Federal Register 60-Day Notice

khammond on DSK9W7S144PROD with NOTICES

32050

Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Notices

Exchanges.62 For example, OCC
proposes to add language allowing it to
disapprove new options that pose a risk
to OCC. OCC also proposes new
provisions governing the pricing and
listing of options that are listed on only
one Exchange, and to add the ability for
OCC to calculate position limits at the
request of the Exchanges. These changes
help decrease the risk to OCC presented
by options that are only listed on one
exchange by reducing the risk that OCC
would be unable to price such options
or that members would be unable to
trade options for which there is open
interest at OCC. It would also help
reduce the risk from position limits so
that OCC can adjust accordingly if a
position grows too large.
As discussed above, the proposed rule
would establish financial requirements
for Exchanges and allow OCC to
monitor for going concern risk. If an
Exchange becomes insolvent it could
pose a risk to OCC and other financial
institutions. Thus, Exchanges would be
required to provide certain financial
statements to OCC and notify OCC if
they experience a certain percentage
decrease in shareholder equity or losses
exceeding a certain percentage of
shareholder equity. At the same time,
the proposed changes to the RPEA
would create clear obligations for OCC
to keep and maintain non-public
information submitted to OCC by the
Exchanges strictly confidential and
would prevent OCC from sharing or
disclosing such information outside of
limited circumstances. Together, these
updates to the RPEA would help OCC
manage financial risk from trading
markets should an exchange become
insolvent, allow OCC to monitor its
member Exchanges for signs of financial
distress, and help ensure that the
Exchnages’ sensitive financial
information is protected and kept
confidential.
The proposed rule change would also
require the parties’ to take commercially
reasonable steps to comply with
relevant cybersecurity regulations. As
part of this change, OCC would be
authorized under the RPEA to take
reasonable steps to mitigate any effects
from a cybersecurity incident at an
Exchange, for example by suspending
its obligations for the impacted
Exchange. Cyber related incidents have
the potential to disrupt financial
institutions, including both the
Exchanges and OCC. These policy
changes would help OCC identify and
manage cybersecurity, connectivity, and
other operational and technology risks
posed to OCC through its connection to
62 See

the Exchanges and the various trading
markets they serve..
The proposed rule would also explain
how Confidential Information is defined
and provide how it can be shared. It
would also outlines the repercussions in
the event of a breach of the
confidentiality provisions. Given the
volume of information produced by
both OCC and the Exchanges, it is
important to set clear standards to
reduce legal risk.
Accordingly, the Proposed Rule
Change is consistent with Rule 17ad–
22(e)(20) under the Exchange Act.63
D. Consistency With Rule 17ad–
22(e)(21) Under the Exchange Act
Rule 17ad–22(e)(21) under the
Exchange Act requires, in part, that a
covered clearing agency establish,
implement, maintain, and enforce
written policies and procedures
reasonably designed to be efficient and
effective in meeting the requirements of
its participants and the markets it
serves, and have the covered clearing
agency’s management regularly review
the efficiency and effectiveness of its (i)
scope of products cleared or settled 64
and (ii) use of technology and
communication procedures.65
As described above, OCC proposes
various changes designed to reflect
current, enhanced, or implied business
practices between OCC and the
Exchanges.66 For example, the proposed
rule change addresses how new options
will be approved, permits OCC to refuse
to issue such option if it identifies a risk
in the new option, and requires OCC to
undertake commercially reasonable
efforts to address the risk that caused
OCC to refuse the new option. The
Exchange is also required to reasonably
cooperate with OCC. The proposed
changes also update the Underlying
Interests provisions of the RPEA and,
more broadly, help establish transparent
and consistent procedures for OCC to
clear new products and identify and
address the specific risks such new
products might pose. Such changes will
enhance OCC’s ability to meet the
requirements of its participants and the
needs of the market it serves.
As described above, OCC proposes
various changes designed to eliminate
RPEA provisions that are out of date.67
For example, the Proposed Rule Change
would remove references to specific
times for opening new option series and
reflect that it is currently the Exchanges,

infra section II.A.

VerDate Sep<11>2014

20:58 Jul 15, 2025

Jkt 265001

PO 00000

63 17

CFR 240.17ad–22(e)(20).
CFR 240.17ad–22(e)(21)(ii).
65 17 CFR 240.17ad–22(e)(21)(iii).
66 See infra section II.A.
67 See infra section II.C.
64 17

Frm 00097

Fmt 4703

Sfmt 4703

not the Securities Committee, that
determine units of trading. Similarly,
OCC proposes to remove the
requirement that lists of options be
provided ‘‘in reasonable quantities’’
because such lists are now provided
electronically. OCC also proposes to
remove references to in-person delivery
of documents and telephone calls,
requirements for local banking
relationships, and the maintenance of
offices in certain cities. These updates
to remove outdated references to
timeframes, quantities, and
requirements improve the clarity and
effectiveness of OCC’s policies and
procedures.
Accordingly, the Proposed Rule
Change is consistent with Rule 17ad–
22(e)(21) under the Exchange Act.68
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the Proposed
Rule Change is consistent with the
requirements of the Exchange Act, and
in particular, the requirements of
Section 17A of the Exchange Act 69 and
the rules and regulations thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,70
that the Proposed Rule Change (SR–
OCC–2025–006) be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.71
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–13263 Filed 7–15–25; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[OMB Control No. 3235–0733]

Proposed Collection; Comment
Request; Extension: Rule 194
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) is soliciting
comments on the proposed collection of
68 17

CFR 240.17ad–22(e)(21).
approving the Proposed Rule Change, the
Commission has considered the proposed rules’
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
70 15 U.S.C. 78s(b)(2).
71 17 CFR 200.30–3(a)(12).
69 In

E:\FR\FM\16JYN1.SGM

16JYN1

Federal Register / Vol. 90, No. 134 / Wednesday, July 16, 2025 / Notices

khammond on DSK9W7S144PROD with NOTICES

information for Commission Rule of
Practice 194, (17 CFR 240.194), under
the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.).
Rule of Practice 194 provides a
process for security-based swap dealers
and major security-based swap
participants (collectively, ‘‘SBS Entity’’)
to make an application to the
Commission for an order permitting an
associated person who is subject to a
statutory disqualification to effect or be
involved in effecting security-based
swaps on behalf of the SBS Entity. Rule
of Practice 194 specifies the process for
obtaining relief from the statutory
prohibition in Exchange Act Section
15F(b)(6), including by setting forth the
required showing, the form of
application and the items to be
addressed with respect to associated
persons that are natural persons. An
SBS Entity is not required to file an
application under Rule of Practice 194
with respect to certain associated
persons that are subject to a statutory
disqualification, as provided for in
paragraph (h) of Rule of Practice 194. To
meet those requirements, however, the
SBS Entity is required to file a notice
with the Commission.
55 SBS Entities in total are currently
registered with the Commission.1 The
Commission anticipates that, on an
average annual basis, only a small
fraction of the natural persons at an SBS
Entity would be subject to a statutory
disqualification. Accordingly, based on
our experience working with Rule of
Practice 194, the Commission estimates
that, on an average annual basis, the
Commission would receive up to one
application in accordance with Rule of
Practice 194 with respect to associated
persons that are natural persons, and up
to three notices pursuant to proposed
Rule of Practice 194(h) with respect to
associated persons that are natural
persons.2 The Commission estimates
1 See SEC, List of Security-Based Swap Dealers
and Major Security-Based Swap Participants,
available at https://www.sec.gov/files/tm-sbsdmsbsp-pax-list-2412.pdf.
2 While we previously estimated that we might
receive as many as five applications and five
notices from SBS Entity respondents in a given
year, our experience since making this estimate has
led us to revise down this expectation. Since the
first registration of an SBS Entity with the
Commission on October 27, 2021, the Commission
has only received three notices and one application
under Rule of Practice 194. See SEC, Applications
and Notices by Security-Based Swap Dealers or
Major Security-Based Swap Participants for
Statutorily Disqualified Associated Persons to Effect
or Be Involved in Effecting Security-Based Swap
Transactions (Rule of Practice 194) (‘‘Rule 194
Approval Orders and Notices Database’’), available
at https://www.sec.gov/rule-practice-194applications-and-notices. Based on this and related
discussions with registered SBS Entities, we do not

VerDate Sep<11>2014

20:58 Jul 15, 2025

Jkt 265001

that the average time necessary for an
SBS Entity to research the questions,
and complete and file an application
under Rule of Practice 194 with respect
to associated persons that are natural
persons is approximately 30 hours, for
a total of approximately 30 burden
hours per year for all SBS Entities. The
Commission estimates that up to three
SBS Entities will provide notices
pursuant to Rule of Practice 194(h) for
one natural person each on an average
annual basis taking approximately 6
hours per notice, for a total of
approximately 18 burden hours per year
for all SBS Entities providing the
notices for an estimated three natural
persons. As such, the combined
estimated annual hour burden for all
SBS Entities to complete applications
and notices pursuant to Rule of Practice
194 is approximately 48 hours per year
(30 + 18).
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid OMB
Control Number.
Written comments are invited on: (a)
whether this proposed collection of
information is necessary for the proper
performance of the functions of the SEC,
including whether the information will
have practical utility; (b) the accuracy of
the SEC’s estimate of the burden
imposed by the proposed collection of
information, including the validity of
the methodology and the assumptions
used; (c) ways to enhance the quality,
utility, and clarity of the information to
be collected; and (d) ways to minimize
the burden of the collection of
information on respondents, including
through the use of automated, electronic
collection techniques or other forms of
information technology.
Please direct your written comments
on this 60-Day Collection Notice to
Austin Gerig, Director/Chief Data
Officer, Securities and Exchange
Commission, c/o Tanya Ruttenberg via
email to PaperworkReductionAct@
sec.gov by September 15, 2025. There
will be a second opportunity to
comment on this SEC request following
the Federal Register publishing a 30Day Submission Notice.
Dated: July 14, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–13312 Filed 7–15–25; 8:45 am]

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–103439; File No. SR–
MEMX–2025–21]

Self-Regulatory Organizations; MEMX
LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend the Exchange’s Fee
Schedule Concerning Equities
Transaction Pricing
July 11, 2025.

Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that, on June 30,
2025, MEMX LLC (‘‘MEMX’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposed rule change to
amend the Exchange’s fee schedule
applicable to Members 3 (the ‘‘Fee
Schedule’’) pursuant to Exchange Rules
15.1(a) and (c). As is further described
below, the Exchange proposes to (i)
increase the fee for executions of Retail
Orders in securities priced at or above
$1.00 per share that remove liquidity
from the Exchange and (ii) modify the
Liquidity Provision Tiers by reducing
the rebate and modifying the required
criteria under Liquidity Provision 2 and
reducing the rebates under Liquidity
Provision Tiers 3, 4, and 5. The
Exchange proposes to implement the
changes to the Fee Schedule pursuant to
this proposal on July 1, 2025. The text
of the proposed rule change is provided
in Exhibit 5.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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

BILLING CODE 8011–01–P
1 15

expect the number of applications and notices to
exceed these figures on an annual basis.

PO 00000

Frm 00098

Fmt 4703

Sfmt 4703

32051

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Exchange Rule 1.5(p).
2 17

E:\FR\FM\16JYN1.SGM

16JYN1