[Federal Register Volume 84, Number 204 (Tuesday, October 22, 2019)]
[Notices]
[Pages 56454-56455]
[FR Doc No: 2019-23004]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Intent To File License Application, Filing of Pre-
Application Document, and Approving Use of the Traditional Licensing
Process

------------------------------------------------------------------------
                                                           Project Nos.
------------------------------------------------------------------------
Midwest Hydro, LLC......................................        2347-051
Midwest Hydro, LLC......................................        2348-042
Midwest Hydro, LLC......................................        2373-012
STS Hydropower, LLC.....................................        2446-051
------------------------------------------------------------------------

    a. Type of Filing: Notices of Intent to File License Applications
and Request to Use the Traditional Licensing Process.
    b. Project Nos.: 2347-051, 2348-042, 2373-012, and 2446-051.
    c. Date Filed: August 30, 2019.
    d. Submitted By: Eagle Creek Renewable Energy, LLC, on behalf of
Midwest Hydro, LLC (Midwest Hydro) and STS Hydropower, LLC (STS
Hydropower).
    e. Name of Projects: Janesville Central, Beloit, Rockton, and Dixon
Hydroelectric Projects.
    f. Location: The four existing projects are located on the Rock
River. The Dixon Project is located at river mile (RM) 87 in Lee and
Ogle Counties, Illinois. The Rockton Project is located at RM 159 in
Winnebago County, Illinois. The Beloit Project is located at RM 163 in
Rock County, Wisconsin. The Janesville Central Project is located at RM
180 in Rock County, Wisconsin. No federal lands are occupied by the
project works or located within the respective project boundaries.
    g. Filed Pursuant to: 18 CFR 5.3 of the Commission's regulations.
    h. Potential Applicant Contact: Michael Scarzello, Regulatory
Director, Eagle Creek Renewable Energy, LLC, 116 N State Street, P.O.
Box 167, Neshkoro, WI 54960[hyphen]0167; phone:<PHONE_NUMBER>; email_
[email protected]
    i. FERC Contact: Laura Washington at<PHONE_NUMBER>; or email at
<EMAIL_ADDRESS>    j. Midwest Hydro and STS Hydropower filed separate requests to use
the Traditional Licensing Process on August 30, 2019. Midwest Hydro and
STS Hydropower provided public notice of their requests on August 30,
2019. In a letter dated October 16, 2019, the Director of the Division
of Hydropower Licensing approved the requests to use the Traditional
Licensing Process.
    k. With this notice, we are initiating informal consultation with
the U.S. Fish and Wildlife Service and/or National Oceanic and
Atmospheric Administration (NOAA) Fisheries under section 7 of the
Endangered Species Act and the joint agency regulations thereunder at
50 CFR, part 402; and NOAA Fisheries under section 305(b) of the
Magnuson-Stevens Fishery Conservation and Management Act and
implementing regulations at 50 CFR 600.920. We are also initiating
consultation the Wisconsin and Illinois

State Historic Preservation Officers, as required by section 106,
National Historical Preservation Act, and the implementing regulations
of the Advisory Council on Historic Preservation at 36 CFR 800.2.
    l. With this notice, we are designating Midwest Hydro and STS
Hydropower as the Commission's non-federal representatives for carrying
out informal consultation, pursuant to section 7 of the Endangered
Species Act and section 305(b) of the Magnuson-Stevens Fishery
Conservation and Management Act; and consultation pursuant to section
106 of the National Historic Preservation Act.
    m. Midwest Hydro and STS Hydropower filed Pre-Application Documents
(PAD); including a proposed process plan and schedule for each project
with the Commission, pursuant to 18 CFR 5.6 of the Commission's
regulations.
    n. A copy of the PADs are available for review at the Commission in
the Public Reference Room or may be viewed on the Commission's website
(http://www.ferc.gov), using the ``eLibrary'' link. Enter the docket
number, excluding the last three digits in the docket number field to
access the document. For assistance, contact FERC Online Support at
<EMAIL_ADDRESS>(866) 208-3676 (toll free), or (202) 502-
8659 (TTY). A copy is also available for inspection and reproduction at
the address in paragraph h.
    o. The licensees state their unequivocal intent to submit an
application for a new license for Project Nos. 2347, 2348, 2373, and
2446. Pursuant to 18 CFR 16.8, 16.9, and 16.10, each application for a
new license and any competing license applications must be filed with
the Commission at least 24 months prior to the expiration of the
existing license. All applications for license for these projects must
be filed by August 31, 2022.
    p. Register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances
related to these or other pending projects. For assistance, contact
FERC Online Support.

    Dated: October 16, 2019.
Kimberly D. Bose,
Secretary.
[FR Doc. 2019-23004 Filed 10-21-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 87, Number 78 (Friday, April 22, 2022)]
[Notices]
[Pages 24210-24214]
[FR Doc No: 2022-08662]

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

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34560; 812-15213]

 Capital Southwest Corporation

April 19, 2022.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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

    Notice of an application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
sections 23(a), 23(b) and 63 of the Act, and pursuant sections 57(a)(4)
and 57(i) of the Act and rule 17d-1 under the Act permitting certain
joint transactions otherwise prohibited by section 57(a)(4) of the Act,
and pursuant section 23(c)(3) of the Act for an exemption from section
23(c) of the Act.

Summary of the Application: Capital Southwest Corporation (``Company''
or ``Applicant''), requests an order (``Order'') to (a) permit it to
issue restricted shares of its common stock (``Restricted Stock'')
under the terms of its 2021 Employee Restricted Stock Award Plan (the
``2021 Employee Plan'') and its 2021 Non-Employee Director Restricted
Stock Award Plan (the ``2021 Non-Employee Director Plan'') as part of
the compensation package for Employee Participants (as defined below)
and Non-Employee Director Participants (as defined below), respectively
and (b) to allow the Company to withhold shares of the Company's common
stock or purchase shares of the Company's common stock from the
Employee Participants and Non-Employee Director Participants to satisfy
tax withholding obligations relating to the vesting of Restricted Stock
pursuant to the 2021 Employee Plan and the 2021 Non-Employee Director
Plan, respectively.

Applicant: Capital Southwest Corporation.

Filing Dates: The application was filed on March 29, 2021 and amended
on January 21, 2022.

Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by emailing the Commission's
Secretary at [email protected] and serving applicants with a
copy of the request by email. Hearing requests should be received by
the Commission by 5:30 p.m. on May 15, 2022, and should be accompanied
by proof of service on the applicants, in the form of an affidavit, or,
for lawyers, a certificate of service. Pursuant to rule 0-5 under the
Act, hearing requests should state the nature of the writer's interest,
any facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons who wish to
be notified of a hearing may request notification by emailing the
Commission's Secretary at [email protected].

ADDRESSES: The Commission: [email protected]. Applicant:
[email protected]; [email protected];
sutherland.com">[email protected]sutherland.com.

FOR FURTHER INFORMATION CONTACT: Asen Parachkevov, Senior Counsel or
Lisa Reid Ragen, Branch Chief, at<PHONE_NUMBER> (Division of
Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's website by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling<PHONE_NUMBER>.

Applicant's Representations

    1. The Company, a Texas corporation, is an internally managed, non-
diversified, closed-end investment company that has elected to be
regulated as a business development company (``BDC'') under the Act.\1\
The Company's investment objective is to produce attractive risk-
adjusted returns by generating current income from its debt investments
and capital appreciation from its equity and equity related
investments.
---------------------------------------------------------------------------

    \1\ Capital Southwest was incorporated in Texas in 1961. On
March 30, 1988 Capital Southwest elected to be regulated as a BDC.
Section 2(a)(48) of the Act defines a BDC to be any closed-end
investment company that operates for the purpose of making
investments in securities described in sections 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------

    2. Shares of the Company's common stock are traded on the NASDAQ
Global Select Market under the symbol ``CSWC.'' As of March September
30, 2021, there were 25,680,551 and 23,341,039 shares of the Company's

common stock issued and outstanding, respectively. As of September 30,
2021, the Company had an aggregate of 24 employees.
    3. The Company currently has a seven-member board of directors (the
``Board'') of whom one is an ``interested person'' of the Company
within the meaning of section 2(a)(19) of the Act and six are not
interested persons (the ``Non-interested Directors''). The Company has
six directors who are neither officers nor employees of the Company.
    4. The Company believes that its successful performance depends on
its ability to offer fair compensation packages to its professionals
that are competitive with those offered by other investment management
businesses. The Company believes the highly specialized nature of its
business, the competitiveness of its market and the small size of its
employee base relative to its assets and revenue make such retentions
even more critical for the Company, and that the ability to offer
equity-based compensation to its professionals is vital to the
Company's future growth and success.
    5. The Commission previously issued a certain exemptive order (the
``Prior Order''), which, among other things, (i) permits the Company to
issue restricted shares of its common stock under the terms of the
Company's 2021 Employee Plan as part of the compensation packages for
certain of its employees and certain employees of its wholly-owned
subsidiaries (``Employee Participants''), and (ii) allows the Company
to withhold shares of the Company's common stock or purchase shares of
the Company's common stock from the Employee Participants to satisfy
tax withholding obligations relating to the vesting of Restricted Stock
(as defined in the 2021 Employee Plan) pursuant to the 2021 Employee
Plan.\2\
---------------------------------------------------------------------------

    \2\ ``Prior Order'' refers to the exemptive order issued by the
Commission on July 19, 2021 (see Capital Southwest Corporation,
Investment Company Act Release Nos. 34309 (notice) (June 22, 2021)
and 34335 (order) (July 19, 2021)).
---------------------------------------------------------------------------

    6. The Company states that the relief it is seeking under the
requested Order is the same type of relief previously provided by the
Commission under the Prior Order, but the requested Order will cover
both Employee Participants and non-employee directors of the Board
(``Non-Employee Director Participants'', and together with Employee
Participants, the ``Participants''). The Order would supersede the
Prior Order, with the result that the Company will no longer rely on
the Prior Order if the Order is granted.
    7. The 2021 Employee Plan will authorize the issuance of shares of
Restricted Stock by the Company to certain of its employees. The
Company states that the Restricted Stock will be subject to
restrictions on transferability and other restrictions as required by
the compensation committee of the Board, which will be comprised solely
of ``non-employee directors'' within the meaning of rule 16b-3 under
the Securities Exchange Act of 1934 (the ``Exchange Act''), each of
whom also is not an ``interested person'' of the Company within the
meaning of section 2(a)(19) of the Act (``Compensation Committee). The
Company states that except to the extent restricted under the terms of
the 2021 Employee Plan, an Employee Participant who is granted
Restricted Stock will have all the rights of any other shareholder,
including the right to vote the Restricted Stock and the right to
receive dividends. The Company states that during the restriction
period (i.e., prior to the lapse of the applicable forfeiture
restrictions), the Restricted Stock generally may not be sold,
transferred, pledged, hypothecated, margined or otherwise encumbered by
the Employee Participant. The Company states that except as the Board
otherwise determines, upon termination of a Participant's employment
during the applicable restriction period, Restricted Stock for which
forfeiture restrictions have not lapsed at the time of such termination
shall be forfeited.
    8. The 2021 Non-Employee Director Plan will authorize the issuance
of shares of Restricted Stock by the Company to Non-Employee Director
Participants. The Company states that the Restricted Stock will be
subject to restrictions on transferability and other restrictions as
required by the Compensation Committee of the Board. The Company states
that except to the extent restricted under the terms of the 2021 Non-
Employee Director Plan, a Non-Employee Director Participant who is
granted Restricted Stock will have all the rights of any other
shareholder, including the right to vote the Restricted Stock and the
right to receive dividends. The Company states that during the
restriction period (i.e., prior to the lapse of the applicable
forfeiture restrictions), the Restricted Stock generally may not be
sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Non-Employee Director Participant. The Company states
that unless otherwise specified in the award agreement or the Board
determines in any individual case, Restricted Stock awards to Non-
Employee Director Participants vest at the end of each one-year term of
service on the Board.
    9. The Company states that the value of Restricted Stock generally
will be taxable to the recipient as ordinary income in the years in
which the restrictions on the shares lapse and that such value will be
the fair market value of the shares on the dates the restrictions
lapse. The Company states that each of the 2021 Employee Plan and the
2021 Non-Employee Director Plan authorizes the Company to withhold
common stock (in whole or in part) from any award of restricted shares
granted at the time the Restricted Stock is taxed in satisfaction of a
Participant's tax obligations.
    10. The Company states that maximum amount of Restricted Stock that
may be issued and outstanding will not at the time of issuance of any
Restricted Stock exceed 10% of the Company's outstanding voting
securities.\3\ In addition, the Company states that no Employee
Participant may be granted more than 25% of the shares reserved for
issuance under the 2021 Employee Plan and no Non-Employee Director
Participant may be granted more than 25% of the shares reserved for
issuance under the 2021 Non-Employee Director Plan.
---------------------------------------------------------------------------

    \3\ For purposes of calculating compliance with this limit,
Capital Southwest counts as Restricted Stock all shares of its
common stock that are issued pursuant to the 2021 Employee Plan and
the 2021 Non-Employee Director Plan, less any shares that are
forfeited back to Capital Southwest and cancelled as a result of
forfeiture restrictions not lapsing.
---------------------------------------------------------------------------

    11. The Company states that each issuance of Restricted Stock under
the 2021 Employee Plan or the 2021 Non-Employee Director Plan will be
approved by the required majority, as defined in section 57(o) of the
Act,\4\ of the Company's directors on the basis that the issuance is in
the best interests of the Company and its shareholders. The Company
states that the date on which the required majority approves an
issuance of Restricted Stock will be deemed the date on which the
subject Restricted Stock is granted.
---------------------------------------------------------------------------

    \4\ Section 57(o) of the Act provides that the term ``required
majority,'' when used with respect to the approval of a proposed
transaction, plan, or arrangement, means both a majority of a BDC's
directors or general partners who have no financial interest in such
transaction, plan, or arrangement and a majority of such directors
or general partners who are not interested persons of such company.
---------------------------------------------------------------------------

    12. The Company states that the 2021 Employee Plan was approved by
the Board as a whole, including the required majority as defined in
section 57(o) of the Act, on March 26, 2021 and was approved by the
Company's shareholders on July 28, 2021. In

addition, the Company states that the 2021 Non-Employee Director Plan
was approved by the Board as a whole, including the required majority
as defined in section 57(o) of the Act, on March 26, 2021. The Company
states that if the Commission issues the Order, the 2021 Non-Employee
Director Plan will become effective upon receipt of the approval of the
Company's shareholders.

Applicant's Legal Analysis

Sections 23(a) and (b), Section 63

    1. Under section 63 of the Act, the provisions of section 23(a) of
the Act generally prohibiting a registered closed-end investment
company from issuing securities for services or for property other than
cash or securities are made applicable to BDCs. This provision would
prohibit the issuance of Restricted Stock as a part of the 2021
Employee Plan and the 2021 Non-Employee Director Plan.
    2. Section 23(b) generally prohibits a registered closed-end
management investment company from selling its common stock at a price
below its current net asset value (``NAV''). Section 63(2) makes
section 23(b) applicable to BDCs unless certain conditions are met.
Because Restricted Stock that would be granted under the 2021 Employee
Plan and the 2021 Non-Employee Director Plan would not meet the terms
of section 63(2), sections 23(b) and 63 prohibit the issuance of the
Restricted Stock.
    3. Section 6(c) provides, in part, that the Commission may, by
order upon application, conditionally or unconditionally exempt any
person, security, or transaction, or any class or classes of persons,
securities or transactions, from any provision of the Act, if and to
the extent that the exemption is necessary or appropriate in the public
interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Act.
    4. The Company requests an order pursuant to section 6(c) of the
Act granting an exemption from the provisions of sections 23(a) and (b)
and section 63 of the Act. The Company states that the concerns
underlying those sections include: (a) Preferential treatment of
investment company insiders and the use of options and other rights by
insiders to obtain control of the investment company; (b) complication
of the investment company's structure that makes it difficult to
determine the value of the company's shares; and (c) dilution of
shareholders' equity in the investment company. The Company states that
the 2021 Employee Plan and the 2021 Non-Employee Director Plan do not
raise concerns about preferential treatment of the Company's insiders
because each of the 2021 Employee Plan and the 2021 Non-Employee
Director Plan is a bona fide compensation plan of the type common among
corporations generally. In addition, section 61(a)(4)(B) of the Act
permits a BDC to issue to its officers, directors and employees,
pursuant to an executive compensation plan, warrants, options and
rights to purchase the BDC's voting securities, subject to certain
requirements. The Company states that while it is not aware of any
specific discussion in the legislative history of section 61 of the Act
regarding the use of direct grants of stock as incentive compensation,
the legislative history recognizes the crucial role that equity-based
compensation played in the operation of a private equity fund and its
ability to attract and retain employees. The Company believes that the
issuance of Restricted Stock is substantially similar, for purposes of
investor protection under the Act, to the issuance of warrants,
options, and rights as contemplated by section 61 of the Act. The
Company also asserts that the 2021 Employee Plan and the 2021 Non-
Employee Director Plan would not become a means for Participants to
obtain control of the Company because the number of shares of the
Company issuable under the 2021 Employee Plan and the 2021 Non-Employee
Director Plan would be limited as set forth in the application.
    5. The Company further states that the 2021 Employee Plan and the
2021 Non-Employee Director Plan will not unduly complicate the
Company's structure because equity-based compensation arrangements are
widely used among corporations and commonly known to investors. The
Company notes that the 2021 Non-Employee Director Plan will be
submitted to its shareholders for their approval. The Company
represents that a concise, ``plain English'' description of the 2021
Non-Employee Director Plan, including its potential dilutive effect,
will be provided in the proxy materials that will be submitted to the
Company's shareholders. The Company also states that it will comply
with the proxy disclosure requirements in Item 10 of Schedule 14A under
the Exchange Act. The Company further notes that the 2021 Employee Plan
and the 2021 Non-Employee Director Plan will be disclosed to investors
in accordance with the requirements of the Form N-2 registration
statement for closed-end investment companies, and pursuant to the
standards and guidelines adopted by the Financial Accounting Standards
Board for operating companies. In addition, the Company will comply
with the disclosure requirements for executive compensation plans
applicable to BDCs.\5\ The Company thus concludes that the 2021
Employee Plan and the 2021 Non-Employee Director Plan will be
adequately disclosed to investors and appropriately reflected in the
market value of the Company's shares.
---------------------------------------------------------------------------

    \5\ See Executive Compensation and Related Party Disclosure,
Securities Act Release No. 8655 (Jan. 27, 2006) (proposed rule);
Executive Compensation and Related Party Disclosure, Securities Act
Release No. 8732A (Aug. 29, 2006) (final rule and proposed rule), as
amended by Executive Compensation Disclosure, Securities Act Release
No. 8765 (Dec. 22, 2006) (adopted as interim final rules with
request for comments).
---------------------------------------------------------------------------

    6. The Company acknowledges that, while awards granted under the
2021 Employee Plan and the 2021 Non-Employee Director Plan may have a
dilutive effect on the shareholders' equity in the Company, that effect
would be outweighed by the anticipated benefits of the 2021 Employee
Plan and the 2021 Non-Employee Director Plan to the Company and its
shareholders. The Company asserts that it needs the flexibility to
provide the requested equity-based employee compensation in order to be
able to compete effectively with other financial services firms for
talented professionals. These professionals, the Company suggests, in
turn are likely to increase the Company's performance and shareholder
value. The Company also asserts that equity-based compensation would
more closely align the interests of the Company's employees with those
of its shareholders. In addition, the Company states that its
shareholders will be further protected by the conditions to the
requested order that assure continuing oversight of the operation of
the 2021 Employee Plan and the 2021 Non-Employee Director Plan by the
Company's Board.

Section 57(a)(4), Rule 17d-1

    7. Section 57(a) proscribes certain transactions between a BDC and
persons related to the BDC in the manner described in section 57(b)
(``57(b) persons''), absent a Commission order. Section 57(a)(4)
generally prohibits a 57(b) person from effecting a transaction in
which the BDC is a joint participant absent such an order. Rule 17d-1,
made applicable to BDCs by section 57(i), proscribes participation in a
``joint enterprise or other joint arrangement or profit-sharing plan,''
which includes a stock option or purchase plan.

Employees and directors of a BDC are 57(b) persons. Thus, the issuance
of shares of Restricted Stock could be deemed to involve a joint
transaction involving a BDC and a 57(b) person in contravention of
section 57(a)(4). Rule 17d-1(b) provides that, in considering relief
pursuant to the rule, the Commission will consider (i) whether the
participation of the company in a joint enterprise is consistent with
the Act's policies and purposes and (ii) the extent to which that
participation is on a basis different from or less advantageous than
that of other participants.
    8. The Company requests an order pursuant to section 57(a)(4) and
57(i) of the Act and rule 17d-1 to permit the Company to issue
Restricted Stock under the 2021 Employee Plan and the 2021 Non-Employee
Director Plan. The Company states that the 2021 Employee Plan and the
2021 Non-Employee Director Plan, although benefiting the Participants
and the Company in different ways, is in the interests of the Company's
shareholders because the 2021 Employee Plan and the 2021 Non-Employee
Director Plan will help align the interests of the Company's employees
and directors with those of its shareholders, which will encourage
conduct on the part of those employees, officers and directors designed
to produce a better return for the Company's shareholders.
Additionally, section 57(j)(1) of the Act expressly permits any
director, officer or employee of a BDC to acquire warrants, options and
rights to purchase voting securities of such BDC, and the securities
issued upon the exercise or conversion thereof, pursuant to an
executive compensation plan which meets the requirements of section
61(a)(4)(B) of the Act. Applicant submits that the issuance of
Restricted Stock pursuant to the 2021 Employee Plan and the 2021 Non-
Employee Director Plan poses no greater risk to stockholders than the
issuances permitted by section 57(j)(1) of the Act.

Section 23(c)

    9. Section 23(c) of the Act, which is made applicable to BDCs by
section 63 of the Act, generally prohibits a BDC from purchasing any
securities of which it is the issuer except in the open market pursuant
to tenders, or under other circumstances as the Commission may permit
to ensure that the purchases are made in a manner or on a basis that
does not unfairly discriminate against any holders of the class or
classes of securities to be purchased. Applicant states that to the
extent that the transactions between Applicant and the respective
Participants described in the application with respect to the 2021
Employee Plan and the 2021 Non-Employee Director Plan constitute
``purchases'' by Applicant of its own securities, Section 23(c), absent
relief, would prohibit such transactions.
    10. Section 23(c)(3) of the Act permits a BDC to purchase
securities of which it is the issuer in circumstances in which the
repurchase is made in a manner or on a basis that does not unfairly
discriminate against any holders of the class or classes of securities
to be purchased. Applicant believes that the requested relief meets the
standards of section 23(c)(3).
    11. Applicant submits that these purchases will be made in a manner
that does not unfairly discriminate against Applicant's stockholders
because all purchases of Applicant's stock will be at the closing price
of the common stock on the Nasdaq Global Select Market (or any primary
exchange on which its shares of common stock may be traded in the
future) on the relevant date (i.e., the public market price on the date
of grant of Restricted Stock). Applicant submits that because all
transactions with respect to the 2021 Employee Plan and the 2021 Non-
Employee Director Plan will take place at the public market price for
the Applicant's common stock, these transactions will not be
significantly different than could be achieved by any stockholder
selling in a market transaction. Applicant represents that no
transactions will be conducted pursuant to the requested order on days
where there are no reported market transactions involving Applicant's
shares.
    12. Applicant represents that the withholding provisions in the
2021 Employee Plan and the 2021 Non-Employee Director Plan do not raise
concerns about preferential treatment of Applicant's insiders because
each of the 2021 Employee Plan and the 2021 Non-Employee Director Plan
is a bona fide compensation plan of the type that is common among
corporations generally. Furthermore, the vesting schedule is determined
at the time of the initial grant of the Restricted Stock. Applicant
represents that all purchases may be made only as permitted by the 2021
Employee Plan, which was approved by both the Board prior to any
application and by shareholders on July 28, 2021, and the 2021 Non-
Employee Director Plan, which will be approved by the Applicant's
stockholders prior to any application of the relief. Applicant believes
that granting the requested relief would be consistent with the
policies underlying the provisions of the Act permitting the use of
equity compensation as well as prior exemptive relief granted by the
Commission under section 23(c) of the Act.

Applicant's Conditions

    Applicant agrees that the order granting the requested relief will
be subject to the following conditions:
    1. The 2021 Non-Employee Director Plan will be authorized by the
Company's shareholders.\6\
---------------------------------------------------------------------------

    \6\ The 2021 Employee Plan was approved by Capital Southwest's
shareholders on July 28, 2021.
---------------------------------------------------------------------------

    2. Each issuance of Restricted Stock to Employee Participants and
Non-Employee Director Participants will be approved by the required
majority, as defined in section 57(o) of the Act, of the Company's
directors on the basis that such grant is in the best interests of the
Company and its shareholders.
    3. The amount of voting securities that would result from the
exercise of all of the Company's outstanding warrants, options, and
rights, together with any Restricted Stock issued and outstanding
pursuant to the 2021 Employee Plan, the 2021 Non-Employee Director Plan
and any other compensation plans of the Company, at the time of
issuance shall not exceed 25% of the outstanding voting securities of
the Company, except that if the amount of voting securities that would
result from the exercise of all of the Company's outstanding warrants,
options, and rights issued to the Company's directors, officers, and
employees, together with any Restricted Stock issued pursuant to the
2021 Employee Plan, the 2021 Non-Employee Director Plan and any other
compensation plans of the Company, would exceed 15% of the outstanding
voting securities of the Company, then the total amount of voting
securities that would result from the exercise of all outstanding
warrants, options, and rights, together with any Restricted Stock
issued pursuant to the 2021 Employee Plan, the 2021 Non-Employee
Director Plan and any other compensation plans of the Company, at the
time of issuance shall not exceed 20% of the outstanding voting
securities of the Company.
    4. The amount of Restricted Stock issued and outstanding will not
at the time of issuance of any Restricted Stock exceed 10% of the
Company's outstanding voting securities.
    5. The Board will review the 2021 Employee Plan and the 2021 Non-
Employee Director Plan at least annually. In addition, the Board will
review periodically the potential impact that the issuance of
Restricted Stock under the 2021 Employee Plan and the

2021 Non-Employee Director Plan could have on the Company's earnings
and NAV per share, such review to take place prior to any decisions to
grant Restricted Stock under the 2021 Employee Plan and the 2021 Non-
Employee Director Plan, but in no event less frequently than annually.
Adequate procedures and records will be maintained to permit such
review. The Board will be authorized to take appropriate steps to
ensure that the issuance of Restricted Stock under the 2021 Employee
Plan and the 2021 Non-Employee Director Plan will be in the best
interests of the Company's shareholders. This authority will include
the authority to prevent or limit the granting of additional Restricted
Stock under the 2021 Employee Plan and the 2021 Non-Employee Director
Plan. All records maintained pursuant to this condition will be subject
to examination by the Commission and its staff.

    For the Commission, by the Division of Investment Management,
under delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-08662 Filed 4-21-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 187 (Friday, September 26, 2014)]
[Notices]
[Pages 58007-58010]
[FR Doc No: 2014-22991]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73187; File No. SR-FICC-2014-801]

Self-Regulatory Organizations; The Fixed Income Clearing
Corporation; Notice of Filing Amendment No. 1 to Advance Notice
Relating to the Government Securities Division's Inclusion of GCF
Repo[supreg] Positions in GSD's Intraday Participant Clearing Fund
Requirement Calculation, and GSD's Hourly Internal Surveillance Cycles

September 23, 2014.
    On January 10, 2014, Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'')
advance notice SR-FICC-2014-801 (``Advance Notice'') pursuant to
Section 806(e)(1)(A) of the Payment, Clearing, and Settlement
Supervision Act of 2010 (``Clearing Supervision Act'') \1\ and Rule
19b-4(n)(1)(i) \2\ of the Securities Exchange Act of 1934 (the
``Exchange Act''). The Advance Notice was published in the Federal
Register on February 10, 2014.\3\ On March 10, 2014, pursuant to
Section 806(e)(1)(D) of the Clearing Supervision Act \4\, additional
information regarding this advance notice was requested. Pursuant to
Section 806(e)(1)`` \5\ of the Clearing Supervision Act and Rule 19b-
4(n)(1)(i) \6\ of the Exchange Act, notice is hereby given that on
August 11, 2014, FICC filed with the Commission, Amendment No. 1 to the
Advance Notice as described in Items I, II, and III below, which Items
have been prepared primarily by FICC.\7\ The Commission is publishing
this notice to solicit comments on the advance notice from interested
persons.
---------------------------------------------------------------------------

    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ Securities Exchange Act Release No. 34-71469 (February 4,
2014), 79 FR 7722 (February 10, 2014) (SR-FICC-2014-801).
    \4\ 12 U.S.C. 5465(e)(1)(D).
    \5\ 12 U.S.C. 5465(e)(1).
    \6\ 17 CFR 240.19b-4(n)(1)(i).
    \7\ FICC also filed the proposal contained in this amendment to
the advance notice as a proposed rule change under Section 19(b)(1)
of the Exchange Act and Rule 19b-4 thereunder. 15 U.S.C. 78s(b)(1);
17 CFR 240.19b-4. See Securities Exchange Act Release No. 72908
(August 25, 2014), 79 FR 51630 (August 29, 2014).
---------------------------------------------------------------------------

I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Advance Notice

    This filing constitutes Amendment No. 1 (``Amendment No. 1'') to
the Advance Notice previously filed by FICC in connection with the
Government Securities Division's (``GSD'') inclusion of the underlying
collateral pertaining to the GCF Repo[supreg] \8\ positions in GSD's
noon intraday \9\ participant Clearing Fund requirement (``CFR'')
calculation, and GSD's hourly internal surveillance cycles.
---------------------------------------------------------------------------

    \8\ The GCF Repo[supreg] service enables dealers to trade
general collateral repos, based on rate, term, and underlying
product, throughout the day without requiring intra-day, trade-for-
trade settlement on a Deliver-versus-Payment (``DVP'') basis. The
service fosters a highly liquid market for securities financing. GCF
Repo[supreg] is a registered trademark of The Depository Trust &
Clearing Corporation.
    \9\ Noon intraday refers to the routine intraday margining cycle
which is based on a 12:00 p.m. (ET) position snap shot. Pursuant to
Rule 4, FICC may request additional margin outside of the formal
intraday margin calls.
---------------------------------------------------------------------------

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Advance Notice

    In its filing with the Commission, FICC included statements
concerning the purpose of and basis for the Advance Notice, as modified
by Amendment No. 1, and discussed any comments it received on the
Advance Notice. The text of these statements may be examined at the
places specified in Item IV below. FICC has prepared summaries, set
forth in sections A and B below, of the most significant aspects of
such statements.

(A) Clearing Agency's Statements on Comments on the Advance Notice
Received From Members, Participants, or Others

    Written comments relating to the change have not yet been solicited
or received. FICC will notify the Commission of any written comments
received by FICC.

(B) Advance Notice Filed Pursuant to Section 806(e) of the Payment,
Clearing and Settlement Supervision Act.

1. Description of the Change
(i) Overview
    On January 10, 2014, FICC filed an Advance Notice with the
Commission. The Advance Notice related to FICC's proposal to
incorporate the underlying collateral pertaining to the GCF
Repo[supreg] positions in its noon intraday participant CFR
calculation, and its hourly internal surveillance cycles. This
enhancement is intended to align GSD's risk management calculations and
monitoring with the changes that have been implemented to the tri-party
infrastructure by the Tri-Party Reform Task Force \10\ (the ``Task
Force''), specifically, with respect to locking up of GCF Repo[supreg]
collateral until 3:30 p.m. (ET) rather than 7:30 a.m. (ET). Subsequent
to the initial Advance Notice filing, FICC discovered that a potential
exposure may result from a GCF Repo[supreg] participant's cash
substitutions and early unwinds of interbank allocations.\11\ As a
result, FICC is amending the initial Advance Notice to discuss the
manner in which GSD intends to protect itself and its members from the
potential exposure.
---------------------------------------------------------------------------

    \10\ The Task Force was formed in September 2009 under the
auspices of the Payments Risk Committee, a private-sector body
sponsored by the Federal Reserve Bank of New York. The Task Force's
goal is to enhance the repo market's ability to navigate stressed
market conditions by implementing changes that help better safeguard
the market. DTCC has worked in close collaboration with the Task
Force on their reform initiatives.
    \11\ The ``early unwind of interbank allocations'' refers to the
automatic return of the collateral from the reverse repo side (cash
lender) to FICC's account at the repo side's (cash borrower's)
settlement bank and the return of cash to the reverse repo side,
which typically occurs before the opening of Fedwire.
---------------------------------------------------------------------------

(ii) Historical Background
    Prior to the changes implemented by the Task Force, the underlying
collateral pertaining to the GCF Repo[supreg] positions was locked up
each afternoon (approximately 4:30 p.m. (ET)) and unwound at the
beginning of the next business day (approximately 7:30 a.m. (ET)).
Thus, the GCF Repo[supreg] positions were included in the end of day
(``EOD'') CFR calculations but not included in GSD's noon intraday CFR
calculations. Because the GCF Repo[supreg] positions were not included
in GSD's noon intraday CFR calculation, the noon calculation could
result in an under-margined condition relative to the same EOD \12\
CFR. Thus, GSD imposed a ``higher-of'' standard on GCF Repo[supreg]
participants, whereby their noon intraday CFR was the higher of the
actual noon intraday CFR calculation or its prior EOD CFR
calculation.\13\
---------------------------------------------------------------------------

    \12\ As used herein ``prior EOD'' refers to the end of day cycle
immediately preceding the current noon intraday cycle and ``same
EOD'' refers to the cycle immediately subsequent to the current noon
intraday cycle.
    \13\ For example, in the extreme case where a participant's
portfolio was comprised entirely of GCF Repo[supreg] positions, at
each EOD margining cycle GSD could calculate a substantial margin
requirement which had to be met by 9:30 a.m. (ET) the next morning.
But at each intraday margining cycle, GSD would calculate a
negligible margin requirement (because GCF Repo[supreg] positions
were not included at intraday). This would allow the participant to
withdraw substantially all its margin collateral before the same
EOD. In this case, if the participant defaulted overnight, GSD would
hold almost no margin collateral from the participant while having
the exposure of liquidating losses on a substantial GCF Repo[supreg]
portfolio. To prevent this potential under-margin condition, GSD
imposed the ``higher of'' standard.

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

    With the advent of the Task Force's reform, which resulted in
moving the unwind from 7:30 a.m. (ET) to 3:30 p.m. (ET), details on the
underlying collateral pertaining to GCF Repo[supreg] positions are now
received from the clearing banks on an hourly basis and can be
incorporated into the noon intraday CFR calculation. Substitutions of
underlying collateral are now permitted between 8:30 a.m. (ET) and 3:30
p.m. (ET).\14\
---------------------------------------------------------------------------

    \14\ A key aspect of the GCF Repo[supreg] service is to give the
repo side (cash borrower) the ability to retrieve its securities
during the business day and deliver those securities to meet a
delivery obligation. As a result, GCF Repo[supreg] was unwound in
the morning. With the Tri-Party Reform's change in the unwind from
7:30 a.m. (ET) to 3:30 p.m. (ET), participants now have access to
their securities during the day via collateral substitutions.
---------------------------------------------------------------------------

    At the time of the initial Advance Notice filing, GSD believed that
the noon intraday CFR calculation based on the actual underlying
collateral pertaining to the GCF Repo[supreg] positions provided a more
accurate CFR and would be more equitable for participants rather than
imposing a ``higher-of'' standard. In connection with this proposal,
GSD performed the testing that was described in SR-FICC-2014-801. The
testing revealed that a potential exposure may result from a GCF
Repo[supreg] participant's cash substitutions and early unwind of
interbank allocations. This information became available after FICC
formally filed the initial Advance Notice with the Commission. As a
result, this information was not included in the filing at that time.
(iii) Proposed Change
    GSD plans to incorporate the underlying collateral pertaining to
GCF Repo[supreg] positions in its noon intraday participant CFR
calculation, and its hourly internal surveillance cycles. This
enhancement is intended to align GSD's risk management calculations and
monitoring with the changes that have been implemented to the tri-party
infrastructure by the Task Force.
    In connection with the Task Force's tri-party reform, GCF
Repo[supreg] collateral now remains locked up until 3:30 p.m. (ET),
with substitutions permitted intraday at the times established by each
clearing bank. Because the GCF Repo[supreg] collateral was unwound at
7:30 a.m. (ET), the current production system does not include GCF
Repo[supreg] collateral in the GSD noon intraday CFR calculation, and
its hourly surveillance cycles. To account for the risk associated with
the underlying collateral pertaining to the GCF Repo[supreg] positions,
GSD's margin requirements currently apply a ``higher of'' standard,
which means that the margin calculation takes the higher of the prior
EOD core charge \15\ (which includes GCF Repo[supreg] collateral) or
the current day's noon intraday core charge (which does not \16\
include GCF Repo[supreg] collateral). However, now that the collateral
is locked-up until 3:30 p.m. (ET), the noon intraday participant CFR
and hourly surveillance calculations will be based on the actual
locked-up GCF Repo[supreg] collateral. In the ordinary course of
business, the ``higher of'' standard will not apply. However, this
standard will remain available in the event that one or both clearing
banks do not provide intraday underlying collateral pertaining to the
GCF Repo[supreg] position data because such clearing bank, as
applicable, is unable to provide the data.
---------------------------------------------------------------------------

    \15\ The core charge consists primarily of value-at-risk, the
implied volatility charge (also known as the augmented volatility
multiplier) and the coverage component.
    \16\ Since GCF Repo[supreg] collateral is excluded, only DVP
positions are included in the noon core charge.
---------------------------------------------------------------------------

    In connection with the testing described in the Advance Notice, GSD
observed that cash substitutions and early unwinds of interbank
allocations resulted in reducing the underlying securities pertaining
to GCF Repo[supreg] positions of impacted participants. As a result,
GSD is proposing the Early Unwind Intraday Charge (``EUIC'') to protect
itself and its membership from the exclusion of the portion of the
underlying collateral pertaining to the GCF Repo[supreg] positions
impacted by cash substitutions or early unwinds of interbank
allocations.\17\ GSD will remove the ``higher of'' standard which will
give margin relief to participants who truly have a lower portfolio
risk profile at intraday, but will impose the EUIC to adjust for the
exposure for the portion of the GCF Repo[supreg] portfolio impacted by
cash substitutions and early unwinds of interbank allocations.
---------------------------------------------------------------------------

    \17\ GSD's review during the parallel testing revealed
circumstances under which a member would be charged an EUIC. If,
however, a member is assessed an EUIC under circumstances that were
not initially contemplated and the EUIC charge is deemed
unnecessary, management will have the discretion to waive such
charge.
---------------------------------------------------------------------------

    The proposed change is consistent with Rule 17Ad-22 \18\ (the
``Clearing Agency Standards'') which establishes the minimum
requirements regarding how registered clearing agencies must maintain
effective risk management procedures and controls. Specifically,
consistent with Rule 17Ad-22(b)(1) \19\ and (b)(2),\20\ the proposed
change (1) provides a more accurate and timely view of member positions
and their corresponding exposures and (2) addresses exposures that
arise as a result of certain cash substitutions or early unwind of
interbank allocations. In sum, FICC's more accurate and timely
calculations around and monitoring of GCF Repo[supreg] activity will
better enable FICC to respond in the event that a member defaults. As
such, FICC believes that the proposal promotes robust risk management,
and the safety and soundness of FICC's operations, which reduce
systemic risk and support the stability of the broader financial system
which is consistent with the Clearing Agency Standards.\21\
---------------------------------------------------------------------------

    \18\ 17 CFR 240.17Ad-22.
    \19\ 17 CFR 240.17Ad-22(b)(1).
    \20\ 17 CFR 240.17Ad-22(b)(2).
    \21\ 17 CFR 240.17Ad-22.
---------------------------------------------------------------------------

(iv) Membership Outreach
    In connection with this initiative, FICC is providing an extended
member parallel period which began on January 13, 2014. The parallel
period has continued for over six months during which GCF Repo[supreg]
participants have been able to view their production and test
requirements on a daily basis. This allows members to assess the impact
of the change in margining for the noon intraday CFR calculation and
potentially adjust their GCF Repo[supreg] activity prior to
implementation of the change. Because this proposal remains subject to
the Commission's approval, the parallel testing period did not include
the proposed EUIC. However, GSD has discussed the EUIC with the
participants that are likely to be materially impacted by this proposed
charge. These participants did not express any concerns about the EUIC.
2. Anticipated Effect on and Management of Risks
    FICC believes that the proposed change to incorporate the
underlying collateral pertaining to the GCF Repo[supreg] positions in
its noon intraday participant CFR calculation, and its hourly internal
surveillance cycles, will improve its risk management by providing a
more accurate and timely view of member positions and their
corresponding exposures. FICC believes that the proposed changes will
better reflect the actual risk in its members' portfolios. For members
who participate in the GCF Repo[supreg] service, this change will
impact their CFRs. However, because of the parallel period, members

will have time to review the possible impact and potentially modify
their settlement and trading activity to align with the changes to the
noon intraday CFR calculation. FICC's parallel period, which began on
January 13, 2014, has covered over six months in order to give
customers ample time to review the impact and consider changes to their
portfolios.
    In addition to the above, FICC is addressing an exposure that may
arise with the incorporation of the GCF Repo[supreg] positions in its
noon intraday participant CFR calculation, and its hourly internal
surveillance cycles. Specifically, in connection with the review of the
testing that was described in the initial Advance Notice, GSD
discovered that there were instances where exposure arose as a result
of certain cash substitutions or early unwind of interbank allocations.
This is because the noon intraday underlying collateral pertaining to
the GCF Repo[supreg] positions of impacted participants may exhibit a
different risk profile than their same EOD positions. The impact could
be to increase or decrease the Value-at-Risk (``VaR'') component of the
CFR.
    In certain instances, cash substitutions, for repo and reverse repo
positions and the early unwind of interbank allocations for reverse
repo positions, could result in higher cash balances in the underlying
collateral pertaining to GCF Repo[supreg] positions at noon intraday
than the same EOD, and could present a potential under-margin condition
because cash collateral is not margined. In addition, it is likely that
the cash will be replaced by securities in the next GCF Repo[supreg]
allocation of collateral. The under-margin condition will exist
overnight because the VaR on the GCF Repo[supreg] collateral in the
same EOD cycle will not be calculated until after Fedwire is closed
thus precluding members from satisfying margin deficits until the
morning of the next business day. Accordingly, GSD will adjust the noon
intraday CFR in the form of an EUIC, to address this risk. In order to
determine whether an EUIC should be applied, GSD will take the
following steps:
    1. At noon, GSD will compare the prior EOD VaR component of the CFR
calculation with the current day's noon intraday VaR component of the
CFR calculation.
    2. If the current day's noon intraday VaR calculation is equal to
or higher than the prior EOD's VaR calculation then GSD will not apply
an EUIC. If however, the current day's noon calculation is lower, then
GSD will proceed to the step 3. below.
    3. GSD will review the GCF Repo[supreg] participant's DVP and GCF
Repo[supreg] portfolio to determine whether the reduction in the noon
calculation may be attributable to the GCF Repo[supreg] participant's
intraday cash substitutions or early unwind of interbank allocations.
If so, then GSD will apply the EUIC.
    4. At the participant level, the EUIC \22\ will be the lesser of
(i) the net VaR decrease that may be deemed to be attributable to
either cash substitutions and/or early unwind of interbank allocations
or (ii) the prior EOD VaR minus the noon intraday VaR.\23\
---------------------------------------------------------------------------

    \22\ The EUIC will be included in the noon intraday participant
CFR, but not the same EOD CFR. This is because the risk associated
with cash lockups exists at intraday, that is, at any time before at
EOD. At EOD in the normal course of business, GCF Repo[supreg]
positions consist of 100% eligible non-cash securities. GCF
Repo[supreg] is used for overnight financing of securities
inventory. Absent extraordinary circumstances, participants do not
use cash to collateralized overnight cash loans. Cash substitutions
occur at intraday as participants substitute in cash to withdraw
securities they need for intraday deliveries.
    \23\ In the event that cash substitutions or early unwind of
interbank allocations impacts the CFR, the prior end of day CFR is
used as a proxy for the same end of day CFR for the portion of the
portfolio that is impacted by such cash substitutions or early
unwind of interbank allocations. The EUIC is designed to prevent the
impact of cash substitutions and early unwind of interbank
allocations from unduly reducing noon intraday CFR relative to the
prior EOD CFR calculation, thus the EUIC will not increase the noon
intraday CFR above the prior EOD CFR calculation. (But the noon
intraday CFR calculation exclusive of EUIC could be higher than the
prior EOD CFR calculation).
---------------------------------------------------------------------------

    The EUIC for cash substitutions will apply to both the repo side
(cash borrower) and the reverse repo side (cash lender) of the
transaction and the EUIC for the early unwind of interbank allocations
will apply to the reverse repo side only. As such, it should be noted
that the reverse repo side is subject to the EUIC notwithstanding its
inability to control the substitutions or the early unwind. The EUIC
applies to the reverse repo side because although they do not initiate
the cash substitutions or the early unwind of interbank allocations,
these events change the reverse repo participants' risk profile and as
a result, their noon intraday CFR could be unduly reduced. GSD has
discussed the EUIC with the participants that are likely to be
materially impacted by this proposed charge. These participants did not
express concerns about the EUIC. The EUIC for the early unwind of
interbank allocations will only apply to the reverse repo side (cash
lender) since it is only the reverse side whose lockup is unwound
early. The securities subject to the early unwind are not returned to
the repo side (cash borrower) in connection with the early unwind of
interbank allocations. The early unwind of interbank allocations is
performed on the reverse repo side to ensure that the underlying
collateral is available to the repo side at its settlement bank. Cash
is returned to the reverse repo side and thus unwound early.
    There is no automatic unwind (return of securities) to the repo
side. If the repo side needs its securities before the 3:30 p.m. (ET)
scheduled unwind, it may perform a securities-for-securities
substitution or a cash-for-securities substitution (in which case it
may be subject to the EUIC).
    Prior to implementation of the proposed changes (including the
proposed EUIC), several steps were and/or will be taken to prepare for
the changes and to prepare members for the changes. These steps include
(1) internal review of the data available in the test environment, (2)
FICC's parallel period, which began on January 13, 2014, and has
covered over six months in order to give customers ample time to review
the impact and consider changes to their portfolios, and (3) outreach
to all GCF Repo[supreg] customers, plus additional outreach to give an
overview of the proposed EUIC to those customers who are likely to be
the most impacted by the EUIC.
    FICC believes it is important to incorporate the proposed changes
in its risk management process as soon as possible because such changes
will allow GSD to use more accurate position information in its margin
calculations.

III. Date of Effectiveness of the Advance Notice and Timing for
Commission Action

    The proposed change may be implemented if the Commission does not
object to the proposed change within 60 days of the later of (i) the
date that the proposed change was filed with the Commission or (ii) the
date that any additional information requested by the Commission is
received. The Clearing Agency shall not implement the proposed change
if the Commission has any objection to the proposed change.
    The Commission may extend the period for review by an additional 60
days if the proposed change raises novel or complex issues, subject to
the Commission providing the Clearing Agency with prompt written notice
of the extension. A proposed change may be implemented in less than 60
days from the date the advance notice is filed, or the date further
information requested by the Commission is received, if the Commission
notifies the Clearing Agency in writing that it does not object to the
proposed change and

authorizes the Clearing Agency to implement the proposed change on an
earlier date, subject to any conditions imposed by the Commission.
    The Clearing Agency shall post notice on its Web site of proposed
changes that are implemented.
    The proposed change shall not take effect until all regulatory
actions required with respect to the proposal are complete.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing. 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_ADDRESS>Please include
File Number SR-FICC-2014-801 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-2014-801. 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 of submission. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the advance notice that are
filed with the Commission, and all written communications relating to
the advance notice between the Commission and any person, other than
those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room 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 FICC's Web site at http://www.dtcc.com/legal/sec-rule-filings.aspx. All comments received will be posted without change;
the Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
FICC-2014-801 and should be submitted on or before October 14, 2014.

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-22991 Filed 9-25-14; 8:45 am]
BILLING CODE 8011-01-P