Notice2026-05026
Paxos Securities Settlement Company, LLC; Notice of Filing of an Amendment to Application for Registration as a Clearing Agency Under Section 17A of the Securities Exchange Act of 1934
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
March 16, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 50 (Monday, March 16, 2026)</title>
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[Federal Register Volume 91, Number 50 (Monday, March 16, 2026)]
[Notices]
[Pages 12660-12661]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05026]
[[Page 12660]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104977; File No. 600-39]
Paxos Securities Settlement Company, LLC; Notice of Filing of an
Amendment to Application for Registration as a Clearing Agency Under
Section 17A of the Securities Exchange Act of 1934
March 11, 2026.
On February 27, 2026, Paxos Securities Settlement Company, LLC
(``PSSC'') filed with the Securities and Exchange Commission
(``Commission'') an amendment (``Amendment'') to its application on
Form CA-1 (``Application'') seeking to register as a clearing agency
pursuant to Section 17A of the Securities Exchange Act of 1934
(``Exchange Act'') and Rule 17Ab2-1 thereunder.\1\ PSSC originally
filed its Application on July 14, 2025.\2\ The filing of this Amendment
serves as PSSC's consent to extend the time for the Commission's review
of the Application to 90 days from the filing of the Amendment, or May
28, 2026.\3\
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\1\ 15 U.S.C. 78q-1; 17 CFR 240.17ab2-1.
\2\ Notice of filing of the Application was published for
comment in the Federal Register on August 6, 2025. Release No. 34-
103624 (Aug. 1, 2025), 90 FR 37940 (Aug. 6, 2025). On November 4,
2025, the Commission instituted proceedings pursuant to Section
19(a)(1)(B) of the Exchange Act to determine whether to grant or
deny the Application. Release No. 34-104174 (Nov. 4, 2025), 90 FR
51416 (Nov. 17, 2025) (``OIP''). On January 30, 2026, the Commission
designated a longer period for Commission action on the OIP. Release
No. 34-104757 (Jan. 30, 2026), 91 FR 4974 (Feb. 3, 2026).
\3\ 15 U.S.C. 78s(a)(1)(B). See also 17 CFR 240.17Ab2-1(d).
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The Commission is publishing this notice (``Notice of Amendment'')
to solicit comments on the Amendment.\4\ A summary of the Application
exhibits modified by the Amendment appears below.
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\4\ Non-confidential aspects of the Application exhibits
modified by the Amendment, including any exhibits cited in this
Notice of Amendment, are available on the Commission's website
together with the previously filed Application at: <a href="https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/pssc-form-ca-1">https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/pssc-form-ca-1</a>.
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I. Discussion
The Amendment modifies Exhibits C, E, and J of the Application, as
described below.
In its amendment to Exhibit C.1,\5\ PSSC has provided additional
considerations regarding Member Directors and the requirement for fair
representation set forth in Section 17A(b)(3)(C) of the Exchange Act,
which state that: (i) Member Directors would not select the initial
Public Directors or the initial Chairman of the Board of Directors of
PSSC; \6\ (ii) the conflict of interest requirements prescribed in
Commission Rule 17Ad-25 apply to Member Directors the same as other
directors; \7\ (iii) the role of Member Directors in the nomination of
Independent Directors is consistent with the Exchange Act and rules
thereunder; \8\ and (iv) a Member Director also serving as a PSSC
Corporate Officer cannot serve on a Board committee.\9\
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\5\ Capitalized terms not defined in this Notice of Amendment
are defined in the Application.
\6\ Amendment, Exhibit C.1 at 9-10.
\7\ Id. at 10.
\8\ Id. at 10-12.
\9\ Id. at 12.
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In its amendment to Exhibit E.12, PSSC has provided a consolidated
set of the PSSC Rules, removing Exhibits E.12 through E.36 which
previously set forth Rules 1 through 15 separately. In addition to
consolidating the PSSC Rules into one exhibit and making certain
technical changes, PSSC has modified or added the following aspects of
the PSSC Rules: Rule 2.4B regarding monitoring of credit risk ratings;
Rule 2.5D regarding the termination of Counterparty Pairs or Eligible
Securities; Rule 5.4B regarding the calculation of the Computed Margin
Requirement; and Rule 6.1 regarding the requirement for timely
settlement.\10\ In addition, PSSC has deleted the definition of
``Required Margin Deposit'' and provisions of its rules related to the
``Potential Adjustment to the Preliminary Computed Margin Requirement''
and to the ``Credit Risk Rating as a Modification Factor,'' as
originally set forth in Rules 5.4.1.7B and 5.4.2B respectively.
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\10\ See Amendment, Exhibit E.12 (``PSSC Rules'').
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In modifying aspects of the PSSC Rules as described above, the
Amendment modifies the Compliance and Risk Management Committee Charter
at Exhibit E.7 to update certain cross references to the corresponding
PSSC Rules.\11\ In addition, in consolidating the PSSC Rules into one
document (i.e., Exhibit E.12), PSSC has revised the numbering for the
Schedule of Fees from Exhibit E.37 to Exhibit E.13.\12\
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\11\ See Amendment, Exhibit E.7.
\12\ See Amendment, Exhibit E.13.
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In its amendment to Exhibit J, PSSC has made a number of technical
changes, as well as the following changes: (i) under ``Ongoing
Monitoring of Participants,'' adding discussion of its Credit Risk
Rating and the Credit Risk Rating Matrix; \13\ (ii) under
``Counterparty Pairs for Settlement of Settlement Obligations,'' adding
discussion regarding actions PSSC may take in response to a
Participant's outstanding Fails; \14\ (iii) under ``Margin,'' in
discussing ``Computed Margin Requirement,'' removing references to the
Credit Risk Modification Factor and revising references to Fails
Charges and Excessive Fails Penalties; \15\ (iv) under ``Margin,'' in
discussing the ``Preliminary Computed Margin Requirement,'' deleting
discussion of the ``Credit Risk Rating as a Modification Factor;'' (v)
under ``Settlement,'' in the context of a Participant's failure to
comply with PSSC Rules, adding reference to restrictions on access,
disciplinary proceedings, and ceasing to act; \16\ and (vi) at the end
of Exhibit J, adding a new discussion of the ``Ramp-Up Period,'' during
which PSSC explains that it would not commence operations sooner than
ten months from the date of any approval of its Application and would
limit operations in certain ways for at least the following 12 months
after the initial 10-month period.\17\ The specific elements of the
Ramp Up Period are described further in the Amendment.
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\13\ Amendment, Exhibit J at 7-9.
\14\ Id. at 12.
\15\ Id. at 18.
\16\ Id. at 25.
\17\ Id. at 37-39.
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II. Request for Comment
Interested persons are invited to submit written data, views, and
arguments concerning the Application as amended, including whether the
Application as amended is consistent with the Exchange Act and the
rules and regulations thereunder applicable to clearing agencies (e.g.,
Exchange Act Rules 17Ad-22, 17Ad-25, 17Ad-26, and Regulation Systems
Compliance and Integrity).\18\
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\18\ See 17 CFR 240.17ad-22 (``Rule 17Ad-22''), 240.17ad-25
(``Rule 17Ad-25''), and 240.17ad-26 (``Rule 17Ad-26''); 17 CFR
242.1000 through 242.1007 (``Regulation Systems Compliance and
Integrity'').
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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/how-submit-comment">https://www.sec.gov/rules-regulations/how-submit-comment</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#3b494e575e16585456565e554f487b485e58155c544d"><span class="__cf_email__" data-cfemail="047671686129676b6969616a7077447761672a636b72">[email protected]</span></a>. Please include
file number 600-39 on the subject line.
Paper Comments
<bullet> Send paper comments to Secretary, Securities and Exchange
Commission, 100 F Street NE, Washington, DC 20549-1090.
[[Page 12661]]
All submissions should refer to file number 600-39. 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/commission-orders-notices/other-commission-orders-notices-information">https://www.sec.gov/rules-regulations/commission-orders-notices/other-commission-orders-notices-information</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 600-39 and should be
submitted on or before April 6, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(16).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-05026 Filed 3-13-26; 8:45 am]
BILLING CODE 8011-01-P
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