82 FR 55139 - Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Margin Framework and Default Fund Methodology for Options on Index Credit Default Swaps
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 222 (November 20, 2017)
Federal Register Volume 82, Issue 222 (November 20, 2017)
| Page Range | 55139-55141 | |
| FR Document | 2017-25040 |
[Federal Register Volume 82, Number 222 (Monday, November 20, 2017)] [Notices] [Pages 55139-55141] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-25040] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82076; File No. SR-LCH SA-2017-008] Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Margin Framework and Default Fund Methodology for Options on Index Credit Default Swaps November 14, 2017. 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 November 6, 2017, 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 primarily by LCH SA. LCH SA filed the proposed rule changes pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-4(f)(2) \4\ 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 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). \4\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- I. Clearing Agency's Statement of the Terms of Substance of the Proposed Rule Change LCH SA is filing the new fee grid in connection with the proposed extension of the CDSClear service to the clearing of options on index credit default swaps (``CDS Options''). The text of the proposed rule change has been annexed as Exhibit 5. Two separate proposed rule changes have been submitted concurrently (SR- [[Page 55140]] LCH SA-2017-006 and 007) with respect to amendments to (i) LCH SA's rule book and other relevant procedures and to (ii) LCH SA CDSClear Margin Framework and Default Fund Methodology in order to incorporate terms and to make conforming and clarifying changes to allow CDS Options to be cleared by LCH SA. The launch of clearing CDS Options will be contingent on LCH SA's receipt of all necessary regulatory approvals, including the approval by the Commission of the proposed rule changes described under SR-LCH-SA-2017-006 and 007. 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 these 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 to establish the applicable fee grid in connection with the proposed extension of the CDSClear service to the clearing of CDS Options. The proposed rule change introduces a fixed onboarding fee payable by every General and Select member that will join the new clearing service. The onboarding fee will be waived for any member whose onboarding for such clearing service is duly confirmed by LCH SA on or before 31st March 2018. In addition to the fixed onboarding fee, the clearing fees are due by each General Member, Select Member or Client in accordance with the amount, currency and volume specified in the fee grid attached in Exhibit 5. Similar to the current Index & Single Names fee grid for General Membership under the Introductory tariff, a floor and a cap on clearing fees have been implemented for General Members opting for the CDS Options clearing service. Select Members opting for the CDS Options clearing service are only subject to capped fees as Select Membership is designed primarily for price takers with a smaller portfolio and a fixed cost (to which a floor amounts to) would deter them from clearing CDS Options. All members and clients will benefit from a clearing fee holiday until 31st December 2017. 2. Statutory Basis LCH SA believes that the proposed rule change in connection with the clearing of CDS Options is consistent with the requirements of Section 17A of the Act and the regulations thereunder, including the standards under Rule 17Ad-22.\5\ --------------------------------------------------------------------------- \5\ 17 CFR 240.17Ad-22. --------------------------------------------------------------------------- Section 17A(b)(3)(D) of the Act requires that the rules of a clearing agency provide for the equitable allocation of reasonable dues, fees, and other charges.\6\ The proposed fee grid for the new non-mandatory Credit Index Options clearing service has been discussed with CDSClear members and designed with the goal of enabling members to register to this service as well as to incentivize clearing of such non-mandated for clearing products while taking into consideration current market trading conditions for options. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78q-1(b)(3)(D). --------------------------------------------------------------------------- As noted above, the proposed fee grid will apply equally to all General members, Select Members and clients that will voluntary participate in this new CDS Clearing Service and LCH SA believes that it is reasonable and appropriate. As Select Members have fewer obligations than General Members, variable clearing fees for CDS Options are higher for Select Members than for General Members (similarly to the current Index & Single Names variable fee grid). Clients have no obligation towards the CCP, and hence variable clearing fees for CDS Options are set higher for them than for Members (similarly to the current Index & Single Names variable fee grid). As for Select Members, a fixed cost (floor) being applied to clients could deter them from choosing to clear CDS Options. Finally, the purpose of the cap is to incentivize participants to provide liquidity into the CDS Options clearing service. Unlike General Members, as clients are not meant to provide such liquidity, LCH SA does not offer capped clearing fees for clients. LCH SA believes that the proposed rule change is consistent with the requirements of Section 17A of the Act \7\ and regulations thereunder applicable to it, because it provides for the equitable allocation of reasonable fees, dues, and other charges among clearing members and market participants by ensuring that General and Select Members and clients pay reasonable fees and dues for the services that LCH SA provides. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78q-1. --------------------------------------------------------------------------- B. Clearing Agency's Statement on Burden on Competition Section 17A(b)(3)(I) of the Act requires that the rules of a clearing agency not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.\8\ LCH SA does not believe that the proposed rule change would impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78q-1(b)(3)(I). --------------------------------------------------------------------------- Credit Index Options contracts will be available to all LCH SA CDSClear participants for clearing. The clearing of CDS Options contracts by LCH SA CDSClear does not preclude the offering of these financial instruments for clearing by other market participants. The proposed rule change does not adversely affect the ability of such Clearing Members or other market participants generally to engage in cleared transactions or to access clearing services. Therefore, LCH SA does not believe that the proposed rule change would impose a burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Clearing Agency's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments relating to the proposed rule change have not been solicited or received. LCH SA will notify the Commission of any written comments received by LCH SA. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Subject to any regulatory review or approval process duly completed, the foregoing proposed rule change has become effective upon filing pursuant to Section 19(b)(3)(A) \9\ of the Act and Rule 19b- 4(f)(2) \10\ thereunder because it establishes a fee or other charge imposed by LCH SA on its Clearing Members. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such proposed 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 [[Page 55141]] in furtherance of the purposes of the Act. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A). \10\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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-LCH SA-2017-008 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-2017-008. 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 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 LCH SA and on LCH SA's Web site at http://www.lch.com/asset-classes/cdsclear. 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-2017-008 and should be submitted on or before December 11, 2017. 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. 2017-25040 Filed 11-17-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 222 / Monday, November 20, 2017 / Notices 55139
F. Written Understanding or Agreements E. Standards and Methods Ensuring Persons submitting comments are
Relating to Interpretation of, or Promptness, Accuracy and cautioned that we do not redact or edit
Participation in, Plan Completeness of Transaction Reports personal identifying information from
Not applicable. Not applicable comment submissions. You should
submit only information that you wish
G. Approval by Sponsors in Accordance F. Rules and Procedures Addressed to to make available publicly. All
With Plan Fraudulent or Manipulative submissions should refer to File
See Item I.C. above. Dissemination Number S7–24–89 and should be
Not applicable. submitted on or before December 11,
H. Description of Operation of Facility 2017.
Contemplated by the Proposed G. Terms of Access to Transaction
By the Commission.
Amendments Reports
Brent J. Fields,
Not applicable. Not applicable. Secretary.
I. Terms and Conditions of Access H. Identification of Marketplace of [FR Doc. 2017–25028 Filed 11–17–17; 8:45 am]
Not applicable. Execution BILLING CODE 8011–01–P
Not applicable.
J. Method of Determination and
Imposition, and Amount of, Fees and III. Solicitation of Comments SECURITIES AND EXCHANGE
Charges The Commission seeks comments on COMMISSION
The Participants believe that the the Amendment. Interested persons are [Release No. 34–82076; File No. SR–LCH
amendment proposed herein is fair and invited to submit written data, views, SA–2017–008]
reasonable since it corrects an and arguments concerning the
inadvertent omission in order to ensure foregoing, including whether the Self-Regulatory Organizations; LCH
the continued implementation of the proposed Amendment is consistent with SA; Notice of Filing and Immediate
derived data policy that has been in the Act. Comments may be submitted by Effectiveness of a Proposed Rule
place for at least ten years. any of the following methods: Change Relating to Margin Framework
The longstanding derived data policy and Default Fund Methodology for
Electronic Comments Options on Index Credit Default Swaps
is reasonable in order to protect the
Plan’s proprietary rights over • Use the Commission’s Internet
November 14, 2017.
consolidated quotation and last sale comment form (http://www.sec.gov/
Pursuant to Section 19(b)(1) of the
information. As previously stated, rules/sro.shtml); or
Securities Exchange Act of 1934
derived data that contains price data • Send an email to rule-comments@
(‘‘Act’’) 1 and Rule 19b–4 thereunder 2
and is based upon a single security sec.gov. Please include File Number S7–
notice is hereby given that on November
symbol is fee liable at the underlying 24–89 on the subject line.
6, 2017, Banque Centrale de
product rates. Derived data that contains Paper Comments Compensation, which conducts
volume data but no price data and business under the name LCH SA (‘‘LCH
derived data that is based upon multiple • Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities SA’’), filed with the Securities and
security symbols is not currently fee Exchange Commission (‘‘Commission’’)
liable. Such an approach is logical given and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090. the proposed rule change described in
the similarity between derived data that Items I, II, and III below, which Items
contains price data and is based upon a All submissions should refer to File
Number File No. S7–24–89. This file have been prepared primarily by LCH
single security symbol to the SA. LCH SA filed the proposed rule
consolidated quotation and last sale number should be included on the
subject line if email is used. To help the changes pursuant to Section
information disseminated by the Plans. 19(b)(3)(A) 3 of the Act and Rule 19b–
Commission process and review your
K. Method and Frequency of Processor comments more efficiently, please use 4(f)(2) 4 thereunder, so that the proposal
Evaluation only one method. The Commission will was effective upon filing with the
post all comments on the Commission’s Commission. The Commission is
Not applicable. publishing this notice to solicit
Web site (http://www.sec.gov/rules/
L. Dispute Resolution sro.shtml). Copies of the submission, all comments on the proposed rule change
written statements with respect to the from interested persons.
Not applicable.
proposed Amendment that are filed I. Clearing Agency’s Statement of the
II. Rule 601(a) with the Commission, and all written Terms of Substance of the Proposed
A. Equity Securities for Which communications relating to the Rule Change
Transaction Reports Shall Be Required proposed Amendment between the LCH SA is filing the new fee grid in
by the Plan Commission and any person, other than connection with the proposed extension
those that may be withheld from the of the CDSClear service to the clearing
Not applicable.
public in accordance with the of options on index credit default swaps
B. Reporting Requirements provisions of 5 U.S.C. 552, will be (‘‘CDS Options’’). The text of the
Not applicable. available for Web site viewing and proposed rule change has been annexed
printing in the Commission’s Public
nshattuck on DSK9F9SC42PROD with NOTICES
C. Manner of Collecting, Processing, as Exhibit 5.
Reference Room on official business Two separate proposed rule changes
Sequencing, Making Available and days between the hours of 10:00 a.m. have been submitted concurrently (SR–
Disseminating Last Sale Information and 3:00 p.m. Copies of the Amendment
Not applicable. also will be available for Web site 1 15 U.S.C. 78s(b)(1).
viewing and printing at the principal 2 17 CFR 240.19b–4.
D. Manner of Consolidation office of the Plan. All comments 3 15 U.S.C. 78s(b)(3)(A).
Not applicable. received will be posted without change. 4 17 CFR 240.19b–4(f)(2).
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![Federal Register / Vol. 82, No. 222 / Monday, November 20, 2017 / Notices 55141
in furtherance of the purposes of the For the Commission, by the Division of additional statements.7 On October 2,
Act. Trading and Markets, pursuant to delegated 2017, during the Commission’s review
authority.11 of the delegated action, CHX informed
IV. Solicitation of Comments Eduardo A. Aleman, the Commission that three of the
Interested persons are invited to Assistant Secretary. upstream investors were withdrawing
submit written data, views, and [FR Doc. 2017–25040 Filed 11–17–17; 8:45 am] from the investor group. CHX
arguments concerning the foregoing, BILLING CODE 8011–01–P subsequently filed Amendment No. 2 to
including whether the proposed rule the proposed rule change to update its
change is consistent with the Act. proposal to reflect this change in the
Comments may be submitted by any of SECURITIES AND EXCHANGE investor group. Because of this change
the following methods: COMMISSION and a number of other changes to the
proposed transaction, as described
Electronic Comments [Release No. 34–82077; File No. SR–CHX– below, including, among other things, a
• Use the Commission’s Internet 2016–20] change to the North America Casin
comment form (http://www.sec.gov/ Holdings, Inc. Certificate of
Self-Regulatory Organizations;
rules/sro.shtml); or Incorporation that provides for an 85%
Chicago Stock Exchange, Inc.; Notice
• Send an email to rule-comments@ of Filing of Amendment No. 2 to super-majority vote requirement for
sec.gov. Please include File Number SR– Proposed Rule Change in Connection certain corporate actions, revised put
LCH SA–2017–008 on the subject line. With the Proposed Transaction agreements for Raptor Holdco LLC and
Involving CHX Holdings, Inc. and North Saliba Ventures Holdings, LLC, and a
Paper Comments
America Casin Holdings, Inc. new put agreement for Penserra
• Send paper comments in triplicate Securities, LLC, the Commission is
to Secretary, Securities and Exchange November 14, 2017. publishing this notice to solicit
Commission, 100 F Street NE., Pursuant to Section 19(b)(1) of the comments on the proposed rule change,
Washington, DC 20549–1090. Securities Exchange Act of 1934 as amended, from interested persons.
All submissions should refer to File (‘‘Exchange Act’’),1 and Rule 19b–4 I. Amendment No. 2 to SR–CHX–2016–
Number SR–LCH SA–2017–008. This thereunder,2 notice is hereby given that 20
file number should be included on the on November 6, 2017, the Chicago Stock
subject line if email is used. To help the Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’) The Chicago Stock Exchange, Inc. is
Commission process and review your filed with the Securities and Exchange filing this Partial Amendment no. 2 to
comments more efficiently, please use Commission (‘‘SEC’’ or ‘‘Commission’’) SR–CHX–2016–20, a proposed rule
only one method. The Commission will Amendment No. 2 to the proposed rule change related to a proposed transaction
post all comments on the Commission’s change as described in Item I below, (‘‘Proposed Transaction’’) involving,
Internet Web site (http://www.sec.gov/ which Item has been prepared by the among others, the Exchange’s direct
rules/sro.shtml). Copies of the Exchange and is reproduced below parent company, CHX Holdings, Inc.
submission, all subsequent verbatim. (‘‘CHX Holdings’’), and North America
amendments, all written statements The proposed rule change was Casin Holdings, Inc. (‘‘NA Casin
with respect to the proposed rule designed to effect an acquisition of CHX Holdings’’), which was originally filed
change that are filed with the Holdings, Inc. by North America Casin on December 2, 2016 (‘‘Initial Filing’’)
Commission, and all written Holdings, Inc., which would be owned and modified by Partial Amendment
communications relating to the by a consortium of investors (‘‘upstream No. 1 on August 7, 2017. The proposed
proposed rule change between the investors’’). On August 9, 2017, the rule change was published for comment
Commission and any person, other than Division of Trading and Markets, for the in the Federal Register on December 12,
those that may be withheld from the Commission pursuant to delegated 2016.8 The U.S. Securities and
public in accordance with the authority,3 approved the proposed rule Exchange Commission then received
provisions of 5 U.S.C. 552, will be change, as modified by Amendment No. seven comment letters,9 including two
available for Web site viewing and 1.4 Pursuant to Commission Rule of response letters from the Exchange.10
printing in the Commission’s Public Practice 431,5 the Commission is On January 12, 2017, the Commission
Reference Room, 100 F Street NE., reviewing the delegated action, and the instituted proceedings to determine
Washington, DC 20549 on official approval order is stayed.6 On August 18, whether to approve or disapprove the
business days between the hours of 2017, the Commission issued a proposed rule change,11 pursuant to
10:00 a.m. and 3:00 p.m. Copies of the scheduling order, pursuant to Section 19(b)(2) of the Securities
filing also will be available for Commission Rule of Practice 431, Exchange Act of 1934 (‘‘Exchange
inspection and copying at the principal providing until September 17, 2017 for
office of LCH SA and on LCH SA’s Web any party or other person to file any 7 See Exchange Act Release No. 81435, 82 FR
site at http://www.lch.com/asset- 40187 (August 24, 2017).
8 See Exchange Act Release No. 79474 (December
classes/cdsclear. 11 17 CFR 200.30–3(a)(12). 6, 2016), 81 FR 89543 (December 12, 2016) (SR–
All comments received will be posted 1 15 U.S.C. 78s(b)(1). CHX–2016–20) (‘‘Notice’’).
without change. Persons submitting 2 17 CFR 240.19b–4. 9 All comment letters on the Initial Filing may be
comments are cautioned that we do not 3 17 CFR 200.30 3(a)(12).
found at https://www.sec.gov/comments/sr-chx-
4 See Exchange Act Release No. 81366, 82 FR 2016-20/chx201620.shtml.
redact or edit personal identifying
nshattuck on DSK9F9SC42PROD with NOTICES
38734 (August 15, 2017). 10 See Letter to Brent J. Fields, Secretary,
information from comment submissions. 5 17 CFR 201.431. Commission, from John K. Kerin, President and
You should submit only information 6 See Letter from Secretary of the Commission to CEO, CHX (January 5, 2017) (‘‘First CHX Letter’’);
that you wish to make available Albert (A.J.) Kim, VP and Associate General see also Letter to Brent J. Fields, Secretary,
publicly. All submissions should refer Counsel, Chicago Stock Exchange, Inc., dated Commission, from Albert J. Kim, Vice President and
to File Number SR–LCH SA–2017–008 August 9, 2017 (providing notice of Commission Associate General Counsel, CHX (January 6, 2017)
review of delegated action and stay of order), (‘‘Second CHX Letter’’).
and should be submitted on or before available at https://www.sec.gov/rules/sro/chx/ 11 See Exchange Act Release No. 79781 (January
December 11, 2017. 2017/34-81366-letter-from-secretary.pdf. 12, 2017), 82 FR 6669 (January 19, 2017).
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Document Created: 2018-10-25 10:41:58
Document Modified: 2018-10-25 10:41:58
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 55139 |
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