    [Federal Register Volume 91, Number 58 (Thursday, March 26, 2026)]
    [Notices]
    [Pages 14731-14735]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 2026-05851]

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    SECURITIES AND EXCHANGE COMMISSION

    [Release No. 34-105066; File No. SR-LCH SA-2026-002]

    Self-Regulatory Organizations; LCH SA; Notice of Filing of
    Proposed Rule Change Relating to the CDS Clearing Rules (AMF
    Outsourcing; EMIR SITG; EU CCPRR)

    March 23, 2026.
        Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
    (``Act''),\1\ and Rule 19b-4,\2\ notice is hereby given that on March
    10, 2026, Banque Centrale de Compensation, which conducts business
    under the name LCH SA (``LCH SA''), filed with the Securities and
    Exchange Commission (``Commission'') the proposed rule change, as
    described in Items I, II and III below, which Items have been prepared
    by the clearing agency. The Commission is publishing this notice to
    solicit comments on the proposed rule change from interested persons.
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        \1\ 15 U.S.C. 78s(b)(1).
        \2\ 17 CFR 240.19b-4.
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    I. Clearing Agency's Statement of the Terms of Substance of the
    Proposed Rule Change

        LCH SA is proposing to amend its CDS Clearing Rule Book (``Rule
    Book'') to: (i) modify the conditions under which a Clearing Member may
    outsource its clearing operations pursuant to regulations of the French
    Financial Markets Authority, the Autorit[eacute] des March[eacute]s
    Financiers (``AMF''); (ii) amend the Rule Book's definition of LCH SA
    Contribution in order to comply with relevant requirements under
    Article 45(4) of Regulation (EU) No 648/2012 of the European Parliament
    and of the Council of 4 July 2012 on OTC derivatives, central
    counterparties and trade repositories (``EMIR'') \3\ and Article 35 of

    [[Page 14732]]

    the European Commission Delegated Regulation (EU) No 153/2013; \4\ and
    (iii) make changes necessary to implement certain provisions of
    Regulation (EU) 2021/23 of the European Parliament and of the Council
    of 16 December 2020 (``CCP Recovery and Resolution Regulation'') \5\
    that are applicable to central counterparties (``CCPs'') authorized
    under EMIR (the ``Proposed Rule Change'').\6\
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        \3\ The latest consolidated version can be found at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02012R0648-20250117&qid=1763483367377.
        \4\ The latest consolidated version can be found at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02013R0153-20240307&qid=1763483974839.
        \5\ The latest consolidated version can be found at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0023.
        \6\ All capitalized terms not defined herein have the same
    meaning as in the Rule Book in its version as available on LCH SA's
    website: https://www.lseg.com/en/post-trade/clearing/clearing-resources/rulebooks/lch-sa#t-over-the-counter-credit-default-swaps.
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        The text of the Proposed Rule Change has been annexed as Exhibit
    5.\7\
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        \7\ All capitalized terms not defined herein have the same
    definition as in the Rule Book or Procedures, as applicable.
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        The implementation of the Proposed Rule Change will be contingent
    on LCH SA's receipt of all necessary regulatory approvals.\8\
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        \8\ The Proposed Rule Change was already approved by the French
    competent authorities/AMF D[eacute]cision relative [agrave] diverses
    modifications des r[egrave]gles de fonctionnement de la chambre de
    compensation LCH SA pour les services RepoClear, CDSClear et
    DigitalAssetClear [verbar] AMF/decision-et-regles.pdf.
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    II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
    for, the Proposed Rule Change

        In its filing with the Commission, LCH SA included statements
    concerning the purpose of and basis for the Risk Policies and discussed
    any comments it received on the Risk Policies. The text of these
    statements may be examined at the places specified in Item IV below.
    LCH SA has prepared summaries, set forth in sections A, B, and C below,
    of the most significant aspects of such statements.

    A. Self-Regulatory Organization's Statement of the Purpose of, and
    Statutory Basis for, the Proposed Rule Change

    1. Purpose
        LCH SA is proposing to amend Articles 2.2.5.2 and 2.2.5.3 of the
    Rule Book and incorporate new Articles 2.2.5.4 and 2.2.5.5 to modify
    the requirements and conditions under which a Clearing Member may
    outsource its clearing operations in order to comply with new
    requirements to which LCH SA is subject pursuant to Article 541-21 of
    the general regulations of the AMF,\9\ pursuant to which an outsourcing
    of clearing operations to a third party entity may be permitted subject
    to requirements to be met by the relevant Clearing Member and its
    subcontractor.
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        \9\ The latest version can be found at: https://www.amf-france.org/en/eli/fr/aai/amf/rg/article/541-21/20210923/notes.
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        Further, LCH SA is proposing to amend the Rule Book's definition of
    LCH SA Contribution, which is an amount contributed by a Clearing
    Member that LCH SA may use to offset Damage incurred by LCH SA as a
    result of a declaration of an Event of Default by a Clearing Member, in
    order to remove the cap on this amount and also make an express
    reference to the amount calculated in accordance with EMIR.
        LCH SA is also proposing to amend the Rule Book to comply with
    certain requirements of the CCP Recovery and Resolution Regulation. For
    this purpose, LCH SA is proposing to create a new Chapter 4 (Recovery
    and Resolution) in Title I (General Provisions & Legal Framework) of
    the Rule Book and to add new related defined terms, as further
    described below.

    A. Proposed Revisions to the Rule Book

    i. Outsourcing by Clearing Members
        LCH SA proposes to amend Article 2.2.5.2 of the Rule Book to
    provide a definition of ``outsourcing of clearing operations'' and
    specify that outsourcing providers can be other Clearing Members, a
    legal entity controlled by or controlling the Clearing Member, or any
    other third-party legal entity, in view of applying certain outsourcing
    conditions to a provider that is not a Clearing Member.
        LCH SA proposes to amend Article 2.2.5.3 of the Rule Book to
    provide that: (i) the outsourcing of clearing operations is subject to
    the prior authorization of LCH SA; (ii) such authorization may be
    denied or withdrawn if the conditions of or a failure in such
    arrangement could be such as to threaten or no longer ensure the proper
    compliance by the Clearing Member with its obligations pursuant to the
    Clearing Rules; (iii) the authorization request must provide details as
    to the clearing activities to be outsourced and the means of control
    and supervision available to the Clearing Member; and (iv) if the
    outsourcing provider is not a Clearing Member, the Clearing Member must
    ensure that the relevant risks have been assessed, a written agreement
    has been entered into with respect to the outsourcing, and a formalized
    policy for control over the third-party outsourcing provider and an
    outsourcing register have been put in place.
        LCH SA proposes a new Article 2.2.5.4 which will provide that a
    Clearing Member outsourcing all or part of its clearing operations
    shall not be relieved of its liabilities or responsibilities as a
    Clearing Member with respect to the outsourced activities or modify its
    relationship with, or obligations to, Clients.
        LCH SA proposes a new Article 2.2.5.5, which will provide that, in
    connection with applying for a prior authorization for the outsourcing
    arrangement, the Clearing Member and its outsourcing provider must sign
    a letter of undertakings pursuant to the terms of a template provided
    by LCH SA and that Clearing Member must ensure that the outsourcing
    provider has formally agreed that the AMF, the Autorit[eacute] de
    Contr[ocirc]le Prudentiel et de R[eacute]solution, or any other
    equivalent foreign authority as that term is defined under the French
    Monetary and Financial Code, have access, including on site, to
    information regarding outsourced activities as necessary for the
    fulfilment of their mission. The proposed new Article 2.2.5.5 will also
    provide that where the outsourcing provider is not a Clearing Member,
    the Clearing Member shall ensure that the outsourcing service provider:
    (i) has the capacity, authorization, systems and control framework,
    expertise, and back-up mechanisms to provide the outsourcing services;
    (ii) commits to service quality comparable with the normal functioning
    of the service; (iii) protects the confidentiality of information
    pertaining to the Clearing Member, its clients, and LCH SA; (iv)
    informs the Clearing Member regarding any event that may have material
    impact on the service provider's capacity to perform the outsourced
    services and does not substantially modify the service without the
    Clearing Member's prior approval; (v) provides the Clearing Member with
    effective access to data related to the outsourced activities and to
    its business premisses and is able to provide access to LCH SA as would
    apply to the Clearing Member under the CDS Clearing Documentation; and
    (vi) complies with procedures set out by the Clearing Member to monitor
    the provision of outsourced services.
    ii. LCH SA Contribution Amount
        LCH SA proposes to amend the definition of the term ``LCH SA
    Contribution'' from a fixed amount of Euro 20 million to an amount
    determined by LCH SA from time to time in accordance with the
    requirements relating to the calculation

    [[Page 14733]]

    and the setting aside of dedicated own resources under Article 45(4) of
    EMIR and Article 35 of the European Commission Delegated Regulation
    (EU) No. 153/2013 with regard to regulatory technical standards on
    requirements for central counterparties, which shall not be less than a
    floor amount of Euro 20 million. The LCH SA Contribution is an amount
    contributed by a LCH SA that LCH SA may use to offset Damage incurred
    by LCH SA as a result of a declaration of an Event of Default by a
    Clearing Member.
    iii. Recovery and Resolution Related Amendments
        First, LCH SA is proposing to add new definitions used in the new
    Articles of the Rule Book described below. The new defined term `Non-
    Default Event', which is proposed to be used in the new Article
    1.4.2.1, will be defined in accordance with article 2(9) of the CCP
    Recovery and Resolution Regulation as a scenario in which losses are
    incurred by LCH SA for any reason other than an Event of Default,
    including but not limited to, business, custody, investment, legal or
    operational failures or fraud, including failures resulting from cyber-
    attacks. LCH SA proposes to specify that the `Resolution Authority' is
    the Autorit[eacute] de contr[ocirc]le prudentiel et de
    r[eacute]solution and any successor organization, being the competent
    resolution authority for LCH SA under French law in accordance with
    Article L. 612-1 of the French Monetary and Financial Code. The term
    `Resolution Measure', which is proposed to be used in the new Article
    1.4.2.7, is intended to be defined as the application of any resolution
    tool by the Resolution Authority as set out in Articles 27 (1), 29, 30,
    31, 33, 40 and 41 of CCP Recovery and Resolution Regulation or the
    exercise by the Resolution Authority of a resolution power pursuant to
    Articles 48 to 58 of CCP Recovery and Resolution Regulation. Finally,
    LCH SA proposes to make some editorial amendments consisting in
    updating: (i) the definition of `website' to provide the updated link
    to the website of LSEG; and (ii) the automatic cross-reference included
    in the definitions of `Weekly Backloading Start Day' and `Weekly
    Backloading Novation Day'.
        With respect to the new Chapter 4 (Recovery and Resolution) in
    Title I (General Provisions & Legal Framework) of the Rule Book, LCH SA
    proposes to create a new Article 1.4.1.1 of the Rule Book which
    provides, pursuant to Article 9 of the CCP Recovery and Resolution
    Regulation, that LCH SA establishes and maintains a recovery plan. In
    addition, LCH SA proposes to move to this new Article 1.4.1.1 the
    content of the former Section 2.4.4 of the Rule Book, which specifies
    the conditions under which LCH SA may deviate from its recovery plan
    measures and that in such case LCH SA shall notify the Competent
    Authority.
        LCH SA proposes to create a new Article 1.4.2.1 of the Rule Book
    which describes the conditions under which the Resolution Authority may
    require Non-Defaulting Clearing Members to make a contribution in cash
    to LCH SA of an amount determined by the Resolution Authority in
    proportion to its Contribution and up to twice the amount equivalent to
    their Contribution. This contribution in cash may be applied to
    address: (i) an Event of Default, in which case the amount of the
    contribution shall refer to the Contribution of the Clearing Member; or
    (ii) a Non-Default Event, in which case the amount of the contribution
    shall refer to the sum of the Contribution of the Clearing Member and
    any contribution to the default funds of LCH SA relating to clearing
    services other than the CDS Clearing Service. Non-Defaulting Clearing
    Members can be requested by the Resolution Authority to make a
    contribution in cash even though all contractual obligations requiring
    cash contributions from them have not been exhausted. Under Article 26
    of the CCP Recovery and Resolution Regulation, this contribution in
    cash can be applied on the basis of a provisional valuation (the
    ``Provisional Valuation''). In this case, the Resolution Authority
    shall ensure that a definitive valuation is carried out as soon as
    possible (the ``Definitive Valuation''). The new Article 1.4.2.1 of the
    Rule Book will provide that the Resolution Authority may require LCH SA
    to reimburse to Clearing Members the possible excess amount of the
    contribution in cash arising after the calculation of the Definitive
    Valuation. Finally, where a Non-Defaulting Clearing Member would not
    pay the required contribution in cash, LCH SA could be required by the
    Resolution Authority to notify the occurrence of an Event of Default to
    that Non-Defaulting Clearing Member and use its Initial Margin and
    Contribution up to the required amount of the contribution in cash.
        LCH SA proposes to create a new Article 1.4.2.2 of the Rule Book to
    provide the conditions under which the Resolution Authority can reduce
    LCH SA's payment obligations to Non-Defaulting Clearing Members where
    such obligations arise from gains due in accordance with LCH SA's
    processes for paying Variation Margin, NPV Amount or a payment that has
    the same economic effect (the ``VM Haircut Tool''). The Resolution
    Authority shall calculate any such reduction using an equitable
    allocation mechanism in accordance with the CCP Recovery and Resolution
    Regulation which shall be communicated to Clearing Members and the
    total net gains to be reduced shall be proportional to the amounts due
    from LCH SA. Clearing Members shall themselves inform their Clients of
    the application of the VM Haircut Tool and its consequences. LCH SA
    proposes to expressly provide in this new Article 1.4.2.2 of the Rule
    Book that the application of the VM Haircut Tool shall take effect and
    be immediately binding on LCH SA and affected Clearing Members from the
    moment at which the Resolution Authority takes such resolution action.
    Non-Defaulting Clearing Members would not have any claim against LCH SA
    or its successor entity arising from the reduction in payment
    obligations, save in the event the Resolution Authority requires LCH SA
    to reimburse Clearing Members partly when such Resolution Authority
    finds that the level of reduction based on the Provisional Valuation
    exceeds the level of reduction required based on the Definitive
    Valuation. Finally, LCH SA proposes explicitly to specify in the same
    new Article 1.4.2.2 of the Rule Book that any residual outstanding
    payable amount that would not be subject to the VM Haircut Tool will
    remain owed to the Non-Defaulting Clearing Member.
        LCH SA proposes to create a new Article 1.4.2.3 of the Rule Book to
    indicate that the Resolution Authority may suspend any payment or
    delivery obligations of LCH SA if it is placed under resolution from
    the publication of the notice provided for in Article 72 of the CCP
    Recovery and Resolution Regulation (the ``Notice'') until the end of
    the working day following that publication. Any payment or delivery
    that would have been due during this suspension period will be due
    immediately upon expiry of the same suspension period.
        LCH SA is proposing to create a new Article 1.4.2.4 of the Rule
    Book which would provide that the Resolution Authority may suspend the
    termination rights of any party to a contract with LCH SA if LCH SA is
    placed under resolution from the publication of the Notice until the
    end of the working day which follows that publication, provided that
    the payment and delivery obligations and the provision of Collateral
    continue to be performed.
        LCH SA proposes to create a new Article 1.4.2.5 of the Rule Book to

    [[Page 14734]]

    indicate that the Resolution Authority has the power to reduce,
    including to reduce to zero, the principal amount of or outstanding
    amount due in respect of debt instruments or other unsecured
    liabilities of LCH SA if it is placed under resolution.
        LCH SA is proposing to create a new Article 1.4.2.6 of the Rule
    Book to list the following other tools that the Resolution Authority
    may implement under the CCP Recovery and Resolution Regulation,
    individually or in any combination: (i) the position and loss
    allocation tools; (ii) the write-down and conversion tools; (iii) the
    sale of business tool; and (iv) the bridge tool. LCH SA proposes that
    the same new Article 1.4.2.6 of the Rule Book specifies that, prior to
    the application of these tools, the Resolution Authority shall enforce
    any existing and outstanding rights of LCH SA or parties other than
    Clearing Members that would result in the provision of financial
    support to LCH SA.
        LCH SA proposes to create a new Article 1.4.2.7 of the Rule Book
    under which each Clearing Member agrees to be bound by the application
    of any resolution tool by the Resolution Authority as set out in
    articles 27(1), 29, 30, 31, 33, 40 and 41 of CCP Recovery and
    Resolution Regulation or the exercise by the Resolution Authority of a
    resolution power pursuant to articles 48 to 58 of CCP Recovery and
    Resolution Regulation (a ``Resolution Measure'') in respect of its
    assets, rights, obligations and liabilities. Further, each Clearing
    Member would acknowledge that, pursuant to article 54 of CCP Recovery
    and Resolution Regulation, any Resolution Measure taken by the
    Resolution Authority with respect to LCH SA does not constitute an LCH
    Default, provided that the substantive obligations under the contract,
    including payment and delivery obligations, and the provision of
    collateral, continue to be performed.

    B. Technical Amendments

        The amendments to the Rule Book also contain the following
    technical clean-up changes:
        (i) in Article 2.3.3.3 a technical change would be made conforming
    to the proposed amendments to Articles 2.2.5.2 and 2.2.5.3 regarding
    outsourcing by Clearing Members; and (ii) in Articles 4.3.3.1 and
    4.4.3.6 technical changes would be made conforming to the proposed
    amendment to the definition of the term ``LCH SA Contribution.''
    2. Statutory Basis
        LCH SA believes that the Proposed Rule Change is consistent with
    the requirements of Section 17A of the Exchange Act \10\ and the
    regulations thereunder, including the standards under Exchange Act Rule
    17ad-22.\11\ Exchange Act Section 17A(b)(3)(A) \12\ requires, among
    other things, that a clearing agency must have the capacity to be able
    to facilitate the prompt and accurate clearance and settlement of
    securities transactions and derivative agreements, contracts, and
    transactions for which it is responsible, to safeguard securities and
    funds in its custody or control or for which it is responsible, and to
    comply with the Exchange Act and the rules and regulations thereunder.
    By establishing a relevant and compliant framework allowing any
    Clearing Member, when necessary, to outsource any clearing activity in
    order to be more operationally efficient, this will definitely
    contribute to the prompt and accurate clearance of the relevant
    transactions in accordance with the provisions of Exchange Act Section
    17A(b)(3)(A).
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        \10\ 15 U.S.C. 78q-1.
        \11\ 17 CFR 240.17ad-22.
        \12\ 15 U.S.C. 78q-1(b)(3)(A).
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        Rule 17Ad-22(e)(3) requires a covered clearing agency to establish,
    implement, maintain and enforce written policies and procedures
    reasonably designed to maintain a sound risk management framework for
    comprehensively managing legal, credit, liquidity, operational, general
    business, investment, custody, and other risks that arise in or are
    borne by the covered clearing agency. Through the proposed
    implementation of a number of provisions required by the AMF or EU
    regulations (EMIR, CCP and Recovery Resolution . . .), LCH SA is
    definitely trying to maintain a sound risk management framework for the
    CCP and its market participants that is contributing to manage
    regulatory, legal and operational risks which is consistent with the
    requirements of Rule 17Ad-22(e)(3).
        Further, Exchange Act Section 17A(b)(4)(B) provides that a
    registered clearing agency may deny participation to, or condition the
    participation of, any person if such person does not meet such
    standards of financial responsibility, operational capability,
    experience, and competence as are prescribed by the rules of the
    clearing agency.\13\ By specifying that any clearing operations
    partially or fully outsourced externally by the Clearing Member will
    have to be duly authorised by LCH SA and also, by ensuring that such
    Clearing Member would not be discharged of its responsibilities with
    respect to the outsourced activities, the Proposed Rule Change remains
    consistent with the provisions of Exchange Act Section 17A(b)(4)(B)
    especially on the operational capability required for any Clearing
    Agency participant.
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        \13\ 15 U.S.C. 78q-1(b)(4)(B).
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        Exchange Act Rule 17ad-22(e)(4)(i) \14\ provides that a clearing
    agency must establish, implement, maintain, and enforce written
    policies and procedures reasonably designed to, among other things,
    effectively identify, measure, monitor, and manage its credit exposures
    to participants and those arising from its payment, clearing, and
    settlement processes, including by maintaining sufficient financial
    resources to cover its credit exposure to each participant fully with a
    high degree of confidence, including collateral requirements and limits
    to cover the clearing agency's credit exposure to each participant
    family fully.\15\ A covered clearing agency's written policies and
    procedures must also be reasonably designed to manage the covered
    clearing agency's operational risks by identifying the plausible
    sources of operational risk, both internal and external, and mitigating
    their impact through the use of appropriate systems, policies,
    procedures, and controls.\16\ LCH SA believes that the Proposed Rule
    Change is consistent with the provisions of Exchange Act Section 17A
    and Commission regulations thereunder referenced above as the Proposed
    Rule Change would ensure LCH SA's ability to comply with AMF rules
    regarding outsourcing of clearing functions by Clearing Members and to
    implement provisions of the CCP Recovery and Resolution Regulation
    which would strengthen the ability of LCH SA to recover losses from
    Clearing Members incurred by LCH SA resulting from an Event of Default
    and certain Non-Default Events.
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        \14\ 17 CFR 240.17ad-22(e)(4)(i).
        \15\ 17 CFR 240.17ad-22(e)(4)(i).
        \16\ 17 CFR 240.17ad-22(e)(17).
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        The Proposed Rule Change also includes enhancements to the Rule
    Book's definition of LCH SA Contribution and to the Rule Book's
    requirements regarding outsourcing of clearing functions by Clearing
    Members which are consistent with provisions of Exchange Act Rule 17ad-
    22 referenced above with respect to limiting the clearing agency's
    exposure to potential losses from defaults by its participants as well
    as with respect to operational risk management.

    [[Page 14735]]

        LCH SA also believes the Proposed Rule Change is consistent with
    Rule 17ad-22(e)(1),\17\ which requires LCH SA to establish, implement,
    maintain and enforce written policies and procedures reasonably
    designed to provide for a well-founded, clear, transparent, and
    enforceable legal basis for each aspect of its activities in all
    relevant jurisdictions.
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        \17\ 17 CFR 240.17ad-22(e)(1).
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        In addition to being registered as a Clearing Agency with the SEC,
    LCH SA is authorized to offer clearing services in the European Union
    pursuant to rules established under EMIR for CCPs. As a result of the
    new AMF or EU regulations LCH SA, as a CCP authorized under EMIR, is
    required to amend and update its rules to remain in full compliance
    with the adoption of these new Regulations. The Proposed Rule Change
    will ensure LCH SA's rules are consistent with the relevant laws and
    regulations applicable to CCPs authorized under EMIR, including the CCP
    Recovery and Resolution Regulation. LCH SA also believes that the legal
    basis for the Proposed Rule Change is clear and understandable to the
    relevant authorities, participants, and participants' customers as
    proposed, and the public disclosure of the amendments to the Rule Book
    are transparent.
        For all the reasons stated above, LCH SA considers that the
    Proposed Rule Change is consistent with the requirements of Section 17A
    of the Exchange Act \18\ and the regulations thereunder, including the
    standards under Exchange Act Rule 17ad-22.\19\
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        \18\ 15 U.S.C. 78q-1.
        \19\ 17 CFR 240.17ad-22.
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    B. Clearing Agency's Statement on Burden on Competition

        Exchange Act Section 17A(b)(3)(I) requires that the rules of a
    clearing agency not impose any burden on competition not necessary or
    appropriate in furtherance of the purposes of the Exchange Act.\20\ LCH
    SA does not believe that the Proposed Rule Change would impose burdens
    on competition that are not necessary or appropriate in furtherance of
    the purposes of the Exchange Act. The Proposed Rule Change would ensure
    LCH SA's ability to comply with AMF rules regarding outsourcing of
    clearing functions by Clearing Members, EMIR regarding LCH SA's
    Contribution and CCP Recovery and Resolution Regulation regarding the
    implementation of the required changes to the Rule Book, but would not
    significantly affect the ability of Clearing Members or other market
    participants generally to engage in cleared transactions or to access
    LCH SA's clearing services. First, the Proposed Rule Change in respect
    of the outsourcing framework applicable to the clearing activities of a
    Clearing Member and in respect of the implementation of the provisions
    of the CCP Recovery and Resolution Regulation shall apply equally to
    all Clearing Members, irrespective of their membership category hence
    do not permit unfair discrimination among the participants. The new
    outsourcing framework aims to replicate a framework which already
    applies to the banks and investment firms established in the European
    Union, in respect of their banking and investment services activities;
    thus, Clearing Members already apply this regulatory outsourcing
    framework to their outsourced banking and investment services
    activities and will simply need to extend these arrangements to their
    clearing activities. There will be no effect on the open access model
    operated by LCH SA. The Proposed Rule Change in respect of the
    implementation of the provisions of the CCP Recovery and Resolution
    Regulation aim to facilitate the enforcement of resolution cash calls
    and of the reduction of the amount of any gain payable to a non-
    defaulting Clearing Member provided by such regulation and to which LCH
    SA is subject, as any other European central counterparty. Therefore,
    LCH SA does not believe that the Proposed Rule Change would impose a
    burden on competition not necessary or appropriate in furtherance of
    the purposes of the Exchange Act.
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        \20\ 15 U.S.C. 78q-1(b)(3)(I).
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    C. Clearing Agency's Statement on Comments on the Proposed Rule Change
    Received From Members, Participants or Others

        Written comments were not and are not intended to be solicited with
    respect to the Proposed Rule Change and none have been received by LCH
    SA.

    III. Date of Effectiveness of the Proposed Rule Change

        Within 45 days of the date of publication of this notice in the
    Federal Register or within such longer period up to 90 days (i) as the
    Commission may designate if it finds such longer period to be
    appropriate and publishes its reasons for so finding or (ii) as to
    which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove such proposed rule change, or (B)
    institute proceedings to determine whether the proposed rule change
    should be disapproved.P

    IV. Solicitation of Comments

        Interested persons are invited to submit written data, views and
    arguments concerning the foregoing, including whether the proposed rule
    change is consistent with the Act. Comments may be submitted by any of
    the following methods:

    Electronic Comments

         Use the Commission's internet comment form (https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking);
    or
         Send an email to rule-comments@sec.gov. Please include
    file number SR-LCH SA-2026-002 on the subject line.

    Paper Comments

         Send paper comments in triplicate to Secretary, Securities
    and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to file number SR-LCH SA-2026-002. 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 (http://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking). Copies of such
    filing will be available for inspection and copying at the principal
    office of LCH SA and on LCH SA's website at http://www.lch.com/resources/rules-and-regulations/proposed-rule-changes-0.
        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 SR-LCH SA-2026-002 and
    should be submitted on or before April 16, 2026.

        For the Commission, by the Division of Trading and Markets,
    pursuant to delegated authority.\21\
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        \21\ 17 CFR 200.30-3(a)(12).
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    Vanessa A. Countryman,
    Secretary.
    [FR Doc. 2026-05851 Filed 3-25-26; 8:45 am]
    BILLING CODE 8011-01-P