Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95843 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 100841 

(Aug. 27, 2024), 89 FR 71646 (Sep. 3, 2024) (File 

No. SR–NSCC–2024–006) (‘‘NSCC Notice of 

Filing’’); Securities Exchange Act Release No. 

100842 (Aug. 27, 2024), 89 FR 71597 (Sep. 3, 2024) 

(File No. SR–DTC–2024–009) (‘‘DTC Notice of 

Filing’’); Securities Exchange Act Release No. 

100843 (Aug. 27, 2024), 89 FR 71593 (Sep. 3, 2024) 

(File No. SR–FICC–2024–010) (‘‘FICC Notice of 

Filing’’). 

4See Clearing Agency Governance and Conflicts 

of Interest, Exchange Act Release No. 98959 (Nov. 

16, 2023), 88 FR 84454 (Dec. 5, 2023) (S7–21–22). 

5See NSCC Notice of Filing, 89 FR 71646; DTC 

Notice of Filing, 89 FR 71598; and FICC Notice of 

Filing, 89 FR 71594, all at note 3 supra. 

6See 17 CFR 240.17ad–25(g), (h), (i) and (j). 7See 17 CFR 240.17ad–25(g). 

(b) the accuracy of the Commission’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information collected; and (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted by 

February 3, 2025. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: Austin Gerig, Director/Chief Data 

Officer, Securities and Exchange 

Commission, c/o Tanya Ruttenberg, 100 

F Street NE, Washington, DC 20549, or 

send an email to: PRA_Mailbox@

sec.gov. 

Dated: November 26, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–28261 Filed 12–2–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101764; File Nos. SR–DTC– 

2024–009; SR–FICC–2024–010; SR–NSCC– 

2024–006] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; The Depository Trust 

Company; Fixed Income Clearing 

Corporation; Order Approving 

Proposed Rule Change To Adopt the 

Clearing Agency Framework for 

Certain Requirements on Governance 

and Conflicts of Interest 

November 26, 2024. 

I. Introduction 

On August 15, 2024, National 

Securities Clearing Corporation 

(‘‘NSCC’’), The Depository Trust 

Company (‘‘DTC’’), and Fixed Income 

Clearing Corporation (‘‘FICC,’’ each a 

subsidiary of The Depository Trust & 

Clearing Corporation (‘‘DTCC’’) and 

each a ‘‘Clearing Agency,’’ and 

collectively, the ‘‘Clearing Agencies’’), 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule changes SR–NSCC–2024–006, SR– 

DTC–2024–009, and SR–FICC–2024– 

010, respectively, pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder (‘‘Proposed Rule Changes’’).2

The Proposed Rule Changes were 

published for comment in the Federal 

Register on September 3, 2024.3 The 

Commission has received no comments 

on the changes proposed. For the 

reasons discussed below, the 

Commission is approving the Proposed 

Rule Changes. 

II. Background 

On November 16, 2023, the 

Commission adopted rules under the 

Act to improve the governance of 

clearing agencies registered with the 

Commission (‘‘registered clearing 

agencies’’) by reducing the likelihood 

that conflicts of interest may influence 

the board of directors or equivalent 

governing body (‘‘board’’) of a registered 

clearing agency.4 The rules identify 

certain responsibilities of the Board, 

increase transparency into board 

governance, and, more generally, 

improve the alignment of incentives 

among owners and participants of a 

registered clearing agency. The 

Commission adopted 17 CFR 240.17ad– 

25 (‘‘Rule 17Ad–25’’) under the Act to 

establish these new requirements for 

board governance and for the 

management of conflicts of interest by 

registered clearing agencies. 

The Proposed Rule Changes would 

adopt a new framework entitled the 

‘‘Clearing Agency Framework for 

Certain Requirements on Governance 

and Conflicts of Interest’’ 

(‘‘Framework’’) to outline the way in 

which the Clearing Agencies and their 

Boards of Directors (‘‘Boards’’) comply 

with certain sections of Rule 17Ad–25,5

specifically subsections (g), (h), (i), and 

(j).6

III. Description of the Proposed Rule 

Change 

A. Section 1 and Section 2: Executive 

Summary and Framework Ownership 

and Change Management 

Section 1 of the Proposed Rule 

Changes constitutes the executive 

summary. Section 1 states that the 

Framework provides an outline for the 

way in which the Clearing Agencies and 

their Boards comply with the 

requirements of Rule 17Ad–25(g), (h), 

(i), and (j). It also states that the Clearing 

Agencies may develop policies, 

procedures, and other supplemental 

documentation to support execution of 

the Framework, and that, in the event of 

a conflict between this Framework and 

such other supplemental 

documentation, the Framework shall 

prevail. Section 1 further states that 

individuals elected to the DTCC Board 

of Directors are also elected to the 

Boards of each of the Clearing Agencies, 

and that the Framework is applicable to 

the directors of each of the Clearing 

Agencies and DTCC separately with 

respect to their role on each Board. 

Section 2 of the Proposed Rule 

Changes covers Framework ownership 

and change management. The 

Framework would be owned and 

managed within the DTCC General 

Counsel’s Office by an officer on behalf 

of each Clearing Agency. Section 2 

states that any changes to the 

Framework shall be approved by either: 

(1) the Boards; (2) such Board 

committees as may be delegated 

authority by the Boards from time to 

time pursuant to their charters; or, (3) 

the General Counsel or Deputy General 

Counsels of the Clearing Agencies, 

pursuant to authority delegated by the 

Boards and with the advice and 

direction of the Framework owner. 

Section 2 also states that the Framework 

would be reviewed and approved 

annually by the Boards or duly 

authorized committees of the Boards. 

B. Section 3: Conflicts of Interest 

Section 3 of the Proposed Rules 

Changes describes how the Clearing 

Agencies comply with sections (g) and 

(h) of Rule 17ad–25. Rule 17Ad–25(g) 

requires each registered clearing agency 

to establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to identify and 

document, and mitigate or eliminate 

existing or potential conflicts of interest 

in the decision-making process of the 

directors or senior managers of the 

registered clearing agency.7 Rule 17ad– 

25(h) requires each registered clearing 

agency to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

require a director of a registered clearing 

agency to document and inform the 

registered clearing agency promptly of 

the existence of any relationship or 

interest that could reasonably affect the 


lotter on DSK11XQN23PROD with NOTICES1
95844 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

8See 17 CFR 240.17ad–25(h) 

9As part of the Proposed Rule Changes, the 

Clearing Agencies filed certain materials as Exhibit 

3: DTCC Board Charter and Mission Statement; 

DTCC Board Code of Ethics and Conflict of Interest 

Policy; Corporate Secretary’s Office Procedures for 

DTCC Director Conflicts of Interest and 

Independence Assessment; DTCC Risk Management 

Advisory Council Charter; and DTCC Gifts, 

Entertainment and Conflicts of Interest Policy and 

Procedures. Pursuant to 17 CFR 240.24b–2, FICC 

requested confidential treatment of Exhibit 3. 

10See 17 CFR 240.17ad–25(i). 

11See 17 CFR 240.17ad–25(a). 

12See NSCC Notice of Filing, 89 FR 71648; DTC 

Notice of Filing, 89 FR 71599; and FICC Notice of 

Filing, 89 FR 71595, all at note 3 supra. 

13 Id. 

14 Id. 

15 Id. 

independent judgment or decisionmaking of the director.8

The Proposed Rule Changes require 

directors to exercise their powers in 

good faith and in the best interests of 

the Clearing Agencies, rather than their 

own interests or the interests of another 

entity or person. The Proposed Rule 

Changes state that a conflict of interest 

is present whenever the interests of the 

Clearing Agencies compete with the 

interests of a director, the director’s 

employer, or any other party with which 

a director is associated, or otherwise 

whenever a director’s corporate or 

personal interests could be viewed as 

affecting his or her objectivity or 

independent judgment in fulfilling the 

director’s duties to the Clearing 

Agencies. 

The Proposed Rule Changes state that 

directors are required to document and 

inform the Corporate Secretary of the 

Clearing Agencies promptly of the 

existence of any relationship or interest 

that reasonably could affect the 

independent judgment or decisionmaking of the director. The Corporate 

Secretary would then escalate any 

disclosure to the General Counsel for 

evaluation. If such disclosure is deemed 

to be an actual conflict of interest, the 

General Counsel would notify the NonExecutive Chairman of the Board and 

discuss how such conflict can be 

mitigated or eliminated. Upon 

identification of a conflict of interest, 

the Non-Executive Chairman, in 

consultation with the General Counsel, 

shall determine how such conflict 

should be addressed on a case-by-case 

basis. In certain cases, it may be 

advisable for the director to recuse 

themselves from any discussion or vote 

related to the matter. In other cases, 

where the conflict is limited or indirect, 

the Non-Executive Chairman, in 

consultation with the General Counsel, 

may determine that the conflict should 

be disclosed to the full Board of 

Directors, but that, in light of such 

disclosure to the Board, recusal of the 

director is unnecessary. The Proposed 

Rule Changes provide that there may be 

cases where a conflict is so significant 

or pervasive that the director would be 

unable to continue to serve on the 

Boards. In such instances, the NonExecutive Chairman and General 

Counsel would discuss with the 

Governance Committee. Any measures 

taken to address a conflict of interest 

would be documented by the Corporate 

Secretary’s Office. 

The Proposed Rule Changes state that 

all staff, including senior managers, 

must avoid activities or relationships 

that might affect objectivity in business 

decisions throughout employment with 

the Clearing Agencies. All staff, 

including senior managers, are required 

to disclose a relationship or interest that 

reasonably could affect objectivity in 

business decisions for review and 

determination on the appropriate course 

of action. A course of action for a 

conflict of interest could include actions 

such as recusal of the staff member from 

the particular matter, such as a vendor 

selection process or disallowing a staff 

member from being on the board of 

directors of a Clearing Agency vendor or 

client. The course of action will be 

documented. 

The Proposed Rule Changes also state 

that the Clearing Agencies maintain 

policies and procedures which provide 

that the Clearing Agencies identify and 

document existing or potential conflicts 

of interest in the decision-making 

process involving directors or senior 

managers of the Clearing Agencies and 

mitigate or eliminate and document the 

mitigation or elimination of such 

conflicts of interest.9

C. Section 4: Management of Risks From 

Relationships With Service Providers for 

Core Services 

Section 4 of the Proposed Rule 

Changes describes how the Clearing 

Agencies comply with section (i) of Rule 

17Ad–25. Rule 17Ad–25(i) requires each 

registered clearing agency to establish, 

implement, maintain and enforce 

written policies and procedures 

reasonably designed to require senior 

management to manage the risks from 

relationships with service providers for 

core services.10 The Clearing Agencies 

would identify service providers for 

core services and would adopt the 

definition of ‘‘service provider for core 

services’’ from Rule 17Ad–25(a), which 

is ‘‘any person that, through a written 

service provider agreement for services 

provided to or on behalf of the 

registered clearing agency, on an 

ongoing basis, directly supports the 

delivery of clearance or settlement 

functionality or any other purposes 

material to the business of the registered 

clearing agency.’’ 11

Specifically, senior management 

would be required to: (1) evaluate and 

document the risks related to 

agreements with service providers for 

core services, including under changes 

to circumstances and potential 

disruptions, and whether the risks can 

be managed in a manner consistent with 

the Clearing Agencies’ risk management 

framework; 12 and, (2) perform ongoing 

monitoring of the relationship and 

report to the Boards for their evaluation 

of any action taken by senior 

management to remedy significant 

deterioration in performance or address 

changing risks or material issues 

identified through such monitoring, or if 

the risk or material issues identified 

cannot be remedied, senior management 

would be required to assess and 

document weaknesses or deficiencies in 

the relationship with the service 

provider for core services for 

submission to the Board.13 Service 

providers for core services can be 

external service providers or internal 

(i.e., intercompany affiliates such as 

DTCC or one of its subsidiaries). The 

Clearing Agencies employ a 

proportionate and risk-based approach 

adapted to the distinct characteristics 

and risks presented by these two 

different categories of service 

providers.14 Regarding internal service 

providers, deficiencies are assessed as 

part of the Clearing agencies’ risk 

tolerance framework. Clearing Agencies 

and their affiliates are all held directly 

accountable by a common governance 

arrangement to a set of performance 

level and risk management standards 

based upon the Clearing Agencies’ 

requirements.15 Regarding external 

service providers, deficiencies are 

assessed against criteria established by 

the Third Party Risk Department, who 

submits deficiency information to the 

Board or relevant Board committee. 

Because external service providers are 

not subject to the same governance 

arrangements and standards as 

intercompany affiliates, the Clearing 

Agencies must use different 

mechanisms (e.g., negotiating and 

enforcing express contractual terms) to 

ensure a comparable degree of risk 

management and monitoring. Given the 

difference in accountability 

mechanisms, the Clearing Agencies rely 

upon a dedicated third party risk 

management function to manage and 

monitor external relationship risks 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95845 

16 Id. 17 Id. 18As part of the Proposed Rule Changes, the 

Clearing Agencies filed certain materials as Exhibit 

3: Excerpts from DTCC Risk Tolerance Procedures: 

Intercompany Agreement Review and Storage 

Procedure; and Excerpts from DTCC Third Party 

Risk Policy and Procedures. Pursuant to 17 CFR 

240.24b–2, FICC requested confidential treatment of 

Exhibit 3. 

19See 17 CFR 240.17ad–25(j). 

20See NSCC Notice of Filing, 89 FR 71648; DTC 

Notice of Filing, 89 FR 71599; and FICC Notice of 

Filing, 89 FR 71595, all at note 3 supra. 

21As part of the Proposed Rule Changes, the 

Clearing Agencies filed certain materials as Exhibit 

3: DTC Asset Services Advisory Council Charter; 

FICC Advisory Council Charter; NSCC and DTC 

Clearance and Settlement Advisory Council 

Charter; and Risk Management Advisory Council 

Charter. Pursuant to 17 CFR 240.24b–2, FICC 

requested confidential treatment of Exhibit 3. 

22 15 U.S.C. 78s(b)(2)(C). 

23 15 U.S.C. 78q–1(b)(3)(F). 

24 17 CFR 240.17ad–22(e)(18)(iv)(C). 

25 15 U.S.C. 78q–1(b)(3)(A). 

26 15 U.S.C. 78q–1(b)(3)(F). 

27See Sections IV.B, C, and D infra. 

separately from the internal functions.16

Business owners of each service 

provider for core services are 

responsible for documenting any 

deficiencies. 

The Proposed Rule Changes state that 

the Boards of the Clearing Agencies 

would: (1) review and approve the 

procedures regarding service providers 

for core services; (2) review and approve 

any agreement that would establish a 

relationship with a service providers for 

core services along with the required 

risk evaluation prepared by senior 

management; and, (3) evaluate any 

action taken by senior management to 

remedy significant deterioration in 

performance or address changing risks 

or material issues identified through 

senior management’s monitoring of 

service providers for core services.17

The Proposed Rule Changes also state 

that the Clearing Agencies currently 

maintain policies and procedures that 

manage risks related to service 

providers for core services.18

D. Section 5: Solicitation of Stakeholder 

Viewpoints on Material Developments 

in Risk Management and Operations 

Rule 17Ad–25(j) requires each 

registered clearing agency to establish, 

implement, maintain and enforce 

written policies and procedures 

reasonably designed to require the board 

of directors to solicit, consider, and 

document its consideration of the views 

of participants and other relevant 

stakeholders of the registered clearing 

agency on material developments in its 

governance and operations on a 

recurring basis.19 Section 5 of the 

Proposed Rule Changes states that in 

support of their compliance with Rule 

17Ad–25(j), the Clearing Agencies have 

established various advisory councils 

(‘‘Advisory Councils’’) made up of 

representatives of the Clearing Agencies’ 

participants and other relevant 

stakeholders. In order to ensure 

appropriate stakeholders are consulted 

for different types of material 

developments at the Clearing Agencies, 

the Clearing Agencies have established 

a joint Advisory Council to consider 

material developments in risk 

management across the Clearing 

Agencies and separate business-line 

specific Advisory Councils to consider 

material developments in operations. 

The Clearing Agencies may also use 

other mechanisms, such as ad hoc group 

meetings of Clearing Agency 

participants and other relevant 

stakeholders, to assist the Boards of the 

Clearing Agencies in meeting their 

obligations under Rule 17Ad–25(j). 

The Proposed Rule Changes state 

further that the Advisory Councils and 

the ad hoc mechanisms assist the 

Boards of the Clearing Agencies in their 

obligation to solicit, consider, and 

document their consideration of the 

views of participants and other relevant 

stakeholders of the Clearing Agencies 

regarding material developments in 

their respective risk management and 

operations on a recurring basis. Senior 

management of the Clearing Agencies 

would bring material developments in 

the Clearing Agencies’ risk management 

and operations to the Advisory Councils 

(or ad hoc mechanisms) for their 

consideration. Senior management 

would document the views of the 

participating stakeholders on such 

developments. Senior management 

would then escalate the views on 

material developments in the Clearing 

Agencies risk management and 

operations to the Boards for their 

consideration. The Boards will consider 

and document their consideration of the 

views of Clearing Agency participants 

and other relevant stakeholders 

regarding material developments in the 

Clearing Agencies’ risk management and 

operations that are escalated by senior 

management via the Advisory Councils 

or other appropriate means.20

The Proposed Rule Changes also 

define ‘‘material developments’’ as 

including developments that would 

significantly affect the risk and/or 

operational profile of a Clearing Agency 

and/or would significantly affect the 

rights and obligations of relevant 

stakeholders. Providing information on 

such material developments enables 

stakeholders to identify and evaluate the 

risk, fees and other significant costs they 

incur by participating or otherwise 

interacting with a Clearing Agency. 

‘‘Material developments’’ in the 

Clearing Agencies’ risk management and 

operations would cover areas such as 

financial risk management, margin 

methodologies, cyber and operational 

resiliency, default management, fee 

structures, the introduction of new 

cleared products and services, access 

models, and the design and functioning 

of the processes and technology systems 

that support the infrastructure of the 

Clearing Agencies and the way that 

participants and other relevant 

stakeholders connect to such systems.21

IV. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act 22

directs the Commission to approve a 

proposed rule change of a selfregulatory organization if it finds that 

such proposed rule change is consistent 

with the requirements of the Act and 

rules and regulations thereunder 

applicable to such organization. After 

carefully considering the Proposed Rule 

Changes, the Commission finds that the 

Proposed Rule Changes are consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to the Clearing Agencies. In 

particular, the Commission finds that 

the Proposed Rule Changes are 

consistent with Section 17A(b)(3)(F) 23

of the Act and Rules 17ad–25(g), (h), (i), 

and (j),24 each promulgated under the 

Act. 

A. Consistency With Sections 

17A(b)(3)(A) and (F) of the Act 

Section 17A(b)(3)(A) of the Act 25

requires, among other things, that the 

Clearing Agencies be so organized and 

have the capacity to be able to comply 

with the provisions of the Act and the 

rules and regulations thereunder. 

Section 17A(b)(3)(F) of the Act 26

requires, among other things, that the 

Clearing Agencies’ rules must be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions, and to foster 

cooperation and coordination with 

persons engaged in the clearance and 

settlement of securities transactions. 

Based on review of the record, and for 

the reasons discussed below,27 the 

Proposed Rule Changes are consistent 

with the Clearing Agencies being so 

organized and having the capacity to 

comply with the Act and the rules and 

regulations thereunder, and the 

Proposed Rule Changes are designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions and to foster cooperation 

and coordination with persons engaged 


lotter on DSK11XQN23PROD with NOTICES1
95846 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

28 17 CFR 240.17ad–25(i). 

29 17 CFR 240.17ad–25. 

30 15 U.S.C. 78q–1(b)(3)(A). 

31 17 CFR 240.17ad–25. 

32 15 U.S.C. 78s(b)(2). 

33 In approving the Proposed Rule Changes, the 

Commission considered its impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

in the clearance and settlement of 

securities transactions. Accordingly, the 

Proposed Rule Changes are consistent 

with Section 17A(b)(3)(A) and (F) of the 

Act. 

B. Consistency With Rule 17Ad–25(g) 

and (h) Under the Act 

Rule 17Ad–25(g) requires each 

registered clearing agency to establish, 

implement, maintain and enforce 

written policies and procedures 

reasonably designed to identify and 

document, and mitigate or eliminate 

existing or potential conflicts of interest 

in the decision-making process of the 

directors or senior managers of the 

registered clearing agency. Also, Rule 

17Ad–25(h) requires each registered 

clearing agency to establish, implement, 

maintain, and enforce written policies 

and procedures reasonably designed to 

require a director to document and 

inform the registered clearing agency 

promptly of the existence of any 

relationship or interest that reasonably 

could affect the independent judgment 

or decision-making of the director. 

As described above, the Proposed 

Rule Changes outline the written 

policies and procedures that provide 

that the Clearing agencies identify, 

document, and mitigate or eliminate 

existing or potential conflicts of interest 

in the decision-making process 

involving directors or senior managers. 

The Proposed Rule Changes require 

directors to document and inform the 

Corporate Secretary promptly of any 

relationship or interest that reasonably 

could affect the independent judgment 

or decision-making of the director. This 

is then escalated to the General 

Counsel’s office who shall notify the 

Non-Executive Chairman if it is 

determined that a conflict exists. These 

conflicts may be addressed in several 

pre-established ways. Based on the 

foregoing, the proposed changes are 

consistent with the requirements of 

Rules 17ad–25(g) and (h). 

C. Consistency With Rule 17Ad–25(i) 

Under the Act 

Rule 17Ad–25(i) requires each 

registered clearing agency to establish, 

implement, maintain, and enforce 

written policies and procedures 

reasonably designed to require senior 

management to: (1) evaluate and 

document the risks related to an 

agreement with a service provider for 

core services, including under changes 

to circumstances and potential 

disruptions, and whether the risks can 

be managed in a manner consistent with 

the clearing agency’s risk management 

framework; (2) submit to the board for 

review and approval any agreement that 

would establish a relationship with a 

service provider for core services; (3) be 

responsible for establishing the policies 

and procedures that govern 

relationships and manage risks related 

to such agreements with service 

providers for core services and require 

the board of directors to be responsible 

for reviewing and approving such 

policies and procedures; and (4) 

perform ongoing monitoring of the 

relationship, and report to the board of 

directors for its evaluation of any action 

taken by senior management to remedy 

significant deterioration in performance 

or address changing risks or material 

issues identified through such 

monitoring; or if the risks or issues 

cannot be remedied, require senior 

management to assess and document 

weaknesses or deficiencies in the 

relationship with the service provider 

for submission to the board of 

directors.28 As described above in 

Section III.C, the Proposed Rule 

Changes require senior management to 

evaluate and document risks related to 

agreements with services providers for 

core services, perform ongoing 

monitoring of the relationship, and 

report to the Boards for their evaluation 

of any action taken by senior 

management to remedy significant 

deterioration in performance or address 

changing risks or material issues 

identified through such monitoring, 

consistent with Rule 17Ad–25(i)(1) and 

(4). The Proposed Rule Changes also 

state that the Boards would review and 

approve the procedures regarding, and 

any agreements that establish a 

relationship with, service providers for 

core services, consistent with Rule 

17Ad–25(i)(2) and (3). The Proposed 

Rule Changes further state that if the 

risk or material issues identified cannot 

be remedied, senior management is 

required to assess and document 

weaknesses or deficiencies in the 

relationship with the service provider 

for core services for submission to the 

Board for evaluation, consistent with 

Rule 17Ad–25(i)(4). Based on the 

foregoing, the proposed changes are 

consistent with the requirements of Rule 

17Ad–25(i). 

D. Consistency With Rule 17Ad–25(j) 

Under the Act 

Rule 17Ad–25(j) requires registered 

clearing agencies to establish, 

implement, maintain, and enforce 

written policies and procedures 

reasonably designed to require the board 

of directors to solicit, consider, and 

document its consideration of the views 

of participants and other relevant 

stakeholders of the registered clearing 

agency regarding material developments 

in its risk management and operations 

on a recurring basis. The Proposed Rule 

Changes require a formal and regular 

process for solicitation, consideration, 

and documenting the consideration of 

participants and other relevant 

stakeholders. Based on the foregoing, 

the proposed changes are consistent 

with the requirements of Rules 17ad– 

25(j). 

Accordingly, the Commission finds 

these proposed changes consistent with 

the requirements of Rule 17Ad–25.29

V. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Changes are consistent with the 

requirements of the Act and in 

particular with the requirements of and 

in particular, Section 17A(b)(3)(A) and 

(F) of the Act 30 and Rule 17Ad–25 

thereunder.31

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 32 that 

proposed rule changes SR–NSCC–2024– 

006, SR–DTC–2024–009, and SR–FICC– 

2024–010 be, and hereby are, 

approved.33

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–28256 Filed 12–2–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101774; File No. SR–C2– 

2024–021] 

Self-Regulatory Organizations; Cboe 

C2 Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Adopt New 

Functionality Relating to the 

Processing of Auction Responses 

November 27, 2024. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on November 

18, 2024, Cboe C2 Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘C2’’) filed with the 


lotter on DSK11XQN23PROD with NOTICES1