Notice2025-19056
Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend GSD Rule 42 (Suspension of Rules) and MBSD Rule 33 (Suspension of Rules in Emergency Circumstances)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 46969-46972]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19056]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104091; File No. SR-FICC-2025-020]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend GSD Rule 42 (Suspension of Rules) and MBSD Rule 33 (Suspension of
Rules in Emergency Circumstances)
September 26, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 46970]]
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 25, 2025, 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 would amend Rule 42 (Suspension of Rules)
of the GSD Rules.\5\ FICC's two affiliate clearing agencies, The
Depository Trust Company (``DTC'') and National Securities Clearing
Corporation (``NSCC,'' and together with DTC and FICC, the ``Clearing
Agencies'' or ``Clearing Agency'' when referring to one of any of the
three Clearing Agencies) \6\ will each file with the Commission
substantively similar proposals to amend their corresponding rules:
Rule 18 of the Rules, By-Laws, Organization Certificate of DTC (``DTC
Rules'') and Rule 22 of the NSCC Rules & Procedures (``NSCC Rules'')
(collectively with GSD Rule 42, the ``Waiver Rules'').\7\ A
substantially similar proposal to amend Rule 33 of the FICC Mortgage-
Backed Securities Division (``MBSD'') Clearing Rules (``MBSD Rules'')
was already filed with the Commission and implemented by FICC; however,
some language was unintentionally omitted from the proposed changes in
that Initial MBSD Filing, which this proposal would add.\8\
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\5\ Capitalized terms not otherwise defined herein are defined
in the FICC Government Securities Division Rulebook (``GSD Rules''),
as applicable, available at <a href="http://www.dtcc.com/legal/rules-and-procedures">http://www.dtcc.com/legal/rules-and-procedures</a>.
\6\ The Clearing Agencies are each a subsidiary of The
Depository Trust & Clearing Corporation (``DTCC''). DTCC operates on
a shared service model with respect to the Clearing Agencies. Most
corporate functions are established and managed on an enterprise-
wide basis pursuant to intercompany agreements under which it is
generally DTCC that provides relevant services to the Clearing
Agencies.
\7\ Each Waiver Rule is publicly available in the respective
rules of the applicable Clearing Agency at <a href="https://www.dtcc.com/legal/rules-and-procedures">https://www.dtcc.com/legal/rules-and-procedures</a>.
\8\ See Securities Exchange Act Release No. 103584 (July 30,
2025), 90 FR 36492 (Aug. 4, 2025) (SR-FICC-2025-016) (``Initial MBSD
Filing'').
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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
The proposed rule change would amend Rule 42 (Suspension of Rules)
of the GSD Rules. The Clearing Agencies will each file with the
Commission substantively similar proposals to amend their corresponding
Waiver Rules. A substantially similar proposal to amend MBSD Rule 33
was already filed with the Commission and implemented by FICC; however,
some language was unintentionally omitted from the proposed changes in
that Initial MBSD Filing, which this proposal would add.
Specifically, the proposed amendments to GSD Rule 42 would (i)
establish ``reasonable and appropriate'' as the new standard for when
an extension, waiver or suspension may occur; (ii) require action under
the rule to be in consideration of FICC's obligations as a clearing
agency; and (iii) make technical, ministerial, and other conforming and
clarifying changes. Additionally, the proposed changes would further
amend MBSD Rule 33 to add language that covers the ``procedures and
regulations'' of FICC in a paragraph describing the application of the
rule's ``reasonable and appropriate'' standard. The language already
existed in other sections of MBSD Rule 33 prior to the Initial MBSD
Filing, but the Initial MBSD Filing unintentionally omitted the
language from the referenced paragraph.\9\ As such, FICC now proposes
to add the missing language, which would better harmonize the language
in the referenced paragraph with the rest of MBSD Rule 33, as well as
the other Clearing Agencies' Waiver Rules.
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\9\ See id.
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(i) Background
GSD Rule 42 authorizes FICC, in general, to extend, waive, or
suspend a GSD Rule, Procedure, or regulation issued by FICC. Under the
current rule, any extension, waiver, or suspension must be (A)
necessary or expedient and (B) requires a written report of such
extension, waiver, or suspension (other than an extension of time of
less than eight hours), stating the pertinent facts, the identity of
the person or persons who authorized such extension, waiver or
suspension and the reason such extension, waiver or suspension was
deemed necessary or expedient. The report must then be promptly made
and filed with FICC's records and available for inspection by any
Member during regular business hours on Business Days.
(ii) Proposed Amendments to GSD Rule 42
The proposed changes would harmonize the language, purpose, and
governance of GSD Rule 42 with the equivalent Waiver Rule of MBSD Rule
33,\10\ and the similarly proposed changes to the Waiver Rules of DTC
Rule 18 \11\ and NSCC Rule 22.\12\ Specifically, the proposed
amendments to GSD Rule 42 would (i) establish ``reasonable and
appropriate'' as the new standard for when an extension, waiver or
suspension may occur; (ii) require action under the rule to be in
consideration of FICC's obligations as a clearing agency; and (iii)
make technical, ministerial, and other conforming and clarifying
changes.
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\10\ MBSD Rules, available at https://www.dtcc.com/~/media/
Files/Downloads/legal/rules/ficc_gov_rules.pdf.
\11\ DTC Rules, available at https://www.dtcc.com/~/media/Files/
Downloads/legal/rules/dtc_rules.pdf.
\12\ NSCC Rules & Procedures (``NSCC Rules''), available at
https://dtcc.com/~/media/Files/Downloads/legal/rules/nscc_rules.pdf.
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GSD proposes to eliminate the requirement that an extension,
waiver, or suspension authorized under GSD Rule 42 must be ``necessary
or expedient.'' Instead, the proposed changes establish ``reasonable
and appropriate'' as the applicable standard, which FICC believes is a
clearer and more relevant standard for the actions to be taken under
the rule. Moreover, FICC proposes to provide some general guidance as
to when the rule may need to be invoked: to prevent, correct, mitigate
or otherwise address an event or situation that, if left unaddressed,
could result in a failure to satisfy a requirement of the GSD Rules,
Procedures, or regulations issued by FICC. Similarly, the proposed rule
change clarifies that such authority may not be used to circumvent
FICC's regulatory obligations provided under GSD Rule 50 (Market
Disruption and
[[Page 46971]]
Force Majeure) in the event of a Market Disruption.
In determining whether to exercise the authority provided by the
proposed changes to GSD Rule 42, the proposed rule text would require
FICC to consider its obligation to facilitate the prompt and accurate
clearance and settlement of securities transactions; to safeguard
securities and funds which are in its custody or control; and, in
general, to protect investors and the public interest. Examples of the
types of actions that may be considered reasonable and appropriate
include, but are not limited to, extension of monthly bill payment that
result from operational constraints; waiving certain charges as a
result of unusual market activity; extension of funds-only settlement
to capture mark-to-market pricing. Note, though, any extension, waiver
or suspension under the proposed changes to GSD Rule 42 could not be a
permanent action, nor would the rule permit extension, waiver or
suspension of any regulatory obligations of FICC.
The proposed rule change would also make technical, ministerial,
and other conforming and clarifying changes, including updating the
title of GSD Rule 42 to ``Extension, Waiver or Suspension of Rules''
and correct missing and defined terms.
This proposed harmonization is important to help ensure that DTC,
NSCC and both FICC divisions can reasonably, appropriately, and
consistently manage situations that may apply across multiple
divisions, Clearing Agencies, or common members.
(iii) Proposed Amendments to MBSD Rule 33
The proposed amendment to MBSD Rule 33 would add language that was
unintentionally omitted from the Initial MBSD Filing. Specifically, the
amendment would add the phrase ``the procedures or any such
regulations'' to a paragraph describing the application of the rule's
``reasonable and appropriate'' standard. This addition clarifies that
the authority to extend, waive, or suspend under MBSD Rule 33 expressly
applies not only to the MBSD Rules but also to FICC Procedures or any
regulations issued by FICC.
Although this language was unintentionally omitted from the above
reference paragraph, neither it nor the substantive authority it
provides are new to MBSD Rule 33, as the language is already reflected
in the opening paragraph of the rule, as well as the corresponding
Waiver Rules of GSD, DTC and NSCC. Therefore, adding it to the above
reference paragraph will simply harmonize MBSD Rule 33 itself, as well
as all the Clearing Agencies' Waiver Rules.
2. Statutory Basis
Section 17A(b)(3)(F) of the Act requires that the rules of the
clearing agency be designed, inter alia, to assure the safeguarding of
securities and funds which are in the custody or control of the
clearing agency or for which it is responsible.\13\ FICC believes that
the proposed rule change is consistent with the Section 17A(b)(3)(F) of
the Act, as cited above.
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\13\ 15 U.S.C. 78q-1(b)(3)(F).
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As described above, the proposed rule change would amend GSD Rule
42 to (i) establish ``reasonable and appropriate'' as the new standard
for when an extension, waiver or suspension may occur; (ii) require
action under the rule to be in consideration of FICC's obligations as a
clearing agency; and (iii) make technical, ministerial, and other
conforming and clarifying changes. Additionally, the proposed rule
change would amend MBSD Rule 33 to add language that was
unintentionally omitted from a prior filing.
The proposed rule change would help ensure that FICC is able to
respond reasonably, appropriately, and effectively to situations that
may require an extension, waiver, or suspension, of a GSD Rule,
Procedure, or regulation issued by FICC. The proposed changes also
enable GSD to respond to such situations in the same way that DTC,
NSCC, and MBSD can respond under their respective Waiver Rules and
under the same governance structure. Specifically, replacing the
current ``necessary or expedient'' standard with a clearer and more
intuitive ``reasonable and appropriate'' standard would enhance
transparency and consistency of actions taken under the rule. Finally,
the proposed technical and confirming changes improve clarity and
consistency with the rule. Additionally, the proposed rule change would
amend MBSD Rule 33 to add language that was unintentionally omitted
from a prior filing.
Therefore, by improving the function and clarity of GSD Rule 42 and
MBSD Rule 33, FICC believes the proposed rule change would help to
assure the safeguarding of securities and funds which are in the
custody or control of FICC or for which it is responsible, consistent
with the requirements of the Act, in particular Section 17A(b)(3)(F) of
the Act, cited above.
(B) Clearing Agency's Statement on Burden on Competition
FICC does not believe that the proposed rule change will have any
impact or impose any burden on competition because, as described above,
the proposed changes would not affect the rights and obligations of the
GSD membership. Rather, the proposed changes are limited to clarifying
the standard and conditions under which FICC may extend, waive, or
suspend GSD's Rules, Procedures, or regulations issued by FICC, while
also making technical and ministerial edits. Similarly, the proposed
amendment to MBSD Rule 33 would not impact the rights or obligations of
MBSD membership but merely adds previously omitted language to
harmonize MBSD Rule 33 within itself and with the Waiver Rules of the
other Clearing Agencies. These proposed changes would not inhibit
access to FICC's services or disadvantage or favor any particular
Member in relationship to another Member. As such, FICC believes the
proposed rule change 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 has not received or solicited any written comments relating to
this proposal. If any written comments are received, FICC will amend
this filing to publicly file such comments as an Exhibit 2 to this
filing, as required by Form 19b-4 and the General Instructions thereto.
Persons submitting written 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 <a href="https://www.sec.gov/regulatory-actions/how-to-submit-comments">https://www.sec.gov/regulatory-actions/how-to-submit-comments</a>. 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
<a href="/cdn-cgi/l/email-protection#02767063666b6c65636c666f637069677671427167612c656d74"><span class="__cf_email__" data-cfemail="7c080e1d1815121b1d1218111d0e1719080f3c0f191f521b130a">[email protected]</span></a> or 202-551-5777.
FICC reserves the right to not respond to any comments received.
[[Page 46972]]
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) \14\ of the Act and
Rule 19b-4(f)(6) \15\ thereunder.
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\14\ 15 U.S.C 78s(b)(3)(A).
\15\ 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking">https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking</a>);
or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#fc8e899099d19f9391919992888fbc8f999fd29b938a"><span class="__cf_email__" data-cfemail="6c1e190009410f0301010902181f2c1f090f420b031a">[email protected]</span></a>. Please include
File Number SR-FICC-2025-020 on the subject line.
Paper Comments
<bullet> 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-2025-020. 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
filing will be available for inspection and copying at the principal
office of FICC and on DTCC's website (<a href="http://www.dtcc.com/legal/sec-rule-filings">www.dtcc.com/legal/sec-rule-filings</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 material that is obscene or subject to copyright
protection. All submissions should refer to File Number SR-FICC-2025-
020 and should be submitted on or before October 21, 2025.
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. 2025-19056 Filed 9-29-25; 8:45 am]
BILLING CODE 8011-01-P
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