Notice2025-24059
Self-Regulatory Organizations; LCH SA; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Cash Spreads and Fees on Securities Collateral
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Published
December 31, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 247 (Wednesday, December 31, 2025)</title>
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[Federal Register Volume 90, Number 247 (Wednesday, December 31, 2025)]
[Notices]
[Pages 61450-61452]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-24059]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104513; File No. SR-LCH SA-2025-009]
Self-Regulatory Organizations; LCH SA; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Relating to Cash
Spreads and Fees on Securities Collateral
December 23, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 23, 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'') described in Items I, II and III below,
which Items have been primarily prepared by LCH SA. 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 for 2026 (the
``Fee Grid'') by incorporating changes in the CDSClear products and
services offered (the ``Proposed Rule Change'').
The text of the Proposed Rule Change has been annexed as Exhibit 5
to File No. SR-LCH SA-2025-009.\5\
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\5\ All capitalized terms not defined herein have the same
definition as in the CDS Clearing Rule Book, available at <a href="https://www.lseg.com/content/dam/post-trade/en_us/documents/lch/rulebooks/lch-sa/lch-sa-cdsclear-rule-book.pdf">https://www.lseg.com/content/dam/post-trade/en_us/documents/lch/rulebooks/lch-sa/lch-sa-cdsclear-rule-book.pdf</a>.
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The implementation of the Proposed Rule Change is expected to be
effective from January 1st, 2026 but will be
[[Page 61451]]
contingent on LCH SA's receipt of all necessary regulatory approvals.
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. Clearing Agency'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 and adapt its Fee Grid for 2026 to the new CDSClear products and
services offered.
LCH SA is proposing to amend the CDSClear Fee Grid for 2026 as
follows:
(A) Self-Clearing Tariff for Corporates, Financials and Sovereign Index
and Single Name CDS
1. General Membership
The annual fixed fee charged by LCH SA CDSClear under the General
Member Unlimited Tariff will increase from [euro]1,700,000 to
[euro]1,759,500 to reflect the expanding offering of products, services
as described in LCH website \6\ and volumes cleared by Clearing Members
under the General Member Unlimited Tariff, which incorporates the
clearing of all Indices, Single Names (including Sovereigns) and
Options under this tariff.
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\6\ A list of cleared products is available at <a href="https://www.lseg.com/en/post-trade/clearing/lch-services/cdsclear/what-we-clear">https://www.lseg.com/en/post-trade/clearing/lch-services/cdsclear/what-we-clear</a>.
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2. Onboarding Fees
As part of the adjustments made to the Fee Grid, LCH SA is
proposing to increase its current onboarding fee from [euro]15,000 to
[euro]50,000.\7\ The purpose is to better reflect the costs associated
with the complexity in optionality of the way Clearing Members and
their Affiliates can interact and use CDSClear services. This
optionality requires more resources allocated for legal contracts,
onboarding, testing and connectivity requiring more expertise and
attention to ensure seamless customer experience when onboarding.
Increasingly, more Clearing Members and their clients are using third
party vendor services, adding to the complexity, engagement and
resource allocation required when onboarding. This will also align with
other LCH derivative clearing services. LCH SA is also clarifying that
the onboarding fee is at a member entity level and will apply to
entities onboarding as General Members, Select Members, CDS Dealers, or
Affiliated Clients.\8\
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\7\ LCH SA reminds that the onboarding fee was [euro]30k prior
to January 2024.
\8\ Participants in LCH SA's CDSClear service can elect to be
General Members or Select Members. Each category of membership has
different obligations and benefits. For example, both General
Members and Select Members can offer clearing for clients, but
Select Members may elect not to participate in competitive bidding
in a default auction or submit end-of-day prices, subject to certain
exceptions. See Exchange Act Release No. 101654 (Nov. 19, 2024), 89
FR 92981 (Nov. 25, 2024) (File No. SR-LCH SA-2024-002). Due to their
different obligations to LCH SA, General Members and Select Members
also have certain differences in margin and pricing. For example,
General Members have access to an unlimited tariff. CDS Dealer is an
additional category of participant in LCH SA's CDSClear service
which allows an affiliate of an existing Clearing Member to submit
transactions on behalf of that Clearing Member. See Exchange Act
Release No. 102217 (Jan. 16, 2025), 90 FR 8060 (Jan. 23, 2025) (File
No. SR-LCH SA-2025-005). An Affiliated Client is an affiliate of
Clearing Member which clears as a client of that Clearing Member.
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3. CDS Dealer Status
In recognition of the increased onboarding fee, LCH SA is proposing
to waive the annual fee for CDSClear Dealer Status due the first year
post go-live for Clearing Members on the General Member Variable Tariff
and for Select Members that will onboard in 2026. For the avoidance of
doubt, the Dealer Status annual fee of [euro]100k will continue to
apply thereafter.
The clearing for entities admitted as a Dealer of General Member
Unlimited Clearing Members will be included in this ``all you can
clear'' tariff, which allows for unlimited clearing once the annual
fixed fee is paid. These members are contributing to the expansion of
the clearing activity and value of the CDSClear service through
increased US client volumes and USD liquidity. LCH SA is also
clarifying that the CDSClear Dealer Status annual fee does not apply to
Clearing Members under the General Members Unlimited Tariff who will no
longer incur an additional fixed annual fee for entities admitted as a
Dealer.
(B) Clients
1. Affiliated Clients of General Members
LCH SA is proposing to remove the fixed annual account charge of
[euro]100,000 for Affiliated Clients of General Members under the
Unlimited Tariff so that General Members will no longer incur this
additional fixed annual fee for their Affiliated Clients. Instead,
clearing for Affiliated Clients of a Clearing Member will be covered by
the General Member Unlimited Tariff.
2. Options Products
LCH SA is proposing to apply the full discount of client variable
fees to 2026. LCH SA is not proposing any other amendments to this
section of the Fee Grid.
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 proposed amendments to the Fee Grid are
reasonable and equitable for both existing and new Clearing Members and
Clients.
The annual fixed fee under the General Member Unlimited Tariff will
be reasonably increased by 3.5 percent to [euro]1,759,500 in order to
reflect the costs associated with the evolution and further maturity of
LCH SA's CDSClear service, including the expansion of the membership
and product offerings that General Members will have access to. This
has been demonstrated by a significant increase in total notional
cleared from members on the General Member Unlimited tariff year to
date November 2025 versus previous year to date.
The increase in the onboarding fee is also made to better and
equally reflect the costs associated with the onboarding process and
membership optionality requiring increased legal and operational
resource allocation, engagement, testing and connectivity as well as
accommodating third party providers as requested by members, over the
length of the onboarding process which on average takes 6-12 months
when entities are joining CDSClear service as a General Member, Select
Member, CDS Dealer or Affiliated Client.
LCH SA also believes that the Proposed Rule Change is consistent
with the requirements of Section 17A of the Act. In particular, Section
17A(b)(3)(F) \11\ 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
[[Page 61452]]
. . . derivatives agreements, contracts, and transactions''.
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\11\ 15 U.S.C. 78q-1(b)(3)(F)
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By deciding to (i) waive the annual fee for CDSClear Dealer Status
for Clearing Members on the General Member Variable Tariff and Select
Members that will onboard in 2026 and (ii) renew for 2026 the full
discount on the credit index option client variable fees, LCH SA is
clearly continuing to encourage market participants and promote the
clearing activity of CDS products which is consistent with the
requirements of Section 17A(b)(3)(F).\12\ The proposed 2026 fee grid
would align more with the underlying costs associated with the types of
products market participants are interested in, the increases in
trading volume, and the higher accompanying onboarding costs. By
calibrating the fees against costs, the proposal would help facilitate
access to the clearance and settlement services provided by LCH SA,
thus promoting the prompt and accurate clearance and settlement of
transactions.
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\12\ 15 U.S.C. 78q-1(b)(3)(F)
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For all the reasons above, LCH SA 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 for 2026 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 and adapt its Fee Grid for 2026 to the new CDSClear products and
services offered to meet Clearing Members' and Clients' evolving
business needs.
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\15\ 15 U.S.C. 78q-1(b)(3)(I).
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As part of this effort, LCH SA is proposing to further encourage
competition by offering certain discounts or a waiver and make
clarifying changes on how fees will be applied to each entity joining
the CDSClear service.
LCH SA believes the Proposed Rule Change would not burden any
Clearing Members or other market participants, given that the proposed
amendments to the Fee Grid will apply equally to all CDSClear Clearing
Members and Clients, in accordance with all applicable regulatory
requirements. Therefore, LCH SA does not believe that the Proposed Rule
Change would impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.
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#6d1f180108400e0200000803191e2d1e080e430a021b"><span class="__cf_email__" data-cfemail="83f1f6efe6aee0eceeeee6edf7f0c3f0e6e0ade4ecf5">[email protected]</span></a>. Please include
file number SR-LCH SA-2025-009 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-LCH SA-2025-009. 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 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-2025-009 and
should be submitted on or before January 21, 2026.
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. 2025-24059 Filed 12-30-25; 8:45 am]
BILLING CODE 8011-01-P
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