 

24 15 U.S.C. 78q–1(b)(3)(F). 

25 17 CFR 240.17Ad–22(e)(1). 

26 Id. 27 17 CFR 240.17Ad–22(e)(13). 28 Id. 29For example, Select Members have historically 

required assistance managing default files and have 

routinely requested assistance addressing questions 

during fire drill exercises. 

30 17 CFR 240.17Ad–22(e)(13). 

31 17 CFR 240.17Ad–22(e)(18). 

32 Id. 

33 Id. 

34 15 U.S.C. 78q–1(b)(3)(I). 

Procedures.21 A Select Member is either 

a CCM or an FCM/BD Clearing Member 

that: (a) does not provide CDS Client 

Clearing Services to Clients other than 

Affiliated Firms; and (b) has been 

admitted by LCH SA as a Select Member 

in accordance with Section 1 of the 

Procedures.22 LCH SA is proposing to 

amend the definition of a Select 

Member to allow Select Members to 

offer client clearing to any client, 

including Affiliates. In doing so, LCH 

SA is proposing to remove the 

obligation that Select Members 

participate in Competitive Bidding for 

Auction Packages including trades 

belonging to the Product Families they 

actively trade. Instead, under certain 

circumstances, Select Members would 

have the ability to elect to participate in 

Competitive Bidding for Auction 

Packages at their own discretion. 

Furthermore, Select Members may elect 

to contribute end of day prices under 

certain circumstances and participate in 

the Default Management Process and 

Default Management Committee. This 

will enhance LCH SA’s ability to 

contain losses and manage a clearing 

member default. Select Members would 

also be incentivized to become General 

Members for purposes of participating 

in default auctions as their client 

clearing activity grows. By expanding 

the clients for whom Select Members 

may clear to include any client, 

including Affiliates and thus expand 

participation in clearing, LCH SA 

believes such changes are consistent 

with Section 17A(b)(3)(B) 23 and Section 

17A(b)(3)(F) 24 of the Act such that its 

rules are designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions, to 

assure the safeguarding of securities and 

funds in the custody or control of LCH 

SA, and are not designed to permit the 

unfair discrimination in the admission 

of participants or among participants in 

the use of the clearing agency. 

LCH SA also believes the Proposed 

Rule Change is consistent with Rule 

17Ad–22(e)(1) of the Act which 

requires, inter alia, that a covered 

clearing agency establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

provide for a well-founded, clear, 

transparent, and enforceable legal basis 

for each aspect of its activities in all 

relevant jurisdictions.25 LCH SA 

believes the changes to its Rule Book 

and Procedures are clear, 

understandable, and consistent with the 

relevant laws and regulations applicable 

to LCH SA. In addition, LCH SA 

believes changes to the Rule Book and 

Procedures regarding the extension of 

the possibility for Select Members to 

provide CDSClear clearing services to 

any client, including Affiliates and 

publishing such changes on its public 

website provides greater transparency to 

Clearing Members and their customers, 

and to the general public. Therefore, 

LCH SA believes that the Proposed Rule 

Change is consistent with Rule 17Ad– 

22(e)(1).26

LCH SA also believes that the 

Proposed Rule Change is consistent 

with Rule 17Ad–22(e)(13) 27 of the Act 

which requires, inter alia, that a covered 

clearing agency establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

ensure the covered clearing agency has 

the authority and operational capacity 

to take timely action to contain losses 

and liquidity demands and continue to 

meet its obligations.28 Select Members 

were previously required to bid during 

default management auctions if the 

auction package contained products in 

the product family they subscribed to, 

regardless of whether the Select Member 

actively traded the product. The 

requirement to participate in such 

default auctions presents challenges for 

certain Select Members that don’t 

actively trade in the products being 

auctioned, and thus may serve as an 

obstacle to clearing agency membership. 

Select Members also may not have the 

operational capacity to participate in 

default auctions as General Members. 

This is evidenced by LCH SA’s 

experience facilitating fire drill 

exercises requiring participation by 

Select Members.29 LCH SA’s proposed 

changes to the mandatory obligation to 

bid in default auctions for Select 

Members will address this issue. 

Furthermore, LCH SA believes the 

existing pool of General Members 

required to bid, in addition to the Select 

Members that opt in to bidding or who 

may be required to bid on default 

auction portfolios provides sufficient 

participation for purposes of ensuring 

LCH SA can take timely action to 

contain losses and liquidity demands 

and continue to meet its obligations. 

Therefore, LCH SA believes that the 

Proposed Rule Change is consistent 

with Rule 17Ad–22(e)(13).30

Finally, LCH SA believes that the 

Proposed Rule Change is consistent 

with Rule 17Ad–22(e)(18) 31 under the 

Act. Rule 17Ad–22(e)(18) under the Act 

requires, inter alia, that a covered 

clearing agency establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

establish objective, risk-based, and 

publicly disclosed criteria for 

participation, which permit fair and 

open access by direct and, where 

relevant, indirect participants and other 

financial market utilities, require 

participants to have sufficient financial 

resources and robust operational 

capacity to meet obligations arising from 

participation in the clearing agency, and 

monitor compliance with such 

participation requirements on an 

ongoing basis.32 LCH SA is proposing to 

expand its membership criteria for 

Select Members by allowing Select 

Members to clear for any clients, 

including Affiliates. LCH SA is 

proposing to remove the obligation that 

Select Members participate in 

Competitive Bidding for Auction 

Packages including trades belonging to 

the Product Families they actively trade. 

Instead, in some circumstances, Select 

Members would have the ability to elect 

to participate in Competitive Bidding 

for Auction Packages at their own 

discretion. LCH SA believes this 

proposed change more accurately 

captures the risk profile of Select 

Members as it pertains to their size and 

operational capabilities. Specifically, 

Select Members are typically non-CDS 

market-making banks (price takers) and 

thus, smaller Clearing Members. In 

addition, Select Members may not have 

the operational capacity to bid on 

products they don’t actively trade 

during a default management auction. 

As such, LCH SA believes that the 

Proposed Rule Change is consistent 

with Rule 17Ad–22(e)(18) under the 

Act.33

B. Clearing Agency’s Statement on 

Burden on Competition 

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

requires that the rules of a clearing 

agency not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.34

LCH SA does not believe the 

Proposed Rule Change would impose 


lotter on DSK11XQN23PROD with NOTICES1
84978 Federal Register / Vol. 89, No. 206 / Thursday, October 24, 2024 / Notices 

35 17 CFR 200.30–3(a)(12). 

1The number of closed-end funds that undertake 

repurchases annually under rule 23c–1 is based on 

information provided in response to Item C.7.i of 

Form N–CEN from January 1, 2023 through 

December 31, 2023. We estimate that each of the 48 

funds undertook an average of 4 repurchases 

annually (48 funds × 4 repurchases = 192 

repurchases annually). 

2This estimate is based on the following 

calculation: 192 repurchases × 2.5 hours per 

repurchase = 480 hours. 

3The $440/hour figure for a compliance attorney 

is from SIFMA’s Management & Professional 

Earnings in the Securities Industry 2013, modified 

burdens on competition that are not 

necessary or appropriate in furtherance 

of the purposes of the Act. Specifically, 

the Proposed Rule Change will 

contribute to offer access to clearing 

services to any client of Select Members 

expanding the client clearing activity. 

Under some circumstances, the 

Proposed Rule Change will also remove 

the burden of Select Members from 

having the obligation to bid on products 

they don’t actively trade in default 

management auctions. LCH SA further 

believes the Proposed Rule Change is 

equitable for both General Members and 

Select Members, as clearing members 

will continue to have discretion in 

electing to be either General Members or 

Select Members under the new 

membership model. Furthermore, 

existing General Members will not be 

prevented from switching to become 

Select Members under the Proposed 

Rule Change. The increased access to 

clearing services under the Proposed 

Rule Change may result in increased 

liquidity in the service as membership 

grows. Therefore, LCH SA does not 

believe that the Proposed Rule Change 

would impose burdens on competition 

that are not necessary or appropriate in 

furtherance of the purposes of the Act. 

C. Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants or Others 

Written comments relating to the 

Proposed Rule Change have not been 

solicited or received. LCH SA will 

notify the Commission of any written 

comments received by LCH SA. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) by order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules-regulations/self-regulatoryorganization-rulemaking); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

LCH SA–2024–002 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–LCH SA–2024–002. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules-regulations/self-regulatoryorganization-rulemaking). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

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 LCH 

SA and on LCH SA’s website at: https:// 

www.lch.com/resources/rulebooks/ 

proposed-rule-changes. 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–LCH SA–2024–002 

and should be submitted on or before 

November 14, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2024–24639 Filed 10–23–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–253, OMB Control No. 

3235–0260] 

Submission for OMB Review; 

Comment Request; Extension: Rule 

23c–1 

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. 3501–3520), the Securities 

and Exchange Commission (the 

‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Rule 23c–1(a) under the Investment 

Company Act (17 CFR 270.23c–1(a)) 

permits a closed-end fund to repurchase 

its securities for cash if, in addition to 

the other requirements set forth in the 

rule, the following conditions are met: 

(i) payment of the purchase price is 

accompanied or preceded by a written 

confirmation of the purchase (‘‘written 

confirmation’’); (ii) the asset coverage 

per unit of the security to be purchased 

is disclosed to the seller or his agent 

(‘‘asset coverage disclosure’’); and (iii) if 

the security is a stock, the fund has, 

within the preceding six months, 

informed stockholders of its intention to 

purchase stock (‘‘six month notice’’). 

Commission staff estimates that 48 

closed-end funds undertake a total of 

192 repurchases annually under rule 

23c–1.1 Staff estimates further that, with 

respect to each repurchase, each fund 

spends 2.5 hours to comply with the 

rule’s written confirmation, asset 

coverage disclosure and six month 

notice requirements. Thus, Commission 

staff estimates the total annual 

respondent reporting burden is 480 

hours.2 Commission staff further 

estimates that the cost of the hourly 

burden per repurchase is approximately 

$388 (one half hour of a compliance 

attorney’s time at $440 per hour,3 and 


lotter on DSK11XQN23PROD with NOTICES1