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Notice2026-08955

Self-Regulatory Organizations; LCH SA; Notice of an Application for an Exemption Pursuant to Section 36 of the Securities Exchange Act of 1934 Relating to Rule Filing Requirements and Request for Comment

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Published
May 6, 2026

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 91 Issue 87 (Wednesday, May 6, 2026)</title>
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[Federal Register Volume 91, Number 87 (Wednesday, May 6, 2026)]
[Notices]
[Pages 24617-24619]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-08955]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-105357; File No. 600-36]


Self-Regulatory Organizations; LCH SA; Notice of an Application 
for an Exemption Pursuant to Section 36 of the Securities Exchange Act 
of 1934 Relating to Rule Filing Requirements and Request for Comment

May 4, 2026.
    On December 22, 2025, Banque Centrale de Compensation, which 
conducts business under the name LCH SA (``LCH SA''), filed an 
application with the Securities and Exchange Commission 
(``Commission'') to amend exemptive relief granted to it by the 
Commission on December 29, 2016 (``Request for Exemptive Relief'') \1\ 
pursuant to Section 36 of the Securities Exchange Act of 1934 
(``Act''),\2\ in accordance with the procedures set forth in Rule 0-12 
under the Act.\3\ As part of the Commission's 2016 order granting LCH 
SA's application for registration as a clearing agency, the Commission 
granted LCH SA exemptions from certain requirements of the Act and the 
rules thereunder, including an exemption from Section 19(b) of the Act 
\4\ and Rule 19b-4 \5\ thereunder with respect to filing certain 
proposed rule changes relating to its business lines operating outside 
of the U.S (``Current Exemptive Relief'').\6\ LCH SA's Request for 
Exemptive Relief would amend the Current Exemptive Relief as it relates 
to Section 19(b) of the Act \7\ and Rule 19b-4 \8\ thereunder relating 
to LCH SA's clearing services. The Commission is publishing this notice 
to provide interested persons with an opportunity to comment.
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    \1\ Letter from Nicolas Dot, Chief Compliance Officer, LCH SA, 
dated December 22, 2025 (``Application'').
    \2\ 15 U.S.C. 78mm. Section 36(a)(1) of the Exchange Act gives 
the Commission the authority to exempt any person, security or 
transaction or any class or classes of persons, securities or 
transactions, conditionally or unconditionally, from any Exchange 
Act provision or any rule or regulation thereunder by rule, 
regulation or order, to the extent that the exemption is necessary 
or appropriate in the public interest and consistent with the 
protection of investors. 15 U.S.C. 78mm(a)(1).
    \3\ 17 CFR 240.0-12. Exchange Act Rule 0-12 sets forth 
procedures for filing applications for orders for exemptive relief 
pursuant to Section 36. The Application will not appear in the 
Federal Register. The Application is available on the Commission's 
internet website at <a href="http://www.sec.gov">www.sec.gov</a>. Defined terms in this notice are 
the same as used in the Application, unless we note otherwise.
    \4\ 15 U.S.C. 78s(b).
    \5\ 17 CFR 240.19b-4.
    \6\ Order Granting Application for Registration as a Clearing 
Agency and Request for Exemptive Relief, Exchange Act Release No. 
79707 (Dec. 29, 2016), 82 FR 1398, 1412 (Jan. 5, 2017) (File No. 
600-36) (``Order'').
    \7\ 15 U.S.C. 78s(b).
    \8\ 17 CFR 240.19b-4.
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I. Background

    LCH SA is a clearing agency registered with the Commission for the 
purpose of clearing security-based swaps. LCH SA clears security-based 
swaps for persons in the U.S. and abroad.\9\ LCH SA clears security-
based swaps through its CDSClear business line.\10\
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    \9\ Order, 82 FR at 1398.
    \10\ Id.
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    In addition to the CDSClear business line, at the time of issuance 
of the Current Exemptive Relief, LCH SA also offered clearing services 
for other financial instruments through other business lines. These 
other business lines operated entirely outside of the U.S., did not 
have any U.S. persons as Clearing Members, and LCH SA did not seek to 
offer them to any U.S. persons (``Non-U.S. Business'').\11\ LCH SA's 
Non-U.S. Business included (i) EquityClear for clearing equities, debt 
instruments, and futures contracts; (ii) CommodityClear for clearing 
futures and options for agricultural and energy products; and (iii) 
RepoClear for clearing repurchase and cash transactions on Euro-
denominated government and supranational debts.\12\
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    \11\ Id. at 1398, 1411.
    \12\ Id. at 1410 n.188; Application, at 3 n.12.
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    Because LCH SA operated these business lines outside of the U.S. 
and neither had nor intended to have U.S. persons as Clearing Members, 
as part of its application for registration as a clearing agency, LCH 
SA requested, and the Commission granted, the Current Exemptive Relief 
with respect to the Non-U.S. Business. Specifically, the Current 
Exemptive Relief exempts LCH SA from filing a proposed rule change 
under Section 19 of the Act \13\ and Rule 19b-4 \14\ thereunder if the 
proposed rule change (i) primarily affects LCH SA's clearing operations 
with respect to its Non-U.S. Business, and (ii) does not significantly 
affect any CDSClear operations or any rights or obligations of LCH SA 
with respect to the CDSClear services or persons using such services 
(``Non-U.S. Business Rule Change'').\15\ Even if a proposed rule change 
primarily affects the Non-U.S. Business, the Current Exemptive Relief 
does not apply if it would significantly affect CDSClear operations, 
services, or persons using those services. Further, as a condition to 
the Current Exemptive Relief, LCH SA must provide Commission staff with 
notice of its Non-U.S. Business Rule Changes within three business days 
following approval by LCH SA's national competent authorities.\16\
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    \13\ 15 U.S.C. 78s(b).
    \14\ 17 CFR 240.19b-4.
    \15\ Order, 82 FR at 1414. Pursuant to Section 19(b)(1) of the 
Act, self-regulatory organizations, including registered clearing 
agencies like LCH SA, are required to file with the Commission 
copies of any proposed rule, or any addition to or deletion from 
their existing rules. See 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-
4(a)(4) (defining ``proposed rule change'').
    \16\ Order, 82 FR at 1412.
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    Since the issuance of the Current Exemptive Relief, LCH SA has 
discontinued its EquityClear and CommodityClear services.\17\ LCH SA 
has also added a new Non-U.S. Business, DigitalAssetClear.\18\ Because 
the EquityClear and CommodityClear business lines have both closed, the 
Non-U.S. Business currently consists of RepoClear and 
DigitalAssetClear, as well as any future business line that LCH SA 
operates entirely outside of the U.S. and does not include U.S. persons 
as Clearing Members.\19\ CDSClear is the only service currently offered 
in the U.S. or to U.S. persons. Thus, as of the date of the Request for 
Exemptive Relief, LCH SA operates three business lines: (i) CDSClear; 
(ii) RepoClear; and (iii) DigitalAssetClear.
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    \17\ Application, at 3 n.10 and 11.
    \18\ LCH SA will provide clearing services through 
DigitalAssetClear for cash-settled Bitcoin index futures and options 
contracts traded on Global Futures and Options Limited, a UK-based 
digital asset derivatives trading venue. Application, at 3 n.13.
    \19\ Order, 82 FR at 1398, 1410 n.188.
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    LCH SA plans to permit U.S. persons to join RepoClear as Clearing 
Members. In doing so, LCH SA proposes to create a new category for 
RepoClear, which LCH SA refers to as its ``Non-Registrable Business.'' 
\20\ Because such a change

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would allow RepoClear to onboard U.S. Clearing Members, RepoClear would 
no longer be a Non-U.S. Business under the Current Exemptive Relief.
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    \20\ LCH SA notes that the Non-Registrable Business does not 
include any clearance and settlement services pertaining to any 
purchase or sale transaction in U.S. Treasury securities or 
repurchase or reverse repurchase agreement collateralized by U.S. 
Treasury securities; any other transaction involving U.S. Treasury 
securities; or any clearance and settlement services pertaining to 
any securities meeting the definition of ``government securities'' 
in Section 3(a)(42) of the Act. Application, at 2 n.7.
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II. Request for Exemptive Relief

    LCH SA requests an amendment to the Current Exemptive Relief as it 
relates to its Non-Registrable Business to provide limited, conditional 
relief for RepoClear while allowing LCH SA to onboard U.S. Clearing 
Members to RepoClear. Specifically, LCH SA requests that, for as long 
as the Non-Registrable Business has U.S. Clearing Members, the 
Commission allow LCH SA to file with the Commission proposed rule 
changes related to the Non-Registrable Business pursuant to Section 
19(b)(3)(A) of the Act \21\ and paragraph (f)(6) of Rule 19b-4 
thereunder,\22\ provided that, consistent with the Current Exemptive 
Relief, any such proposed rule change (i) primarily affects LCH SA's 
clearing operations with respect to the Non-Registrable Business and 
(ii) does not significantly affect any CDSClear operations or any 
rights or obligations of LCH SA with respect to the CDSClear services 
or persons using the CDSClear services (``Non-Registrable Business Rule 
Change'').\23\ LCH SA further proposes that this relief would end 
following written notice from LCH SA to the Commission that the Non-
Registrable Business no longer has any U.S. Clearing Members. After 
such a notice, all Non-Registrable Business Rule Changes would be 
treated like Non-U.S. Business Rule Changes under the Current Exemptive 
Relief.\24\
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    \21\ 15 U.S.C. 78s(b)(3)(a).
    \22\ 17 CFR 240.19b-4(f)(6).
    \23\ Under the requested relief, the Commission would designate 
that Non-Registrable Business Rule Changes may become effective 
under Rule 19b-4(f)(6) earlier than 30 days after the date of the 
filing, but not sooner than the date of filing, and LCH SA may file 
Non-Registrable Business Rule Changes even if LCH SA has not given 
the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of filing 
the proposed rule change. Application, at 13 n.47.
    \24\ Application, at 4.
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    LCH SA's requested relief would have several additional conditions.
    <bullet> LCH SA's obligation to file with the Commission the Non-
Registrable Business Rule Changes would begin on the effective date 
that the first U.S. Clearing Member is admitted as a member of the Non-
Registrable Business.
    <bullet> LCH SA will continue to comply with the terms of the 
Current Exemptive Relief in respect of the Non-U.S. Business (including 
DigitalAssetClear) by providing notice to Commission staff of its Non-
U.S. Business Rule Changes within three (3) business days of such rules 
taking effect pursuant to the requirements of the European Market 
Infrastructure Regulation or LCH SA's national competent authorities.
    <bullet> LCH SA must provide prompt written notice to the 
Commission in the event that the Non-Registrable Business onboards U.S. 
Clearing Members or ceases to have U.S. Clearing Members.
    <bullet> LCH SA must continue to file Non-Registrable Business Rule 
Changes, and otherwise comply with the terms of the requested relief 
until LCH SA has, with respect to the Non-Registrable Business, closed 
all transactions and positions involving U.S. Clearing Members and 
their clients; completed final settlement of amounts owed to or from 
U.S. Clearing Members and their clients; returned any collateral, 
margin, or other property of U.S. Clearing Members and their clients; 
and provided prompt written notice to the Commission when these 
conditions are satisfied.
    <bullet> If LCH SA is no longer required to file Non-Registrable 
Business Rule Changes because LCH SA no longer has U.S. Clearing 
Members in the Non-Registrable Business and has otherwise met the 
above-described conditions, LCH SA may not again onboard U.S. Clearing 
Members to the Non-Registrable Business without first receiving 
approval from the Commission.
    <bullet> Finally, in connection with the statutory and rule 
provisions discussed throughout the Application, from which exemptive 
relief is requested, LCH SA represents that, as a condition of such 
relief, LCH SA shall continue to implement policies and procedures 
designed to ensure compliance with the terms and conditions described 
in the Application, and to conduct periodic internal risk-based reviews 
related to its compliance program.\25\
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    \25\ Application, at 12-13.
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    The Request for Exemptive Relief would not alter the treatment of 
either CDSClear or the Non-U.S Business under the Current Exemptive 
Relief.\26\ For CDSClear, LCH SA would, as now, file with the 
Commission proposed rule changes pursuant to Section 19(b) of the Act 
and Rule 19b-4 thereunder. For the Non-U.S. Business (i.e., 
DigitalAssetClear), LCH SA would, as now, be exempt from filing 
proposed rule changes that primarily affect its clearing operations 
with respect to its Non-U.S. Business, and do not significantly affect 
any CDSClear operations or any rights or obligations of LCH SA with 
respect to the CDSClear services or persons using such services, 
subject to the conditions set out in the Current Exemptive Relief.\27\
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    \26\ Application, at 5.
    \27\ Order, 82 FR at 1410.
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III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the Request for Exemptive Relief, including 
whether the Request for Exemptive Relief should be granted. In 
particular, the Commission solicits comments on the following 
questions:
    1. Do commenters agree that the Commission should grant the Request 
for Exemptive Relief subject to the conditions described in the 
Application?
    2. Should the Commission add any additional conditions to the 
requested relief, such as a limit on the overall number of U.S Clearing 
Members that can join the Non-Registrable Business or a limit on the 
amount of activity by U.S. Clearing Members in the Non-Registrable 
Business? If so, please describe what those conditions should be and 
why. For conditions specific to a membership or activity limit 
threshold, please describe what the threshold should be and why that 
threshold would be appropriate. Would the requested relief impact how 
market participants structure their transactions or access central 
clearing? If so, please describe the impact and provide any information 
or data to support this position.
    3. Would the requested relief impact competition between different 
clearing agencies or different types of participants in clearing 
agencies? If so, please describe the impact on competition, as well as 
any potential mechanism to address that impact and the potential 
effects thereof.
    4. Would the requested relief have any impact on existing U.S 
regulatory requirements, other than those identified in the Application 
or otherwise identified above? Please explain.
    5. Would the requested relief have any impact on U.S. Clearing 
Members that join the Non-Registrable Business, or any other U.S. 
persons, such as clients of these U.S. Clearing Members? Please 
explain.
    6. Please describe how the requested relief would or would not 
protect investors and the public interest as required by Sections 17A 
and 36 of the Exchange Act.
    7. Please describe how the requested relief would or would not help 
to

[[Page 24619]]

facilitate the prompt and accurate clearance and settlement of 
securities transactions as well as the safeguarding of securities and 
funds as required by Section 17A of the Exchange Act.
    Comments should be received on or before June 5, 2026. 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/exchange-act-exemptive-notices-orders">https://www.sec.gov/rules-regulations/exchange-act-exemptive-notices-orders</a>); 
or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#6614130a034b05090b0b030812152615030548010910"><span class="__cf_email__" data-cfemail="daa8afb6bff7b9b5b7b7bfb4aea99aa9bfb9f4bdb5ac">[email&#160;protected]</span></a>. Please include 
file number 600-36 on the subject line.

Paper Comments

    <bullet> Send paper comments to Secretary, Securities and Exchange 
Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to file number 600-36. 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/exchange-act-exemptive-notices-orders">https://www.sec.gov/rules-regulations/exchange-act-exemptive-notices-orders</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.
    For further information, you may contact Jeffrey Mooney, Associate 
Director; Moshe Rothman, Assistant Director; Kevin Schopp, Senior 
Special Counsel; or Joseph Tabler, Special Counsel, Office of Clearance 
and Settlement, Division of Trading and Markets, at (202) 551-5500, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549.

    By the Commission.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2026-08955 Filed 5-5-26; 8:45 am]
BILLING CODE 8011-01-P


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