22(e)(15)(ii) also requires a covered clearing agency to establish,
implement, maintain and enforce written policies and procedures
reasonably designed to provide for monitoring its business operations
and reducing the likelihood of losses. Rule 17Ad-22(e)(15)(iii)
requires a covered clearing agency to establish, implement, maintain
and enforce written policies and procedures reasonably designed to
provide for maintaining a viable plan, approved by the board of
directors and updated at least annually, for raising additional equity
should its equity fall close to or below the amount required by the
rule, as discussed above.\236\
---------------------------------------------------------------------------

    \236\ See 17 CFR 240.17Ad-22(e)(15); CCA Standards adopting
release, supra note 7, at 474.
---------------------------------------------------------------------------

    The purpose of this information collection is to mitigate the
potential impairment of a covered clearing agency as a result of a
decline in revenues or increase in expenses.
16. Rule 17Ad-22(e)(16)
    Rule 17Ad-22(e)(16) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to safeguard its own and its
participants' assets and minimize the risk of loss and delay in access
to these assets. Rule 17Ad-22(e)(16) also requires a covered clearing
agency to establish, implement, maintain and enforce written policies
and procedures reasonably designed to invest such assets in instruments
with minimal credit, market, and liquidity risks.\237\
---------------------------------------------------------------------------

    \237\ See 17 CFR 240.17Ad-22(e)(16); CCA Standards adopting
release, supra note 7, at 474.
---------------------------------------------------------------------------

17. Rule 17Ad-22(e)(17)
    Rule 17Ad-22(e)(17) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to manage the covered clearing agency's
operational risk. Rule 17Ad-22(e)(17)(i) requires a covered clearing
agency to establish, implement, maintain and enforce written policies
and procedures reasonably designed to identify the plausible sources of
operational risk, both internal and external, and mitigate their impact
through the use of appropriate systems, policies, procedures, and
controls. Rule 17Ad-22(e)(17)(ii) requires a covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to ensure that systems have a high
degree of security, resiliency, operational reliability, and adequate,
scalable capacity. Finally, Rule 17Ad-22(e)(17)(iii) requires a covered
clearing agency to establish, implement, maintain and enforce written
policies and procedures reasonably designed to provide for a business
continuity plan that addresses events posing a significant risk of
disrupting operations.\238\
---------------------------------------------------------------------------

    \238\ See 17 CFR 240.17Ad-22(e)(17); CCA Standards adopting
release, supra note 7, at 474.
---------------------------------------------------------------------------

    The purpose of this information collection is to limit operational
disruptions that may impede the proper functioning of a covered
clearing agency.
18. Rule 17Ad-22(e)(18)
    Rule 17Ad-22(e)(18) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to establish objective, risk-based, and
publicly disclosed criteria for participation, which permit fair and
open access by direct and, where relevant, indirect participants and
other FMUs. Rule 17Ad-22(e)(18) also requires that a covered clearing
agency establish, implement, maintain and enforce written policies and
procedures reasonably designed to require participants to have
sufficient financial resources and robust operational capacity to meet
obligations arising from participation in the clearing agency and to
monitor compliance with participation requirements on an ongoing
basis.\239\
---------------------------------------------------------------------------

    \239\ See 17 CFR 240.17Ad-22(e)(18); CCA Standards adopting
release, supra note 7, at 474.
---------------------------------------------------------------------------

    The purpose of this information collection is to enable a covered
clearing agency to ensure that only entities with sufficient financial
and operational capacity are direct participants in the covered
clearing agency, while still ensuring that all qualified persons can
access a covered clearing agency's services. The purpose of this
information collection is also to enable a covered clearing agency to
monitor that participation requirements are met on an ongoing basis and
to identify a participant experiencing financial difficulties before
the participant fails to meet its settlement obligations.
19. Rule 17Ad-22(e)(19)
    Rule 17Ad-22(e)(19) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to identify, monitor, and manage the
material risks to the covered clearing agency arising from arrangements
in which firms that are indirect participants in the covered clearing
agency rely on the services provided by direct participants in the
covered clearing agency to access the covered clearing agency's
payment, clearing, or settlement facilities. In addition, Rule 17Ad-
22(e)(19) also requires that a covered clearing agency establish,
implement, maintain and enforce written policies and procedures
reasonably designed to regularly review the material risks to the
covered clearing agency arising from such tiered participation
arrangements.\240\
---------------------------------------------------------------------------

    \240\ See 17 CFR 240.17Ad-22(e)(19); CCA Standards adopting
release, supra note 7, at 474.
---------------------------------------------------------------------------

    The purpose of this information collection is to enable a covered
clearing agency to identify and manage risks posed by non-member
entities, such as the customers of clearing members.
20. Rule 17Ad-22(e)(20)
    Rule 17Ad-22(e)(20) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to identify, monitor, and manage risks
related to any link with one or more other clearing agencies, FMUs, or
trading markets.\241\
---------------------------------------------------------------------------

    \241\ See 17 CFR 240.17Ad-22(e)(20); CCA Standards adopting
release, supra note 7, at 475.

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

    The purpose of this information collection is to enable a covered
clearing agency to identify and manage risks posed by linkages to other
entities, such as other clearing agencies, FMUs, or trading markets.
21. Rule 17Ad-22(e)(21)
    Rule 17Ad-22(e)(21) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to require the covered clearing agency
to be efficient and effective in meeting the requirements of its
participants and the markets it serves. Additionally, the rule requires
a covered clearing agency to establish, implement, maintain and enforce
written policies and procedures reasonably designed to have the
management of a covered clearing agency regularly review the efficiency
and effectiveness of the covered clearing agency's (i) clearing and
settlement arrangement; (ii) operating structure, including risk
management policies, procedures, and systems; (iii) scope of products
cleared or settled; and (iv) use of technology and communications
procedures.\242\
---------------------------------------------------------------------------

    \242\ See 17 CFR 240.17Ad-22(e)(21); CCA Standards adopting
release, supra note 7, at 475.
---------------------------------------------------------------------------

    The purpose of this information collection is to ensure that the
services provided by a covered clearing agency do not become
inefficient and to promote the sound operation of a covered clearing
agency.
22. Rule 17Ad-22(e)(22)
    Rule 17Ad-22(e)(22) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to use, or at a minimum, accommodate,
relevant internationally accepted communication procedures and
standards in order to facilitate efficient payment, clearing, and
settlement.\243\
---------------------------------------------------------------------------

    \243\ See 17 CFR 240.17Ad-22(e)(22); CCA Standards adopting
release, supra note 7, at 475.
---------------------------------------------------------------------------

    The purpose of this information collection is to ensure the prompt
and accurate clearance and settlement of securities transactions by
enabling participants to communicate with a clearing agency in a
timely, reliable, and accurate manner.
23. Rule 17Ad-22(e)(23)
    Rule 17Ad-22(e)(23) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to (i) publicly disclose all relevant
rules and material procedures, including key aspects of its default
rules and procedures; (ii) 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; and (iii) publicly disclose relevant basic data on transaction
volume and values.
    Rule 17Ad-22(e)(23)(iv) requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to maintain clear and comprehensive
rules and procedures that provide for a comprehensive public disclosure
that describes the covered clearing agency's material rules, policies,
and procedures regarding its legal, governance, risk management, and
operating framework, accurate in all material respects at the time of
publication, including (i) a general background of the covered clearing
agency, including its function and the market it serves, basic data and
performance statistics on its services and operations, such as basic
volume and value statistics by product type, average aggregate intraday
exposures to its participants, and statistics on the covered clearing
agency's operational reliability, and a description of its general
organization, legal and regulatory framework, and system design and
operations; (ii) a standard-by-standard summary narrative for each
applicable standard set forth in Rules 17Ad-22(e)(1) through (23) with
sufficient detail and context to enable the reader to understand its
approach to controlling the risks and addressing the requirements in
each standard; (iii) a summary of material changes since the last
update of the disclosure; and (iv) an executive summary of the key
points regarding each. Rule 17Ad-22(e)(23)(v) also requires a covered
clearing agency to establish, implement, maintain and enforce written
policies and procedures reasonably designed to ensure the comprehensive
public disclosure required under Rule 17Ad-22(e)(23)(iv) is updated not
less than every two years, or more frequently following changes to its
system or the environment in which it operates to the extent necessary,
to ensure statements previously provided remain accurate in all
material respects.
    The purpose of this information collection is to ensure that
participants and prospective participants in a covered clearing agency
are provided with a complete picture of the covered clearing agency's
operations and risk management so that they can understand the risks
and responsibilities of participation in the covered clearing agency.
24. Rule 17Ad-22(c)(1)
    Rule 17Ad-22(c)(1) requires that, each fiscal quarter (based on
calculations made as of the last business day of the clearing agency's
fiscal quarter) or at any time upon Commission request, a registered
clearing agency that performs CCP services shall calculate and maintain
a record, in accordance with Rule 17a-1 under the Exchange Act, of the
financial and qualifying liquid resources necessary to meet the
requirements, as applicable, of Rules 17Ad-22(b)(3), (e)(4), and
(e)(7), and sufficient documentation to explain the methodology it uses
to compute such financial resources or qualifying liquid resources
requirement.
    The purpose of the collection of information is to enable the
Commission to monitor the financial resources of registered clearing
agencies that provide CCP services.

B. Respondents

    The requirements in Rule 17Ad-22(e) impose a PRA burden on covered
clearing agencies. Under the adopted definition of ``covered clearing
agency,'' Rule 17Ad-22(e) applies to five registered clearing agencies,
including four registered clearing agencies that provide CCP services
and one registered clearing agency that provides CSD and SSS services.
In the CCA Standards adopting release, the Commission estimated that
two additional entities might seek to register with the Commission.
Accordingly, the Commission estimated that the majority of the
requirements under Rule 17Ad-22(e) would have seven respondents, of
which (i) six would be CCPs and one would be a CSD and (ii) two would
be security-based swap clearing agencies. The Commission further
clarified that Rule 17Ad-22(e)(6) would only have six respondents
because it only applies to CCPs, Rule 17Ad-22(e)(11) would only have
one respondent because it only applies to CSDs, and Rule 17Ad-22(e)(14)
would only have two respondents because it only applies to security-
based swap clearing agencies.
    Under the proposed amendment to the definition of ``covered
clearing agency'' described above, Rule 17Ad-22(e) would instead apply
to six registered clearing agencies, including five registered clearing
agencies that provide CCP services and one registered clearing agency
that provides CSD and SSS services.\244\ The Commission

continues to believe that two additional entities might seek to
register with the Commission. Accordingly, the Commission preliminarily
estimates that, under the proposed amendment to the definition of
``covered clearing agency'' described above, a majority of the
requirements under Rule 17Ad-22(e) would have eight respondents, of
which (i) seven would be CCPs and one would be a CSD and (ii) two would
be security-based swap clearing agencies. The Commission also notes
that Rule 17Ad-22(e)(6) would now have seven respondents because it
only applies to CCPs, Rule 17Ad-22(e)(11) would continue to only have
one respondent because it only applies to CSDs, and Rule 17Ad-22(e)(14)
would continue to only have two respondents because it only applies to
security-based swap clearing agencies.
---------------------------------------------------------------------------

    \244\ See supra Part III.B and accompanying text. The additional
registered clearing agency that provides CCP services and that would
be subject to Rule 17Ad-22(e) under the proposed amendment to the
definition of ``covered clearing agency'' is currently a registered
clearing agency subject to Rule 17Ad-22(d).
---------------------------------------------------------------------------

    The PRA analysis for seven of the eight respondents appears in the
CCA Standards adopting release. Below, the Commission provides a PRA
analysis for the one remaining respondent that would be subject to Rule
17Ad-22(e) under the proposed amendment to the definition of ``covered
clearing agency,'' therefore reflecting the incremental annual
reporting and recordkeeping burdens resulting from the proposed
amendment to the definition of ``covered clearing agency.'' In
addition, because the one remaining respondent provides CCP services
and does not provide CSD services, the analysis does not include Rule
17Ad-22(e)(11).

C. Total Annual Reporting and Recordkeeping Burdens

    As described in the CCA Standards adopting release,\245\ the
Commission continues to believe that the information collected pursuant
to Rule 17Ad-22(e) reflects, to a degree, existing policies and
procedures at covered clearing agencies, but in some instances a
covered clearing agency will be required to develop new policies and
procedures. Thus, when a covered clearing agency reviews and updates
its policies and procedures pursuant to Rule 17Ad-22(e), the Commission
believes that the PRA burden may vary across the requirements under
Rule 17Ad-22(e), depending on the complexity of the requirement in
question and the extent to which a covered clearing agency already has
policies and procedures consistent with the requirement. As a general
matter, the portions of Rule 17Ad-22(e) for which the Commission
expects a higher PRA burden are those provisions including requirements
not comparable to any existing requirements under Rule 17Ad-22(d).
Where the requirements do not reflect existing practices or the normal
course of a covered clearing agency's activity, the PRA burden may
entail, in addition to ongoing burdens, initial one-time burdens to
develop new policies and procedures.
---------------------------------------------------------------------------

    \245\ See CCA Standards adopting release, supra note 7, at 416-
418.
---------------------------------------------------------------------------

    Consistent with the CCA Standards adopting release, the Commission
continues to believe that Rules 17Ad-22(e)(1), (8) through (10), (12),
(14), (16), and (22) contain requirements either substantially similar
to those in Rule 17Ad-22(d) or reflect current practices at covered
clearing agencies. The Commission believes that a covered clearing
agency may need to make only limited changes to its policies and
procedures pursuant to the requirements in these rules. For example, a
covered clearing agency may need to conduct a comparison of its
existing policies and procedures against each rule to confirm that its
policies and procedures are consistent with the requirements therein.
    The Commission also continues to believe that Rules 17Ad-22(e)(2),
(3), (5), (11), (13), (17), (18), (20), and (21) contain provisions
that are similar to those in Rule 17Ad-22(d) but would also impose
additional requirements not found in Rule 17Ad-22(d). The Commission
believes that a covered clearing agency may need to make changes to
update its policies and procedures pursuant to the requirements in
these rules. For example, a covered clearing agency may need to review
and amend its existing rules, policies, and procedures but may not need
to develop, design, or implement new operations or practices pursuant
to these rules.
    For Rules 17Ad-22(e)(4), (6), (7), (15), (19), and (23), for which
no comparable pre-existing requirements under Rule 17Ad-22 have been
identified, the Commission continues to believe that a covered clearing
agency may need to make more extensive changes to its policies and
procedures, may need to implement new policies and procedures, and may
need to take other steps pursuant to the requirements in these rules.
For example, a covered clearing agency may need to develop, design, and
implement new operations and practices. In these cases, the PRA burden
is greater since these requirements may not reflect established
practices or the normal course of a covered clearing agency's
activities. Further, the PRA burden for these rules may entail both
initial one-time burdens, such as create new policies and procedures,
as well as ongoing burdens, such as requirements to make certain
disclosures or perform certain types of review, on a periodic basis.
1. Rule 17Ad-22(e)(1)
    Rule 17Ad-22(e)(1) contains substantially similar provisions to
Rule 17Ad-22(d)(1).\246\ The Commission therefore expects that a
respondent clearing agency has written rules, policies, and procedures
substantially similar to the requirements in the rule and that the PRA
burden would include the incremental burdens of reviewing current
policies and procedures and revising them, where appropriate, pursuant
to the rule. Accordingly, based on the similar provisions and the
corresponding burden estimates previously made by the Commission for
Rule 17Ad-22(d)(1),\247\ the Commission preliminarily estimates that a
respondent clearing agency would incur an aggregate one-time burden of
approximately 8 hours to review and revise existing policies and
procedures.\248\
---------------------------------------------------------------------------

    \246\ See 17 CFR 240.17Ad-22(d)(1), (e)(1).
    \247\ See CCA Standards adopting release, supra note 7, at 418-
419; Clearing Agency Standards adopting release, supra note 31, at
66260.
    \248\ This figure was calculated as follows: ((Assistant General
Counsel for 2 hours) + (Compliance Attorney for 6 hours)) = 8 hours
x 1 respondent clearing agency = 8 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(1) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\249\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(1) would impose an aggregate annual burden on a respondent
clearing agency of 3 hours.\250\
---------------------------------------------------------------------------

    \249\ See CCA Standards adopting release, supra note 7, at 419;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \250\ This figure was calculated as follows: (Compliance
Attorney for 3 hours) x 1 respondent clearing agency = 3 hours.
---------------------------------------------------------------------------

2. Rule 17Ad-22(e)(2)
    Rule 17Ad-22(e)(2) contains similar provisions to Rule 17Ad-
22(d)(8) but also adds additional requirements that do not appear in
Rule 17Ad-22(d).\251\ The Commission therefore expects that a
respondent clearing agency may have written rules, policies, and
procedures similar to the requirements in the rule and that the PRA
burden includes the

incremental burdens of reviewing and revising current policies and
procedures and creating new policies and procedures, as necessary,
pursuant to the rule. Accordingly, based on the similar provisions and
the corresponding burden estimates previously made by the Commission
for Rule 17Ad-22(d)(8),\252\ the Commission preliminarily estimates
that a respondent clearing agency would incur an aggregate one-time
burden of approximately 22 hours to review and revise existing policies
and procedures and to create new policies and procedures, as
necessary.\253\
---------------------------------------------------------------------------

    \251\ See 17 CFR 204.17Ad-22(d)(8), (e)(2).
    \252\ See CCA Standards adopting release, supra note 7, at 420;
Clearing Agency Standards adopting release, supra note 31, at 66260.
    \253\ This figure was calculated as follows: ((Assistant General
Counsel for 24 hours) + (Compliance Attorney for 10 hours)) = 22
hours x 1 respondent clearing agency = 22 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(2) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\254\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(2) would impose an aggregate annual burden on a respondent
clearing agency of 4 hours.\255\
---------------------------------------------------------------------------

    \254\ See CCA Standards adopting release, supra note 7, at 421;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \255\ This figure was calculated as follows: (Compliance
Attorney for 4 hours) x 1 respondent clearing agency = 4 hours.
---------------------------------------------------------------------------

3. Rule 17Ad-22(e)(3)
    While Rule 17Ad-22(d) requires registered clearing agencies to have
policies and procedures to manage certain risks,\256\ Rule 17Ad-
22(e)(3) requires a comprehensive framework for risk management, under
which policies and procedures for risk management are designed
holistically, are consistent with each other, and work effectively
together. Accordingly, the PRA burden requires a respondent clearing
agency to revise its written rules, policies, and procedures to
include, among other things, periodic review and plans for the recovery
and orderly wind-down of the covered clearing agency. As a result, the
Commission preliminarily estimates that a respondent clearing agency
would incur an aggregate one-time burden of 57 hours to review and
revise existing policies and procedures and to create new policies and
procedures, as necessary.\257\
---------------------------------------------------------------------------

    \256\ See 17 CFR 240.17Ad-22(d), (e)(3).
    \257\ This figure was calculated as follows: ((Assistant General
Counsel for 25 hours) + (Compliance Attorney for 18 hours) + (Senior
Risk Management Specialist for 7 hours) + (Computer Operations
Manager for 7 hours)) = 57 hours x 1 respondent clearing agency = 57
hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(3) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures created in
response to the rule and activities related to facilitating a periodic
review of the risk management framework. Based on the Commission's
previous estimates for ongoing monitoring and compliance burdens with
respect to Rule 17Ad-22,\258\ the Commission preliminarily estimates
that the ongoing activities required by Rule 17Ad-22(e)(3) would impose
an aggregate annual burden on a respondent clearing agency of 49
hours.\259\ The Commission notes that the estimated ongoing burden for
Rule 17Ad-22(e)(3) is similar to the initial one-time burden because
the rule includes a specific requirement that policies and procedures
for comprehensive risk management include review on a specified
periodic basis and approval by the board of directors annually.
---------------------------------------------------------------------------

    \258\ See CCA Standards adopting release, supra note 7, at 422-
423; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \259\ This figure was calculated as follows: ((Compliance
Attorney for 8 hours) + (Administrative Assistant for 3 hours) +
(Senior Business Analyst for 5 hours) + (Risk Management Specialist
for 33 hours)) = 49 hours x 1 respondent clearing agency = 49 hours.
---------------------------------------------------------------------------

4. Rule 17Ad-22(e)(4)
    The Commission has previously estimated that the PRA burdens for
Rule 17Ad-22(e)(4) are more significant than in other cases under Rule
17Ad-22(e) and may require a respondent clearing agency to make
substantial changes to its written rules, policies, and procedures
pursuant to the rule.\260\ In addition, Rule 17Ad-22(e)(4) will require
a respondent clearing agency to make one-time systems adjustments so
that it has the capability to test the sufficiency of its financial
resources and to perform an annual model validation. As a result, the
Commission preliminarily estimates that a respondent clearing agency
would incur an aggregate one-time burden of 200 hours to review and
revise existing policies and procedures and to create new policies and
procedures, as necessary.\261\
---------------------------------------------------------------------------

    \260\ See Clearing Agency Standards adopting release, supra note
7, at 423.
    \261\ This figure was calculated as follows: ((Assistant General
Counsel for 60 hours) + (Compliance Attorney for 40 hours) + (Senior
Risk Management Specialist for 30 hours) + (Computer Operations
Manager for 45 hours) + (Chief Compliance Officer for 15 hours) +
(Senior Programmer for 10 hours)) = 200 hours x 1 respondent
clearing agency = 200 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(4) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures developed in
response to the rule and ongoing activities with respect to testing the
sufficiency of its financial resources and performing the annual model
validation. Based on the Commission's previous estimates for ongoing
monitoring and compliance burdens with respect to Rule 17Ad-22,\262\
the Commission preliminarily estimates that the ongoing activities
required by Rule 17Ad-22(e)(4) would impose an aggregate annual burden
on a respondent clearing agency of 60 hours.\263\
---------------------------------------------------------------------------

    \262\ See CCA Standards adopting release, supra note 7, at 424-
425; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \263\ This figure was calculated as follows: ((Compliance
Attorney for 24 hours) + (Administrative Assistant for 3 hours) +
(Senior Business Analyst for 3 hours) + (Risk Management Specialist
for 30 hours)) = 60 hours x 1 respondent clearing agency = 60 hours.
---------------------------------------------------------------------------

5. Rule 17Ad-22(e)(5)
    Rule 17Ad-22(e)(5) contains similar provisions to Rule 17Ad-
22(d)(3).\264\ The Commission therefore expects that a respondent
clearing agency has written rules, policies, and procedures
substantially similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing current policies
and procedures and revising them, where appropriate, pursuant to the
rule. For example, a respondent clearing agency may need to develop new
policies and procedures for an annual review of the sufficiency of its
collateral haircuts and concentration limits. Accordingly, based on the
similar policies and procedures requirements in and the Commission's
previous corresponding burden estimates for Rule 17Ad-22(d)(3),\265\
the Commission preliminarily estimates that a respondent clearing
agency would incur an aggregate one-time burden of approximately 42
hours to review and review existing policies and procedures

and to create new policies and procedures, as necessary.\266\
---------------------------------------------------------------------------

    \264\ See 17 CFR 240.17Ad-22(d)(3), (e)(5).
    \265\ See CCA Standards adopting release, supra note 7, at 425-
426; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \266\ This figure was calculated as follows: ((Assistant General
Counsel for 16 hours) + (Compliance Attorney for 12 hours) + (Senior
Risk Management Specialist for 7 hours) + (Computer Operations
Manager for 7 hours)) = 42 hours x 1 respondent clearing agency = 42
hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(5) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to the written policies and procedures created
in response to the rule and also requires an annual review of
collateral haircuts and concentration limits. Based on the Commission's
previous estimates for ongoing monitoring and compliance burdens with
respect to Rule 17Ad-22,\267\ the Commission preliminarily estimates
that the ongoing activities required by Rule 17Ad-22(e)(5) would impose
an aggregate annual burden on a respondent clearing agency of 36
hours.\268\ The Commission notes that the estimated ongoing burden for
Rule 17Ad-22(e)(5) is similar to the initial one-time burden because
the rule requires policies and procedures for a not-less-than-annual
review of the sufficiency of a covered clearing agency's collateral
haircuts and concentration limits.
---------------------------------------------------------------------------

    \267\ See CCA Standards adopting release, supra note 7, at 426;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \268\ This figure was calculated as follows: ((Compliance
Attorney for 6 hours) + (Risk Management Specialist for 30 hours)) =
36 hours x 1 respondent clearing agency = 36 hours.
---------------------------------------------------------------------------

6. Rule 17Ad-22(e)(6)
    The Commission has previously estimated that the PRA burdens for
Rule 17Ad-22(e)(6) are more significant than in other cases under Rule
17Ad-22(e) and may require a respondent clearing agency to make
substantial changes to its written rules, policies, and procedures
pursuant to the rule.\269\ For example, Rule 17Ad-22(e)(6) requires
one-time systems adjustments to perform daily backtesting and monthly
(or more frequent) sensitivity analyses. As a result, the Commission
preliminarily estimates that a respondent clearing agency would incur
an aggregate one-time burden of 180 hours to review and revise existing
policies and procedures and to create new policies and procedures, as
necessary.\270\
---------------------------------------------------------------------------

    \269\ See CCA Standards adopting release, supra note 7, at 427.
    \270\ This figure was calculated as follows: ((Assistant General
Counsel for 50 hours) + (Compliance Attorney for 40 hours) + (Senior
Risk Management Specialist for 25 hours) + (Computer Operations
Manager for 40 hours) + (Chief Compliance Officer for 15 hours) +
(Senior Programmer for 10 hours)) = 180 hours x 1 respondent
clearing agency = 180 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(6) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to the written policies and procedures created
in response to the rule and activities associated with daily
backtesting, monthly (or more frequent) sensitivity analyses, and
annual model validation. Based on the Commission's previous estimates
for ongoing monitoring and compliance burdens with respect to Rule
17Ad-22,\271\ the Commission preliminarily estimates that the ongoing
activities required by Rule 17Ad-22(e)(6) would impose an aggregate
annual burden on a respondent clearing agency of 60 hours.\272\
---------------------------------------------------------------------------

    \271\ See CCA Standards adopting release, supra note 7, at 427-
428; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \272\ This figure was calculated as follows: ((Compliance
Attorney for 24 hours) + (Administrative Assistant for 3 hours) +
(Senior Business Analyst for 3 hours) + (Risk Management Specialist
for 30 hours)) = 60 hours x 1 respondent clearing agency = 60 hours.
---------------------------------------------------------------------------

7. Rule 17Ad-22(e)(7)
    The Commission estimates that the PRA burdens for Rule 17Ad-
22(e)(7) are more significant than in other cases under Rule 17Ad-22(e)
and may require a respondent clearing agency to make substantial
changes to its written rules, policies, and procedures pursuant to the
rule.\273\ For example, Rule 17Ad-22(e)(7) requires one-time systems
adjustments to test the sufficiency of its liquid resources, test its
access to liquidity providers, and perform an annual model validation.
As a result, the Commission preliminarily estimates that a respondent
clearing agency would incur an aggregate one-time burden of 330 hours
to review and revise existing policies and procedures.\274\
---------------------------------------------------------------------------

    \273\ See CCA Standards adopting release, supra note 7, at 428.
    \274\ This figure was calculated as follows: ((Assistant General
Counsel for 95 hours) + (Compliance Attorney for 85 hours) + (Senior
Risk Management Specialist for 45 hours) + (Computer Operations
Manager for 60 hours) + (Chief Compliance Officer for 30 hours) +
(Senior Programmer for 15 hours)) = 330 hours x 1 respondent
clearing agency = 330 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(7) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to policies and procedures created in response
to the rule as well as activities related to testing the sufficiency of
its liquidity resources, testing access to its liquidity providers, and
performing an annual model validation. Based on the Commission's
previous estimates for ongoing monitoring and compliance burdens with
respect to Rule 17Ad-22,\275\ the Commission preliminarily estimates
that the ongoing activities required by Rule 17Ad-22(e)(7) would impose
an aggregate annual burden on a respondent clearing agency of 128
hours.\276\
---------------------------------------------------------------------------

    \275\ See CCA Standards adopting release, supra note 7, at 429;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \276\ This figure was calculated as follows: ((Compliance
Attorney for 48 hours) + (Administrative Assistant for 5 hours) +
(Senior Business Analyst for 5 hours) + (Risk Management Specialist
for 60 hours) + (Senior Risk Management Specialist for 10 hours)) =
128 hours x 1 respondent clearing agency = 128 hours.
---------------------------------------------------------------------------

8. Rule 17Ad-22(e)(8)
    Rule 17Ad-22(e)(8) contains substantially similar provisions to
Rule 17Ad-22(d)(12).\277\ The Commission therefore expects that a
respondent clearing agency has written rules, policies, and procedures
substantially similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing current policies
and procedures and revising them, where appropriate, pursuant to the
rule. Accordingly, based on the similar provisions and the
corresponding burden estimates previously made by the Commission for
Rule 17Ad-22(d)(12),\278\ the Commission preliminarily estimates that a
respondent clearing agency would incur an aggregate one-time burden of
approximately 12 hours to review and revise existing policies and
procedures.\279\
---------------------------------------------------------------------------

    \277\ See 17 CFR 240.17Ad-22(d)(12), (e)(8).
    \278\ See Clearing Agency Standards adopting release, supra note
31, at 66260.
    \279\ This figure was calculated as follows: ((Assistant General
Counsel for 2 hours) + (Compliance Attorney for 6 hours) + (Senior
Business Analyst for 2 hours) + (Computer Operations Manager for 2
hours)) = 12 hours x 1 respondent clearing agency = 12 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(8) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\280\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(8) would impose an aggregate annual burden on

a respondent clearing agency of approximately 5 hours.\281\
---------------------------------------------------------------------------

    \280\ See CCA Standards adopting release, supra note 7, at 429-
430; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \281\ This figure was calculated as follows: (Compliance
Attorney for 5 hours) x 1 respondent clearing agency = 5 hours.
---------------------------------------------------------------------------

9. Rule 17Ad-22(e)(9)
    Rule 17Ad-22(e)(9) contains substantially similar provisions to
Rule 17Ad-22(d)(5).\282\ The Commission therefore expects that a
respondent clearing agency has written rules, policies, and procedures
substantially similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing current policies
and procedures and revising them, where appropriate, pursuant to the
rule. Accordingly, based on the similar provisions and the
corresponding burden estimates previously made by the Commission for
Rule 17Ad-22(d)(5),\283\ the Commission preliminarily estimates that a
respondent clearing agency would incur an aggregate one-time burden of
approximately 12 hours to review and revise existing policies and
procedures.\284\
---------------------------------------------------------------------------

    \282\ See 17 CFR 240.17Ad-22(d)(5), (e)(9).
    \283\ See CCA Standards adopting release, supra note 7, at 431;
Clearing Agency Standards adopting release, supra note 31, at 66260.
    \284\ This figure was calculated as follows: ((Assistant General
Counsel for 2 hours) + (Compliance Attorney for 6 hours) + (Senior
Business Analyst for 2 hours) + (Computer Operations Manager for 2
hours)) = 12 hours x 1 respondent clearing agency = 12 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(9) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\285\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(9) would impose an aggregate annual burden on a respondent
clearing agency of approximately 5 hours.\286\
---------------------------------------------------------------------------

    \285\ See CCA Standards adopting release, supra note 7, at 431;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \286\ This figure was calculated as follows: (Compliance
Attorney for 5 hours) x 1 respondent clearing agency = 5 hours.
---------------------------------------------------------------------------

10. Rule 17Ad-22(e)(10)
    Rule 17Ad-22(e)(10) contains substantially similar provisions to
Rule 17Ad-22(d)(15).\287\ The Commission therefore expects that a
respondent clearing agency has written rules, policies, and procedures
substantially similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing current policies
and procedures and revising them, where appropriate, pursuant to the
rule. Accordingly, based on the similar provisions and the
corresponding burden estimates previously made by the Commission for
Rule 17Ad-22(d)(15),\288\ the Commission preliminarily estimates that a
respondent clearing agency would incur an aggregate one-time burden of
approximately 12 hours to review and revise existing policies and
procedures.\289\
---------------------------------------------------------------------------

    \287\ See 17 CFR 240.17Ad-22(d)(15), (e)(10).
    \288\ See CCA Standards adopting release, supra note 7, at 432;
Clearing Agency Standards adopting release, supra note 31, at 66260.
    \289\ This figure was calculated as follows: ((Assistant General
Counsel for 2 hours) + (Compliance Attorney for 6 hours) + (Senior
Business Analyst for 2 hours) + (Computer Operations Manager for 2
hours)) = 12 hours x 1 respondent clearing agency = 12 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(10) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\290\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(10) would impose an aggregate annual burden on a respondent
clearing agency of approximately 5 hours.\291\
---------------------------------------------------------------------------

    \290\ See CCA Standards adopting release, supra note 7, at 432-
433; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \291\ This figure was calculated as follows: (Compliance
Attorney for 5 hours) x 1 respondent clearing agency = 5 hours.
---------------------------------------------------------------------------

11. Rule 17Ad-22(e)(12)
    Rule 17Ad-22(e)(12) contains substantially similar provisions to
Rule 17Ad-22(d)(13).\292\ The Commission therefore expects that a
respondent clearing agency has written rules, policies, and procedures
substantially similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing current policies
and procedures and revising them, where appropriate, pursuant to the
rule. Accordingly, based on the similar provisions and the
corresponding burden estimates previously made by the Commission for
Rule 17Ad-22(d)(13),\293\ the Commission preliminarily estimates that a
respondent clearing agency would incur an aggregate one-time burden of
approximately 12 hours to review and revise existing policies and
procedures.\294\
---------------------------------------------------------------------------

    \292\ See 17 CFR 240.17Ad-22(d)(13), (e)(12).
    \293\ See CCA Standards adopting release, supra note 7, at 434-
435; Clearing Agency Standards adopting release, supra note 31, at
66260.
    \294\ This figure was calculated as follows: ((Assistant General
Counsel for 2 hours) + (Compliance Attorney for 6 hours) + (Senior
Business Analyst for 2 hours) + (Computer Operations Manager for 2
hours)) = 12 hours x 1 respondent clearing agency = 12 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(12) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\295\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(12) would impose an aggregate annual burden on a respondent
clearing agency of approximately 5 hours.\296\
---------------------------------------------------------------------------

    \295\ See CCA Standards adopting release, supra note 7, at 435;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \296\ This figure was calculated as follows: (Compliance
Attorney for 5 hours) x 1 respondent clearing agency = 5 hours.
---------------------------------------------------------------------------

12. Rule 17Ad-22(e)(13)
    Rule 17Ad-22(e)(13) requires a respondent clearing agency to have
written policies and procedures reasonably designed to address
participant default and ensure that the clearing agency can contain
losses and liquidity demands and continue to meet its obligations. Rule
17Ad-22(e)(13) contains similar provisions to Rule 17Ad-22(d)(11) but
also imposes additional requirements that do not appear in Rule 17Ad-
22.\297\ The Commission therefore expects that a respondent clearing
agency may have written rules, policies, and procedures similar to some
requirements in the rule and that the PRA burden includes the
incremental burdens of reviewing and revising existing policies and
procedures pursuant to Rule 17Ad-22(e)(13) and creating new policies
and procedures, as necessary. Accordingly, based on the similar
policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-
22(d)(11),\298\ the Commission preliminarily believes that a respondent
clearing agency would incur an aggregate one-time burden of
approximately 60 hours to review and revise existing policies and
procedures

and to create new policies and procedures, as necessary.\299\
---------------------------------------------------------------------------

    \297\ See 17 CFT 240.17Ad-22(d)(11), (e)(13).
    \298\ See CCA Standards adopting release, supra note 7, at 436-
437; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \299\ This figure was calculated as follows: ((Assistant General
Counsel for 20 hours) + (Compliance Attorney for 16 hours) + (Senior
Business Analyst for 12 hours) + (Computer Operations Manager for 12
hours)) = 60 hours x 1 respondent clearing agency = 60 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(13) also imposes ongoing burdens on a respondent
clearing agency. The rule requires policies and procedures for the
annual review and testing of a clearing agency's default policies and
procedures. Based on the Commission's previous estimates for ongoing
monitoring and compliance burdens with respect to Rule 17Ad-22,\300\
the Commission preliminarily estimates that the ongoing activities
required by Rule 17Ad-22(e)(13) would impose an aggregate annual burden
on a respondent clearing agency of approximately 9 hours.\301\
---------------------------------------------------------------------------

    \300\ See CCA Standards adopting release, supra note 7, at 437;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \301\ This figure was calculated as follows: (Compliance
Attorney for 9 hours) x 1 respondent clearing agency = 9 hours.
---------------------------------------------------------------------------

13. Rule 17Ad-22(e)(14)
    With respect to Rule 17Ad-22(e)(14), a respondent clearing agency
is a registered clearing agency that provides CCP services for
security-based swaps. Such clearing agencies generally have written
policies and procedures regarding the segregation and portability of
customer positions and collateral as a result of applicable rules and
regulations notwithstanding Rule 17Ad-22.\302\ The Commission therefore
expects that a respondent clearing agency has written rules, policies,
and procedures substantially similar to the requirements in the rule
and that the PRA burden includes the incremental burdens of reviewing
current policies and procedures and revising them, where appropriate,
pursuant to the rule. Accordingly, the Commission estimates that Rule
17Ad-22(e)(14) imposes on respondent clearing agencies an aggregate
one-time burden of 36 hours to review and revise existing policies and
procedures.\303\
---------------------------------------------------------------------------

    \302\ See, e.g., 77 FR 6336 (Feb. 7, 2012) (CFTC adopting rules
imposing LSOC on DCOs for cleared swaps). Because the respondent
clearing agency is subject to the CFTC's segregation and portability
requirements for cleared swaps, the Commission has previously
expected that the burden imposed by Rule 17Ad-22(e)(14) will be
limited. See CCA Standards adopting release, supra note 7, at 438.
    \303\ This figure was calculated as follows: ((Assistant General
Counsel for 12 hours) + (Compliance Attorney for 10 hours) +
(Computer Operations Manager for 7 hours) + (Senior Business Analyst
for 7 hours)) = 36 hours x 1 respondent clearing agency that
provides CCP services = 36 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(14) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\304\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(14) would impose an aggregate annual burden on a respondent
clearing agency of approximately 6 hours.\305\
---------------------------------------------------------------------------

    \304\ See CCA Standards adopting release, supra note 7, at 438-
439; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \305\ This figure was calculated as follows: (Compliance
Attorney for 6 hours) x 1 respondent clearing agency = 6 hours.
---------------------------------------------------------------------------

14. Rule 17Ad-22(e)(15)
    Because Rule 17Ad-22(d) does not include requirements related to
general business risk, the Commission estimates that the PRA burdens
for Rule 17Ad-22(e)(15) are more significant than in other cases under
Rule 17Ad-22(e) and may require a respondent clearing agency to make
substantial changes to its written rules, policies, and procedures
pursuant to the rule.\306\ The Commission preliminarily estimates that
Rule 17Ad-22(e)(15) would impose an aggregate one-time burden on a
respondent clearing agency of 210 hours to review and revise existing
policies and procedures and to create new policies and procedures, as
necessary.\307\
---------------------------------------------------------------------------

    \306\ See 17 CFR 240.17Ad-22(d), (e)(15).
    \307\ This figure was calculated as follows: ((Assistant General
Counsel for 40 hours) + (Compliance Attorney for 30 hours) +
(Computer Operations Manager for 10 hours) + (Senior Business
Analyst for 10 hours) + (Financial Analyst for 70 hours) + (Chief
Financial Officer for 50 hours)) = 210 hours x 1 respondent clearing
agency = 210 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(15) also imposes ongoing burdens on a respondent
clearing agency. Rule 17Ad-22(e)(15) requires a respondent clearing
agency to establish, implement, maintain and enforce written policies
and procedures reasonably designed to maintain a viable plan, approved
by its board of directors and updated at least annually, for raising
additional equity in the event that the covered clearing agency's
liquid net assets fall below the level required by the rule. Based on
the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\308\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(15) would impose an aggregate annual burden on a respondent
clearing agency of 48 hours.\309\
---------------------------------------------------------------------------

    \308\ See CCA Standards adopting release, supra note 7, at 439-
440; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \309\ This figure was calculated as follows: ((Compliance
Attorney for 42 hours) + (Administrative Assistant for 3 hours) +
(Senior Business Analyst for 3 hours)) = 48 hours x 1 respondent
clearing agency = 48 hours.
---------------------------------------------------------------------------

15. Rule 17Ad-22(e)(16)
    Rule 17Ad-22(e)(16) contains substantially similar provisions to
Rule 17Ad-22(d)(3).\310\ The Commission therefore expects that a
respondent clearing agency has written rules, policies, and procedures
substantially similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing current policies
and procedures and revising them, where appropriate, pursuant to the
rule. Accordingly, based on the similar provisions and the
corresponding burden estimates previously made by the Commission for
Rule 17Ad-22(d)(3),\311\ the Commission preliminarily estimates that a
respondent clearing agency would incur an aggregate one-time burden of
approximately 20 hours to review and revise existing policies and
procedures.\312\
---------------------------------------------------------------------------

    \310\ See 17 CFR 240.17Ad-22(d)(3), (e)(16).
    \311\ See CCA Standards adopting release, supra note 7, at 440;
Clearing Agency Standards adopting release, supra note 31, at 66260.
    \312\ This figure was calculated as follows: ((Assistant General
Counsel for 4 hours) + (Compliance Attorney for 8 hours) + (Senior
Business Analyst for 4 hours) + (Computer Operations Manager for 4
hours)) = 20 hours x 1 respondent clearing agency = 20 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(16) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\313\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(16) would impose an aggregate annual burden on a respondent
clearing agency of 6 hours.\314\
---------------------------------------------------------------------------

    \313\ See CCA Standards adopting release, supra note 7, at 441;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \314\ This figure was calculated as follows: (Compliance
Attorney for 6 hours) x 1 respondent clearing agency = 6 hours.
---------------------------------------------------------------------------

16. Rule 17Ad-22(e)(17)
    Rule 17Ad-22(e)(17) contains similar provisions to Rule 17Ad-
22(d)(4) but also imposes additional requirements that do not appear in
Rule 17Ad-22.\315\ The Commission therefore expects that a respondent
clearing agency may have written rules, policies, and procedures

similar to the requirements in the rule and that the PRA burden
includes the incremental burdens of reviewing and revising current
policies and procedures and creating new policies and procedures, as
necessary, pursuant to the rule. Accordingly, based on the similar
policies and procedures requirements and the corresponding burden
estimates previously made by the Commission for Rule 17Ad-
22(d)(4),\316\ the Commission preliminarily estimates that a respondent
clearing agency would incur an aggregate one-time burden of 28 hours to
review and revise existing policies and procedures and to create new
policies and procedures, as necessary.\317\
---------------------------------------------------------------------------

    \315\ See 17 CFR 240.17Ad-22(d)(4), (e)(17).
    \316\ See CCA Standards adopting release, supra note 7, at 442;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \317\ This figure was calculated as follows: ((Assistant General
Counsel for 4 hours) + (Compliance Attorney for 8 hours) + (Computer
Operations Manager for 6 hours) + (Senior Business Analyst for 4
hours) + (Chief Compliance Officer for 4 hours) + (Senior Programmer
for 2 hours)) = 28 hours x 1 respondent clearing agency = 28 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(17) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\318\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(17) would impose an aggregate annual burden on a respondent
clearing agency of 6 hours.\319\
---------------------------------------------------------------------------

    \318\ See CCA Standards adopting release, supra note 7, at 442;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \319\ This figure was calculated as follows: (Compliance
Attorney for 6 hours) x 1 respondent clearing agency = 6 hours.
---------------------------------------------------------------------------

17. Rule 17Ad-22(e)(18)
    Rule 17Ad-22(e)(18) contains similar provisions to Rules 17Ad-
22(b)(5) through (7) and (d)(2).\320\ The Commission therefore expects
that a respondent clearing agency may have written rules, policies, and
procedures similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing and revising
current policies and procedures and creating new policies and
procedures, as necessary, pursuant to the rule. Accordingly, based on
the similar policies and procedures requirements and the corresponding
burden estimates previously made by the Commission for Rules 17Ad-
22(b)(5) through (7) and (d)(2),\321\ the Commission preliminarily
estimates that a respondent clearing agency would incur an aggregate
one-time burden of 44 hours to review and revise existing policies and
procedures and to create new policies and procedures, as
necessary.\322\
---------------------------------------------------------------------------

    \320\ See 17 CFR 240.17Ad-22(b)(5)-(7), (d)(2), (e)(18).
    \321\ See CCA Standards adopting release, supra note 7, at 443;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \322\ This figure was calculated as follows: ((Assistant General
Counsel for 10 hours) + (Compliance Attorney for 7 hours) + Computer
Operations Manager for 15 hours) + (Senior Business Analyst for 5
hours) + (Chief Compliance Officer for 5 hours) + (Senior Programmer
for 2 hours)) = 44 hours x 1 respondent clearing agency = 44 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(18) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\323\ the Commission
preliminarily estimates that the ongoing activities required by the
rule would impose an aggregate annual burden on a respondent clearing
agency of 7 hours.\324\
---------------------------------------------------------------------------

    \323\ See CCA Standards adopting release, supra note 7, at 443-
444; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \324\ This figure was calculated as follows: (Compliance
Attorney for 7 hours) x 1 respondent clearing agency = 7 hours.
---------------------------------------------------------------------------

18. Rule 17Ad-22(e)(19)
    Tiered participation arrangements are not addressed by Rule 17Ad-
22(d). The Commission therefore expects that a respondent clearing
agency may need to create policies and procedures pursuant to Rule
17Ad-22(e)(19).\325\ The Commission estimates that Rule 17Ad-22(e)(19)
imposes an aggregate one-time burden on respondent clearing agencies of
44 hours to review and revise existing policies and procedures and to
create new policies and procedures, as necessary.\326\
---------------------------------------------------------------------------

    \325\ See 17 CFR 240.17Ad-22(d), (e)(19).
    \326\ This figure was calculated as follows: ((Assistant General
Counsel for 10 hours) + (Compliance Attorney for 7 hours) +
(Computer Operations Manager for 15 hours) + (Senior Business
Analyst for 5 hours) + (Chief Compliance Officer for 5 hours) +
(Senior Programmer for 2 hours)) = 44 hours x 1 respondent clearing
agency = 44 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(19) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\327\ the Commission
preliminarily estimates that the ongoing activities required by the
rule would impose an annual aggregate burden on a respondent clearing
agency of 7 hours.\328\
---------------------------------------------------------------------------

    \327\ See CCA Standards adopting release, supra note 7, at 444-
445; Clearing Agency Standards adopting release, supra note 31, at
66260.
    \328\ This figure was calculated as follows: (Compliance
Attorney for 7 hours) x 1 respondent clearing agency = 7 hours.
---------------------------------------------------------------------------

19. Rule 17Ad-22(e)(20)
    Rule 17Ad-22(e)(20) contains similar provisions to Rule 17Ad-
22(d)(7) but also adds additional requirements that do not appear in
Rule 17Ad-22(d).\329\ The Commission therefore expects that a
respondent clearing agency may have written rules, policies, and
procedures similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing and revising
current policies and procedures and creating new policies and
procedures, as necessary, pursuant to the rule. Accordingly, based on
the similar policies and procedures requirements and compliance burdens
associated with Rule 17Ad-22(d)(7),\330\ the Commission preliminarily
believes that a respondent clearing agency would incur an aggregate
one-time burden of approximately 44 hours to review and revise existing
policies and procedures.\331\
---------------------------------------------------------------------------

    \329\ See17 CFR 240.17Ad-22(d)(7), (e)(20).
    \330\ See CCA Standards adopting release, supra note 7, at 445;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \331\ This figure was calculated as follows: ((Assistant General
Counsel for 10 hours) + (Compliance Attorney for 7 hours) + (Senior
Business Analyst for 5 hours) + (Computer Operations Manager for 15
hours) + (Chief Compliance Officer for 5 hours) + (Senior Programmer
for 2 hours) = 44 hours x 1 respondent clearing agency = 44 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(20) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\332\ the Commission
preliminarily estimates that the ongoing activities required by the
rule would impose an aggregate annual burden on a respondent clearing
agency of 7 hours.\333\
---------------------------------------------------------------------------

    \332\ See CCA Standards adopting release, supra note 7, at 446;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \333\ This figure was calculated as follows: (Compliance
Attorney for 7 hours) x 1 respondent clearing agency = 7 hours.

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

20. Rule 17Ad-22(e)(21)
    Rule 17Ad-22(e)(21) contains similar provisions to Rule 17Ad-
22(d)(6) but also adds additional requirements that do not appear in
Rule 17Ad-22(d).\334\ The Commission therefore expects that a
respondent clearing agency may have written rules, policies, and
procedures similar to the requirements in the rule and that the PRA
burden includes the incremental burdens of reviewing and revising
current policies and procedures and creating new policies and
procedures, as necessary, pursuant to the rule. Accordingly, based on
the similar policies and procedures requirements and the corresponding
burden estimates previously made by the Commission for Rule 17Ad-
22(d)(6),\335\ the Commission preliminarily estimates that a respondent
clearing agency would incur an aggregate one-time burden of
approximately 32 hours to review and revise existing policies and
procedures.\336\
---------------------------------------------------------------------------

    \334\ See 17 CFR 240.17Ad-22(d)(6), (e)(21).
    \335\ See CCA Standards adopting release, supra note 7, at 447;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \336\ This figure was calculated as follows: ((Assistant General
Counsel for 10 hours) + (Compliance Attorney for 7 hours) + (Senior
Business Analyst for 5 hours) + (Computer Operations Manager for 10
hours)) = 32 hours x 1 respondent clearing agency = 32 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(21) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\337\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(21) would impose an aggregate annual burden on a respondent
clearing agency of 11 hours.\338\
---------------------------------------------------------------------------

    \337\ See CCA Standards adopting release, supra note 7, at 447;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \338\ This figure was calculated as follows: ((Compliance
Attorney for 5 hours) + (Administrative Assistant for 3 hours) +
(Senior Business Analyst for 3 hours) = 11 hours x 1 respondent
clearing agency = 11 hours.
---------------------------------------------------------------------------

21. Rule 17Ad-22(e)(22)
    Although Rule 17Ad-22(d) does not include any requirements with
provisions similar to Rule 17Ad-22(e)(22), the Commission understands
that covered clearing agencies currently use the relevant
internationally accepted communication procedures and standards and
therefore expects that a respondent clearing agency may need to make
only limited changes to its policies and procedures under the
rule.\339\ Accordingly, the Commission preliminarily estimates that
Rule 17Ad-22(e)(22) would impose an aggregate one-time burden on a
respondent clearing agency of 24 hours to review and revise existing
policies and procedures.\340\
---------------------------------------------------------------------------

    \339\ See 17 CFR 240.17Ad-22(d), (e)(22).
    \340\ This figure was calculated as follows: ((Assistant General
Counsel for 2 hours) + (Compliance Attorney for 6 hours) + (Computer
Operations Manager for 7 hours) + (Senior Business Analyst for 2
hours) + (Chief Compliance Officer for 5 hours) + (Senior Programmer
for 2 hours)) = 24 hours x 1 respondent clearing agency = 24 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(22) also imposes ongoing burdens on a respondent
clearing agency. It requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\341\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(22) would impose an aggregate annual burden on a respondent
clearing agency of 5 hours.\342\
---------------------------------------------------------------------------

    \341\ See CCA Standards adopting release, supra note 7, at 448;
Clearing Agency Standards adopting release, supra note 31, at 66260.
    \342\ This figure was calculated as follows: (Compliance
Attorney for 5 hours) x 1 respondent clearing agency = 5 hours.
---------------------------------------------------------------------------

22. Rule 17Ad-22(e)(23)
    Rule 17Ad-22(e)(23) contains similar requirements to Rule 17Ad-
22(d)(9) but also imposes substantial new requirements.\343\ The
Commission therefore expects that, although a respondent clearing
agency may have written rules, policies and procedures similar to those
required by some provisions under the rule, a respondent clearing
agency will need to create new policies and procedures to address the
other provisions. Accordingly, based on the similar policies and
procedures requirements and the corresponding burden estimates
previously made by the Commission for Rule 17Ad-22(d)(9),\344\ the
Commission preliminarily estimates that a respondent clearing agency
would incur an aggregate one-time burden of 138 hours to review and
revise existing policies and procedures and to create policies and
procedures, as necessary.\345\
---------------------------------------------------------------------------

    \343\ See 17 CFR 240.17Ad-22(d)(9), (e)(23).
    \344\ See CCA Standards adopting release, supra note 7, at 449;
Clearing Agency Standards adopting release, supra note 31, at 66260-
63.
    \345\ This figure was calculated as follows: ((Assistant General
Counsel for 38 hours) + (Compliance Attorney for 24 hours) +
(Computer Operations Manager for 32 hours) + (Senior Business
Analyst for 18 hours) + (Chief Compliance Officer for 18 hours) +
(Senior Programmer for 8 hours)) = 138 hours x 1 respondent clearing
agency = 138 hours.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(23) also imposes ongoing burdens on a respondent
clearing agency. The rule requires ongoing monitoring and compliance
activities with respect to its policies and procedures under the rule.
Based on the Commission's previous estimates for ongoing monitoring and
compliance burdens with respect to Rule 17Ad-22,\346\ the Commission
preliminarily estimates that the ongoing activities required by Rule
17Ad-22(e)(23) would impose an aggregate annual burden on a respondent
clearing agency of 34 hours.\347\
---------------------------------------------------------------------------

    \346\ See CCA Standards adopting release, supra note 7, at 449-
450; Clearing Agency Standards adopting release, supra note 31, at
66260-63.
    \347\ This figure was calculated as follows: (Compliance
Attorney for 34 hours) x 1 respondent clearing agency = 34 hours.
---------------------------------------------------------------------------

23. Total Burden for Rule 17Ad-22(e)
    The Commission preliminarily estimates that the aggregate initial
burden for a new respondent clearing agency under Rule 17Ad-22(e) would
be 1,567 hours. The aggregate ongoing burden for a new respondent
clearing agency under Rule 17Ad-22(e) would be 502 hours. Further, the
Commission preliminarily estimates that, under Rule 17Ad-22(e) and the
proposed amendment to the definition of ``covered clearing agency,''
all respondent clearing agencies would incur an aggregate initial
burden of 12,343 hours under Rule 17Ad-22(e) and an aggregate ongoing
burden of 4,039 hours.
24. Total Burden for Rule 17Ad-22(c)(1)
    With respect to Rule 17Ad-22(c)(1), a respondent clearing agency is
a registered clearing agency that provides CCP services. In the CCA
Standards adopting release the Commission estimated that respondent
clearing agencies would incur both initial and ongoing burdens under
Rule 17Ad-22(c)(1). Specifically, the Commission estimated that Rule
17Ad-22(c)(1) would impose on a respondent clearing agency a one-time
burden of 110 hours.\348\ The Commission preliminarily believes that
this estimate remains correct and that a respondent clearing agency
would incur an aggregate one-time burden of 110 hours to perform
adjustments needed to synthesize and

format existing information in a manner sufficient to explain the
methodology used to meet the requirements of Rule 17Ad-22(c)(1).\349\
---------------------------------------------------------------------------

    \348\ See CCA Standards adopting release, supra note 7, at 452-
453. This figure was calculated as follows: ((Chief Compliance
Officer at 44 hours) + (Computer Operations Department Manager at 44
hours) + (Senior Programmer at 22 hours)) = 110 hours.
    \349\ This figure was calculated as follows: ((Chief Compliance
Officer at 44 hours) + (Computer Operations Department Manager at 44
hours) + (Senior Programmer at 22 hours)) = 110 hours x 1 respondent
clearing agency = 110 hours.
---------------------------------------------------------------------------

    In addition, the Commission estimated that Rule 17Ad-22(c)(1) would
impose ongoing burdens on a respondent clearing agency of three hours
per respondent clearing agency.\350\ The Commission preliminarily
believes that this estimate remains correct and that the ongoing
activities required by Rule 17Ad-22(c)(1) would impose an aggregate
annual burden on respondent clearing agencies of 120 hours to perform
adjustments needed to synthesize and format existing information in a
manner sufficient to explain the methodology used to meet the
requirements of the rule.\351\
---------------------------------------------------------------------------

    \350\ This figure was calculated as follows: ((Compliance
Attorney at 1 hour) + (Computer Operations Department Manager at 2
hours)) = 3 hours per quarter x 4 quarters per year = 12 hours.
    \351\ This figure was calculated as follows: ((Compliance
Attorney at 2 hours) + (Computer Operations Department Manager at 3
hours)) = 5 hours per quarter x 4 quarters per year = 20 hours x 1
respondent clearing agency = 20 hours.
---------------------------------------------------------------------------

D. Collection of Information Is Mandatory

    The collection of information requirements for Rule 17Ad-22(c)(1)
and (e) are mandatory.

E. Confidentiality

    The Commission preliminarily expects that the policies and
procedures developed pursuant to Rule 17Ad-22(e) would be communicated
to the participants, as applicable, of each respondent clearing agency
and, as applicable, the public. A respondent clearing agency would be
required to preserve such policies and procedures in accordance with,
and for the periods specified in, Rules 17a-1 and 17a-4(e)(7) under the
Exchange Act.\352\ To the extent that the Commission receives
confidential information pursuant to this collection of information,
such information would be kept confidential subject to the provisions
of applicable law.\353\
---------------------------------------------------------------------------

    \352\ See 17 CFR 240.17a-1 and 17a-4(e)(7).
    \353\ See, e.g., 5 U.S.C. 552. Exemption 4 of the Freedom of
Information Act provides an exemption for trade secrets and
commercial or financial information obtained from a person and
privileged or confidential. See 5 U.S.C. 552(b)(4). Exemption 8 of
the Freedom of Information Act provides an exemption for matters
that are contained in or related to examination, operating, or
condition reports prepared by, on behalf of, or for the use of an
agency responsible for the regulation or supervision of financial
institutions. See 5 U.S.C. 552(b)(8).
---------------------------------------------------------------------------

F. Request for Comments

    The Commission invites comments on all of the above estimates.
Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission requests comment in
order to (a) evaluate whether the collection of information is
necessary for the proper performance of our functions, including
whether the information will have practical utility; (b) evaluate the
accuracy of our estimates of the burden of the collection of
information; (c) determine whether there are ways to enhance the
quality, utility, and clarity of the information to be collected; (d)
evaluate whether there are ways to minimize the burden of the
collection of information on those who respond, including through the
use of automated collection techniques or other forms of information
technology; and (e) determine whether there are cost savings associated
with the collection of information that have not been identified in
this proposal.
    Persons submitting comments on the collection of information
requirements should direct them to the Office of Management and Budget,
Attention: Desk Officer for the Securities and Exchange Commission,
Office of Information and Regulatory Affairs, Washington, DC 20503, and
should also send a copy of their comments to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090, with reference to File Number S7-23-16.
Requests for materials submitted to OMB by the Commission with regard
to this collection of information should be in writing, with reference
to File Number S7-23-16, and be submitted to the Securities and
Exchange Commission, Office of FOIA Services, 100 F Street NE.,
Washington, DC 20549-2736. As OMB is required to make a decision
concerning the collections of information between 30 and 60 days after
publication, a comment to OMB is best assured of having its full effect
if OMB receives it by November 14, 2016.

V. Small Business Regulatory Enforcement Fairness Act

    Under the Small Business Regulatory Enforcement Fairness Act of
1996, a rule is considered ``major'' where, if adopted, it results or
is likely to result in (i) an annual effect on the economy of $100
million or more (either in the form of an increase or a decrease); (ii)
a major increase in costs or prices for consumers or individual
industries; or (iii) significant adverse effect on competition,
investment, or innovation.\354\ The Commission requests comment on the
potential impact of the proposed amendments to Rule 17Ad-22 on the
economy on an annual basis, any potential increase in costs or prices
for consumers or individual industries, and any potential effect on
competition, investment, or innovation. Commenters are requested to
provide empirical data and other factual support for their views to the
extent possible.
---------------------------------------------------------------------------

    \354\ Public Law 104-121, 110 Stat. 857 (1996) (codified in
various sections of 5 U.S.C., 15 U.S.C. and as a note to 5 U.S.C.
601).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act (``RFA'') requires the Commission,
in promulgating rules, to consider the impact of those rules on small
entities.\355\ Section 603(a) of the Administrative Procedure Act,\356\
as amended by the RFA, generally requires the Commission to undertake a
regulatory flexibility analysis of all proposed rules to determine the
impact of such rulemaking on ``small entities.'' \357\ Section 605(b)
of the RFA states that this requirement shall not apply to any proposed
rule which, if adopted, would not have a significant impact on a
substantial number of small entities.\358\
---------------------------------------------------------------------------

    \355\ See 5 U.S.C. 601 et seq.
    \356\ 5 U.S.C. 603(a).
    \357\ Section 601(b) of the RFA permits agencies to formulate
their own definitions of ``small entities.'' See 5 U.S.C. 601(b).
The Commission has adopted definitions for the term ``small entity''
for the purposes of rulemaking in accordance with the RFA. These
definitions, as relevant to this proposed rulemaking, are set forth
in Rule 0-10, 17 CFR 240.0-10.
    \358\ See 5 U.S.C. 605(b).
---------------------------------------------------------------------------

A. Registered Clearing Agencies

    The proposed amendments to Rule 17Ad-22 would apply to registered
clearing agencies that are CCPs, CSDs, or SSSs. For the purposes of
Commission rulemaking and as applicable to the amendments to Rule 17Ad-
22, a small entity includes, when used with reference to a clearing
agency, a clearing agency that (i) compared, cleared, and settled less
than $500 million in securities transactions during the preceding
fiscal year, (ii) had less than $200 million of funds and securities in
its custody or control at all times during the preceding fiscal year
(or at any time that it has been in business, if shorter), and (iii) is
not affiliated with any person (other than a natural person) that is
not a small business or small organization.\359\
---------------------------------------------------------------------------

    \359\ See 17 CFR 240.0-10(d).

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

    Based on the Commission's existing information about the clearing
agencies currently registered with the Commission,\360\ the Commission
preliminarily believes that all such registered clearing agencies
exceed the thresholds defining ``small entities'' set out above. While
other clearing agencies may emerge and seek to register as clearing
agencies with the Commission, the Commission preliminarily does not
believe that any such entities would be ``small entities'' as defined
in Exchange Act Rule 0-10.\361\ Accordingly, the Commission
preliminarily believes that any such registered clearing agencies will
exceed the thresholds for ``small entities'' set forth in Exchange Act
Rule 0-10.
---------------------------------------------------------------------------

    \360\ In 2015, DTCC processed $1.508 quadrillion in financial
transactions. Within DTCC, DTC settled $112.3 trillion of securities
and held securities valued at $45.4 trillion, NSCC processed an
average daily value of $976.6 billion in equity securities, and FICC
cleared $917.1 trillion of transactions in government securities and
$48.2 trillion of transactions in agency mortgage-backed securities.
See DTCC, 2015 Annual Report, available at http://www.dtcc.com/annuals/2015/index.php. OCC cleared more than 4.1 billion contracts
and held margin of $98.3 billion at the end of 2015. See OCC, 2015
Annual Report, available at http://www.theocc.com/components/docs/about/annual-reports/occ-2015-annual-report.pdf. In addition,
Intercontinental Exchange (``ICE'') averaged daily trade volume of
9.3 million and revenues of $3.3 billion in 2015. See ICE at a
glance, available at https://www.theice.com/publicdocs/ICE_at_a_glance.pdf.
    \361\ See 17 CFR 240.0-10(d). The Commission based this
determination on its review of public sources of financial
information about registered clearing agencies.
---------------------------------------------------------------------------

B. Certification

    For the reasons described above, the Commission certifies that the
proposed amendments to Rule 17Ad-22 would not have a significant
economic impact on a substantial number of small entities for purposes
of the RFA. The Commission requests comment regarding this
certification. The Commission requests that commenters describe the
nature of any impact on small entities, including clearing agencies and
counterparties to security and security-based swap transactions, and
provide empirical data to support the extent of the impact.

VII. Statutory Authority

    Pursuant to the Exchange Act, particularly Section 17A thereof, 15
U.S.C. 78q-1, and Section 805 of the Clearing Supervision Act, 12
U.S.C. 5464, the Commission proposes to amend Rule 17Ad-22.

List of Subjects in 17 CFR Part 240

    Reporting and recordkeeping requirements, Securities.

Text of Proposed Amendment

    In accordance with the foregoing, 17 CFR part 240, as amended
elsewhere in this issue of the Federal Register, is proposed to be
further amended as follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE

0
1. The general authority citation for part 240 continues to read in
part as follows:

    Authority:  15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f,
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4,
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78ll, 78mm, 80a-20,
80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 et. seq.; and
8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 1350;
Pub. L. 111-203, 939A, 124 Stat. 1376 (2010); and Pub. L. 112-106,
sec. 503 and 602, 126 Stat. 326 (2012), unless otherwise noted.
* * * * *

    Section 240.17Ad-22 is also issued under 12 U.S.C. 5461 et seq.

* * * * *
0
2. Amend Sec.  240.17Ad-22 by revising paragraphs (a)(3), (5), (15),
(16), (17), (18) and (19), and adding paragraph (a)(20) to read as
follows:

Sec.  240.17Ad-22  Standards for clearing agencies.

    (a) * * *
    (3) Central securities depository means a clearing agency that is a
securities depository as described in Section 3(a)(23)(A) of the Act
(15 U.S.C. 78c(a)(23)(A)).
* * * * *
    (5) Covered clearing agency means a registered clearing agency that
provides the services of a central counterparty, central securities
depository, or securities settlement system.
* * * * *
    (15) Securities settlement system means a clearing agency that
enables securities to be transferred and settled by book entry
according to a set of predetermined multilateral rules.
    (16) Security-based swap means a security-based swap as defined in
section 3(a)(68) of the Act (15 U.S.C. 78c(a)(68)).
    (17) Sensitivity analysis means an analysis that involves analyzing
the sensitivity of a model to its assumptions, parameters, and inputs
that:
    (i) Considers the impact on the model of both moderate and extreme
changes in a wide range of inputs, parameters, and assumptions,
including correlations of price movements or returns if relevant, which
reflect a variety of historical and hypothetical market conditions.
    (ii) Uses actual portfolios and, where applicable, hypothetical
portfolios that reflect the characteristics of proprietary positions
and customer positions;
    (iii) Considers the most volatile relevant periods, where
practical, that have been experienced by the markets served by the
clearing agency; and
    (iv) Tests the sensitivity of the model to stressed market
conditions, including the market conditions that may ensue after the
default of a member and other extreme but plausible conditions as
defined in a covered clearing agency's risk policies.
    (18) Stress testing means the estimation of credit or liquidity
exposures that would result from the realization of potential stress
scenarios, such as extreme price changes, multiple defaults, or changes
in other valuation inputs and assumptions.
    (19) Systemically important in multiple jurisdictions means, with
respect to a covered clearing agency, a covered clearing agency that
has been determined by the Commission to be systemically important in
more than one jurisdiction pursuant to Sec.  240.17Ab2-2.
    (20) Transparent means, for the purposes of paragraphs (e)(1), (2),
and (10) of this section, to the extent consistent with other statutory
and Commission requirements on confidentiality and disclosure, that
documentation required under paragraphs (e)(1), (2), and (10) is
disclosed to the Commission and, as appropriate, to other relevant
authorities, to clearing members and to customers of clearing members,
to the owners of the covered clearing agency, and to the public.

    By the Commission.

    Dated: September 28, 2016.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-23892 Filed 10-12-16; 8:45 am]
 BILLING CODE 8011-01-P