87656 Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5All capitalized terms not defined herein have 

the same definition as in the CDS Clearing Rule 

Book available at https://www.lch.com/system/files/ 

media_root/CDSClear_Rule_Book_01.02.2024.pdf. 

will not cause any unnecessary or 

inappropriate burden on intermarket 

competition, as the proposed incentive 

program applies uniformly to any 

purchaser of Historical Depth Reports. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 16 and paragraph (f) of Rule 

19b–4 17 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBYX–2024–038 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–CboeBYX–2024–038. 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–CboeBYX–2024–038 and should be 

submitted on or before November 25, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25537 Filed 11–1–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101469; File No. SR–LCH 

SA–2024–004] 

Self-Regulatory Organizations; LCH 

SA; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Cash Spreads and 

Fees on Securities Collateral 

October 29, 2024. 

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 October 

23, 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’’) described in Items I, II 

and III below, which Items have been 

primarily prepared by LCH SA. LCH SA 

filed the proposed rule change pursuant 

to Section 19(b)(3)(A) of the Act,3 and 

Rule 19b–4(f)(2) 4 thereunder, so that the 

proposal was effective upon filing with 

the Commission. 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 

LCH SA is proposing to amend the 

fees it charges clearing members for 

cash and securities collateral posted as 

initial margin for its clearing services 

including CDSClear (the ‘‘Proposed Rule 

Change’’). 

The text of the Proposed Rule Change 

has been annexed as Exhibit 5 to File 

No. SR–LCH SA–2024–004.5 The 

implementation of the Proposed Rule 

Change will be contingent on LCH SA’s 

receipt of all necessary regulatory 

approvals. 

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. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

LCH SA currently applies a spread for 

clearing member cash collateral and 

charges fees on securities collateral 

posted to cover initial margin 

requirements for its CDSClear business. 

Cash collateral spreads are primarily 

based on underlying market conditions 

for a given currency and are subtracted 

from a reference index to determine a 

total rate to be applied to CDSClear 

house and client accounts. Securities 

collateral fees are primarily based on a 

combination of factors, including, but 

not limited to operational costs to 

manage a specific non-cash collateral 

type, the liquidation profile and 


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Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices 87657 

subsequent impact on LCH SA’s 

liquidity coverage ratio of the securities 

collateral and commercial 

considerations such as competitive 

landscape. The securities collateral fees 

charged to clearing members varies 

based on the instrument type (e.g., 

government securities), whether the 

securities collateral is posted on behalf 

of the CDSClear house account or on 

behalf of CDSClear clients and the 

method of posting the collateral (i.e., 

full title transfer, pledge or tri-party). 

The purpose of the Proposed Rule 

Change is for LCH SA to amend the cash 

spreads and securities collateral fees for 

margin collateral posted by clearing 

members. 

i. Changes to Cash Collateral Spreads 

LCH SA currently accepts euro, GBP 

and USD cash to satisfy initial margin 

requirements for its CDSClear business. 

Clearing members that post these 

eligible currencies as margin may 

receive interest on these balances based 

on an associated benchmark index and 

cash collateral spreads applied by LCH 

SA. The total rate that clearing members 

and their clients may be eligible for is 

the difference between the value of the 

underlying benchmark index and the 

spreads applied by LCH SA. Interest 

earned on cash collateral is based on 

daily balances by account and posted 

monthly to clearing member accounts. 

LCH SA currently applies the 

following cash collateral spreads for 

CDSClear house and client accounts: 

Currency Unsecured overnight index 

Cash collateral fee/spread 

(bps) 

All markets CDSClear 

clients Default funds 

EUR ....................................................................... ÖSTR ........................................................ 21.5 6.5 11.5 

GBP ....................................................................... SONIA ...................................................... 35 20 

USD ....................................................................... FEDFUND ................................................ 30 15 

LCH SA is proposing to decrease the 

cash collateral spread for EUR, GBP and 

USD by 2bps. Accordingly, LCH SA will 

apply a revised spread of 19.5bps, 33bps 

and 28bps for EUR, GBP and USD cash 

collateral balances, respectively, posted 

for initial margin. In addition, LCH SA 

is proposing to add a column reflecting 

the current Default Fund spread for 

purposes of transparency, however LCH 

SA is not proposing any changes to this 

spread. LCH SA is also not proposing 

any changes to the cash collateral 

spread for CDSClear clients. LCH SA is 

proposing these changes primarily to 

encourage members to post more cash 

collateral, as non-cash collateral 

deposited has become a larger 

proportion of all margin collateral on 

deposit. An increase in the proportion 

of cash collateral on deposit will 

enhance LCH SA’s Liquidity Coverage 

Ratio, provide LCH SA with the 

required operational liquidity to inject 

into the settlement and payment 

networks and to ensure there is no 

disruption in clearing services, should 

LCH SA liquidate the portfolio of a 

defaulted clearing member. 

LCH SA is proposing to reduce the 

spreads for eligible cash collateral 

balances to encourage CDSClear clearing 

members to post more cash as initial 

margin for clearing and to better 

diversify the mix of collateral posted as 

initial margin from clearing members, as 

non-cash collateral has become a greater 

portion of all margin collateral on 

deposit. LCH SA believes this will 

enhance its liquidity risk management 

processes by ensuring it maintains 

sufficient liquid resources (i.e., cash) to 

facilitate the timely settlement of its 

payment obligations with a high degree 

of confidence under a wide range of 

foreseeable stress scenarios. In addition, 

an increase in cash collateral will 

support LCH SA’s ability to manage the 

ongoing operational liquidity needs for 

the purposes of injecting liquidity into 

the various settlement and payment 

networks and will further support LCH 

SA’s default management process (e.g., 

during the liquidation of a member 

portfolio). LCH SA does not believe any 

changes are necessary to the cash 

collateral spreads for CDSClear Clients 

or with respect to cash posted to satisfy 

Default Fund requirements. CDSClear 

Clients will continue to benefit from a 

larger spread than CDSClear House 

accounts and the Default Fund cash 

collateral spread will remain 

unchanged, as clearing members must 

continue to meet their Default Fund 

obligations in cash collateral. 

ii. Changes to Securities Collateral Fees 

LCH SA is also proposing to amend 

the fees it charges clearing members for 

securities collateral posted as initial 

margin. Eligible securities collateral 

currently includes government 

securities from select countries, select 

European supranational debt, 

government agency debt issued by 

Rentenbank (Germany), Kreditanstalt fu ̈r 

Wiederaufbau (Germany) and CADES 

(France) and select equities listed on the 

EURO STOXX 50 index. The fees 

charged on each securities collateral 

type varies based on the mechanism of 

how the clearing member posts the 

collateral. For example, securities 

collateral may be deposited via Full 

Title Transfer (FTT) to an account 

opened by LCH SA at various central 

securities depositories (CSDs). Clearing 

members may also pledge securities 

collateral directly to LCH SA, whereby 

it will deposit securities via a Single 

Pledgor Pledged Account (SPPA) 

opened by LCH SA at Euroclear Bank. 

LCH SA also offers a Tri-Party solution 

whereby LCH SA and a Clearing 

member may appoint Euroclear Bank 

and/or Euroclear France as a triparty 

agent and authorize such triparty agent 

to enter settlement instructions on their 

behalf into the securities settlement 

system to affect movements of securities 

between a giver account and a taker 

account opened with the relevant 

triparty agent on a full title transfer 

basis for the purposes of transferring 

Collateral to LCH SA or releasing such 

collateral. LCH SA currently applies the 

following fees for securities collateral 

for CDSClear house and client accounts: 

Securities 

House Client 

Full title 

transfer Pledge Triparty CDSClear clients 

Government Securities .......... Australia ....................................................... 13 NA NA 10 

Austria .......................................................... 11 15 9.5 10 


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87658 Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices 

6 15 U.S.C. 78a et seq. 7 15 U.S.C. 78q–1(b)(3)(D). 

8 17 CFR 240.17Ad–22(e)(7)(i). 9 Id. 

Securities 

House Client 

Full title 

transfer Pledge Triparty CDSClear clients 

Belgium ........................................................ 11 15 9.5 10 

Canada ......................................................... 13 NA NA 10 

Denmark ....................................................... 13 NA NA 10 

Finland .......................................................... 11 15 9.5 10 

France .......................................................... 11 15 9.5 10 

Germany ....................................................... 11 15 9.5 10 

Italy ............................................................... 11 15 9.5 10 

Japan ............................................................ 13 NA NA 10 

Netherlands .................................................. 11 15 9.5 10 

Norway ......................................................... 13 NA NA 10 

Portugal ........................................................ 11 NA 9.5 10 

Spain ............................................................ 11 15 9.5 10 

Sweden ........................................................ 13 NA NA 10 

Switzerland ................................................... 13 NA NA 10 

UK ................................................................ 11 15 NA 10 

USA .............................................................. 11 15 NA 10 

Supranationals ...................... European Financial Stability Facility ............ 13 15 11.5 10 

European Stability Mechanism .................... 13 15 11.5 10 

European Investment Bank .......................... 13 15 11.5 10 

European Union ........................................... 13 15 11.5 10 

Investment Bank for Reconstruction and 

Development.

13 15 11.5 10 

Agencies ............................... Rentenbank .................................................. 13 15 11.5 10 

Kreditanstalt fu ̈r Wiederaufbau .................... 13 15 11.5 10 

CADES ......................................................... 13 15 NA 10 

Equities .................................. All (as listed in Haircut Schedule) ................ 13 NA NA NA 

LCH SA is proposing to increase the 

fees for securities collateral posted via 

FTT or tri-party for clearing members by 

1bp and by 10bps for securities 

collateral posted via pledge. LCH SA is 

also proposing to remove the second 

footnote to the securities collateral fee 

table, as the Triparty fees are now 

currently effective for all services. LCH 

SA is not proposing any changes to the 

fees charged to CDSClear Clients or for 

other non-cash collateral types. As 

previously noted, LCH SA charges 

different fees depending on the type of 

securities, the way that such securities 

are deposited, as well as the type of 

activity these cover. As a reminder, LCH 

SA has the capacity to raise euro 

liquidity by: 

• pledging euro securities posted via 

FTT in the Banque de France 3G Pool; 

and 

• executing cross-currency repo 

trades to borrow euro cash, 

collateralized by U.S. Treasuries and 

GBP Gilts posted via FTT. 

However, securities posted by 

clearing members via pledge cannot be 

used for liquidity risk management 

purposes, and as such, are not 

considered liquid assets. LCH SA 

believes the increase in the fees for 

securities collateral and concurrent 

decrease in the spread for cash collateral 

will create an additional incentive for 

clearing members to post cash as initial 

margin. Consequently, this will 

strengthen LCH SA’s Liquidity Coverage 

Ratio and further enhance LCH SA’s 

liquidity risk profile. 

2. Statutory Basis 

LCH SA believes that the Proposed 

Rule Change is consistent with the 

requirements of Section 17A of the 

Exchange Act 6 and the regulations 

thereunder applicable to LCH SA. 

Section 17A(b)(3)(D) of the Act 7

requires that the rules of a clearing 

agency provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its participants. 

LCH SA believes the amendments to 

the spread applied to cash collateral and 

fees applied to securities collateral for 

the CDSClear business are reasonable. 

To ensure it continues to maintain 

sufficient liquid resources to meet the 

minimum liquid resource requirement 

as set forth in Exchange Act Rule 17Ad– 

22(e)(7)(i), 8 LCH SA is proposing to 

increase the fees for securities collateral 

posted as margin to strengthen its 

Liquidity Coverage Ratio and further 

enhance LCH SA’s liquidity risk profile. 

Concurrent with the increase in fees for 

securities collateral, LCH SA is 

proposing to decrease the spread for 

cash collateral. LCH SA assessed the 

impact of the Proposed Rule Change by 

applying the proposed cash spreads and 

securities collateral fees against the 

current portfolio of margin collateral for 

CDSClear members and concluded these 

changes will not have a significant 

impact on expected revenues and are 

thus reasonable for CDSClear clearing 

members. 

In addition, LCH SA believes the 

Proposed Rule Change is equitable for 

all participants. All CDSClear Members 

will continue to have the choice to post 

either securities collateral or cash 

collateral to satisfy initial margin 

requirements. Clearing members 

wishing to post securities collateral via 

FTT will continue to face a lower fee 

than posting via a pledge arrangements. 

Likewise, clearing members may 

continue to post securities collateral via 

the tri-party option at a lower fee rate 

than FTT or via pledge. LCH SA 

believes the change in securities 

collateral fees are equitable for all 

clearing members and enables LCH SA 

to strengthen its liquidity risk profile. 

LCH SA also believes the 

amendments to the spreads applied to 

cash collateral and fees applied to 

securities collateral for the CDSClear 

business are consistent with the 

requirements set forth in Exchange Act 

Rule 17Ad–22(e)(7)(i).9 Exchange Act 

Rule 17Ad–22(e)(7)(i) requires clearing 

agencies to, inter alia, establish, 

implement, maintain and enforce 

written policies and procedures 

reasonably designed to . . . maintain 

sufficient liquid resources at the 


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Federal Register / Vol. 89, No. 213 / Monday, November 4, 2024 / Notices 87659 

10 Id. 

11 15 U.S.C. 78q–1(b)(3)(D). 

12 17 CFR 240.17Ad–22(e)(7)(i). 

13 15 U.S.C. 78q–1(b)(3)(I). 14 17 CFR 200.30–3(a)(12). 

minimum in all relevant currencies to 

effect same-day and, where appropriate, 

intraday and multiday settlement of 

payment obligations with a high degree 

of confidence under a wide range of 

foreseeable stress scenarios that 

includes, but is not limited to, the 

default of the participant family that 

would generate the largest aggregate 

payment obligation for the covered 

clearing agency in extreme but plausible 

market conditions.10 As previously 

noted, LCH SA anticipates the Proposed 

Rule Change will strengthen its 

Liquidity Coverage Ratio and further 

enhance its liquidity risk profile by 

incentivizing clearing members to 

increase the amount of cash to satisfy 

margin requirements. The additional 

cash will add to LCH SA’s total liquid 

resources, which can be used for the 

settlement of daily payment obligations, 

including with respect to the default of 

the participant family generating the 

largest aggregate payment obligation for 

LCH SA. 

For these reasons, LCH SA believes 

the Proposed Rule Change is consistent 

with the requirements of Section 

17A(b)(3)(D) of the Act 11 in that the 

amendments to the cash spreads and 

securities fees are reasonable and 

equitable among its participants. In 

addition, LCH SA believes that the 

Proposed Rule Change is consistent 

with the requirements of Exchange Act 

Rule 17Ad–22(e)(7)(i) 12 by enhancing 

LCH SA’s liquidity risk profile. 

B. Clearing Agency’s Statement on 

Burden on Competition 

Section 17A(b)(3)(I) of the Act 13

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. LCH SA does not 

believe that the Proposed Rule Change 

would impose any burden on 

competition. The Proposed Rule Change 

will enhance LCH SA’s ability to 

manage the liquidity risks and related 

costs associated with converting 

securities collateral to cash and will 

apply equally to all participants. LCH 

SA also believes the proposed increase 

in fees for securities collateral will not 

be burdensome for participants, as 

participants will continue to have the 

option of posting securities collateral as 

initial margin or instead post cash 

collateral subject to the decreased 

spread. Therefore, LCH SA does not 

believe that the Proposed Rule Change 

would impose any burden on 

competition 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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and paragraph (f) of Rule 

19b–4 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

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

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

LCH SA–2024–004 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–2024–004. 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 such filings 

will also be available for inspection and 

copying at the principal office of LCH 

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

www.lch.com/resources/rules-andregulations/proposed-rule-changes-0. 

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–2024–004 and 

should be submitted on or before 

November 25, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–25533 Filed 11–1–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

35351A; 812–15580] 

Institutional Investment Strategy Fund 

and Buena Capital Advisors, LLC 

October 29, 2024. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’). 

ACTION: Notice. 

Notice of an application under section 

6(c) of the Investment Company Act of 

1940 (the ‘‘Act’’) for an exemption from 

sections 18(a)(2), 18(c) and 18(i) of the 

Act, under sections 6(c) and 23(c) of the 

Act for an exemption from rule 23c–3 

under the Act, and for an order pursuant 

to section 17(d) of the Act and rule 17d– 

1 under the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order to permit certain 

registered closed-end investment 

companies to issue multiple classes of 

shares and to impose asset-based 


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