102234 Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices 

22 15 U.S.C. 78s(b)(3)(A)(ii). 

23 17 CFR 240.19b–4(f)(2). 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 79528 

(Dec. 12, 2016), 81 FR 91232 (Dec. 16, 2016) (SR– 

DTC–2016–007, SR–FICC–2016–005, SR–NSCC– 

2016–003). 

4See Securities Exchange Act Release No. 101695 

(Nov. 21, 2024), 89 FR 93763 (Nov. 27, 2024) (SR– 

FICC–2024–007) (‘‘Account Segregation Filing’’). 

The changes proposed in the Account Segregation 

Filing are expected to be implemented by no later 

than March 31, 2025, on a date to be announced by 

an Important Notice posted to FICC’s website. 

Terms not defined herein are defined in the GSD 

Rules, available at www.dtcc.com/∼/media/Files/ 

Downloads/legal/rules/ficc_gov_rules.pdf. 

5 17 CFR 240.17ad–22(e)(6)(i). See Securities 

Exchange Act Release No. 99149 (Dec. 13, 2023), 89 

FR 2714 (Jan. 16, 2024) (‘‘Adopting Release,’’ and 

the rules adopted therein referred to herein as 

‘‘Treasury Clearing Rules’’). 

6 17 CFR 240.15c3–3a, Note H. See id. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 22 and Rule 

19b–4(f)(2) thereunder.23 At any time 

within 60 days of the filing of the 

proposed rule change, the 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– 

NYSECHX–2024–35 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–NYSECHX–2024–35. 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–NYSECHX–2024–35 and should be 

submitted on or before January 7, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29626 Filed 12–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101882; File No. SR–FICC– 

2024–011] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing of Proposed Rule Change To 

Amend the Clearing Agency 

Investment Policy 

December 11, 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 December 

3, 2024, Fixed Income Clearing 

Corporation (‘‘FICC’’) 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 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 

The proposed rule change consists of 

amendments to the Clearing Agency 

Investment Policy (‘‘Investment Policy’’, 

or ‘‘Policy’’) of FICC and its affiliates, 

The Depository Trust Company (‘‘DTC’’) 

and National Securities Clearing 

Corporation (‘‘NSCC,’’ and together with 

FICC and DTC, the ‘‘Clearing 

Agencies’’) 3 and would facilitate 

changes to the FICC Government 

Securities Division Rulebook (‘‘GSD 

Rules’’) that will be implemented by 

FICC.4

Specifically, as described in greater 

detail in the Account Segregation Filing, 

FICC will implement changes to the 

GSD Rules that will, among other 

things, provide for FICC to (1) hold 

margin collected with respect to the 

proprietary transactions of a Netting 

Member separately and independently 

from the margin collected with respect 

to transactions that a Netting Member 

submits to FICC on behalf of indirect 

participants, (2) legally segregate certain 

margin collected with respect to indirect 

participant transactions from the margin 

for a Netting Member’s proprietary 

transactions (as well as those of other 

indirect participants), and (3) limit 

investments of certain margin collected 

with respect to indirect participant 

transactions to only U.S. Treasuries 

with a maturity date of one year or less. 

The Clearing Agencies are proposing to 

amend the Policy to facilitate 

implementation of these changes and 

would also make other clean-up changes 

to the Policy, as described in greater 

detail below. 

The changes that were proposed in 

the Account Segregation Filing and the 

changes proposed to the Investment 

Policy herein are collectively designed 

to comply with certain requirements of 

Rule 17ad–22(e)(6)(i) under the Act,5

and to ensure that FICC has appropriate 

rules to satisfy certain conditions of 

Note H to Rule 15c3–3a under the Act 

for a broker-dealer to record a debit in 

the customer and broker-dealer 

proprietary account reserve formulas.6


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices 102235 

7The respective Clearing Funds of NSCC, FICC’s 

GSD and FICC’s MBSD, and the DTC Participants 

Fund are described further in the Rules & 

Procedures of NSCC (‘‘NSCC Rules’’), the DTC 

Rules, By-laws and Organization Certificate (‘‘DTC 

Rules’’), the Clearing Rules of the Mortgage-Backed 

Securities Division of FICC (‘‘MBSD Rules’’) or the 

GSD Rules, respectively, available at http://

dtcc.com/legal/rules-and-procedures. See Rule 4 

(Clearing Fund) of the NSCC Rules, Rule 4 

(Participants Fund and Participants Investment) of 

the DTC Rules, Rule 4 (Clearing Fund and Loss 

Allocation) of the GSD Rules, and Rule 4 (Clearing 

Fund and Loss Allocation) of the MBSD Rules. 

8The Depository Trust & Clearing Corporation 

(‘‘DTCC’’) is the parent company of the Clearing 

Agencies. 

9 17 CFR 240.17ad–22(e)(6)(i). 

10 Id. 

11 17 CFR 240.15c3–3. 

12 17 CFR 240.15c3–3a. 

13 Id. 14Supra note 4. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency 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 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The Investment Policy governs the 

management, custody and investment of 

cash deposited to the respective NSCC 

and FICC Clearing Funds, and the DTC 

Participants Fund,7 the proprietary 

liquid net assets (cash and cash 

equivalents) of the Clearing Agencies, 

and other funds held by the Clearing 

Agencies pursuant to their respective 

rules. In doing this, the Investment 

Policy identifies the guiding principles 

for investments and defines the roles 

and responsibilities of DTCC 8 staff in 

administering the Investment Policy 

pursuant to those principles. The 

guiding principles for investments set 

forth in Section 3 of the Investment 

Policy address, among other things, how 

the Clearing Agencies segregate and 

separately hold cash deposited to the 

NSCC Clearing Fund, the Clearing Fund 

of FICC’s Government Securities 

Division (‘‘GSD’’), the Clearing Fund of 

FICC’s Mortgage-Backed Securities 

Division (‘‘MBSD’’) and the DTC 

Participants Fund. The Investment 

Policy also identifies sources of funds 

that may be invested, and the permitted 

investments of those funds, including 

the authority required to make such 

investments and the parameters of, and 

limitations on, each type of investment. 

The Commission recently adopted 

amendments to Rule 17ad–22(e)(6)(i) 

under the Act that are applicable to 

FICC as a covered clearing agency that 

provides, through GSD, central 

counterparty services for transactions in 

U.S. Treasury securities.9 These 

amendments require, among other 

things, that FICC hold margin from a 

direct participant for its proprietary 

transactions separately and 

independently from the margin 

calculated and collected for the 

transactions of an indirect participant 

that relies on the services provided by 

the direct participant to access FICC’s 

payment, clearing, or settlement 

facilities.10

In the Treasury Clearing Rules, the 

Commission also amended its customer 

protection rule (‘‘Rule 15c3–3’’) 11 and 

the reserve formulas thereunder (‘‘Rule 

15c3–3a’’),12 to permit broker-dealers to 

include margin required and on deposit 

at FICC as a debit item in the reserve 

formula under certain conditions. One 

of the conditions for the relief is that the 

margin be collected in accordance with 

the GSD Rules that impose certain 

requirements, which include, among 

other things, that FICC (i) only invest 

cash margin in U.S. Treasuries with a 

maturity of one year or less, and (ii) 

must hold the margin itself or at an 

account of a Federal Reserve Bank or an 

FDIC-insured bank, which account must 

be segregated from any other account of 

FICC or any other person at a U.S. 

Federal Reserve Bank or FDIC-insured 

bank and used exclusively to hold 

customer assets to meet the current 

margin requirements of FICC resulting 

from positions in U.S. Treasury 

securities of the customers of the brokerdealer members of FICC.13

In the Account Segregation Filing, 

FICC proposed changes to the GSD 

Rules to comply with the requirements 

of the Treasury Clearing Rules. Such 

changes are expected to be implemented 

in the GSD Rules by no later than March 

31, 2025 and will, among other things, 

(1) provide for FICC to calculate, collect, 

and hold margin for the proprietary 

transactions of a Netting Member 

separately and independently from the 

margin for transactions that the Netting 

Member submits to FICC on behalf of 

indirect participants, and (2) allow 

Netting Members to elect for margin for 

indirect participant transactions to be 

calculated on a gross basis (i.e., an 

indirect participant-by-indirect 

participant basis) and legally segregated 

from the margin for the Netting 

Member’s proprietary transactions (as 

well as those of other indirect 

participants).14

The proposed changes to the 

Investment Policy would facilitate the 

implementation of the changes that will 

be made to the GSD Rules pursuant to 

the Account Segregation Filing, as 

described in greater detail below. 

i. Separately Holding Indirect 

Participant Margin 

First, the proposed changes to the 

Investment Policy would facilitate the 

implementation of the changes to the 

GSD Rules that will require FICC to 

calculate, collect, and hold margin for 

the proprietary transactions of a GSD 

Netting Member separately and 

independently from margin collected 

with respect to transactions that a 

Netting Member submits to FICC on 

behalf of indirect participants. 

The proposed changes to the Policy 

would do this by first amending Section 

2 to include a definition of Indirect 

Participants Clearing Fund Deposits to 

mean ‘‘the total amount deposited in the 

GSD Clearing Fund to support activity 

in Agent Clearing Member Omnibus 

Accounts and Sponsoring Member 

Omnibus Accounts, other than 

Segregated Indirect Participants 

Accounts, as such terms are defined in 

the FICC Government Securities 

Division (‘‘GSD’’) Rulebook (‘‘GSD 

Rules’’).’’ Next, the proposed changes 

would amend Section 3.2 (Section 3 

describes the guiding principles that 

underpin the Policy) regarding the 

separation and segregation of cash 

deposits to the NSCC, GSD and MBSD 

Clearing Funds, and the DTC 

Participants Fund. Within this section, 

the proposed changes would specify 

that Indirect Participants Clearing Fund 

Deposits shall be held separately and 

independently on FICC’s books and 

records from all other deposits to the 

GSD Clearing Fund. 

In connection with this change, the 

proposed changes to the Policy would 

also amend Section 5, which describes 

investable funds that are invested by the 

Clearing Agencies pursuant to the 

Policy. The changes to this section 

would provide that Indirect Participants 

Clearing Fund Deposits are included in 

the GSD Clearing Fund. This proposed 

change would clarify that these funds 

are considered investable funds under 

the Policy, to be invested similarly to 

other cash deposits to the GSD Clearing 

Fund. 


ddrumheller on DSK120RN23PROD with NOTICES1
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15 17 CFR 240.15c3–3 and 15c3–3a. 

16Supra note 7. 

17 15 U.S.C. 78q–1(b)(3)(F). 

18 17 CFR 240.17ad–22(e)(6)(i). 

19 15 U.S.C. 78q–1(b)(3)(F). 

ii. Legally Segregating and Limiting 

Investments of Segregated Customer 

Margin 

Second, the proposed changes to the 

Investment Policy would facilitate 

implementation of the changes that will 

be made to the GSD Rules pursuant to 

the Account Segregation Filing that will 

require FICC to legally segregate certain 

Indirect Participants Clearing Fund 

Deposits that have been designated by 

GSD Netting Members for such 

segregation (‘‘Segregated Customer 

Margin’’), and to hold and invest such 

funds in a manner that meets the 

conditions set forth in the Commission’s 

amendments to Rule 15c3–3 and Rule 

15c3–3a.15

The GSD Rules will describe the 

manner in which FICC will meet the 

requirements of Rule 15c3–3 and Rule 

15c3–3a with respect to Segregated 

Customer Margin. The standards that 

FICC must adhere to in holding, 

investing and legally segregating 

Segregated Customer Margin are critical 

to its Netting Members’ ability to obtain 

certain relief with respect to these 

funds. Therefore, the Clearing Agencies 

believe it is appropriate for these 

provisions to be described publicly in 

the GSD Rules, which are published to 

the DTCC website.16

While the manner in which FICC 

would hold and invest Segregated 

Customer Margin will primarily be 

described in the GSD Rules, the 

proposed changes would incorporate 

Segregated Customer Margin into the 

Investment Policy such that the general 

governance and investment philosophy 

underpinning the Policy, described in 

Section 3.1 as ‘‘a prudent and 

conservative investment philosophy 

that places highest priority on 

maximizing liquidity and risk 

avoidance,’’ would apply to these funds. 

The proposed changes would amend 

Section 2 to include a definition of 

Segregated Customer Margin as having 

‘‘the meaning given such term in the 

GSD Rules.’’ The proposed changes 

would also amend Section 3.2 to 

include a separate statement that refers 

to the provisions of the GSD Rules, 

specifically, but not limited to, Section 

1a of GSD Rule 4, which would, 

following implementation of the 

changes that were proposed by the 

Account Segregation Filing, address 

how FICC would segregate and hold 

Segregated Customer Margin in 

compliance with the applicable 

conditions set forth in Rule 15c3–3 and 

Rule 15c3–3a. 

The proposed changes to the Policy 

would amend Section 5 to identify 

Segregated Customer Margin as a source 

of investable funds and to state that 

‘‘Segregated Customer Margin is 

described in the GSD Rules, including, 

but not limited to, Section 1a of GSD 

Rule 4.’’ The proposed changes to 

Section 5 would also clarify the 

description of ‘‘Participants Fund and 

Clearing Funds’’ to make clear that 

Segregated Customer Margin is not 

treated as general FICC Clearing Fund. 

Finally, the proposed changes would 

include ‘‘Segregated Customer Margin’’ 

as a separate category of ‘‘Allowable 

Investments’’ in Section 6.1, showing 

that these funds may only be invested 

in bank deposits, including a Federal 

Reserve Bank. Under Section 6.2.1, 

which describes limits on bank deposit 

investments, the proposed changes 

would include a statement that refers 

back to GSD Rule 4 as describing the 

manner in which Segregated Customer 

Margin may be invested and would also 

provide that higher investment limits 

may be applied to investments of 

Segregated Customer Margin. 

iii. Clean-Up Proposed Changes 

The proposed changes to the Policy 

would replace references to the 

‘‘Management Committee’’ with the 

‘‘senior most management committee,’’ 

which accurately describes this internal 

governing body without referring to it 

by formal name. The DTCC Management 

Committee is comprised of the 

executive members of DTCC’s 

management team and is the senior 

most management committee in the 

organization. The Policy currently 

requires that certain actions and 

authorizations described therein be 

taken by a member of this body. For 

example, Section 4.3 of the Policy 

requires that the establishment of any 

new investment relationships be 

authorized by specified persons, which 

include a member of the Management 

Committee. 

The Management Committee has 

recently changed its name to the 

Executive Committee. Therefore, the 

proposed change to replace the formal 

name of this body would continue to 

correctly refer to the group but would 

ensure that the group continues to be 

accurately described in the Policy in the 

event of any future changes to its formal 

name. The proposed changes would 

include a new defined term for ‘‘senior 

most management committee’’ in 

Section 2 to provide clarity that this 

term is intended to refer to the highestlevel committee of DTCC. Conforming 

changes would also be made to Section 

4.3 (regarding authorization to establish 

new investment relationships), Section 

6.2.3 (regarding authorization of 

investment transactions in U.S. 

Treasury securities), Section 6.2.5 

(regarding authorization of investment 

transactions in high-grade corporate 

debt) and Section 7.2 (regarding 

authorization to exceed investment 

limits). 

Implementation Timeframe 

The Clearing Agencies expect to 

implement the proposal by no later than 

March 31, 2025, or such earlier date on 

which the changes proposed by the 

Account Segregation Filing are effective. 

2. Statutory Basis 

The Clearing Agencies believe that the 

proposed changes are consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a registered clearing 

agency, particularly, Section 

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

17ad–22(e)(6)(i) under the Act,18 for the 

reasons described below. 

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

requires, in part, that the rules of a 

registered clearing agency be designed 

to assure the safeguarding of securities 

and funds which are in their custody or 

control or for which they are 

responsible.19

The investment guidelines and 

governance procedures set forth in the 

Investment Policy are designed to 

safeguard funds that are in the custody 

or control of the Clearing Agencies or 

for which they are responsible. Such 

protections include, for example, 

following a prudent and conservative 

investment philosophy that places the 

highest priority on maximizing liquidity 

and risk avoidance. The Clearing 

Agencies believe the proposed changes 

would allow them to continue to adhere 

to these guidelines by addressing the 

segregation, separation and investment 

of Indirect Participants Clearing Fund 

Deposits and Segregated Customer 

Margin, consistent with the changes that 

were proposed in the Account 

Segregation Filing. The proposed 

changes would reflect a prudent and 

conservative investment philosophy by 

limiting FICC’s ability to hold 

Segregated Customer Margin in either 

an account of a Federal Reserve Bank or 

an FDIC-insured bank. Therefore, the 

Clearing Agencies believe the proposed 

rule change would allow the Clearing 

Agencies to continue to operate the 

Investment Policy pursuant to a prudent 

and conservative investment philosophy 


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Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices 102237 

20 Id. 

21 Id. 

22 17 CFR 240.17ad–22(e)(6)(i). 

that assures the safeguarding of 

securities and funds that are in their 

custody and control, or for which they 

are responsible, consistent with Section 

17A(b)(3)(F) of the Act.20

The proposed changes to more 

generally describe the senior most 

management committee would ensure 

that the Policy remains clear and 

accurate in describing the governance 

around important actions described 

therein. By creating clearer descriptions, 

the Clearing Agencies believe these 

proposed changes would make the 

Investment Policy more effective in 

governing the management, custody, 

and investment of funds of and held by 

the Clearing Agencies. The Clearing 

Agencies believe the proposed changes 

would improve the effectiveness of the 

Investment Policy and allow the 

Investment Policy to continue to be 

administered in alignment with the 

investment guidelines and governance 

procedures set forth therein. Given that 

such guidelines and governance 

procedures are designed to safeguard 

funds which are in the custody or 

control of the Clearing Agencies or for 

which they are responsible, the Clearing 

Agencies believe the proposed changes 

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

of the Act.21

Rule 17ad–22(e)(6)(i) under the Act 

requires, in part, FICC to establish 

written policies and procedures 

reasonably designed to calculate, 

collect, and hold margin amounts from 

a direct participant for its proprietary 

positions in Treasury securities 

separately and independently from 

margin calculated and collected from 

that direct participant in connection 

with U.S. Treasury securities 

transactions by an indirect participant 

that relies on the services provided by 

the direct participant to access FICC’s 

payment, clearing, or settlement 

facilities.22 As described above, the 

proposed changes would amend Section 

3.2, which describes the separation and 

segregation of cash deposits to the 

NSCC, GSD and MBSD Clearing Funds, 

and the DTC Participants Fund. The 

proposed changes would specify in this 

section that Indirect Participants 

Clearing Fund Deposits shall be held 

separately and independently on FICC’s 

books and records from all other 

deposits to the GSD Clearing Fund. 

Together with the changes to be 

implemented to the GSD Rules pursuant 

to the Account Segregation Filing, the 

proposed changes to the Policy would 

support FICC’s compliance with the 

requirements of Rule 17ad–22(e)(6)(i) by 

providing that Indirect Participants 

Clearing Fund Deposits shall be held 

separately and independently from 

margin held for GSD Netting Members’ 

proprietary activity. 

(B) Clearing Agency’s Statement on 

Burden on Competition 

The Clearing Agencies believe that the 

proposed revisions to the Investment 

Policy would not have any impact, or 

impose any burden, on competition. 

The Investment Policy applies equally 

to allowable investments of Clearing 

Fund and Participants Fund deposits, as 

applicable, of each member of the 

Clearing Agencies, and establishes a 

uniform policy at the Clearing Agencies. 

The proposed changes to the Investment 

Policy would not effect any changes on 

the fundamental purpose or operation of 

this document and, as such, would also 

not have any impact, or impose any 

burden, on competition. 

The Clearing Agencies do not believe 

the proposed rule changes to make 

clean-up changes to the Policy would 

impact competition. These changes 

would ensure the clarity and accuracy 

of the descriptions in the Policy and 

would not affect participants’ rights and 

obligations. As such, the Clearing 

Agencies believe the proposed clean-up 

changes would not have any impact on 

competition. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

The Clearing Agencies have not 

received or solicited any written 

comments relating to this proposal. If 

any written comments are received, they 

will be publicly filed as an Exhibit 2 to 

this filing, as required by Form 19b–4 

and the General Instructions thereto. 

Persons submitting comments are 

cautioned that, according to Section IV 

(Solicitation of Comments) of the 

Exhibit 1A in the General Instructions to 

Form 19b–4, the Commission does not 

edit personal identifying information 

from comment submissions. 

Commenters should submit only 

information that they wish to make 

available publicly, including their 

name, email address, and any other 

identifying information. 

All prospective commenters should 

follow the Commission’s instructions on 

how to submit comments, available at 

www.sec.gov/regulatory-actions/how-tosubmit-comments. General questions 

regarding the rule filing process or 

logistical questions regarding this filing 

should be directed to the Main Office of 

the Commission’s Division of Trading 

and Markets at tradingandmarkets@

sec.gov or 202–551–5777. 

The Clearing Agencies reserve the 

right not to respond to any comments 

received. 

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 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– 

FICC–2024–011 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–FICC–2024–011. 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-regulations/self-regulatoryorganization-rulemaking). 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 


ddrumheller on DSK120RN23PROD with NOTICES1
102238 Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This proposal will adjust for inflation up to 

August 2024. Depending on inflation thereafter, 

further adjustments may, or may not, be necessary. 

4These measurements compare the time 

difference between events on the matching engine 

and the time these events are published. 

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 FICC 

and on DTCC’s website (www.dtcc.com/ 

legal/sec-rule-filings). 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–FICC–2024–011 and 

should be submitted on or before 

January 7, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29628 Filed 12–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101886; File No. SR–Phlx– 

2024–68] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Certain Fees 

Based on the Rate of Inflation 

December 11, 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 December 

2, 2024, Nasdaq PHLX LLC (‘‘Phlx’’ 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 amend the 

Exchange’s fees based on the rate of 

inflation. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on January 1, 2025. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/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 purpose of the proposed rule 

change is to adjust market data fees for 

inflation, to be operative on January 1, 

2025. 

Many market data fees have not 

changed for years. As such, the fees 

have fallen substantially in real terms. 

The Exchange proposes to restore fees to 

the real amount intended in the original 

filings in a one-time inflationary 

adjustment. This adjustment will 

become operative in three parts: 45 

percent in 2025; 30 percent in 2026; and 

the final 25 percent in 2027. The 

Exchange believes that it is necessary to 

spread the impact of this one-time 

adjustment for past inflation to prevent 

any undue impact that execution in a 

single tranche may have on our 

customers.3

The proposed fee increases will apply 

to three product families: (i) PSX 

Managed Data Solutions; (ii) Market 

Data Distributor Fees; and (iii) PSX 

TotalView. A detailed list of fee 

adjustments is set forth below. The 

Exchange is not proposing to adjust fees 

for non-professional usage, 

administrative fees, extranet fees, or 

certain categories of Non-Display usage. 

The Exchange plans to use this 

inflationary adjustment to support 

continued investment in innovative, 

high-quality data products. 

Investments in Nasdaq Data Products 

PHLX has continuously invested in its 

products in the period after the current 

fees were first instituted to 

accommodate the increasing amount of 

information processed and the changes 

in technology over time. It is reasonable 

and consistent with the Act for the 

Exchange to recoup its investments, at 

least in part, by adjusting its fees. 

Continuing to operate at fees frozen in 

time impacts the Exchange’s ability to 

enhance its offerings and the interests of 

market participants and investors. 

These investments have been 

necessary in part because of increases in 

the amount of information processed, 

coupled with the need to maintain 

infrastructure in a high fixed cost 

environment. The following message 

rate metrics for the PSX depth of book 

feed illustrate changes in system 

demand over time: 

• Peak Rate by Millisecond: down 

approximately 6% 

• Average Rate per Millisecond: up 

approximately 0.1% 

• Peak Rate per Second: up 

approximately 73% 

• Average Rate per Second: up 

approximately 79% 

• Peak Total Messages: up 

approximately 344% 

• Average Total Messages: up 

approximately 283% 

• Average Daily Volume: down 

approximately 58% 

• Maximum Message Count: up 

approximately 344% 

With this increase in message traffic 

and need to maintain infrastructure, the 

Exchange expended significant 

resources to improve its market data 

products to meet customer expectations, 

including continued investment in all 

aspects of the technology ecosystem 

(e.g., software, hardware, and network). 

During the period between 2018 and 

2023, advancements in system 

performance as measured by latency not 

only accommodated the high message 

traffic volumes but stayed well ahead of 

it. The following latency metrics 4

illustrate the increase in message 

processing speed: 

• Median: down approximately 40% 

• Average: down approximately 46% 

• Max: down approximately 50% 

The Exchange continues to invest in 

enhancing its technology for the benefit 

and often at the behest of its customers. 

Yet the Exchange has not adjusted any 

of the fees included in this proposal for 

many years (as set forth below), to even 


ddrumheller on DSK120RN23PROD with NOTICES1