Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36799 

15See supra note 12. 

16Based on OCC data for monthly volume of 

equity-based options and monthly volume of ETFbased options, see id., the Exchange’s market share 

in equity-based options decreased from 11.17% for 

the month of May 2020 to 9.28% for the month of 

May 2021. 

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

18 17 CFR 240.19b–4(f)(2). 

19 15 U.S.C. 78s(b)(2)(B). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

fees to remain competitive with other 

exchanges and to attract order flow to 

the Exchange. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

has more than 16% of the market share 

of executed volume of multiply-listed 

equity and ETF options trades.15

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity & 

ETF options order flow. More 

specifically, in May 2021, the Exchange 

had less than 10% market share of 

executed volume of multiply-listed 

equity & ETF options trades.16

The Exchange believes that the 

proposed rule change reflects this 

competitive environment because it 

modifies the Exchange’s fees and credits 

in a manner that is competitive and 

designed to incent OTP Holders to 

direct trading interest (particularly 

Customer posted interest and 

Professional Customer and NonCustomer liquidity-taking interest) to 

the Exchange, to provide liquidity and 

to attract order flow. To the extent that 

this purpose is achieved, all the 

Exchange’s market participants should 

benefit from the improved market 

quality and increased opportunities for 

price improvement. 

The Exchange believes that the 

proposed change could promote 

competition between the Exchange and 

other execution venues as OTP Holders 

(and their affiliates) may direct their 

order flow to any of the 16 options 

exchanges, including those that offer 

similar pricing incentives and 

discounts. The Exchange also believes 

that the proposed change is designed to 

provide the public and investors with a 

Fee Schedule that is clear and 

consistent, thereby reducing burdens on 

the marketplace and facilitating investor 

protection. 

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 is effective 

upon filing pursuant to Section 

19(b)(3)(A) 17 of the Act and 

subparagraph (f)(2) of Rule 19b–4 18

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 19 of the Act to 

determine whether the proposed rule 

change should be approved or 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2021–58 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–NYSEArca–2021–58. 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 (http://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 the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2021–58, and 

should be submitted on or before 

August 3, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–14794 Filed 7–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92341; File No. SR–FICC– 

2021–004] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing of Proposed Rule Change 

Relating to Confidential Information, 

Market Disruption Events, and Other 

Changes 

July 7, 2021. 

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 June 25, 

2021, 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 

modifications to FICC’s Government 

Securities Division (‘‘GSD’’) Rulebook 

(the ‘‘GSD Rules’’), Mortgage-Backed 

Securities Division (‘‘MBSD’’) Clearing 

Rules (the ‘‘MBSD Clearing Rules’’) and 


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3Capitalized terms not defined herein are defined 

in the GSD Rules, MBSD Clearing Rules or the EPN 

Rules, as applicable, available at https://

www.dtcc.com/legal/rules-and-procedures. 

4Section 5 of GSD Rule 2A, supra note 3. GSD 

Rule 2A relates to initial membership requirements 

including information that FICC may require 

applicants to furnish to become Members of FICC. 5Section 4 of GSD Rule 3, supra note 3. GSD Rule 

3 relates to ongoing membership requirements 

including information that FICC may require 

Members to furnish to FICC to continue 

membership at FICC. 6Section 10 of GSD Rule 3, supra note 3. Section 

10 of GSD Rule 3 states that the books and records 

of Members, and in the case of a Registered 

Investment Company Netting Member, their 

Controlling Management, shall be open to 

inspection and that FICC shall be furnished certain 

information. 

7Section 2(j) of GSD Rule 3A, supra note 3. GSD 

Rule 3A relates to the rights, liabilities and 

obligations of Sponsoring Members and Sponsored 

Members including information that FICC may 

require Sponsoring Members, Sponsored Members 

and applicants to become Sponsoring Members or 

Sponsored Members, to furnish to FICC. 

8Section 3(e) of GSD Rule 3B, supra note 3. GSD 

Rule 3B relates to the rights, liabilities and 

obligations of CCIT Members including information 

that FICC may require CCIT Members and 

applicants to become CCIT Members to furnish to 

FICC. 

9Section 5(k) of GSD Rule 3B, supra note 3. 

Section 5(k) of GSD Rule 3B states that the books 

and records of CCIT Members, and their Controlling 

Management, shall be open to inspection and that 

FICC shall be furnished certain information. 

10Section 6 of MBSD Rule 2A, supra note 3. 

MBSD Rule 2A relates to initial membership 

requirements including information that FICC may 

require applicants to furnish to become Clearing 

Members of FICC. 

11Section 3 of MBSD Rule 3, supra note 3. MBSD 

Rule 3 relates to ongoing membership requirements 

including information that FICC may require 

Members to furnish to FICC to continue 

membership in FICC. 

12Section 9 of MBSD Rule 3, supra note 3. 

Section 9 of MBSD Rule 3 states that the books and 

records of Members shall be open to inspection and 

that FICC shall be furnished certain information. 

13Section 9 of EPN Rule 1 of Article III of the EPN 

Rules, supra note 3. Rule 1 of Article III of the EPN 

Rules relates to initial and ongoing requirements to 

become and continue to be an EPN User including 

information that FICC may require applicants or 

EPN Users to provide to FICC. 

MBSD EPN Rules (the ‘‘EPN Rules,’’ and 

collectively with the GSD Rules and the 

MBSD Clearing Rules, the ‘‘Rules’’) 3 to 

(i) revise certain provisions in the Rules 

relating to the confidentiality of 

information furnished by applicants, 

Members and EPN Users (collectively, 

‘‘participants’’) to FICC, (ii) require that 

each participant maintain confidential 

information furnished by FICC or its 

affiliates in confidence and restrict use 

and disclosure of such information, (iii) 

add certain officers who are allowed to 

determine that there is a Market 

Disruption Event pursuant to GSD Rule 

50 and MBSD Rule 40 and (iv) add a 

new GSD Rule 50A and MBSD Rule 40A 

to address situations in which it is 

necessary to disconnect a Member, EPN 

User, third party service provider, or 

service bureau due to an imminent 

threat of harm to FICC, Members, EPN 

Users and/or other market participants. 

Each of the proposed changes is 

described in greater detail below. 

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 proposed rule change consists of 

modifications to (i) revise certain 

provisions in the Rules relating to the 

confidentiality of information furnished 

by participants to FICC, (ii) require that 

each participant maintain confidential 

information furnished by FICC or its 

affiliates in confidence and restrict use 

and disclosure of such information, (iii) 

add certain officers who are allowed to 

determine that there is a Market 

Disruption Event pursuant to GSD Rule 

50 and MBSD Rule 40 and (iv) add a 

new GSD Rule 50A and MBSD Rule 40A 

to address situations in which it is 

necessary to disconnect a Member, EPN 

User, third party service provider, or 

service bureau due to an imminent 

threat of harm to FICC, Members, EPN 

Users and/or other market participants. 

Each of the proposed changes is 

described in greater detail below. 

(i) FICC Confidentiality Requirements 

Section 5 of GSD Rule 2A,4 Section 4 

of GSD Rule 3,5 Section 10 of GSD Rule 

3,6 Section 2(j) of GSD Rule 3A,7 Section 

3(e) of GSD Rule 3B,8 Section 5(k) of 

GSD Rule 3B,9 Section 6 of MBSD Rule 

2A,10 Section 3 of MBSD Rule 3,11

Section 9 of MBSD Rule 3 12 and Section 

9 of EPN Rule 1 of Article III of the EPN 

Rules 13 each contain provisions relating 

to confidentiality of information 

furnished by participants to FICC 

(collectively, the ‘‘FICC Confidentiality 

Requirements’’). Each of the FICC 

Confidentiality Requirements provides 

that either (a) such furnished 

information will be held by FICC in the 

same degree of confidence as may be 

required by law or the rules and 

regulations of the appropriate regulatory 

body having jurisdiction over the 

participant or (b) the rights of FICC to 

inspect books and records or receive 

information is subject to any applicable 

laws or rules or regulations of regulatory 

bodies having jurisdiction over the 

participant that relate to confidentiality 

of records. FICC is proposing to update 

the FICC Confidentiality Requirements 

because such provisions (i) may result 

in unequal treatment of participants due 

to differing laws or regulations of 

regulatory bodies, (ii) may result in a 

potential conflict of laws where rules or 

regulations governing a regulatory body 

of a participant differ from the laws 

applicable to FICC, or a participant has 

multiple regulatory bodies whose rules 

conflict, (iii) are burdensome as they 

require FICC to track the rules and 

regulations of each regulatory body of 

its participants, and ensure that 

information provided by participants to 

FICC is held in confidence to the same 

degree as it is held by such regulatory 

bodies, or to determine what applicable 

laws or rules or regulations of regulatory 

bodies that relate to confidentiality of 

records affect FICC’s rights to receive 

information and (iv) are unnecessary as 

FICC has sufficient protections in place 

relating to protection and 

confidentiality of participant data. 

The regulatory bodies that have 

jurisdiction over participants differ by 

participant depending on certain criteria 

of each participant, including the type 

of entity of the participant, where the 

participant was organized, the types of 

businesses in which the participant 

engages and where the participant is 

doing business. In addition, many 

participants are regulated by more than 

one regulatory body. As a result, a 

requirement to maintain confidentiality 

standards for information provided by a 

participant or the right to receive 

information based on the regulatory 

body or bodies that regulate such 

participant result in varying standards 

of confidentiality for participants that 

are regulated by different regulatory 

bodies. Such varying standards may 

result in unequal treatment of 

participants due to differing laws or 

regulations of the regulatory body or 

bodies governing such participants. In 

addition, such varying standards may 

result in a potential conflict of laws 

where rules or regulations governing a 

regulatory body of a participant differ 

from the laws applicable to FICC or an 

entity that has multiple regulatory 

bodies whose rules conflict. 

FICC believes that it is unnecessarily 

burdensome to determine the rules and 

regulations of each of the regulatory 

bodies that regulate its participants. 


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14 DTCC provides a set of core business processes 

for FICC and DTCC’s other subsidiaries, including 

the technology systems and networks that provide 

connectivity between FICC and its participants and 

that provide the ability of FICC to provide the 

services as required under its Rules. Most corporate 

functions are established and managed on an 

enterprise-wide basis pursuant to intercompany 

agreements under which it is generally DTCC that 

provides relevant services to FICC and DTCC’s 

other subsidiaries. 

15 GSD Rule 50 and MBSD Rule 40, supra note 

3. The Force Majeure Rule is identical in the GSD 

Rules and the MBSD Rules. 

16 Id. 

17See Section 5 of EPN Rule 1 of Article III of 

the EPN Rules, supra note 3. 

18 Id. 

19Section 2 of GSD Rule 50 and Section 2 of 

MBSD Rule 40, supra note 3. 

Such regulatory bodies include 

numerous U.S. federal and state 

regulators as well as foreign national, 

state and local regulators. FICC proposes 

revising the language in the FICC 

Confidentiality Requirements to 

maintain one confidentiality standard 

for all participants rather than 

maintaining potentially different 

confidentiality standards for 

participants based on the various, 

unrelated regulatory bodies regulating 

such participants. FICC is proposing to 

replace the existing language in the 

FICC Confidentiality Requirements with 

language that would provide that FICC 

will hold non-public information 

furnished pursuant to those Rules in 

confidence as may be required under 

the law or the rules and regulations 

applicable to FICC that relate to the 

confidentiality of records. Such laws, 

rules and regulations would include 

national, state and foreign laws 

governing confidentiality of data that 

are applicable to FICC in connection 

with its collection and disclosure of 

data. 

FICC believes that the rules and 

regulations applicable to FICC 

governing the use and disclosure of 

confidential information provide 

standards that are representative of 

those of the various regulatory bodies 

governing its participants. As a result, 

FICC does not believe that the proposed 

rule change relating to the FICC 

Confidentiality Requirements would 

result in any change to FICC’s practices 

relating to data protection and 

confidentiality of information provided 

by participants. 

(ii) Participant Confidentiality 

Requirements 

Historically, FICC has generally not 

provided, nor been requested to 

provide, information that contains 

confidential or proprietary information 

of FICC or its affiliates to its participants 

except for information necessary for 

participants and their service providers 

and service bureaus to connect to FICC 

and to participate in the services that 

FICC offers to its participants. While 

certain information is protected by 

intellectual property rights of FICC and 

its affiliates under applicable 

intellectual property laws, such as 

copyright laws and trademark laws, the 

Rules do not include any express 

obligations for participants to protect 

confidential information received by 

them from FICC or its affiliates. 

In connection with the development 

of cyber and information security 

programs pursuant to applicable 

regulatory requirements by participants, 

FICC and its parent company, The 

Depository Trust & Clearing Corporation 

(‘‘DTCC’’), have received an increasing 

number of requests from participants for 

confidential and proprietary 

information of FICC and DTCC.14 This 

includes, for example, information 

regarding DTCC’s network operations 

and data security practices, legal 

settlements, and other information. 

Additionally, in the event there is a 

cyber incident relating to a participant, 

FICC or DTCC may be requested to 

disclose confidential information 

regarding its cyber threat indicators, 

sources of cyber threat information, or 

other information and actions taken 

related to a cyber event. 

In order to provide for contractual 

protections for such confidential 

information of DTCC, FICC and DTCC’s 

other subsidiaries, FICC is proposing to 

add provisions to the Rules that would 

require participants to maintain 

confidential information of FICC and its 

affiliates that FICC provides to such 

participants in confidence and not to 

disclose such confidential information 

except as necessary to perform such 

participant’s obligations under FICC’s 

Rules or as otherwise required by 

applicable law (‘‘Participant 

Confidentiality Requirements’’). The 

Participant Confidentiality 

Requirements would provide that in the 

event of a breach of the Participant 

Confidentiality Requirements, FICC or 

DTCC would be entitled to seek any 

temporary or permanent injunctive or 

other equitable relief in addition to any 

monetary damages under the Rules. In 

addition, as with any failure to comply 

with its Rules, FICC would have the 

ability to impose other disciplinary 

proceedings or restrictions on access to 

services as provided in the Rules for 

failure to comply with the Participant 

Confidentiality Requirements. 

(iii) Market Disruption Events 

GSD Rule 50 and MBSD Rule 40 

(Market Disruption and Force 

Majeure) 15 (the ‘‘Force Majeure Rule’’) 

contain provisions that identify the 

events or circumstances that would be 

considered a Market Disruption Event, 

including, for example, events that lead 

to the suspension or limitation of 

trading or banking in the markets in 

which FICC operates, or the 

unavailability or failure of any material 

payment, bank transfer, wire or 

securities settlement systems.16 The 

Force Majeure Rule set forth in MBSD 

Rule 40 is also incorporated into the 

EPN Rules, and EPN Users are treated as 

Members for purposes of the EPN Rules, 

and references to ‘‘Rules’’ and 

‘‘Procedures’’ are treated as references to 

EPN Rules for purposes of the EPN 

Rules.17 Under the Force Majeure Rule, 

during the pendency of a Market 

Disruption Event, FICC would be 

entitled to (i) suspend the provision of 

any or all services and (ii) take, or 

refrain from taking, or require Members 

to take, or refrain from taking, any 

actions FICC considers appropriate to 

address, alleviate, or mitigate the event 

and facilitate the continuation of FICC’s 

services as may be practicable.18

Section 2 of the Force Majeure Rule 

provides that the Board of Directors may 

determine the existence of a Market 

Disruption Event and the actions to be 

taken in response thereto.19 However, if 

the Board of Directors is unable to 

convene, the Force Majeure Rule 

provides that certain officers may make 

such determination, on an interim basis, 

which determination is then ratified, 

modified or rescinded as soon as 

practicable by the Board of Directors. 

The officers that may make such 

determination are all senior executive 

officers of FICC: Chief Executive Officer, 

Chief Financial Officer, Group Chief 

Risk Officer and General Counsel. 

The proposed rule change would add 

two senior executive officers of FICC, 

the Chief Information Officer and the 

Head of Clearing Agency Services, to the 

list of officers that could make such 

determination if the Board of Directors 

is unable to convene. These two officers, 

like the other senior executive officers 

currently listed in the Rules, maintain 

senior executive level positions at FICC, 

oversee divisions of FICC, and hold 

positions at FICC that would provide 

them a necessary global view into 

FICC’s operations and systems to enable 

them to determine the existence of a 

Market Disruption Event in the event 

that the Board of Directors in unable to 

convene. Adding these two additional 

officers would facilitate FICC’s ability to 

implement its emergency procedures in 

the event of a Market Disruption Event. 


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20Some Members use third parties to connect to 

FICC’s systems and/or to send data to FICC and 

receive data from FICC on the Member’s or EPN 

User’s behalf. Such third parties are referred to as 

‘‘service providers’’ or ‘‘service bureaus’’ herein. 

21Affiliate is defined in GSD Rule 1 and MBSD 

Rule 1, as applicable, and is intended to cover 

DTCC and DTCC’s other subsidiaries that use 

shared systems with FICC. GSD Rule 1 and MBSD 

Rule 1, supra note 3. See description of the shared 

systems of DTCC, FICC and DTCC’s other 

subsidiaries, supra note 14. 

22Section 5 of GSD Rule 2A, supra note 3. 

23Section 4 of GSD Rule 3, supra note 3. 

24Section 10 of GSD Rule 3, supra note 3. 

25Section 2(j) of GSD Rule 3A, supra note 3. 

26Section 3(e) of GSD Rule 3B, supra note 3. 

27Section 5(k) of GSD Rule 3B, supra note 3. 

28Section 6 of MBSD Rule 2A, supra note 3. 

29Section 3 of MBSD Rule 3, supra note 3. 

30Section 9 of MBSD Rule 3, supra note 3. 

31Section 9 of EPN Rule 1 of Article III of the EPN 

Rules, supra note 3. 

(iv) Systems Disconnect: Threat of 

Significant Impact to FICC’s Systems 

The proposed rule change would add 

a new GSD Rule 50A and an identical 

new MBSD Rule 40A (Systems 

Disconnect: Threat of Significant Impact 

to the Corporation’s Systems) (‘‘Systems 

Disconnect Rule’’) that would address 

situations in which FICC determines it 

is necessary for FICC to disconnect a 

single or limited number of Members, or 

third party service providers or service 

bureaus used by Members to connect to 

FICC20 (collectively, ‘‘DTCC Systems 

Participants’’) from FICC’s systems or 

network due to an imminent threat of 

harm to FICC’s or DTCC’s systems. The 

imminent threat could be the result of 

a system disruption or cyber incident 

applicable to the DTCC Systems 

Participants. This would allow DTCC to 

work with the affected participants 

while protecting FICC, its systems and 

its other participants. Like the Force 

Majeure Rule set forth in MBSD Rule 40, 

the new MBSD Rule 40A would be 

incorporated into the EPN Rules, and 

EPN Users would be treated as 

Members, and references to ‘‘Rules’’ and 

‘‘Procedures’’ would be treated as 

references to EPN Rules for purposes of 

the EPN Rules. 

The proposed Systems Disconnect 

Rule would be structured similarly to 

the Force Majeure Rule. The Systems 

Disconnect Rule would address FICC’s 

authority to take certain actions upon 

the occurrence, and during the 

pendency, of a Major Event. A ‘‘Major 

Event’’ would be defined as the 

happening of one or more ‘‘Systems 

Disruption(s)’’ (as defined below) that is 

reasonably likely to have a significant 

impact on FICC’s operations, including 

the ‘‘DTCC Systems’’ (as defined below), 

that affect the business, operations, 

safeguarding of securities or funds, or 

physical functions of Members and/or 

other market participants. ‘‘Systems 

Disruption’’ would be defined as the 

unavailability, failure, malfunction, 

overload, or restriction (whether partial 

or total) of a DTCC Systems Participant’s 

systems that disrupts or degrades the 

normal operation of such DTCC Systems 

Participant’s systems; or anything that 

impacts or alters the normal 

communication or the files that are 

received, or information transmitted, to 

or from the DTCC Systems. ‘‘DTCC 

Systems’’ would be defined as the 

systems, equipment and technology 

networks of DTCC, FICC and/or their 

Affiliates,21 whether owned, leased, or 

licensed, software, devices, IP addresses 

or other addresses or accounts used in 

connection with providing the services 

set forth in the Rules, or used to transact 

business or to manage the connection 

with FICC. 

The proposed Systems Disconnect 

Rule would allow FICC to mitigate the 

effect of such events by facilitating the 

continuity of services (or, if deemed 

necessary, the temporary suspension of 

services). To that end, under the 

proposed Systems Disconnect Rule, 

FICC would be entitled, during the 

pendency of a Major Event, to (1) 

disconnect a DTCC Systems 

Participant’s systems from the DTCC 

Systems, (2) suspend the receipt and/or 

transmission of files or communications 

to or from the DTCC Systems Participant 

to the DTCC Systems and/or (3) take, or 

refrain from taking, or require a DTCC 

Systems Participant to take or refrain 

from taking, any actions that FICC 

considers appropriate to prevent, 

address, correct, mitigate or alleviate the 

Major Event and facilitate the 

continuation of services as may be 

practicable and, in that context, issue 

instructions to the DTCC Systems 

Participant. 

The proposed Systems Disconnect 

Rule would define the governance 

procedures for how FICC would 

determine whether, and how, to 

implement the provisions of the rule. A 

determination that a Major Event has 

occurred could be made by the same 

officers with delegated authority under 

the Force Majeure Rule as discussed 

above (an ‘‘Officer Major Event 

Action’’). Following this determination, 

any management committee on which 

all of the foregoing officers serve would 

convene, and FICC would convene a 

Board of Directors meeting as soon as 

practicable thereafter, and in any event 

within five Business Days following 

such determination, in each case, to 

ratify, modify, or rescind the Officer 

Major Event Action. The proposed 

Systems Disconnect Rule would require 

Members to notify FICC immediately 

upon becoming aware of a Major Event, 

and, likewise, would require FICC to 

promptly notify the DTCC Systems 

Participant(s) of any action FICC takes 

or intends to take with respect to such 

DTCC Systems Participant(s) pursuant 

to the proposed rule. 

Finally, the Systems Disconnect Rule 

would address certain miscellaneous 

matters including: (i) A limitation of 

liability for any failure or delay in 

performance, in whole or in part of 

FICC’s obligations under the Rules, 

arising out of or related to a Major 

Event, (ii) a statement that the power of 

FICC to take any action pursuant to the 

Systems Disconnect Rule also includes 

the power to repeal, rescind, revoke, 

amend or vary such action, (iii) a 

statement that the powers of FICC 

pursuant to the Systems Disconnect 

Rule shall be in addition to and not in 

derogation of, authority granted 

elsewhere in the Rules to take action as 

specified therein, (iv) a requirement that 

Members shall keep any DTCC 

Confidential Information (as defined 

below) provided to them by FICC and/ 

or in connection with a Major Event 

confidential and (v) a statement that in 

the event of any conflict between the 

provisions of the Systems Disconnect 

Rule and any other Rules or Procedures, 

the provisions of the Systems 

Disconnect Rule would prevail. 

(v) Proposed Rule Changes 

The proposed rule change would 

amend the Rules to make the following 

changes to implement the changes 

discussed above: 

FICC Confidentiality Requirements 

Changes 

The proposed rule change would 

amend the FICC Confidentiality 

Requirements in Section 5 of GSD Rule 

2A,22 Section 4 of GSD Rule 3,23 Section 

10 of GSD Rule 3,24 Section 2(j) of GSD 

Rule 3A,25 Section 3(e) of GSD Rule 

3B,26 Section 5(k) of GSD Rule 3B,27

Section 6 of MBSD Rule 2A,28 Section 

3 of MBSD Rule 3,29 Section 9 of MBSD 

Rule 3 30 and Section 9 of EPN Rule 1 

of Article III of the EPN Rules.31 to state 

as follows: 

[A]ny non-public information 

furnished to the Corporation pursuant to 

this Rule shall be held in confidence as 

may be required under the laws, rules 

and regulations applicable to the 

Corporation that relate to the 

confidentiality of records. 

As discussed above, the proposed 

language is intended to provide one 


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32Section 5 of GSD Rule 2A, supra note 3. 

33Section 4 of GSD Rule 3, supra note 3. 

34Section 2(j) of GSD Rule 3A, supra note 3. 

35Section 3(e) of GSD Rule 3B, supra note 3. 

36 GSD Rule 29, supra note 3. 

37MBSD Rule 22, supra note 3. 

38Section 6 of MBSD Rule 2A, supra note 3. 

39Section 3 of MBSD Rule 3, supra note 3. 

40Section 5 of GSD Rule 2A, supra note 3. 

41Section 4 of GSD Rule 3, supra note 3. 

42Section 2(j) of GSD Rule 3A, supra note 3. 

43Section 3(e) of GSD Rule 3B, supra note 3. 

44Section 6 of MBSD Rule 2A, supra note 3. 

45Section 3 of MBSD Rule 3, supra note 3. 

46Section 9 of EPN Rule 1 of Article III of the EPN 

Rules, supra note 3. 

47 GSD Rule 1 and MBSD Rule 1, supra note 3. 

48 GSD Rule 22D and MBSD Rule 17B, supra note 

3. 

49 GSD Rule 50 and MBSD Rule 40, supra note 

3. 

50 GSD Rule 3A, Section 17(b), supra note 3. 

51 GSD Rule 3B, Section 17(a), supra note 3. 

52 GSD Rule 13, Section 4(m), supra note 3. 

53MBSD Rule 3A, Section (m), supra note 3. 

54Section 5 of EPN Rule 1 of Article III of the EPN 

Rules, supra note 3. 

55 15 U.S.C. 78q–1(b)(3)(F). 

56 17 CFR 240.17Ad–22(e)(1) and (e)(21). 

standard that FICC would apply 

uniformly to all participants, which 

assures participants that such 

information would be held in 

confidence with appropriate controls. 

FICC would add ‘‘non-public’’ when 

describing the information that is 

subject to the FICC Confidentiality 

Requirements to make it clear that such 

requirements would only apply to 

information that is not public. In 

addition, in Section 5 of GSD Rule 2A,32

Section 4 of GSD Rule 3,33 Section 2(j) 

of GSD Rule 3A 34 and Section 3(e) of 

GSD Rule 3B,35 FICC would remove the 

phrase ‘‘Except as otherwise provided in 

Rule 29’’ or ‘‘Except as otherwise 

provided in Rule 29 (Clearing Data)’’ 

because the exception would no longer 

be needed with the addition of the 

proposed language. GSD Rule 29 36

relates to the ability of FICC to release 

‘‘Clearing Data’’ under certain 

circumstances. Because GSD Rule 29 

would be a rule applicable to FICC, it 

would be covered by the proposed 

language which states that FICC would 

hold the information in confidence 

subject to rules applicable to it. FICC 

would remove a similar reference to 

MBSD Rule 22 37 in Section 6 of MBSD 

Rule 2A 38 and Section 3 of MBSD Rule 

3 39 for the same reason. FICC would 

also amend a sentence in the Board 

Statements of Policy in the GSD Rules 

that references the FICC Confidentiality 

Requirements set forth in GSD Rule 3 to 

reflect the proposed updated language. 

Certain Rules relating to FICC 

Confidentiality Requirements would 

also include language relating to 

Participant Confidentiality 

Requirements as described below. 

Participant Confidentiality 

Requirements 

In order to provide for Participant 

Confidentiality Requirements, FICC 

would add provisions in Section 5 of 

GSD Rule 2A,40 Section 4 of GSD Rule 

3,41 Section 2(j) of GSD Rule 3A,42

Section 3(e) of GSD Rule 3B,43 Section 

6 of MBSD Rule 2A,44 Section 3 of 

MBSD Rule 3,45 and Section 9 of EPN 

Rule 1 of Article III of the EPN Rules 46

to state that each participant shall 

maintain DTCC Confidential 

Information in confidence to the same 

extent and using the same means it uses 

to protect its own confidential 

information, but no less than a 

reasonable standard of care, and shall 

not use DTCC Confidential Information 

or disclose DTCC Confidential 

Information to any third party except as 

necessary to perform its obligations 

under the Rules or as otherwise required 

by applicable law. FICC would add a 

new definition of DTCC Confidential 

Information in GSD Rule 1 and MBSD 

Rule 1 47 to provide that ‘‘DTCC 

Confidential Information’’ would mean 

all non-public information provided by 

DTCC and/or FICC that (i) is marked or 

otherwise identified in writing prior to 

disclosure to the recipient as 

confidential, (ii) is designated by DTCC 

or FICC as confidential, or (iii) the 

recipient knows or, under the 

circumstances surrounding disclosure, 

ought to reasonably know is 

confidential. FICC would also add a 

definition of DTCC in GSD Rule 1 and 

MBSD Rule 1, and remove a 

corresponding definition in GSD Rule 

22D and MBSD Rule 17B 48 since it 

would be defined in GSD Rule 1 and 

MBSD Rule 1. 

FICC would also add a statement in 

each provision relating to Participant 

Confidentiality Requirements that each 

participant acknowledges that a breach 

of its confidentiality obligations under 

the Rules may result in serious and 

irreparable harm to FICC and/or DTCC 

for which there is no adequate remedy 

at law. In the event of such a breach by 

the participant, FICC and/or DTCC 

would be entitled to seek any temporary 

or permanent injunctive or other 

equitable relief in addition to any 

monetary damages. 

Force Majeure Rule Officer Additions 

The proposed rule change would add 

the Chief Information Officer and the 

Head of Clearing Agency Services to the 

list of officers that could make a 

determination of a Market Disruption 

Event if the Board of Directors is unable 

to convene in GSD Rule 50 and MBSD 

Rule 40.49

Systems Disconnect Rule 

The proposed rule change would add 

a new GSD Rule 50A and MBSD Rule 

40A entitled ‘‘Systems Disconnect: 

Threat of Significant Impact to the 

Corporation’s Systems’’ that would 

address situations in which FICC 

determines it is necessary for FICC to 

disconnect a DTCC Systems Participant 

or DTCC Systems Participants from 

FICC’s systems or network due to an 

imminent threat of harm to FICC’s or 

DTCC’s systems consistent with the 

description above. The proposed 

Systems Disconnect Rule would include 

new definitions for ‘‘DTCC Systems,’’ 

‘‘DTCC Systems Participant,’’ ‘‘Major 

Event’’ and ‘‘Systems Disruption’’ 

consistent with the descriptions of the 

Systems Disconnect Rule above. 

References to the new GSD Rule 50A 

would be added to GSD Rule 3A, 

Section 17(b),50 GSD Rule 3B, Section 

17(a) 51 and GSD Rule 13, Section 

4(m),52 in each case, to reflect that the 

new GSD Rule 50A would apply to 

Sponsored Members and Sponsoring 

Members, CCIT Members and FundsOnly Settling Bank Members, 

respectively, in the same manner as 

other GSD Rules, including GSD Rule 

50. References to the new MBSD Rule 

40A would be added to MBSD Rule 3A, 

Section (m) 53 to reflect that the new 

MBSD Rule 40A would apply to Cash 

Settling Bank Members in the same 

manner as other MBSD Rules, including 

MBSD Rule 40. References to the new 

MBSD Rule 40A would also be added to 

Section 5 of EPN Rule 1 of Article III of 

the EPN Rules 54 to reflect that the new 

MBSD Rule 40A would be incorporated 

into the EPN Rules in the same manner 

as other MBSD Rules, including MBSD 

Rule 40. 

2. Statutory Basis 

FICC believes that the proposal is 

consistent with the requirements of the 

Act, and the rules and regulations 

thereunder applicable to a registered 

clearing agency. In particular, FICC 

believes that each of the proposed rule 

changes is consistent with Section 

17A(b)(3)(F) of the Act,55 and Rules 

17Ad–22(e)(1) and (e)(21) 56

promulgated under the Act. In addition, 

FICC believes that the proposed changes 

to add the two senior executive officers 

in the Force Majeure Rule and to add 

the proposed Systems Disconnect Rule 


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57 17 CFR 240.17Ad–22(e)(2) and (e)(17). 

58 15 U.S.C. 78q–1(b)(3)(F). 

59Section 5 of GSD Rule 2A, supra note 3. 

60Section 4 of GSD Rule 3, supra note 3. 

61Section 10 of GSD Rule 3, supra note 3. 

62Section 2(j) of GSD Rule 3A, supra note 3. 

63Section 3(e) of GSD Rule 3B, supra note 3. 

64Section 5(k) of GSD Rule 3B, supra note 3. 

65Section 6 of MBSD Rule 2A, supra note 3. 

66Section 3 of MBSD Rule 3, supra note 3. 

67Section 9 of MBSD Rule 3, supra note 3. 

68Section 9 of EPN Rule 1 of Article III of the EPN 

Rules, supra note 3. 

69 15 U.S.C. 78q–1(b)(3)(F). 

70 Id. 71 Id. 

are consistent with Rules 17Ad–22(e)(2) 

and (e)(17) under the Act.57

Section 17A(b)(3)(F) 

Section 17A(b)(3)(F) of the Act 58

requires, in part, that the Rules be 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions, to assure the 

safeguarding of securities and funds 

which are in the custody or control of 

FICC or for which it is responsible and 

to remove impediments to and perfect 

the mechanism of a national system for 

the prompt and accurate clearance and 

settlement of securities transactions. 

FICC believes that the proposed 

changes revising the FICC 

Confidentiality Requirements and 

adding the Participant Confidentiality 

Requirements are each consistent with 

this provision of the Act. The proposed 

revisions to the FICC Confidentiality 

Requirements are consistent with this 

provision because the proposed 

revisions would provide a clear and 

consistent standard relating to how 

FICC holds the information furnished by 

participants pursuant to Section 5 of 

GSD Rule 2A,59 Section 4 of GSD Rule 

3,60 Section 10 of GSD Rule 3,61 Section 

2(j) of GSD Rule 3A,62 Section 3(e) of 

GSD Rule 3B,63 Section 5(k) of GSD 

Rule 3B,64 Section 6 of MBSD Rule 

2A,65 Section 3 of MBSD Rule 3,66

Section 9 of MBSD Rule 3 67 and Section 

9 of EPN Rule 1 of Article III of the EPN 

Rules.68 The confidential information 

that FICC receives pursuant to these 

Rules is used by FICC to determine 

whether to admit a participant as a 

Member or EPN User, to continue to 

allow such participant to be a Member 

or EPN User, or to better understand the 

risks relating to each participant. 

Providing a clear and consistent 

standard would facilitate this process by 

allowing participants to better 

understand FICC’s obligations with 

respect to such information and 

providing a uniform obligation for FICC 

with respect to such information. FICC 

believes that facilitating the ability of 

FICC to evaluate participants would 

promote the prompt and accurate 

clearance and settlement of securities 

transactions by FICC. As such, FICC 

believes the proposed rule changes are 

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

the Act.69

FICC also believes that the proposed 

rule change adding the Participant 

Confidentiality Requirements is 

consistent with this provision of the Act 

because the proposed revisions to the 

Participant Confidentiality 

Requirements would provide a clear and 

consistent contractual obligation for 

participants who are requesting 

confidential information from FICC. 

Having clear and consistent Rules 

would help participants to better 

understand their rights and obligations 

regarding FICC’s clearance and 

settlement services. The information 

requested by participants that would be 

subject to the Participant Confidentiality 

Requirements would be used by 

participants to determine whether to 

participate in FICC’s services, FICC 

system requirements and FICC system 

safeguards. FICC believes that when 

Members and EPN Users better 

understand their rights and obligations 

regarding FICC’s clearance and 

settlement services, they can better act 

in accordance with the Rules. FICC 

believes that better enabling Members 

and EPN Users to comply with the Rules 

would promote the prompt and accurate 

clearance and settlement of securities 

transactions by FICC. As such, FICC 

believes the proposed rule changes are 

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

the Act.70

FICC believes that the proposed 

changes to add the two officers to make 

a determination of a Market Disruption 

Event and to add the Systems 

Disconnect Rule in the GSD Rules and 

the MBSD Rules are also consistent with 

this provision of the Act because those 

changes would enhance and streamline 

FICC’s ability to take necessary actions 

in the event of a Market Disruption 

Event or a Major Event. Improving the 

ability of FICC to react to a Market 

Disruption Event or a Major Event 

would allow FICC to protect its 

participants and their ability to 

promptly and accurately clear and settle 

securities transactions, and allow FICC 

to safeguard securities and funds that 

are in its custody or control. In 

particular, allowing two additional 

officers that are able to make an interim 

determination of a Market Disruption 

Event in the event that the Board of 

Directors is unable to convene would 

add additional flexibility and tools to 

FICC while maintaining proper risk 

controls and improve the ability of FICC 

to act in the event of a Market 

Disruption Event. Also, providing for 

the ability of FICC to disconnect DTCC 

Systems Participants, suspend the 

receipt or transmission of files or 

communications to or from a DTCC 

Systems Participant, and/or require the 

DTCC Systems Participant to take such 

other actions as are necessary to protect 

FICC and its participants would, in each 

case, provide additional tools for FICC 

in the event of a Major Event. 

Improving the governance around the 

determination of a Market Disruption 

Event, and the implementation of 

procedures allowing FICC to disconnect 

a DTCC Systems Participant or DTCC 

Systems Participants from FICC’s 

systems or network due to an imminent 

threat of harm, would improve FICC’s 

ability to address and minimize losses 

to FICC and its participants. Risks, 

threats and potential vulnerabilities due 

to a Market Disruption Event or a Major 

Event could impact FICC’s ability to 

clear and settle securities transactions, 

or to safeguard the securities and funds 

which are in its custody or control, or 

for which it is responsible. In addition, 

providing governance around the ability 

to disconnect a DTCC Systems 

Participant that is having a systems 

disruption that could disrupt the ability 

of FICC or other DTCC Systems 

Participants from using FICC’s systems 

would remove impediments to and 

perfect the mechanism of a national 

system for the prompt and accurate 

clearance and settlement of securities 

transactions. Although disconnecting or 

limiting the service of a DTCC Systems 

Participant in the event of a Major Event 

would likely be an impediment to such 

DTCC Systems Participant, improving 

FICC’s ability to address and minimize 

losses to FICC and its participants, and 

reducing risks, threats and potential 

vulnerabilities due to a Major Event that 

could impact FICC’s ability to clear and 

settle securities transactions, or to 

safeguard the securities and funds 

which are in its custody or control or for 

which it is responsible, would be 

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

the Act.71

Therefore, by implementing tools that 

would help to mitigate these risks, FICC 

believes that the proposed rule change 

would promote the prompt and accurate 

clearance and settlement of securities 

transactions, assure the safeguarding of 

securities and funds which are in the 

custody or control of FICC or for which 

it is responsible, and remove 

impediments to and perfect the 

mechanism of a national system for the 

prompt and accurate clearance and 


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72 Id. 

73 17 CFR 240.17Ad–22(e)(1). 

74 Id. 75 17 CFR 240.17Ad–22(e)(21). 

76 Id. 

77 17 CFR 240.17Ad–22(e)(2). 

78 Id. 

79 Id. 

80 Id. 

81 17 CFR 240.17Ad–22(e)(17)(i). 

settlement of securities transactions, 

consistent with the requirements of 

Section 17A(b)(3)(F) of the Act.72

Rule 17Ad–22(e)(1) 

In addition, the proposed rule change 

is designed to be consistent with Rule 

17Ad–22(e)(1) promulgated under the 

Act,73 which requires FICC to establish, 

implement, maintain and enforce 

written policies and procedures 

reasonably designed to provide for a 

well-founded, clear, transparent and 

enforceable legal basis for each aspect of 

its activities in all relevant jurisdictions. 

Establishing clear and consistent rules 

for each participant with respect to the 

FICC Confidentiality Requirements 

would allow FICC to maintain one 

confidentiality standard for all 

participants rather than maintaining 

potentially different confidentiality 

standards for participants based on the 

various, unrelated regulatory bodies 

governing such participants. In 

addition, setting forth a clear 

contractual obligation relating to 

Participant Confidentiality 

Requirements would enhance the 

understanding of the participants 

receiving information from FICC and 

allow FICC to treat participants equally 

with respect to how the information 

furnished to participants should be 

protected by the participants. 

Adding the two officers to make a 

determination of a Market Disruption 

Event and adding the Systems 

Disconnect Rule are also consistent with 

Rule 17Ad–22(e)(1) under the Act 

because those changes would describe 

the circumstances under which FICC 

could take actions in the event of a 

Market Disruption Event or a Major 

Event that are necessary to protect FICC 

and its participants. Providing clear 

guidelines with respect to Market 

Disruption Events and Major Events 

would allow participants to understand 

the rights and obligations of the 

participants in the event of a Market 

Disruption Event or a Major Event. 

Therefore, by establishing uniform 

and clear standards with respect to its 

receipt and furnishing of confidential 

information, and by providing clear 

rights and obligations of FICC and its 

participants with respect to Market 

Disruption Events and Major Events, 

FICC believes that the proposed rule 

change is consistent with the 

requirements of Rule 17Ad–22(e)(1) 

promulgated under the Act.74

Rule 17Ad–22(e)(21) 

In addition, the proposed rule change 

is designed to be consistent with Rule 

17Ad–22(e)(21) promulgated under the 

Act,75 which requires FICC to, inter alia, 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to be efficient and 

effective in meeting the requirements of 

its participants and the markets it 

serves. The proposed rule change would 

streamline the FICC Confidentiality 

Requirements by providing that FICC 

would apply one standard for all 

participants relating to confidential 

information sent to FICC by 

participants, which would enhance (i) 

efficiency by avoiding applying varying 

standards of confidentiality based on 

the rules and regulations of the varying 

regulatory bodies that regulate the 

participants, and (ii) effectiveness by 

reducing potential conflicts of laws and 

providing equal treatment to 

participants relating to such 

confidential information. 

The addition of the Participant 

Confidentiality Requirements would 

also provide a uniform and easily 

discernable requirement for all 

participants with respect to confidential 

information provided by FICC allowing 

FICC to provide necessary information 

to such participants in a safe and 

efficient manner. Adding two additional 

officers that are able to make an interim 

determination of a Market Disruption 

Event in the event that the Board of 

Directors is unable to convene would 

add additional flexibility and tools to 

FICC while maintaining proper risk 

controls and improve the ability of FICC 

to act quickly, efficiently and effectively 

in a Market Disruption Event to address 

and minimize losses. Also, providing for 

the ability of FICC to disconnect DTCC 

Systems Participants, suspend the 

receipt or transmission of files or 

communications to or from a DTCC 

Systems Participant, and/or require the 

DTCC Systems Participant to take such 

other actions as are necessary to protect 

FICC and its participants would, in each 

case, provide additional tools for FICC 

in the event of a Major Event and 

improve FICC’s ability to act quickly, 

efficiently and effectively in the event of 

a Major Event to address and minimize 

losses. 

Therefore, by establishing a more 

efficient and effective process for the 

treatment of confidential language, and 

establishing procedures designed to 

improve FICC’s ability to act quickly, 

efficiently and effectively in the event of 

a Market Disruption Event and a Major 

Event, FICC believes that the proposed 

rule change is consistent with the 

requirements of Rule 17Ad–22(e)(21) 

promulgated under the Act.76

Rule 17Ad–22(e)(2) 

In addition, the proposed rule change 

is designed to be consistent with Rule 

17Ad–22(e)(2) promulgated under the 

Act,77 which requires FICC to, inter alia, 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to provide for 

governance arrangements that are clear 

and transparent and that specify clear 

and direct lines of responsibility. 

Adding two additional officers that 

are able to make an interim 

determination of a Market Disruption 

Event in the event that the Board of 

Directors is unable to convene would 

add additional flexibility and tools to 

FICC while maintaining proper risk 

controls, and improve the ability of 

FICC to act quickly, efficiently and 

effectively in a Market Disruption Event 

and mitigate any impact from such 

Market Disruption Event. Adding these 

officers to the governance procedures 

relating to a determination of a Market 

Disruption Event would make such 

governance procedures clear and 

transparent, and specify clear and direct 

lines of responsibility with respect to 

the determination of a Market 

Disruption Event, consistent with Rule 

17Ad–22(e)(2) under the Act.78

Adding the governance procedures 

relating to making a determination of a 

Major Event in the Systems Disconnect 

Rule is also consistent with Rule 17Ad– 

22(e)(2) promulgated under the Act.79

Identifying the officers that have the 

ability to determine if there is a Major 

Event, and providing for the ability of 

any management committee on which 

all of such officers serve and the Board 

of Directors to ratify, modify or rescind 

any determination of a Major Event by 

an officer would make such governance 

procedures clear and transparent, and 

specify clear and direct lines of 

responsibility with respect to the 

determination of a Major Event, 

consistent with Rule 17Ad–22(e)(2).80

Rule 17Ad–22(e)(17) 

In addition, the proposed rule change 

is designed to be consistent with Rule 

17Ad–22(e)(17)(i) promulgated under 

the Act,81 which requires FICC to 

establish, implement, maintain and 


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82 Id. 

83 15 U.S.C. 78q–1(b)(3)(I). 

84 Id. 

85 15 U.S.C. 78q–1(b)(3)(F). 

86 17 CFR 240.17Ad–22(e)(1), (e)(2), (e)(17) and 

(e)(21). 

87 15 U.S.C. 78q–1(b)(3)(F). 

88 17 CFR 240.17Ad–22(e)(1). 

89 17 CFR 240.17Ad–22(e)(2). 

90 17 CFR 240.17Ad–22(e)(17)(i). 

91 17 CFR 240.17Ad–22(e)(21). 

enforce written policies and procedures 

reasonably designed to manage the 

covered clearing agency’s operational 

risks by identifying the plausible 

sources of operational risk, both internal 

and external, and mitigating their 

impact through the use of appropriate 

systems, policies, procedures, and 

controls. 

Adding two additional officers that 

are able to make an interim 

determination of a Market Disruption 

Event in the event that the Board of 

Directors is unable to convene would 

add additional flexibility and tools to 

FICC while maintaining proper risk 

controls and improve the ability of FICC 

to act quickly, efficiently and effectively 

in a Market Disruption Event and 

mitigate any impact from such Market 

Disruption Event. Also, providing for 

the ability of FICC to disconnect DTCC 

Systems Participants, suspend the 

receipt or transmission of files or 

communications to or from a DTCC 

Systems Participant, and/or require the 

DTCC Systems Participant to take such 

other actions as are necessary to protect 

FICC and its participants would, in each 

case, provide additional tools for FICC 

in the event of a Major Event and 

improve FICC’s ability to act quickly, 

efficiently and effectively in the event of 

a Major Event and mitigate any impact 

from such Major Event. 

Therefore, by providing clear, 

efficient procedures of FICC and its 

participants with respect to Market 

Disruption Events and Major Events that 

help identify and mitigate operational 

risks, FICC believes that the proposed 

rule change is consistent with the 

requirements of Rule 17Ad–22(e)(17)(i) 

promulgated under the Act.82

(B) Clearing Agency’s Statement on 

Burden on Competition 

FICC does not believe that the 

proposed changes relating to the FICC 

Confidentiality Requirements would 

have any impact on competition. These 

changes would provide one standard for 

how FICC treats participant information 

furnished subject to the FICC 

Confidentiality Requirements but would 

not affect the information that the 

participants are required to provide or 

affect the manner in which the 

participants must provide the 

information. As such, FICC believes 

these proposed rule changes would not 

have any impact on competition. 

FICC does not believe the proposed 

changes relating to adding Participant 

Confidentiality Requirements would 

have any impact on competition. 

Although the addition of the Participant 

Confidentiality Requirements would be 

adding obligations on participants with 

respect to how they treat confidential or 

proprietary information of FICC or its 

affiliates, such obligations would be 

minimal because FICC would only 

require that such participants hold such 

confidential information using the same 

means they use to protect their own 

confidential information but not less 

than a reasonable standard of care. The 

use of this standard would protect FICC 

by providing a clear legal obligation to 

protect such information but would not 

be burdensome or expensive for 

participants, and therefore FICC 

believes that it would not have any 

impact on competition. 

FICC does not believe the changes 

relating to adding the two officers to 

make a determination of a Market 

Disruption Event would have any 

impact on competition. The proposed 

rule change would add two senior 

executive officers of FICC, the Chief 

Information Officer and the Head of 

Clearing Agency Services, to the list of 

officers that could make a determination 

of a Market Disruption Event if the 

Board of Directors is unable to convene. 

Such addition would provide additional 

officers who could determine whether 

there is a Market Disruption Event but 

would not otherwise affect the rights of 

participants or FICC in the 

determination of a Market Disruption 

Event or if a Market Disruption Event is 

declared. Therefore, FICC does not 

believe that the addition of the two 

officers would have any impact on 

competition. 

FICC does not believe that the 

changes relating to adding the Systems 

Disconnect Rule would have any 

impact, or impose any burden, on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.83 To the extent that 

FICC determines that there is a Major 

Event, it could take or refrain from 

taking actions, or require participants to 

take or refrain from taking actions, that 

could burden competition because such 

requirements could cause participants 

to incur additional costs, allow FICC to 

suspend services or communications or 

disconnect a DTCC Systems Participant 

from the DTCC Systems. FICC believes 

such burden on competition could be 

significant but would be both necessary 

and appropriate in furtherance of the 

purposes of the Act, as permitted by 

Section 17A(b)(3)(I) of the Act,84 for the 

reasons described below. 

FICC believes that the proposed 

changes to add the Systems Disconnect 

Rule are necessary in furtherance of the 

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

Act,85 and Rules 17Ad–22(e)(1), (e)(2), 

(e)(17) and (e)(21) promulgated under 

the Act.86 The proposed changes to add 

the Systems Disconnect Rule would (i) 

improve the ability of FICC to react to 

a Major Event allowing FICC to protect 

itself and its participants and their 

ability to promptly and accurately clear 

and settle securities transactions, and 

allow FICC to safeguard securities and 

funds that are in its custody or control, 

consistent with the requirements of 

Section 17A(b)(3)(F) of the Act,87 (ii) 

provide clear guidelines with respect to 

Major Events that would allow 

participants to understand the rights 

and obligations of the participants and 

FICC in the event of a Major Event, 

consistent with Rule 17Ad–22(e)(1) 

promulgated under the Act,88 (iii) 

identify the officers that have the ability 

to determine if there is a Major Event, 

and provide for the ability of any 

management committee on which all of 

such officers serve, and the Board of 

Directors, to ratify, modify or rescind 

any determination of a Major Event by 

an officer, which would make such 

governance procedures clear and 

transparent, and specify clear and direct 

lines of responsibility with respect to 

the determination of a Major Event, 

consistent with Rule 17Ad 22(e)(2) 

promulgated under the Act,89 (iv) 

improve the ability of FICC to act 

quickly, efficiently and effectively in the 

event of a Major Event, and mitigate any 

impact from such event by providing 

clear, efficient procedures of FICC and 

its participants with respect to such 

event consistent with the requirements 

of Rule 17Ad–22(e)(17)(i) promulgated 

under the Act 90 and (v) establish 

procedures designed to improve FICC’s 

ability to act quickly, efficiently and 

effectively in the event of a Major Event, 

consistent with the requirements of Rule 

17Ad–22(e)(21) promulgated under the 

Act.91

In addition, FICC believes that the 

proposed changes to add the Systems 

Disconnect Rule are appropriate in 

furtherance of the Act. Such changes 

have been designed to improve the 

ability of FICC to act quickly, efficiently 

and effectively in the event of a Major 

Event, and mitigate any impact from 

such event while also providing the 


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Federal Register / Vol. 86, No. 131 / Tuesday, July 13, 2021 / Notices 36807 

92 15 U.S.C. 78q–1(b)(3)(I). 93 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

participants clear guidelines with 

respect to such event to allow 

participants to understand their rights 

and obligations. Such changes have also 

been designed to apply uniformly to all 

Members and EPN Users in the event of 

a Major Event and should not affect 

FICC’s day-to-day operations under 

normal circumstances, or in the 

management of a typical Member or 

EPN User default scenario or nondefault event. 

Therefore, FICC does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act.92

(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. FICC will notify the 

Commission of any written comments 

received by FICC. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

FICC–2021–004 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–2021–004. 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 (http://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 

(http://dtcc.com/legal/sec-rulefilings.aspx). All comments received 

will be posted without change. Persons 

submitting comments are cautioned that 

we do not redact or edit personal 

identifying information from comment 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–FICC– 

2021–004 and should be submitted on 

or before August 3, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.93

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–14796 Filed 7–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92345; File No. SR– 

NASDAQ–2021–055] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend 

Listing Rule 5910 To Establish Entry 

and All-Inclusive Annual Listing Fees 

for Companies Listing Under IM–5101– 

2 on the Nasdaq Global Market 

July 7, 2021. 

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 June 28, 

2021, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 

Listing Rule 5910 to establish Entry and 

All-Inclusive Annual Listing Fees for 

companies listing under IM–5101–2 

(companies whose business plan is to 

complete one or more acquisitions) on 

the Nasdaq Global Market. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/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. 


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