Federal Register / Vol. 87, No. 134 / Thursday, July 14, 2022 / Notices 42233 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 94977 (May 

24, 2022), 87 FR 32485 (May 31, 2022) (SR–NSC– 

2022–004) (‘‘Notice of Filing’’). 

4NSCC’s Rules are available at https://dtcc.com/ 

∼/media/Files/Downloads/legal/rules/nscc_

rules.pdf. 

5See Financial Stability Oversight Counsel 2012 

Annual Report, Appendix A (‘‘FSOC 2012 Report’’), 

available at http://www.treasury.gov/initiatives/ 

fsoc/Documents/2012%20Annual%20Report.pdf. 

6 12 U.S.C. 5465(e)(1). See FSOC 2012 Report, 

supra note 5. 

7See FSOC 2012 Report, Appendix A, supra note 

5. 

8Notice of Filing, supra note 3, at 32486. 

9 Id. 

10 Id. 

11 Id. 

12 Id. 

13 Id. 

14 Id. 

15 Id. NIST is part of the U.S. Department of 

Commerce. The IETF is an open standards 

organization that develops and promotes voluntary 

internet standards, in particular, the technical 

standards that comprise the internet protocol suite 

(TCP/IP). For example, NIST Special Publication 

800–52 revision 2, specifies servers that support 

government-only applications shall be configured to 

use Transport Layer Security (‘‘TLS’’) 1.2 and 

should be configured to use TLS 1.3 as well. See 

https://nvlpubs.nist.gov/nistpubs/ 

SpecialPublications/NIST.SP.800-52r2.pdf. (TLS, 

the successor of the now-deprecated Secure Sockets 

Layer (‘‘SSL’’), is a cryptographic protocol designed 

to provide communications security over a 

computer network.) These servers should not be 

configured to use TLS 1.1 and shall not use TLS 1.0, 

SSL 3.0, or SSL 2.0. Additionally, the IETF formally 

deprecated TLS versions 1.0 and 1.1 in March of 

2021, stating that ‘‘[t]hese versions lack support for 

current and recommended cryptographic algorithms 

and mechanisms, and various government and 

industry profiles of applications using TLS now 

mandate avoiding these old TLS versions. . . . 

Removing support for older versions from 

implementations reduces the attack surface, reduces 

opportunity for misconfiguration, and streamlines 

library and product maintenance.’’ See https://

datatracker.ietf.org/doc/rfc8996/. NSCC would also 

require members to discontinue using File Transfer 

Protocol (‘‘FTP’’), which NSCC believes to be an 

insecure protocol because it transfers user 

authentication data (username and password) and 

file data as plain-text (not encrypted) over the 

network. Notice of Filing, supra note 3, at 32486. 

16Notice of Filing, supra note 3, at 32486–87. 

17 Id. 

18 Id. 

19Notice of Filing, supra note 3, at 32487. 

20 15 U.S.C. 78s(b)(2)(C). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95237; File No. SR–NSCC– 

2022–004] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Order Approving a 

Proposed Rule Change To Require 

Applicants and Members To Maintain 

or Upgrade Their Network or 

Communications Technology 

July 8, 2022. 

I. Introduction 

On May 11, 2022, National Securities 

Clearing Corporation (‘‘NSCC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–NSCC–2022–004 

(‘‘Proposed Rule Change’’) pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder.2 The Proposed Rule 

Change was published for comment in 

the Federal Register on May 31, 2022.3

The Commission did not receive any 

comment letters on the proposed rule 

change. For the reasons discussed 

below, the Commission is approving the 

Proposed Rule Change. 

II. Description of the Proposed Rule 

Change 

A. Background 

NSCC proposes to modify its Rules 

and Procedures (‘‘Rules’’) 4 to require its 

Members, Limited Members, Sponsored 

Members, and applicants for 

membership (collectively, ‘‘members’’) 

to upgrade and maintain their network 

technology, and communications 

technology or protocols, to meet 

standards that NSCC would identify and 

publish via Important Notice on its 

website, as described more fully below. 

NSCC provides clearance, settlement, 

risk management, central counterparty 

services, and a guarantee of completion 

for virtually all broker-to-broker trades 

involving equity securities, corporate 

and municipal debt securities, 

American depository receipts, exchange 

traded funds, and unit investment 

trusts.5 In light of its critical role in the 

marketplace, NSCC was designated a 

Systemically Important Financial 

Market Utility (‘‘SIFMU’’) under Title 

VIII of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of 

2010.6 Due to NSCC’s unique position 

in the marketplace, a failure or a 

disruption at NSCC could, among other 

things, increase the risk of significant 

liquidity problems spreading among 

financial institutions or markets, and 

thereby threaten the stability of the 

financial system in the United States.7

NSCC’s Rules currently do not 

require, either as part of an application 

for membership or as an ongoing 

membership requirement, any level or 

version for network technology, such as 

a web browser or other technology, or 

any level or version of communications 

technology or protocols, such as email 

encryption, secure messaging, or file 

transfers, that members may use to 

connect to or communicate with NSCC.8

Therefore, NSCC currently maintains 

multiple network and communications 

methods and protocols to interact with 

its members.9 This includes some 

outdated communication technologies 

in order to support members that 

continue to use such older 

technologies.10 NSCC believes that 

continuing to use such outdated 

technologies could render 

communications between NSCC and 

some of its members vulnerable to cyber 

risks.11 Additionally, members’ use of 

outdated technology delays NSCC’s 

implementation of its own internal 

system upgrades, which by doing so, 

risks losing connectivity between NSCC 

and a number of its members.12 Finally, 

NSCC states that it currently expends 

additional resources, both in personnel 

and equipment, to maintain outdated 

communications channels.13

To mitigate the foregoing security 

concerns and resource inefficiencies, 

NSCC proposes to require its members 

to upgrade and maintain network 

technology, communication technology, 

and protocol standards, in accordance 

with applicable technology standards 

that NSCC would identify and publish 

via Important Notice on its website from 

time to time.14 NSCC would base these 

requirements on standards set forth by 

widely accepted organizations such as 

the National Institute of Standards and 

Technology (‘‘NIST’’) and the internet 

Engineer Task Force (‘‘IETF’’).15

To implement the proposed changes, 

NSCC would revise its Rules to require 

members to maintain or upgrade their 

network technology, communications 

technology, or protocols on the systems 

that connect to NSCC, to the version 

NSCC requires, within the time period 

NSCC requires.16 Consistent with the 

guidance from NIST and other standards 

organizations, NSCC would require the 

use of TLS 1.2, Secure FTP (‘‘SFTP’’), 

and other modern technology and 

communication standards and 

protocols, by its members for 

communication with NSCC.17 NSCC 

would publish such requirements via 

Important Notice on its website.18 NSCC 

also proposes to amend its Rules to 

provide that failure to perform a 

necessary technology upgrade within 

the required timeframe would subject 

members to a monetary fine.19

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act 20

directs the Commission to approve a 

proposed rule change of a selfregulatory organization if it finds that 

such proposed rule change is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to such organization. After 


jspears on DSK121TN23PROD with NOTICES1
42234 Federal Register / Vol. 87, No. 134 / Thursday, July 14, 2022 / Notices 

21 15 U.S.C. 78q–1(b)(3)(F). 

22 15 U.S.C. 78q–1(b)(3)(G). 

23 17 CFR 240.17Ad–22(e)(17)(i) and (ii). 

24 17 CFR 240.17Ad–22(e)(21)(iv). 

25 15 U.S.C. 78q–1(b)(3)(F). 

26 Id. 27 15 U.S.C. 78q–1(b)(3)(G). 28 Id. Additionally, by including the monetary 

fine provision in its Rules, NSCC would enable its 

members to better identify and evaluate the material 

costs they might incur by participating in NSCC, 

consistent with Rule 17Ad–22(e)(23)(ii). under the 

Act, which requires a covered clearing agency 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. See 17 CFR 

240.17Ad–22(e)(23)(ii). 

29 17 CFR 240.17Ad–22(e)(17)(i). 

30 Id. 

31 17 CFR 240.17Ad–22(e)(17)(ii). 

careful consideration, the Commission 

finds that the Proposed Rule Change is 

consistent with the requirements of the 

Act and the rules and regulations 

applicable to NSCC. In particular, the 

Commission finds that the Proposed 

Rule Change is consistent with Sections 

17A(b)(3)(F) 21 and (b)(3)(G) 22 of the Act 

and Rules 17Ad–22(e)(17) 23 and 

(e)(21) 24 thereunder. 

A. Consistency With Section 

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

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

requires that the rules of a clearing 

agency be designed to, among other 

things, promote the prompt and 

accurate clearance and settlement of 

securities transactions and assure the 

safeguarding of securities and funds 

which are in the custody or control of 

the clearing agency or for which it is 

responsible.25

As described above, NSCC proposes 

to require its members to upgrade and 

maintain network technology, and 

communication technology and protocol 

standards, that meet the standards 

identified by NSCC and published via 

Important Notice to NSCC’s website 

from time to time. NSCC would use 

standards set forth by widely accepted 

organizations such as NIST and the 

IETF as the requirements. The proposed 

requirements would enable NSCC to 

avoid communicating with its members 

using outdated technologies that present 

security vulnerabilities to NSCC. 

Specifically, as an initial matter, the 

proposed requirements would enable 

NSCC to discontinue using 

communication technologies such as 

TLS 1.0, TLS 1.1, SSL 2.0, SSL 3.0, and 

FTP, which have been deemed not 

secure by organizations such as NIST 

and/or the IETF. Removing support for 

such outdated technologies would 

reduce NSCC’s potential exposure to 

cyberattacks and other cyber 

vulnerabilities. 

If not adequately addressed, the risk 

of cyberattacks and other cyber 

vulnerabilities could affect NSCC’s 

network and, in turn, NSCC’s ability to 

clear and settle securities transactions, 

or to safeguard the securities and funds 

which are in NSCC’s custody or control, 

or for which it is responsible. NSCC 

designed the proposed requirements for 

members to upgrade their 

communications technology to address 

those risks, as described above. 

Accordingly, the Commission finds the 

proposed technology requirements on 

NSCC’s members would promote the 

prompt and accurate clearance and 

settlement of securities transactions and 

assure the safeguarding of securities and 

funds which are in the custody or 

control of NSCC or for which it is 

responsible, consistent with the 

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

the Act.26

B. Consistency With Section 

17A(b)(3)(G) of the Act 

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

requires the rules of a clearing agency to 

provide that its participants shall be 

appropriately disciplined for violation 

of any provision of the rules of the 

clearing agency by fine or other fitting 

sanction.27 As noted above, NSCC 

proposes to require its members to 

upgrade and maintain network 

technology, communication technology, 

and protocol standards, in accordance 

with applicable technology standards 

that NSCC would identify and publish 

via Important Notice on its website. The 

proposed requirements would enable 

NSCC to avoid communicating with its 

members using outdated technologies 

that present security vulnerabilities to 

NSCC. If not adequately addressed, such 

vulnerabilities could affect NSCC’s 

network and its ability to operate. NSCC 

also proposes to amend its Rules to 

provide that failure to perform a 

necessary technology upgrade within 

the required timeframe would subject 

members to a monetary fine. Because 

the proposed monetary fine should 

incentivize NSCC’s members to upgrade 

and maintain secure communications 

technology, thereby reducing NSCC’s 

operational risks, the Commission finds 

the proposed rule change is consistent 

with the requirements of Section 

17A(b)(3)(G) of the Act.28

C. Consistency With Rule 17Ad– 

22(e)(17) Under the Act 

Rule 17Ad–22(e)(17)(i) under the Act 

requires that each covered clearing 

agency establish, implement, maintain 

and 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.29 NSCC’s 

operational risks include cyber risks to 

its electronic systems. 

As described above, NSCC and its 

members connect electronically to 

communicate with one another. 

However, NSCC’s Rules currently do not 

require any level or version for network 

technology, such as a web browser or 

other technology, or any level or version 

of communications technology or 

protocols, such as email encryption, 

secure messaging, or file transfers, that 

members may use to connect to or 

communicate with NSCC. As a result, 

NSCC maintains some outdated 

communication technologies in order to 

support members that continue to use 

such older technologies. Continuing to 

use such outdated technologies could 

render communications between NSCC 

and some of its members vulnerable to 

cyber risks. 

To mitigate the foregoing cyber risks, 

NSCC proposes to require its members 

to upgrade and maintain network 

technology, and communication 

technology and protocol standards that 

meet the standards identified by NSCC 

from time to time. The proposed 

technology requirements should reduce 

NSCC’s cyber risk by requiring members 

to upgrade and maintain 

communications technology based on 

standards set forth by widely accepted 

organizations such as NIST and the 

IETF, thereby decreasing the operational 

risks presented to NSCC. Because the 

proposed technology requirements 

would help NSCC mitigate plausible 

sources of external operational risk, the 

Commission finds the proposed changes 

are consistent with the requirements of 

Rule 17Ad–22(e)(17)(i) under the Act.30

Rule 17Ad–22(e)(17)(ii) under the Act 

requires that each covered clearing 

agency establish, implement, maintain 

and enforce written policies and 

procedures reasonably designed to 

manage the covered clearing agency’s 

operational risks by ensuring, in part, 

that systems have a high degree of 

security, resiliency, and operational 

reliability.31 As noted above, NSCC’s 

operational risks include cyber risks. 

As described above, NSCC’s Rules 

currently do not require any level or 

version for network technology, such as 

a web browser or other technology, or 

any level or version of communications 


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Federal Register / Vol. 87, No. 134 / Thursday, July 14, 2022 / Notices 42235 

32 Id. 

33 17 CFR 240.17Ad–22(e)(21)(iv). 

34 Id. 

35 15 U.S.C. 78q–1. 

36 15 U.S.C. 78s(b)(2). 

37 In approving the Proposed Rule Change, the 

Commission considered the proposals’ impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

38 17 CFR 200.30–3(a)(12). 

technology or protocols, such as email 

encryption, secure messaging, or file 

transfers, that members may use to 

connect to or communicate with NSCC. 

NSCC designed the proposed 

technology requirements to reduce 

cyber risks by requiring its members to 

upgrade and maintain communications 

technology based on standards set forth 

by widely accepted organizations such 

as NIST and the IETF. Requiring NSCC’s 

members to use only secure 

communications technology would 

reduce NSCC’s cyber risks and thereby 

strengthen the security, resiliency, and 

operational reliability of NSCC’s 

network and other systems. Because the 

proposed technology requirements 

would enhance NSCC’s ability to ensure 

that its systems have a high degree of 

security, resiliency, and operational 

reliability, the Commission finds the 

Proposed Rule Change is consistent 

with the requirements of Rule 17Ad– 

22(e)(17)(ii) under the Act.32

D. Consistency With Rule 17Ad– 

22(e)(21) Under the Act 

Rule 17Ad–22(e)(21)(iv) under the Act 

requires that each covered clearing 

agency establish, implement, maintain 

and enforce written policies and 

procedures reasonably designed to have 

the covered clearing agency’s 

management regularly review the 

efficiency and effectiveness of its use of 

technology and communication 

procedures.33

As mentioned above, NSCC maintains 

multiple network and communication 

methods to interact with its members, 

including certain outdated 

communication technologies necessary 

to support members that continue to use 

such older technologies. NSCC believes 

that continuing to use such outdated 

technologies could render 

communications between NSCC and 

some of its members vulnerable to cyber 

risks. Additionally, members’ use of 

outdated technology delays NSCC’s 

implementation of its own internal 

system upgrades, which by doing so, 

risks losing connectivity between NSCC 

and a number of its members. Finally, 

NSCC states that it currently expends 

unnecessary resources to maintain 

outdated communications channels. In 

other words, NSCC has subjected its 

network communication methods to 

review for efficiency and effectiveness. 

As a result, to enhance the efficiency 

and effectiveness of its technology and 

communication procedures, NSCC 

proposes to require its members to 

upgrade and maintain network 

technology, communication technology, 

and protocol standards, in accordance 

with applicable technology standards 

that NSCC would identify and publish 

via Important Notice on its website. 

Because the Proposed Rule Change is an 

outgrowth of NSCC’s review of the 

efficiency and effectiveness of its 

technology and communication 

procedures, the Commission finds the 

Proposed Rule Change is consistent 

with the requirements of Rule 17Ad– 

22(e)(21)(iv) under the Act.34

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Act and in 

particular with the requirements of 

Section 17A of the Act 35 and the rules 

and regulations promulgated 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act 36 that 

Proposed Rule Change SR–NSCC–2022– 

004, be, and hereby is, approved.37

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15005 Filed 7–13–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34644; File No. 812–15090] 

Sixth Street Specialty Lending, Inc., et 

al 

July 8, 2022. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’). 

ACTION: Notice. 

Notice of application for an order 

(‘‘Order’’) under sections 17(d) and 57(i) 

of the Investment Company Act of 1940 

(the ‘‘Act’’) and rule 17d–1 under the 

Act to permit certain joint transactions 

otherwise prohibited by sections 17(d) 

and 57(a)(4) of the Act and rule 17d–1 

under the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order to permit certain 

business development companies 

(‘‘BDCs’’) and closed-end management 

investment companies to co-invest in 

portfolio companies with each other and 

with certain affiliated investment 

entities. 

APPLICANTS: Sixth Street Specialty 

Lending, Inc., Sixth Street Specialty 

Lending Advisers, LLC, Sixth Street 

Opportunities Partners III (A), L.P., 

Sixth Street Opportunities Partners III 

(B), L.P., Sixth Street Opportunities 

Partners III (C), L.P., TOP III Delaware 

AIV I–A, L.P., Opps III Delaware AIV I– 

B, L.P., Sixth Street Opportunities 

Partners IV (A), L.P., Sixth Street 

Opportunities Partners IV (B), L.P., 

Sixth Street Opportunities Partners IV 

(C), L.P., Opps IV Delaware AIV I–A, 

L.P., Opps IV Delaware AIV I–B, L.P., 

Sixth Street Opportunities Partners V 

(A), L.P., Sixth Street Opportunities 

Partners V (B), L.P., Sixth Street 

Opportunities Partners V (C), L.P., Sixth 

Street Opps V Delaware AIV I–A, L.P., 

Sixth Street Opps V Delaware AIV I–B, 

L.P., Sixth Street TAO Partners, L.P., 

Sixth Street TAO Partners (A), L.P., 

Sixth Street TAO Partners (B), L.P., 

Sixth Street TAO Partners (C), L.P., 

Sixth Street TAO Partners (D), L.P., 

Sixth Street TAO Partners (E), L.P., 

Sixth Street TAO Partners (F), L.P., 

Super TAO Contingent MA, L.P., Knight 

TAO, L.P., Super TAO MA, L.P., PSERS 

TAO Partners Parallel Fund, L.P., TAO 

(B) AIV II–A, L.P., TAO (C) AIV II–A, 

L.P., TAO (D) AIV II–A, L.P., TAO (E) 

AIV II–A, L.P., Sixth Street Growth 

Partners (A), L.P., Sixth Street Growth 

Partners (B), L.P., Sixth Street Growth 

Partners (A) AIV, L.P., Sixth Street 

Growth Partners (B) AIV, L.P., Sixth 

Street Growth Partners II (A), L.P., Sixth 

Street Growth Partners II (B), L.P., Sixth 

Street Growth II (A) AIV, L.P., Sixth 

Street Growth II (B) AIV, L.P., Growth 

II Lending, LLC, Sixth Street 

Fundamental Strategies Partners (A), 

L.P., Sixth Street Fundamental 

Strategies Partners (B), L.P., Sixth Street 

FS AIV I–A, L.P., Sixth Street FS AIV I– 

B, L.P., Sixth Street Specialty Lending 

Europe I, L.P., Sixth Street Specialty 

Lending Europe II, L.P., Super TSLE, 

L.P., Sixth Street Agriculture Partners 

(A), L.P., Sixth Street Bluegrass Strategic 

Holdings I, L.P., Sixth Street Willow 

Strategic Holdings I, L.P., Sixth Street 

Cottonwood Strategic Holdings I, L.P., 

Sixth Street Dogwood Strategic 

Holdings I, L.P., Sixth Street Red Pine 

Strategic Holdings I, L.P., Sixth Street 

CMS Dynamic Credit Fund, L.P., TCS 

Lending, LLC, TDL Lending, LLC, TOP 

IV Lending, LLC, Opps V Lending, LLC, 

FS I Lending, LLC, TICP CLO V 2016– 

1, Ltd., TICP CLO VI 2016–2, Ltd., TICP 

CLO VII, Ltd., TICP CLO VIII, Ltd., TICP 


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