92978 Federal Register / Vol. 89, No. 227 / Monday, November 25, 2024 / Notices 

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). 

5 17 CFR 240.19b–4(f)(4). 

6Terms not defined herein are defined in the 

NSCC Rules & Procedures (‘‘Rules’’), available at 

www.dtcc.com/legal/rules-and-procedures. 

7 I&RS Members include (i) insurance companies 

that are Insurance Carrier/Retirement Services 

Members (‘‘Carriers’’); and (ii) Carriers’ 

intermediaries, such as broker-dealers, banks and 

insurance agencies, that are Members, Mutual 

Fund/Insurance Services Members and Data 

Services Only Members that distribute participating 

Carriers’ insurance products (collectively, 

‘‘Distributors,’’ and, together with ‘‘Carriers,’’ 

collectively referred to herein as ‘‘I&RS Members’’). 

8NSCC has in place procedures to control costs 

and to regularly review pricing levels against costs 

of operation. NSCC’s fees are cost-based plus a 

markup as approved by its Board of Directors. This 

markup is applied to recover development costs 

and operating expenses and to accumulate capital 

sufficient to meet regulatory and economic 

requirements. See NSCC Disclosure Framework for 

Covered Clearing Agencies and Financial Market 

Infrastructures, available at www.dtcc.com/-/media/ 

Files/Downloads/legal/policy-and-compliance/ 

NSCC_Disclosure_Framework.pdf, at 118. 

9 ‘‘I&RS Data’’ means data and information 

relating to I&RS Eligible Products. See Rule 57, 

supra note 6. ‘‘I&RS Eligible Product’’ means an 

insurance product or a retirement or other benefit 

plan or program included in the list for which 

provision is made in Section 1.(d) of Rule 3 of the 

Rules. See definition of I&RS Eligible Product, Rule 

1, supra note 6. 

for investigations of individuals holding 

low risk non-sensitive positions. 

As a result of a new fiscal year 

beginning after the posting of the 60 Day 

Notice on September 11, 2024, the 

number of respondents in the analysis 

has been updated from the average of 

55,000 respondents in FY18, 19 and 20 

to 239,900, which was the number of 

respondents in FY24. The actual 

estimated time per respondent has not 

changed and remains 120 minutes. 

Analysis 

Agency: Office of Personnel 

Management. 

Title: Questionnaire for Non-Sensitive 

Positions, Standard Form 85 (SF 85). 

OMB Number: 3206–0261. 

Frequency: On occasion. 

Affected Public: Individuals. 

Number of Respondents: 239,200. 

Estimated Time per Respondent: 120 

minutes. 

Total Burden Hours: 478,400. 

Alexys Stanley, 

Federal Register Liaison. 

[FR Doc. 2024–27464 Filed 11–22–24; 8:45 am] 

BILLING CODE 6325–66–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101656; File No. SR– 

NSCC–2024–009] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Add Activity Status 

Tracking to I&RS and Make Certain 

Clarification Changes in the Rules 

November 19, 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 November 

14, 2024, National Securities Clearing 

Corporation (‘‘NSCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the clearing agency. NSCC filed the 

proposed rule change pursuant to 

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

19b–4(f)(2) 4 and Rule 19b–4(f)(4) 

thereunder.5 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 Insurance & 

Retirement Services (‘‘I&RS’’) in order to 

provide for Activity Status Tracking 

(‘‘Activity Status’’), a new service 

offering designed to allow I&RS 

members to communicate with each 

other relating to activity status of I&RS 

transactions, and to make other 

clarification changes to the Rules, as 

described in greater detail below.6

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The proposed rule change consists of 

modifications to I&RS in order to 

provide for Activity Status, a new 

service offering designed to allow I&RS 

members to communicate with each 

other relating to activity status of I&RS 

transactions, and to make other 

clarification changes to the Rules, as 

described in greater detail below. 

The objectives and expected impacts 

of the proposed rule change to I&RS 

Members 7 would be to make available 

a new optional service offering that 

would provide a more efficient method 

for I&RS Members to choose to transmit, 

view and retrieve I&RS Data and to 

improve the Member’s understanding of 

the Rules relating to I&RS. 

Activity Status was developed at the 

request of and in consultation with 

industry participants, and the proposed 

fees for the service offering were 

designed to pay for the costs of 

developing and maintaining such 

offering in a manner that would fulfill 

the requirements expected from 

industry participants consistent with 

NSCC’s cost-based plus markup fee 

model.8 Based on financial projections 

of development and maintenance costs 

and anticipated participation by I&RS 

Members, it is anticipated that the costs 

and revenues would result in a slight 

increase in the overall operating margin 

percentage of I&RS. NSCC anticipates 

recouping the costs of building the 

service offering within approximately 

3.5 years of implementing the fees. In 

addition to the building cost of Activity 

Status, NSCC incurs a run-cost based on 

use and maintenance of its staffing and 

technology resources to operate I&RS. 

NSCC would continue to evaluate the 

costs and revenues of Activity Status 

after implementation to determine if its 

fees for the service are consistent with 

NSCC’s overall pricing methodology. 

As with its other services, if NSCC 

determines that its operating margin is 

too high or too low, NSCC could change 

pricing levels of Activity Status to be 

consistent with its overall pricing 

methodology. 

I&RS 

I&RS allows I&RS Members to 

transmit I&RS Data 9 among each other, 

including data relating to annuity and 

life insurance policy applications and 

premiums, licensing and appointments, 

commission payments, reporting of 

client positions and valuations, asset 

pricing, financial activity reporting and 

annuity customer account transfers. 

I&RS also allows certain I&RS Members 

to settle payments relating to I&RS 

Eligible Products. NSCC does not act as 

a central counterparty with respect to 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 89, No. 227 / Monday, November 25, 2024 / Notices 92979 

10 15 U.S.C. 78q–1(b)(3)(F). 

11 Id. 

12 Id. 

13 15 U.S.C. 78q–1(b)(3)(D). 

I&RS and I&RS are not guaranteed by 

NSCC. 

Activity Status Tracking (ACT) 

NSCC is proposing to establish 

Activity Status which is intended to 

allow I&RS Members to communicate 

the status of business transactions 

involving I&RS Eligible Products. 

Currently, there is not a standardized 

method for I&RS Members to 

communicate with each other relating to 

the status of transactions involving I&RS 

Eligible Products from the beginning of 

the application process until the 

applicable contracts are in force. 

Applications that are submitted to 

Carriers may take weeks to process 

before a position is sent back to a 

Distributor. During the processing time, 

there is currently no standardized way 

to communicate the status of the order. 

Overseeing the statuses of new business 

across different Carriers can be difficult 

and inefficient, with many 

communications existing across 

multiple mediums, like paper 

applications, Carrier websites and 

phone calls. For instance, some Carriers 

offer activity status of new business via 

their public website which requires 

Distributors to go to multiple Carrier 

websites to get a complete view of their 

outstanding business. 

Clients have requested a feature that 

would allow I&RS Members to update 

each other on the status of transactions 

in I&RS Eligible Products beginning at 

the application stage including such 

information as the applicable Carrier, 

product type, product CUSIP (if 

applicable), the producer involved in 

the transaction and similar information. 

Activity Status would provide the 

ability of I&RS Members to 

communicate with each other using 

standardized messages relating to the 

status of transactions in I&RS Eligible 

Products from the start of such 

transactions beginning at the 

application stage. Activity Status is 

designed to standardize messages 

relating to providing real-time activity 

across platforms and planning tools. 

I&RS Members would be able to track 

electronic applications through the 

underwriting process, participating in 

standardized communication. 

As with other I&RS service offerings, 

Activity Status was built to be 

accessible by an Application 

Programming Interface (‘‘API’’) 

specifically for use for users of Activity 

Status. Using the Activity Status API, 

I&RS Members will be able to send 

messages in a standard file format 

containing information relating to the 

activity status of each transaction. 

NSCC would add the following 

description of Activity Status in a new 

Section 3 in Rule 57: 

Activity Status Tracking (ACT) 

SEC. 3. The Corporation may provide 

a service to enable I&RS Members to 

transmit status information to other 

I&RS Members relating to transactions 

involving I&RS Eligible Products. 

NSCC would also renumber the 

sections following Activity Status to 

reflect the addition of Activity Status as 

a new Section 3. 

NSCC would also amend Addendum 

A to provide for fees for Activity Status. 

The fees would be $0.35 per transaction, 

per side. NSCC would add a fee 

description for Activity Status in a 

Section IV.H.3. in Addendum A. 

Additional Clarification Changes 

NSCC would also modify the names 

of two services in Addendum A for 

clarity. In Section IV.H.2.c. of 

Addendum A, NSCC would change the 

description of ‘‘Commissions (COM)’’ to 

‘‘Commissions and Compensation 

(COM)’’ and in Section IV.H.2.d. of 

Addendum A, NSCC would change the 

description of ‘‘Initial Application 

Information (APP)’’ to ‘‘Applications 

and Premiums (APP)’’. In each case, 

NSCC would be changing the 

descriptions to match the formal name 

of those services and to match the 

description of those services in Rule 57 

for consistency and to make the Rules 

easier to understand for I&RS Members. 

Implementation Timeframe 

NSCC would implement the proposed 

changes on November 21, 2024. 

2. Statutory Basis 

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

requires, that the Rules be designed to, 

among other things, promote the prompt 

and accurate clearance and settlement of 

securities transactions.10

The proposed addition of the Activity 

Status service offering would provide a 

standardized method to communicate 

I&RS Data among I&RS Members 

relating to the activity status of 

transactions in I&RS Eligible Products 

beginning at the application stage, as 

discussed above. The addition of 

Activity Status would enhance I&RS 

Members’ ability to communicate with 

each other relating to ongoing 

transactions starting at the application 

stage and bring greater efficiency and 

expediency to the buying, selling and 

settlement of such I&RS Eligible 

Products among I&RS Members. 

Providing a more efficient and 

streamlined process with respect to 

transmitting and receiving such I&RS 

Data would promote the prompt and 

accurate clearance and settlement of 

securities transactions, consistent with 

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

of the Act.11

The renumbering of the Sections in 

Rule 57 and the renaming of two 

services in Addendum A discussed 

above is consistent with this provision 

because the proposed change would 

enhance clarity and transparency for 

participants with respect to services 

offered by NSCC allowing I&RS 

Members to have a better understanding 

of the Rules relating to I&RS. Having 

clear and accurate Rules would help 

I&RS Members to better understand 

their rights and obligations regarding 

NSCC’s services. NSCC believes that 

when I&RS Members better understand 

their rights and obligations regarding 

NSCC’s services, they can act in 

accordance with the Rules. NSCC 

believes that better enabling I&RS 

Members to comply with the Rules 

would promote the prompt and accurate 

clearance and settlement of securities 

transactions by NSCC consistent with 

the requirements of the Act, in 

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

Act.12

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

requires that the Rules provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

participants. NSCC believes the 

proposed fees for Activity Status would 

align with the cost of building and 

delivering the proposed service offering, 

consistent with the provision of the Act. 

NSCC believes the proposed changes to 

the fees are equitable because they 

would apply uniformly to all I&RS 

Members that utilize the service 

offering. NSCC believes the proposed 

changes are reasonable because they 

would be commensurate with the costs 

of resources allocated by NSCC in 

developing and maintaining the service 

offering. Based on financial projections 

of development and maintenance costs 

and anticipated participation by I&RS 

Members, it is anticipated that the costs 

and revenues would result in a slight 

increase in the overall operating margin 

percentage of I&RS. Therefore, by 

establishing fees that align with the cost 

of delivery of these service offerings and 

allocating those fees equitably among 

the subscribing users, the proposed rule 

change would provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its participants 


khammond on DSK9W7S144PROD with NOTICES
92980 Federal Register / Vol. 89, No. 227 / Monday, November 25, 2024 / Notices 

14 Id. 

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

16 17 CFR 240.19b–4(f). 

consistent with the requirements of 

Section 17A(b)(3)(D) of the Act.14

(B) Clearing Agency’s Statement on 

Burden on Competition 

NSCC does not believe that the 

proposed rule change would have any 

adverse impact, or impose any burden, 

on competition. 

The proposed changes to adopt 

Activity Status would add optional 

functions to NSCC’s services to provide 

more efficient methods by which 

subscribing Carriers and Distributors 

may transmit, view and retrieve I&RS 

Data. Such changes would not affect 

services for I&RS Members that do not 

subscribe to such service offering and 

non-subscribing I&RS Members would 

transmit, view and retrieve I&RS Data in 

the same manner as they currently 

transmit, view and retrieve I&RS Data. 

The fees for Activity Status were 

designed to be reasonable and align 

with the projected cost of building and 

operating such service offering and 

would be charged ratably based on each 

I&RS Members’ use of such service 

offering. Therefore, the proposed 

changes to implement such optional 

service offerings would not 

disproportionally impact any I&RS 

Members, have any effect on existing 

NSCC services other than to add a new 

method of transmitting, viewing and 

retrieving I&RS Data, nor have any 

adverse impact on competition. 

Moreover, because the proposed rule 

changes would improve the efficiency 

by which subscribing I&RS Members 

may view, transmit and retrieve I&RS 

Data, the proposed rule change may 

have a positive effect on competition 

among Carriers and Distributors. The 

proposed features would provide these 

firms with a faster, more streamlined 

method of transmitting and receiving 

I&RS Data, and therefore could enable 

I&RS Eligible Products to be marketed 

more quickly. Specifically, I&RS 

Members could have the ability to 

distribute I&RS Eligible Products into 

the market to consumers more quickly 

because I&RS Members would have the 

ability to obtain information with 

respect to these products in a quicker, 

more efficient manner. 

NSCC does not believe the 

renumbering of the section numbers in 

Rule 57 in connection with the addition 

of Activity Status or the renaming of 

two services in Addendum A discussed 

above would impact competition. Such 

changes would help to ensure that the 

Rules remain clear and facilitate I&RS 

Members’ understanding of the Rules 

and their obligations thereunder. The 

proposed changes would not affect 

NSCC’s operations or the rights and 

obligations of the membership. As such, 

NSCC believes the proposed rule change 

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 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 

www.sec.gov/regulatory-actions/how-tosubmit-comments. General questions 

regarding the rule filing process or 

logistical questions regarding this filing 

should be directed to the Main Office of 

the Commission’s Division of Trading 

and Markets at tradingandmarkets@

sec.gov or 202–551–5777. 

NSCC reserves the right not to 

respond to any comments received. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A) 15 of the Act and paragraph 

(f) 16 of Rule 19b–4 thereunder. At any 

time within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form 

(https://www.sec.gov/rules/sro.shtml); 

or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NSCC–2024–009 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–2024–009. 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 (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 

10:00 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 

(https://dtcc.com/legal/sec-rulefilings.aspx). Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to File 

Number SR–NSCC–2024–009 and 

should be submitted on or before 

December 16, 2024. 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 89, No. 227 / Monday, November 25, 2024 / Notices 92981 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 99847 

(Mar. 22, 2024), 89 FR 21579 (Mar. 28, 2024) (File 

No. SR–LCH SA–2024–002) (‘‘Notice’’). 

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

5Securities Exchange 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). 

7Securities Exchange Act Release No. 100394 

(June 21, 2024), 89 FR 53685 (June 27, 2024) (File 

No. SR–LCH SA–2024–002). 

8Securities Exchange Act Release No. 101094 

(Sept. 18, 2024), 89 FR 77919 (Sept. 24, 2024) (File 

No. SR–LCH SA–2024–002). 

9Amendment No. 1 modified the Proposed Rule 

Change to require a Select Member to participate in 

competitive bidding in default auctions and 

contribute end-of-day prices should its margins 

exceed a predetermined threshold over a designated 

time. This requirement is discussed in Part II of this 

Order. It also included an Exhibit 3.3 to the filing 

showing LCH SA’s responses to an SEC request for 

information related to the Select Membership 

model. 

10Partial Amendment No. 1 fixed errors in the 

Exhibit 1A filed with Amendment No. 1 by 

replacing the Statutory Basis and Burden on 

Competition sections of the amended Exhibit 1A 

with the text of the Statutory Basis and Burden on 

Competition sections of the amended 19b–4 

narrative. 

11Securities Exchange Act Release No. 101383 

(Oct. 18, 2024), 89 FR 84972 (Oct. 24, 2024) (File 

No. SR–LCH SA–2024–002) (‘‘Amended Notice’’). 

12What We Clear, https://www.lch.com/services/ 

cdsclear/what-we-clear (last visited Sept. 27, 2024). 

13Capitalized terms not otherwise defined herein 

have the meanings assigned to them in the 

CDSClear Rule Book or CDS Clearing Procedures, as 

applicable. 

14The Rule Book defines an Affiliated Firm as 

any Affiliate or any entity that is otherwise member 

to the same institutional protection scheme (as 

defined in the CRR) as the Clearing Member. The 

CRR is defined in the Rule Book as Regulation (EU) 

No. 575/2013 and certain related regulations and 

standards. LCH SA CDS Clearing Rule Book Chapter 

1 Article 1.1.1 An institutional protection scheme 

under the CRR is a contractual or statutory liability 

arrangement that protects those institutions and in 

particular ensures their liquidity and solvency to 

avoid bankruptcy where necessary. Regulation (EU) 

No 575/2013 of the European Parliament and of the 

Council of 26 June 2013 on prudential requirements 

for credit institutions and investment firms and 

amending Regulation (EU) No 648/2012, Article 

113(7), available at https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:32013R0575. 

15Notice, 89 FR at 21579. 

16 Id. at 21581. 

17Notice, 89 FR at 21579, 81. 

18Select Members originally were not allowed to 

offer client clearing services. See LCH SA, Self 

Certification Letter, Select Membership, available 

at, https://www.cftc.gov/sites/default/files/filings/ 

orgrules/16/07/rule070816lchsadco001.pdf. In 

2019, the Commission approved amendments to the 

Rule Book and Procedures to allow Select Members 

to provide client clearing services to Affiliated 

Firms. See Securities Exchange Act Release No. 

86376 (July 15, 2019), 84 FR 34955, 34957 (July 19, 

2019) (File No. SR–LCH SA–2019–003). LCH SA 

proposed these to allow client clearing limited in 

this manner because a Select Member requested the 

ability to offer client clearing to an affiliate. LCH SA 

provided background and analysis related to the 

Select Membership model in confidential Exhibit 

3.3 to the Proposed Rule Change, which LCH SA 

added to the Proposed Rule change with 

Amendment No. 1. 

19Notice, 89 FR at 21581. 

20Currently, Select Members and General 

Members must nominate representatives for the 

CDS Default Management Committee and CDS 

Default Management Group because both Select 

Members and General Members currently must 

participate in auctions to some extent. Notice, 89 

FR at 21581; LCH SA provided background and 

analysis related to the Select Membership model in 

confidential Exhibit 3.3 to the Proposed Rule 

Change, which LCH SA added to the Proposed Rule 

change with Amendment No. 1. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–27478 Filed 11–22–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101654; File No. SR–LCH 

SA–2024–002] 

Self-Regulatory Organizations; LCH 

SA; Order Granting Accelerated 

Approval of Proposed Rule Change, as 

Modified by Amendment No. 1 and 

Partial Amendment No. 1, Relating to 

the CDSClear Select Membership 

Model 

November 19, 2024. 

I. Introduction 

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’’), 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2 a 

proposed rule change (the ‘‘Proposed 

Rule Change’’) to amend its CDS 

Clearing Rule Book (the ‘‘Rule Book’’) 

and CDS Clearing Procedures 

(‘‘Procedures’’). The Proposed Rule 

Change was published for 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 

proceedings to determine whether to 

approve or disapprove the Proposed 

Rule Change, until November 23, 2024.8

On October 11, 2024, LCH SA filed 

Amendment No. 1 to the Proposed Rule 

Change.9 On October 17, 2024, LCH SA 

filed Partial Amendment No. 1 to the 

Proposed Rule Change.10 Notice of 

Amendment No.1 and Partial 

Amendment No. 1 were published in 

the Federal Register on October 24, 

2024.11 The Commission has not 

received any comments on the Proposed 

Rule Change, as modified by 

Amendment No. 1 and Partial 

Amendment 1. For the reasons 

discussed below, the Commission is 

approving the Proposed Rule Change, as 

modified by Amendment No. 1 and 

Partial Amendment No. 1 (hereinafter 

defined as ‘‘Proposed Rule Change’’) on 

an accelerated basis. 

II. Description of the Proposed Rule 

Change 

LCH SA is a clearing agency 

registered with the Commission. 

Through its CDSClear business unit, 

LCH SA provides central counterparty 

services for security-based swaps, 

including credit default swaps, and 

options on credit default swaps.12 LCH 

SA provides these central counterparty 

services to its Clearing Members.13

Some of these Clearing Members 

provide clearing services for clients. 

LCH SA has two different types of 

Clearing Members, General Members 

and Select Members, with different 

obligations to LCH SA. General 

Members must participate in 

competitive bidding for auction 

packages, must submit prices to LCH 

SA, and may provide client clearing 

services to Affiliated Firms 14 and nonAffiliated Firms.15 General Members 

also must nominate representatives for 

the CDS Default Management 

Committee and CDS Default 

Management Group.16

Select Members, on the other hand, 

must participate in competitive bidding 

only for a subset of Auction Packages 

and may opt out of submitting prices.17

Select Members also may provide client 

clearing services,18 but only for 

Affiliated Firms. Finally, while Select 

Members also must nominate 

representatives for the CDS Default 

Management Committee and CDS 

Default Management Group,19 as noted, 

their participation in competitive 

bidding is limited to a subset of Auction 

Packages.20

The obligations of General Members 

and Select Members differ because LCH 

SA designed the two membership 

categories with different potential 

members in mind. LCH SA created the 


khammond on DSK9W7S144PROD with NOTICES