97142 Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 / Notices 

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

2 17 CFR 240.19b–4. 

3The version of the Rule Book and Sections 1 and 

5 of the Procedures which includes the Proposed 

Rule Change reflects a separate proposed rule 

change previously submitted to the Securities and 

Exchange Commission (SEC) under the Filing No. 

SR–LCH SA–2024–002 recently approved by the 

SEC. 

4All capitalized terms not defined herein have 

the same meaning as in the Rule Book or 

Procedures, as applicable, in their version as 

available on LCH SA’s website: https://

www.lch.com/resources/rulebooks/lch-sa. 

5Pursuant to Section 1.1.1 of the Rule Book, a 

CCM means any legal entity admitted as a clearing 

member in accordance with the CDS Clearing Rules 

and party to the CDS Admission Agreement, 

provided that if such entity is an FCM/BD, it has 

satisfied LCH SA that it is able to provide the CDS 

Client Clearing Services in accordance with Title V 

prior to offering such services. 

6 In accordance with amended Section 1.2 of the 

Procedures. Thus, a CDS Dealer will not be 

permitted to submit any Original Transaction under 

which it is acting on behalf of anyone other than 

itself or its affiliated CCM to LCH SA for clearing. 

7Pursuant to Section 1.1.1 of the Rule Book, the 

list of the Approved Trade Source Systems that can 

be used for the purposes of submitting Original 

Transactions to LCH SA for clearing is published 

in a Clearing Notice, which is available here: 

https://www.lch.com/system/files/media_root/

Clearing%20Notice_ATSS_no_2021-001_

04.01.2021.pdf. 

Dated: December 3, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–28732 Filed 12–5–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101790; File No. SR–LCH 

SA–2024–005] 

Self-Regulatory Organizations; LCH 

SA; Notice of Filing of Proposed Rule 

Change Relating to Dealer Status 

December 2, 2024. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4,2 notice is 

hereby given that on November 21, 

2024, Banque Centrale de 

Compensation, which conducts 

business under the name LCH SA (‘‘LCH 

SA’’), filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change (‘‘Proposed 

Rule Change’’), as described in Items I, 

II and III below, which Items have been 

prepared by the clearing agency. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

LCH SA is proposing to amend its: (i) 

CDS Clearing Rule Book (‘‘Rule Book’’), 

and (ii) CDS Clearing Procedures 

(‘‘Procedures’’) (collectively the ‘‘CDS 

Clearing Rules’’) 3 to incorporate new 

terms and to make conforming, 

clarifying, and clean-up changes in 

order to enable affiliates of a Clearing 

Member, which would be referred to as 

‘‘CDS Dealers’’, to present Original 

Transactions to LCH SA for clearing, 

novation and registration in the name of 

a Clearing Member without having to be 

admitted as either a Clearing Member or 

being a Client of a Clearing Member.4

The text of the Proposed Rule Change 

has been annexed as Exhibit 5 to File 

No. SR–LCH SA–2024–005. The 

implementation of the Proposed Rule 

Change will be contingent on LCH SA’s 

receipt of all necessary regulatory 

approvals. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, 

LCH SA included statements concerning 

the purpose of and basis for the 

Proposed Rule Change and discussed 

any comments it received on the 

Proposed Rule Change. The text of these 

statements may be examined at the 

places specified in Item IV below. LCH 

SA has prepared summaries, set forth in 

sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

LCH SA is proposing to amend its 

CDS Clearing Rules to enable affiliates 

of Clearing Members that are registered 

as CCMs with LCH SA to present 

Original Transactions to LCH SA for 

clearing, novation and registration in 

the name of a Clearing Member that is 

a CCM 5 without having to be admitted 

as either a Clearing Member or being a 

Client of a Clearing Member. A CCM’s 

affiliate will need to be admitted as a 

CDS Dealer by LCH SA to a register of 

CDS Dealers before submitting any 

Original Transaction, under which such 

affiliate is acting as agent for and on 

behalf of its CCM or as principal,6 to 

LCH SA through an Approved Trade 

Source System.7 Under the current Rule 

Book, an affiliate of a Clearing Member 

may submit Original Transactions for 

clearing with LCH SA only if such 

affiliate is itself admitted as a Clearing 

Member of LCH SA or if it is a Client 

of a Clearing Member. 

The new status of CDS Dealer will 

allow affiliates of a CCM, that is either 

a General Member or a Select Member, 

registered as such CDS Dealers to 

present Original Transactions to LCH 

SA for clearing, novation and 

registration in the name of a Clearing 

Member. This new status will provide 

flexibility to Clearing Members in how 

they operate their execution and 

booking arrangements within their 

respective group, without the need to 

have multiple Clearing Members within 

such group or to onboard their affiliates 

as Clients. Specifically, it will enable 

Clearing Members to operate more 

efficiently by servicing their clients via 

the existing execution entities and, 

where applicable, documentation 

required but allows consolidation of 

clearing positions and margin within a 

single membership. 

A CDS Dealer will be required to enter 

into a tripartite agreement with LCH SA 

and a Clearing Member within its 

corporate group (the ‘‘CDS Dealer 

Clearing Agreement’’). Under this 

agreement, the CDS Dealer will agree to 

be bound by the CDS Clearing Rules. 

An Original Transaction presented by 

a CDS Dealer to LCH SA for clearing 

will give rise to the novation of such 

Original Transaction into a Cleared 

Transaction between LCH SA and the 

Clearing Member with which such CDS 

Dealer is party to a CDS Dealer Clearing 

Agreement, that will be registered in the 

House Trade Account of such Clearing 

Member; hence these Cleared 

Transactions under which the Clearing 

Member is acting as principal will be 

registered in the House Trade Account 

in which the Cleared Transactions 

resulting from the novation of Original 

Transactions presented by the Clearing 

Member on its own behalf are also 

registered. 

For illustrative purposes, Exhibit 3 

provides an example of a simplified 

operational framework under the 

current model as compared to the 

proposed model for house and client 

transactions. Under the current 

operational framework reflected in 

‘‘Example 1A: House v. House Standard 

Trade’’, a CCM may present Original 

Transactions to LCH SA for clearing, 

novation and registration in the House 

Trade Account of such CCM. In 

addition, an affiliate of a CCM may also 

present Original Transactions to LCH 

SA for clearing only if such affiliate is 

itself admitted as a Clearing Member of 

LCH SA or if it is a Client of a Clearing 

Member. Under the proposed 

framework reflected in ‘‘Example 1B: 

House v. Dealer Trade’’, a CDS Dealer 

(as an affiliate of the CCM) will be able 

to present Original Transactions to LCH 

SA for clearing and novation, with the 

resulting trade registered in the House 


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Trade Account of the CCM that is party 

to the CDS Dealer Clearing Agreement. 

The resulting Cleared Transaction will 

exist between LCH SA and the CCM as 

party to the CDS Dealer Clearing 

Agreement. 

A client trade under the current 

framework is operationally similar to 

Example 1A in Exhibit 3. Under 

‘‘Example 2A: Client v. House Standard 

Trade’’, a client may present an Original 

Transaction to LCH SA for clearing, 

novation and registration to LCH SA via 

a clearing broker. The resulting Cleared 

Transaction will exist between LCH SA 

and the client (via the clearing broker). 

Under the proposed framework reflected 

in ‘‘Example 2B: Client v. Dealer 

Trade’’, a CDS Dealer (as an affiliate of 

the CCM) may present an Original 

Transaction to LCH SA for clearing and 

novation, with the resulting transaction 

registered in the House Trade Account 

of the CCM. The CCM and not the CDS 

Dealer is therefore party to the Cleared 

Transaction with LCH SA. There are no 

changes to the operational structure of 

the transaction to the client in Example 

2B. 

The criteria to be met by a CDS Dealer 

differ from the ones that shall be met by 

a Clearing Member. For example, the 

clearing membership criteria are 

designed to ensure that Clearing 

Members have sufficient financial 

resources and operational capacity to 

meet the obligations arising from 

participation in a central counterparty. 

In contrast, the criteria for a CDS Dealer 

to meet is primarily meant to ensure 

that LCH SA is able to receive trades 

directly from such CDS Dealer for 

clearing. Once the trade is cleared and 

registered in the house trade account of 

the Clearing Member, the resulting 

clearing trade will be a house cleared 

trade as any other trade directly 

submitted by the Clearing Member for 

its own account. 

Under the Proposed Rule Change, 

LCH SA will not have any direct 

exposure to the CDS Dealer, and this 

proposed change will only introduce a 

new source of trades from the Clearing 

Member. Given that an Original 

Transaction presented by the CDS 

Dealer is only between LCH SA and the 

Clearing Member, LCH SA’s credit risk 

framework and the membership criteria 

will only apply to the Clearing Member. 

In addition, LCH SA does not anticipate 

any increase in operational risk 

resulting from an increase in the 

number of cleared transactions brought 

by CDS Dealers, as it will be able to 

leverage its current process for 

managing trade flows for existing 

Clearing Members. 

1. Proposed Revisions to the Rule Book 

and Procedures 

i. Rule Book 

LCH SA proposes to add additional 

defined terms and make amendments to 

existing defined terms contained within 

Title I, Chapter 1, Section 1.1.1 of the 

Rule Book. 

The term ‘‘CDS Dealer’’ will be added 

to define the new status that LCH SA is 

proposing to implement under the 

Proposed Change Rule and means a 

Person admitted by LCH SA to the 

Register of CDS Dealers and who has not 

been removed from the Register of CDS 

Dealers and for the avoidance of any 

doubt, a CDS Dealer is not a Clearing 

Member. As further described below, a 

CDS Dealer will be required to comply 

with the criteria as provided for in 

Section 1.2 of the Procedures, pursuant 

to which it shall belong to the same 

Financial Group as its Clearing Member. 

The term of ‘‘Register of CDS Dealers’’ 

will be added to refer to the register 

which lists the CDS Dealers regarded by 

LCH SA as for the time being eligible to 

submit Original Transactions for 

registration as CCM Cleared 

Transactions by LCH SA. 

The term ‘‘CDS Dealer Clearing 

Agreement’’ will be added to refer to the 

written agreement that a CDS Dealer 

will be required to execute with LCH SA 

and a CCM. 

The term ‘‘ATSS Participant’’ will be 

modified to add a reference to a CDS 

Dealer as such a CDS Dealer will be 

required to be a participant of an 

Approved Trade Source System for the 

purpose of submitting Original 

Transactions, as part of the intraday 

and/or the backloading process, to LCH 

SA for clearing and will therefore be 

considered as an ATSS Participant. 

The term ‘‘CCM Client’’ will be 

amended to expressly indicate, for the 

avoidance of any doubt, that a CDS 

Dealer shall not be considered as a CCM 

Client. 

The term ‘‘CCM House Margin 

Account’’ will be modified to correct a 

typographical error by removing ‘‘CCM’’ 

before ‘‘House Cleared Transactions’’ as 

‘‘CCM House Cleared Transactions’’ is 

not a defined term. 

The term ‘‘Clearing Notice’’ will be 

amended to add references to the CDS 

Dealers as the topics covered by such 

Clearing Notices will also be relevant to 

CDS Dealers (for instance, the 

occurrence of an event of default 

occurring in respect of a Clearing 

Member or LCH SA). 

The term ‘‘Data Protection Law’’ will 

be updated to refer to the latest EU and 

French regulations applicable under 

French law in respect of data protection 

matters. 

The term ‘‘House Trade Account’’ will 

be amended to make an express 

reference to Cleared Transactions 

resulting from the novation of Original 

Transactions presented by a CDS Dealer 

to LCH SA for clearing that will be 

registered in the House Trade Account 

of the Clearing Member with which that 

CDS Dealer is party to a CDS Dealer 

Clearing Agreement. 

The term ‘‘House Trade Leg’’ will be 

amended to include trade legs of a CDS 

or Index Swaption in respect of which 

a CDS Dealer acts as protection seller or 

buyer or Index Swaption buyer or seller, 

respectively, so that such trade legs will 

be covered in the definition of ‘‘Original 

Transaction’’. 

The term ‘‘Index Swaption Clearing 

Service’’ will be modified to provide 

that, in addition to Clearing Members, 

CDS Dealers and Clients will be able to 

submit Index Swaptions for clearing by 

LCH SA. 

The term ‘‘Procedures’’ will be 

modified to specify that Procedures will 

also provide for the procedure for 

application for admission to the Register 

of CDS Dealers and regulation of CDS 

Dealers admitted to such register. 

Beyond definitional changes, a new 

Article 1.1.3.10 will be added to Section 

1.1.3 (Interpretation and references) to 

make clear that nothing in the CDS 

Clearing Documentation shall give rise 

to a requirement for LCH SA to take any 

action which would contravene the 

provisions of Applicable Law or its 

continuing regulatory obligations. 

Indeed, each of the CDS Clearing 

Document is subject to, and interpreted 

in accordance with, the relevant 

Applicable Law. This amendment is not 

linked to the introduction of the CDS 

Dealer status but shall apply to the 

interpretation of each provision of the 

CDS Clearing Documentation for the 

avoidance of doubt. 

LCH SA also proposes to amend 

Article 1.2.4.1 to specify that the time 

fixed by the CDS Clearing 

Documentation for the doing of any acts 

in relation to LCH SA may be extended 

or waived by LCH SA in its discretion, 

in respect of acts done by a CDS Dealer, 

similarly to what is currently provided 

in respect of acts done by a Clearing 

Member. 

LCH SA proposes to amend Article 

1.2.5.1 to extend to CDS Dealers the 

provision relating to the conditions in 

which LCH SA delivers a notice, order 

or communication to Clearing Members. 

LCH SA proposes to amend Section 

1.2.10 to extend the applicable liability 

provisions which currently apply to 

LCH SA and its Clearing Members, to 


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the CDS Dealers as well and pursuant to 

which a CDS Dealer shall be liable for 

any direct Damage incurred by LCH SA 

as a consequence of the CDS Dealer’s 

breach of any of its obligation under the 

CDS Clearing Documentation or the 

terms of a Cleared Transaction (Article 

1.2.10.1). Amended Article 1.2.10.2 will 

be amended to specify that a CDS 

Dealer, as this is currently the case for 

a Clearing Member, will not be held 

liable for any special, indirect or 

consequential Damage or any Damage 

which results from abnormal or 

fraudulent use of the CDS Clearing 

System by third parties, or for any 

Damage resulting from acts or omissions 

of third parties, other than members of 

its respective Financial Group. LCH SA 

also proposes to add a reference to CDS 

Dealers to the cases where LCH SA is 

not liable for damages arising out of or 

in connection with certain situations 

involving the CDS Dealers, that are 

mentioned in Article 1.2.10.3. 

LCH SA will process personal data 

concerning representatives, managers, 

employees or any other individuals 

acting on behalf of CDS Dealers, 

therefore requiring such CDS Dealers to 

notify each of their relevant 

Representatives that their personal data 

is disclosed to LCH SA. Articles 1.2.13.1 

and 1.2.13.4 will be modified 

accordingly to reflect the foregoing. In 

addition, Article 1.2.13.5 will be 

amended to provide that CDS Dealers 

consent to the recording of telephone 

conversations and agree to obtain any 

necessary consent of, and give any 

necessary notice of such records to, its 

relevant personnel, and agree that 

recordings may be used in evidence. 

References to CDS Dealers are 

proposed to be added in Article 2.2.7.7 

to provide that such CDS Dealers use 

the services offered by Approved Trade 

Source Systems in accordance with 

their own contractual arrangements and 

that LCH SA will not be responsible for 

verifying the content of such contractual 

arrangements, as this is currently the 

case for Clearing Members. CDS Dealers 

will need to be participants of an 

Approved Trade Source System at least 

to be able to submit Original 

Transactions to LCH SA for clearing. 

LCH SA is proposing to amend Article 

2.3.1.1 to request each Clearing Member 

to notify LCH SA in case of any material 

breach of the CDS Clearing 

Documentation by any of the CDS 

Dealers with which such a Clearing 

Member is party to a CDS Dealer 

Clearing Agreement. 

LCH SA proposes to amend Article 

2.3.1.5(ii) so that Clearing Members will 

not be in breach of any obligation to 

provide information to LCH SA if they 

are prevented from providing such 

information due to the refusal of a CDS 

Dealer—as this is currently the case for 

Clients—to provide the relevant 

Clearing Member with the required 

information (provided the Clearing 

Member has undertaken reasonable due 

diligence and provides LCH SA with 

documented proof of its inability to 

obtain relevant information from the 

CDS Dealer despite such due diligence). 

LCH SA is proposing to create a new 

Chapter 5 in Title II relating to the status 

of a CDS Dealer. This chapter sets out 

the role of a CDS Dealer, consisting in 

the ability to present Original 

Transactions to LCH SA for clearing, 

novation and registration in the name of 

the Clearing Member with which the 

relevant CDS Dealer is party to a CDS 

Dealer Clearing Agreement in the CDS 

Clearing System pursuant to the CDS 

Clearing Documentation. New Chapter 5 

provides that once a CDS Dealer is 

admitted to the Register of CDS Dealers, 

such CDS Dealer shall automatically 

and without further formalities be 

subject to, and bound by, the CDS 

Clearing Documentation. This new 

Chapter 5 also refers to Section 1 of the 

Procedures, which specifies the 

conditions under which an applicant 

may be considered for admission into 

the Register of CDS Dealers as a CDS 

Dealer, including that the applicant for 

CDS Dealer status must have a clearing 

arrangement in place with a Clearing 

Member within their Financial Group, 

as well as the ongoing obligations 

applicable to a CDS Dealer. Finally, LCH 

SA is proposing to provide in new 

Chapter 5 that it may suspend or remove 

a CDS Dealer from the Register of CDS 

Dealers and the consequences of any 

such suspension which are, for a 

suspended CDS Dealer, to remain bound 

by all of its obligations under the CDS 

Clearing Documentations and its CDS 

Dealer Clearing Agreement and to be 

removed from the Register of CDS 

Dealers if such CDS Dealers has been 

suspended for a period of more than 

three months. If the membership of a 

Clearing Member which has signed a 

CDS Dealer Clearing Agreement with a 

CDS Dealer is suspended or terminated, 

its CDS Dealer will be automatically 

suspended, or removed, from the 

Register of CDS Dealers. 

LCH SA is proposing to amend 

Articles 3.1.6.1(iii) and (iv) (describing 

the consequences of the novation of 

Original Transactions that are either 

CDS or Index Swaptions) to provide that 

the Clearing Member with which a CDS 

Dealer is party to a CDS Dealer Clearing 

Agreement will become party to the 

relevant Cleared Transaction novated 

from an Original Transaction presented 

by such CDS Dealer for clearing by LCH 

SA. 

Article 3.1.6.4, which currently 

provides for the assumptions made by 

LCH SA in respect of any Original 

Transaction received for clearing, will 

be amended to also cover Original 

Transactions submitted by CDS Dealers 

and therefore such CDS Dealer (like a 

Clearing Member) will acknowledge and 

agree that certain notices on any event 

that may be delivered in respect of an 

Original Transaction, such as a Credit 

Event Notice, in relation to an Original 

Transaction accepted for clearing by 

LCH SA shall be deemed never to have 

been delivered at the Novation Time. 

LCH SA also proposes to amend 

Article 3.1.6.6 to extend the application 

of such Article to CDS Dealers in respect 

of their ability to submit Original 

Transactions through a particular 

Approved Trade Source System that 

may be suspended from time to time. 

LCH SA proposes to replace ‘‘Clearing 

Member concerned’’ with ‘‘Clearing 

Member in whose Trade Accounts such 

Cleared Transactions are registered’’ in 

Article 3.1.6.7 to include Cleared 

Transactions novated from Original 

Transactions presented by a CDS Dealer 

for clearing by LCH SA in the Cleared 

Transactions registered on the basis of 

incorrect or corrupted data in respect of 

which a Clearing Member agrees to be 

bound. Further, under the proposed 

amended version of the same article, 

LCH SA will not be liable to CDS 

Dealers with regard to the registration of 

such Cleared Transactions. 

Article 3.1.9.1 will be amended to 

provide that, in the context of the CDS 

Default Management Process applicable 

to the default of a Clearing Member, the 

notice that is published by LCH SA will 

notify CDS Dealers, in addition to all 

Clearing Members, that it will not 

novate any Original Transactions 

submitted to LCH SA for clearing on the 

Clearing Day on which LCH SA requests 

that an adjustment be made to the Loss 

Distribution Cap Amount for one or 

more Non-Defaulting Clearing 

Member(s) and until each affected NonDefaulting Clearing Member has agreed 

to such adjustment. LCH SA is 

proposing to add a reference to CDS 

Dealers in Article 3.1.9.4 so that LCH 

SA will also inform CDS Dealers of the 

arising of an Early Termination Trigger 

Date. LCH SA proposes to remove the 

reference to Clearing Members at the 

end of the same article in order not to 

imply that only Clearing Members are 

able to submit Original Transactions to 

LCH SA for clearing, as CDS Dealers 

will also be authorized to do so. 

LCH SA proposes to add a reference 

to CDS Dealers in Articles 3.1.10.1 and 


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8Especially, in accordance with Article 37 of 

Regulation (EU) No 648/2012 of the European 

Parliament and of the Council of 4 July 2012 on 

OTC derivatives, central counterparties and trade 

repositories. 

9The criteria to be met by a CDS Dealer differ 

from the ones that shall be met by a Clearing 

Member. Indeed, the clearing membership related 

criteria are designed to ensure that clearing 

members have sufficient financial resources and 

operational capacity to meet the obligations arising 

from participation in a central counterparty, which 

is not the case for a CDS Dealer for which the 

criteria shall ensure that LCH SA is able to receive 

trades directly from them for clearing. Once the 

trade is cleared and registered in the house trade 

account of the Clearing Member, the resulting 

clearing trade will be a house cleared trade as any 

other trade directly submitted by the Clearing 

Member for its own account. 

3.1.10.2 to provide that LCH SA will 

arrange for the removal of Backloading 

Transactions and Intraday Transactions 

from the TIW on behalf of the relevant 

CDS Dealers (in addition to the Clearing 

Members and Clients). 

LCH SA proposes to amend Article 

4.2.7.2 so that Clearing Members will be 

authorized to provide Markit LCH 

Settlement Prices to CDS Dealers, as it 

is currently the case for Clients of 

Clearing Members. 

LCH SA is proposing to amend Article 

4.3.2.3 which currently provides for the 

non-exhaustive list of measures that 

LCH SA may take, following the 

issuance of a Default Notice in respect 

of a Defaulting Clearing Member, to 

allow LCH SA to suspend the ability of 

the CDS Dealers with whom a 

Defaulting Clearing Member is party to 

a CDS Dealer Clearing Agreement to 

submit new Original Transactions for 

clearing (in indent (iv)). 

Under the current Rule Book, Article 

5.1.1.1 provides that, pursuant to EMIR, 

an Affiliate of a CCM shall be treated as 

a CCM Client. LCH SA proposes to 

delete this sentence and specify at the 

beginning of the same article that a CCM 

Client may include an Affiliate of a 

CCM, considering that under the 

Proposed Rule Change an Affiliate of a 

CCM may also be a CDS Dealer which 

may submit Original Transactions to 

LCH SA for clearing that will result in 

the registration of Cleared Transactions 

in the House Trade Account of the 

Clearing Member (excluding any Client 

Trade Account). 

ii. Procedures 

(A) Section 1 

LCH SA is proposing to rename 

Section 1 of the Procedures 

(Membership) ‘‘Clearing Member and 

CDS Dealer Status’’ since this Section 

will also cover the application process 

for the CDS Dealer status. 

Paragraph 1.1 will be amended to 

explicitly indicate that such paragraph 

relates to the application procedure for 

Clearing Member status and therefore to 

distinguish it from the new application 

procedure for CDS Dealer status set out 

in new Paragraph 1.2. Such new 

application procedure is also different 

from the process applicable for the 

onboarding the Clearing Member’s 

clients since the Cleared Transactions 

resulting from the novation of the 

Original Transactions submitted by the 

CDS Dealer are registered in the House 

Trade Account of a CDS Dealer’s 

Clearing Member and not in a Client 

Trade Account. Where necessary, 

references to the status of Clearing 

Member will be added in Paragraph 1.1. 

Further, a minor amendment is being 

made to correct a typographical error by 

replacing the reference to the ‘‘Access 

Agreement’’ which is not defined in the 

CDS Clearing Rules with a reference to 

an agreement providing an Applicant 

with a technical access to LCH SA that 

must be executed by the Applicant and 

LCH SA. 

LCH SA proposes to delete the 

reference to ‘‘Regulatory Body’’ in 

Paragraph 1.1(d)(iii) as this term is not 

defined in the Rule Book and the 

reference to existing defined term 

‘‘Competent Authority’’ is sufficient. A 

new Paragraph 1.2 will be added 

providing for the new application 

procedure for CDS Dealer status. It will 

mainly replicate the application 

procedure that applies to applicants for 

the Clearing Member status; hence this 

new Paragraph 1.2(a) will address the 

form in which such an application must 

be made with LCH SA and will provide 

that CDS Dealers that have been 

approved by LCH SA shall, within six 

months of notification of their approval, 

fulfil all conditions attached to their 

approval (if any). Paragraph 1.2(b) will 

also describe the actions LCH SA will be 

authorized to take in respect of an 

applicant for CDS Dealer status as part 

of the due diligence and application 

review process. As for any applicant 

that wishes to be admitted as a Clearing 

Member, LCH SA will be permitted to: 

(i) make enquiries of any nature about 

the applicant for the CDS Dealer status 

and any Person connected or associated 

with the applicant; (ii) ask the applicant 

to supply additional information and 

take whatever steps are necessary to 

verify information (which may include 

an on-site visit); (iii) disclose 

information to a Competent Authority, 

LCH SA’s insurers in connection with 

any form of insurance, or otherwise in 

accordance with the CDS Clearing 

Documentation and the CDS Dealer 

Clearing Agreement; (iv) and to 

endeavor to process, consider and 

decide upon an application in a timely 

fashion, but owes no duty or obligation 

to the applicant for the CDS Dealer 

status to do so, contrary to an 

application for the clearing membership 

for which there is an indicative timeline 

provided for in Section 1.1 of the 

Procedures to comply with the 

regulatory transparency requirements 

that LCH SA shall comply with.8 It 

should be noted that, contrary to the 

applicable process for any applicant for 

the Clearing Member status, there will 

be no requirement for an applicant for 

the CDS Dealer status to carry out any 

operational test linked to its capacity of 

using the CDS Clearing Service; indeed, 

the CDS Dealer is a party to the Cleared 

Transactions resulting from the 

novation of Original Transactions 

submitted by the CDS Dealer to LCH SA 

for clearing. 

Paragraph 1.2(c) will set out the 

following criteria that an applicant for 

CDS Dealer status must satisfy in order 

to be considered for admission to the 

Register of CDS Dealers: 9

(i) be validly incorporated and 

existing under the laws of its 

jurisdiction of incorporation and (if 

relevant in such jurisdiction) be in good 

standing; 

(ii) execute and maintain a CDS 

Dealer Clearing Agreement and comply 

with the provisions hereof; 

(iii) undertake to accept and comply 

with the CDS Clearing Documentation 

by executing the CDS Dealer Clearing 

Agreement; 

(iv) accept to comply with all 

Applicable Law relating to its status as 

a CDS Dealer and the performance of its 

obligations pursuant to the CDS 

Clearing Documentation; 

(v) ensure that all fees and other 

amounts required by LCH SA are paid 

in accordance with the CDS Clearing 

Documentation and/or the CDS Dealer 

Clearing Agreement; 

(vi) be an ATSS Participant for the 

purpose of submitting Original 

Transactions for clearing by LCH SA; 

(vii) provided the applicant specifies 

any number of branches, with 

agreement from its corresponding 

Clearing Member from which it 

proposes to submit Original 

Transactions for clearing by LCH SA, 

such branches shall be of the same legal 

entity as the CDS Dealer; and 

(viii) have a clearing arrangement 

governing the submission of Original 

Transactions in place with a Clearing 

Member, with which that applicant for 

the CDS Dealer status is party to a CDS 

Dealer Clearing Agreement, within their 

Financial Group; this arrangement will 


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97146 Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 / Notices 

10For the avoidance of doubt, this amendment is 

not linked to the CDS Dealer initiative. 

11 15 U.S.C. 78q–1. 

12 17 CFR 240.17Ad–22. 

13 15 U.S.C. 78q–1(b)(3)(F). 

take the form of either a give up 

agreement or an agency agreement. 

The CDS Dealer shall also comply 

with the provisions of the CDS Dealer 

Clearing Agreement to which it is a 

party. 

Finally, the scope of Paragraph 1.3 

(Change Procedure) will be clarified by 

adding a reference to the clearing 

membership (and therefore excluding 

CDS Dealer status). 

(B) Section 4 

LCH SA is proposing to amend the 

criteria constituting the Eligibility 

Requirements for an Original 

Transaction set out in Paragraph 4.1(c) 

in order to: (i) specify that the Eligibility 

Requirements relating to the Clearing 

Member apply to the Clearing Member 

in whose Account Structure the Cleared 

Transaction corresponding to an 

Original Transaction is to be registered 

so that it also applies to a Clearing 

Member whose CDS Dealers and/or 

Clients submit Original Transactions to 

LCH SA for clearing; (ii) add the new 

criteria pursuant to which a CDS Dealer 

presenting an Original Transaction shall 

not be suspended or removed from the 

Register of CDS Dealers as an new 

indent (ii); and (iii) indicate that LCH 

SA shall be permitted to clear such 

Original Transaction, including when it 

will have been presented by a CDS 

Dealer. 

Paragraphs 4.2(f)(ii), 4.3(e)(ii), 

4.4(e)(ii) currently provide that, if and 

for so long as any Clearing Member has 

one or more Open Position(s) registered 

in any of its Margin Accounts, the 

Clearing Member may submit for 

clearing an Original Transaction which 

no longer meets the applicable 

Eligibility Requirements if such Original 

Transaction is a risk reducing 

transaction. These paragraphs will be 

amended to indicate that CDS Dealers 

will also be authorized to submit such 

risk reducing transactions; we have also 

taken the opportunity to add a reference 

to Clients for the sake of clarity.10

(C) Section 5 

LCH SA is proposing to amend 

Paragraph 5.13 which currently deals 

with the process applicable to the 

Original Transactions cleared in error to 

provide that a Clearing Member will be 

also able to reverse an Original 

Transaction presented for clearing by a 

CDS Dealer in error by submitting an 

equal but opposite transaction to LCH 

SA for clearing and then using the 

compression functionality, in the same 

way as for any Original Transaction that 

a Clearing Member has submitted to 

LCH SA for clearing in error. 

2. Technical Amendments 

The amendments to the Procedures 

and Rule Book also contain 

typographical corrections, clean-up 

changes, cross references corrections 

and similar technical corrections as well 

as various conforming references to the 

new or revised defined terms: 

(i) in respect of the Rule Book, the 

term ‘‘Trading Venue Transaction’’, 

Articles 2.2.3.1, 2.2.1.1(iv), 2.2.2.1(iv), 

2.4.1.1, 4.2.7.7., 5.1.1.3(xviii), the 

second paragraph of Article 5.3.3.2 and 

Articles 5.3.5.1, 5.3.5.2, 5.3.5.4 and 

6.1.1.3(xvi). We have also taken the 

opportunity to replace any reference to 

a ‘‘person’’ with the defined term 

‘‘Person’’ for consistency purposes in 

Article 1.0.1.2, Section 1.1.1, Articles 

1.2.12.1, 1.2.12.2, 2.1.1.2, 4.2.7.5, 6.1.1.2 

and the Annex of Appendix 1; 

(ii) in respect of Section 1 of the 

Procedures, the numbering of certain 

sub-paragraphs of Paragraph 1.1 and the 

paragraphs following the new Paragraph 

1.2 and the use of the defined term 

‘‘Person’’; and 

(iii) in respect of Section 5 of the 

Procedures, Paragraphs 5.2(a)(iii), 5.5(a), 

5.18.3, 5.18.4, 5.18.5(a), 5.6(a) and 5.8(a) 

with the use of the defined term 

‘‘website’’ instead of referring to ‘‘LCH 

website’’. Paragraph 5.16(a)(iii)(G)(1) is 

also being amended to remove reference 

to the ‘‘CDSClear Margin And Product 

Flows Document’’, as this is duplicative. 

2. Statutory Basis 

LCH SA believes that the Proposed 

Rule Change is consistent with the 

requirements of Section 17A of the 

Exchange Act 11 and the regulations 

thereunder, including the clearing 

agency standards under Exchange Act 

Rule 17Ad–22.12 Section 17A(b)(3)(F) of 

the Exchange Act 13 requires, among 

other things, that the rules of a clearing 

agency be designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivative 

agreements, contracts, and transactions, 

to foster cooperation and coordination 

with persons engaged in the clearance 

and settlement of securities 

transactions, and are not designed to 

permit the unfair discrimination in the 

admission of participants or among 

participants in the use of the clearing 

agency. LCH SA also notes that the 

Congressional findings set forth under 

Section 17A indicate that Section 17A 

was enacted to, among other things, 

reduce unnecessary costs on investors. 

As discussed above, LCH SA is 

proposing to amend its CDS Clearing 

Rules to enable affiliates of a Clearing 

Member admitted by LCH SA to the 

Register of CDS Dealers to present 

Original Transactions to LCH SA for 

clearing, novation and registration in 

the name of a Clearing Member without 

having to be admitted as either a 

Clearing Member or being a Client of a 

Clearing Member. By allowing affiliates 

of a Clearing Member to present 

Original Transactions to LCH SA for 

clearing in this manner, the Proposed 

Rule Change will broaden the solutions 

for Clearing Members and their affiliates 

and enable further optimization of their 

clearing activities, thus reducing the 

overall cost of clearing which is 

consistent with the unnecessary clearing 

costs reduction policy underlying the 

adoption of Section 17A of the 

Exchange Act. Further, the Proposed 

Rule Change will promote flexibility 

and permit Clearing Members and their 

affiliates to manage and mitigate risks in 

a manner that is more closely tailored to 

their needs and the needs of their 

customers. The Proposed Rule Change 

will also facilitate a more efficient 

access to cleared markets by CDS 

Dealers, which may result in a larger 

number of cleared transactions that are 

carried out in a clear and transparent 

manner. LCH SA does not anticipate 

any increase in operational risk 

resulting from an increase in the 

number of cleared transactions, as it 

will be able to leverage its current 

process for managing trade flows for 

existing Clearing Members. The 

Proposed Rule Change may also 

contribute to more efficient and 

systematic clearing of more products by 

Clearing Members, thus contributing to 

the prompt and accurate clearance 

process and settlement of securities 

transactions and derivative agreements, 

contracts, and transactions, which will 

be in the public interest and consistent 

with Section 17A of the Exchange Act 

and the rules promulgated thereunder. 

Specifically, clearing Members will be 

able to consolidate their cleared 

positions and margin within a single 

membership under the Proposed Rule 

Change. In addition, Clearing Members 

will have the benefit of a single netting 

pool for all trades cleared. This provides 

efficiency of margin offset, while also 

reducing funding requirements of a 

separate default fund contribution if 

joining as a standalone Clearing Member 

Further, the Proposed Rule Change will 

not have any impact on the existing risk 

methodology applied by LCH SA or on 


lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 / Notices 97147 

14 17 CFR 240.17Ad–22(e)(18). 

15 17 CFR 240.17Ad–22(e)(19). 

16 17 CFR 240.17Ad–22(e)(18). 

17 17 CFR 240.17Ad–22(e)(19). 

18 17 CFR 240.17Ad–22(e)(18). 

19 17 CFR 240.17Ad–22(e)(19). 

20 15 U.S.C. 78q–1(b)(3)(I). 

LCH SA’s existing policies and 

procedures for assuring the safeguarding 

of securities and funds which are in the 

custody or control of the clearing agency 

or for which it is responsible, which is 

also consistent with Section 17A of the 

Exchange Act and the rules promulgated 

thereunder. LCH SA will continue to 

apply its existing risk methodology and 

the policies and procedures, thereunder 

to Clearing Members, regardless of 

whether such Clearing Members provide 

clearing services for CDS Dealers, 

primarily because executed trades made 

by CDS Dealers will be between LCH SA 

and the respective Clearing Member. 

Clearing Members will still be required 

to comply with the Membership 

Requirements set forth in Article 2.2.1.1. 

of the Procedures, which include, inter 

alia, minimum capital requirements and 

maintaining a minimum internal credit 

score. 

LCH SA also believes that the 

Proposed Rule Change is consistent 

with the requirements of Exchange Act 

Rule 17Ad–22(e)(18) 14 and (e)(19) 15. 

Rule 17Ad–22(e)(18)(i) provides, inter 

alia, that a covered clearing agency 

establish objective, risk-based, and 

publicly disclosed criteria for 

participation, which permits fair and 

open access by direct and, where 

relevant, indirect participants and other 

financial market utilities.16 Rule 17Ad– 

22(e)(19) provides, inter alia, that a 

covered clearing agency identify, 

monitor, and manage the material risks 

arising from arrangements in which 

firms that are indirect participants in 

the covered clearing agency rely on the 

services provided by direct participants 

to access the covered clearing agency’s 

payment, clearing, or settlement 

facilities.17

By enabling affiliates of a Clearing 

Member admitted by LCH SA to the 

Register of CDS Dealers to present 

Original Transactions to LCH SA for 

clearing, novation and registration in 

the name of a Clearing Member without 

having to be admitted as either a 

Clearing Member or being a Client of a 

Clearing Member, LCH SA is increasing 

access to its clearing and settlement 

services. In doing so, LCH SA is 

proposing amendments to its 

Procedures for the admission of CDS 

Dealers that are based on reasonable 

risk-related participation requirements 

that are tailored to and commensurate 

with the specific risks of such an 

arrangement, and are publicly disclosed. 

LCH SA is also proposing to amend its 

Procedures to describe the actions it 

will be authorized to take in respect of 

an applicant for CDS Dealer status as 

part of the due diligence and 

application review process. This process 

will align with the existing review 

process for onboarding Clearing Member 

applicants. Furthermore, CDS Dealers 

will be required to enter into a CDS 

Dealer Clearing Agreement whereby 

they will be bound by the CDS Clearing 

Rules. The CDS Dealer Clearing 

Agreement will provide LCH SA with 

the ability to gather information about 

CDS Dealers to identify, monitor, and 

manage any material risks arising from 

the arrangement, including by allowing 

LCH SA to make enquiries of any nature 

regarding the CDS Dealer and asking the 

CDS Dealer to supply additional 

information for purposes of assessing 

whether such CDS Dealer meets the 

criteria to remain on the Register of CDS 

Dealers. As such, LCH SA believes that 

the Proposed Rule Change is consistent 

with Rule 17Ad–22(e)(18) 18 and 

(e)(19). 19

B. Clearing Agency’s Statement on 

Burden on Competition 

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

requires that the rules of a clearing 

agency not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.20 LCH SA does not 

believe that the Proposed Rule Change 

would impose burdens on competition 

that are not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Proposed Rule Change would 

provide flexibility of clearing services 

access to affiliates of Clearing Members 

but would not otherwise affect the 

ability of Clearing Members or other 

market participants generally to engage 

in cleared transactions or to access LCH 

SA’s clearing services. Therefore, LCH 

SA does not believe that the Proposed 

Rule Change would impose a burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants or Others 

Written comments relating to the 

Proposed Rule Change have not been 

solicited or received. LCH SA will 

notify the Commission of any written 

comments received by LCH SA. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) by order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should 

be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, security-based swap 

submission, or advance notice 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-regulations/self-regulatoryorganization-rulemaking); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

LCH SA–2024–005 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Vanessa Countryman, Secretary, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 20549. 

All submissions should refer to file 

number SR–LCH SA–2024–005. 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, 


lotter on DSK11XQN23PROD with NOTICES1
97148 Federal Register / Vol. 89, No. 235 / Friday, December 6, 2024 / Notices 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–101074 

(September 5, 2024), 89 FR 77920 (September 24, 

2024) (SR–GEMX–2024–34). 

4Half cabinets are not available to new 

subscribers. See General 8, Section 1(a). 

5Supra note 3. 

6Because of the addition of the Ultra High 

Density Cabinet option in NY11–4, the Super High 

Density Cabinet in NY11–4 will have power density 

greater than 15 kW and less than or equal to 17.3 

kW. 

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 LCH 

SA and on LCH SA’s website at: https:// 

www.lch.com/resources/rulebooks/ 

proposed-rule-changes. 

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–LCH SA–2024–005 

and should be submitted on or before 

December 27, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–28547 Filed 12–5–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101784; File No. SR– 

GEMX–2024–41] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Establish Fees for Its 

Expanded Co-Location Services 

December 2, 2024. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on November 

18, 2024, Nasdaq GEMX, LLC (‘‘GEMX’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to a proposal 

to establish fees for its expanded colocation services, as described further 

below. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/gemx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange filed a proposal to 

expand its co-location services by 

offering new cabinet, power, and power 

distribution unit options in the 

Exchange’s expanded data center.3 As 

described in that filing, the Exchange’s 

current data center (‘‘NY11’’) in 

Carteret, NJ is undergoing an expansion 

(‘‘NY11–4’’) in response to demand for 

power and cabinets. The purpose of this 

proposed rule change is to establish fees 

for the expanded co-location services. 

Specifically, the Exchange proposes to 

establish (i) a monthly fee for Ultra High 

Density Cabinets, (ii) an installation fee 

for cabinets in NY11–4, (iii) fees for 

power installation in NY11–4, and (iv) 

fees for power distribution unit options 

in NY11–4. 

Ultra High Density Cabinet 

Currently, co-location customers have 

the option of obtaining cabinets of 

various sizes and power densities. Colocation customers may obtain a Half 

Cabinet,4 a Low Density Cabinet with 

power density less than or equal to 2.88 

kilowatts (‘‘kW’’), a Medium Density 

Cabinet with power density greater than 

2.88 kW and less than or equal to 5 kW, 

a Medium-High Density Cabinet with 

power density greater than 5 kW and 

less than or equal to 7 kW, a High 

Density Cabinet with power density 

greater than 7 kW and less than 10 kW, 

and a Super High Density Cabinet with 

power density greater than 10 kW and 

less than or equal to 17.3 kW. 

The Exchange filed a proposal to 

introduce a new cabinet choice in 

NY11–4, an ‘‘Ultra High Density 

Cabinet,’’ with power density greater 

than 10 kW and less than or equal to 15 

kW.5 The Ultra High Density Cabinet 

option will only be offered in NY11–4 

because of the power configuration 

necessary for such cabinets, which is 

not possible or available in other 

portions of the data center due to 

different power distribution.6 In 

addition to the Ultra High Density 

Cabinet, the Exchange will offer the 

other, existing cabinet options in NY11– 

4, with the exception of the Low Density 

Cabinet and Half Cabinet due to a lack 

of demand for such cabinets. The 

ongoing monthly fees for the Super High 

Density Cabinet, High Density Cabinet, 

Medium-High Density Cabinet, and 

Medium Density Cabinet are the same in 

NY11 and NY11–4 and the Exchange is 

not proposing to modify such fees. 

The Exchange proposes to establish 

an ongoing monthly fee of $7,230 for the 

Ultra High Density Cabinets. To 

effectuate this change, the Exchange 

proposes to add the $7,230 ongoing 

monthly fee for Ultra High Density 

Cabinets to its fee schedule in General 

8, Section 1(a). The Exchange notes that 

the proposed fee amount falls between 

the $4,748 ongoing monthly fee charged 

for High Density Cabinets and the 

$8,440 ongoing monthly fee charged for 

Super High Density Cabinets. 

Furthermore, the proposed fee is 

consistent with the existing ongoing 

monthly cabinet fees on a per kW basis. 

The existing monthly cabinet fees range 

from approximately $475 per kW to 

$916 per kW, while the proposed 

ongoing monthly cabinet fee for the 

Ultra High Density Cabinet ranges from 

approximately $482 per kW (at the high 

end of the power density range for Ultra 

High Density Cabinets) to $723 per kW 

(at the low end of the power density 

range for Ultra High Density Cabinets). 

Lastly, Nasdaq notes that the proposed 

fee for the Ultra High Density Cabinet 

accounts for the cost of the cabinet and 

is actually lower than the cost to Nasdaq 

of procuring it from its vendor, Wise 

Components. 

Installation Fee for Cabinets in NY11–4 

The Exchange proposes to establish a 

cabinet installation fee of $5,940 for all 

cabinets in NY11–4. To effectuate this 


lotter on DSK11XQN23PROD with NOTICES1