95878 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

67 17 CFR 200.30–3(a)(12), (59). 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

MEMX–2024–45 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–MEMX–2024–45. 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–MEMX–2024–45 and should be 

submitted on or before December 24, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.67

Stephanie J. Fouse, 

Assistant Secretary. 

[FR Doc. 2024–28345 Filed 12–2–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

35402; File No. 812–15574] 

Antares Private Credit Fund and 

Antares Capital Credit Advisers LLC 

November 27, 2024. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application under section 

6(c) of the Investment Company Act of 

1940 (the ‘‘Act’’) for an exemption from 

sections 18(a)(2), 18(c), 18(i) and section 

61(a) of the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order to permit certain 

registered closed-end investment 

companies that have elected to be 

regulated as business development 

companies to issue multiple classes of 

shares with varying sales loads and 

asset-based distribution and/or service 

fees. 

APPLICANTS: Antares Private Credit 

Fund and Antares Capital Credit 

Advisers LLC. 

FILING DATES: The application was filed 

on May 15, 2024, and amended on 

November 15, 2024. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing on any application by 

emailing the SEC’s Secretary at 

Secretarys-Office@sec.gov and serving 

the Applicants with a copy of the 

request by email, if an email address is 

listed for the relevant Applicant below, 

or personally or by mail, if a physical 

address is listed for the relevant 

Applicant below. 

Hearing requests should be received 

by the Commission by 5:30 p.m. on 

December 23, 2024, and should be 

accompanied by proof of service on the 

Applicants, in the form 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. The 

Applicants: Michael B. Levitt, Antares 

Capital LP, mike.levitt@antares.com; 

William J. Bielefeld, Esq., Dechert LLP, 

william.bielefeld@dechert.com; Nadeea 

Zakaria, Esq., Dechert LLP, 

nadeea.zakaria@dechert.com. 

FOR FURTHER INFORMATION CONTACT: 

Christine Y. Greenlees, Senior Counsel, 

or Lisa Reid Ragen, Branch Chief, at 

(202) 551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and condition, please refer to 

Applicants’ first amended and restated 

application, dated November 15, 2024, 

which may be obtained via the 

Commission’s website by searching for 

the file number at the top of this 

document, or for an Applicant using the 

Company name search field, on the 

SEC’s EDGAR system. The SEC’s 

EDGAR system may be searched at 

https://www.sec.gov/edgar/searchedgar/ 

legacy/companysearch.html. You may 

also call the SEC’s Public Reference 

Room at (202) 551–8090. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Stephanie J. Fouse, 

Assistant Secretary. 

[FR Doc. 2024–28334 Filed 12–2–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101754; File No. SR–OCC– 

2024–011] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Granting Approval of Proposed Rule 

Change, as Modified by Partial 

Amendment No. 1, by The Options 

Clearing Corporation Concerning Its 

Stock Loan Programs 

November 26, 2024. 

I. Introduction 

On August 22, 2024, the Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2024– 

011 pursuant to Section 19(b) of the 

Securities Exchange Act of 1934 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95879 

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

2 17 CFR 240.19b–4. 

3 In Partial Amendment No. 1, OCC corrected an 

error in Exhibit 5A to SR–OCC–2024–011 without 

changing the substance of the proposed rule change. 

Partial Amendment No. 1 does not materially alter 

the substance of the proposed rule change or raise 

any novel regulatory issues. 

4Securities Exchange Act Release No. 100930 

(Sept. 4, 2024), 89 FR 73466 (Sept. 10, 2024) (File 

No. SR–OCC–2024–011) (‘‘Notice of Filing’’). 

5Historical volume is available at https://

www.theocc.com/market-data/market-data-reports/ 

volume-and-open-interest/historical-volumestatistics. 

6OCC provided survey results as confidential 

Exhibit 3B to File No. SR–OCC–2024–011. 

7Notice of Filing, 89 FR 73471, n.31. 

8 Id. 

9See Notice of Filing, 89 FR 73467–68. (‘‘OCC 

aggregates all stock loan positions and stock borrow 

positions of a Clearing Member relating to the same 

Eligible Stock for reporting and margin calculation 

purposes. OCC separately identifies stock loan and 

stock borrow positions resulting from each of the 

Stock Loan Programs, and such positions are not 

fungible with positions resulting from the other 

program. Position aggregation in both Stock Loan 

Programs is a legacy practice and does not follow 

industry-standard book-keeping practices. Because 

of position aggregation, certain industry standard 

post-trade activity must be performed bilaterally 

away from OCC, such as re-rate transactions that 

change the rebate rate on an individual loan.’’) 

10Notice of Filing, 89 FR 73469–70. OCC intends 

to eventually decommission the Hedge Program 

through a phased program, after which the Market 

Loan Program would become OCC’s single Stock 

Loan Program. The immediate proposal, however, 

does not contemplate the removal of provisions 

supporting the Hedge Program from OCC’s rules. 

11See Notice of Filing, 89 FR 73466. Further 

detail on Renaissance is available at https://

www.theocc.com/company-information/occtransformation/clearing-risk-and-data-changes. 

Renaissance includes the replacement of its current 

clearance and settlement system (‘‘ENCORE’’) with 

a streamlined operational framework for clearance 

and settlement (‘‘Ovation’’). See Notice of Filing, 89 

FR 73466, n. 6. The Proposed Rule Change is not 

legally dependent on the planned technology 

changes. 

(‘‘Exchange Act’’) 1 and Rule 19b–4 2

thereunder. The proposed rule change 

would address limitations in the 

structure of OCC’s Stock Loan/Hedge 

(‘‘Hedge’’) Program and Market Loan 

Program (together, the ‘‘Stock Loan 

Programs’’) by creating the framework 

for a single, enhanced program designed 

to support current and future needs. On 

September 3, 2024, OCC filed a partial 

amendment (‘‘Partial Amendment No. 

1’’) to the proposed rule change.3 The 

Commission published a notice for 

public comment on the proposed rule 

change, as modified by Partial 

Amendment No. 1 (hereafter ‘‘the 

Proposed Rule Change’’), in the Federal 

Register on September 10, 2024.4 The 

Commission has received no comments 

regarding the Proposed Rule Change. 

This order approves the Proposed Rule 

Change. 

II. Description of the Proposed Rule 

Change 

OCC has historically operated two 

stock lending programs, the Hedge 

Program and Market Loan Program, 

which, together, accounted for about 

0.02% of OCC’s total volume in 2023.5

In its capacity as a central counterparty 

in administering these programs, OCC 

becomes the lender to every borrower 

and the borrower to every lender and 

thus guarantees the return of the full 

value of cash collateral to the Borrowing 

Clearing Member and the return of the 

Loaned Stock (or value of that Loaned 

Stock) to the Lending Clearing Member. 

OCC also offers additional guarantees 

under the Market Loan Program, 

including dividend equivalent 

payments and rebate payments. OCC’s 

Rules and By-Laws govern OCC’s 

novation of cleared stock loan 

transactions and provide for processes 

around stock loan initiation, 

recordkeeping, returns and recalls, and 

risk management around stock loans of 

suspended Clearing Members. 

OCC’s current Hedge Program 

requires a certain set of processes among 

balancing and reconciliation of 

transactions. The Market Loan Program, 

by comparison, does not require the 

same processes because of the difference 

in how transactions are initiated in that 

program. A recent survey of Clearing 

Members participating in the Stock 

Loan programs 6 indicates that most 

firms have a significant spend for stock 

loan post-trade and reconciliation 

processing.7 Based on such survey 

responses, OCC believes that a service 

that can provide operational efficiencies 

and further reduce manual processing 

and operational risk would be well 

received.8 Additionally, the Hedge and 

Market Loan Programs differ in their 

treatment of Canadian Clearing 

Members. Specifically, a Canadian 

Clearing Member may participate in the 

Hedge Program, but not the Market Loan 

Program because of rules related to 

certain tax withholding obligations. 

Separately, OCC has recognized that its 

current aggregate position-level 

recordkeeping practices regarding these 

stock loan programs could be better 

aligned with the current industry 

practice of contract-level 

recordkeeping.9

OCC has expressed a desire to 

consolidate the Hedge Program and 

Market Loan Program at some point in 

the future.10 The immediate proposal is 

designed to support that initiative by 

making changes to align the Hedge 

Program and Market Loan Program as 

well as changes to address limitations 

across both Stock Loan Programs, such 

as aligning to the industry practice of 

contract-level record keeping. 

Specifically, OCC proposes to (i) align 

the Rules for and support transactions 

under both Stock Loan Programs 

through contract-level recordkeeping, 

revisions regarding re-matching 

matched book positions in suspension 

across Stock Loan Programs, and 

revisions regarding mark-to-market 

settlement accounts; (ii) conform the 

terms of Market Loans cleared by OCC 

more closely to the provisions most 

commonly included in stock loan 

transactions executed under standard 

loan market documents, and provide a 

uniform guaranty of terms across Market 

Loans, regardless of how those Market 

Loans are initiated under the enhanced 

program; and (iii) clarify and amend 

processes around the participation of 

Canadian Clearing Members and other 

types of Clearing Members in the Stock 

Loan Programs. Separately, OCC 

proposes to reorganize, restate, and 

consolidate provisions of its By-Laws 

and Rules governing the Stock Loan 

Programs. 

In proposing the immediate changes, 

OCC expressed the view that its current 

technology modernization project 

(‘‘Renaissance’’) presents an opportunity 

to address limitations in the structure of 

OCC’s Stock Loan Programs and 

enhance OCC’s stock loan services to 

support current and future needs.11

A. Limitations of OCC’s Current Stock 

Loan/Hedge and Market Loan Programs 

1. Position Aggregation 

Within both Stock Loan programs, 

OCC maintains records of aggregate 

positions, rather than following the 

industry practice of contract-level 

recordkeeping. OCC calculates margin 

by aggregating stock loan and borrow 

positions for the same Eligible Stock. 

However, stock loans of the same 

Eligible Stock are not fungible between 

programs. As a result, all post-trade 

activity for Hedge Loan positions is 

performed bilaterally between the 

original counterparties. For example, 

the original counterparty Clearing 

Members to Hedge Program loans must 

resolve dividend payments or 

distributions bilaterally, away from 

OCC. This process of position 

aggregation complicates margin 

calculation and bookkeeping, and 

ultimately increases OCC’s operational 

risk. 

2. Offset and Re-Matching of MatchedBook Positions 

Hedge Loan Clearing Members often 

maintain ‘‘Matched-Book Positions,’’ 

meaning they hold an account with a 


lotter on DSK11XQN23PROD with NOTICES1
95880 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

12OCC currently limits settlement of daily markto-market of cash collateral to the Clearing 

Member’s firm account or combined MarketMakers’ account. See OCC Rule 2201(a). 

13See Notice of Filing, 89 FR 73467. On the other 

hand, Market Loan transactions match on an 

electronic platform called a Loan Market. Then the 

Loan Market sends the two separate linked 

instructions to DTC detailing what stock and cash 

collateral should move between accounts at OCC. 

stock loan position to one Hedge 

Clearing Member as well as a borrow 

position to another Hedge Clearing 

Member for the same or fewer shares. If 

a Hedge Clearing Member with a 

matched book defaults, OCC may rematch the loan and borrow positions to 

other Hedge Loan Clearing Members to 

avoid price dislocation from manually 

buying in and selling out of the 

offsetting positions of the defaulting 

Hedge Clearing Member. However, such 

re-matching is not currently supported 

separately in the Market Loan Program, 

and thus the loan and borrow positions 

of a defaulting Hedge Clearing Member 

cannot be re-matched to a Market Loan 

Clearing Member. 

3. Stock Loan Initiation 

Under the Hedge Program, 

Prospective Lending and Borrowing 

Clearing Members first negotiate terms 

bilaterally before sending them to the 

Depository Trust Company (‘‘DTC’’) for 

settlement, and DTC then sends a 

specified number of shares and amount 

of cash collateral to OCC for clearing 

and guarantee of performance.12 This 

process adds complexity to balancing 

and reconciliation under the current 

Hedge Program.13

4. Scope of OCC’s Guaranty 

OCC guarantees the return of the 

collateral and borrowed stock of both 

Hedge Program and Market Loan 

Program loans. However, for Market 

Loan Program transactions, OCC also 

provides a limited guaranty of substitute 

dividend and rebate payments based on 

instructions from the Loan Market based 

on the amount of margin collected. OCC 

does not offer the same guaranty for 

loans made under the Hedge Program, 

which creates operational complexity. 

5. Collateralization Rate 

As part of clearing, OCC marks-tomarket payments for cleared stock loans 

on a daily basis. The payments are made 

between Clearing Members based on the 

value of the loaned securities. However, 

the loans are marked-to-market 

differently depending on whether they 

originated from the Hedge Program or 

the Market Loan Program. In the Hedge 

Program, loans are collateralized 100 or 

102 percent, and the preferred rounding 

is dependent on the bilateral Master 

Securities Loan Agreement (‘‘MSLA’’) 

between the original counterparties. In 

the Market Program, all loans are 

collateralized 102 percent, rounding to 

the nearest dollar. In both programs, 

settlements are generally combined and 

netted against other OCC settlement 

obligations, and Clearing Member 

positions are factored into that Clearing 

Member’s overall margin and guaranty 

fund contribution. 

6. Dividends and Distributions 

OCC ordinarily processes Market 

Loan Program dividend equivalent 

payments through DTC’s Dividend 

Service. If, however, a Loan Market 

notifies OCC that the dividend or 

distribution for a particular Market Loan 

is not tracked by DTC’s Dividend 

Service (or if OCC uses its discretion to 

remove a Market Loan from the DTC 

Dividend Service), the dividend 

equivalent payments are made through 

OCC’s cash settlement system the day 

after the expected payment date. For 

such dividend payments, the Loan 

Market calculates the amount outside of 

DTC’s Dividend Service, and for noncash dividends and distributions, the 

Loan Market may set an equivalent cash 

settlement value for OCC to administer. 

As part of clearing, OCC guarantees 

dividend equivalent payments from a 

defaulting Clearing Member, but only to 

the extent OCC has collected margin 

equal to such dividend equivalent 

according to the instructions from the 

Loan Market. Additionally, OCC 

currently has no responsibility to verify 

the accuracy of the Loan Market’s 

calculation. 

7. Termination of Stock Loans 

Again, because of the differences in 

stock loan origination, OCC handles 

stock loan terminations differently 

depending on whether they are Hedge 

Loans or Market Loans. Hedge Loans are 

terminated through DTC when: (1) a 

Borrowing Clearing Member instructs 

DTC to transfer a specified quantity of 

Loaned Stock to the Lending Clearing 

Member in exchange for payment of the 

settlement price from the Lending 

Clearing Member, or (2) the Lending 

Clearing Member terminates all or part 

of the loan with the Borrowing Clearing 

Member. Initiating returns through DTC 

for the Hedge Program can break 

positions if the return transactions are 

not coded properly. 

As with dividend distributions, 

Market Loans are terminated via 

instruction from a Clearing Member 

through the Loan Market to recall or 

return Loaned Stock. The Loan Market 

then instructs OCC, OCC validates the 

request, and OCC sends a pair of orders 

to DTC to initiate the transfer. 

Where a Clearing Member under 

either program fails to return the stock 

or pay the settlement amount, the other 

counterparty may choose to execute a 

‘‘buy-in’’ or ‘‘sell-out’’ of the Loaned 

Stock. Neither of the current Stock Loan 

Programs enables OCC to administer 

buy-ins or sell-outs. After execution of 

the buy-in/sell-out, the initiating 

Clearing Member provides notice to 

OCC and its counterparty for Hedge 

Loans and to the Loan Market for 

Market Loans. Termination is complete 

once OCC records the termination. 

8. Canadian Clearing Members 

Canadian Clearing Members may 

participate in the Hedge Program if they 

appoint CDS Clearing and Depository 

Services Inc. (‘‘CDS’’) to act as agent 

with DTC and the National Securities 

Clearing Corporation (‘‘NSCC’’) to 

provide cross-border clearance and 

settlement with U.S. counterparties. 

Canadian Clearing Members cannot 

participate in the Market Loan Program. 

Canadian Hedge Clearing Members 

are subject to additional restrictions to 

participate in OCC’s Hedge Program. 

Normally, federal tax rules impose a 

30% withholding on ‘‘dividend 

equivalent’’ payments to non-U.S. 

persons for certain derivatives that 

reference U.S. equities. OCC has no 

current tax withholding or reporting 

obligations for Canadian Hedge Clearing 

Members, because substitute dividend 

payments are handled bilaterally 

between Hedge Clearing Members. 

Consequently, OCC requires that 

Canadian Hedge Clearing Members 

establish that their activity will not 

result in the imposition of taxes or 

withholding, and they are prohibited 

from entering into transactions that 

would impose taxes or withholding. 

B. Proposed Changes to OCC’s Stock 

Loan Program Framework 

1. Consolidation of the Stock Loan 

Programs 

OCC proposes to consolidate its Stock 

Loan Programs into a single stock loan 

program over the course of three phases. 

This Proposed Rule Change covers the 

first and second phases. The third phase 

is not part of this Proposed Rule Change 

and would require a separate filing with 

the Commission. 

The first phase would (1) amend the 

rules related to the Market Loan 

Program to allow it to eventually 

become OCC’s single stock loan 

program, and (2) update the Hedge 

Program and Market Loan Program to 

align with the implementation of 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95881 

14Based on a survey of all Clearing Members who 

participate in OCC’s Stock Loan Programs (provided 

as confidential Exhibit 3B to File No. SR–OCC– 

2024–011), members have expressed interest in 

being able to have, for example, the rebate amounts 

calculated, settled, and guaranteed by OCC—an 

expansion of services that necessarily would be 

achieved by the migration from the Hedge Program 

to the Market Loan Program. See Notice of Filing, 

89 FR 73470, n.30. OCC indicated that it anticipates 

that Clearing Members will be motivated to migrate 

activity to the Market Loan Program because of the 

expansion of such services and OCC’s expanded 

guarantee under the Market Loan Program. See 

Notice of Filing, 89 FR 73470. 

15OCC is not proposing to require business 

expansions for Hedge Clearing Members, because 

they already are approved for stock loan activity, 

and the business expansion for Market Loan 

Program participation aims to verify proper 

subscription through a Loan Market, which would 

no longer be necessary to participate in the Market 

Loan Program. 

16The relevant authority to terminate existing 

loans comes from Section 2(c) of Article XXI of 

OCC’s By-Laws. OCC proposes to move the text of 

that section of its By-Laws to new Rule 2213(e)(1) 

as part of the broader reorganization described 

herein. 

17OCC proposes, however, to amend its Rules to 

avoid ambiguity by using ‘‘Hedge Loan’’ instead of 

‘‘Stock Loan’’ when referring to Stock Loans under 

the Hedge Program, unless in reference to Stock 

Loans under either of the Stock Loan Programs, 

consistent with the current definition of that term 

in Article I of the By-Laws. See Notice of filing, 89 

FR 73470. 

18See Notice of filing, 89 FR 73477. 

19OCC proposes to move Article XXI, Section 2(b) 

and Article XXIA, Section 5(a) of its By-Laws to 

new Rules 2203(d)(2)(A) and 2206A(b)(2)(E), 

respectively, without changes other than those 

explicitly described in the Notice of Filing. 

20OCC is not proposing to change the required 

terms already defined in its rules (e.g., 

identification of Eligible Stock, number of shares 

loaned, amount of collateral received, identity of 

lending and borrowing Clearing Members). 

21 Id. 

Ovation, OCC’s new system for 

clearance and settlement. Such changes 

include contract-level recordkeeping, rematching matched book positions in 

suspension across both Stock Loan 

Programs, and expanding bilaterallynegotiated Market Loans. These changes 

are designed to facilitate and encourage 

Hedge Clearing Members to submit new 

bilateral stock loan transactions through 

the Market Loan Program.14 Hedge 

Clearing Members would be required to 

provide the appropriate documentation 

and certifications, similar to those 

required of Market Loan Clearing 

Members, and to submit to certification 

testing before utilizing the Market Loan 

program.15

During the second phase, OCC will 

announce that it will no longer accept 

new loans through the Hedge Program, 

but will continue to support existing 

Hedge Loans until they naturally 

terminate. To facilitate this change, OCC 

proposes to adopt new Rule 2213(e)(2), 

which would authorize OCC to stop 

accepting new Hedge Loans. 

Additionally, OCC proposes to maintain 

its existing authority to terminate 

outstanding Hedge Loans upon two 

business days’ written notice to Clearing 

Members based on several enumerated 

reasons, one of which is OCC’s 

impending termination of this line of 

business.16 Under proposed Rule 

2213(e)(2), OCC’s Chief Executive 

Officer or Chief Operating Officer would 

be authorized to approve the decision 

for OCC to cease accepting new Hedge 

Loans based on factors including, but 

not limited to, the number of 

participants that are able to conduct 

business under the Market Loan 

Program, the amount of transactions 

flowing through the Market Loan 

Program, the proportion of loan 

balances between the Stock Loan/Hedge 

Program and the Market Loan Program, 

and feedback from members about when 

they expect to be ready to migrate fully 

to the Market Loan Program. OCC is not 

proposing to remove the rules related to 

the Hedge Program at this time.17

2. Proposed Changes Across Both Stock 

Loan Programs 

a. Contract-Level Recordkeeping. As 

stated in Section II.A.1, above, OCC 

currently aggregates stock loan and 

borrow positions for the same Eligible 

Stock, which is not the industry 

standard of contract-level 

recordkeeping. To alleviate inaccuracies 

and, at times, lack of information in 

OCC’s bookkeeping practices, OCC 

proposes to eliminate this legacy 

practice. Under the new contract-based 

approach, each stock loan position or 

stock borrow position would be a 

distinct contract recorded in each 

Clearing Member account. Every new 

recorded loan will generate a new stock 

borrow position and stock loan position 

for the number of shares lent and 

borrowed. By maintaining stock loan 

positions and stock borrow positions at 

the contract level, OCC would be able to 

record additional terms, such as (a) 

rebate rate; (b) whether the rebate rate 

is a fixed or a floating value (and if 

floating the interest rate benchmark); 

and (c) end date, if it is a term loan. 

Clearing Members would not be 

required to submit such additional 

terms. OCC would assume that no such 

terms exist, unless otherwise directed 

by its Clearing Members. OCC believes 

that contract-level recordkeeping would 

allow Clearing Members to see more 

precisely the contracts with shares lent 

by lender and borrower.18

This contract-level recordkeeping 

would be implemented in OCC’s rules 

by proposed amendments to Article 

XXI, Section 2 (Hedge Program) and 

Article XXIA, Section 5 (Market Loan 

Program) of OCC’s By-Laws, retained 

portions of which would migrate to 

become OCC Rules 2203 and 2206A, 

respectively. Under these proposed 

revisions, OCC would delete the rules 

requiring the aggregation of positions 

and eliminate text providing that OCC 

shall identify stock loan and stock 

borrow positions resulting from Hedge 

Loans separately from positions 

resulting from Market Loans. Because 

OCC proposes to eliminate position 

aggregation altogether, the latter 

prohibition against aggregating positions 

across programs would no longer be 

relevant. 

As noted above, the proposed 

contract-level recordkeeping would 

allow OCC to record additional terms at 

the contract level. Specifically, OCC 

proposes to change Article XXI, Section 

2(b) and Article XXIA, Section 5(a) of 

OCC’s By-Laws 19 to allow Clearing 

Members to provide additional terms 

beyond those already required by the 

rules.20 The proposed changes regarding 

such optional terms, which are not 

associated with OCC’s guaranty (i.e., 

rebate rate and interest rate benchmark 

with respect to Hedge Loans, and loan 

term with respect to both Hedge Loans 

and Market Loans), would not impose 

any additional obligations on OCC. 

Rather, the proposed changes would 

facilitate the optional inclusion of 

additional terms between the parties 

that survive OCC’s novation and would 

be recorded in OCC’s system for the 

Clearing Member’s convenience.21

To further accommodate contractlevel recordkeeping, OCC proposes the 

following conforming changes: 

• Current Interpretation and Policy 

.01 to OCC Rules 2201 and 2201A (i.e., 

proposed OCC Rules 2206(b) and 

2206A(d)), which concern the transfer of 

stock loan positions or stock borrow 

positions between Clearing Member 

accounts, would be amended to delete 

the phrase ‘‘all or any portion of’’ as it 

relates to stock loan or stock borrower 

positions, and add the text ‘‘provided, 

that any such transfer will result in the 

transfer of all shares related to the 

relevant stock loan position or stock 

borrow position.’’ Accordingly, any 

transfer of a stock loan position or stock 

borrow position, each representing an 

individual contract, would be for all 

shares that are the subject of the 

contract. 

• Current Interpretation and Policy 

.02 to OCC Rule 2201 (i.e., proposed 

OCC Rule 2206(c)(1)), which concerns 

how OCC would apply Hedge Loan 

return instructions received from DTC 

to a Clearing Member’s default account, 


lotter on DSK11XQN23PROD with NOTICES1
95882 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

22See Notice of filing, 89 FR 73478. 

23 Id. 

would be modified to eliminate the 

ability of Clearing Members to designate 

OCC accounts in DTC delivery orders. 

Instead, returns of shares will be 

reflected in the Clearing Member’s 

default account. To support the shift to 

contract-level recordkeeping, OCC also 

would add proposed OCC Rule 

2206(c)(2), which would provide that 

returns will decrease the number of 

shares borrowed beginning with the 

oldest Hedge Loan between the 

Borrowing Clearing Member and the 

Lending Clearing Member on OCC’s 

books and records. If the return exhausts 

the oldest Hedge Loan, OCC would 

decrement to the next oldest. 

• Current Interpretation and Policy 

.02 to OCC Rule 2201A (i.e., proposed 

OCC Rule 2206A(e)), which concerns 

how Market Loan return instructions 

would be applied to a Clearing 

Member’s accounts, would be amended 

to reflect that, if there are insufficient 

shares in the account designated by the 

delivery order submitted to OCC, or in 

the default account if the delivery order 

did not specify an account, OCC would 

reject the return instruction rather than 

fulfill the return to the extent of the 

shares in the designated or default 

account, as applicable. If an account 

was designated in the delivery order, 

OCC would fulfill the return based only 

on that account and would reject the 

return instruction if sufficient shares 

were not available in that account rather 

than applying shares in the default 

account to cover the excess. 

• Current OCC Rule 2209A(a)(2) (i.e., 

proposed OCC Rule 2216A(a)(5)), which 

concerns the termination of Market 

Loans upon receipt of end-of-day 

information from DTC concerning 

return or recall delivery orders, would 

be amended to delete the phrase ‘‘and 

reduce the respective Clearing Member’s 

open stock loan and stock borrow 

positions accordingly,’’ which refers to 

adjustments required for aggregated 

stock loan and stock borrow positions. 

OCC would also remove the phrase ‘‘the 

end of the day’’ with respect to the stock 

loan activity files it receives from DTC 

because OCC receives and processes 

such information from DTC throughout 

the business day. 

b. Aligning Mark-to-Market Settlement 

Accounts. As described above, in 

Section II.A.3, OCC currently limits 

settlement of daily mark-to-market of 

cash collateral to the Clearing Member’s 

firm account or combined MarketMakers’ account. OCC proposes to 

change its rules such that cash 

settlement would occur in the account 

in which the stock loan or stock borrow 

position is held, to reflect changes in the 

stock loan market that facilitate fully 

paid for lending programs, which have 

developed over the last two decades to 

allow customers to earn returns on their 

portfolios by allowing their broker to 

lend their shares.22

The proposed change would align 

mark-to-market cash settlements with 

positions by deleting current OCC Rules 

2201(a)(iii) and 2201A(a)(iii), as 

relocated to proposed OCC Rules 

2207(a)(1)(C) and 2207A(a)(1)(C). The 

text of these provisions currently 

requires Clearing Members to provide 

OCC with standing instructions to 

identify the Clearing Member’s firm 

accounts or combined Market-Makers’ 

account from which mark-to-market 

payments are to be made. However, 

these provisions would not be necessary 

under the Proposed Rule Change 

because OCC would settle the mark-tomarket payments in whichever account 

the stock loan or stock borrow position 

is held. OCC also would amend current 

Rules 2204(a) and 2204A(a), the relevant 

portions of which would be renumbered 

as proposed Rules 2209(a) and 

2209A(a), respectively, to provide that 

any mark-to-market payment shall be 

made in the account in which the Hedge 

Loan or Market Loan is held. 

OCC proposes to delete the last clause 

to Interpretation and Policy .04 to Rule 

1104, which concerns the use of a 

Liquidating Settlement Account to 

satisfy mark-to-market obligations 

arising from a suspended Clearing 

Member’s stock loan or borrow 

positions in customers’ accounts. That 

clause provides for the use of the 

Liquidating Settlement Account, 

notwithstanding that such mark-tomarket payments may settle in another 

account under current Rules 2201(a) 

and 2201A(a). This clarifying clause 

would no longer be relevant because of 

the alignment of settlement with the 

accounts in which the positions are 

held.23

c. Simplifying Mark-to-Market 

Accounts. As a further update to markto-market settlement accounts and to 

help facilitate OCC’s planned switch 

from loan aggregation to contract-level 

recordkeeping, OCC proposes to change 

its mark-to-market calculation to focus 

on the change to the contract value of 

a Clearing Member’s Stock Loans. 

Currently, the mark-to-market 

calculation focuses on the value of the 

loaned shares of stock by taking the 

quantity of stock that is on loan each 

morning and marking it to a closing 

price each night. Quantities of stock that 

correspond to new loans put on during 

the day are also marked to the end-ofday closing price. 

Now, OCC proposes to amend current 

Rules 2204 and 2204A, to be 

renumbered as proposed Rules 2209 and 

2209A, respectively. Proposed OCC 

Rules 2209(b) and 2209A(b) would 

provide that the mark-to-market 

payment will be the amount necessary 

to cause the amount of Collateral to be 

equal to the Collateral requirement 

applicable to the Stock Loan. For Hedge 

Loans, the Collateral requirement is 

either 100 or 102 percent of the markto-market value of the Loaned Stock, 

depending on which percentage the 

parties selected when initiating the 

Hedge Loan, as described in Section 

II.A.5., above. For Market Loans, as 

described below in Section II.B.3.c., the 

Collateral requirement would be fixed at 

102 percent of the value of the Loaned 

Stock, which is the collateralization for 

all Market Loans currently. 

d. Re-Matching Matched Book 

Positions in Suspension Across Stock 

Loan Programs. As stated above, in 

Section II.A.2., OCC’s current 

framework does not contemplate the rematching of Matched-Book Positions 

across OCC’s Stock Loan Programs in 

the event of a Clearing Member default. 

The Proposed Rule Change would 

extend OCC’s authority to close out and 

re-establish the Matched-Book Positions 

of a suspended Clearing Member to the 

Market Loan Program and would allow 

re-matching in suspension across the 

Hedge and Market Loan Programs. 

Under the current OCC Rule 2212, OCC 

has authority to terminate MatchedBook Positions by offset and rematching with other Clearing Members. 

OCC proposes to extend its re-matching 

authority and allow for re-matching 

across programs by inserting proposed 

OCC Rule 2219A, which would be 

similar in structure and content to 

current OCC Rule 2212. 

Proposed OCC Rule 2219A(a) would 

provide that, in the event that a 

suspended Clearing Member has 

Matched-Book Positions within the 

Hedge or Market Loan Programs, OCC 

will, upon notice to affected Clearing 

Members, close out the suspended 

Clearing Member’s Matched-Book 

Positions to the greatest extent possible 

by (1) the termination by offset of stock 

loan and stock borrow positions that are 

Matched-Book Positions in the 

suspended Clearing Member’s 

account(s) and (2) OCC’s re-matching in 

the order of priority in paragraph (c) of 

proposed OCC Rule 2219A of stock 

borrow positions for the same number of 

shares in the same Eligible Stock 

maintained in a designated account of a 

Matched-Book Borrowing Clearing 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95883 

24OCC indicated that this algorithmic process 

would limit the number of returns that may be 

initiated for re-matching that results in Disclosed 

Market Loans between parties who have not 

executed an MSLA. See Notice of Filing, 89 FR 

73479. 

Member against a stock loan position for 

the same number of shares in the same 

Eligible Stock maintained in a 

designated account of a Matched-Book 

Lending Clearing Member. Under 

proposed OCC Rule 2219A(b), as under 

current OCC Rule 2212(b), the MatchedBook Borrowing Clearing Member and 

Matched-Book Lending Clearing 

Member would not be required to issue 

instructions to DTC to terminate the 

relevant stock loan and stock borrow 

positions or to initiate new stock loan 

transactions to reestablish such 

positions, because the affected positions 

would be re-matched without requiring 

the transfer of securities against the 

payment of settlement prices. 

Proposed OCC Rule 2219A(c), as 

under current OCC Rule 2212(c), would 

provide that OCC shall make reasonable 

efforts to re-match Matched-Book 

Borrowing Clearing Members with 

Matched-Book Lending Clearing 

Members that maintain MSLAs 

executed between them, based upon 

information provided by Clearing 

Members to OCC on an ongoing basis. 

Proposed OCC Rule 2219A(c) would 

further provide that OCC shall be 

entitled to rely on, and shall have no 

responsibility to verify, the MSLA 

records provided by Clearing Members 

and on record as of the time of rematching. Proposed Rule OCC 

2219A(c)(1) through (13), which would 

mirror current OCC Rule 2212(d), would 

require that the termination by offset 

and re-matching be done using a 

matching algorithm in which the 

Matched-Book Positions of the 

suspended Clearing Member are first 

terminated by offset and then the 

affected Matched-Book Borrowing 

Clearing Members and Matched-Book 

Lending Clearing Members are rematched in order of priority based first 

upon whether the re-matched Clearing 

Members have an existing MSLA 

between them or, in the case of 

Anonymous Market Loans, can be kept 

anonymous by re-matching with a 

Matched-Book Position that is another 

Anonymous Market Loan initiated 

through the same Loan Market.24

Under this proposed matching 

algorithm, OCC would first select the 

largest stock loan or stock borrow 

position regarding a Disclosed Market 

Loan for a given Eligible Stock from the 

suspended Clearing Member’s MatchedBook Positions. These selected positions 

would then be re-matched with the 

largest available stock borrow or stock 

loan position regarding a Disclosed 

Market Loan for the selected Eligible 

Stock for which a MSLA exists between 

a Matched-Book Borrowing Clearing 

Member and a Matched-Book Lending 

Clearing Member. OCC would repeat 

this process until all potential rematching between Matched-Book 

Borrowing Clearing Members and 

Matched-Book Lending Clearing 

Members with MSLAs is completed for 

positions within the Hedge Program. 

Simultaneously, OCC would perform 

the same re-matching process within the 

Market Loan Program for (i) MatchedBook Positions that are Disclosed 

Market Loans for which a MSLA exists 

between a Matched-Book Borrowing 

Clearing Member and a Matched-Book 

Lending Clearing Member, and (ii) 

Matched-Book Positions that are 

Anonymous Market Loans initiated 

through the same Loan Market. After rematching to the extent possible within 

the Market Loan Program based on 

manner of initiation and trade source, 

OCC would proceed to re-match 

Matched-Book Positions within the 

Market Loan Program for which an 

MSLA exists between a Matched-Book 

Borrowing Clearing Member and a 

Matched-Book Lending Clearing 

Member, regardless of whether the 

Matched-Book Position was part of a 

Disclosed Market Loan or Anonymous 

Market Loan. 

After matching Matched-Book 

Positions to the extent possible between 

borrowers and lenders with existing 

MSLAs in both the Hedge Program and 

the Market Loan Program, OCC would 

then select the largest remaining stock 

loan or stock borrow positions for a 

given Eligible Stock regardless of 

whether the position is a Hedge Loan or 

a Market Loan, and re-match it with the 

largest available stock borrow or stock 

loan position for the selected Eligible 

Stock in the other Stock Loan Program 

for which an MSLA exists between the 

lenders and borrowers in the other 

Stock Loan Program, regardless of 

whether the Market Loan selected or 

matched is a Disclosed Market Loan or 

Anonymous Market Loan. OCC would 

repeat this process until it has 

rematched all Matched-Book Positions 

to the extent possible between parties to 

existing MSLAs between the two Stock 

Loan Programs. 

After re-matching among lenders and 

borrowers with existing MSLAs, OCC 

proposes to repeat the process for all 

remaining Matched-Book Positions for 

which MSLAs do not exist between the 

lenders and borrowers. OCC would first 

complete such rematching to the extent 

possible within each program. The rematching process would then be 

repeated for all remaining MatchedBook Positions across the Stock Loan 

Programs for which MSLAs do not exist 

between the lenders and borrowers. 

Remaining positions that are not able to 

be rematched either within or across 

programs would then be closed out 

pursuant to the rules governing closeout of Hedge Loans or Market Loans, as 

applicable. 

Under proposed OCC Rule 2219A(d), 

as under current OCC Rule 2212(e), in 

the event Borrowing and Lending 

Clearing Members are re-matched 

through this algorithmic process, the 

pre-defined terms and instructions 

established by the Lending Clearing 

Member would govern the re-matched 

positions pursuant to proposed OCC 

Rule 2207 for Hedge Loans or proposed 

Rule 2207A for Market Loans. For 

Matched-Book Positions re-matched 

across programs, the resulting rematched loan would be a Hedge Loan. 

If the re-matched positions were 

Anonymous Market Loans, the resulting 

Loan would be an Anonymous Market 

Loan. However, if one of the positions 

was a Disclosed Market Loan or the 

positions were Anonymous Market 

Loans initiated through different Loan 

Markets, the resulting loan would be a 

Disclosed Market Loan. Going forward, 

such a Disclosed Market Loan would be 

deemed to have been initiated through 

OCC, which would facilitate rematching within the Market Loan 

Program for parties who are not 

subscribers to a Loan Market. Pursuant 

to proposed OCC Rule 2219A(j), the rematched Clearing Members may choose 

to execute an MSLA or close out the rematched positions in accordance with 

proposed OCC Rules 2213 or 2216A, as 

applicable. 

Under proposed OCC Rule 2219A(e), 

which corresponds to the second 

sentence of current OCC Rule 2212(e), 

any change in Collateral requirements 

arising from a change in the terms of 

stock loan or stock borrow positions 

between a Lending Clearing Member 

and Borrowing Clearing Member with 

re-matched positions would be included 

in the calculation of the mark-to-market 

payment obligations on the stock loan 

business day following the completion 

of the positions adjustments as set forth 

in proposed OCC Rule 2219A(f). Under 

proposed OCC Rule 2219A(f), which 

reflects current OCC Rule 2212(f), the 

termination by offset and re-matching of 

positions would be complete upon OCC 

finishing all position adjustments in the 

accounts of the suspended Clearing 

Member and the Borrowing Clearing 

Members and Lending Clearing 

Members with re-matched positions, 


lotter on DSK11XQN23PROD with NOTICES1
95884 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

25See Notice of Filing, 89 FR 73471. 

26See proposed OCC Rule 101.H(1), which is 

originally By-Law Article XXIA, Section 1.D.(2), 

and was proposed to be deleted from the By-Laws 

and relocated to the Rules. (‘‘The term ‘‘Hedge 

Loan’’ means a matched pair of securities contracts 

for the loan of Eligible Stock made through the 

Stock Loan/Hedge Program, with one such 

securities contract being between the Lending 

Clearing Member and the Corporation as the 

borrower and the second such securities contract 

being between the Corporation as the lender and the 

Borrowing Clearing Member.’’). 

27Proposed OCC Rule 2206A(a). 

28See Notice of Filing, 89 FR 73471. 

and the applicable systems reports are 

produced and provided to the Clearing 

Members showing the transactions. 

Under proposed OCC Rules 2219A(g) 

through (i), from and after the time OCC 

has completed the position adjustments 

as set forth above in proposed OCC Rule 

2219A(f), the suspended Clearing 

Member would have no further 

obligations under the By-Laws and 

Rules with respect to such positions. 

However, a Borrowing Clearing Member 

with re-matched stock borrow positions 

would remain obligated as a Borrowing 

Clearing Member and a Lending 

Clearing Member with re-matched stock 

loan positions would remain obligated 

as a Lending Clearing Member. 

Furthermore, upon notification that 

OCC has completed the termination by 

offset and re-matching of stock loan and 

borrow positions, the suspended 

Clearing Member and Borrowing/ 

Lending Clearing Members with rematched positions would be required to 

promptly make any necessary 

bookkeeping entries at DTC to ensure 

the accuracy and efficacy of those stock 

loan terms not governed by OCC’s ByLaws and Rules. Under proposed OCC 

Rule 2219A(j), as under current OCC 

Rule 2212(j), Borrowing/Lending 

Clearing Members that have been rematched would be required to work in 

good faith to either (i) reestablish any 

terms, representations, warranties, and 

covenants not covered by the By-Laws 

and Rules (e.g., establish an MSLA) or 

(ii) terminate the re-matched stock loan 

or borrow positions in the ordinary 

course pursuant to OCC Rules 2213 or 

2216A, as applicable, as soon as 

reasonably practicable. Current OCC 

Rule 2212, which concerns re-matching 

in suspension for the Hedge Program, 

would be deleted and replaced with 

proposed OCC Rule 2217, with a crossreference to proposed OCC Rule 2219A. 

3. Market Loan Program Enhancements 

a. Expansion of Bilaterally Negotiated 

Market Loans. The current Market Loan 

Program, as described in Section II.A.3. 

above, allows for the acceptance of 

electronic messages from the Loan 

Market for new loans and returns. OCC 

proposes to expand the program to 

allow the acceptance of bilaterally 

negotiated loans submitted directly from 

Clearing Members or their third-party 

service providers. As proposed, after a 

new loan or return is affirmed, OCC 

would instruct DTC to settle the 

transaction using OCC’s DTC account, 

or the account of the lender, borrower, 

or Appointed Clearing Member. The 

proposal would allow for two separate 

avenues for submitting loans: either 

through a Loan Market or through the 

direct submission of bilaterally 

negotiated Loans to OCC. As proposed, 

the scope of OCC’s guaranty and posttrade processing for all transactions 

would be uniform, in contrast to the 

current scope of guarantee, as described 

in Section II.A.4., above. Under the 

proposal, counterparties to bilaterally 

negotiated contracts submitted to the 

Market Loan Program would remain 

paired in OCC’s system for purposes of 

recalls, returns, and contract 

modifications, as they are under the 

current Hedge Program. In OCC’s view, 

allowing automated submission of 

transactions to OCC prior to DTC 

settlement, combined with OCC’s 

control of the settlement process, would 

help reduce the burden and risks 

associated with the balancing and 

reconciliation under the current Hedge 

Program.25

OCC would update its Rules to 

facilitate the proposed expansion of the 

Market Loan Program to allow for direct 

submission of bilaterally negotiated 

stock loans. For example, definitions of 

‘‘Anonymous Market Loan’’ and 

‘‘Disclosed Market Loan’’ would be 

added to OCC Rule 101 to accommodate 

the fact that certain proposed Rules 

would apply differently to Loans 

matched anonymously through a Loan 

Market and Loans initiated bilaterally, 

whether through a Loan Market or with 

OCC directly. Anonymous Market Loans 

would be defined as those initiated 

through a Loan Market and for which 

the identities of the Lending Clearing 

Member and Borrowing Clearing 

Member are not disclosed to each other. 

Disclosed Market Loans would be 

defined to include either those Market 

Loans (i) initiated through a Loan 

Market and for which the identities of 

the Lending Clearing Member and 

Borrowing Clearing Member are 

disclosed to each other, or (ii) initiated 

directly between the Lending Clearing 

Member and Borrowing Clearing 

Member away from a Loan Market such 

that the identities of the Lending 

Clearing Member and Borrowing 

Clearing Member are disclosed to each 

other. 

The proposal further would amend 

OCC Rule 2202A (Initiation of Market 

Loans), where the newly renumbered 

OCC Rule 2202A(a)(1), currently OCC 

Rule 2202A(a)(i), would add that, in 

addition to initiation through a Loan 

Market, a Market Loan may be initiated 

when a Lending Clearing Member and 

Borrowing Clearing Member send 

details of a stock loan between the two 

Clearing Members directly to OCC. 

Proposed OCC Rule 2202A(h) would 

provide that a Market Loan may be 

either an Anonymous Market Loan or a 

Disclosed Market Loan. 

OCC also would amend current 

Article XXIA, Section 5 of OCC’s ByLaws (Maintaining Stock Loan and 

Stock Borrow Positions in Accounts), 

which would become OCC Rule 2206A. 

Specifically, a new sentence would be 

added to the beginning of Rule 2206A 

that would introduce the concept of 

‘‘matched pairs’’ to remain consistent 

with the definition of ‘‘Hedge Loan.’’ 26

The sentence would read, ‘‘Each Market 

Loan will be maintained on the books 

and records of the Corporation as a 

unique matched pair of contracts with 

one such contract being between the 

Lending Clearing Member and the 

Corporation as borrower and the second 

such contract being between the 

Corporation as Lender and the 

Borrowing Clearing Member.’’ 27 OCC 

stated that this clarifying sentence 

would ensure that the original 

counterparties to such a Disclosed 

Market Loan remain paired in OCC 

system, notwithstanding OCC’s 

novation.28 Proposed OCC Rule 2206A, 

Paragraph (a) additionally would 

provide that the identities of the 

Lending Clearing Member and 

Borrowing Clearing Member would be 

elements identified for stock loan 

positions and stock borrow positions 

resulting from Disclosed Market Loans. 

Apart from the initiation process for 

bilateral Market Loans, OCC would 

amend its Rules regarding the 

accommodation of direct submission of 

other types of post-trade transactions for 

which the Rules currently rely on 

actions taken by a Loan Market. The 

first paragraph of current OCC Rule 

2209A(a) (Termination of Market Loans) 

would be reflected in the newly 

renumbered OCC Rule 2216A(a)(1) and 

the newly created Rule 2214A 

(Modifications) and would provide that 

termination or modification of a Market 

Loan, respectively, may be initiated 

either through a Loan Market or OCC, 

depending on the way in which the 

Loan was initiated. Such instructions 

would be made through the Loan 

Market for Anonymous Market Loans; 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95885 

29See proposed OCC Rules 101.R(2) and (5), 

which are, respectively, By-Law Article XXIA, 

Section 1.R.(2) and (3), and were proposed to be 

deleted from the By-Laws and relocated to the 

Rules. (For example, ‘‘The term ‘recall,’ as used in 

respect of any Market Loan, means the process by 

which the Lending Clearing Member may initiate 

the termination of the Market Loan, or any portion 

thereof, by submitting a notice to the applicable 

Loan Market or the Corporation, as applicable, 

calling for the return of all or any portion of the 

Loaned Stock.’’ (emphasis added)). 

30See proposed OCC Rule 2202A(b)(2)(E). 

(‘‘[W]ith respect to Disclosed Market Loans, the 

terms of the original stock loan (other than terms 

that establish congruence) and the representations, 

warranties and covenants made by each of the 

parties to the original stock loan under the Master 

Securities Loan Agreement or any other agreements 

with respect to the original stock loan shall (1) to 

the extent that they are inconsistent with the ByLaws and Rules of the Corporation, be eliminated 

from the pair of congruent contracts constituting the 

Market Loan and replaced by applicable By-Laws 

and Rules of the Corporation, and (2) to the extent 

that they are not inconsistent with the By-Laws and 

Rules of the Corporation, remain in effect as 

between such parties to the original stock loan, but 

shall not impose any additional obligations on the 

Corporation.’’) 

31See Notice of Filing, 89 FR 73471–72. 

32See Notice of Filing, 89 FR 73472. OCC 

previously contemplated fixing the collateralization 

rate at 100 percent, considering that its guaranty 

would replace the additional collateral needed to 

protect Lenders from counterparty default risk. 

However, in a survey of all Clearing Members who 

participate in OCC’s Stock Loan Programs (provided 

as confidential Exhibit 3B to File No. SR–OCC– 

2024–011), most were opposed to that idea and 

preferred that the rate be fixed at 102 percent 

because, in part, the loss of the additional two 

percent in collateral would materially reduce the 

income lenders earn by investing the cash 

collateral, which is one of the reasons lenders 

choose to lend their shares. Id. 

33OCC indicated that rounding rates for Market 

Loans submitted through a Loan Market would not 

change. See Notice of Filing, 89 FR 73472. 

34See id. 

35 Id. 

through OCC for Disclosed Market 

Loans initiated through OCC directly; 

and through either the Loan Market or 

OCC for Disclosed Market Loans 

initiated through a Loan Market. The 

definitions of ‘‘Recall’’ and ‘‘Return,’’ as 

migrated from the By-Laws to OCC Rule 

101, also would be amended to reflect 

the separate channels for initiating such 

a transaction.29

OCC would make other conforming 

changes to the text of the Rules to reflect 

the submission of bilaterally negotiated 

loans directly to OCC. Throughout the 

Rules governing the Market Loan 

Program, OCC would remove references 

to ‘‘matching’’ or ‘‘matched’’ 

transactions (i.e., matched through a 

Loan Market) to reflect that Market Loan 

transactions could also be initiated 

bilaterally, either through a Loan Market 

or directly with OCC. The definition of 

‘‘Market Loan Program,’’ as migrated 

from Section 1 of Article I of the OCC 

By-Laws to OCC Rule 101, would be 

amended to recognize that Market Loans 

may be initiated either through a Loan 

Market or through direct submission of 

bilaterally negotiated Loans to OCC. 

b. Recognition of Additional/ 

Supplementary MSLA Terms. The 

Proposed Rule Change would allow 

OCC to recognize supplementary or 

additional terms under an MSLA 

between the counterparties to such 

bilaterally negotiated transactions 

submitted under the Market Loan 

Program, as OCC’s Rules currently 

recognize under the Hedge Program. 

Because parties to a bilaterally 

negotiated stock loan transaction 

typically execute an MSLA, OCC’s 

current Rule 2202(b) allows Hedge 

Clearing Members to establish and 

maintain additional terms under an 

MSLA that are not extinguished through 

OCC’s novation, provided that the 

additional terms are not inconsistent 

with OCC’s By-Laws or Rules. Such 

additional or supplementary terms may 

include a term structure or fees for buyin transactions, for example. Under the 

proposal, OCC would add the same 

provision allowing additional or 

supplementary terms (so long as they 

are not inconsistent with the By-Laws 

and Rules) to the Market Loan Program 

in proposed OCC Rule 2202A(b)(2)(E).30

As described above, in Section II.B.2.b., 

OCC indicated that the recognition of 

MSLAs within the Market Loan Program 

also would facilitate the re-matching of 

Matched Book Positions in suspension 

because OCC would give priority to rematching counterparties with existing 

MSLAs, both when re-matching within 

and across the Stock Loan Programs.31

c. Collateral and Mark-to-Market 

Pricing. To further facilitate the 

submission of bilaterally negotiated 

Market Loans directly to OCC, the 

Proposed Rule Change would set the 

collateral for all Market Loans at 102 

percent, which is the same rate at which 

Market Loans submitted through a Loan 

Market currently are collateralized. OCC 

Rule 2204A (Mark-to-Market Payments), 

which would become proposed OCC 

Rule 2209A, would be amended to 

provide in proposed paragraph (b) 

(Market-to-Market Payment Amount) 

that the collateralization rate for all 

Market Loans would be 102 percent, 

regardless of whether it was initiated 

through a Loan Market or submitted 

directly to OCC. Current text in OCC 

Rule 2204A, providing that the 

collateralization rate shall be set by the 

relevant Loan Market, would then be 

deleted, because it would no longer be 

accurate. OCC also would delete the 

part of the definition of the term 

‘‘Collateral’’ in Article XXIA of the OCC 

By-Laws, as migrated to OCC Rule 101, 

that references setting the 

collateralization rate by the relevant 

Loan Market, to maintain consistency 

and avoid confusion. According to OCC, 

fixing the collateral at 102 percent not 

only would assist in preserving 

compatibility between OCC’s cleared 

offerings and the standard practices for 

over-the-counter (‘‘OTC’’) uncleared 

stock loans (as well as with OCC’s 

current practice within the Market Loan 

Program), but also reduce complexity in 

OCC’s risk management process by 

establishing a single rate across all 

Market Loans.32

The Proposed Rule Change would 

further align the Market Loan Program 

with the Hedge Program by allowing 

Clearing Members submitting Market 

Loans directly to OCC to select the 

default rate at which mark-to-market 

payments would be rounded up to the 

nearest level, which is the current 

practice for Hedge Loans, as described 

in Section II.A.5., above. Under the 

proposal, OCC Rule 2201A (Instructions 

to the Corporation) would become 

proposed OCC Rule 2207A, and would 

provide that the default rate is one of 

the standing instructions that Market 

Loan Clearing Members must submit 

with respect to Market Loans submitted 

directly to OCC.33 The Lending Clearing 

Member’s default rate would govern the 

Market Loan if there is a difference 

between the default rates of a Borrowing 

Clearing Member and a Lending 

Clearing Member. OCC indicated that 

allowing the same flexibility in the 

Market Loan Program as currently exists 

in the Hedge Program would support 

Clearing Members in synchronizing 

cash flows between cleared and OTC 

stock loan transactions.34

d. Cancellation of Pending 

Transactions. As proposed, OCC would 

modify its Rules that concern the 

cancellation of pending transactions to 

accommodate the submission of 

cancellation instructions by Clearing 

Members, in addition to such 

submissions made by a Loan Market. 

This change is designed to bolster OCC’s 

ability to accept bilaterally negotiated 

contracts in the Market Loan Program.35

To that end, OCC proposes to amend 

current OCC Rule 2202A(a)(ii), which 

allows a Loan Market to instruct OCC to 

disregard a previously reported matched 

transaction that is pending settlement at 

DTC, after which OCC instructs DTC to 

cancel the previously issued delivery 

order. The current OCC Rule 

2202A(a)(ii) also provides that, upon 


lotter on DSK11XQN23PROD with NOTICES1
95886 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

36 Id. 37See Notice of Filing, 89 FR 73473. 

38OCC clarified that it would not alter or 

eliminate the authority to permit Clearing Members 

to submit standing instructions, which currently 

exists under OCC Rule 2201A (Instructions to the 

Corporation), the applicable provision of which 

would be renumbered OCC Rule 2207A(a)(2). See 

Notice of Filing, 89 FR 73473. OCC added that this 

existing authority would be facilitated by planned 

technology changes, which would support 

automatic affirmation based on system settings that 

could be selected by Clearing Members. When new 

loans are received, the system would check whether 

there is a standing instruction that applies to the 

new loan. If no instruction is found, then the new 

loan would be pended for affirmation. If a standing 

instruction applies, then OCC would follow that 

instruction as satisfaction of the affirmation 

requirement. Id. 

confirmation that DTC has processed 

such cancellation instructions, the 

related matched transaction is deemed 

null and void and given no effect; but 

also clarifies that OCC has no obligation 

to any Market Loan Clearing Member in 

acting pursuant to a Loan Market’s 

instruction to disregard a previously 

reported transaction. OCC would amend 

OCC Rule 2202A(a)(ii), which would be 

renumbered as proposed OCC Rule 

2202A(a)(2), to permit a Market Loan 

Clearing Member to submit a 

cancellation instruction for a pending 

transaction directly to OCC for 

bilaterally negotiated transactions 

submitted under the Market Loan 

Program. 

OCC would add a new OCC Rule 

2215A (Cancellation of Pending 

Instructions) to address the cancellation 

of pending post-trade instructions, other 

than cancellation of loan initiation 

under current OCC Rule 2202A. Under 

current OCC Rule 2202A, Hedge 

Clearing Members are able to cancel 

return instructions or recall instructions 

pending with DTC, and Market Loan 

Clearing Members likewise may cancel 

pending transactions by issuing a 

cancellation instruction to the Loan 

Market, which may then instruct OCC to 

disregard a previously reported 

transaction. The newly proposed OCC 

Rule 2215A would allow members that 

submit bilaterally negotiated Market 

Loans to issue cancellation instructions 

directly to OCC, as they do now to DTC 

and the Loan Market, thus further 

aligning the Stock Loan Programs.36

e. Transaction Affirmation. Currently, 

Market Loan Program transactions are 

matched when a Loan Market sends 

them to OCC. To help assure that the 

same matched status applies to loans 

submitted directly to OCC, the Proposed 

Rule Change would establish a 

transaction affirmation process. 

Regarding new loans, counterparties 

would be required to affirm the 

transaction details prior to OCC 

submitting the new loan to DTC for 

settlement and OCC would reject new 

loans that are not affirmed by the time 

that it stops accepting instructions for 

the day. Proposed OCC Rule 2202A(a)(1) 

would describe this process in detail, 

providing that a Market Loan is initiated 

when (i) the Loan Market sends details 

of a stock loan transaction to OCC or (ii) 

a Lending Clearing Member and 

Borrowing Clearing Member send 

details to OCC of a stock loan 

transaction between them and such 

details are either matched by OCC or 

affirmed by the Clearing Members, as 

applicable. 

The Proposed Rule Change would 

allow a Lending Clearing Member to 

have the opportunity to affirm or reject 

the initiation of a return by a cut-off 

time on the same business day, so long 

as the Borrowing Clearing Member 

initiated a return within OCC’s 

timeframe for submitting such an 

instruction on a stock loan business day. 

Proposed OCC Rule 2216A(a)(2) would 

describe an auto-affirmation process in 

detail, providing that any such returns 

pending after the cut-off time would be 

deemed affirmed and submitted to DTC 

for processing. OCC indicated that this 

approach would help balance a Lending 

Clearing Member’s desire to have the 

opportunity to affirm or reject return 

instructions, while simultaneously 

addressing a Borrowing Clearing 

Member’s concern that a delay in 

affirmation or allowing the transaction 

to pend indefinitely could have 

regulatory consequences for the 

Borrowing Clearing Member.37

Unlike returns, recalls would not 

need to be affirmed under the Proposed 

Rule Change. Proposed OCC Rule 

2216A(a)(3) would provide that, 

according to standard MSLA terms, a 

Borrowing Clearing Member will be 

deemed to have affirmed the initiation 

of a recall, provided that the Lending 

Clearing Member requested the return of 

the specific quantity of Loaned Stock no 

earlier than the standard settlement date 

that would apply to a purchase or sale 

of the Loaned Stock in the principal 

market of such Loaned Stock. 

Proposed OCC Rule 2214A(a) would 

be amended to add a new affirmation 

requirement to contract modifications. 

Specifically, contract modifications to 

the rebate rate, interest rate benchmark, 

or loan term submitted by either a 

Borrowing Clearing Member or Lending 

Clearing Member would not become 

effective until affirmed by both parties. 

Provisions in proposed OCC Rule 

2216A, paragraphs (b)(2)(B) and (c)(2) 

would define the processes for buy-ins 

and sell-outs to alleviate some of the 

concerns surrounding termination of 

stock loans, as described in Section 

II.A.7., above. In particular, for Market 

Loans submitted directly to OCC, the 

Borrowing Clearing Member and 

Lending Clearing Member will be given 

the opportunity to affirm or reject a buyin or sell-out, respectively, by a cut-off 

time specified by OCC on the stock loan 

business day the buy-in or sell-out 

transaction is received by OCC. If the 

Clearing Member does not affirm or 

reject the buy-in or sell-out by that time, 

OCC would deem the buy-in or sell-out 

to be complete if OCC determines that 

the Buy-In or Sell-Out Costs for the 

Loaned Stock initiated is more than the 

lowest market price and less than the 

highest market price for the Loaned 

Stock on the stock loan business day the 

buy-in or sell-out is submitted to OCC. 

Otherwise, the buy-in or sell-out would 

be rejected. This approach would be 

aligned with the buy-in and sell-out 

process under the current Hedge 

Program, in which any objection that 

the counterparty has with respect to the 

timeliness of the buy-in or sell-out, or 

the reasonableness of the Buy-In or SellOut Costs are matters that must be 

resolved away from OCC, and between 

the Lending Clearing Member and the 

Borrowing Clearing Member.38

f. Cash Distributions. The Proposed 

Rule Change would allow OCC to 

calculate and effect cash entitlements, 

including dividends, distributions, and 

rebates, using its internal clearance and 

settlement system. Paragraphs (a)(ii) and 

(a)(iii) of current OCC Rule 2206A 

(Dividends and Distributions; Rebates) 

would be renumbered as proposed OCC 

Rule 2211A(b) and (c), and would 

provide that under OCC’s proprietary 

clearance and settlement system, OCC 

shall assume responsibility for 

calculating the margin add-on collected 

with respect to dividend equivalent 

payments. As under the current OCC 

process, described in Section II.A.6., 

above, OCC would continue to effect 

dividend equivalent payments primarily 

through DTC’s Dividend Service. 

However, as amended under the 

proposed OCC Rule 2211A(b), OCC 

would effect payments through its 

proprietary clearance and settlement 

system if (i) OCC determines that the 

dividend or distribution for a Market 

Loan is not tracked through DTC’s 

dividend tracking service or (ii) if OCC 

has determined to remove a Market 

Loan from DTC’s dividend tracking 

service. Consistent with current OCC 

Rules, OCC would continue to add noncash dividends and distributions to the 

Loaned Stock if OCC determines that 

such dividends and distributions are 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95887 

39See Notice of Filing, 89 FR 73473. 

40OCC clarified that this change would not have 

any effect on OCC’s margin methodology and that 

OCC would continue to collect a margin add-on for 

such cash distributions. See Notice of Filing, 89 FR 

73473–74. 

41See Notice of Filing, 89 FR 73474. 

42 Id. 

43 Id. 44See Notice of Filing, 89 FR 73474. 

legally transferable and the transfer can 

be effected through DTC. However, the 

proposed changes to proposed OCC 

Rule 2211A(c) would clarify that the 

determination to fix a cash value for 

non-cash dividends and distributions 

not added to the Loaned Stock would lie 

with OCC, rather than the Loan Market. 

OCC contends that this change would 

eliminate OCC’s reliance on the Loan 

Market for its margin add-on process 

and settlement of dividend equivalent 

payments,39 and, as such, OCC proposes 

to eliminate the limitations under 

current OCC Rule 2206A, including the 

provision that OCC’s guaranty is limited 

by the amount of margin OCC collected 

in reliance of the Loan Market’s 

calculation.40

A new paragraph (d) would be added 

to proposed OCC Rule 2211A, 

addressing the rights of a Lending 

Clearing Member with respect to 

optional dividends, meaning those that 

a shareholder can elect to receive in 

cash, stock, or some combination of the 

two. Proposed OCC Rule 2211A(d) 

would provide that the Lending 

Clearing Member will have the right to 

elect an option only if it recalls the 

Loaned Stock in time to make such 

election. Otherwise, if the Lending 

Clearing Member does not recall the 

Loaned Stock, the Lending Clearing 

Member would be entitled to receive the 

default option set by the issuer of the 

Loaned Stock. OCC indicated that by 

adding paragraph (d) to proposed OCC 

Rule 2211A, the proposed rule would 

match the Loan Market’s current process 

for optional dividends and would help 

clarify OCC’s approach to such optional 

dividends in the stock lending context 

in OCC Rules, which currently do not 

address the rights of a Lending Clearing 

Member with respect to optional 

dividends.41

OCC also proposes to amend current 

OCC Rule 2206A(b), which would be 

renumbered as OCC Rule 2211A(e), to 

facilitate the calculation, collection, and 

payment of rebates under its internal 

clearance and settlement system. 

Currently, OCC Rule 2206A(b) provides 

that OCC generally will collect and pay 

rebate payments on a monthly basis as 

instructed by the Loan Market, with the 

rationale being that the Loan Market 

currently is responsible for rebate 

payment calculation, as it is with the 

calculation of dividend equivalent 

payments.42 However, proposed OCC 

Rule 2211A(e) would provide that OCC 

would assume responsibility for 

calculating the rebate payments under 

its internal clearance and settlement 

system. Paragraph (e) of proposed OCC 

Rule 2211A would provide OCC the 

flexibility to calculate and effect 

collection and payment of rebate 

payments not just on a monthly basis, 

but also on each business day, with OCC 

indicating that this change would 

prepare it for if and when the stock loan 

industry transitions to daily, rather than 

monthly, collection of rebate 

payments.43

g. Market Loan Modifications. To 

support OCC’s move to the industry 

standard practice of contract-level 

recordkeeping, the Proposed Rule 

Change would add a new rule, proposed 

OCC Rule 2214A, regarding Market 

Loan modifications. Permissible 

modifications would be limited to the 

rebate rate, interest rate benchmark, or 

loan term. Modifications agreed to by 

the Market Loan Clearing Members over 

the life of a Market Loan would be 

accepted by OCC and maintained in 

OCC’s books and records at the contract 

level. 

The channel through which 

modification requests would be 

processed would be determined by the 

manner in which the loan was initiated. 

For example, under proposed OCC Rule 

2214A(b)(1), in the case of Anonymous 

Market Loans, modification requests 

must be submitted to the Loan Market 

through which the Market Loan was 

initiated, consistent with current 

practice. Proposed OCC Rule 

2214A(b)(2)–(3) would extend this 

approach by providing that, in the case 

of Disclosed Market Loans initiated 

directly with OCC, modification 

requests must be submitted to OCC; or, 

in the case of Disclosed Market Loans 

initiated through a Loan Market, 

modification requests must be 

submitted either through the Loan 

Market or OCC. Proposed OCC Rule 

2214A(c) would state that OCC shall 

update the relevant terms in its books 

and records if, as applicable, (i) the 

Loan Market notifies OCC that the 

parties agreed to the modification, or, 

(ii) with respect to Market Loans 

initiated directly through OCC, the 

parties provided OCC with matching or 

affirmed instructions. OCC would 

provide notice of the modified terms in 

the daily reports that OCC is required to 

make available to Market Loan Clearing 

Members under proposed OCC Rule 

2210A. 

h. Buy-In Controls and Settlement 

Cycle. As stated above, in Section 

II.A.7., neither of the present Stock Loan 

Programs enables OCC to administer 

buy-ins of the Loaned Stock. OCC 

proposes to amend current OCC Rule 

2209A, which would be renumbered as 

proposed OCC Rule 2216A, to provide 

OCC with additional controls over the 

buy-in process for the recall of a Market 

Loan initiated by a Lending Clearing 

Member if the Borrowing Clearing 

Member fails to return the Loaned Stock 

in situations other than suspension of 

the Borrowing Clearing Member. 

Current OCC Rule 2209A provides that 

a Lending Clearing Member is entitled 

to initiate a buy-in if a recall transaction 

fails to settle by the Settlement Time on 

the first stock loan business day after 

submitting the recall. Also under OCC’s 

current rules, the Borrowing Clearing 

Member may return the Loaned Stock 

up until the time that the Lending 

Clearing Member that initiated the 

return or recall provides written notice 

to the Loan Market that it has executed 

the buy-in or sell-out. OCC noted that 

such a process can lead to situations 

where the Borrowing Clearing Member 

is allowed to return the Loaned Stock 

during the period after the buy-in 

becomes permissible, but before the 

Lending Clearing Member executes the 

transaction and provides written 

notice.44

To address such situations, proposed 

OCC Rule 2216A(b) would be amended 

to provide that, upon timely notice from 

the Lending Clearing Member that it 

intends to execute a buy-in after a 

Borrowing Clearing Member fails to 

return the Loan Stock following a recall 

transaction, OCC would prevent the 

Borrowing Clearing Member from 

returning the Loaned Stock while the 

Lending Clearing Member executes the 

buy-in. OCC would recognize the 

Borrowing Clearing Member’s return of 

the Loaned Stock until the Lending 

Clearing Member provides such notice. 

The stock loan and stock borrow 

positions would then remain open until 

the Lending Clearing Member provides 

notice that the buy-in is complete. 

4. Accommodating Canadian and Other 

Clearing Members 

a. Supporting Canadian Clearing 

Members. The Proposed Rule Change 

would allow Canadian Clearing 

Members to expand their participation 

beyond OCC’s Hedge Program, which 

they currently are permitted to use, and 

into the Market Loan Program, while 

preventing certain transactions that 

could trigger tax withholding 


lotter on DSK11XQN23PROD with NOTICES1
95888 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

45See Notice of Filing, 89 FR 73475. Specifically, 

under the expanded Market Loan Program, OCC 

would clear and settle the types of cash 

distributions, such as substitute dividend and 

rebate payments, that OCC does not guarantee 

under the Hedge Program and must be resolved 

bilaterally by Hedge Clearing Members, away from 

OCC. Id. 

46See Notice of Filing, 89 FR 73475. 

47 Id. 

48OCC understands that under Canadian law, the 

loan of a security issued by a Canadian company 

would be treated as a loan of the underlying shares 

for Canadian tax purposes. The substitute dividend 

paid by the Canadian Clearing Member as the 

Borrowing Clearing Member to OCC, in its capacity 

as the lender, would be a payment made by the 

Canadian Clearing Member, as a corporation, to 

OCC of a dividend payable on the underlying 

securities under subparagraph 260(8)(a)(ii) of the 

Income Tax Act (Canada), and the payment would 

be subject to Canadian withholding tax under 

subsection 212(2) of that act. See Notice of Filing, 

89 FR 73475. 

49OCC understands that no similar tax 

withholding obligation would exist for substitute 

dividend payments with respect to a Canadian 

underlying security made by OCC, in its capacity 

as the borrower, to a Canadian Clearing Member 

that was a Lending Clearing Member. See Notice of 

Filing, 89 FR 73475. 

50OCC believes that Positive Rebate would be 

treated as interest for U.S. federal tax purposes 

because Positive Rebate compensates the Borrowing 

Clearing Member for the use of the cash collateral 

by the Lending Clearing Member, and would 

therefore constitute U.S.-source ‘‘fixed or 

determinable annual or periodic income,’’ or 

‘‘FDAPI,’’ under section 1442 of the I.R.C. While 

U.S.-source FDAPI generally is subject to a 30% 

U.S. withholding tax when paid to a foreign 

corporation, exemptions from withholding apply to 

(i) payments to a Qualified Intermediary in its 

capacity as an intermediary that has accepted 

primary withholding responsibility, and (ii) interest 

paid to a Canadian Clearing Member that qualifies 

for an exemption from withholding on interest 

under Article XI of the Convention Between the 

United States of America and Canada with Respect 

to Taxes on Income, October 16, 1980, as amended 

by subsequent Protocols (the ‘‘Canada Treaty’’). A 

Qualified Intermediary that has accepted primary 

withholding responsibility is exempt from U.S. 

federal withholding on payments from a 

withholding agent, including U.S.-source interest, 

received in its capacity as an intermediary. See 

Notice of Filing, 89 FR 73475–76. 

obligations. To facilitate this expansion, 

OCC proposes to amend current Rules to 

recognize Canadian Clearing Members 

as potential participants in the Market 

Loan Program and address operational 

capabilities that will be required to 

support their participation. The 

proposal would revise paragraph (f) of 

OCC Rule 302 (Operational Capability) 

to include Canadian Clearing Members 

as members qualifying for participation 

in the Market Loan Program, including 

by providing these members the ability 

to settle transactions through a CDS subaccount at the Depository, which they 

do under the Hedge Program today, as 

described in Section II.A.8., above. This 

same provision also would consolidate 

operational requirements for 

participation in the Hedge Program and 

the Market Loan Program so that the 

historical division between the 

programs does not impede the planned 

eventual decommission of the Hedge 

Program. As a further example, OCC 

would revise OCC Rule 306A (EventBased Reporting) to reflect that a 

Canadian Clearing Member’s current 

obligation to provide OCC with prompt 

written notice if CDS has or likely will 

cease to act for that Canadian Clearing 

Member would extend to such members 

that participate in both Stock Loan 

Programs. OCC also proposes to 

replicate OCC Rule 2201(c), which 

concerns a Canadian Clearing Member’s 

appointment of CDS for purposes of 

settling Hedge Loan delivery-versuspayment transactions, as proposed OCC 

Rule 2207A(c), to help ensure that the 

same requirements would apply to 

Canadian Clearing Members that 

participate in the Market Loan Program. 

In expanding the Market Loan 

Program to Canadian Clearing Members, 

OCC stated that it considered its ability 

to offer an expanded guaranty without 

incurring tax or withholding obligations 

on the associated payments that would 

be incurred under the expanded Market 

Loan Program.45 OCC stated that its 

current Rules, particularly OCC Rule 

202, already provide the framework for 

the expanded guaranty under the 

Market Loan Program, while balancing 

the need to avoid tax imposition 

triggers. OCC Rule 202 currently 

imposes obligations on Canadian 

Clearing Members to allow OCC to clear 

listed options transactions free from tax 

withholding obligations on dividend 

equivalent payments or deemed 

payments. OCC indicated that current 

OCC Rule 202 also would allow it to 

make substitute dividend payments to 

Canadian Clearing Members as Lending 

Clearing Members under the enhanced 

Market Loan Program without imposing 

tax or withholding obligations.46 OCC 

would report substitute dividend 

payments to the IRS using information 

provided by the Canadian Clearing 

Members, as OCC currently does for 

dividend equivalent payments or 

deemed payments to Canadian Clearing 

Members in connection with listed 

options transactions. Additionally, 

under current OCC Rule 202(b), OCC 

has the authority to prohibit or limit 

specific transactions with respect to 

non-U.S. members that may give rise to 

tax or withholding obligations, and OCC 

expects to continue to use that authority 

to impose certain limitations on the 

Market Loan activity of Canadian 

Clearing Members to address specific 

situations in which tax withholding 

obligations might otherwise arise, 

including limitations on transactions 

involving (i) Canadian underlying 

securities, (ii) Positive Rebate, and (iii) 

Negative Rebate. OCC Rule 202(b)(5) 

also requires Canadian Clearing 

Members to indemnify OCC for any loss, 

liability or expense—including taxes 

and penalties—that it may sustain as a 

result of its failure to comply with 

requirements of OCC Rule 202(b). 

As stated above, OCC is not proposing 

to change any part of OCC Rule 202, but 

OCC has indicated that it believes the 

current framework under OCC Rule 202 

can be applied to the expansion of the 

Market Loan Program to Canadian 

Clearing Members, and could help OCC 

avoid tax or withholding obligations.47

Pursuant to OCC Rule 202(b), OCC 

would preclude a Canadian Clearing 

Member from executing Market Loan 

transactions as a Borrowing Clearing 

Member, whether on behalf of a 

customer or for its own account, for 

which the Loaned Stock is issued by a 

Canadian issuer because of tax 

withholding obligations under Canadian 

law for substitute dividend payments 

that would be owed by the Canadian 

Clearing Member in its capacity as the 

lender.48 In such a situation, the 

Borrowing Clearing Member would be 

precluded from initiating a Market Loan 

in its capacity as a Borrowing Clearing 

Member because the Canadian Clearing 

Member could not fulfill its obligation 

under OCC’s Rules to provide a 

substitute dividend payment free from 

tax and withholding obligations.49

With respect to positive and negative 

rebate payments, OCC also believes that 

current OCC Rule 202 would allow 

clearance and settlement of such 

payments to Canadian Clearing 

Members in connection with the 

expanded Market Loan Program without 

triggering tax withholding obligations. 

Although neither the Internal Revenue 

Code nor Internal Revenue Service 

(‘‘IRS’’) regulations specifically provide 

for the treatment of rebate payments, 

OCC believes that such rebate payments 

to Canadian Clearing Members would 

not trigger tax withholding obligations, 

because, not only would these members 

be considered qualified intermediaries 

and therefore exempt under U.S. tax 

law, but they also are required to be 

Qualified Intermediaries as a condition 

of membership under OCC Rule 202.50

OCC understands that rebate payments, 

whether positive or negative, to a 

Canadian Clearing Member in its 

capacity as a Qualified Intermediary, 

may be made by OCC free from 

withholding, consistent with treatment 

of dividend equivalent payments in 

connection with listed options 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95889 

51See Notice of Filing, 89 FR 73476. 

52Article XI(1) of the Canada Treaty reduces the 

rate of withholding from 30% to zero for U.S.- 

source interest beneficially owned by a resident of 

Canada entitled to treaty benefits, provided that 

income is not attributable to a permanent 

establishment, within the meaning of the Canada 

Treaty, or effectively connected with a trade or 

business conducted in the United States. See Notice 

of Filing, 89 FR 73476. 

53See Notice of Filing, 89 FR 73476. 

54 Id. 

55See Exchange Act Release No. 97439 (May 5, 

2023), 88 FR 30373, 30373 (May 11, 2023) (SR– 

OCC–2023–002). 

56 15 U.S.C. 78s(b)(2)(C). 

57Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

58 Id. 

59 Id. 

60Susquehanna Int’l Group, LLP v. Securities and 

Exchange Commission, 866 F.3d 442, 447 (D.C. Cir. 

2017) (‘‘Susquehanna’’). 

transactions.51 As with substitute 

dividends, OCC would add rebate 

payments for transactions in a Canadian 

Clearing Member’s capacity as a 

Qualified Intermediary to the current 

reporting OCC submits to the IRS for 

dividend equivalent payments on listed 

options, based on information to be 

received from the Canadian Clearing 

Member pursuant to current OCC Rule 

202(b)(3). 

In the case of Positive Rebate 

payments on Market Loans initiated by 

a Canadian Clearing Member in its 

capacity as principal, OCC would 

require Canadian Clearing Members to 

demonstrate through annual 

certification and submission of 

underlying tax documents, pursuant to 

OCC Rule 202, that such payments are 

subject to exemption from U.S. 

withholding obligations under the 

Canada Treaty.52

OCC understands that, because there 

is a risk that no exemption from U.S. tax 

withholding would apply to the 

payment of Negative Rebate to a 

Canadian Clearing Member outside its 

capacity as a Qualified Intermediary, 

OCC would limit Canadian Clearing 

Members from initiating Market Loans 

with a Negative Rebate as a Lending 

Clearing Member other than in its 

capacity as a Qualified Intermediary, 

pursuant to OCC Rule 202(b), as further 

protection from potential tax liability.53

In addition, OCC would limit Canadian 

Clearing Members’ ability to modify the 

rebate on a Market Loan to a Negative 

Rebate as a Lending Clearing Member 

other than in its capacity as a Qualified 

Intermediary.54

b. Provide for Appointed and 

Appointing Clearing Members. Under 

current OCC Rule 302, all participants 

in the Market Loan Program are required 

to be members of DTC. As stated above, 

in Section II.B.4.a, OCC would allow 

Canadian Clearing Members to settle 

Market Loan transactions through a CDS 

sub-account maintained at DTC as a way 

to extend the Market Loan Program to 

Canadian Clearing Members. In a 

similar manner, OCC proposes to build 

a framework of Appointing Clearing 

Members and Appointed Clearing 

Members so that the Market Loan 

Program would be available to new 

types of Clearing Members who are not 

necessarily members of DTC, given that 

OCC expanded its membership to 

different types of participants in 2023.55

To make this accommodation, OCC 

proposes to revise current OCC Rules 

101 and 302, as well as proposed OCC 

Rules 2202A, 2207A, and 2216A. This 

accommodation would allow a Clearing 

Member participating in the Market 

Loan Program—the Appointing Clearing 

Member—to appoint an Appointed 

Clearing Member to make settlement of 

obligations arising from the initiation or 

termination of Market Loans. The 

approach would be similar to how 

current OCC Rule 901 allows for the 

operation of Appointed and Appointing 

Clearing Members with respect to 

delivery or receipt of underlying 

securities arising from the exercise of 

equity options and maturity of stock 

futures, or how current OCC Rule 2201 

allows Canadian Clearing Members to 

appoint CDS as its agent for purposes of 

effective delivery orders for stock loan 

and stock borrow transactions. Under 

the Proposed Rule Change, Clearing 

Members wishing to participate in the 

Market Loan Program would be able to 

forego membership at DTC and instead 

establish a relationship with an 

Appointed Clearing Member. To 

support this process, OCC would revise 

the definitions in current OCC Rule 101 

for ‘‘Appointed Clearing Member’’ and 

‘‘Appointing Clearing Member’’ to 

reference the initiation and termination 

of Market Loans. These definitions 

would refer to proposed Rule 2207A 

(Instructions to the Corporation), which 

would contain a paragraph providing 

the mechanism for such appointments. 

Proposed OCC Rules 2202A (Initiation 

of Market Loans) and 2216A 

(Termination of Market Loans) would 

also provide for OCC to submit delivery 

orders to the Depository’s account for 

the Appointed Clearing Member in 

connection with the initiation or 

termination of a Market Loan, 

respectively. 

5. By-Laws and Rules Reorganization 

and Restatement 

In consolidating the two stock loan 

programs, OCC proposes to move 

pertinent provisions out of its By-Laws 

and into its Rules to allow for a clearer 

and more transparent presentation of 

the details. OCC proposes to make 

clarifying, conforming, and 

organizational changes to OCC’s ByLaws and Rules, and rule-filed policies 

that reference those By-Laws or Rules. 

OCC would reorganize, restate, and 

consolidate provisions of OCC’s ByLaws governing the Stock Loan 

Programs into Chapter XXII (Hedge 

Program) and Chapter XXIIA (Market 

Loan Program) of OCC’s Rules, as 

amended by this Proposed Rule Change. 

As part of these revisions, OCC would 

preserve the governance requirements 

concerning amendments to the stock 

loan-related By-Laws migrated to the 

Rules by amending Article XI, Section 2 

of the OCC By-Laws. 

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Exchange 

Act 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 Exchange 

Act and the rules and regulations 

thereunder applicable to such 

organization.56 Under the Commission’s 

Rules of Practice, the ‘‘burden to 

demonstrate that a proposed rule change 

is consistent with the Exchange Act and 

the rules and regulations issued 

thereunder . . . is on the self-regulatory 

organization [‘SRO’] that proposed the 

rule change.’’ 57

The description of a proposed rule 

change, its purpose and operation, its 

effect, and a legal analysis of its 

consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,58 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Exchange Act and the 

applicable rules and regulations.59

Moreover, ‘‘unquestioning reliance’’ on 

an SRO’s representations in a proposed 

rule change is not sufficient to justify 

Commission approval of a proposed rule 

change.60

After carefully considering the 

Proposed Rule Change, the Commission 

finds that the proposal is consistent 

with the requirements of the Exchange 

Act and the rules and regulations 

thereunder applicable to OCC. More 

specifically, the Commission finds that 

the proposal is consistent with Section 


lotter on DSK11XQN23PROD with NOTICES1
95890 Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 

61 15 U.S.C. 78q–(b)(3)(F). 

62 17 CFR 240.17Ad–22(e)(21)(ii). 

63 17 CFR 240.17Ad–22(e)(1). 

64 15 U.S.C. 78q–(b)(3)(F). 

65 Id. 66 17 CFR 240.17Ad–22(e)(21)(ii). 67Securities Exchange Act Release No. 78961 

(Sept. 28, 2016), 81 FR 70786, 70841 (Oct. 13, 2016) 

(File No. S7–03–14) (‘‘Standards for Covered 

Clearing Agencies’’). 

17A(b)(3)(F) of the Exchange Act,61 and 

Rules 17Ad–22(e)(21)(ii) 62 and 17Ad– 

22(e)(1) 63 thereunder, as described 

below. 

A. Consistency With Section 

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

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

Act requires, among other things, that a 

clearing agency’s rules are designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions and, to the extent 

applicable, derivative agreements, 

contracts, and transactions.64 Based on 

a review of the record, and for the 

reasons described below, the changes 

described above are consistent with 

promoting the prompt and accurate 

clearance and settlement of securities 

transactions and, to the extent 

applicable, derivative agreements, 

contracts, and transactions. 

As discussed above, OCC’s current 

Stock Loan Programs are limited in 

several ways due to their historical 

development on two separate pathways. 

For example, OCC does not currently 

record stock loan transactions in its 

books and records on a contract-level 

basis but instead uses position 

aggregation, which is not aligned to the 

current industry standard. Additionally, 

Hedge Program participants, unlike 

Market Loan Program participants, 

currently must first negotiate terms 

bilaterally before sending them to DTC 

for settlement, as well as address certain 

post-trade transactions bilaterally with 

each of their counterparties, away from 

OCC. This creates operational burdens 

and costs when Clearing Members must 

reconcile their internal records with 

OCC’s position-based records on a daily 

basis. Finally, the treatment of Canadian 

and other types of Clearing Members 

participating in the Stock Loan 

Programs potentially raises tax liability 

issues under the current stock loan 

framework. 

The Proposed Rule Change would 

help address these concerns by, among 

other things, aligning the rules 

governing both of OCC’s Stock Loan 

Programs with each other, thus 

streamlining the loan initiation, 

tracking, and termination processes for 

both programs. The Proposed Rule 

Change also would replace OCC’s 

current practice of aggregating new 

stock loan positions and stock borrow 

positions for the same Clearing Member 

in the same Eligible Stock with contractlevel accounting, consistent with 

current industry-standard bookkeeping 

practices. The Proposed Rule Change 

also would allow for the submission of 

bilaterally negotiated transactions in the 

Market Loan Program. Likewise, the 

Proposed Rule Change would conform 

the terms of Market Loans cleared by 

OCC more closely to the provisions 

most commonly included in stock loan 

transactions executed under standard 

loan market documents; provide a 

uniform guaranty of terms across Market 

Loans, regardless of how those Market 

Loans are initiated under the enhanced 

program; and support transactions 

under both Stock Loan Programs. The 

proposed changes also would allow rematching of Matched-Book Positions in 

suspension across both loan programs, 

thus helping to manage stock loan 

transactions in the event of a Clearing 

Member default. Also, OCC would use 

its current Rules to facilitate equal 

treatment of Canadian Clearing 

Members participating in the Stock 

Loan Programs, as well as to prevent 

certain transactions that could trigger 

tax withholding obligations. OCC would 

similarly amend its Rules to build a 

framework of Appointing Clearing 

Members and Appointed Clearing 

Members so that the Market Loan 

Program would be available to new 

types of Clearing Members who are not 

necessarily members of DTC. 

Taken together, these proposed 

changes would aid in reducing existing 

frictions in the current stock loan 

program framework, both by ensuring 

the accuracy and consistency of 

information and contract terms that 

OCC receives rather than relying on a 

one-on-one reconciliation process with 

each participating Clearing Member, 

and by more precisely managing the 

rebates, dividends, and other 

information that OCC keeps on its 

books. The proposed changes would 

also broaden Canadian Clearing Member 

access, which would facilitate a 

transition away from the Hedge Program 

in the event that OCC proposes to 

decommission it in the future. By 

eliminating the current manual 

reconciliation process, the Proposed 

Rule Change also would help reduce 

participating Clearing Members’ costs 

and operational burdens associated with 

that process. As a result, the Proposed 

Rule Change would aid in promoting 

the prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivative 

agreements, contracts, and transactions. 

Accordingly, the changes proposed to 

the Stock Loan Programs are consistent 

with the requirements of Section 

17A(b)(3)(F) of the Exchange Act.65

B. Consistency With Rule 17Ad– 

22(e)(21)(ii) Under the Exchange Act 

Rule 17Ad–22(e)(21)(ii) under the 

Exchange Act requires, in part, that a 

covered clearing agency establish, 

implement, maintain, and enforce 

written policies and procedures 

reasonably designed to be efficient and 

effective in meeting the requirements of 

its participants and the markets it 

serves.66 In adopting Rule 17Ad– 

22(e)(21), the Commission provided 

guidance that a covered clearing agency 

generally should consider in 

establishing and maintaining policies 

and procedures that address efficiency 

and effectiveness, including whether its 

design meets the needs of its 

participants and the market it serves.67

As described in Section II.A., the 

historical development of the Market 

Loan and Hedge Programs resulted in 

two programs designed to clear similar 

products in different ways. The current 

form of the programs presents certain 

inefficiencies, such as the costly 

reconciliation processes related to the 

Hedge Program and lack of visibility 

into additional contract terms due to 

OCC’s aggregate portfolio-level 

bookkeeping. Such inefficiencies, in 

turn, have resulted in costs and burdens 

to Clearing Members, who have 

expressed interest in the enhancements 

such as having the rebate amounts 

calculated, settled, and guaranteed by 

OCC. The alignment of rules governing 

the Hedge and Market Loan Programs, 

along with improvements to both 

programs described above (e.g., 

contract-level recordkeeping, expanded 

guaranty encompassing additional 

contract terms), help to address such 

inefficiencies to meet the needs of 

OCC’s Clearing Members that 

participate in the Stock Loan Programs, 

and would reduce manual processing 

and the potential for stock loan 

transactions to be delayed or to fail. For 

example, while OCC continue to operate 

both the Hedge and Market Loan 

Programs, OCC would provide the same, 

uniform guaranty and post-trade 

processing for all transactions. By 

allowing for automated submission of 

transactions to OCC prior to DTC 

settlement and by controlling the 

settlement process, the Stock Loan 

Programs would help reduce the burden 

and risks currently associated with 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 232 / Tuesday, December 3, 2024 / Notices 95891 

68 17 CFR 240.17Ad–22(e)(21)(ii). 

69 17 CFR 240.17Ad–22(e)(1). 

70Standards for Covered Clearing Agencies, 81 

FR 70802. 

71 17 CFR 240.17Ad–22(e)(1). 

72 In approving this Proposed Rule Change, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

73 15 U.S.C. 78s(b)(2). 

74 17 CFR 200.30–3(a)(12). 

balancing and reconciliation. 

Additionally, by fixing the collateral for 

Market Loans at a single rate of 102 

percent consistent with member 

feedback, as described in Section 

II.B.3.c., OCC would reduce the 

complexity in its risk management of 

stock loan positions by establishing a 

single rate across all Market Loans. 

Accordingly, the changes proposed to 

the Stock Loan Programs are consistent 

with the requirements of Rule 17Ad– 

22(e)(21) under the Exchange Act.68

C. Consistency With Rule 17Ad–22(e)(1) 

Under the Exchange Act 

Rule 17Ad–22(e)(1) under the 

Exchange Act requires that a covered 

clearing agency establish, implement, 

maintain, and enforce written policies 

and procedures reasonably designed to 

provide for a well-founded, clear, 

transparent, and enforceable legal basis 

for each aspect of its activities in all 

relevant jurisdictions.69 In adopting 

Rule 17Ad–22(e)(1), the Commission 

provided guidance that a covered 

clearing agency generally should 

consider in establishing and 

maintaining policies and procedures to 

address legal risk, including whether its 

rules, policies and procedures, and 

contracts are clear, understandable, and 

consistent with relevant laws and 

regulations.70

As described above, in Section II.B.5., 

the proposed changes consolidate and 

reorganize provisions concerning the 

Stock Loan Programs that are scattered 

across two documents—both OCC’s ByLaws and Rules—into a single location: 

OCC’s Rules. The streamlining and 

consolidation of these provisions into 

OCC’s Rules enhances their clarity, 

transparency, and consistency for 

Clearing Members and stakeholders who 

choose to participate in the Stock Loan 

Programs. More specifically, the 

incorporation of current Interpretations 

and Policies into the body of the Rules 

would enhance clarity and readability of 

the provisions concerning the Stock 

Loan Programs. Additionally, the global 

and administrative changes would 

apply consistent terms and numbering 

conventions, improve consistency of the 

text between similar Hedge Program and 

Market Loan Program rules, and remove 

duplicative provisions, thus increasing 

clarity, understandability, and 

consistency. 

Accordingly, the changes proposed to 

the Stock Loan Programs are consistent 

with the requirements of Rule 17Ad– 

22(e)(1) under the Exchange Act.71

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Exchange Act, and 

in particular, the requirements of 

Section 17A of the Exchange Act 72 and 

the rules and regulations thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,73

that the proposed rule change, as 

modified by Partial Amendment No. 1, 

(SR–OCC–2024–011) be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.74

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–28257 Filed 12–2–24; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #20699 and #20700; 

FLORIDA Disaster Number FL–20012] 

Presidential Declaration Amendment of 

a Major Disaster for the State of Florida 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Amendment 6. 

SUMMARY: This is an amendment of the 

Presidential declaration of a major 

disaster for the State of Florida (FEMA– 

4828–DR), dated September 28, 2024. 

Incident: Hurricane Helene. 

DATES: Issued on November 22, 2024. 

Incident Period: September 23, 2024 

through October 7, 2024. 

Physical Loan Application Deadline 

Date: January 7, 2025. 

Economic Injury (EIDL) Loan 

Application Deadline Date: June 30, 

2025. 

ADDRESSES: Visit the MySBA Loan 

Portal at https://lending.sba.gov to 

apply for a disaster assistance loan. 

FOR FURTHER INFORMATION CONTACT: 

Alan Escobar, Office of Disaster 

Recovery & Resilience, U.S. Small 

Business Administration, 409 3rd Street 

SW, Suite 6050, Washington, DC 20416, 

(202) 205–6734. 

SUPPLEMENTARY INFORMATION: The notice 

of the President’s major disaster 

declaration for the State of Florida, 

dated September 28, 2024, is hereby 

amended to extend the deadline for 

filing applications for physical damages 

as a result of this disaster to January 7, 

2025. 

All other information in the original 

declaration remains unchanged. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

Alejandro Contreras, 

Acting Deputy Associate Administrator, 

Office of Disaster Recovery & Resilience. 

[FR Doc. 2024–28279 Filed 12–2–24; 8:45 am] 

BILLING CODE 8026–09–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #20608 and #20609; 

NEW YORK Disaster Number NY–20015] 

Administrative Declaration of a 

Disaster for the State of New York 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of New York dated 

November 26, 2024. 

Incident: Severe Storms and Flooding. 

DATES: Issued on November 26, 2024. 

Incident Period: August 18, 2024 

through August 19, 2024. 

Physical Loan Application Deadline 

Date: January 27, 2025. 

Economic Injury (EIDL) Loan 

Application Deadline Date: August 26, 

2025. 

ADDRESSES: Visit the MySBA Loan 

Portal at https://lending.sba.gov to 

apply for a disaster assistance loan. 

FOR FURTHER INFORMATION CONTACT: 

Alan Escobar, Office of Disaster 

Recovery & Resilience, U.S. Small 

Business Administration, 409 3rd Street 

SW, Suite 6050, Washington, DC 20416, 

(202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

Administrator’s disaster declaration, 

applications for disaster loans may be 

submitted online using the MySBA 

Loan Portal https://lending.sba.gov or 

other locally announced locations. 

Please contact the SBA disaster 

assistance customer service center by 

email at disastercustomerservice@

sba.gov or by phone at 1–800–659–2955 

for further assistance. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Suffolk. 

Contiguous Counties: 


lotter on DSK11XQN23PROD with NOTICES1