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Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices
Minor drafting amendments would be made in paragraph 2.2 to correct typographical errors and use of defined terms.
Paragraph 3.6 would be amended to include investigation of the before Eligible Complaint for drafting clarity.
A drafting improvement would be made in paragraph 4.1 to clarify that acknowledgment of the complaint by the Clearing House must be made promptly, and in any case within 5
Business Days of receipt.
New paragraph 4.2 would be added to allow the Clearing House to refer complaints to another recognized body or authorized person where they consider that such entity is entirely or partly responsible for the subject matter of the complaint. For example, a complaint might better be administered by an exchange for which the Clearing House clears. New paragraph 4.3 would be added to set out the process whereby the Clearing House would be able to refer such a complaint. The amendments are intended to clarify existing procedures, and avoid a situation where the Clearing House would be forced to address a duplicative complaint or a complaint better handled by another entity.
Paragraph 4.4 would be amended to correct minor typographical errors.
The amendments to paragraph 4.5
would clarify that the Investigator must be an individual who has no personal interest or involvement in the matter of the Eligible Complaint. The amendments to that paragraph would also make typographical corrections and similar drafting improvements.
Paragraph 4.7 would be amended to make clear that the Investigator would not be required to disclose any information about the Complainants identity when drafting their report of the Eligible Complaint. This paragraph would also be amended to correct minor typographical errors and to update cross-references.
Paragraph 4.8 would be amended to include delivery disputes and appeals in the list of potential ongoing matters that could warrant delay in the consideration of an Eligible Complaint.
A similar change would also be made in paragraph 4.12. Certain typographical errors would also be corrected.
Paragraph 4.11 would be amended to clarify that where the Clearing House objects to the referral of a complaint to the Commissioner under specified circumstances such that the Clearing House can conclude its own investigation, it must submit to the Commissioner the reasons for that determination. Several cross-references in the paragraph would also be updated.

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Paragraph 4.12 would be amended to expand the list of ongoing matters that would justify delay in the Commissioners consideration of an Eligible Complaint to be consistent with the list at paragraph 4.8, and also reference other processes under Part 10
of the Rules.
Paragraph 4.14 would be amended with minor non-substantive drafting improvements.
Paragraph 5 would be amended to clarify that the Investigator recommends rather than takes remedial action himself.
Paragraph 6.3 would be amended to add appeal process to the list of dispute resolution procedures that a Complainant cannot use if it requires the referral of any Eligible Complaint to the Commissioner pursuant to the Complaint Resolution Procedures.
Reference to mediation has also been deleted as unnecessary in light of the other listed types of dispute resolution.
Paragraph 7.2 would be amended to clarify that the Commissioner does not have to continue investigating a complaint if the complaint is not an Eligible Complaint. Paragraph 7.3 would be amended to make clear that the Commissioner would only be required to produce a final response where the complaint is an Eligible Complaint.
Paragraph 7.6 would be amended to ensure that the Commissioner has access to all relevant personnel including directors, officers and other persons to whom functions have been outsourced that may be needed for the purposes of the Eligible Complaint.
Paragraph 7.8 would be amended to obligate the Clearing House to inform the Complainant of an alternative Commissioner, when one is appointed, within five Business Days of the date of appointment.
Paragraph 8.1 would be amended to state explicitly that the Clearing House is required to consider the Commissioners report and recommendations, in addition to informing the Commissioner of any proposed steps it would take in response to the report and recommendations. Certain other nonsubstantive drafting clarifications would be made as well.
Paragraphs 8.2 and 8.3 would be amended to correct typographical errors.
Paragraph 11 would be amended to include the Investigator as a person subject to the confidentiality obligations with respect to the complaint, and make certain drafting clarifications.

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r. Amendments to CDS Procedures Relating to List of Eligible Single Name Reference Entities Paragraph 11.4 would be amended such that the Clearing House be required to update certain relevant information relating to CDS Contracts on its website after making certain updates relating to Permitted Single Name Fixed Rates and Eligible Single Name Reference Entities instead of giving notice by Circular of such actions.
s. Amendments to CDS Procedures To Allow Clearing Members To Nominate Affiliates Paragraph 4.4f of the CDS
Procedures would be amended to clarify that CDS Clearing Members could designate an Affiliate that is also a CDS
Clearing Member to accept CDS
Contracts in lieu of it for CDS Contracts arising as a result of the existing CDS
end-of-day pricing process pursuant to Rule 401axi.
A similar same change would be made at paragraph 11.5, to allow designation of an Affiliate to accept transactions arising out of the existing auction process to be used in the case of self-referencing CDS transactions.
This reflects existing practice for CDS
Clearing Members, as documented in certain arrangements between the Clearing House and certain CDS
Clearing Members allowing this to take place, but was unintentionally omitted from the CDS Procedures.
t. Clarifications to CDS Clearing Member Sign Off of Weekly Cycles It is proposed that new paragraph 3.5
be added to the CDS Procedures to require CDS Clearing Members to provide sign off via email on weekly cycles by the time specified by the Clearing House. This change would document existing operational processes.
u. Adjustments to Clearing Member Capital Requirements It is proposed that paragraph 3.5a of the Membership Procedures would be amended to lower, from 50% to 25%, the portion of a Clearing Members Capital requirement that may be covered by subordinated loans before the Clearing House would require a written undertaking from the Clearing Member to not repay subordinated loans without the consent of the Clearing House. This change would align the Clearing Member capital requirement more closely with Basel III requirements. The Basel II standard for tier 2
instruments was set at 50% of total capital, i.e., Tier 2 capital including
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