Rule 701 30 Day Federal Register Notice

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Federal Register / Vol. 87, No. 161 / Monday, August 22, 2022 / Notices

Office of Management and Budget this
request for extension of the previously
approved collection of information
discussed below.
Form F–8 (17 CFR 239.38) may be
used to register securities of certain
Canadian issuers under the Securities
Act of 1933 (15 U.S.C. 77a et seq.) that
will be used in an exchange offer or
business combination. The information
collected is intended to ensure that the
information required to be filed by the
Commission permits verification of
compliance with securities law
requirements and assures the public
availability of such information. The
information provided is mandatory and
all information is made available to the
public upon request. We estimate that
Form F–8 takes approximately one hour
per response to prepare and is filed by
approximately 5 respondents. We
estimate that 25% of one hour per
response (15 minutes) is prepared by the
company for a total annual reporting
burden of one hour (15 minutes/60
minutes per response × 5 responses =
1.25 hours rounded to nearest whole
number).
An agency may conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a currently valid control
number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice by September 21, 2022 to (i)
www.reginfo.gov/public/do/PRAMain
and (ii) David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
Dated: August 16, 2022.
Jill M. Peterson,
Assistant Secretary.
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SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–306, OMB Control No.
3235–0522]

Submission for OMB Review;
Comment Request; Extension: Rule
701
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
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget this
request for extension of the previously
approved collection of information
discussed below.
Rule 701(17 CFR 230.701) under the
Securities Act of 1933 (‘‘Securities Act’’)
(15 U.S.C. 77a et seq.) provides an
exemption for certain issuers from the
registration requirements of the
Securities Act for limited offerings and
sales of securities issued under
compensatory benefit plans or contracts.
The purpose of Rule 701 is to ensure
that a basic level of information is
available to employees and others when
substantial amounts of securities are
issued in compensatory arrangements.
Information provided under Rule 701 is
mandatory. We estimate that
approximately 800 companies annually
rely on the Rule 701 exemption and that
it takes 2 hours to prepare each
response. We estimate that 25% of the
2 hours per response (0.5 hours) is
prepared by the company for a total
annual reporting burden of 400 hours
(0.5 hours per response × 800
responses).
An agency may conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a currently valid control
number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice by September 21, 2022 to (i)
www.reginfo.gov/public/do/PRAMain
and (ii) David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John

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Pezzullo, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
Dated: August 16, 2022.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2022–17980 Filed 8–19–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–127, OMB Control No.
3235–0108]

Submission for OMB Review;
Comment Request; Extension: Rule
14f–1
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
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget this
request for extension of the previously
approved collection of information.
Under Exchange Act Rule 14f–1 (17
CFR 240.14f–1), if a person or persons
have acquired securities of an issuer in
a transaction subject to Sections 13(d) or
14(d) of the Exchange Act, and changes
a majority of the directors of the issuer
otherwise than at a meeting of security
holders, then the issuer must file with
the Commission and transmit to security
holders information related to the
change in directors within 10 days prior
to the date the new majority takes office
as directors. We estimate that it takes
approximately 18 burden hours to
provide the information required under
Rule 14f–1 and that the information is
filed by approximately 30 respondents
for a total annual burden of 540 hours
(18 hours per response x 30 responses).
An agency may conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a currently valid control
number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice by September 21, 2022 to (i)

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Federal Register / Vol. 87, No. 161 / Monday, August 22, 2022 / Notices
www.reginfo.gov/public/do/PRAMain
and (ii) David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
Dated: August 16, 2022.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2022–17979 Filed 8–19–22; 8:45 am]
BILLING CODE 8011–01–P

SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95503; File No. SR–LCH
SA–2022–004]

Self-Regulatory Organizations; LCH
SA; Order Approving Proposed Rule
Change Relating to the Clearing of
Markit iTraxx® Australia Indices and
the Associated Single-Name
Constituents and Remediation of WWR
Margin Instability
August 16, 2022.

I. Introduction
On June 30, 2022, Banque Centrale de
Compensation, which conducts
business under the name LCH SA (‘‘LCH
SA’’), filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend its the
Methodology Services Reference Guide:
Credit Default Swap (‘‘CDS’’) Margin
Framework (‘‘CDSClear Risk
Methodology’’) and its CDS Clearing
Supplement (the ‘‘Clearing
Supplement’’) to permit the clearing of
Markit iTraxx® Australia indices and
the associated single-name constituents.
The proposed rule change was
published for comment in the Federal
Register on July 13, 2022.3 The
Commission did not receive comments
regarding the proposed rule change. For
the reasons discussed below, the
Commission is approving the proposed
rule change.

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1 15

U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Self-Regulatory Organizations; LCH SA; Notice
of Filing of Proposed Rule Change Relating to the
Clearing of Markit iTraxx® Australia Indices and
the Associated Single Name Constituents and
Remediation of WWR Margin Instability; Exchange
Act Release No. 34–95207 (July 7, 2022); 87 FR
41788 (July 13, 2022) (File No. SR–LCH SA–2022–
004) (‘‘Notice’’).
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II. Description of the Proposed Rule
Change
LCH SA is proposing to amend its
CDSClear Risk methodology and its
Clearing Supplement to allow LCH SA
to clear Markit iTraxx® Australia
indices and the associated single-name
constituents. The proposal would apply
LCH SAs’ current risk management
processes to the management of risks
posed by such products. Additionally,
LCH SA proposes changes to its rules to
remediate the recommendation of an
independent model validation regarding
the wrong-way risk (‘‘WWR’’ or ‘‘WrongWay Risk’’) margin instability.4
A. Amendments to the Clearing
Supplement
The proposed rule change would
amend the Clearing Supplement in
order to include the relevant provisions
to allow the clearing of the new Markit
iTraxx® Australia indices and the
associated single-name constituents.
The proposed rule change would amend
Part B of the Clearing Supplement,
Section 1.2 (Terms defined in the CDS
Clearing Supplement) to include a new
sub-paragraph (a) to the definition of an
‘‘Index Cleared Transaction
Confirmation’’ in order to make a
reference to the form of confirmation
which incorporates the iTraxx® Asia/
Pacific Untranched Standard Terms
Supplement. As a consequence, the subparagraphs (a), (b), (c), and (d) have
been re-lettered as (b), (c), (d), and (e),
respectively.
Further, Section 2.2 (Index Cleared
Transaction Confirmation) of Part B of
the Clearing Supplement would be
amended to make appropriate references
to any Index Cleared Transaction that is
a Markit iTraxx® Australia Index in
paragraphs (a)(i), (b)(i), (c)(i) and (f)(i).
B. Proposed Amendments to the
CDSClear Risk Framework
The proposed rule change would
amend Section 2.1.1.1 (Interest Rate
Curve) of the CDSClear Risk
Methodology by removing the specific
interest rate curve name used with the
International Swaps and Derivatives
Association, Inc. (ISDA) standard model
pricer (used as a converter between
upfront cash and quoted spread in basis
points, as described on
www.cdsmodel.com). The proposal
would instead refer to the ISDA website
such that when the standard model
moves to using new benchmark interest
4 The description that follows is substantially
excerpted from the Notice. Capitalized terms not
otherwise defined herein have the meanings
assigned to them in the LCH SA CDSClear Risk
methodology, CDS Clearing Supplement or LCH SA
rules, as applicable.

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rates instead of LIBOR (such as the
Secured Overnight Financing Rate and
the Sterling Overnight Index Average)
(collectively, the ‘‘Risk Free Rates’’), the
CDSClear Risk Methodology will
continue to refer to current information
without risking becoming outdated.
For clarity, the proposal would
remove ‘‘through a CDS index’’ under
the provisions of Section 3.2 (Selfreferencing margin risk) because the
Self-Referencing Margin would apply as
soon as a clearing member sells
protection on itself regardless of the
financial instrument used.
The proposed rule change would also
add iTraxx® Australia to the list of
indices on which index basis packages
can be cleared under Section 3.4.5
(Portfolio Margining).
Because there are financial singlename constituents in the iTraxx®
Australia index family, LCH SA
proposes to subject positions on this
index to a wrong-way risk margin
requirement, which aims at capturing
the potential contagion effect off the
default of a clearing member (that is a
financial institution) on instruments
with open positions in the defaulter’s
portfolio (‘‘Wrong Way Risk’’ or
‘‘WWR’’). Specifically, the application
of wrong-way risk margin is designed to
address the risk that Australian
financials credit spreads may widen
following the default of a clearing
member to an extent that goes beyond
the spread move already covered by the
spread margin. Because of this
requirement, coupled with the need to
address a recommendation raised by the
independent risk model validation on
the instability of the Wrong Way Risk
margin component, the proposal would
amend the provisions under Section 3.8
of the CDSClear Risk Methodology
about the Wrong Way Risk margin to
introduce the following updates:
—the introduction of the shocks applied
to Australian entities in Section
3.8.1.1 (Spread parallel moves),
alongside the shocks applied to
existing products.
—a generalization of the calculation to
all indices under Section 3.8.1.4
(Index Shocks) instead of specifically
referring to Senior Financial or its
parent index Main as is currently the
case in Section 3.8.1.3.
—a description of the way the shocks on
indices are defined in Section 3.8.1.4
(Index Shocks) as being derived
directly from the shocks applied on
constituents as a spread and CS01
weighted average.5
5 The new definition would apply to iTraxx®
Australia as well as other indices containing

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