8624 Federal Register / Vol. 87, No. 31 / Tuesday, February 15, 2022 / Notices 

1 12 U.S.C. 5465(e)(1). 

2 17 CFR 240.19b–4(n)(1)(i). 

3Securities Exchange Act Release No. 92568 

(August 5, 2021), 86 FR 44530 (August 12, 2021) 

(SR–NSCC–2021–803). 

4See 12 U.S.C. 5465(e)(1)(E)(ii) and (G)(ii). 

5 17 CFR 200.30–3(a)(93). 

6 12 U.S.C. 5465(e)(1)(D). 

7See 12 U.S.C. 5465(e)(1)(E)(ii) and (G)(ii). 

8 12 U.S.C. 5465(e)(1)(H). 

9 Id. 

10 17 CFR 200.30–3(a)(94). 

of an affidavit, or, for lawyers, a 

certificate of service. Pursuant to rule 0– 

5 under the Act, hearing requests should 

state the nature of the writer’s interest, 

any facts bearing upon the desirability 

of a hearing on the matter, the reason for 

the request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

Domenick Pugliese, dpugliese@

sullivanlaw.com. 

FOR FURTHER INFORMATION CONTACT: 

Steven B. Levine, Senior Counsel, or 

Kaitlin C. Bottock, Branch Chief, at 

(202) 551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and conditions, please refer to 

Applicants’ second amended and 

restated application, dated November 

12, 2021, which may be obtained via the 

Commission’s website by searching for 

the file number, using the Company 

name box, at http://www.sec.gov/ 

search/search.htm, or by calling (202) 

551–8090. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03152 Filed 2–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94203; File No. SR–NSCC– 

2021–803] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Extension of 

Review Period of Advance Notice To 

Establish the Securities Financing 

Transaction Clearing Service and Make 

Other Changes 

February 9, 2022. 

On July 22, 2021, National Securities 

Clearing Corporation (‘‘NSCC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) advance 

notice SR–NSCC–2021–803 (‘‘Advance 

Notice’’), pursuant to Section 806(e)(1) 

of Title VIII of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act entitled the Payment, Clearing, and 

Settlement Supervision Act of 2010 

(‘‘Clearing Supervision Act’’) 1 and Rule 

19b–4(n)(1)(i) under the Securities 

Exchange Act of 1934 (‘‘Exchange 

Act’’).2 The Advance Notice was 

published for comment in the Federal 

Register on August 12, 2021.3

Sections 806(e)(1)(E)(ii) and (G)(ii) of 

the Clearing Supervision Act 4 provide 

that if the Commission requests 

additional information, the 

Commission’s period of review of the 

Advance Notice is tolled, and an 

additional 60-day review period begins 

on the date any further information 

requested for consideration is received. 

On August 30, 2021, the Commission, 

by the Division of Trading and Markets, 

pursuant to delegated authority,5

requested additional information from 

NSCC under Section 806(e)(1)(D) of the 

Clearing Supervision Act.6 On 

December 13, 2021, the Commission 

received NSCC’s response to the 

Commission’s request for additional 

information. Accordingly, pursuant to 

Sections 806(e)(1)(E)(ii) and (G)(ii),7 the 

Commission shall notify NSCC of any 

objection regarding the Advance Notice 

no later than February 11, 2022. 

Section 806(e)(1)(H) of the Clearing 

Supervision Act 8 provides that the 

Commission may extend the review 

period of an advance notice for an 

additional 60 days, if the changes 

proposed in the advance notice raise 

novel or complex issues, subject to the 

Commission providing the clearing 

agency with prompt written notice of 

the extension. Here, the Commission is 

extending the review period of the 

Advance Notice for an additional 60 

days pursuant to that authority because 

the Commission finds that the Advance 

Notice raises both novel and complex 

issues, as discussed further below. 

Specifically, the proposed changes 

described in the Advance Notice would 

establish new membership categories 

and requirements, and establish a new 

central clearing service for equity 

securities financing transactions 

(‘‘SFTs’’). NSCC described SFTs as, 

broadly speaking, securities lending 

transactions where parties exchange 

equity securities against cash and 

simultaneously agree to exchange the 

same securities and cash, plus or minus 

a rate payment, on a future date. In 

particular, the Advance Notice would 

expand central clearing at NSCC to 

include SFTs with a one business day 

term (i.e., overnight SFTs) in eligible 

equity securities that are entered into 

either by Members, institutional firms 

that are sponsored into NSCC by a 

sponsoring member, or agent clearing 

members on behalf of Customers. 

Currently, such SFTs are not centrally 

cleared at NSCC and, instead, are settled 

bilaterally. 

The establishment of a central 

clearing service for SFTs requires a 

number of changes to the NSCC Rules 

& Procedures to effectuate and manage 

the risks arising from this new service. 

For example, the proposed changes 

would encompass new membership 

categories, including agent clearing and 

sponsored clearing models that do not 

currently exist at NSCC. In addition, the 

proposed changes would establish new 

risk management features to allow 

NSCC to measure and monitor the risk 

arising from the SFT transactions, 

including a methodology to provide 

mark-to-market payments and to close 

out a defaulted member’s portfolio. 

NSCC would institute rules governing 

buy-in, recall, and accelerated 

settlement, which are generally 

designed to be consistent with how 

SFTs operate when settled bilaterally. 

Taken together, the rules that NSCC 

would establish to administer this new 

central clearing service for SFTs raise 

novel and complex issues for NSCC. 

Accordingly, pursuant to 806(e)(1)(H) 

of the Clearing Supervision Act,9 the 

Commission is extending the review 

period of the Advance Notice for an 

additional 60 days so that the 

Commission shall have until April 12, 

2022 to issue an objection or nonobjection to the Advance Notice, unless 

the Commission requests further 

information for consideration of the 

Advance Notice (SR–NSCC–2021–803). 

The proposal shall not take effect 

until all regulatory actions required 

with respect to the proposal are 

completed. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03141 Filed 2–14–22; 8:45 am] 

BILLING CODE 8011–01–P 


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