Federal Register / Vol. 90, No. 13 / Wednesday, January 22, 2025 / Notices 7713 

1 15 U.S.C. 78q–1. 

2See Exhibit J. 

3 15 U.S.C. 78s(a); 15 U.S.C. 78q–1(b)(3). 

4 15 U.S.C. 78q–1(a)(2)(A). 

5See Exhibit C and C–1 (narrative description of 

ownership and diagrams of overall CME Group 

structure). 

6See Exhibit E–1 (certificate of incorporation). 

7See Exhibit C–2 (diagram of CMESC’s structure); 

Exhibit E–2B (Board of Directors Charter). 

8See Exhibit E–2C (Risk Management Committee 

Charter); E–2D (Nominating Committee Charter); E– 

2E (Audit Committee Charter), and Exhibit E–2F 

(Regulatory Oversight Committee Charter). 

Materials Under Seal; Filing Acceptance 

Date: January 15, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Jennaca Upperman; Comments Due: 

January 24, 2025. 

4. Docket No(s).: MC2025–1136 and 

K2025–1136; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1311 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 15, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Kenneth Moeller; Comments Due: 

January 24, 2025. 

5. Docket No(s).: MC2025–1137 and 

K2025–1137; Filing Title: USPS Request 

to Add Priority Mail & USPS Ground 

Advantage Contract 597 to the 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: January 15, 2025; 

Filing Authority: 39 U.S.C. 3642, 39 CFR 

3035.105, and 39 CFR 3041.310; Public 

Representative: Kenneth Moeller; 

Comments Due: January 24, 2025. 

6. Docket No(s).: MC2025–1138 and 

K2025–1138; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1312 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 15, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Kenneth Moeller; Comments Due: 

January 24, 2025. 

7. Docket No(s).: MC2025–1139 and 

K2025–1139; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1313 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 15, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Almaroof Agoro; Comments Due: 

January 24, 2025. 

8. Docket No(s).: MC2025–1140 and 

K2025–1140; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1314 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 15, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Almaroof Agoro; Comments Due: 

January 24, 2025. 

9. Docket No(s).: MC2025–1141 and 

K2025–1141; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1315 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 15, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Elsie Lee-Robbins; Comments Due: 

January 24, 2025. 

10. Docket No(s).: MC2025–1142 and 

K2025–1142; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1316 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 15, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Elsie Lee-Robbins; Comments Due: 

January 24, 2025. 

III. Summary Proceeding(s) 

None. See Section II for public 

proceedings. 

This Notice will be published in the 

Federal Register. 

Jennie L. Jbara, 

Primary Certifying Official. 

[FR Doc. 2025–01500 Filed 1–21–25; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102200; File No. 600–44] 

CME Securities Clearing, Inc.; Notice 

of Filing of an Application for 

Registration as a Clearing Agency 

Under Section 17A of the Securities 

Exchange Act of 1934 

January 15, 2025. 

On December 13, 2024, CME 

Securities Clearing, Inc. (‘‘CMESC’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) an 

application on Form CA–1 

(‘‘Application’’) under section 17A of 

the Securities Exchange Act of 1934 

(‘‘Exchange Act’’) seeking to register as 

a clearing agency.1 Specifically, the 

Application states that CMESC is 

applying to register as a clearing agency 

to provide central counterparty clearing 

services to market participants for their 

secondary cash market transactions in 

U.S. Treasury securities and 

transactions in repurchase and reverse 

repurchase agreements involving U.S. 

Treasury securities.2 The Application 

provides detailed information regarding 

how CMESC proposes to satisfy the 

requirements of the Exchange Act. The 

proposed Rules of CMESC are included 

as Exhibit E–3 to CMESC’s Form CA–1 

application. 

The Commission is publishing this 

notice to solicit comments on the 

Application. To grant CMESC’s request 

to register as a clearing agency, the 

Commission must find that it satisfies 

the requirements of the Exchange Act 

and the rules and regulations 

thereunder, including the 

determinations required under 

Exchange Act section 17A(b)(3)(A) 

through (I).3 Pursuant to section 17A of 

the Exchange Act, the Commission is 

directed, having due regard for the 

public interest, the protection of 

investors, the safeguarding of securities 

and funds, and maintenance of fair 

competition among brokers and dealers, 

clearing agencies, and transfer agents, to 

use its authority to: (i) facilitate the 

establishment of a national system for 

the prompt and accurate clearance and 

settlement of transactions in securities 

(other than exempt securities); and (ii) 

facilitate the establishment of linked or 

coordinated facilities for clearance and 

settlement of transactions in securities 

in accordance with the findings and to 

carry out the objectives set forth in 

section 17A.4 The Commission will 

consider any comments it receives in 

making its determination about whether 

to grant CMESC’s request to be 

registered as a clearing agency. 

The Application states that CMESC 

would be wholly owned by its parent 

company, CME Group, Inc.5 CMESC is 

a corporation registered in the state of 

Delaware.6 CMESC would have its own 

Board of Directors, made up of at least 

five independent directors, one member 

representative, and one user 

representative.7 CMESC would also 

have several Board committees, 

including a Nominating Committee, 

Audit Committee, Regulatory Oversight 

Committee, and Risk Management 

Committee.8

CMESC’s proposed Rules describe 

two types of participants: first, 

Members, which would be able to clear 

proprietary Eligible Securities 

Transactions through CMESC and to 

authorize Users with respect to clearing 

Eligible Securities Transactions through 

CMESC; and second, Users, which 


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7714 Federal Register / Vol. 90, No. 13 / Wednesday, January 22, 2025 / Notices 

9See Exhibit J. 

10See id. 

11See id. 

12See id. 

13See id. 

14See Exhibit K; Exhibit M. 

15See Exhibit M. 

16See Exhibit E–5. 

17See 17 CFR 240.17Ad–22, 240.17Ad–25, and 

240.17Ad–26; 17 CFR 242.1000 through 242.1007. 18 17 CFR 200.30–3(a)(16). 

would be authorized by a Member and 

would be further classified as 

Independent Users or Supported Users. 

CMESC states that the primary 

difference between these User Types is 

that an Independent User is obligated to 

post margin and make variation 

payments to CMESC for its Independent 

User Account, whereas that obligation 

falls to a Supported User’s authorizing 

Member in relation to the Supported 

User’s Supported User Account at the 

Corporation. For both types of Users, the 

User is directly liable to the Corporation 

for settlement of their cleared 

transactions.9

A Member that authorizes a User is 

responsible for guaranteeing the 

financial performance of that User 

beyond the margin posted to the User’s 

Account at the Applicant, and in this 

respect Members, but not Users, are 

required to make contributions to the 

Applicant’s Guaranty Fund. A person 

will be admitted as a User only with the 

authorization of a Member and may 

utilize the Clearing Services as a User 

only for so long as it has a Member’s 

authorization in place. In contrast to 

Members, CMESC does not impose 

direct financial responsibility 

requirements on User applicants and 

instead relies upon Members that 

authorize Users to determine the 

appropriate financial responsibility 

standards to impose, based on their 

assessment of a User’s financial 

circumstances and their obligations to 

conduct due diligence of their 

authorized Users.10

In Exhibit J, the Application provides 

information regarding CMESC’s risk 

management framework, which CMESC 

describes as being intended to: (i) 

reduce the potential impact of a 

participant default via credit risk 

management standards and ongoing 

monitoring, and (ii) ensure that CMESC 

has sufficient financial and liquidity 

resources to manage the default of a 

certain number of participants. CMESC 

states that it would use onboarding 

requirements for each of its Members to 

mitigate counterparty risk and would 

apply financial responsibility 

requirements to its Members. CMESC 

may take action against a Member for its 

failure to remain in compliance with 

such requirements. Additionally, 

CMESC states that it would seek to 

mitigate counterparty and liquidity risk 

through various mechanisms, including 

its credit rating process for Members, 

credit limits, daily risk monitoring, 

margin collection, settlement variation 

exchange, backtesting, and stress 

testing.11

With respect to risk management, the 

Application states that CMESC would 

maintain and structure a Guaranty Fund 

using its stress test methodology that is 

designed to ensure that the size of the 

Guaranty Fund is at least equal to the 

largest theoretical loss to the Registrant 

resulting from the Default of two 

Member Families, covering, if 

applicable, a predefined number of User 

accounts, in extreme but plausible 

market conditions.12 The Application 

also states that CMESC would establish 

credit and liquidity ‘‘waterfalls’’ that 

would apply in the event of a default, 

to prevent losses to its Participants and 

minimize the potential for market 

disruption.13

With respect to systems, the 

Application states that CMESC’s 

systems will be hosted in a virtual 

private cloud environment and in 

physical datacenters.14 Among other 

things, the Application describes 

CMESC’s approach to operational 

resilience, availability and disaster 

recovery, and data backup.15

With respect to fees, the Application 

states that CMESC continues to engage 

the marketplace on its ultimate fee 

structure, which it plans to finalize as 

it approaches the launch date for 

operating its clearing agency. The 

Application also states that cleared repo 

and cleared U.S. Treasuries services that 

it offers will operate in a competitive 

environment, which in turn is expected 

to impact fees, and that fees for 

Members and Users will be published 

on CMESC’s website when its clearing 

services are launched after filing a 

proposed rule change with the 

Commission pursuant to section 

19(b)(3)(A) of the Exchange Act.16

CMESC’s application on Form CA–1, 

including each exhibit thereto 

referenced above, is available online at 

www.sec.gov/rules/other/shtml as well 

as in the Commission’s Public Reference 

Room. Interested persons are invited to 

submit written data, views, and 

arguments concerning the Application, 

including whether the application is 

consistent with the Exchange Act and 

the rules and regulations thereunder 

applicable to clearing agencies (e.g., 

Exchange Act Rules 17Ad–22, 17Ad–25, 

17Ad–26, and Regulation SCI, among 

others).17

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/proposed.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number 

600–44 on the subject line. 

Paper Comments 

• Send paper comments to Vanessa 

A. Countryman, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. All 

submissions should refer to File 

Number 600–44. 

To help the Commission process and 

review your comments more efficiently, 

please use only one method of 

submission. The Commission will post 

all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/other.shtml). 

Copies of the Form CA–1, all 

subsequent amendments, all written 

statements with respect to the Form 

CA–1 that are filed with the 

Commission, and all written 

communications relating to the Form 

CA–1 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 Section, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. 

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 600–44 and should be 

submitted on or before March 10, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–01410 Filed 1–21–25; 8:45 am] 

BILLING CODE 8011–01–P 


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