Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 93685 

18 15 U.S.C. 78s(b)(3)(A). 

19 17 CFR 240.19b–4(f). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

with the economics of a maker-taker 

model, as well as the expectations of 

Members that remove liquidity from 

EDGA (i.e., Members would expect to 

pay a fee to remove liquidity). 

Moreover, moving EDGA to the list of 

high-cost destinations for the RMPL 

routing strategy that are assigned the PL 

fee code simply reflects the fact that 

orders routed to EDGA that remove 

liquidity will now—just as they do on 

other exchanges accessed with the PL 

fee code—pay a remove fee instead of 

receiving a rebate. In addition, the BJ fee 

code was typically appended to orders 

utilizing the TRIM or SLIM strategies, 

which are designed to seek low-cost 

executions. Given EDGA’s transition to 

a maker-taker fee model, though, 

removers of liquidity will now pay a 

remove fee. As such, it is appropriate to 

remove the BJ fee code as Member’s 

utilizing this fee code would expect to 

receive a rebate and not expect to pay 

a fee. Accordingly, these proposed 

changes are necessary and appropriate 

in order to align Members’ expectations 

with the economics of EDGA’s new 

maker-taker fee model and will not have 

any impact on competition. 

Additionally, moving EDGA from fee 

code, PX, to fee code is PL, will not 

have any impact on competition. Rather, 

it is necessary and appropriate given 

EDGA’s transition to a maker-taker fee 

model. Users of the PL fee code already 

expect to pay fees for removing liquidity 

from exchanges, whereas users of the PX 

fee code would expect lower-cost 

executions for removing liquidity from 

exchanges, including EDGA. 

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 18 and paragraph (f) of Rule 

19b–4 19 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–2024–042 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–2024–042. 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–2024–042 and should be 

submitted on or before December 18, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–27765 Filed 11–26–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101686; File No. SR–MRX– 

2024–43] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend its Fees for 

Connectivity and Co-location Services 

November 21, 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 

8, 2024, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) 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 Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s fees for connectivity and colocation services, as described further 

below. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/mrx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 


ddrumheller on DSK120RN23PROD with NOTICES1
93686 Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 

3The Exchange initially filed the proposed 

pricing change on March 1, 2024 (SR–MRX–2024– 

04). On April 29, 2024, the Exchange withdrew that 

filing and submitted SR–MRX–2024–10. On June 

27, 2024, the Exchange withdrew SR–MRX–2024– 

10 and submitted SR–MRX–2024–18. The Exchange 

withdrew SR–MRX–2024–18 and replaced it with 

SR–MRX–2024–34 on September 10, 2024. On 

October 11, 2024, The Exchange replaced SR–MRX– 

2024–34 with SR–MRX–2024–41. This instant filing 

replaces SR–MRX–2024–41. 

4The Exchange proposes to exclude the GPS 

Antenna fees from the proposed fee increase 

because, unlike the other fees in General 8, the 

Exchange recently increased its GPS Antenna fees. 

See Securities Exchange Act Release No. 34–99130 

(December 11, 2023), 88 FR 87009 (December 15, 

2023) (SR–MRX–2023–24). The Exchange also 

proposes to exclude the Cabinet Proximity Option 

Fee for cabinets with power density >10kW from 

the proposed fee increase because the Exchange 

recently established such fee. See Securities 

Exchange Act Release No. 34–100200 (May 21, 

2024), 89 FR 46183 (May 28, 2024) (SR–MRX– 

2024–12). Similarly, the Exchange proposes to 

exclude from the proposed fee increase those fees 

that the Exchange recently established for services 

in its new NY11–4 expansion facility. See 

Securities Exchange Act Release No. 34–101269 

(October 7, 2024), 89 FR 82657 (October 11, 2024) 

(SR–MRX–2024–37). 

5See https://fred.stlouisfed.org/series/ 

PCU51825182#0. 6See https://www.bls.gov/ppi/overview.htm. 

7See Id. 

8NAICS appears in table 5 of the PPI Detailed 

Report and is available at https://data.bls.gov/ 

timeseries/PCU518210518210. 

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 

The purpose of the proposed rule 

change is to amend the Exchange’s fees 

relating to connectivity and co-location 

services.3 Specifically, the Exchange 

proposes to raise its fees for 

connectivity and co-location services in 

General 8 as well as certain fees related 

to its Testing Facilities in Options 7, 

Section 7 by 10%, with certain 

exceptions. 

General 8, Section 1 includes the 

Exchange’s fees that relate to 

connectivity, including fees for cabinets, 

external telco/inter-cabinet connectivity 

fees, fees for connectivity to the 

Exchange, fees for connectivity to third 

party services, fees for market data 

connectivity, fees for cabinet power 

install, and fees for additional charges 

and services. General 8, Section 2 

includes the Exchange’s fees for direct 

connectivity services, including fees for 

direct circuit connection to the 

Exchange, fees for direct circuit 

connection to third party services, and 

fees for point of presence connectivity. 

With the exception of the Exchange’s 

GPS Antenna fees and the Cabinet 

Proximity Option Fee for cabinets with 

power density >10kW,4 the Exchange 

proposes to increase its fees throughout 

General 8 by 10%. 

In addition to increasing fees in 

General 8, the Exchange also proposes 

to increase certain fees in Options 7, 

Section 7, which relate to the Testing 

Facility. Options 7, Section 7 provides 

that subscribers to the Testing Facility 

located in Carteret, New Jersey shall pay 

a fee of $1,000 per hand-off, per month 

for connection to the Testing Facility. 

The hand-off fee includes either a 1Gb 

or 10Gb switch port and a cross connect 

to the Testing Facility. In addition, 

Options 7, Section 7 provides that 

subscribers shall also pay a one-time 

installation fee of $1,000 per hand-off. 

The Exchange proposes to increase 

these aforementioned fees by 10% to 

require that subscribers to the Testing 

Facility shall pay a fee of $1,100 per 

hand-off, per month for connection to 

the Testing Facility and a one-time 

installation fee of $1,100 per hand-off. 

The proposed increases in fees would 

enable the Exchange to maintain and 

improve its market technology and 

services to remain competitive with its 

peers. Over the years, customer demand 

for more sophisticated, higherthroughput, lower-latency, and higherpower connectivity solutions has 

increased. The Exchange continues to 

invest in maintaining, improving, and 

enhancing its connectivity and colocation products, services, and 

facilities—for the benefit and often at 

the behest of its customers. Such 

enhancements include refreshing 

hardware and expanding Nasdaq’s 

existing co-location facility to offer 

customers additional space and power. 

Nevertheless, and with the exception of 

fees that were established as part of a 

new service in 2017 (and have remained 

unchanged since their adoption), the 

Exchange has not increased any of the 

fees included in the proposal since prior 

to 2017, and many of the fees date back 

to between 2010 and 2014. For each of 

the connectivity products and services 

that pre-date 2017, inflation (as 

measured using the ‘‘Data PPI’’ metric 

described below) has been between 

roughly 15–17%, and in no instance has 

such inflation been less than 10%. 

Nevertheless, the Exchange proposes to 

increase its fees only with respect to the 

10% inflation that has occurred since 

2017. 

As discussed below, the Exchange 

proposes to adjust its fees by an 

industry- and product-specific 

inflationary measure. It is reasonable 

and consistent with the Act for the 

Exchange to recoup its investments, at 

least in part, by adjusting its fees. 

Continuing to operate at fees frozen at 

2010–2017 levels impacts the 

Exchange’s ability to enhance its 

offerings and the interests of market 

participants and investors. 

The fee increases the Exchange 

proposes are based on an industryspecific Producer Price Index (‘‘PPI’’), 

which is a tailored measure of 

inflation.5 As a general matter, the 

Producer Price Index is a family of 

indexes that measures the average 

change over time in selling prices 

received by domestic producers of 

goods and services. PPI measures price 

change from the perspective of the 

seller. This contrasts with other metrics, 

such as the Consumer Price Index 

(‘‘CPI’’), that measure price change from 

the purchaser’s perspective.6 About 

10,000 PPIs for individual products and 

groups of products are tracked and 

released each month.7 PPIs are available 

for the output of nearly all industries in 

the goods-producing sectors of the U.S. 

economy—mining, manufacturing, 

agriculture, fishing, and forestry—as 

well as natural gas, electricity, and 

construction, among others. The PPI 

program covers approximately 69 

percent of the service sector’s output, as 

measured by revenue reported in the 

2017 Economic Census. 

For purposes of this proposal, the 

relevant industry-specific PPI is the 

Data Processing and Related Services 

PPI (‘‘Data PPI’’), which is an industry 

net-output PPI that measures the 

average change in selling prices 

received by companies that provide data 

processing services. 

The Data PPI was introduced in 

January 2002 by the Bureau of Labor 

Statistics (‘‘BLS’’) as part of an ongoing 

effort to expand Producer Price Index 

coverage of the services sector of the 

U.S. economy and is identified as 

NAICS—518210 in the North American 

Industry Classification System.8

According to the BLS ‘‘[t]he primary 

output of NAICS 518210 is the 

provision of electronic data processing 

services. In the broadest sense, 

computer services companies help their 

customers efficiently use technology. 

The processing services market consists 

of vendors who use their own computer 

systems—often utilizing proprietary 

software—to process customers’ 

transactions and data. Companies that 

offer processing services collect, 

organize, and store a customer’s 

transactions and other data for recordkeeping purposes. Price movements for 

the NAICS 518210 index are based on 

changes in the revenue received by 

companies that provide data processing 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 93687 

9See https://www.bls.gov/ppi/factsheets/ 

producer-price-index-for-the-data-processing-andrelated-servicesindustry-naics-518210.htm. 

10See https://www.usinflationcalculator.com/ 

inflation/consumer-price-index-and-annualpercent-changesfrom-1913-to-2008/. 

11See supra discussion of connectivity product 

and facility improvements. Additionally, other 

exchanges have filed for increases in certain fees, 

based in part on comparisons to inflation. See, e.g., 

Securities Exchange Act Release Nos. 34–100004 

(April 22, 2024), 89 FR 32465 (April 26, 2024) (SR– 

CboeBYX–2024–012); and 34–100398 (June 21, 

2024), 89 FR 53676 (June 27, 2024) (SR–BOX–2024– 

16)l; Securities Exchange Act Release No. 34– 

100994 (September 10, 2024), 89 FR 75612 

(September 16, 2024) (SR–NYSEARCA–2024–79). 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(4) and (5). 

14See https://www.officialdata.org/us/inflation/ 

2017?amount=1. 

15See, e.g., Securities Exchange Act Release No. 

34–101077 (September 18, 2024), 89 FR 77904 

(September 24, 2024) (SR–MRX–2024–36 (Notice of 

Filing and Immediate Effectiveness of Proposed 

Rule Change To Expand [the Exchange’s] CoLocation Services)). 

services. Each month, companies 

provide net transaction prices for a 

specified service. The transaction is an 

actual contract selected by probability, 

where the price-determining 

characteristics are held constant while 

the service is repriced. The prices used 

in index calculation are the actual 

prices billed for the selected service 

contract.’’ 9

The Exchange believes the Data PPI is 

an appropriate measure to be considered 

in the context of the proposed rule 

change to modify the fee for its 

connectivity products because the 

Exchange uses its ‘‘own computer 

systems’’ and ‘‘proprietary software,’’ 

i.e., its own data center and proprietary 

matching engine software, respectively, 

to collect, organize, store and report 

customers’ transactions in U.S. equity 

securities on the Exchange’s proprietary 

trading platform. In other words, the 

Exchange is in the business of data 

processing and related services. 

For purposes of this proposed rule 

change, the Exchange examined the 

Data PPI value for the period from 

January 2017 to August 2024. The Data 

PPI had a starting value of 105.6 in 

January 2017 and an ending value of 

116.022 in August 2024, a 10.422% 

increase. This indicates that companies 

who are also in the data storage and 

processing business have generally 

increased prices for a specified service 

covered under NAICS 518210 by an 

average of 10.422% during this period. 

Based on that percentage change, the 

Exchange proposes to make a one-time 

fee increase of only 10%, which reflects 

an increase covering roughly the entire 

period since the last price adjustments 

to these fees were made. 

The Exchange further believes the 

Data PPI is an appropriate measure for 

purposes of the proposed rule change on 

the basis that it is a stable metric with 

limited volatility, unlike other 

consumer-side inflation metrics. In fact, 

the Data PPI has not experienced a 

greater than 2.16% increase for any one 

calendar year period since Data PPI was 

introduced into the PPI in January 2002. 

The average calendar year change from 

January 2002 to December 2023 was 

.62%, with a cumulative increase of 

15.67% over this 21-year period. The 

Exchange believes the Data PPI is 

considerably less volatile than other 

inflation metrics such as CPI, which has 

had individual calendar-year increases 

of more than 6.5%, and a cumulative 

increase of over 73% over the same 

period.10

The Exchange believes the Data PPI, 

and significant investments into, and 

enhanced performance of, the Exchange 

support the reasonableness of the 

proposed fee increases.11

These proposed fee increases will be 

immediately effective upon filing. 

However, going forward and until 

December 1, 2024, the Exchange will 

waive all fees set forth herein to the 

extent that such fees exceed the levels 

that would have been charged for the 

same products and services purchased 

during that time period, had such fees 

been calculated at the rates set forth in 

SR–MRX–2024–34 (i.e., pricing 

reflective of a 5.5% increase from prior 

fee levels). This waiver is reasonable, 

equitable, and not unfairly 

discriminatory because it will afford all 

customers in excess of the 30-day prior 

notice period for fee changes set forth in 

the Exchange’s service terms. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,12 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,13 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

This belief is based on two factors. 

First, the current fees do not properly 

reflect the quality of the services and 

products, as fees for the services and 

products in question have been static in 

nominal terms, and therefore falling in 

real terms due to inflation. Second, the 

Exchange believes that investments 

made in enhancing the capacity and 

speed of Exchange systems increase the 

performance of the services and 

products. 

The Proposed Rule Change Is 

Reasonable 

As noted above, the Exchange has not 

increased any of the fees included in the 

proposal since 2017 or earlier. However, 

in the years following the last fee 

increases, the Exchange has made 

significant investments in upgrades to 

its connectivity products, services, and 

facilities, enhancing the quality of its 

services. In other words, Exchange 

customers have greatly benefitted, while 

the Exchange’s ability to recoup its 

investments has been hampered. 

Between 2017 and 2024, the inflation 

rate is 3.64% per year, on average, 

producing a cumulative inflation rate of 

28.43%.14 Using the more targeted 

inflation number of Data PPI, the 

cumulative inflation rate was 10.422%. 

The exchange believes the Data PPI is a 

reasonable metric to base this fee 

increase on because it is targeted to 

producer-side increases in the data 

processing industry. 

Notwithstanding inflation, as noted 

above, the Exchange has not increased 

its fees at all for over seven years for the 

subject services. The proposed fee 

changes represent a modest increase 

from the current fees. The Exchange 

believes the proposed fee increase is 

reasonable in light of the Exchange’s 

continued expenditure in maintaining a 

robust technology ecosystem. 

Furthermore, the Exchange continues to 

invest in maintaining and enhancing its 

connectivity products—for the benefit 

and often at the behest of its customers 

and global investors. Such 

enhancements include refreshing all 

aspects of the technology ecosystem 

including software, hardware, and 

network while introducing new and 

innovative products and expanded and 

modernized facilities.15 The goal of the 

enhancements discussed above, among 

other things, is to provide faster, highercapacity, and more modern connectivity 

products and services. Accordingly, the 

Exchange continues to expend resources 

to innovate and modernize technology 

so that it may benefit its members in 

offering its connectivity products and 

services. 

The Proposed Fees Are Equitably 

Allocated and Not Unfairly 

Discriminatory 

The Exchange believes that the 

proposed fee increases are equitably 


ddrumheller on DSK120RN23PROD with NOTICES1
93688 Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 

16 15 U.S.C. 78s(b)(3)(A)(ii). 17 17 CFR 200.30–3(a)(12). 

allocated and not unfairly 

discriminatory because they would 

apply to all market participants that 

choose to purchase connectivity 

products and services from the 

Exchange. Any participant that chooses 

to purchase the Exchange’s connectivity 

products and services would be subject 

to the same Fee Schedule, regardless of 

what type of business they operate or 

the use they plan to make use of the 

products and services. Additionally, the 

fee increase would be applied uniformly 

to market participants without regard to 

Exchange membership status or the 

extent of any other business with the 

Exchange or affiliated entities. The 

Exchange also believes that the proposal 

represents an equitable allocation of 

reasonable dues, fees and other charges 

because Exchange fees have fallen in 

real terms during the relevant period. 

Finally, the Exchange believes that the 

proposed fee changes are not unfairly 

discriminatory because the fees would 

be assessed uniformly across all market 

participants, in the same manner they 

are today, that voluntarily purchase the 

Exchange’s connectivity products and 

services, which would remain available 

for purchase by all market participants. 

These proposed fee increases will be 

immediately effective upon filing. 

However, going forward and until 

December 1, 2024, the Exchange will 

waive all fees set forth herein to the 

extent that such fees exceed the levels 

that would have been charged for the 

same products and services purchased 

during that time period, had such fees 

been calculated at the rates set forth in 

SR–MRX–2024–34 (i.e., pricing 

reflective of a 5.5% increase from prior 

fee levels). This waiver is reasonable, 

equitable, and not unfairly 

discriminatory because it will afford all 

customers in excess of the 30-day prior 

notice period for fee changes set forth in 

the Exchange’s service terms. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed fees will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Intramarket Competition 

The Exchange believes that the 

proposed fees do not put any market 

participants at a relative disadvantage 

compared to other market participants. 

As noted above, the fee schedule would 

continue to apply to all purchasers of 

the Exchange’s connectivity products 

and services in the same manner as it 

does today albeit at inflation-adjusted 

rates for certain fees, and customers may 

choose whether to purchase these 

products and services at all. The 

Exchange also believes that the level of 

the proposed fees neither favor nor 

penalize one or more categories of 

market participants in a manner that 

would impose an undue burden on 

competition. Likewise, the proposed fee 

waiver described above will apply to all 

purchasers of the Exchange’s 

connectivity products and services in 

the same manner and therefore will not 

burden competition among them. 

Intermarket Competition 

The Exchange believes that the 

proposed fees do not impose a burden 

on competition or on other SROs that is 

not necessary or appropriate. In 

determining the proposed fees, the 

Exchange utilized an objective and 

stable metric with limited volatility. 

Utilizing Data PPI over a specified 

period of time is a reasonable means of 

recouping the Exchange’s investment in 

maintaining and enhancing its 

connectivity products, services, and 

facilities. The Exchange believes 

utilizing Data PPI, a tailored measure of 

inflation, to increase certain fees for 

connectivity products and services to 

recoup the Exchange’s investment in 

maintaining and enhancing such 

products, services, and its facilities 

would not impose a burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or 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)(ii) of the Act.16 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: (i) 

necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

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– 

MRX–2024–43 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–MRX–2024–43. 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–MRX–2024–43 and should be 

submitted on or before December 18, 

2024. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 93689 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 99802 

(Mar. 20, 2024), 89 FR 21118 (Mar. 26, 2024) (File 

No. SR–DTC–2024–003) (‘‘DTC Notice of Filing’’); 

Securities Exchange Act Release No. 99805 (Mar. 

20, 2024), 89 FR 21068 (Mar. 26, 2024) (File No. 

SR–FICC–2024–006) (‘‘FICC Notice of Filing’’); 

Securities Exchange Act Release No. 99803 (Mar. 

20, 2024), 89 FR 21091 (Mar. 26, 2024) (File No. 

SR–NSCC–2024–003) (‘‘NSCC Notice of Filing’’). 

4Specifically, the Commission received 

comments on the FICC Notice of Filing, and the 

comments are available at https://www.sec.gov/ 

comments/sr-ficc-2024-006/srficc2024006.htm. The 

comments generally relate to issues raised in other 

FICC proposed rule changes that are not relevant to 

the Notices of Filing. See, Securities Exchange Act 

Release Nos. 99817 (SR–FICC–2024–005) and 99844 

(SR–FICC–2024–007). The Commission considers 

the relevant comments related to the FICC Notice 

of Filing in its analysis at Section IV infra. 

5See Standards for Covered Clearing Agencies for 

U.S. Treasury Securities and Application of the 

Broker-Dealer Customer Protection Rule with 

Respect to U.S. Treasury Securities, Exchange Act 

Release No. 99149 (Feb. 15, 2023), 88 FR 13872 

(Jan. 16, 2024) (S7–23–22) (‘‘Treasury Clearing 

Adopting Release’’). 

6 17 CFR 240.17ad–22(e)(18)(iv)(C). 

7The Framework provides an outline for, among 

other things, how each of the Clearing Agencies 

comprehensively manages the risks, including the 

legal, credit, liquidity, operational, general 

business, investment, custody, and other risks, that 

arise in or are borne by it. 

8See DTC Notice of Filing, supra note 3, 89 FR 

at 21119; FICC Notice of Filing, supra note 3, 89 

FR at 21069; and NSCC Notice of Filing, supra note 

3, 89 FR at 21091. 

9See DTC Notice of Filing, supra note 3, 89 FR 

at 21119; FICC Notice of Filing, supra note 3, 89 

FR at 21069; and NSCC Notice of Filing, supra note 

3, 89 FR at 21092. 

10 17 CFR 240.17ad–22(e)(18)(iv)(C). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–27755 Filed 11–26–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101685; File Nos. SR–DTC– 

2024–003; SR–FICC–2024–006; SR–NSCC– 

2024–003] 

Self-Regulatory Organizations; The 

Depository Trust Company; Fixed 

Income Clearing Corporation; National 

Securities Clearing Corporation; Order 

Approving Proposed Rule Change To 

Amend the Clearing Agency Risk 

Management Framework 

November 21, 2024. 

I. Introduction 

On March 11, 2024, The Depository 

Trust Company (‘‘DTC’’), Fixed Income 

Clearing Corporation (‘‘FICC’’), and 

National Securities Clearing Corporation 

(‘‘NSCC,’’ each a ‘‘Clearing Agency,’’ 

and collectively, the ‘‘Clearing 

Agencies’’), filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

proposed rule changes SR–DTC–2024– 

003, SR–FICC–2024–006, and SR– 

NSCC–2024–003, respectively, pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder (the ‘‘Proposed Rule 

Changes’’).2 The Proposed Rule Changes 

were published for comment in the 

Federal Register on March 26, 2024.3

The Commission has received 

comments on the changes proposed.4

For the reasons discussed below, the 

Commission is approving the Proposed 

Rule Changes. 

II. Background 

On December 13, 2023, the 

Commission adopted rules under the 

Act to amend the standards applicable 

to covered clearing agencies providing 

central counterparty services for 

transactions in U.S. Treasury securities 

to require policies and procedures be 

reasonably designed to ensure that the 

covered clearing agency has appropriate 

means to facilitate access to clearance 

and settlement services of all eligible 

secondary market transactions in U.S. 

Treasury securities, including those of 

indirect participants.5 The adopted 

rules also require that these policies and 

procedures be reviewed annually by the 

board of directors of such covered 

clearing agencies for U.S. Treasury 

securities.6 Currently, FICC is the only 

Clearing Agency providing clearance 

and settlement services to the U.S. 

Treasury securities market. 

To address the new requirements, the 

Clearing Agencies propose to amend 

their Clearing Agency Risk Management 

Framework (‘‘Framework).7 Specifically, 

the Proposed Rule Changes would add 

a new section to the Framework 

regarding ‘‘Solicitation of Participant 

and Stakeholder Views’’. This 

subsection would: (i) describe generally 

Clearing Agency participant and 

industry stakeholder outreach in the 

development and evaluation of new 

programs or risk management practices, 

and (ii) provide for the annual review of 

FICC’s Government Securities Division 

(‘‘GSD’’) access models by FICC’s Board 

of Directors. The proposal would also 

make other conforming and clean up 

changes to the text of the Framework, as 

described below. 

III. Description of the Proposed Rule 

Changes 

A. Subsection 3.4.1 General Solicitation 

of Views 

The Clearing Agencies state that they 

routinely solicit their participants’ and 

other industry stakeholders’ views when 

developing and evaluating products, 

services, or risk management practices 

so they may best meet the industry’s 

needs.8 To codify this practice, the 

proposal would add a new subsection to 

the Framework (entitled ‘‘General 

Solicitation of Views’’), which identifies 

several ways that the Clearing Agencies 

may seek the views of participants and 

stakeholders. Such methods would 

include targeted outreach to firms 

expected to be impacted by a proposal, 

widely distributed surveys, ad hoc 

forums, and standing advisory councils 

assembled to consider issues relevant to 

a proposal. This list of outreach 

methods is illustrative, not exhaustive. 

The subsection would also identify 

the industry stakeholders that may 

participate in such advisory councils, 

including for example, representatives 

from transfer agents, liquidity providers, 

market infrastructures, institutional and 

retail investors, customers of the 

Clearing Agencies’ participants, 

securities issuers, and securities 

holders. The Clearing Agencies state 

that the proposed changes in subsection 

3.4.1 do not create any obligation for the 

Clearing Agencies to conduct such 

outreach in any particular 

circumstances.9

B. Subsection 3.4.2 Required 

Solicitation of Views—Annual Review of 

GSD Access Models 

The Clearing Agencies propose 

adding a new subsection to the 

Framework (entitled ‘‘Required 

Solicitation of Views—Annual Review 

of GSD Access Models’’) in connection 

with the recently adopted requirement 

in Rule 17ad–22(e)(18)(iv)(C) that the 

board of directors of a covered clearing 

agency annually review the policies and 

procedures that the covered clearing 

agency uses to ensure that they have 

appropriate means to facilitate access to 

clearance and settlement services of all 

eligible secondary market transactions 

in U.S. Treasury securities, including 

those of indirect participants.10 To assist 

the board in their review of GSD access 

models, the Proposed Rule Changes 

would establish an advisory council 

comprised of participants, their 

customers, and other industry 

stakeholders. This advisory council 

review of GSD’s access models would be 

escalated to the FICC Board of Directors, 

or a committee thereof, with its annual 

review of GSD’s access models, which 


ddrumheller on DSK120RN23PROD with NOTICES1