Federal Register / Vol. 89, No. 246 / Monday, December 23, 2024 / Notices 104595 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5Capitalized terms not defined herein are defined 

in the GSD Rules and the MBSD Rules, as 

applicable, available at www.dtcc.com/legal/rulesand-procedures. 

6Securities Exchange Act Release No. 78529 

(Aug. 10, 2016), 81 FR 54626 (Aug. 16, 2016) (SR– 

FICC–2016–004). 

7The Maintenance Fee would not apply to 

amounts deposited as Segregated Customer Margin, 

which, under changes to the GSD Rules recently 

approved by the Commission, are separate from a 

Member’s Required Fund Deposit. See Securities 

Exchange Act Release No. 101695 (Nov. 21, 2024), 

89 FR 93763 (Nov. 27, 2024) (SR–FICC–2024–007). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101947; File No. SR–FICC– 

2024–012] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Clearing Fund Maintenance Fee of 

MBSD and GSD 

December 17, 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 

9, 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. FICC filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(2) thereunder.4 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 FICC MortgageBacked Securities Division (‘‘MBSD’’) 

Clearing Rules (‘‘MBSD Rules’’) and 

Government Securities Division 

(‘‘GSD’’) Rulebook (‘‘GSD Rules’’ and 

together with the MBSD Rules, the 

‘‘Rules’’) in order to modify the 

respective Clearing Fund Maintenance 

Fee (‘‘Maintenance Fee’’) of GSD and 

MBSD, effective January 1, 2025, as 

described in greater detail below.5

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 

FICC is proposing to amend the 

MBSD Rules and the GSD Rules to 

modify the respective Maintenance Fee 

of GSD and MBSD, effective January 1, 

2025, as described in greater detail 

below. 

(i) Background 

FICC implemented the Maintenance 

Fee in 2016 in order to (i) diversify 

FICC’s revenue sources, mitigating its 

dependence on revenues driven by 

trading volumes, and (ii) add a stable 

revenue source that would contribute to 

FICC’s operating margin by offsetting 

increasing costs and expenses.6 The 

Maintenance Fees for MBSD and GSD 

are charged to MBSD Clearing Members 

and GSD Netting Members (collectively, 

‘‘Members’’) in proportion to the 

Member’s cash deposit in their 

respective MBSD or GSD Clearing Fund 

(collectively, ‘‘Clearing Fund’’), as 

described below. 

The Maintenance Fee is calculated 

monthly, in arrears, as the product of 

(A) 0.25% and (B) the average of the 

Member’s cash deposit balance in the 

Clearing Fund as of the end of each day, 

for the month, multiplied by the number 

of days in that month and divided by 

360. FICC operates a cost plus low 

margin pricing model. Specifically, 

FICC’s fees are cost-based plus a markup 

or ‘‘low margin.’’ 

(ii) Proposed Changes 

Proposed Modification to the 

Maintenance Fee 

As part of FICC’s annual pricing 

review process and budgeting for 2025, 

FICC identified opportunities to better 

align fees and costs for FICC and 

potentially diversify its liquidity 

resources. In furtherance of these 

objectives, FICC is proposing to change 

the current methodology of the Clearing 

Fund Maintenance Fee for both MBSD 

and GSD. 

As currently calculated, the 

Maintenance Fee effectively 

disincentivizes Member’s from posting 

excess cash as part of a Members 

Required Fund Deposit by imposing a 

0.25% fee on a Member’s cash deposit 

balance in the Clearing Fund. FICC is 

proposing to change the methodology of 

the Maintenance Fee to apply the fee to 

the total Required Fund Deposit instead 

of the cash deposit balance.7 The 

proposed change would also reduce the 

Maintenance Fee percentage from 

0.25% to 0.085%. This change will 

ideally remove the disincentive to 

Members posting excess cash in the 

Clearing Fund, resulting in an increase 

in cash deposits at FICC. 

In addition, FICC continually 

evaluates the composition and 

sufficiency of its liquidity resources in 

line with its liquidity risk management 

strategy and objective. An increase in 

cash deposits to the clearing fund would 

result in additional liquidity resources 

for FICC, thereby improving FICC’s 

ability to manage its liquidity risks. 

Members would be required to continue 

depositing cash as part of its Required 

Fund Deposit, which is currently 

charged a 0.25% fee, however, pursuant 

to the proposed changes, FICC would 

now collect the Maintenance Fee, in a 

manner that does not disincentivize 

excess cash deposits and would 

continue to achieve the Maintenance 

Fee’s purpose of diversifying FICC’s 

liquidity sources and maintaining a 

stable revenue source that would 

contribute to FICC’s operating margins. 

To effectuate the proposed fee change 

described above, for MBSD, the terms 

‘‘0.25%’’ and ‘‘cash deposit balance’’ 

would be changed to ‘‘0.085%’’ and 

‘‘Required Fund Deposit,’’ respectively, 

in (i) the Clearing Fund Maintenance 

Fee in Section I (Fees) of the Schedule 

of Charges Broker Account Group in the 

MBSD Rules, and (ii) the Clearing Fund 

Maintenance Fee of Section I (Fees) of 

the Schedule of Charges Dealer Account 

Group in the MBSD Rules. For GSD, the 

terms ‘‘0.25%’’ and ‘‘cash deposit 

balance’’ would be changed to 

‘‘0.085%’’ and ‘‘Required Fund 

Deposit,’’ respectively, in Section XIII 

(Clearing Fund Maintenance Fee) of the 

Fee Structure in the GSD Rules. 

Expected Member Impact 

The proposed change is revenue 

neutral to FICC but not for FICC 

Members. Impact will vary across 

Members based on their risk profile and 

Required Fund Deposits. FICC projects 

that approximately 13% of Members 

will see a fee increase with only a small 

percentage of those Members seeing an 

increase over $1 million, approximately 

17% of Members seeing a fee reduction 

and 70% of Members remaining neutral. 


khammond on DSK9W7S144PROD with NOTICES
104596 Federal Register / Vol. 89, No. 246 / Monday, December 23, 2024 / Notices 

8 15 U.S.C. 78q–1(b)(3)(D). 

9 17 CFR.17ad–22(e)(23)(ii). 

10 15 U.S.C. 78q–1(b)(3)(D). 

11See Rule 4, GSD Rules and Rule 4, MBSD 

Rules, supra note 5. 

12 Id. 

13 15 U.S.C. 78q–1(b)(3)(D). 

14See supra note 5. 

15 17 CFR 240.17ad–22(e)(23)(ii). 

16 15 U.S.C. 78q–1(b)(3)(D). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f). 

The proposed changes will take effect 

on January 1, 2025. 

Member Outreach 

FICC has conducted ongoing outreach 

to Members to provide them with notice 

of the proposed changes and the 

anticipated impact for the Member. As 

of the date of this filing, no written 

comments relating to the proposed 

changes have been received in response 

to this outreach. The Commission will 

be notified of any written comments 

received. 

Implementation Timeframe 

FICC would implement this proposal 

on January 1, 2025. As proposed, a 

legend would be added to the Rules 

stating there are changes that became 

effective upon filing with the 

Commission but have not yet been 

implemented. The proposed legend also 

would include the date on which such 

changes would be implemented and the 

file number of this proposal, and state 

that, once this proposal is implemented, 

the legend would automatically be 

removed. 

2. Statutory Basis 

FICC believes this proposal is 

consistent with the requirements of the 

Act, and the rules and regulations 

thereunder applicable to a registered 

clearing agency. Specifically, FICC 

believes the proposed changes to modify 

the respective Maintenance Fee of GSD 

and MBSD is consistent with Section 

17A(b)(3)(D) of the Act 8 and Rule 17ad– 

22(e)(23)(ii) 9 thereunder, for the reasons 

described below. 

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

requires that the rules of a clearing 

agency, such as FICC, provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

participants.10 FICC believes that the 

proposed changes to the Maintenance 

Fee are consistent with this provision of 

the Act. 

FICC believes the fee would continue 

to be equitably allocated. More 

specifically, as mentioned above, the 

Maintenance Fee would be charged to 

all Members in proportion to the 

Member’s total Required Fund Deposit. 

As such, and as is currently the case, 

Members that present greater risk to 

FICC would generally be subject to a 

larger Maintenance Fee because such 

Member would typically be required to 

maintain a larger Clearing Fund deposit 

pursuant to the respective MBSD Rules 

or GSD Rules.11 Conversely, Members 

that present less risk to FICC would 

generally be subject to a smaller 

Maintenance Fee because such Members 

would typically be required to maintain 

a smaller Clearing Fund deposit 

pursuant to the respective MBSD Rules 

or GSD Rules.12 For this reason, FICC 

believes the Maintenance Fee would 

continue to be equitably allocated 

among Members. 

FICC also believes the fee is 

reasonable because, as discussed above, 

the proposed fee change would remove 

an unnecessary disincentive for 

Members to post more cash as part of 

their Clearing Fund by modifying the 

Maintenance Fee to base the fee on the 

total Required Fund Deposit rather than 

basing it on the cash component only. 

By removing this disincentive, FICC 

believes Members may post more cash 

as part of their Required Total Fund 

Deposit, providing FICC with access to 

additional liquid resources. For this 

reason, FICC believes the Maintenance 

Fee would continue to be reasonable. 

Based on the forgoing, FICC believes the 

proposed rule change is consistent with 

Section 17A(b)(3)(D) of the Act.13

Rule 17ad–22(e)(23)(ii) under the Act 

requires FICC to establish, implement, 

maintain and enforce written policies 

and procedures reasonably designed to 

provide sufficient information to enable 

participants to identify and evaluate the 

risks, fees, and other material costs they 

incur by participating in the covered 

clearing agency. The proposed fees 

would be clearly and transparently 

published in Section I (Fees) of the 

Schedule of Charges Broker Account 

Group in the MBSD Rules, Section I 

(Fees) of the Schedule of Charges Dealer 

Account Group in the MBSD Rules, and 

Section XIII (Clearing Fund 

Maintenance Fee) of the Fee Structure 

in the GSD Rules, which are available 

on a public website,14 thereby enabling 

Members to identify the fees and costs 

associated with participating in FICC. 

As such, FICC believes the proposed 

rule change is consistent with Rule 

17ad–22(e)(23)(ii) under the Act.15

(B) Clearing Agency’s Statement on 

Burden on Competition 

FICC believes that although Members 

may experience some impact from the 

proposed rule change to modify the 

Maintenance Fee calculation, FICC does 

not believe that the proposed rule 

change would impose a burden on 

competition among its Members that is 

not necessary or appropriate in 

furtherance of the purposes of the Act.16

As described above, the Maintenance 

Fee is charged ratably based on the risk 

that each Member brings to FICC, as 

reflected in Members’ total Required 

Fund Deposit. Thus, the fee is designed 

to be reflective of each Member’s 

individual activity at FICC. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

FICC has 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. 

FICC reserves the right not to respond 

to any comments received. 

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) 17 of the Act and paragraph 

(f) 18 of Rule 19b–4 thereunder. 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, 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 89, No. 246 / Monday, December 23, 2024 / Notices 104597 

19 17 CFR 200.30–3(a)(12). 

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 (www.sec.gov/rules/ 

sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

FICC–2024–012 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–2024–012. 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 (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 

10:00 a.m. and 3:00 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–2024–012 and 

should be submitted on or before 

January 13, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–30520 Filed 12–20–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–425, OMB Control No. 

3235–0468] 

Proposed Collection; Comment 

Request; Reinstatement Without 

Change: Rule 10A–1 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

provided for in Rule 10A–1 (17 CFR 

240.10A–1), under the Securities 

Exchange Act of 1934 (‘‘Act’’) (15 U.S.C. 

78a et seq.). The Commission plans to 

submit this existing collection of 

information to the Office of 

Management and Budget (‘‘OMB’’) for 

reinstatement and approval. 

Rule 10A–1 (17 CFR 240.10A–1) 

implements the reporting requirements 

in Section 10A of the Exchange Act (15 

U.S.C. 78j–1) which was enacted by 

Congress on December 22, 1995 as part 

of the Private Securities Litigation 

Reform Act of 1995, Public Law 104–67, 

109 Stat 737. Under section 10A and 

Rule 10A–1, reporting occurs only if a 

registrant’s board of directors receives a 

report from its auditor that (1) there is 

an illegal act material to the registrant’s 

financial statements, (2) senior 

management and the board have not 

taken timely and appropriate remedial 

action, and (3) the failure to take such 

action is reasonably expected to warrant 

the auditor’s modification of the audit 

report or resignation from the audit 

engagement. The board of directors 

must notify the Commission within one 

business day of receiving such a report. 

If the board fails to provide that notice, 

then the auditor, within the next 

business day, must provide the 

Commission with a copy of the report 

that it gave to the board. 

Likely respondents are those 

registrants filing audited financial 

statements under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a, et 

seq.) and the Investment Company Act 

of 1940 (15 U.S.C. 80a–1, et seq.). 

This information collection 

requirement was previously approved 

by OMB, but the approval expired on 

June 30, 2021. Accordingly, the 

Commission will request a 

reinstatement of OMB’s approval. 

It is estimated that Rule 10A–1 results 

in an aggregate additional reporting 

burden of 5 hours per year. The 

estimated average burden hours are 

solely for purposes of the Paperwork 

Reduction Act and are not derived from 

a comprehensive or even a 

representative survey or study of the 

costs of SEC rules or forms. 

Written comments are invited on: (a) 

whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to Austin Gerig, Director/Chief Data 

Officer, Securities and Exchange 

Commission, c/o Tanya Ruttenberg, 100 

F Street NE, Washington, DC 20549 or 

send an email to: PRA_Mailbox@

sec.gov. 

Dated: December 17, 2024. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–30495 Filed 12–20–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101941; File No. SR-Phlx2024–69] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Options 7, 

Section 9 

December 17, 2024. 

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

Securities Exchange Act of 1934 


khammond on DSK9W7S144PROD with NOTICES