Notice2025-11881
Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Revisions to Its CDSClear Fee Grid for Services Provided to Dealers
Primary source
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Published
June 27, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 122 (Friday, June 27, 2025)</title>
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[Federal Register Volume 90, Number 122 (Friday, June 27, 2025)]
[Notices]
[Pages 27696-27698]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-11881]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103312; File No. SR-LCH SA-2025-006]
Self-Regulatory Organizations; LCH SA; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Relating to Revisions
to Its CDSClear Fee Grid for Services Provided to Dealers
June 24, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4,\2\ notice is hereby given that on June
11, 2025, Banque Centrale de Compensation, which conducts business
under the name LCH SA (``LCH SA''), filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change
(``Proposed Rule Change''), as described in Items I, II and III below,
which Items have been prepared primarily by the clearing agency. LCH SA
has designated this proposal for immediate effectiveness pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f) 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).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
LCH SA is proposing to amend its CDSClear fee grid (the ``Fee
Grid'') by incorporating changes with respect to the CDSClear business
and clearing services offered for CDS Dealers (the ``Proposed Rule
Change'').\5\ The text of the Proposed Rule Change is provided in
Exhibit 5.\6\ The implementation of the Proposed Rule Change will be
contingent on LCH SA's receipt of all necessary regulatory approvals.
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\5\ All capitalized terms not defined herein have the same
meaning as in the Rule Book in its version as available on LCH SA's
website: <a href="https://www.lseg.com/en/post-trade/clearing/clearing-resources/rulebooks/lch-sa#t-over-the-counter-credit-default-swaps">https://www.lseg.com/en/post-trade/clearing/clearing-resources/rulebooks/lch-sa#t-over-the-counter-credit-default-swaps</a>.
\6\ All capitalized terms not defined herein have the same
definition as in the Framework, unless otherwise stated.
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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, LCH SA included statements
concerning the purpose of and basis for the Proposed Rule Change and
discussed any comments it received on the Proposed Rule Change. The
text of these statements may be examined at the places specified in
Item IV below. LCH SA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the Proposed Rule Change is for LCH SA CDSClear to
amend its Fee Grid regarding the CDS Dealer status offering.\7\ The
Proposed Rule Change also removes references to LCH SA's former service
offerings, EquityClear and CommodityClear, and adds references to LCH
SA's new offering, DigitalAssetClear.
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\7\ See Exchange Act Release No. 34-102217 (Jan. 16, 2025), 90
FR 8060 (Jan. 23, 2025) (SR-LCH SA-2024-005).
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LCH SA is proposing to amend the CDSClear Fee Grid as follows:
(A) Self-Clearing Fees
1. CDS Dealer Status
Following the full regulatory approval received by LCH SA for the
CDS Dealer Status arrangement,\8\ LCH SA is proposing to add a new fee
for market participants that are CDS Dealers of [euro]100,000 per
annum. This fee is separate from any fees for trades submitted for
clearing, which will be charged based on the tariff of the Clearing
Member with which the CDS Dealer is party to a CDS Dealer Clearing
Agreement.
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\8\ Id.
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LCH SA is proposing to add footnote (4) to its fee grid to note
that the annual fee will be charged to the Clearing Member with which
the CDS Dealer is party to a CDS Dealer Clearing Agreement. The fee
will be paid over 12 months and charged one twelfth each month where
the CDS Dealer is considered live for the whole month, regardless of
the go-live date within that month. Footnote (4) further specifies that
variable fees will be charged based on the fee tariff of the Clearing
Member with which the CDS Dealer is party to a CDS Dealer Clearing
Agreement.
(B) Annual Account Structure Fees
LCH SA is proposing to remove references to LCH SA EquityClear and
CommodityClear Account Charges following the closure of these
businesses in 2024. References to account fees for Cash Markets and
Derivatives Markets are being removed for the same reason and replaced
with
[[Page 27697]]
references to the new clearing service, DigitalAssetClear.
Specifically, LCH SA is removing references to the previously applied
quarterly account charges for EquityClear and CommodityClear.
2. Statutory Basis
LCH SA believes that the Proposed Rule Change is consistent with
the requirements of Section 17A of the Exchange Act \9\ and the
regulations thereunder applicable to LCH SA. Section 17A(b)(3)(D) of
the Act \10\ requires that the rules of a clearing agency provide for
the equitable allocation of reasonable dues, fees and other charges
among its participants.
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\9\ 15 U.S.C. 78q-1.
\10\ 15 U.S.C. 78q-1(b)(3)(D).
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LCH SA believes the amendments to the Fee Grid are reasonable given
the changes to its CDSClear service and equitable for both existing and
new Clearing Members and Clients.
A participant that is not a member of CDSClear but is affiliated
with an existing Clearing Member that wishes to otherwise access the
service, may clear as a Client of the Clearing Member or as a CDS
Dealer.\11\ LCH is proposing to amend the annual fee payable by a
participant joining as a CDS Dealer to [euro]100,000. The variable fees
are still payable based on the fee tariff of the Clearing Member.
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\11\ Participants may also apply to become a Clearing Member
directly.
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LCH SA also believes that the Proposed Rule Change is consistent
with the requirements of Section 17A of the Act and regulations
thereunder applicable to it, including Commission Rule 17Ad-22(e). In
particular, Section 17A(b)(3)(F) \12\ of the Act requires, inter alia,
that the rules of a clearing agency be designed to ``promote the prompt
and accurate clearance and settlement of . . . derivatives agreements,
contracts, and transactions''.
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\12\ 15 U.S.C. 78q-1(b)(3)(F).
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LCH SA is proposing an annual fee that allows participants to join
as CDS Dealers and is designed to incentivize and encourage a broader
set of market participants to submit transactions for clearing even if
not a Clearing Member of the CDSClear service. LCH SA believes the
specific CDS Dealer fee provides transparency regarding the cost of
clearing and promotes the prompt and accurate clearance and settlement
of CDS products.
LCH SA therefore believes that the Proposed Rule Change is
consistent with the requirements of Section 17A(b)(3)(D) \13\ of the
Act and 17A(b)(3)(F) \14\ of the Act in that the amendments to the Fee
Grid are reasonable and equitable among its participants and are
encouraging clearing activity.
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\13\ 15 U.S.C. 78q-1(b)(3)(D).
\14\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Clearing Agency's Statement on Burden on Competition
Section 17A(b)(3)(I) of the Act \15\ requires that the rules of a
clearing agency not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act. LCH SA does not
believe that the Proposed Rule Change would impose any burden on
competition. The purpose of the Proposed Rule Change is for LCH SA to
amend its Fee Grid to incorporate a new fee for market participants
that are CDS Dealers following the implementation of the Dealer Status
initiative. This fee will be separate from any variable clearing fees,
which will be charged based on the tariff of the Clearing Member with
which the CDS Dealer is party to a CDS Dealer Clearing Agreement and in
accordance with the existing CDSClear fees and will be applied equally
for all Dealers. Thus, LCH SA does not believe that the Proposed Rule
Change would impose a burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.
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\15\ 15 U.S.C. 78q-1(b)(3)(I).
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C. Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others
Written comments relating to the Proposed Rule Change have not been
solicited or received. LCH SA will notify the Commission of any written
comments received by LCH SA.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 thereunder. 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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1b696e777e36787476767e756f685b687e78357c746d"><span class="__cf_email__" data-cfemail="ea989f868fc7898587878f849e99aa998f89c48d859c">[email protected]</span></a>. Please include
file number SR-LCH SA-2025-006 on the subject line.
Paper Comments
Send paper comments in triplicate to Vanessa Countryman, Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549.
All submissions should refer to file number SR-LCH SA-2025-006. 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 (<a href="https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking</a>). 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 a.m. and 3 p.m.
Copies of the filing also will be available for inspection and copying
at the principal office of LCH SA and on LCH SA's website at: (<a href="https://www.lch.com/resources/rulebooks/proposed-rule-changes">https://www.lch.com/resources/rulebooks/proposed-rule-changes</a>).
Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted materials that is obscene or subject to copyright protection.
All submissions should refer to file number SR-LCH SA-2025-006 and
should be submitted on or before July 18, 2025.
[[Page 27698]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-11881 Filed 6-26-25; 8:45 am]
BILLING CODE 8011-01-P
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