[Federal Register Volume 80, Number 139 (Tuesday, July 21, 2015)]
[Notices]
[Pages 43084-43085]
[FR Doc No: 2015-17807]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER15-2205-001]

Prairie Breeze Wind Energy III LLC; Supplemental Notice That
Initial Market-Based Rate Filing Includes Request for Blanket Section
204 Authorization

    This is a supplemental notice in the above-referenced proceeding of
Prairie Breeze Wind Energy III LLC's application for market-based rate
authority, with an accompanying rate tariff, noting that such
application includes a request for blanket authorization, under 18 CFR
part 34, of future issuances of securities and assumptions of
liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is August 4, 2015.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
5 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.

    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for electronic review in the
Commission's Public Reference Room in Washington, DC. There is an
eSubscription link on the Web site that enables subscribers to receive
email notification when a document is added to a subscribed docket(s).
For assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.

    Dated: July 15, 2015.
Kimberly D. Bose,
Secretary.
[FR Doc. 2015-17807 Filed 7-20-15; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register: January 19, 2006 (Volume 71, Number 12)]
[Notices]
[Page 3071]
[DOCID:fr19ja06-58]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP-91-143-056]

Great Lakes Gas Transmission Limited Partnership; Notice of
Revenue Sharing Report

January 10, 2006.
    Take notice that on December 8, 2005, Great Lakes Gas Transmission
Limited Partnership (Great Lakes) tendered for filing its
Interruptible/Overrun (I/O) Revenue Sharing Report pursuant to the
stipulation and agreement filed on September 24, 1992, and approved by
the Commission's February 3, 1993 order issued in Docket No. RP91-143-
000.
    Great Lakes states that copies of the filing has been served upon
the parties on the official service list, firm customers and the Public
Service Commission's of Minnesota, Wisconsin and Michigan.
    Any person desiring to protest this filing must file in accordance
with Rule 211 of the Commission's Rules of Practice and Procedure (18
CFR 385.211). Protests to this filing will be considered by the
Commission in determining the appropriate action to be taken, but will
not serve to make protestants parties to the proceeding. Such protests
must be filed on or before the date as indicated below. Anyone filing a
protest must serve a copy of that document on all the parties to the
proceeding.
    The Commission encourages electronic submission of protests in lieu
of paper using the ``eFiling'' link at http://www.ferc.gov. Persons

unable to file electronically should submit an original and 14 copies
of the protest to the Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on January 17, 2006.

Magalie R. Salas,
Secretary.
 [FR Doc. E6-493 Filed 1-18-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 84, Number 121 (Monday, June 24, 2019)]
[Rules and Regulations]
[Pages 29375-29376]
[FR Doc No: 2019-13273]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket No. USCG-2019-0457]

Special Local Regulations; Seattle Seafair Unlimited Hydroplane
Race, Lake Washington, WA

AGENCY: Coast Guard, DHS.

ACTION: Notice of enforcement of regulation.

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SUMMARY: This year the Seattle Seafair Unlimited Hydroplane Race
Special Local Regulation on Lake Washington, WA will be subject to
enforcement from 7 a.m. until 7 p.m. daily, from August 1 through
August 4. This action is necessary to ensure public safety from the
inherent dangers associated with high-speed, hydroplane races, while
allowing race area access for rescue personnel in the event of an
emergency. While these regulations are subject to enforcement, no
person or vessel will be allowed to enter Zone 1 of the regulated area
without the permission of the Captain of the Port, on-scene Patrol
Commander, or her Designated Representative.

DATES: The regulations in 33 CFR 100.1301 will be subject to
enforcement from 7 a.m. until 7 p.m. on August 1, 2019, through August
4, 2019.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notice of enforcement, call or email Lieutenant Ellie Wu, Sector Puget
Sound Waterways Management Division, Coast Guard; telephone 206-217-
6051, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The Seattle Seafair Unlimited Hydroplane
Race special local regulations in 33 CFR 100.1301 will be subject to
enforcement daily, from 7 a.m. until 7 p.m., from August 1, 2019,
through August 4, 2019. Hydroplane races are scheduled to take place
within these time periods.
    Under the provisions of 33 CFR 100.1301, the Coast Guard will
restrict general navigation in the following area: All waters of Lake
Washington bounded by the Interstate 90 (Mercer Island/Lacey V. Murrow)
Bridge, the western shore of Lake Washington, and the east/west line
drawn tangent to Bailey Peninsula and along the shoreline of Mercer
Island.
    The regulated area has been divided into two zones. The zones are
separated by a line perpendicular from the I-90 Bridge to the northwest
corner of the East log boom and a line extending from the southeast
corner of the East log boom to the southeast corner of the hydroplane
race course and then to the northerly tip of Ohlers Island in Andrews
Bay. The western zone is designated Zone I, the eastern zone, Zone II.
(Refer to NOAA Chart 18447).
    The Coast Guard will maintain a patrol consisting of Coast Guard
vessels, assisted by Coast Guard Auxiliary vessels, in Zone II. The
Coast Guard patrol of this area is under the direction of the Coast
Guard Patrol Commander (the ``Patrol Commander''). The Patrol Commander
is empowered to control the movement of vessels on the race course and
in the adjoining waters during the periods this regulation is subject
to enforcement. The Patrol Commander may be assisted by other federal,
state and local law enforcement agencies.
    Only vessels authorized by the Patrol Commander may be allowed to
enter Zone I during the hours this regulation is subject to
enforcement. Vessels in the vicinity of Zone I shall maneuver and
anchor as directed by the Patrol Commander.
    During the times in which the regulation is subject to enforcement,
the following rules will apply:
    (1) Swimming, wading, or otherwise entering the water in Zone I by
any person is prohibited while hydroplane boats are on the race course.
At other times in Zone I, any person entering the water from the
shoreline shall remain west of the swim line, denoted by buoys, and any
person entering the water from the log boom shall remain within 10 feet
of the log boom.
    (2) Any person swimming or otherwise entering the water in Zone II
shall remain within 10 feet of a vessel.
    (3) Rafting to a log boom will be limited to groups of three
vessels.
    (4) Up to six vessels may raft together in Zone II if none of the
vessels are secured to a log boom. Only vessels authorized by the
Patrol Commander, other law enforcement agencies or event sponsors
shall be permitted to tow other watercraft or inflatable devices.
    (5) Vessels proceeding in either Zone I or Zone II during the hours
this

regulation is subject to enforcement shall do so only at speeds, which
will create minimum wake, 7 miles per hour or less. This maximum speed
may be reduced at the discretion of the Patrol Commander.
    (6) Upon completion of the daily racing activities, all vessels
leaving either Zone I or Zone II shall proceed at speeds of 7 miles per
hour or less. The maximum speed may be reduced at the discretion of the
Patrol Commander.
    (7) A succession of sharp, short signals by whistle or horn from
vessels patrolling the areas under the direction of the Patrol
Commander shall serve as signal to stop. Vessels signaled shall stop
and shall comply with the orders of the patrol vessel; failure to do so
may result in expulsion from the area, citation for failure to comply,
or both.
    The Captain of the Port may be assisted by other federal, state and
local law enforcement agencies in enforcing this regulation.
    If the Captain of the Port determines that the regulated area need
not be enforced for the full duration stated in this notice, he or she
may use a Broadcast Notice to Mariners to grant general permission to
enter the regulated area.

    Dated: June 18, 2019.
L.A. Sturgis,
Captain, U.S. Coast Guard, Captain of the Port, Puget Sound.
[FR Doc. 2019-13273 Filed 6-21-19; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 86, Number 19 (Monday, February 1, 2021)]
[Rules and Regulations]
[Pages 7637-7643]
[FR Doc No: 2020-28194]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-90667; File No. S7-08-11]
RIN 3235-AK74

Exemption From the Definition of ``Clearing Agency'' for Certain
Activities of Security-Based Swap Dealers and Security-Based Swap
Execution Facilities

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is
adopting a rule pursuant to Section 36 of the Securities Exchange Act
of 1934 (``Exchange Act'') to exempt from the definition of ``clearing
agency'' in Section 3(a)(23) of the Exchange Act certain activities of
a registered security-based swap dealer, a registered security-based
swap execution facility, and a person engaging in dealing activity in
security-based swaps that is eligible for an exception from
registration as a security-based swap dealer because the quantity of
dealing activity is de minimis.

DATES: Effective date: April 2, 2021.

FOR FURTHER INFORMATION CONTACT: Matthew Lee, Assistant Director, or
Jesse Capelle, Special Counsel, Office of Clearance and Settlement,
Division of Trading and Markets, Securities and Exchange Commission,
100 F Street NE, Washington, DC 20549-7010, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The Commission is adopting 17 CFR 240.17Ad-
24 (``Rule 17Ad-24'') to exempt certain activities of a registered
security-based swap execution facility,\1\ a registered security-based
swap dealer,\2\ and an entity that is eligible for an exception under
17 CFR 240.3a71-2(a) (or subject to the period set forth in 17 CFR
240.3a71-2(b)) \3\ from the definition of ``clearing agency.''
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    \1\ 15 U.S.C. 78c-4(a) (setting forth the registration
requirement for security-based swap execution facilities). The
Commission has not yet adopted rules regarding the registration of
security-based swap execution facilities. The Commission has granted
a temporary exemption from the registration requirement for
security-based swap execution facilities. See Release No. 34-64678
(June 15, 2011), 76 FR 36287, 36292-93, 36306 (June 22, 2011). This
exemption will expire on the earliest compliance date set forth in
any of the final rules regarding registration of security-based swap
execution facilities. See id. at 36292-93, 36306.
    \2\ 15 U.S.C. 78o-10(a)(1); see also Release No. 34-75611 (Aug.
5, 2015), 80 FR 48964, 48988 (Aug. 14, 2015). A security-based swap
market participant that meets the definition of ``security-based
swap dealer'' as of August 6, 2021 is required to register with the
Commission no later than November 1, 2021. See Release No. 34-87780
(Dec. 18, 2019), 85 FR 6270, 6345-46 (Feb. 4, 2020).
    \3\ In contrast to the definition of ``dealer'' in Section
3(a)(5) of the Exchange Act, Section 3(a)(71)(D) of the Exchange Act
and 17 CFR 240.3a71-2(a) thereunder contain an exception from the
definition of ``security-based swap dealer'' for any entity that
engages in a de minimis quantity of security-based swap dealing in
connection with transactions with or on behalf of its customers. See
15 U.S.C. 78c(a)(71)(D); 17 CFR 240.3a71-2(a). In addition, 17 CFR
240.3a71-2(b) provides that a person that has not registered as a
security-based swap dealer by virtue of satisfying the requirements
of paragraph (a) of the rule, but that no longer can take advantage
of the de minimis exception, will be deemed not to be a security-
based swap dealer under section 3(a)(71) of the Act (15 U.S.C.
78c(a)(71)) and subject to the requirements of section 15F of the
Act (15 U.S.C. 78o-10) and the rules, regulations and
interpretations issued thereunder until the earlier of the date on
which it submits a complete application for registration pursuant to
section 15F(b) (15 U.S.C. 78o-10(b)) or two months after the end of
the month in which that person becomes no longer able to take
advantage of the exception.
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Table of Contents

I. Background
II. New Rule 17Ad-24
    A. Proposed Rule Text
    B. Comment Received
    C. Final Rule
III. Economic Analysis
    A. Baseline
    B. Consideration of Benefits, Costs, and the Effect on
Competition, Efficiency, and Capital Formation
IV. Paperwork Reduction Act
V. Regulatory Flexibility Act Certification
VI. Other Matters
VII. Statutory Authority

I. Background

    The term ``clearing agency'' is broadly defined in Section
3(a)(23)(A) of the Exchange Act and includes a variety of functions.\4\
Section 3(a)(23)(B) of the Exchange Act excludes a number of

entities and activities from the definition of ``clearing agency,''
including certain activities of, among other types of market
intermediaries, national securities exchanges and securities dealers
that are also clearing agency functions.\5\ These exclusions are
designed to limit the potential for overlapping or duplicative
requirements that may otherwise be imposed on these regulated
entities.\6\
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    \4\ Specifically, the term ``clearing agency'' includes, among
other things, any person who acts as an intermediary in making
payments or deliveries or both in connection with transactions in
securities or that provides the facilities for comparison of data
respecting the terms of settlement of securities transactions, to
reduce the number of settlements of securities transactions, or for
the allocation of securities settlement responsibilities. The
definition also includes any person, such as a securities
depository, who (i) acts as a custodian of securities in connection
with a system for the central handling of securities whereby all
securities of a particular class or series of any issuer deposited
within the system are treated as fungible and may be transferred,
loaned, or pledged by bookkeeping entry without physical delivery of
securities certificates, or (ii) otherwise permits or facilitates
the settlement of securities transactions or the hypothecation or
lending of securities without physical delivery of securities
certificates. 15 U.S.C. 78c(a)(23)(A); see also Release Nos. 34-
71699 (Mar. 12, 2014), 79 FR 16865 (Mar. 26, 2014), corrected at 79
FR 29507, 29510-11 (May 22, 2014); 34-68080 (Oct. 22, 2012), 77 FR
66219, 66221-22 (Nov. 2, 2012) (``Clearing Agency Standards adopting
release'') (discussing the same).
    \5\ See 15 U.S.C. 78c(a)(23)(B).
    \6\ Release No. 34-64017 (Mar. 3, 2011), 76 FR 14472, 14531
(Mar. 16, 2011) (``proposing release'').
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    Title VII of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (``Dodd-Frank Act'') created new categories of
entities in the security-based swap market that may perform clearing
agency functions similar to the functions performed by entities
excluded from the definition of ``clearing agency'' in Section
3(a)(23)(B) of the Exchange Act in the traditional securities markets.
However, Title VII did not amend the scope of the term ``clearing
agency'' to address these new types of financial intermediaries for the
security-based swap markets or their potential clearing agency
functions, even if those new intermediaries perform similar functions
as entities excluded from the ``clearing agency'' definition, such as a
national securities exchange or a securities dealer. As a result,
certain activities performed for security-based swaps by security-based
swap dealers and security-based swap execution facilities are also
clearing agency functions that trigger the requirement to either
register as a clearing agency or obtain an exemption from registration
as a clearing agency, while the same activities performed for
securities that are not security-based swaps do not carry the same
legal and regulatory implications.\7\
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    \7\ See 15 U.S.C. 78q-1(b)(1).
---------------------------------------------------------------------------

    Specifically, Section 3(a)(23)(B)(ii) of the Exchange Act provides
that the term ``clearing agency'' does not include, among other things,
any national securities exchange solely by reason of its providing
facilities for comparison of data respecting the terms of settlement of
securities transactions effected on such exchange.\8\ As noted above,
the Dodd-Frank Act did not amend the Exchange Act definition of
``clearing agency'' to provide a comparable exclusion for a registered
security-based swap execution facility. A security-based swap execution
facility is a trading system or platform in which multiple participants
have the ability to execute or trade security-based swaps by accepting
bids and offers made by multiple participants in the facility or
system.\9\ This function, similar to that provided by a national
securities exchange, facilitates the execution of a security-based swap
transaction between two counterparties by providing facilities for the
comparison of data respecting the terms of settlement of that
transaction.\10\ Accordingly, although a national securities exchange
performing this clearing agency function is excluded under Section
3(a)(23)(B)(ii) from the definition of ``clearing agency,'' a
registered security-based swap execution facility performing this
function is not.
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    \8\ 15 U.S.C. 78c(a)(23)(B).
    \9\ The Exchange Act definition of ``security-based swap
execution facility'' states that a security-based swap execution
facility is not a national securities exchange. 15 U.S.C.
78c(a)(77).
    \10\ A registered security-based swap execution facility may
facilitate trade processing of any security-based swap. See 15
U.S.C. 78c-4(b)(2).
---------------------------------------------------------------------------

    Similarly, Section 3(a)(23)(B)(iii) provides that the term
``clearing agency'' does not include, among other things, any dealer if
such dealer would be deemed to be a clearing agency solely by reason of
functions performed by such institution as part of customary brokerage
or dealing activities, or solely by reason of acting on behalf of a
clearing agency or a participant therein in connection with the
furnishing by the clearing agency of services to its participants or
the use of services of the clearing agency by its participants.\11\ As
with security-based swap execution facilities, the Exchange Act
definition of ``clearing agency'' does not provide an exclusion for a
registered security-based swap dealer.\12\ Section 3(a)(71) of the
Exchange Act defines ``security-based swap dealer'' as any person that:
(i) Holds itself out as a dealer in security-based swaps; (ii) makes a
market in security-based swaps; (iii) regularly enters into security-
based swaps with counterparties as an ordinary course of business for
its own account; or (iv) engages in any activity causing it to be
commonly known in the trade as a dealer or market maker in security-
based swaps.\13\ These functions are similar to those provided by a
dealer for securities that are not security-based swaps.\14\
Accordingly, although a dealer performing these functions is excluded
from the definition of ``clearing agency,'' a registered security-based
swap dealer performing the same functions is not.\15\
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    \11\ 15 U.S.C. 78c(a)(23)(B).
    \12\ See 15 U.S.C. 78c(a)(5) (defining ``dealer'' to exclude a
dealer for security-based swaps, other than security-based swaps
with or for persons that are not eligible contract participants);
see also, supra, note 3 (discussing the same).
    \13\ 15 U.S.C. 78c(a)(71). In 2012, the Commission and the
Commodity Futures Trading Commission further defined a number of
terms defining the intermediaries in the swap and security-based
swap markets, including ``security-based swap dealer.'' See Release
No. 34-66868 (Apr. 27, 2012), 77 FR 30596 (May 23, 2012) (``Entity
Definitions adopting release''). Among other things, the release
adopted 17 CFR 240.3a71-1 through 3a71-5, which further define
``security-based swap dealer.'' Furthermore, the definition of
``dealer'' in Section 3(a)(5) of the Exchange Act provides that an
entity transacting as a dealer in security-based swaps would not
need to separately register with the Commission as a broker-dealer
so long as its security-based swap transactions are solely with
persons that satisfy the definition of ``eligible contract
participant.'' See 17 U.S.C. 78c(a)(5) (defining ``dealer''); 17
U.S.C. 78(a)(65) (defining ``eligible contract participant'' by
reference to Section 1a(18) of the Commodity Exchange Act (7 U.S.C.
1a(18)).
    \14\ See supra note 3 (noting that, in contrast to the
definition of ``dealer'' in Section 3(a)(5) of the Exchange Act,
Section 3(a)(71)(D) of the Exchange Act and 17 CFR 240.3a71-2(a)
thereunder contain an exception from the definition of ``security-
based swap dealer'' for any entity that engages in a de minimis
quantity of security-based swap dealing in connection with
transactions with or on behalf of its customers).
    \15\ See supra note 2 (noting the adoption of final rules for
security-based swap dealers in 2019 and the compliance date for
registration of November 1, 2021).
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    To address the disparate treatment of similarly situated entities
performing potential clearing agency functions, the Commission proposed
Rule 17Ad-24 in 2011.\16\ The Commission explained that the rule would
avoid imposing overlapping or duplicative requirements on these
entities with marginal or no benefit to safeguarding securities and
funds and protecting investors.\17\ As described in the proposing
release,\18\ Rule 17Ad-24 would provide exemptions from the Exchange
Act term ``clearing agency'' for certain activities of registered
security-based swap dealers and registered security-based swap
execution facilities that are also clearing agency functions, mirroring
the exclusions from the definition described above for national
securities exchanges and dealers. A person acting as a security-based
swap dealer may make payments or deliveries or both in connection with
transactions in securities, in a manner that could require that person
to register as a clearing agency under the Exchange Act.\19\ In
particular, over the life of a security-based swap transaction, a
security-based swap dealer may facilitate the transfer of collateral,
periodic fixed amount payments, or termination payments between the
counterparties to a transaction, which would constitute making payments
or deliveries or both in connection with transactions in securities
under the ``clearing agency'' definition. Similarly,

a security-based swap execution facility that provides a trading system
or platform in which multiple participants have the ability to execute
or trade security-based swaps by accepting bids and offers made by
multiple participants in the facility or system also may provide
facilities for comparison of data respecting the terms of settlement of
securities transactions, to reduce the number of settlements of
securities transactions, or for the allocation of securities settlement
responsibilities, in a manner that could require that entity to
register as a clearing agency.\20\
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    \16\ See proposing release, supra note 6.
    \17\ Id. at 14531.
    \18\ See id. at 14494-95.
    \19\ Compare 15 U.S.C. 78c(a)(71) with 15 U.S.C. 78c(a)(23).
    \20\ Compare 15 U.S.C. 78c(a)(77) with 15 U.S.C. 78c(a)(23).
---------------------------------------------------------------------------

    The Commission received one comment regarding the proposed
rule,\21\ as discussed in Part II.B below. The Commission is now
adopting Rule 17Ad-24, as discussed in Part II.C below.
---------------------------------------------------------------------------

    \21\ See Letter from Jeff Gooch, Chief Executive Officer,
MarkitSERV (Apr. 29, 2011) (``MarkitSERV Letter''). The comment
letter is available on the Commission's website at https://www.sec.gov/comments/s7-08-11/s70811.shtml.
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II. New Rule 17Ad-24

A. Proposed Rule Text

    Proposed Rule 17Ad-24 provided that a registered security-based
swap dealer and a registered security-based swap execution facility
shall be exempt from inclusion in the term ``clearing agency,'' as
defined in section 3(a)(23)(A) of the Act, where such registered
security-based swap dealer or registered security-based swap execution
facility would be deemed to be a clearing agency solely by reason of
functions performed by such institution as part of customary dealing
activities or providing facilities for comparison of data respecting
the terms of settlement of securities transactions effected on such
registered security-based swap execution facility, respectively, or
acting on behalf of a clearing agency or participant therein in
connection with the furnishing by the clearing agency of services to
its participants or the use of services of the clearing agency by its
participants.

B. Comment Received

    One commenter agreed with the Commission's proposed approach that a
security-based swap execution facility not be required to register as a
clearing agency solely because it performs trade data comparison as
part of the trade execution process for security-based swaps.\22\
However, the commenter also stated that a security-based swap execution
facility should not have a blanket exemption from clearing agency
registration for activities related to matching or trade verification
services because, in the commenter's view, such an approach would
result in the rule applying differently to third-party providers of
such services than it would to a security-based swap execution
facility.\23\
---------------------------------------------------------------------------

    \22\ See MarkitSERV Letter.
    \23\ See id. at 6.
---------------------------------------------------------------------------

    By its terms, proposed Rule 17Ad-24 would not provide a blanket
exemption from clearing agency registration to a security-based swap
execution facility to provide matching or trade verification services
that otherwise are clearing agency functions as defined in the Exchange
Act. Rather, the Commission's approach under Rule 17Ad-24 specifies
that a registered security-based swap execution facility would not be
required to register as a clearing agency solely based upon the fact
that such an entity provides facilities for comparison of data
respecting the terms of settlement of securities transactions effected
on such registered security-based swap execution facility.\24\ As noted
in the proposing release and restated here,\25\ were a security-based
swap execution facility to engage in activity that is outside the scope
of the exemption provided in Rule 17Ad-24 and that falls within the
definition of ``clearing agency'' under the Exchange Act, it would be
required to register as a clearing agency or obtain a separate
exemption from clearing agency registration.\26\
---------------------------------------------------------------------------

    \24\ This approach is consistent with the approach that applies
to a national securities exchange when performing the same activity
for transactions in securities that are not security-based swaps.
    \25\ See proposing release, supra note 6, at 14495.
    \26\ See id. For example, with respect to transactions in
securities that are not security-based swaps, the Commission has
explained that ``matching'' is a clearing agency function. Release
No. 34-39829 (Apr. 6, 1998), 63 FR 17943 (Apr. 13, 1998).
---------------------------------------------------------------------------

C. Final Rule

    Pursuant to the Commission's authority under Section 36 of the
Exchange Act,\27\ the Commission is adopting Rule 17Ad-24, and the
Commission is making two modifications from the proposal. First, since
the Commission proposed Rule 17Ad-24, the Commission adopted 17 CFR
240.3a71-2 to provide an exception from the definition of ``security-
based swap dealer'' to any entity that engages in a de minimis quantity
of security-based swap dealing activity in connection with transactions
with or on behalf of its customers.\28\ In adopting the de minimis
exception, the Commission explained that the exception should be
interpreted to address amounts of dealing activity that are
sufficiently small that they do not warrant registration to address
concerns implicated by the regulations governing swap dealers and
security-based swap dealers.\29\ The Commission similarly noted in
proposing Rule 17Ad-24 that the exemptions in the rule are intended to
avoid imposing requirements with marginal or no benefit to safeguarding
securities and funds and protecting investors.\30\ Accordingly, the
Commission is adding persons eligible for this exception under 17 CFR
240.3a71-2 to the exemption in Rule 17Ad-24 because imposing clearing
agency registration on persons solely to regulate functions performed
by such persons as part of customary dealing activity for security-
based swaps, and where that dealing activity is sufficiently small that
it does not warrant registration as a security-based swap dealer, would
present only marginal or no benefit to safeguarding securities and
funds and protecting investors. Second, to improve clarity and
readability, the Commission is dividing the rule text into
subparagraphs (a) and (b).
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78mm. Section 36 of the Exchange Act authorizes
the Commission to conditionally or unconditionally exempt any
person, security, or transaction, or any class of classes of
persons, securities, or transactions, from any provision or
provisions of the Exchange Act or any rule or regulation thereunder,
by rule, regulation, or order, to the extent that such exemption is
necessary or appropriate in the public interest, and is consistent
with the protection of investors.
    \28\ See supra notes 3 and 14 and accompanying text.
    \29\ See Entity Definitions adopting release, supra note 13, at
30626.
    \30\ See proposing release, supra note 6, at 14531.
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    Accordingly, new Rule 17Ad-24 provides that a registered security-
based swap dealer, a registered security-based swap execution facility,
or an entity engaging in dealing activity in security-based swaps that
is eligible for an exception under 17 CFR 240.3a71-2(a) (or subject to
the period set forth in 17 CFR 240.3a71-2(b)) \31\ is exempt from
inclusion in the term ``clearing agency,'' as defined in Section
3(a)(23)(A) of the Exchange Act, where such registered security-based
swap dealer, registered security-based swap execution facility, or
entity engaging in dealing activity in security-based swaps that is
eligible for an exception under 17 CFR 240.3a71-2(a) (or subject to the
period set forth in 17 CFR 240.3a71-2(b)) would be deemed to be a
clearing agency solely by

reason of: (a) Functions performed by such institution as part of
customary dealing activities or providing facilities for comparison of
data respecting the terms of settlement of securities transactions
effected on such registered security-based swap execution facility,
respectively, or (b) acting on behalf of a clearing agency or
participant therein in connection with the furnishing by the clearing
agency of services to its participants or the use of services of the
clearing agency by its participants.
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    \31\ See supra note 3 (providing the text of 17 CFR 240.3a71-
2(a) and (b)). Accordingly, an entity subject to the period set
forth in 17 CFR 240.3a71-2(b) will continue to be exempt from
inclusion in the term ``clearing agency'' during the period after it
is no longer able to able to rely on the de minimis exception but
before it is deemed to be a security-based swap dealer.
---------------------------------------------------------------------------

    In addition, as noted above, the Commission has granted a temporary
exemption from the registration requirement for security-based swap
execution facilities. The temporary exemption from the registration
requirement for security-based swap execution facilities will expire on
the earliest compliance date set forth in any of the final rules
regarding registration of security-based swap execution facilities.\32\
To the extent an entity relying on the temporary exemption from the
registration requirement for security-based swap execution facilities
also performs the activities of a registered security-based swap
execution facility as described in Rule 17Ad-24, the Commission notes
that it has provided a separate, temporary exemption from clearing
agency registration for entities providing certain clearing services
for security-based swaps, including trade matching services.\33\
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    \32\ See supra note 1.
    \33\ See Release No. 34-64796 (July 1, 2011), 76 FR 39963, 39964
(July 7, 2011).
---------------------------------------------------------------------------

III. Economic Analysis

    The Commission is sensitive to the economic consequences and
effects of the adopted amendments, including their benefits and costs.
Under Section 3(f) of the Exchange Act, whenever the Commission engages
in rulemaking under the Exchange Act and is required to consider or
determine whether an action is necessary or appropriate in the public
interest, it must consider, in addition to the protection of investors,
whether the action will promote efficiency, competition, and capital
formation.\34\ Section 23(a)(2) of the Exchange Act also prohibits the
Commission from adopting any rule that would impose a burden on
competition not necessary or appropriate in furtherance of the purposes
of the Exchange Act.\35\
---------------------------------------------------------------------------

    \34\ See 15 U.S.C. 78c(f).
    \35\ See 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    The Commission is exempting entities engaging in dealing activity
in security-based swaps and registered security-based swap execution
facilities from inclusion in the term ``clearing agency'' under the
Exchange Act for the following functions: (a) Performing customary
dealing activities or providing facilities for the comparison of data
respecting the settlement of securities transactions; or (b) acting on
behalf of a clearing agency or participant in connection with the
furnishing of clearing services.\36\ Section 3(a)(23)(B) of the
Exchange Act excludes national securities exchanges and securities
dealers from the definition of ``clearing agency,'' to limit the
potential for overlapping or duplicative requirements that may
otherwise be imposed on these regulated entities. Entities engaging in
dealing activity in security-based swaps and security-based swap
execution facilities perform similar functions for the security-based
swap market as securities dealers and national securities exchanges
perform for the general securities industry. Accordingly, new Rule
17Ad-24 is intended to avoid imposing requirements on these entities
with marginal or no benefit to safeguarding securities and funds and
protecting investors by mirroring the existing exemption from the
definition of ``clearing agency'' for entities engaging in dealing
activity in security-based swaps and security-based swap execution
facilities.\37\ Under new Rule 17Ad-24, these entities will not have to
expend additional resources determining their registration
requirements, registering as a clearing agency, or meeting the
standards required of registered clearing agencies as long as their
activities do not fall outside the scope of the exemption in new Rule
17Ad-24. Excluding either entities engaging in dealing activity in
security-based swaps or security-based swap execution facilities from
the requirements applicable to clearing agencies should not hinder the
Dodd-Frank Act's goals of greater transparency and financial stability
of the security-based swap market because the Commission has or will
have a regulatory framework for these entities targeted to dealing
activity in security-based swaps or the functions performed by
security-based swap execution facilities, rather than incidental
functions that may be similar to those performed by a clearing agency.
Just as de minimis amounts of dealing activity are sufficiently small
so as not to warrant registration to address concerns implicated by the
regulations governing security-based swap dealers, they are also
sufficiently small such that they do not implicate the concerns
underpinning the regulations governing clearing agencies.
---------------------------------------------------------------------------

    \36\ See supra Part II.C (setting forth the final rule text).
For purposes of this economic analysis, ``entities engaging in
dealing activity in security-based swaps'' includes both registered
security-based swap dealers and entities engaging in dealing
activity in security-based swaps that are eligible for an exception
under 17 CFR 240.3a71-2(a) (or subject to the period set forth in 17
CFR 240.3a71-2(b)).
    \37\ See supra note 5 and accompanying text.
---------------------------------------------------------------------------

A. Baseline

    To assess the economic impact of new Rule 17Ad-24, the Commission
is using as its baseline the security-based swap market as it exists at
the time of this release. This analysis uses existing Commission
analyses of security-based swap market in rules adopted pursuant to
Title VII of the Dodd-Frank Act, updated using data from the DTCC
Derivatives Repository Limited Trade Information Warehouse (``TIW'') to
calendar year 2019.\38\ The data available to the Commission from TIW
do not encompass those transactions that both: (i) Do not involve U.S.
counterparties, and (ii) are based on non-U.S. reference entities.
---------------------------------------------------------------------------

    \38\ See, e.g., infra note 40; supra note 13.
---------------------------------------------------------------------------

    The Commission estimates, based on an analysis of TIW data that out
of more than 4,000 entities engaged in single name CDS activity
worldwide in 2019, potentially 50 entities may engage in dealing
activity that would exceed the de minimis threshold, and thus
ultimately have to register as security-based swap dealers.\39\ Ten
entities that engaged in dealing activity had less than $3 billion of
notional transacted in single-name credit default swaps, so they could
use the de minimis exception for the definition of ``security-based
swap dealer.'' \40\
---------------------------------------------------------------------------

    \39\ See Release No. 34-75611 (Aug. 14, 2015), 80 FR 48963,
49000 (Aug. 14, 2015). The estimate has been updated for data for
calendar year 2019.
    \40\ See Entity Definitions adopting release, supra note 13, at
30636. To identify dealing activity, the Commission counted the
number of entities that had three or more counterparties in a
calendar year that were not recognized as dealers by the
International Swaps and Derivatives Association. The estimate has
been updated with data for calendar year 2019.
---------------------------------------------------------------------------

    In addition, eighteen swap execution facilities have permanent or
temporary registration with the Commodity Futures Trading
Commission.\41\ Of those, nine allow trading of credit default swap
indices; if these nine allow trading of single-name credit default
swaps, they would be required to register as security-based swap

execution facilities with the Commission.\42\
---------------------------------------------------------------------------

    \41\ CFTC, Trading Organizations--Swap Execution Facilities
(SEF), https://sirt.cftc.gov/SIRT/SIRT.aspx?Topic=SwapExecutionFacilities.
    \42\ Compare BGC Swap Execution Facility, http://www.bgcsef.com/
; Bloomberg Professional Swap Execution Facility Historical Data,
https://data.bloombergsef.com/; GFI Swaps Exchange Trade Data,
http://www.gfigroup.com/markets/gfi-sef/trade-data/; ICE Swap Trade,
https://www.theice.com/swap-trade; MarketAxess Credit Default Swaps,
https://www.marketaxess.com/trade/credit-default-swaps; tpSEF CDS
Data, https://www.tpinformation.com/In-Depth-Data/Credit/Credit-Default-Swaps; Tradeweb and Dealerweb Swap Execution Facilities,
https://www.tradeweb.com/our-markets/market-regulation/sef/;
TraditionSEF Daily Activity, http://www.traditionsef.com/market-activity/ (which allow trading of credit default swap indices), with
360T Swap Execution Facilitiy, https://www.360t.com/trading-solutions/sef/; Cboe Swap Execution Facility, https://markets.cboe.com/global/fx/sef/; Clearmarkets CM-SEF Center, https://www.clear-markets.com/cm-sef-centre/; LatAmSEF Market Activity,
http://latamsef.com/marketactivity.phtml; LedgerX, https://www.ledgerx.com/; NEX SEF Data, http://www.nexsef.com/; Refinitiv
SEF Volumes, https://www.refinitiv.com/en/products/sef-swap-execution-facility#sef-volumes; SwapEx, http://www.swapex.com/swapex/market-data/NDF/; TeraExchange Instruments, https://teraexchange.com/Home/Instruments (which do not host trading of
credit default swap indices).
---------------------------------------------------------------------------

    Security-based swap dealers must register with the Commission and
comply with prudential and conduct standards of the Dodd-Frank Act.\43\
Security-based swap dealers are subject to a registration and
regulatory framework that is tailored to the functions they serve and
risks they pose. These risks, and the corresponding Commission analysis
of costs and benefits of the ensuring requirements, are discussed in
the Security-Based Swap Entity Registration, Security-Based Swap
Recordkeeping and Reporting, Security-Based Swap Capital, Margin, and
Segregation, and Security-Based Swap Business Conduct Standards
releases.\44\ Entities that engage in dealing activity in security-
based swaps below the de minimis threshold of $3 billion of notional
activity in a twelve-month period are excepted from the definition of
``security-based swap dealer.'' \45\ The Dodd-Frank Act also requires
security-based swap-execution facilities, as therein defined, to be
registered with and comply with prudential and conduct standards to be
set forth by the Commission.\46\
---------------------------------------------------------------------------

    \43\ Id.
    \44\ See Release Nos. 34-756711 (Aug. 5, 2015), 80 FR 48963
(Aug. 14, 2015) (``Security-Based Swap Entity Registration''); 34-
87782 (Dec. 18, 2019), 85 FR 6270 (Feb. 4, 2020) (``Risk Mitigation
Techniques''); 34-87005 (Sep. 19, 2019), 84 FR 68550 (Dec. 16, 2019)
(``Security-Based Swap Recordkeeping and Reporting''); 34-86175
(Jun. 21, 2019), 84 FR 43872 (Aug. 22, 2019) (``Security-Based Swap
Capital, Margin, and Segregation''); 34-77617 (Apr. 14, 2016), 81 FR
29959 (May 13, 2016) (``Security-Based Swap Business Conduct
Standards'').
    \45\ See Entity Definitions adopting release, supra note 13, at
30639.
    \46\ See 15 U.S.C. 78c-4.
---------------------------------------------------------------------------

B. Consideration of Benefits, Costs, and the Effect on Competition,
Efficiency, and Capital Formation

    The exemption in new Rule 17Ad-24 is designed to avoid imposing
requirements with marginal or no benefit to safeguarding securities and
funds and protecting investors on entities engaging in dealing activity
in security-based swaps and security-based swap execution facilities,
which will benefit these entities since they will not be required to
register as a clearing agency or comply with the Commission's
requirements for clearing agencies. Since these types of entities also
each have their own registration and regulatory frameworks or are
exempt due to a de minimis level of activity,\47\ the Commission does
not expect new Rule 17Ad-24 to impose substantial costs, and there
should be minimal impacts on transparency and financial stability.
Lastly, new Rule 17Ad-24 may improve competition and efficiency in the
security-based swap dealer and security-based swap execution facility
markets.
---------------------------------------------------------------------------

    \47\ See supra notes 44, 46, and accompanying text.
---------------------------------------------------------------------------

    The cost savings to both entities engaging in dealing activity in
security-based swaps and security-based swap execution facilities under
new Rule 17Ad-24 are likely to be significant. New Rule 17Ad-24 will
benefit entities engaging in dealing activity in security-based swaps
and security-based swap execution facilities to the extent that
additional clarity regarding registration requirements reduces the
costs they may incur to determine which requirements apply to their
activities. Furthermore, although no entities engaging in dealing
activity in security-based swaps or security-based swap execution
facilities are currently registered as clearing agencies with the
Commission, exempted entities engaging in dealing activity in security-
based swaps and future exempted security-based swap execution
facilities and security-based swap dealers will not have to incur
registration and compliance costs for clearing agencies.\48\ Many of
the costs of complying with requirements for clearing agencies involve
collecting information, and the Commission has estimated the monetized
burden of these standards per clearing agency at $0.5 million in
initial costs and $1.2 million in annual ongoing costs, adjusted to
2020 dollars.\49\ Absent the exemption, entities engaging in dealing
activity in security-based swaps and security-based swap execution
facilities may have to incur these costs. However, as existing clearing
agencies follow the Principles for Financial Market Infrastructures,
many of the Commission's requirements for clearing agencies had minimal
additional per-entity costs.\50\ Since these requirements are not
common practice for entities engaging in dealing activity in security-
based swaps and security-based swap execution facilities, applying the
Commission's clearing agency requirements to these entities would
likely have higher per-entity costs than the Commission's past
estimates for clearing agencies.\51\ The Commission does not expect
either security-based swap execution facilities or security-based swap
dealers will face new costs from relying on new Rule 17Ad-24.
---------------------------------------------------------------------------

    \48\ Though a registered clearing agency may be affiliated with
a security-based swap execution facility, none of the registered
clearing agencies are either a registered security-based swap dealer
or security-based swap execution facility.
    \49\ See Clearing Agency Standards adopting release, supra note
4, at 66273. The estimates were updated on a per entity basis using
SIFMA's Management & Professional Earnings in the Securities
Industry 2013, modified to account for an 1,800-hour work year;
multiplied by 5.35 to account for bonuses, firm size, employee
benefits and overhead.
    Because the exempted activities are not among the core central
counterparty or central securities depository functions of a
clearing agency, security-based swap execution facilities and
security-based swap dealers would not unduly benefit from avoiding
the higher standards of a ``covered clearing agency.'' See generally
Release No. 34-78961 (Apr 9, 2020), 85 FR 28853 (May 14, 2020)
(adopting an amendment to the definition of ``covered clearing
agency'' such that ``covered clearing agency'' means a clearing
agency that provides the services of a central counterparty or
central securities depository).
    \50\ See Clearing Agency Standards adopting release, supra note
4, at 66274.
    \51\ However, many of the clearing agency requirements would not
apply to entities engaging in dealing activity and security-based
swap execution facilities because these entities are not likely to
provide central counterparty or central securities depository
services, which are the focus of the compliance costs associated
with the SEC's regulatory framework for registered clearing
agencies.
---------------------------------------------------------------------------

    The Commission also does not expect new Rule 17Ad-24 to impose
costs on security-based swap markets. Many of the requirements that
apply to registered security-based swap dealers, such as recordkeeping,
governance, margin, and capital requirements, cover risks that overlap
with those facing clearing agencies.\52\ Other aspects of clearing
agency regulation, such as standards addressing settlement risk or
participation requirements, are either not applicable to entities
engaging in

dealing activity in security-based swaps or may place an undue burden
on access to this market.\53\ In crafting the security-based swap
dealer requirements, the Commission has considered the benefits for
financial stability as well as the burden on competition and the
promotion of efficiency, competition, and capital formation.\54\ As
such, in the Commission's view, applying requirements for clearing
agencies to entities engaging in dealing activity in security-based
swaps for performing customary dealing activity is not necessary to
achieve the goals of the Dodd-Frank Act.
---------------------------------------------------------------------------

    \52\ The Commission has exempted entities that engage in
security-based swap dealing activity below the de minimis threshold
from these requirements since these entities do not implicate the
concerns that these requirements address.
    \53\ See Clearing Agency Standards adopting release, supra note
4, at 66242-43. In particular, security-based swap dealers do not
have members like clearing agencies do. Requiring that they accept
any participant that has net capital above $50 million may unduly
restrict their ability to mitigate risks and function as a dealer.
    \54\ See, e.g., Risk Mitigation Techniques adopting release,
supra note 44, at 6390 (requiring certain risk mitigation techniques
for registered security-based swap dealers who hold uncleared swaps
because ``the risks of the counterparties' failure to manage credit
risk adequately may not become apparent until the onset of a
financial crisis,'' as well as discussing the rule's burden on
competition and promotion of efficiency, competition, and capital
formation).
---------------------------------------------------------------------------

    Similarly, security-based swap execution facilities will have to
register with the Commission and abide by the standards listed in the
Dodd-Frank Act, as implemented by future Commission rules.\55\
Providing data to participants to compare settlement terms or acting on
behalf of a clearing agency to facilitate clearing services to the
security-based swap execution facilities' customers, while related to
clearing and settlement, does not expose the security-based swap
execution facility to market volatility, so the Commission does not
believe that these activities alone justify requiring security-based
swap execution facilities to adopt the risk management practices
required of clearing agencies.
---------------------------------------------------------------------------

    \55\ See 15 U.S.C. 78c-4.
---------------------------------------------------------------------------

    The cost savings associated with new Rule 17Ad-24 may promote
competition among entities engaging in dealing activity in security-
based swaps and security-based swap execution facilities. For example,
new Rule 17Ad-24 may lower barriers to entry for entities engaging in
dealing activity in security-based swaps, promoting competition among
liquidity providers in the security-based swap market. Similarly, lower
costs for security-based swap execution facilities that provide trade
processing services should increase competition in providing these
services, which may reduce the price and/or increase the quality of
these services. To the extent that new Rule 17Ad-24 increases the
availability of and competition between either liquidity providers or
trade execution services, it may marginally improve efficiency of these
services. The Commission does not anticipate new Rule 17Ad-24 to have a
substantial impact on capital formation.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (``PRA'') imposes certain
requirements on Federal agencies in connection with the conducting or
sponsoring of any ``collection of information.'' \56\ An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid control
number. Further, 44 U.S.C. 3507(a) provides that, before adopting or
revising a collection of information requirement, an agency must, among
other things, publish notice in the Federal Register stating that the
agency has submitted the proposed collection of information to the
Office of Management and Budget (``OMB'') and setting forth certain
required information, including (i) a title for the collection of
information; (ii) a summary of the collection of information; (iii) a
brief description of the need for the information and the proposed use
of the information; (iv) a description of the likely respondents and
proposed frequency of response to the collection of information; (v) an
estimate of the paperwork burden that shall result from the collection
of information; and (vi) notice that comments may be submitted to the
agency and director of OMB.\57\
---------------------------------------------------------------------------

    \56\ See 44 U.S.C. 3501 et seq.; 44 U.S.C. 3502(3).
    \57\ See 44 U.S.C. 3507(a)(1)(D); see also 5 CFR
1320.5(a)(1)(iv).
---------------------------------------------------------------------------

    The proposing release provided notice that Rule 17Ad-24 does not
impose recordkeeping or information collection requirements and would
not be a ``collection of information'' within the meaning of the PRA.
The Commission received no comments in response, and the Commission
continues to believe that Rule 17Ad-24 does not impose a recordkeeping
burden.

V. 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.\58\ Section 603(a) of the Administrative Procedure Act,\59\
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.'' \60\ The Commission
certified in the proposing release, pursuant to Section 605(b) of the
RFA, that Rule 17Ad-24 would not, if adopted, have a significant impact
on a substantial number of small entities.\61\ The Commission received
no comments on this certification.
---------------------------------------------------------------------------

    \58\ See 5 U.S.C. 601 et seq.
    \59\ 5 U.S.C. 603(a).
    \60\ 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 rulemaking, are set forth in 17 CFR
240.0-10.
    \61\ See 5 U.S.C. 605(b).
---------------------------------------------------------------------------

    Because the exemptions provided in Rule 17Ad-24 ensure that certain
activities of registered security-based swap dealers, registered
security-based swap execution facilities, and entities engaging in
dealing activity in security-based swaps that are eligible for an
exception under 17 CFR 240.3a71-2(a) (or subject to the period set
forth in 17 CFR 240.3a71-2(b)) do not trigger the requirement to
register as a clearing agency,\62\ the Commission certifies that Rule
17Ad-24 will not have a significant economic impact on a substantial
number of small entities.
---------------------------------------------------------------------------

    \62\ See supra Part III.
---------------------------------------------------------------------------

VI. Other Matters

    If any of the provisions of this rule, or the application thereof
to any person or circumstance, is held to be invalid, such invalidity
shall not affect other provisions or application of such provisions to
other persons or circumstances that can be given effect without the
invalid provision or application.
    Pursuant to the Congressional Review Act,\63\ the Office of
Information and Regulatory Affairs has designated these rules as not a
``major rule,'' as defined by 5 U.S.C. 804(2).
---------------------------------------------------------------------------

    \63\ 5 U.S.C. 801 et seq.
---------------------------------------------------------------------------

VII. Statutory Authority

    Pursuant to the Exchange Act, particularly Sections 17A and 36
thereof, 15 U.S.C. 78q-1 and 15 U.S.C. 78mm, the Commission is adopting
Rule 17Ad-24.

List of Subjects in 17 CFR Part 240

    Reporting and recordkeeping requirements, Securities.

Text of Amendment

    In accordance with the foregoing, title 17, chapter II of the Code
of Federal Regulations is amended as follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

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, 78dd, 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.
* * * * *

0
2. Section 240.17Ad-24 is added to read as follows:

Sec.  240.17Ad-24   Exemption from clearing agency definition for
certain registered security-based swap dealers, registered security-
based swap execution facilities, and entities engaging in dealing
activity in security-based swaps that are eligible for an exception
under Sec.  240.3a71-2(a) (or subject to the period set forth in Sec.
240.3a71-2(b)).

    A registered security-based swap dealer, a registered security-
based swap execution facility, or an entity engaging in dealing
activity in security-based swaps that is eligible for an exception
under Sec.  240.3a71-2(a) (or subject to the period set forth in Sec.
240.3a71-2(b)) shall be exempt from inclusion in the term ``clearing
agency,'' as defined in section 3(a)(23)(A) of the Act, where such
registered security-based swap dealer, registered security-based swap
execution facility, or entity engaging in dealing activity in security-
based swaps that is eligible for an exception under Sec.  240.3a71-2(a)
(or subject to the period set forth in Sec.  240.3a71-2(b)) would be
deemed to be a clearing agency solely by reason of:
    (a) Functions performed by such institution as part of customary
dealing activities or providing facilities for comparison of data
respecting the terms of settlement of securities transactions effected
on such registered security-based swap execution facility,
respectively; or
    (b) Acting on behalf of a clearing agency or participant therein in
connection with the furnishing by the clearing agency of services to
its participants or the use of services of the clearing agency by its
participants.

    By the Commission.
    Dated: December 16, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-28194 Filed 1-29-21; 8:45 am]
BILLING CODE 8011-01-P