[Federal Register Volume 88, Number 35 (Wednesday, February 22, 2023)]
[Notices]
[Pages 10954-10958]
[FR Doc No: 2023-03576]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96938; File No. SR-FICC-2023-002]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Consisting of Modifications to the FICC Government Securities Division
Rulebook

February 15, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 6, 2023, Fixed Income Clearing Corporation (``FICC'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the clearing agency. FICC filed the
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change consists of modifications to the FICC
Government Securities Division (``GSD'') Rulebook (``Rules'') \5\ in
order to improve the transparency of those rules by making
clarifications, corrections, and technical changes to the Rules, as
described in greater detail below.
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    \5\ Capitalized terms used herein and not defined shall have the
meaning assigned to such terms in the GSD Rules, available at http://www.dtcc.com/legal/rules-and-procedures.aspx.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. The clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

1. Purpose
    In Rule 3A, Sections 2(g) and 3(d), FICC proposes to clarify that
Members should refer to the Fine Schedule for the dollar amount of the
fine by deleting the references to $1,000 and adding that the fine is
pursuant to the applicable Fine Schedule in the Rules. The proposed
rule changes would also remove the requirement that notifications under
these Sections be provided orally, as such notifications are difficult
to record and are redundant of the written notification also required
in these Sections of Rule 3A.
    FICC would also revise these sections to more clearly describe the
Sponsoring Members' obligations to notify FICC of certain events that
involve either the Sponsoring Member or their Sponsored Members.
Currently, Section 2(g) describes only the Sponsoring Members'
obligation to notify FICC when it is no longer in compliance with the
relevant standards and qualification for a Sponsoring Member
membership, and Section 3(d) describes an obligation of the Sponsored
Members to notify their Sponsoring Member(s) if it is no longer in
compliance with the applicable requirements of Rule 3A. Section 3(d)
then describes the obligation of a Sponsoring Member to notify FICC
after it receives such notification from a Sponsored Member.
    First, the proposed changes would remove from the Rules the
obligation of a Sponsored Member to notify the Sponsoring Member stated
in Section 3(d) because this obligation is one that should be created
and enforced between those two entities and not in the GSD Rules.
Second, the proposed changes would move the obligation of a Sponsoring
Member to notify FICC when a Sponsored Member is no longer in
compliance with the applicable requirements of that Rule from Section
3(d) to Section 2(g), where the obligations of Sponsoring Members are
stated. Third, the proposed rule changes would include the requirement
that a Sponsoring Member also notify FICC at least 90 calendar days
prior to the effective date of any Reportable Event, as such term is
defined in Rule 1 of the GSD Rules, applicable to a Sponsored Member,
unless the Sponsoring Member demonstrates that it could not have
reasonably done so, in which case such notice shall be provided as soon
as possible. This proposed change would clarify that the reporting
obligations of Sponsoring Members with respect to their Sponsored
Members are the same reporting obligations applicable to other GSD
Members.
    Finally, the proposed changes would revise a statement in Section
3(d) of Rule 3A that currently states FICC shall cease to act for a
Sponsored Member that no longer meets the requirements for such
membership. The proposed change would revise this statement to replace
``shall'' with ``may'' and would clarify that FICC has the right, but
not the obligation, to cease to act for a Sponsored Member in such
circumstances. This proposed change would align Section 3(d) with
Section 13 of Rule 3A, which provides that FICC may, based on its
judgement that there is adequate cause to do so, suspend a Sponsored
Member from any FICC services in the circumstances described in that
Section.
    FICC also proposes changes to Sections 2(i) and 3(e), which address
the procedures for Sponsoring Members and Sponsored Members,
respectively, to voluntarily terminate their membership with FICC.
These Sections currently state that a Sponsoring Member Voluntary
Termination Notice or a Sponsored Member Voluntary Termination Notice,
as applicable and as defined in those Sections of Rule 3A, is not
effective until it is accepted by FICC and that such acceptance is
evidenced by a notice to all Members announcing the termination of that
membership.
    First, FICC is proposing to revise these Sections to make clear
that its acceptance of a voluntary termination of a Sponsoring Member's
or Sponsored Member's membership shall be evidenced by a notification
from FICC to the firm terminating its membership and that the effective
date of the membership termination will be set forth in that notice
from FICC to the member.
    Second, the proposed changes to these Sections will clarify that
the notice to all members regarding the voluntary termination of a
Sponsoring Member's or Sponsored Member's membership (i) is an
Important Notice, which is a notice posted to FICC's public website,
and (ii) is only posted when a Sponsoring Member has terminated its
status as a Sponsoring Member with respect to all Sponsored Members or
when a Sponsored Member has terminated its relationship with all
Sponsoring Members and, as such, has terminated its membership with
FICC. More specifically, the proposed changes would clarify that an
Important Notice is not posted if a Sponsored Member terminates its
relationship with one, but not all, of its Sponsoring Members, for
example, but only when a Sponsored

Member or a Sponsoring Member ceases to participate in the Sponsored
Clearing service.
    FICC also proposes to make a clarification to Rule 3A, Section
3(c). Rule 3A, Section 3(c) currently states that each Person to become
a Sponsored Member that shall be an FFI Member must be FATCA Compliant.
FICC proposes to enhance clarity by adding that each Person to become a
Sponsored Member that shall be a FFI Member is subject to the
requirements of Section 9(iii) of Rule 3. FICC does not believe that
this proposed change would change the relationship between existing
Sponsored Members that are FFI Members and FICC because the
requirements of Section 9(iii) of Rule 3A are currently applicable to
FFI Members, including Sponsored Members that are FFI Members.
Therefore, the proposed change would not impose any new requirement to
these firms but would simply clarify the Rules regarding current
requirements.
    FICC also proposes to revise Rule 3, Section 9(iii), which
currently states that an FFI Member shall indemnify FICC for any loss,
liability or expense sustained by FICC as a result of such FFI Member
failing to be FATCA Compliant. FICC proposes to revise this provision
to clarify that the indemnification currently provided by an FFI Member
to FICC under this Rule also covers FICC's affiliates, and each of
their respective shareholders, directors, officers, employees, agents
and advisors (each, an ``Indemnified Person''). FICC would also define
``Indemnified Person'' in Rule 1. The proposed change would also align
the indemnifications provided by Sponsored Members that are FFI Members
pursuant to Rule 3, Section 9(iii) with the indemnifications provided
by these firms in the membership agreements that they execute and
deliver to FICC in connection with onboarding.
    Rule 3A, Section 2(a) states that a Netting Member that is a Tier
One Netting Member, other than an Inter-Dealer Broker Netting Member or
a Non-IDB Repo Broker with respect to its activity in its Segregated
Repo Account, is eligible to apply to become a Category 2 Sponsoring
Member. FICC proposes to replace this description of Tier One Netting
Members that are not eligible to apply to become a Category 2
Sponsoring Member (i.e., an Inter-Dealer Broker Netting Member, or a
Non-IDB Repo Broker with respect to activity in its Segregated Repo
Account) with the phrase ``Repo Broker in its capacity as a broker.''
In Rule 1, Repo Broker is currently defined as (i) an Inter-Dealer
Broker Netting Member, or (ii) Non-IDB Repo Broker with respect to
activity in its Segregated Repo Account. As such, FICC believes it
would enhance clarity to use the defined term ``Repo Broker'' with the
additional detail that it is the Repo Broker in its capacity as a
broker when describing Tier One Netting Members that are not eligible
to apply to become Category 2 Sponsoring Members.
    FICC is also proposing to revise Section 10 of Rule 3A to clarify
the circumstances in which FICC may treat a Sponsoring Member's Netting
System accounts and Omnibus Account as a single account. This Section
10 currently provides that a Sponsoring Member's Netting System
accounts and its Sponsoring Member Omnibus Account shall be treated
separately, as if they were accounts of separate entities, for purposes
of satisfying Clearing Fund requirements for both its Netting Member
activity and its Sponsoring Member activity. The rest of Section 10,
however, describes FICC's right to treat these accounts as a single
account in its sole discretion and without notice to a Sponsoring
Member. FICC has not, and does not intend to, treat any Sponsoring
Member's Netting System accounts and Sponsoring Member Omnibus Account
as a single account for purposes of calculating its Clearing Fund
requirements to FICC. Therefore, the proposed rule change would remove
these statements from Section 10 of Rule 3A. The proposed rule changes
would include a statement regarding FICC's right to apply a Sponsoring
Member's Clearing Fund deposits to any obligations of that Sponsoring
Member, as provided for under the GSD Rules. This proposed change would
clarify that the statements in this Section 10 of Rule 3A do not have
any impact on other rights FICC may have with respect to the
application of a Member's Clearing Fund deposits, for example,
following the default of that firm and as provided for under Sections 5
and 6 of Rule 4.
    Finally, as described in greater detail below, FICC is also
proposing changes to Section 12(a) of Rule 3A and the definition of
Off-the-Market Transaction in Rule 1 to clarify the treatment of
Sponsored Member Trades that are Off-the-Market Transactions.
    By way of background, in 2019, FICC explained in a proposed rule
change filing \6\ that, in light of the intermediary relationship
between a Sponsoring Member and its Sponsored Member, a Sponsoring
Member may choose to post to its Sponsored Member a haircut in order to
address regulatory and/or investment guideline concerns. Specifically,
the regulations and/or investment guidelines applicable to a Sponsored
Member may require that it receive Eligible Securities worth more than
the cash it is due to receive at final settlement of a FICC-cleared
reverse repo, for example, in the form of a haircut. Similarly, in some
circumstances, a Sponsoring Member may choose to collect such haircut
from its Sponsored Member at the Start Leg to mitigate its exposure
under the Sponsoring Member Guaranty. In both situations, FICC's
understanding is that accounting considerations may favor those
postings being facilitated through FICC's systems. Specifically, in
light of the fact that the counterparty on a FICC-cleared trade changes
after novation (and the Sponsoring Member and Sponsored Member
thereafter both face FICC as principal), having an obligation to
receive and/or deliver a haircut at final settlement directly to FICC
as the post-novation counterparty may be favorable for the Sponsoring
Member and the Sponsored Member from an accounting perspective.
Following regulatory approval of the Sponsored Close-Out Clarification
Filing, FICC added the new defined term ``Initial Haircut'' to the
Rules to refer to this haircut.\7\
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    \6\ Securities Exchange Act Release No. 88262 (February 21,
2020), 85 FR 11401 (February 27, 2020) (SR-FICC-2019-007)
(``Sponsored Close-Out Clarification Filing'').
    \7\ Id.
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    In addition, the Sponsored Close-Out Clarification Filing made
clear that FICC is not under any obligation to verify the parties'
agreement in respect of an Initial Haircut, and the parties'
calculation of any Initial Haircut will be conclusive and binding on
the parties.\8\ These statements were consistent with the long-standing
view that Initial Haircuts be treated as ``off market'' under the
Rules. For example, when the Sponsored Membership Program was first
proposed, FICC stated that it learned that custodial banks that are
likely to be interested in becoming Sponsoring Members generally
collateralize their custody clients (i.e., the potential Sponsored
Members) at 102 percent for U.S. Treasury repurchase agreements.\9\ In
the

Sponsored Service Filing, FICC also stated that under the GSD Clearing
Fund formula at the time, this collateralization would cause a
Sponsoring Member to pay an additional 4 percent of its overall
transactional volume with Sponsored Members in the form of Clearing
Fund margin. Therefore, FICC amended the Clearing Fund rule to avoid
the potential adverse impact on a Sponsoring Member given that these
additional funds payments are pass-through amounts and do not represent
risk to FICC or its members.\10\
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    \8\ Id. at 11404 (``FICC would also amend Section 9(a) of Rule
3A to make clear that any Initial Haircut would be as agreed between
the parties to the Sponsored Member Trade, and that FICC would not
be under any obligation to verify the parties' agreement with
respect to any Initial Haircut, and its calculation of the Initial
Haircut would be conclusive and binding on the parties'').
    \9\ Securities Exchange Act Release No. 51659 (May 5, 2005), 70
FR 25129 (May 12, 2005) (SR-FICC-2004-22) (``Sponsored Service
Filing'').
    \10\ Id.
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    FICC is now proposing to clarify Section 12(a) of Rule 3A to
clarify the Rules regarding how Initial Haircuts are treated in loss
allocation arising from a default of a Sponsoring Member and would
propose to amend the definition of Off-the-Market Transaction in Rule 1
to state that an Off-the-Market Transaction includes a Sponsored Member
Trade in which the Sponsored Member provided the Initial Haircut.
    More specifically, the proposed changes would clarify that, in the
event a Sponsoring Member defaults, and a Sponsored Member has a
Receive Obligation regarding a Sponsored Member Trade for which that
Sponsored Member gave an Initial Haircut (which, pursuant to the Rules,
makes that Sponsored Member Trade an Off-the-Market Transaction), the
Sponsored Member would bear the risk of loss on such Sponsored Member
Trade. This clarification would make this provision of the Rules
consistent with FICC's practice to facilitate Initial Haircuts as
payments but are not otherwise part of FICC's risk management
processes. The proposed rule change would add clarifying language to
this effect in Section 12(a) of Rule 3A. Specifically, FICC would add
that, except as expressly set forth in Section 12 of Rule 3A, if a loss
or liability of FICC is determined to arise in connection with the
close-out or liquidation of a Sponsored Member Trade of a Sponsored
Member that is an Off-the-Market Transaction because the Sponsored
Member has provided an Initial Haircut, FICC would allocate such loss
or liability attributable to the Initial Haircut to such Sponsored
Member in accordance with Section 7 of Rule 4. Currently, Section 7 of
Rule 4 states that, to the extent that a loss or liability of FICC is
determined by FICC to arise in connection with the close-out or
liquidation of an Off-the-Market Transaction in the portfolio of a
Defaulting Member, it shall be allocated directly and entirely to the
Member that was the counterparty to such Off-the-Market Transaction.
    Furthermore, as noted above, FICC also proposes to add that an Off-
the-Market Transaction includes a Sponsored Member Trade in which the
Sponsored Member provided the haircut in the definition of Off-the-
Market Transaction in GSD Rule 1.
(ii) Corrections
    FICC is also proposing to make a number of changes to the Rules,
described below, that would correct errors in the Rules. First, FICC
would make a grammatical correction in Rule 3A, Section 1 by revising
``and to'' to ``nor.''
    Next, FICC is proposing to correct an error in Rule 3A, Section
6(b). Currently, Rule 3A, Section 6(b) states that the comparison of
Sponsored Member Trades will be governed by Rule 5 and either: (i) Rule
6A or (ii) Sections 1, 2, 4, 6 through 10 and 13 of Rule 6C depending
upon the type of comparison for which the Sponsored Member Trades are
submitted. FICC would add a reference to Rule 6B as new subsection (ii)
to the list of Rules that govern the comparison of Sponsored Member
Trades; Rule 6B describes Demand Comparison and is applicable for
Sponsored Member Trades that are between a Sponsored Member and a
Netting Member.\11\ Rule 6B, Section 1 states that in order for FICC to
process a trade for Demand Comparison, FICC must receive trade data
from a Demand Trade Source. Rule 6B, Section 1 also states that FICC
has designated the Repo Brokers as Demand Trade Sources with respect to
Brokered Repo Transactions (other than GCF Repo Transactions) that are
submitted to FICC by the deadline established for this purpose in the
Schedule of Timeframes. Therefore, Rule 6B should have been included in
Rule 3A, Section 6(b) when the Sponsored Member Trade definition was
expanded in 2019 to allow Sponsored Members to submit FICC eligible
securities transactions with Netting Members other than their
Sponsoring Members.\12\ The proposed change would correct this error
that failed to include Rule 6B in Rule 3A, Section 6(b).
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    \11\ The term ``Sponsored Member Trade'' means (a) a transaction
that satisfies the requirements of Section 5 of Rule 3A and that is
(i) between a Sponsored Member and its Sponsoring Member or (ii)
between a Sponsored Member and a Netting Member or (b) a Sponsored
GC Trade. Rule 1, supra note 5.
    \12\ Securities Exchange Act Release No. 85470 (March 29, 2019),
84 FR 13328 (April 4, 2019) (SR-FICC-2018-013). As of February 11,
2019, the advance notice (SR-FICC-2018-802) was deemed to not have
been objected to by the Commission.
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    FICC is also proposing to correct an error in Rule 3A, Section
8(iii) by changing the reference from section (a)(ii) of the definition
of Sponsored Member Trade to section (a) of the definition of Sponsored
Member Trade. Rule 3A, Section 8(iii) currently states that with
respect to Section 1 of Rule 12, the optional Pair-Off Service is
available to Sponsored Member Trades within the meaning of section
(a)(ii) of that definition. Section (a)(ii) of the definition of
Sponsored Member Trades means a transaction that satisfies the
requirements of Section 5 of Rule 3A and that is between a Sponsored
Member and a Netting Member. Section (a)(i) of the definition of
Sponsored Member Trade means a transaction that satisfies the
requirements of Section 5 of Rule 3A and that is between a Sponsored
Member and its Sponsoring Member. The Pair-Off Service is currently
available to transactions that fall within the meaning of section
(a)(ii) of the definition of Sponsored Member Trades as well as
transactions that fall within the meaning of section (a)(i) of the
definition of Sponsored Member Trades. Therefore, FICC proposes to
correct the current reference from section (a)(ii) to section (a) of
the definition of Sponsored Member Trade in Rule 3A, Section 8(iii) to
clarify that the optional Pair-Off Service is available to Sponsored
Member Trades that fall within the meaning of sections (a)(i) and
(a)(ii) of the definition of Sponsored Member Trade.
    FICC is proposing to delete the first sentence in Rule 3A, Section
12(c), which states that that the entire amount of the Required Fund
Deposit associated with the Sponsoring Member's Netting System accounts
and the entire amount of the Sponsoring Member's Omnibus Account
Required Fund Deposit may be used to satisfy any amount allocated
against a Sponsoring Member in its capacity as either a Netting Member
or a Sponsoring Member. The proposed change would remove this
statement, which does not describe the current process and should have
been removed when FICC revised the loss allocation rules to, among
other things, incorporate the concept of the Loss Allocation Cap and to
reference the applicable sections in Rule 4 that would apply when a
Sponsoring Member elects to terminate its status as a Sponsoring
Member.\13\ The proposed change would correct the

error of failing to delete this sentence in the Loss Allocation Filing.
The Loss Allocation Filing added the description of the current process
in the second sentence of Rule 3A, Section 12(c), but should have also
deleted the description of the process that was in the Rules at the
time (i.e., the first sentence of Rule 3A, Section 12(c)).\14\
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    \13\ Securities Exchange Act Release Nos. 83970 (August 28,
2018), 83 FR 44929 (September 4, 2018) (SR-FICC-2017-022) and 83951
(August 27, 2018), 83 FR 44331 (August 30, 2018) (SR-FICC-2017-806)
(``Loss Allocation Filing'').
    \14\ Id.
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    The process is correctly described in the second sentence of Rule
3A, Section 12(c), which as described above, was added in the Loss
Allocation Filing and intended to replace the process described in the
first sentence of Rule 3A, Section 12(c). The second sentence of Rule
3A, Section 12(c) states that with respect to an obligation to make
payment due to any loss allocation amounts assessed to a Sponsoring
Member pursuant to Rule 3A, Section 12(b) above, the Sponsoring Member
may instead elect to terminate its membership in FICC pursuant to
Section 7b of Rule 4 and thereby benefit from its Loss Allocation Cap
pursuant to Section 7 of Rule 4. In addition, for the purpose of
determining the Loss Allocation Cap for such Sponsoring Member, its
Required Fund Deposit will be the sum of its Required Fund Deposit and
its Sponsoring Member's Omnibus Account Required Fund Deposit.\15\
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    \15\ Id.
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    Finally, FICC would correct the Interpretative Guidance with
Respect to Settlement Finality by adding a section describing the point
of finality for Sponsored GC Trades. Specifically, FICC proposes to add
a section that would state that the point of finality of settlement of
Sponsored GC Trades occurs on the books of the Sponsored GC Clearing
Agent Bank at the point when the Sponsoring Member and Sponsored Member
make the relevant payment obligation or securities delivery, as
applicable, to the account at the Sponsored GC Clearing Agent Bank
specified by the pre-novation counterparty in accordance with such
procedures as the Sponsoring GC Clearing Agent Bank may specify from
time to time. This proposed subsection describing the point of finality
for Sponsored GC Trades should have been added to the Interpretative
Guidance with Respect to Settlement Finality in the proposal to add the
Sponsored GC Service but was inadvertently omitted; this proposal was
approved in 2021.\16\
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    \16\ Securities Exchange Act Release Nos. 92808 (August 30,
2021), 86 FR 49580 (September 3, 2021) (SR-FICC-2021-003) and 92799
(August 27, 2021), 86 FR 49387 (September 2, 2021) (SR-FICC-2021-
801).
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(iii) Technical Changes
    FICC is also proposing to make a number of technical changes to the
Rules, which include correcting grammar, for example, by adding a comma
after the word ``hereinafter'' in the second paragraph of Rule 3A,
Section 2(i) and adding ``hereinafter,'' before the defined terms in
Rule 3A, Sections 2(i), 3(e) and 18(b). The proposed changes would also
add the word ``the'' before the defined term ``Sponsored Member
Voluntary Termination Notice'' in Rule 3A, Section 3(e), and would
revise the hyphens in the headings of Sections 3, 4, 5, 6, 8, 10, 12,
13, 14, 15 and 16 of Rule 3A to be consistent with the hyphens in the
headings of the other sections in Rule 3A (e.g., Sections 1 and 2).
    In the Schedule of Sponsored GC Trade Timeframes, with respect to
the ``10:30 p.m. to 2:00 a.m.'' timeframe, FICC proposes to delete the
double space after the line that lists ``10:30 p.m.'' so that there
would only be a single space between the line that lists ``10:30 p.m.''
and the line that lists ``to 2:00 a.m.'' FICC also proposes to bold the
times listed in the Sponsored GC Trade Timeframes to be consistent with
the formatting of times in the other schedules in the Rules.
    In the Schedule of GC Comparable Securities, FICC proposes to
delete the extra space after the hyphen in the description of GC
Comparable Securities for Generic Security Type ``FFARM'' (Fannie Mae
and Freddie Mac Fixed Rate and Adjustable Rate Mortgage-Backed
Securities) and for Generic Security Type ``TIPS'' (U.S. Treasury
inflation-protected notes and bonds). In the Schedule of GC Comparable
Securities, FICC proposes to add the word ``and'' in the description of
GC Comparable Securities for Generic Security Type ``STRP'' and to
delete the comma and add the word ``and'' in the description of GC
Comparable Securities for Generic Security Type ``TIPS''.
    In Rule 3A, Section 6(b), FICC proposes to add a new subsection
(ii) as described above and as such, also proposes to make a conforming
change to renumber current subsection (ii) to subsection (iii).
Similarly, in the Interpretative Guidance with Respect to Settlement
Finality, FICC proposes to add subsection 2(b), as further described
above. As such, FICC proposes to make a conforming change to revise
current subsection 2(b) to subsection 2(c).
2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules
be designed to promote the prompt and accurate clearance and settlement
of securities transactions.\17\
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    \17\ 15 U.S.C. 78q-1(b)(3)(F).
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    The proposed changes to make certain clarifications, corrections,
and technical changes to the Rules would help to ensure that the Rules
are accurate and clear to participants. When participants better
understand their rights and obligations regarding the Rules, such
participants are more likely to act in accordance with the Rules, which
FICC believes would promote the prompt and accurate clearance and
settlement of securities transactions. As such, FICC believes that the
proposed changes would be consistent with Section 17A(b)(3)(F) of the
Act.\18\
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    \18\ Id.
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(B) Clearing Agency's Statement on Burden on Competition

    FICC does not believe the proposed rule changes to make certain
clarifications, corrections, and technical changes to the Rules would
impact competition. The proposed rule changes would help to ensure that
the Rules remain clear and accurate. In addition, the changes would
facilitate participants' understanding of the Rules and their
obligations thereunder. These changes would not affect FICC's
operations or the rights and obligations of the membership. As such,
FICC believes the proposed rule changes would not have any impact on
competition.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others

    FICC reviewed the proposed rule change with Sponsoring Members, who
are the FICC Members that would be impacted by the proposed changes.
FICC has not received any written comments relating to this proposal.
If any written comments are received, they will be publicly filed as an
Exhibit 2 to this filing, as required by Form 19b-4 and the General
Instructions thereto.
    Persons submitting comments are cautioned that, according to
Section IV (Solicitation of Comments) of the Exhibit 1A in the General
Instructions to Form 19b-4, the Commission does not edit personal
identifying information from comment submissions. Commenters should
submit only information that they wish to make available publicly,
including their name, email address, and any other identifying
information.
All prospective commenters should follow the Commission's instructions
on

how to submit comments, available at https://www.sec.gov/regulatory-actions/how-to-submit-comments. General questions regarding the rule
filing process or logistical questions regarding this filing should be
directed to the Main Office of the Commission's Division of Trading and
Markets at [email protected] or<PHONE_NUMBER>.
    FICC reserves the right to not respond to any comments received.

III. Date of Effectiveness of the Proposed Rule Change, and Timing for
Commission Action

    Because the foregoing proposed rule change does not:
    (i) significantly affect the protection of investors or the public
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \19\ and
Rule 19b-4(f)(6) thereunder.\20\
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-FICC-2023-002 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-FICC-2023-002. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of FICC and on DTCC's website
(http://dtcc.com/legal/sec-rule-filings.aspx). All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-FICC-2023-002 and should be submitted on
or before March 15, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03576 Filed 2-21-23; 8:45 am]
BILLING CODE 8011-01-P