Notice2026-19916
Notice of an Application of Cboe Clear U.S., LLC for an Exemption Pursuant to Section 36 of the Securities Exchange Act of 1934 Regarding the Treatment of Customer Margin Under Item 13 and Note F of Exhibit A to Rule 15c3-3
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Published
September 29, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 187 (Tuesday, September 29, 2026)</title>
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[Federal Register Volume 91, Number 187 (Tuesday, September 29, 2026)]
[Notices]
[Pages 61528-61530]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19916]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106493; File No. 4-930]
Notice of an Application of Cboe Clear U.S., LLC for an Exemption
Pursuant to Section 36 of the Securities Exchange Act of 1934 Regarding
the Treatment of Customer Margin Under Item 13 and Note F of Exhibit A
to Rule 15c3-3
September 25, 2026.
On September 18, 2026, Cboe Clear U.S., LLC (``CCUS''), an
applicant for registration with the Securities and Exchange Commission
(``Commission'') as a clearing agency, filed an application with the
Commission (the ``Application'') to obtain an exemption pursuant to
section 36(a)(1) \1\ of the Securities Exchange Act of 1934 (``Exchange
Act''),\2\ in accordance with the procedures set forth in Exchange Act
Rule 0-12.\3\ Specifically, CCUS is requesting exemptive relief on
behalf of broker-dealers that are CCUS clearing
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members (``Clearing Members'') from the limitation in Item 13 and Note
F of Exhibit A to Rule 15c3-3 \4\ that confines the Item 13 debit to
the amount of margin required and on deposit with the Options Clearing
Corporation (``OCC'') for all option contracts written or purchased in
customer accounts. The requested exemption would allow CCUS Clearing
Members to include as a debit under Item 13 and Note F margin that is
required and on deposit at CCUS for binary options that are cleared by
CCUS on behalf of Clearing Member customers in the same manner as is
currently provided for margin required and on deposit with OCC. The
Commission is publishing this notice to provide interested persons with
an opportunity to comment.
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\1\ 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 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.
\2\ 15. U.S.C. 78a et seq.
\3\ 17 CFR 240.0-12. Exchange Act Rule 0-12 sets forth the
procedures for filing applications for orders for exemptive relief
pursuant to section 36. The application will not appear in the
Federal Register (``Application''). 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 noted
otherwise.
\4\ 17 CFR 240.15c3-3a.
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I. Background
Rule 15c3-3, the broker-dealer customer protection rule, requires,
among other things, broker-dealers that hold customer cash and
securities (``carrying broker-dealers'') to compute the net amount of
cash owed to customers under a formula in Rule 15c3-3a (``customer
reserve computation'').\5\ Generally, carrying broker-dealers must
perform their customer reserve computation and make any required
deposits in a special reserve account at a bank daily or weekly. The
rule also requires a carrying broker-dealer to perform a PAB reserve
computation for the proprietary securities and cash it holds for other
broker-dealers, known as proprietary accounts of broker-dealers (``PAB
accounts'').\6\
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\5\ 17 CFR 240.15c3-3.
\6\ Broker-dealers use the formula in Rule 15c3-3a for the
purposes of computing the PAB reserve requirement, except that
references to ``accounts,'' ``customer accounts,'' or ``customers''
will be treated as references to PAB accounts. See Note 1 to Rule
15c3-3a (17 CFR 240.15c3-3a). For the purposes of this notice,
references to ``accounts,'' ``customer,'' or ``customer accounts''
will also include ``PAB'' or ``PAB accounts'' as appropriate.
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Item 13 of the customer reserve computation in Rule 15c3-3a
includes as a debit in the computation the amount of margin required
and on deposit with OCC for all option contracts written or purchased
in customer accounts. Note F to Item 13 states that Item 13 must
include the amount of margin required and on deposit with the OCC to
the extent such margin is represented by cash, proprietary qualified
securities and letters of credit collateralized by customers'
securities.\7\ Under that framework, the permitted debit is based on
the margin amount posted by the broker-dealer to OCC that is calculated
by OCC across all of the broker-dealer's customers with listed options
(i.e., on an omnibus or net basis).
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\7\ See Note F to Rule 15c3-3a (17 CFR 240.15c3-3a).
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II. Summary of the Application and Proposed Conditions
In the Application, CCUS requests, pursuant to section 36(a)(1) of
the Exchange Act, and in accordance with the procedures set forth in
Rule 0-12, that the Commission issue an order exempting Clearing
Members of CCUS from the limitation in Item 13 and Note F of Rule 15c3-
3a that confines the Item 13 debit to the amount of margin required and
on deposit with OCC for option contracts written or purchased in
customer accounts. CCUS is also requesting that the exemptive relief
apply with respect to the PAB reserve computation.\8\
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\8\ See Application, at 3-4.
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CCUS states that it has filed an application with the Commission to
register as a clearing agency, seeking temporary registration to
provide central counterparty services for binary options that are
securities.\9\ In connection with its application to register as a
clearing agency, CCUS is seeking under this Application comparable
treatment under the customer reserve computation with respect to the
margin that is required and on deposit at CCUS as has been afforded
OCC.
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\9\ See Application at 2. Non-confidential aspects of CCUS's
Form CA-1 application and exhibits thereto are available on the
Commission's website at: <a href="https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/ccus-form-ca-1">https://www.sec.gov/rules-regulations/other-commission-orders-notices-information/ccus-form-ca-1</a>.
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In support of its request, CCUS states that when the Commission
adopted Item 13, and Note F thereto, OCC was the only clearing agency
registered with the Commission to provide central counterparty services
for securities options. CCUS states that it does not believe that the
Exchange Act requires or warrants different treatment for margin held
on similar terms for security option products at different registered
clearing agencies. Further, CCUS states that section 17A(a)(2) of the
Exchange Act \10\ directs the Commission, with due regard for the
maintenance of fair competition among clearing agencies, to facilitate
a national system for the prompt and accurate clearance and settlement
of securities transactions and to assure equal regulation under the
Exchange Act of registered clearing agencies. Consequently, CCUS states
that reading Item 13 to exclude margin held at a second registered
options clearing agency because it did not exist when the rule was
amended would be inconsistent with this statutory mandate.\11\
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\10\ 15 U.S.C. 78q-1(a)(2).
\11\ See Application at 4.
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To further support its position, CCUS states that Item 14 \12\ and
Item 15 \13\ of the customer reserve computation do not name any
particular clearing agency, and do not distinguish between registered
clearing agencies.\14\ CCUS states that where the Commission
anticipated that more than one clearing agency could hold margin, it
framed the customer reserve computation treatment of such margin by
reference to a registered category rather than name a specific existing
clearing agency. Consequently, CCUS states that permitting broker-
dealers to treat margin held at other registered clearing agencies
would treat functionally equivalent margin on equivalent terms.\15\
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\12\ Item 14 of the customer reserve computation is a debit item
for margin that is required and on deposit with a registered
clearing agency under section 17A of the Exchange Act (15 U.S.C 78q-
1), or a derivatives clearing organization registered with the
Commodity Futures Trading Commission under section 5b of the
Commodity Exchange Act (7 U.S.C. 7a-1) related to positions written,
purchased or sold in customer accounts with respect to security
futures products, and futures contracts (and options thereon)
carried in a securities account pursuant to a self-regulatory
organization margining rule. See 17 CFR 240.15c3-3a, Item 14.
\13\ Item 15 of the customer reserve computation is a debit item
for margin required and on deposit with a clearing agency registered
with the Commission under section 17A of the Exchange Act (15 U.S.C.
78q-1) resulting from specified transactions in U.S. Treasury
securities in customer accounts that have been cleared, settled and
novated by the clearing agency. See 17 CFR 240.15c3-3a, Item 15.
\14\ See Application at 4-5.
\15\ See id.
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In its Application, CCUS states that its proposed rules contemplate
customer protection standards that satisfy the same regulatory
requirements as those under which OCC operates. Specifically, CCUS
states that it will offer separate customer, firm, and market-maker
accounts, and that its rules require all funds and assets held for
securities customers of a Clearing Member be maintained in a segregated
Securities Customer Account. Further, CCUS states that the binary
options it proposed to clear will be fully margined and that its risk
management framework provides for daily and intraday margin collection,
guaranty fund resources, and a default waterfall.\16\
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\16\ See Application at 2-3.
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In its Application, CCUS states that a failure to provide
equivalent treatment under the customer reserve computation to margin
required and on deposit at
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CCUS would result in its Clearing Members facing a customer reserve
computation penalty for clearing customer security options at CCUS.
CCUS goes on to state that this result could hinder the development of
a cleared securities environment for trading in binary options that
CCUS expects to clear.\17\
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\17\ See Application at 5.
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CCUS proposes certain conditions that would apply in connection
with its Clearing Members being able to include margin required and on
deposit with respect to customer binary options transactions in the
Item 13 debit. Specifically, CCUS proposes that:
1. Registration: CCUS must register with the Commission as a
clearing agency in accordance with section 17A(b) \18\ of the
Exchange Act and Rule 17ab2-1 \19\ thereunder.
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\18\ 15 U.S.C. 78q-1.
\19\ 17 CFR 240.17ab2-1.
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2. Eligibility Limitation: The relief will apply solely to
margin required and on deposit with CCUS with respect to customer
positions in binary options.
3. Margined Customer Positions: The binary options that CCUS
clears will be margined by CCUS consistent with the requirements of
Rule 17Ad-22(e) \20\ and Clearing Members will collect such margin
from their customers, with any proposed changes to CCUS's margin
system subject to Commission review, and, as appropriate, approval
pursuant to section 19(b) \21\ of the Exchange Act and Rule 19b-4
\22\ thereunder.
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\20\ 17 CFR 240.17ad-22(e).
\21\ 15 U.S.C. 78s.
\22\ 17 CFR 240.19b-4.
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4. Segregation of Customer Margin: For purposes of Rule 15c3-3a,
CCUS will maintain margin required and on deposit with CCUS for
options contracts written or purchased in customer accounts
separately and independently from margin required and on deposit for
proprietary positions of Clearing Members.
5. The relief would be subject to the same conditions set forth
in Note F to Item 13 of Rule 15c3-3a that apply to margin required
and on deposit with OCC for all option contracts written or
purchased in customer accounts.
6. The rules of CCUS must comply with the conditions on any
exemptive order the Commission may issue in response to this request
and CCUS shall amend its rulebook as may be necessary to ensure that
its rulebook complies with such conditions.
III. Request for Comment
We request and encourage any interested person to submit comments
regarding the Application, including whether the Commission should
grant the request. In particular, we solicit comment on the following
questions:
1. Do commenters agree with CCUS's reasons described in the
Application \23\ in support of the Commission finding that the
exemptive relief is consistent with section 36 of the Exchange Act?
Why or why not?
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\23\ See, e.g., section III of the Application.
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2. Are the conditions upon which the relief would be granted
sufficient? Why or why not? Are there other or alternative
conditions not outlined in the Application, or modifications to the
conditions proposed within the Application, that the Commission
should consider? If so, please describe those conditions or
modifications.
3. Would the exemption requested in the Application have a
competitive impact--either positive or negative--on broker-dealers
and their customers in the context of clearing security options?
What would be the potential benefits and costs of the exemption?
Would the exemption and conditions impact investor protection? If
so, what would those impacts be?
Comments should be received on or before October 20, 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/comments/4-930/notice-application-cboe-clear-us-llc-exemption-pursuant-section-36-securities-exchange-act-1934">https://www.sec.gov/comments/4-930/notice-application-cboe-clear-us-llc-exemption-pursuant-section-36-securities-exchange-act-1934</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#453730292068262a2828202b3136053620266b222a33"><span class="__cf_email__" data-cfemail="b2c0c7ded79fd1dddfdfd7dcc6c1f2c1d7d19cd5ddc4">[email protected]</span></a>. Please include
File Number 4-930 on the subject line.
Paper Comments
<bullet> Send paper comments to Secretary, Securities and Exchange
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number 4-930. 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 of submission. The Commission will post all
comments on the Commission's internet website (<a href="https://www.sec.gov/rules-regulations/public-comments/4-930">https://www.sec.gov/rules-regulations/public-comments/4-930</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 Raymond A. Lombardo,
Acting Associate Director; Sheila Dombal Swartz, Senior Special
Counsel; or Abraham Jacob, Special Counsel at (202) 551-5500, Office of
Broker-Dealer Finances, Division of Trading and Markets, Securities and
Exchange Commission, 100 F Street NE, Washington, DC 20549-7010.
By the Commission.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-19916 Filed 9-28-26; 8:45 am]
BILLING CODE 8011-01-P
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