Federal Register / Vol. 87, No. 11 / Tuesday, January 18, 2022 / Notices 2647 

16 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). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00752 Filed 1–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93952; File No. SR–LCH 

SA–2021–004] 

Self-Regulatory Organizations; LCH 

SA; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to 2022 CDSClear Fee 

Grid 

January 11, 2022. 

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 December 

28, 2021, 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 

prepared primarily 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 

proposed rule change 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 

(a) Banque Centrale de Compensation, 

which conducts business under the 

name LCH SA, is proposing to update 

the current CDSClear fee grid to be 

effective early January 2022 (the 

‘‘Proposed Rule Change’’). The text of 

the proposed rule change has been 

annexed [sic] as Exhibit 5. 

The text of the Proposed Rule Change 

has been annexed [sic] hereto as Exhibit 

5. 

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 is currently applying the 

below fee grid for CDSClear members: 

SELF-CLEARING TARIFF FOR CORPORATES AND FINANCIALS INDEX AND SINGLE NAME CDS 

Membership Annual fixed fee 

Self-clearing/variable fees 

EUR 

indices 

EUR 

single names 

USD 

indices 

USD 

single names 

General Member—Unlimited 

Tariff.

Ö1,350,000 ............................. No Variable Fee. Covers all self-clearing Corporate and Financials Index 

and Single Name activity 

for a Financial Group of a 

Clearing Member. 

General Member—Introductory 

Tariff.

Ö200,000 if the total annual 

gross notional cleared is 

under Ö10 billion.

Ö3.5 Per million gross 

notional 

cleared.

Ö10 Per million 

gross notional 

cleared.

$4.5 Per million gross 

notional 

cleared.

$13 Per million 

gross notional 

cleared.

Ö400,000 if the total annual 

gross notional cleared is 

over Ö10 billion.

Ö3.5 Per million gross 

notional 

cleared.

Ö10 Per million 

gross notional 

cleared.

$4.5 Per million gross 

notional 

cleared.

$13 Per million 

gross notional 

cleared.

Select Member ......................... Ö250,000 if the total annual 

gross notional cleared is 

under Ö20 billion.

Ö4 Per million 

gross notional 

cleared.

Ö10 Per million 

gross notional 

cleared.

$5 Per million 

gross notional 

cleared.

$13 Per million 

gross notional 

cleared.

Ö450,000 if the total annual 

gross notional cleared is 

over Ö20 billion.

OPTIONS TARIFF INCLUDING FEE REBATE

General Member 

Introductory Tariff ....................................................................... Can cover either one or multiple legal entities under conditions below (no Affiliate coverage). In-year 

switches are not permitted. No EEP usage fees in 2021. 

Clearing Fees ...................................................................... $8 per million of option notional on US Indices. 

Ö8 per million of option notional on European Indices. 

Floor on clearing fees .................................................. Ö115k Per calendar year (no pro-rating) for 1 entity. 

Ö150k Per calendar year (no pro-rating) for 2 entities of the same Financial Group of a 

Clearing Member. 

Ö190k Per calendar year (no pro-rating) for 3 or more entities of the same Financial 

Group of a Clearing Member. 


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2648 Federal Register / Vol. 87, No. 11 / Tuesday, January 18, 2022 / Notices 

5Subject to regulatory approval. 

OPTIONS TARIFF INCLUDING FEE REBATE—Continued 

Unlimited Tariff ........................................................................... Cover all Affiliates of a given Financial Group of a Clearing Member. Cover all clearing fees for 

Credit Option House activity for both iTraxx and CDX.NA underlying index families. In-year switches 

are not permitted. No EEP usage fees in 2021. 

Fixed fee (annual) ............................................................... Ö375k Per calendar year (no pro-rating). 

Discounted Rates* ............................................................... Ö115k if notionals cleared strictly above Ö15bn. 

Onboarding Fees (both Introductory & unlimited) ...................... Ö30k One-off fee per Legal Entity under the Introductory tariff or per Financial Group of a 

Clearing Member under the Unlimited tariff. 

Select Member 

Introductory Tariff ....................................................................... Cover only one legal entity (no affiliate coverage). In-year switches are not permitted. No EEP usage 

fees in 2021. 

Clearing Fees ...................................................................... $10 per million of option notional on US Indices. 

Ö10 per million of option notional on European Indices. 

Unlimited Tariff ........................................................................... Cover all Affiliates of a given Financial Group of a Clearing Member. Cover all clearing fees for 

Credit Option House activity for both iTraxx and CDX.NA underlying index families. In-year switches 

are not permitted. No EEP usage fees in 2021. 

Fixed fee (annual) ............................................................... Ö400k Per calendar year (no pro-rating). 

Discounted Rates ................................................................ Ö115k if notionals cleared strictly above Ö15bn. 

Onboarding Fees (both Introductory & unlimited) ...................... Ö30k One-off fee per Legal Entity under the Introductory tariff or per Financial Group of a 

Clearing Member under the Unlimited tariff. 

Clearing Member (Options only) 

Up to Ö200,000 fee rebate limited to the total amount of Options clearing fees paid in 2021 for the first two Clearing Members clearing Options for at least one client 

by 31-July-2021. 

Client 

Options Clearing Fees ................................................................ $5 per million of option notional on US Indices. 

Ö5 per million of option notional on European Indices. 

2021: Full discount of client variable fees. 

AFFILIATES CLEARING AS CLIENT (ALL PRODUCTS) 

Affiliates clearing as Clients ...................................................... Full rebate on variable clearing fees for the Affiliate of a Clearing Member onboarded as client of 

such Clearing Member under the following conditions: 

• The Clearing Member is a General Member under the Unlimited Tariff; 

• The Affiliate is a legal entity part of the same Financial Group as the Clearing Member; 

• The rebate applies to 1 trade account per affiliate and for all clearing services for which the 

Clearing Member is under the Unlimited Tariff (i.e., Index & Single Names and/or Options); 

• The rebate cannot apply to any account opened for CCM Indirect Clients; and 

• A fixed annual account fee of Ö100,000 is charged per affiliate of a Clearing Member 

onboarded as a client and benefiting from the full rebate on variable fees. 

The purpose of the proposed fee 

changes is for LCH SA CDSClear to take 

into account the evolution of the 

CDSClear business and arrangements. 

—Regarding the Index and Single 

Names clearing activity: The proposed 

fee change reflects the ongoing 

development and product scope of the 

CDSClear service with the objective to 

meet clearing members and clients’ 

expectations, and 

—for the Options: The intent is to adjust 

the fee conditions to the new 

competitive environment as well as 

encourage the development of options 

clearing by clients and new market 

participants. 

Therefore, as specified in the new fee 

grid attached [sic] under Exhibit 5, LCH 

SA is proposing to amend the CDSClear 

fee grid from January 1st, 2022 as 

follows. 

(1) Clearing Fees for Sovereign Index 

and Single Name CDS 5 Activity 

LCH SA CDSClear currently offers an 

Unlimited Tariff for General Members 

that covers all self-clearing Corporate 

and Financials CDS Index and Single 

Names activity for a Financial Group of 

a Clearing Member for an annual fixed 

fee of Ö1,350,000 (no variable fees). 

CDSClear is also offering an 

Introductory Tariff for General and 

Select Members that covers all selfclearing corporate and financials CDS 

index and single names activity. 

LCH SA currently treats fees from all 

indexes differently from fees for single 

names, reflecting both the difference in 

client and member activity in the 

products and the nature of the 

underlying products. Specifically for 

sovereigns, the intended list of cleared 

sovereign names is much wider in scope 

than purely the constituents of the CDX 

EM index. 

The Proposed Rule Change consists in 

defining the clearing fees associated to 

the clearing activity of Sovereign 

indices and single names under the 

General Members Unlimited Tariff and 

Introductory Tariff as well as the Select 

Members Tariff. This proposed change 

will be effective once this new clearing 

activity is duly approved by the relevant 

regulators. 

Under the proposed change, for 

General Members under the Unlimited 

Tariff, self-clearing Sovereign indices 

activity will be included in the scope of 

the fixed fee of Ö1,350,000 per year, 

whereas Sovereign single names will 

attract variable clearing fees of Ö10/$13 

per million Ö/$ of notional cleared 

depending on the currency in which 

they are denominated. 


khammond on DSKJM1Z7X2PROD with NOTICES

I 
Federal Register / Vol. 87, No. 11 / Tuesday, January 18, 2022 / Notices 2649 

6Self-Regulatory Organizations; LCH SA; Notice 

of Filing and Immediate Effectiveness of Proposed 

Rule Change Relating to the Amendments of the 

CDSClear Fee Grid, Release No. 34–90862 (Jan. 6, 

2021), 86 FR 2468 (Jan. 12, 2021), File No. SR–LCH 

SA–2020–007. 

7 15 U.S.C. 78q–1(b)(3)(D). 

8 15 U.S.C. 78q–1. 

9 15 U.S.C. 78q–1(b)(3)(D). 

10 15 U.S.C. 78q–1(b)(3)(F). 

11 15 U.S.C. 78q–1(b)(3)(I). 

For General Members under the 

Introductory Tariff, Select Members as 

well as Clients, Sovereign indices and 

single names clearing activity will be 

charged at the same variable clearing 

fees currently existing for USD and EUR 

denominated Corporate and Financial 

indices and single names. 

Finally, in order to build liquidity in 

the products on the CDSClear service, 

all General Members, whether under the 

Unlimited or the Introductory Tariff, 

will benefit from a fee holiday for their 

variable fees from self-clearing 

Sovereign single names clearing activity 

for 1 year from the product launch date. 

(2) Introduction of a New Tariff for the 

Options Clearing Service 

In order to take into account the new 

competitive environment as well as 

encourage the development of options 

clearing by market participants, LCH SA 

is proposing to create a new tariff called 

‘New Market Participant Tariff’ (NMP), 

based on variable fees, and to which 

only members which are new joiners to 

the Options clearing service will be 

eligible to subscribe, for one calendar 

year renewable once only. Under this 

NMP Tariff, clearing members will be 

charged Ö10/$10 per million of optional 

notional cleared depending on the 

currency in which the underlying index 

is denominated. Because New Market 

Participants do not have to pay the fixed 

fee, the purpose of this type of tariff is 

to attract clearing members who are not 

currently on the option service to join 

by removing the barrier of the fixed fee, 

which is payable even if no option 

notional is cleared. This is also in line 

with the existing Select Members 

variable tariff. 

(3) Reduction of the Client Clearing Fees 

for Options, Maintaining the EEP Usage 

Free of Charge in 2022 and Extension of 

the Fee Holiday Period 

Under the proposed change and based 

on feedback from the market, the 

variable clearing fees to be paid by 

Clients for Options clearing would 

decrease from Ö5/$5 to Ö4/$4 per 

million of option notional cleared. 

LCH SA is maintaining for 2022 the 

Electronic Exercise Platform (EEP) usage 

free of charge to promote and encourage 

option clearing take-up. 

LCH SA is also proposing to renew 

the fee holiday for Clients clearing 

Options in 2022. 

As specified in the filing LCH SA– 

2020–007,6 the proposed Ö200,000 fee 

rebate limited to the total amount of 

Options clearing fees paid by a 

Financial Group of a Clearing Member 

in 2021 for the first two Clearing 

Members clearing Options for at least 

one Client has expired on 31 July 2021 

and was duly removed from the updated 

fee grid. 

2. Statutory Basis 

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

requires that the rules of a clearing 

agency provide for the equitable 

allocation of reasonable dues, fees, and 

other charges.7

LCH SA believes that its clearing fees 

change proposal is consistent with the 

requirements of Section 17A of the Act 8

and the regulations thereunder 

applicable to it, and in particular 

provides for the equitable allocation of 

reasonable fees, dues, and other charges 

among clearing members and market 

participants by ensuring that clearing 

members and clients pay reasonable fees 

and dues for the services provided by 

LCH SA, within the meaning of Section 

17A(b)(3)(D) of the Act.9

Indeed, there’s no change on the 

tariffs on which LCH SA CDSClear has 

existing activity (i.e., Corporates and 

Financials Index and Single Names, 

General Members Unlimited and 

Introductory tariffs for Index Options). 

All of the new products being 

introduced will fall into the scope of the 

fixed fee for GMs under the Unlimited 

Tariff, except for Sovereign Single 

Names for which a one year fee holiday 

period is offered to both General 

Members under the Unlimited and the 

Intro Tariffs. 

So, the proposed clearing fees for 

Sovereign index and single names, are 

consistent with the existing fees for 

Corporate and Financial indices and 

single names for General Members, 

Select Members as well as Clients. In 

particular, none of the fixed fee 

components of the various tariffs are 

impacted, and the variable fees, where 

applicable, are the same as the existing 

ones excepted for Sovereign single 

names products which are not 

considered to be part of the unlimited 

fixed fee that was designed and 

established prior to LCH SA intending 

to offer these products. Therefore, 

subject to regulatory approvals, only 

variable fees coming from new products 

being cleared by General Members 

under the Introductory Tariffs, Select 

Members and Clients would be new fees 

collected by LCH SA CDSClear. 

Besides, the proposed fee holiday for 

Sovereign single names self-clearing 

activity is equivalent and offered to all 

General Members for 1 year only, in 

order to help build the dealers’ liquidity 

of the LCH SA CDSClear service for 

Sovereign CDS which is a critical step 

for Clients to be able to clear their 

Sovereign CDS activity as well. 

Regarding the Options clearing 

service, in accordance with the feedback 

received from the market, the main 

proposed change is the creation of the 

New Market Participant Tariff, available 

to new joiners for a fixed period of time 

only (maximum 2 years) in order to 

facilitate the onboarding of new 

Members with an option market-making 

business to the LCH SA CDSClear 

Option clearing service, which in turn is 

one element that will contribute to 

Clients clearing their options activity as 

most if not all of their executing brokers 

will be able to clear options. New 

Markets Participants are not paying the 

fixed fee. As such, LCH SA believes that 

this new reasonable tariff consistent 

with Section 17A(b)(3)(D) is designed to 

encourage Options clearing activity 

which is also consistent with the 

prompt and accurate clearance in 

accordance with Section 17A(b)(3)(F) of 

the Exchange Act.10

A second element that will contribute 

to growing the options client clearing 

activity is the renewal of the fee holiday 

for options clearing fees in 2022. 

Finally, the decrease in the variable 

headline clearing fees to be paid by 

Clients for options will also contribute 

to the same objective in the longer term. 

For all the reasons stated above, LCH 

SA believes that the proposed fee rates 

are reasonable and appropriate so that 

LCH SA can provide the CDSClear 

services. 

B. Clearing Agency’s Statement on 

Burden on Competition 

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

requires that the rules of a clearing 

agency not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.11

LCH SA does not believe that the 

Proposed Rule Change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because LCH 

SA is offering the possibility for 

CDSClear members and clients to obtain 

a more appropriate and flexible access 

to the clearing services. The Proposed 


khammond on DSKJM1Z7X2PROD with NOTICES
2650 Federal Register / Vol. 87, No. 11 / Tuesday, January 18, 2022 / Notices 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(2). 14 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. 93709 

(December 2, 2021), 86 FR 69687 (December 8, 

2021) (SR–NSCC–2021–013) (‘‘Notice’’). 

4Capitalized terms not defined herein are defined 

in the Rules, available at http://www.dtcc.com/ 

legal/rules-and-procedures. 

5See Section 2 of Rule 2, supra note 4. 

6 Id. 

7See Rule 53, supra note 4. See also definition 

of ‘‘AIP Non-Member Fund’’ in Rule 1, id. 

Rule Change would not affect the ability 

of Clearing Members or other market 

participants generally to engage in 

cleared transactions or to access clearing 

services. Additionally, the clearing fee 

conditions remain transparent and 

equally applicable to any category of 

market participant wishing to access the 

CDSClear clearing service for all 

proposed products including those that 

are not mandatory for clearing. 

Further, as explained above, LCH SA 

believes that the fee rates remain set up 

at an appropriate level given the costs 

and expenses to LCH SA in offering the 

relevant clearing services. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has become effective upon filing 

pursuant to Section 19(b)(3)(A) 12 of the 

Act and Rule 19b–4(f)(2) 13 thereunder 

because it establishes a fee or other 

charge imposed by LCH SA on its 

Clearing Members. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such proposed 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: 

• Use the Commission’s internet 

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

rules/sro.shtml) or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

LCH SA–2021–004 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–2021–004. 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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filings will also be available for 

inspection and copying at the principal 

office of LCH SA and on LCH SA’s 

website at https://www.lch.com/ 

resources/rulebooks/proposed-rulechanges. All comments received will be 

posted without change. Persons 

submitting comments are cautioned that 

we do not redact or edit personal 

identifying information from comment 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–LCH 

SA–2021–004 and should be submitted 

on or before February 8, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00751 Filed 1–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93953; File No. SR–NSCC– 

2021–013] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Order Approving 

Proposed Rule Change To Provide for 

a Passive Acknowledgment Process, 

Codify Certain Settlement Processes, 

and Make Technical and Conforming 

Changes to the NSCC Rules & 

Procedures 

January 11, 2022. 

I. Introduction 

On November 18, 2021, National 

Securities Clearing Corporation 

(‘‘NSCC’’) 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

proposed rule change SR–NSCC–2021– 

013. The proposed rule change was 

published for comment in the Federal 

Register on December 8, 2021.3 The 

Commission did not receive any 

comment letters on the proposed rule 

change. For the reasons discussed 

below, the Commission is approving the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

NSCC proposes to modify its Rules 

and Procedures (‘‘Rules’’) 4 in order to 

(i) provide for a passive 

acknowledgment process whereby any 

settling bank that does not timely 

acknowledge its intention to pay to or 

collect its settlement balance from 

NSCC), or refuse to settle for one or 

more members for which it is the 

designated settling bank and has not 

otherwise been in contact with NSCC, 

would be deemed to have acknowledged 

its settlement balances, (ii) amend the 

definition of AIP Settling Bank and 

remove AIP Settling Bank Only Member 

as a membership category, (iii) codify 

certain settlement processes, and (iv) 

make certain technical and conforming 

changes. 

A. Current Settlement Process 

NSCC membership consists of 

Members that have access to NSCC’s 

guaranteed central counterparty services 

and Limited Members that have access 

to NSCC’s non-guaranteed services, 

such as Mutual Fund Services and 

Alternative Investment Product Services 

(‘‘AIP’’).5 Limited Members that only 

have access to AIP are referred to as AIP 

Members.6 AIP Non-Member Funds are 

entities that are not AIP Members but 

that NSCC has approved to settle AIP 

Payments.7

NSCC provides two separate 

standardized, automated money 

settlement processes: (i) End of day 

settlement for Members and Limited 

Members other than AIP Members 

(‘‘EOD Settlement’’), and (ii) daily 

settlement for AIP Members and AIP 

Non-Member Funds (‘‘AIP 


khammond on DSKJM1Z7X2PROD with NOTICES