Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Extension of Review Period of Advance Notice To Amend and Restate the Second Amended and Restated Cross-Margining Agreement Between FICC and CME and Amend Related GSD Rules

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104486; File No. SR-FICC-2025-801]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing and Extension of Review Period of Advance Notice To Amend and Restate the Second Amended and Restated Cross-Margining Agreement Between FICC and CME and Amend Related GSD Rules</SUBJECT> <DATE>December 22, 2025.</DATE> Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the Payment, Clearing, and Settlement Supervision Act of 2010 (“Clearing Supervision Act”)  <SU>1</SU> <FTREF/> and Rule 19b-4(n)(1)(i) under the Securities Exchange Act of 1934 (“Exchange Act”), <SU>2</SU> <FTREF/> notice is hereby given that on December 12, 2025, Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) the advance notice SR-FICC-2025-801 (“Advance Notice”) as described in Items I, II and III below, which Items have been prepared by the clearing agency. <SU>3</SU> <FTREF/> On December 19, 2025, FICC filed Partial Amendment No. 1 to the Advance Notice to make certain changes to the narrative description of the filing and exhibits provided by FICC. <SU>4</SU> <FTREF/> The Commission is publishing this notice to solicit comments on the Advance Notice, as modified by Partial Amendment No. 1 (hereafter “Advance Notice”), from interested persons and to extend the review period of the advance notice. <FTNT> <SU>1</SU>  12 U.S.C. 5465(e)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4(n)(1)(i). </FTNT> <FTNT> <SU>3</SU>  On December 12, 2025, FICC filed this Advance Notice as a proposed rule change (SR-FICC-2025-025) with the Commission pursuant to Section 19(b)(1) of the Exchange Act, 15 U.S.C. 78s(b)(1), and Rule 19b-4 thereunder, 17 CFR 240.19b-4. A copy of the proposed rule change is <E T="03">available at www.dtcc.com/legal/sec-rule-filings.</E> </FTNT> <FTNT> <SU>4</SU>  Partial Amendment No. 1 makes clarifications and corrections to the narrative description of the Advance Notice and Exhibit 5A of the filing. Specifically, the Amendment corrects the narrative description of a proposed change to the GSD Rules to accurately reflect the change, as it appears in Exhibit 5A. The Amendment also modifies Exhibit 5A to correct to correct a typographical error and mismarked rule text as compared to the currently effective GSD Rules. These clarifications and corrections have been incorporated, as appropriate, into the description of the Advance Notice in Item II below. </FTNT> <HD SOURCE="HD1">I. Clearing Agency's Statement of the Terms of Substance of the Advance Notice</HD> This Advance Notice consists of proposed rule changes related its cross-margining arrangement (the “Cross-Margining Arrangement”) with the Chicago Mercantile Exchange Inc. (“CME”, and collectively with FICC, the “Clearing Organizations” or “Parties”). The proposed rule changes consist of (i) a proposed Third Amended and Restated Cross-Margining Agreement (the “Third A&R Agreement”) between FICC and CME, which would replace the Second Amended and Restated Cross-Margining Agreement between the Parties (the “Second A&R Agreement”) in its entirety and would be incorporated into the FICC Government Securities Division (“GSD”) Rulebook (“GSD Rules” or “Rules”), and (ii) a number of related rule changes to the GSD Rules. Together, the proposed changes would extend the availability of the Cross-Margining Arrangement to positions cleared and carried for customers by a dually registered broker-dealer (“BD”) and futures commission merchant (“FCM”) that is a common member of FICC and CME (an “Eligible BD-FCM”). <SU>5</SU> <FTREF/> <FTNT> <SU>5</SU>  The Commission recently approved FICC's proposed rule change to enter into the Second Amended and Restated Cross-Margining Agreement between FICC and CME. <E T="03">See</E> Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change to Amend and Restate the Cross-Margining Agreement between FICC and CME, 90 FR 31043 (July 11, 2025). The Second A&R Agreement has thus been incorporated in the GSD Rules <E T="03">available at www.dtcc.com/legal/rules-and-procedures.</E> Unless otherwise specified, capitalized terms not defined herein shall have the meanings ascribed to them in the GSD Rules. </FTNT> <HD SOURCE="HD1">II. Clearing Agency's Statement of the Purpose of, and Statutory Basis for, the Advance Notice</HD> In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the Advance Notice and discussed any comments it received on the Advance Notice. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A and B below, of the most significant aspects of such statements. <HD SOURCE="HD2">(A) Clearing Agency's Statement on Comments on the Advance Notice Received From Members, Participants, or Others</HD> FICC has not received or solicited any written comments relating to this proposal. If any written comments are received, they will be publicly filed as an Exhibit 2 to this filing, as required by Form 19b-4 and the General Instructions thereto. Persons submitting comments are cautioned that, according to Section IV (Solicitation of Comments) of the Exhibit 1A in the General Instructions to Form 19b-4, the Commission does not edit personal identifying information from comment submissions. Commenters should submit only information that they wish to make available publicly, including their name, email address, and any other identifying information. All prospective commenters should follow the Commission's instructions on how to submit comments, <E T="03">available at www.sec.gov/rules-regulations/how-submit-comment.</E> General questions regarding the rule filing process or logistical questions regarding this filing should be directed to the Main Office of the Commission's Division of Trading and Markets at <E T="03">tradingandmarkets@sec.gov</E> or 202-551-5777. FICC reserves the right not to respond to any comments received. <HD SOURCE="HD2">(B) Advance Notice Filed Pursuant to Section 806(e) of the Clearing Supervision Act</HD> Currently, the Cross-Margining Arrangement allows FICC and CME to recognize for margin purposes the offsetting risk of certain positions in futures on U.S. Treasury securities and other interest rate futures and Treasury market transactions (“Eligible Positions”) maintained by a member of both Clearing Organizations (a “Joint Clearing Member”) for itself or certain eligible affiliates (an “Eligible Affiliate”), or by affiliated members of CME and FICC (each, a “Cross-Margining Affiliate,” and each Joint Clearing Member and each Cross-Margining Affiliate, a “Cross-Margining Participant”), at the two Clearing Organizations in circumstances when the Clearing Organizations can look to all of those positions (and all associated margin) for performance of the Joint Clearing Member's or a pair of Cross-Margining Affiliates' obligations (the “Proprietary Cross-Margining Arrangement”). In particular, the Proprietary Cross-Margining Arrangement allows the Clearing Organizations to consider the net risk of a Joint Clearing Member's and its Eligible Affiliates' Eligible Positions or a pair of Cross-Margining Affiliates' Eligible Positions at FICC and CME when setting margin requirements for such positions. <SU>6</SU> <FTREF/> Any resulting margin reductions create capital efficiencies for the Cross-Margining Participants and their Eligible Affiliates and incentivize them to maintain or carry portfolios that present lower overall risk. <FTNT> <SU>6</SU>   <E T="03">See</E> Section 4 of the Second A&R Agreement, <E T="03">supra</E> note 3. </FTNT> FICC and CME have submitted to the Securities and Exchange Commission (the “Commission”) and the Commodity Futures Trading Commission (the “CFTC”) petitions for exemptive relief from certain provisions of the Commodity Exchange Act (“CEA”) and Exchange Act that would enable FICC and CME to make cross-margining available to customers (other than an Eligible Affiliate) of an Eligible BD-FCM (“Cross-Margining Customers”). <SU>7</SU> <FTREF/> The proposed rule changes aim to set forth a customer cross-margining arrangement that is consistent with the descriptions in the Petitions and the requirements of the Proposed Orders (the “Customer Cross-Margining Arrangement”). The Customer Cross-Margining Arrangement would allow Cross-Margining Customers to benefit from the margin reductions that are currently only available to Cross-Margining Participants and their Eligible Affiliates under the Proprietary Cross-Margining Arrangement. As a result, it would facilitate access to clearing for indirect participants, promote the maintenance of more balanced portfolios that present lower risk, and enhance liquidity in, and otherwise promote the resilience and robustness of, the Treasury market. <FTNT> <SU>7</SU>   <E T="03">See</E> Letter from the Fixed Income Clearing Corporation and Chicago Mercantile Exchange Inc. to Vanessa Countryman dated as of December 11, 2025 and filed as Confidential Exhibit 3B (the “ <E T="03">SEC Petition</E> ”) and Letter from the Fixed Income Clearing Corporation and Chicago Mercantile Exchange Inc. to Christopher J. Kirkpatrick dated as of May 14, 2025, and filed as Confidential Exhibit 3C (the “ <E T="03">CFTC Petition</E> ”, and collective with the <E T="03">SEC Petition,</E> the “ <E T="03">Petitions</E> ”, and the proposed Commission and CFTC orders as described in the Petitions, the “ <E T="03">Proposed Orders</E> ”). </FTNT> The Third A&R Agreement would effectuate the Customer Cross-Margining Arrangeme ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 118k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━