81 FR 68071 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule To Amend the Nonstandard Expirations Pilot Program To Permit New Series To Be Added Up to and Including on the Expiration Date
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 191 (October 3, 2016)
Federal Register Volume 81, Issue 191 (October 3, 2016)
| Page Range | 68071-68074 | |
| FR Document | 2016-23755 |
[Federal Register Volume 81, Number 191 (Monday, October 3, 2016)] [Notices] [Pages 68071-68074] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-23755] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78954; File No. SR-CBOE-2016-069] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule To Amend the Nonstandard Expirations Pilot Program To Permit New Series To Be Added Up to and Including on the Expiration Date September 27, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on September 16, 2016, Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the [[Page 68072]] Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A)(iii). \4\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to align CBOE's listing ability under the Nonstandard Expirations Pilot Program with CBOE's listing ability under the Short Term Option Series (``STOs'') Program (which is an industry-wide program). Specifically, CBOE proposes to permit new series to be added up to and including on the expiration date for expirations listed under the Nonstandard Expirations Pilot Program. The text of the proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, and at the Commission. 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. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CBOE proposes to permit new series to be added up to and including on the expiration date for expirations listed under the Nonstandard Expirations Pilot Program. The Exchange states that the ability to list new series up to and including on their last trading day or expiration date (as applicable) is currently permitted for expirations listed under the STOs Program, which is an industry-wide program.\5\ This proposal seeks to align CBOE's listing ability under the two Programs. --------------------------------------------------------------------------- \5\ The STOs Program is set forth in Rule 5.5(d) (which governs the STOs Program for stock and exchange-traded product (``ETP'') option classes) and Rule 24.9(a)(2)(A) (which governs the STOs Program for index option classes). The last trading day and expiration date for an options class are generally determined by its exercise-settlement style. For P.M.-settled contracts, the last trading day and expiration date occur on the same business day. For A.M.-settled contracts, the last trading is on the business day before the expiration date. Because the expirations listed under the Nonstandard Expirations Pilot Program are P.M.-settled, the last trading and expiration date for these expirations occur on the same business day. --------------------------------------------------------------------------- In July 2005, the Commission approved a CBOE rule filing to establish the STOs Program on a pilot basis.\6\ When it was adopted, the STOs Program permitted CBOE to list series in an approved class (i.e., stock, ETP or index) on any Friday to expire at the close of business on the next Friday that is a business day (excluding third Fridays).\7\ Importantly, under the Program then and now, STOs are settled in the same manner as monthly (standard) expiration series in the same class. For example, if the monthly option contract for a particular class is A.M.-settled, as most index options are, STOs for that class are also A.M.-settled. This means that the last trading day for A.M.-settled index STOs is on the business day prior to their expiration day (Thursday) and the exercise settlement value is based on the reported level of the index calculated using opening prices of the index components on the expiration day.\8\ A.M.-settled index STOs and P.M.-settled index STOs expire at the close of business on their expiration dates. --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 52011 (July 12, 2005), 70 FR 41451 (July 19, 2005) (order approving SR-CBOE-2004- 63). \7\ Similar versions of the STOs Program have been adopted by the majority, if not all, of the other options exchanges, see e.g., BOX IM-5050-6 to Rule 5050 (Short Term Option Series Program) and ISE Rule 504.02 (Short Term Option Series Program), MIAX Rule 404.02 (Short Term Option Series Program). \8\ The last trading day and expiration date are the same day (Friday) for P.M.-settled index STOs and the exercise settlement value is based on the reported level of the index calculated using the last reported prices of the index components on the expiration date. CBOE currently lists P.M.-settled index STOs on the S&P 100 Index (OEX which has American-style exercise and XEO which has European-style exercise). These index STOs are P.M.-settled because monthly (standard) expiration series in OEX and XEO are P.M.- settled. --------------------------------------------------------------------------- The STOs Program was made permanent \9\ and has been expanded several times so that currently, among other things, STOs expirations may be listed to expire on the next five Fridays that are business days (excluding third Fridays and days on which Quarterly Option Series expire) and new series of STOs may be added up to and including on their last trading day or expiration date (as applicable).\10\ --------------------------------------------------------------------------- \9\ See Securities Exchange Act Release No. 59824 (April 27, 2009), 74 FR 20518 (May 4, 2009) (order approving SR-CBOE-2009-018). \10\ See Securities Exchange Act Release No. 71005 (December 6, 2013), 78 FR 75395 (December 11, 2013) (order approving SR-CBOE- 2013-096). --------------------------------------------------------------------------- Due to the same expiration style restriction for STOs on broad- based indexes, CBOE submitted a proposal in 2009 to establish a pilot program under which CBOE is permitted to list P.M.-settled options on broad-based indexes that expire on (a) any Friday of the month, other than the third Friday-of-the-month, and (b) the last trading day of the month.\11\ This pilot program is currently named the ``Nonstandard Expirations Pilot Program'' and expirations listed under this Program compete with expirations listed under the industry wide STOs Program.\12\ --------------------------------------------------------------------------- \11\ See Securities Exchange Act Release No. 62911 (September 14, 2010), 75 FR 57539 (September 21, 2010) (order approving SR- CBOE-2009-075). \12\ See Securities Exchange Act Release Nos. 76909 (January 14, 2016), 81 FR 3512 (January 21, 2016) (order approving SR-CBOE-2015- 106) and 78531 (August 10, 2016), 81 FR 54643 (August 16, 2016) (order approving SR-CBOE-2016-046). --------------------------------------------------------------------------- Unlike new series listed under the STOs Program, the listing of new series under the Nonstandard Expirations Pilot Program is treated the same as standard options on the same underlying index (other than being P.M.-settled).\13\ Specifically, Rule 24.9.01(c) governs the listing of new series under the Nonstandard Expirations Pilot Program and that Rule provides, in relevant part, that new series of index options may be added up to the fifth business day prior to expiration. As a result, classes traded under the Nonstandard Expirations Pilot Program are competitively disadvantaged to classes traded under the STOs Program. This is because new series of STOs may be added past the time that they may be added for Nonstandard Expirations. Additionally, Rule 24.9.01 permits new series to be added up to and including on the last trading day for other index options that expire on a weekly basis (i.e., VIX options and VXST options, which are both classes that have weekly expirations).\14\ --------------------------------------------------------------------------- \13\ For standard stock and ETP options, new series may generally be added until the beginning of the month in which the option contract will expire Due to unusual market conditions, the Exchange, in its discretion, may add new series of options on an individual stock until the close of trading on the second business day prior to expirations. See Rule 5.5.04. \14\ VIX and VXST are A.M.-settled index options and do not trade on their expiration date. Because series listed under the Nonstandard Expirations Pilot Program are P.M.-settled and trade throughout the day on their expiration date, the Exchange is seeking to permit new series in Nonstandard Expirations to be added up to and including on their expiration date (which is their last trading day, too). This proposed change tracks the Exchange's listing ability for P.M.-settled series listed under the industry-wide STOs Program. --------------------------------------------------------------------------- [[Page 68073]] Accordingly, the Exchange seeks to align CBOE's listing ability under the Nonstandard Expirations Pilot Program with CBOE's listing ability under the STOs Program and with other index options that expire on a weekly basis. Specifically, the Exchange proposes to amend Rule 24.9(e)(1) and Rule 24.9(e)(2) to expressly permit the addition of new series up to and including on the expiration date for series listed under the Nonstandard Expirations Pilot Program. As with intraday series added under the STOs Program, The Options Clearing Corporation (``OCC'') has the ability to accommodate same day series adds under the Nonstandard Expirations Pilot Program. The Exchange is proposing to correct two typographical errors in Rule 24.9(e)(1). This proposed change is a cleanup change and is non- substantive. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.\15\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \16\ requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78f(b). \16\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, because expirations listed under the Nonstandard Expirations Pilot Program compete with expirations listed under the STOs Program (both intra and inter-market), the Exchange believes that is necessary for competitive reasons (both intra and inter-market) to have the same series listing abilities under each Program. Market participants would also benefit from this proposal because they would be able to request and receive strikes in competing products up to and including on the expiration date for these competing products. The Exchange notes that the ability to list series up to and including on expiration for P.M.-settled STOs (and their last trading day for A.M.- settled STOs and weekly VIX and VXST options) already exists. As a result, permitting new series listed under the Nonstandard Expirations Pilot Program to be added up to and including on their expiration date is not a new or novel proposal. Finally, the Exchange is proposing to make two technical changes to the text of Rule 5.5(d). One proposed change is grammatical and the other deletes a repetitive word. These changes would benefit investors because CBOE's Rulebook would read correctly. B. Self-Regulatory Organization's Statement on Burden on Competition CBOE 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. The Exchange notes that new series are permitted to be added up to and including on their last trading day or expiration date (as applicable) for series listed under the STOs Program and on their last trading day for certain weekly expiring index options. As a result, permitting new series to be added up to and including on the expiration date for Nonstandard Expirations is not a new or novel proposal. Additionally, the current rule change is being proposed to allow Nonstandard Expirations to compete (both intra and inter-market) with series listed under the STOs program. CBOE believes this proposed rule change is necessary to ensure fair competition among the options exchanges. Also, the Exchange does not believe the proposal would impose any burden on intramarket competition, as all market participants would be treated in the same manner and would have more tools for trading if CBOE has the same listing ability in both programs. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-4(f)(6) \18\ thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(3)(A). \18\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-CBOE-2016-069 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2016-069. 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 Web site (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 [[Page 68074]] available for Web site 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; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2016-069 and should be submitted on or before October 24, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-23755 Filed 9-30-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Notices 68071
volume of orders and executions on advantage over other Participants. The comments more efficiently, please use
BOX. Exchange notes that although it does not only one method. The Commission will
The Exchange notes that a Market have liquidity adding orders, post all comments on the Commission’s
Maker’s obligation to provide Participants can easily add liquidity by Internet Web site (http://www.sec.gov/
continuous two-sided quotes on a daily submitting orders as they currently do rules/sro.shtml). Copies of the
basis is not diminished by the proposed today. The Exchange also notes that submission, all subsequent
change. A Market Maker will still be other exchanges already have liquidity amendments, all written statements
required to provide continuous two- adding only mechanisms for market with respect to the proposed rule
sided quotes on a daily basis and quotes participants; 14 therefore, the Exchange change that are filed with the
will still expire at the end of the day. does not believe this proposal imposes Commission, and all written
Even though rejected quotes will not be an undue burden on inter-market communications relating to the
considered when determining a Market competition. proposed rule change between the
Maker’s quoting obligations, due to the Commission and any person, other than
C. Self-Regulatory Organization’s those that may be withheld from the
fact that a Market Maker’s quote very
Statement on Comments on the public in accordance with the
rarely ever takes liquidity on BOX,13 the
Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be
Exchange believes that the proposed
Members, Participants, or Others available for Web site viewing and
rule change will not have a material
effect on a Market Maker’s quoting The Exchange has neither solicited printing in the Commission’s Public
ability or a Market Maker’s quoting nor received comments on the proposed Reference Room, 100 F Street NE.,
requirements outlined in BOX Rule rule change. Washington, DC 20549, on official
8050. Lastly, the Exchange notes that business days between the hours of
III. Date of Effectiveness of the 10:00 a.m. and 3:00 p.m. Copies of such
Market Makers will still be able to send Proposed Rule Change and Timing for
orders in and out of classes to which filing will also be available for
Commission Action inspection and copying at the principal
they are appointed.
Within 45 days of the date of office of the Exchange. All comments
B. Self-Regulatory Organization’s publication of this notice in the Federal received will be posted without change;
Statement on Burden on Competition Register or within such longer period (i) the Commission does not edit personal
The Exchange does not believe that as the Commission may designate up to identifying information from
the proposed rule change will impose 90 days of such date if it finds such submissions. You should submit only
any burden on competition not longer period to be appropriate and information that you wish to make
necessary or appropriate in furtherance publishes its reasons for so finding or available publicly. All submissions
of the purposes of the Act. BOX believes (ii) as to which the self-regulatory should refer to File Number SR–BOX–
the proposal will add value to market organization consents, the Commission 2016–45 and should be submitted on or
making on BOX. The Exchange does not will: before October 24, 2016.
believe the proposal will impose a (A) By order approve or disapprove For the Commission, by the Division of
burden on competition among the the proposed rule change, or Trading and Markets, pursuant to delegated
options exchanges because of vigorous (B) institute proceedings to determine authority.15
competition for order flow among the whether the proposed rule change Robert W. Errett,
options exchanges. The Exchange should be disapproved. Deputy Secretary.
competes with many other options IV. Solicitation of Comments [FR Doc. 2016–23749 Filed 9–30–16; 8:45 am]
exchanges. In this highly competitive BILLING CODE 8011–01–P
market, market participants can easily Interested persons are invited to
and readily direct order flow to submit written data, views, and
competing venues. The proposal does arguments concerning the foregoing, SECURITIES AND EXCHANGE
not impose an undue burden on including whether the proposed rule COMMISSION
intramarket competition because the change is consistent with the Act.
Comments may be submitted by any of [Release No. 34–78954; File No. SR–CBOE–
proposed change will apply to all 2016–069]
Market Makers on BOX. The Exchange the following methods:
does not believe that the proposed Electronic Comments Self-Regulatory Organizations;
restriction on Market Maker quotes will • Use the Commission’s Internet Chicago Board Options Exchange,
impose an undue burden on Market comment form (http://www.sec.gov/ Incorporated; Notice of Filing and
Makers because they will continue to be rules/sro.shtml); or Immediate Effectiveness of a Proposed
permitted to submit orders which can • Send an email to rule-comments@ Rule To Amend the Nonstandard
take liquidity. The Exchange does not sec.gov. Please include File Number SR– Expirations Pilot Program To Permit
believe that the proposed rule change BOX–2016–45 on the subject line. New Series To Be Added Up to and
will provide Market Makers with any Including on the Expiration Date
Paper Comments
September 27, 2016.
• Send paper comments in triplicate
13 Itis the Exchange’s understanding that
generally when a Market Maker’s quote takes Pursuant to Section 19(b)(1) of the
liquidity, it was done unintentionally. Specifically, to Secretary, Securities and Exchange Securities Exchange Act of 1934 (the
it occurs when the price of the underlying security Commission, 100 F Street NE., ‘‘Act’’),1 and Rule 19b–4 thereunder,2
updates, but the Market Maker did not update the Washington, DC 20549–1090.
sradovich on DSK3GMQ082PROD with NOTICES
incoming quote to reflect the new price of the notice is hereby given that on
underlying security. When Market Makers wish to All submissions should refer to File September 16, 2016, Chicago Board
take liquidity they do so by sending an order to the Number SR–BOX–2016–45. This file Options Exchange, Incorporated (the
Exchange, not a quote. When a Market Maker sends number should be included on the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the
a quote to the Exchange it is done as part of a bulk subject line if email is used. To help the
quote message with numerous other quotes and
quote updates; this is why it is more efficient for Commission process and review your 15 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
a Market Maker to use an order when it is looking
to take liquidity. 14 See supra note 8. 2 17 CFR 240.19b–4.
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![68074 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Notices
available for Web site viewing and 22(c)(2)(iii) 6 with respect to its annual European Union pursuant to the
printing in the Commission’s Public audited financial statements; and (iv) European Market Infrastructure
Reference Room, 100 F Street NE., Rule 17a–22 7 with respect to Regulation (‘‘EMIR’’) and also is
Washington, DC 20549 on official requirements to provide the registered with the CFTC as a
business days between the hours of Commission with physical copies of derivatives clearing organization
10:00 a.m. and 3:00 p.m. Copies of the certain materials.8 The Commission is (‘‘DCO’’) to provide clearing services for
filing also will be available for publishing this notice to solicit broad-based index CDS to U.S. members
inspection and copying at the principal comments from interested persons and their customers.13
office of the Exchange. All comments regarding LCH SA’s Form CA–1 and LCH SA offers clearing services for
received will be posted without change; Request for Exemptive Relief.9 The derivatives, exchange-traded futures and
the Commission does not edit personal Commission will consider any options, cash equities and fixed income
identifying information from comments it receives in making its and energy instruments through three
submissions. You should submit only determination of whether to grant LCH lines of CCP services: EquityClear,
information that you wish to make SA’s application for registration as a CommodityClear, and RepoClear.14
available publicly. All submissions clearing agency and Request for These services constitute LCH SA’s
should refer to File Number SR–CBOE– Exemptive Relief. ‘‘non-U.S. business’’ in that they operate
2016–069 and should be submitted on entirely outside the United States and
II. LCH SA Form CA–1 Application do not have any U.S. clearing members.
or before October 24, 2016.
For the Commission, by the Division of
LCH SA’s Form CA–1 application and LCH SA’s CDS clearing services are
Trading and Markets, pursuant to delegated accompanying exhibits contain located in the CDSClear business unit.
authority.19 information regarding LCH SA and its While all clearing services are provided
Robert W. Errett, CDSClear operations.10 Set forth below from within the same legal entity,
Deputy Secretary. is a summary of certain aspects of LCH CDSClear is ‘‘ring-fenced’’ as it has its
[FR Doc. 2016–23755 Filed 9–30–16; 8:45 am]
SA’s Form CA–1 application. own rulebook, policies and procedures,
risk management framework, risk
BILLING CODE 8011–01–P A. Overview of LCH SA
management personnel, default fund,
LCH SA maintains its principal office waterfall, default management process,
in Paris, France and is a wholly-owned operations department, and certain
SECURITIES AND EXCHANGE
subsidiary of LCH.Clearnet Group information technology resources.15
COMMISSION
Limited (‘‘LCH Group’’), a limited Registration with the Commission as a
[Release No. 34–78941; File No. 600–36] company incorporated under the laws of clearing agency would permit LCH SA
England and Wales.11 LCH Group is to offer single-name CDS clearing
Self-Regulatory Organizations; LCH majority owned by the London Stock services to U.S. persons through its
SA; Notice of Filing of Application for Exchange Group plc (‘‘LSEG’’). In its CDSClear business unit. LCH SA
Registration as a Clearing Agency and home jurisdiction, LCH SA is the only currently offers index CDS and single-
Request for Exemptive Relief CCP in France and is regulated as a bank name CDS clearing services to non-U.S.
September 27, 2016. and a CCP under French law by the persons in Europe and is authorized to
Autorité des Marchés Financiers, offer index CDS clearing services to U.S.
I. Introduction Autorité de Contrôle Prudentiel et de clearing members and their customers
On July 5, 2016, Banque Centrale de Résolution, and Banque de France.12 In under its DCO registration.
Compensation, which conducts addition, LCH SA is a CCP authorized
business under the name LCH SA (‘‘LCH to offer clearing services in the B. LCH SA Membership Standards and
SA’’) filed with the Securities and Enforcement of Rules
6 17 CFR 240.17Ad–22(c)(2) and 17 CFR
Exchange Commission (‘‘Commission’’) 1. Membership Standards
240.17Ad–22(c)(2)(iii).
a Form CA–1 seeking registration as a 7 17 CFR 240.17a–22. LCH SA has established requirements
clearing agency under Section 17A of 8 See Letter from Christophe Hémon, CEO, LCH concerning membership. These
the Securities Exchange Act of 1934 1 SA, to Brent J. Fields, Secretary, Securities and requirements are used to accept, deny,
(‘‘Act’’) and Rule 17Ab2–1 thereunder.2 Exchange Commission (August 9, 2016) (hereinafter or condition any person’s participation
Specifically, LCH SA is seeking to ‘‘Request for Exemptive Relief’’).
9 The descriptions set forth in this notice in LCH SA’s clearing services as a
provide central counterparty (‘‘CCP’’) member and include standards for
regarding the structure and operations of LCH SA
services for U.S. persons for security- have been derived from information contained in financial responsibility, operational
based swaps, in particular single-name LCH SA’s Form CA–1 application. The application capacity, business experience, and
credit default swaps (‘‘CDS’’), through and exhibits thereto for which LCH SA has not
creditworthiness.16 Members must
its CDSClear business unit. LCH SA also requested confidential treatment are available on
the Commission’s Web site at www.sec.gov/rules/ comply with these requirements on an
is seeking exemptive relief (i) from other.shtml. ongoing basis.17
Sections 5 and 6 of the Act 3 with 10 Schedule A to LCH SA’s Form CA–1 includes
With respect to financial
respect to its end-of-day pricing process; a description of the risk management procedures responsibility, LCH SA’s rulebook
(ii) from Section 19(b) of the Act 4 and utilized by LCH SA. Exhibit A contains information
about the ownership and governance structure of contains net capital requirements that,
Rule 19b–4 thereunder 5 with respect to LCH SA. Exhibit B contains a list of LCH SA’s among other things, establish minimum
filing certain proposed rule changes officers and senior managers of LCH SA and the net capital requirements for members
relating to its non-U.S. business; (iii) CDSClear business unit. Exhibit C includes a that may be scalable based on the risk
sradovich on DSK3GMQ082PROD with NOTICES
from Rules 17Ad–22(c)(2) and 17Ad– narrative and graphic descriptions of LCH SA’s
organizational structure. Exhibit E includes copies
13 Id.
19 17
of the CDS Clearing rulebook, procedures and
CFR 200.30–3(a)(12). articles of association. Exhibit J provides a 14 See generally, LCH SA Form CA–1, Exhibit C.
1 15 U.S.C. 78q–1. 15 See
description of CDSClear’s services and functions. generally, LCH SA Form CA–1, Exhibit C.
2 17 CFR 240.17Ab2–1(a). 11 See LCH SA Form CA–1, Exhibit A at 1. 16 See generally, LCH SA Form CA–1, Exhibit E–
3 15 U.S.C. 78e and 78f. 12 See generally, LCH SA Form CA–1, Exhibit J– 4 (LCH SA CDS Rule Book) Section 2.2.1.
4 15 U.S.C. 78s(b).
3 (LCH SA CDSClear Service Description) Section 17 See generally, LCH SA Form CA–1, Exhibit E–
5 17 CFR 240.19b–4. 2.3. 4 (LCH SA CDS Rule Book) Section 2.2.2.
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Document Created: 2018-02-13 14:11:32
Document Modified: 2018-02-13 14:11:32
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 81 FR 68071 |
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