Document ID: SEC-2018-1786-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: LCH SA
Posted Date: 2018-11-21T05:00Z

[Federal Register Volume 83, Number 225 (Wednesday, November 21, 2018)]
[Notices]
[Pages 58798-58800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25342]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84602; File No. SR-LCH SA-2018-005]

Self-Regulatory Organizations; LCH SA; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change, as Modified by 
Amendment No. 1, Relating to a New Fee Incentive Scheme

November 15, 2018.
    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 October 31, 2018, Banque Centrale de Compensation, which conducts 
business under the name LCH SA (``LCH SA''), filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change 
described in Items I, II and III below, which Items have been prepared 
by LCH SA. On November 15, 2018, LCH SA filed Amendment No. 1 to the 
proposed rule change.\3\ LCH SA filed the proposal pursuant to Section 
19(b)(3)(A) of the Act,\4\ and Rule 19b-4(f)(2) \5\ thereunder, so that 
the proposal was effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as modified by Amendment No. 1, from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, LCH SA added to Item II an additional 
description of the proposed fees.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change will introduce a new fee incentive scheme

[[Page 58799]]

for CDSClear client clearing activities applicable from October 31st, 
2018.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, LCH SA 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. LCH SA 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 purpose of the proposed rule change is for LCH SA to introduce 
and specify a clearing fees incentive scheme for clients of CDSClear 
members, including volume based discounts, in order to encourage the 
growth of the CDSClear client clearing franchise.
    Currently, CDSClear clearing members are charged a fee on their 
client clearing flows per EUR/USD million of gross notional cleared 
defined as follows:

                                                  Variable Fee
----------------------------------------------------------------------------------------------------------------
                              Client Clearing (Per million gross notional cleared)
-----------------------------------------------------------------------------------------------------------------
                                         Credit index                                             Credit index
   EUR indices      EUR single names    options-- EUR        US indices      US single names      option-- US
                                           indices                                                 indices *
----------------------------------------------------------------------------------------------------------------
        [euro]4           [euro]12           [euro]20                 $5                $17              [$20]
----------------------------------------------------------------------------------------------------------------
* Subject to regulatory approval.

    The proposed incentive scheme defines a fee rebate based on volumes 
in order to make it more attractive for new buy side clients to select 
CDSClear services and/or CDSClear existing clients to clear more by 
reducing the marginal cost of clearing past pre-defined volumes 
thresholds as detailed hereinafter and below in Exhibit 5.

               1. Quarterly Credit Index Option Thresholds
------------------------------------------------------------------------
       Notional cleared (quarterly)                     Fees
------------------------------------------------------------------------
From [euro]0 to [euro]2bn.................  Full published variable fees
                                             apply.
From over [euro]2bn to [euro]10bn.........  20% discount on published
                                             variable fees (applicable
                                             only above [ 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-LCH SA-2018-005 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-LCH SA-2018-005. 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 such filings will also be available for inspection 
and copying at the principal office of LCH SA and on LCH SA's website 
at https://www.lch.com/resources/rules-and-regulations/proposed-rule-changes-0.
    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-LCH SA-2018-005 and should 
be submitted on or before December 12, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25342 Filed 11-20-18; 8:45 am]
BILLING CODE 8011-01-P