[Federal Register Volume 88, Number 65 (Wednesday, April 5, 2023)]
[Notices]
[Pages 20195-20200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07004]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97225; File No. SR-OCC-2023-003]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Notice of Filing of Proposed Rule Change by The Options Clearing 
Corporation Concerning Clearing Member Cybersecurity Obligations

March 30, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on March 21, 2023, The Options Clearing 
Corporation (``OCC'' or ``Corporation'') filed with the Securities and 
Exchange Commission (``SEC'' or ``Commission'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared primarily by OCC. 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

    The proposed rule change would amend certain provisions in OCC's 
Rules relating to Clearing Member cybersecurity obligations to address 
the occurrence of a cyber-related disruption or intrusion of a Clearing 
Member (``Security Incident''). The proposed changes would (i) require 
a Clearing Member to immediately notify OCC of a Security Incident; 
(ii) memorialize OCC's ability to take actions reasonably necessary to 
mitigate any effects to its operations; and (iii) require such

[[Page 20196]]

Clearing Member to provide a form containing written representations 
addressing the incident and attesting to certain security requirements 
(``Reconnection Attestation'') and an associated checklist describing 
remediation efforts (``Reconnection Checklist'' and together, 
``Reconnection Attestation and Checklist'').
    The proposed changes to OCC's Rules are included as Exhibit 5 to 
File No. SR-OCC-2023-003. Material proposed to be added to the Rules as 
currently in effect is underlined and material proposed to be deleted 
is marked in strikethrough text. All capitalized terms not defined 
herein have the same meaning as set forth in the OCC By-Laws and 
Rules.\3\
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    \3\ OCC's By-Laws and Rules can be found on OCC's public 
website: https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules.
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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, OCC 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. OCC has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

(1) Purpose
Overview
    The proposed rule change would amend certain provisions in the 
Rules relating to Clearing Member cybersecurity obligations to address 
the occurrence of a Security Incident. The proposed changes would (i) 
require a Clearing Member to immediately notify OCC of a Security 
Incident; (ii) memorialize OCC's ability to take actions reasonably 
necessary to mitigate any effects to its operations; and (iii) require 
such Clearing Member to provide a Reconnection Attestation containing 
written representations addressing the incident and attesting to 
certain security requirements and an associated Reconnection Checklist 
describing remediation efforts. As described in more detail below, the 
proposed rule change is designed to help OCC assess and take 
appropriate action to manage the cybersecurity risks that may be 
introduced to OCC's information and data systems due to a Security 
Incident.
    OCC believes it is prudent to implement a standardized approach to 
assess and manage the cybersecurity risks that OCC may face through its 
interconnections to Clearing Members. Cybersecurity incidents pose an 
ongoing risk to OCC, as well as market participants, as an attack on 
OCC can lead to the loss of data or system integrity, unauthorized 
disclosure of sensitive information, or an inability to conduct 
essential clearance and settlement functions. Moreover, as a designated 
systemically important financial market utility (``SIFMU''),\4\ a 
failure or disruption to OCC could increase the risk of significant 
liquidity problems spreading among financial institutions or markets 
and thereby threaten the stability of the financial system in the 
United States. Given its designation as a SIFMU, OCC believes it is 
prudent to enhance its management of Security Incidents so that OCC's 
own information and data systems remain protected against cyberattacks.
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    \4\ OCC was designated as a SIFMU under Title VIII of the Dodd-
Frank Wall Street Reform and Consumer Protection Act of 2010. 12 
U.S.C. 5465(e)(1).
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    The proposed rule change would amend certain provisions in the 
Rules relating to Clearing Member cybersecurity obligations to address 
the occurrence of a Security Incident. Clearing Member cybersecurity 
obligations are currently set out in Rule 219, which addresses 
requirements related to a firm's cybersecurity program. The proposed 
rule change would expand the scope of this Rule to incorporate 
provisions that address the occurrence of a Security Incident, as 
further described below. The current Clearing Member cybersecurity 
obligations in this Rule would remain unchanged.
    The proposed changes would clearly describe Clearing Member 
obligations and OCC rights with respect to a Security Incident. The 
proposal would require Clearing Members to immediately notify OCC of a 
Security Incident. OCC's notification and reporting requirements for 
Clearing Members are currently set forth in various provisions of the 
By-Laws and the Rules and require, among other things, that Clearing 
Members provide OCC with such documents and information as OCC may 
require from time to time.\5\ These existing notification and reporting 
requirements do not directly address Security Incidents. The proposal 
would amend OCC's notification and reporting requirements to adopt a 
specific requirement in the Rules that Clearing Members immediately 
notify OCC of a Security Incident and promptly confirm such notice in 
writing.
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    \5\ See Article V, Section 1, Interpretation and Policy .07 of 
the By-Laws and Rules 201(b), 215, 216, 217(b), 303, 306, 308 and 
310(a)-(c).
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    The proposed changes would also memorialize in the Rules OCC's 
ability to take actions reasonably necessary to mitigate any effects of 
a Security Incident to its operations. OCC's existing right to 
disconnect access, or to modify the scope and specifications of access, 
of a Clearing Member to OCC information and data systems is based in 
the Agreement for OCC Services, which sets forth the terms of various 
services that OCC may provide to Clearing Members.\6\ OCC maintains 
various contracts and forms, including the Agreement for OCC Services, 
that in conjunction with OCC's By-Laws and Rules, establish and govern 
the relationship between OCC and each Clearing Member.\7\ Pursuant to 
the Agreement for OCC Services, OCC may terminate electronic access to 
particular OCC information and data systems, or modify the scope and 
specifications of such access, from time to time. Codifying this 
ability of OCC to take actions reasonably necessary to mitigate any 
effects to its operations in the Rules would centralize relevant 
information pertaining to cybersecurity in the Rules.
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    \6\ See Exchange Act Release No. 34-73577 (Nov. 12, 2014), 79 FR 
68733 (Nov. 18, 2014) (File No. SR-OCC-2014-20).
    \7\ Id.
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    The proposal would further implement a standardized approach to 
evaluate and manage the cybersecurity risks that OCC may face due to a 
Security Incident. The proposal would set out new procedures that would 
require a Clearing Member to submit, upon OCC's request, the 
Reconnection Attestation and Checklist after reporting a Security 
Incident, both as provided by OCC from time to time. The Rule is 
designed to provide OCC with a degree of flexibility in requesting the 
Reconnection Attestation and Checklist to consider circumstances where 
there may be no risk or threat to OCC, such as when a Security Incident 
is contained to a part of a Clearing Member's business with no 
relevance to OCC or its markets. The Reconnection Attestation and 
Checklist are designed to enable OCC to determine whether the risk or 
threat to OCC has been mitigated sufficiently, including whether to 
resume connectivity to a Clearing Member if connectivity was 
disconnected or modified. OCC would detail specific representations and 
information required of Clearing Members in the proposed Reconnection

[[Page 20197]]

Attestation and Checklist, included in Exhibit 3 to File No. SR-OCC-
2023-003. OCC believes an attestation-based format coupled with a 
checklist would be most effective in ascertaining a Clearing Member's 
response to a Security Incident, including whether the Clearing Member 
has appropriate security requirements and carried out suitable 
remediation measures, to determine any potential threats to OCC's 
information and data systems. The forms filter the requested 
information and representations into a standardized format, which would 
better enable OCC to review and identify areas of interest, concern, or 
heightened risk in respect of a Security Incident. Standardizing the 
form and contents of submissions would also improve efficiency for 
Clearing Members and OCC by reducing the potential uncertainty and time 
required to demonstrate an acceptable response to a Security Incident, 
which would facilitate OCC's ability to evaluate the potential risk or 
threat posed by the Security Incident and facilitate the resumption of 
Clearing Member connectivity.
Proposed Rule Changes
    The proposed rule change would amend certain provisions in the 
Rules relating to Clearing Member cybersecurity obligations to address 
the occurrence of a Security Incident. In addition to expanding the 
scope of existing Rules, the proposed changes would (i) require a 
Clearing Member to immediately notify OCC of a Security Incident; (ii) 
memorialize OCC's ability to take actions reasonably necessary to 
mitigate any effects to its operations; and (iii) require such Clearing 
Member to provide a Reconnection Attestation and Checklist.
Amended Cybersecurity Obligations Provisions
    The proposed changes would expand the scope of existing Rule 219 to 
address the occurrence of a Security Incident. Existing Rule 219, 
titled ``Cybersecurity Confirmation,'' currently includes requirements 
related to a firm's cybersecurity program and requires Clearing Members 
and applicants for clearing membership to submit a form, referred to as 
the ``Cybersecurity Confirmation,'' that confirms the existence of a 
cybersecurity program. To broaden the scope, OCC proposes to retitle 
this Rule from ``Cybersecurity Confirmation'' to ``Cybersecurity 
Obligations'' to address Security Incidents and centralize 
cybersecurity-related provisions in one section of the Rules. For 
clarity, OCC also proposes to add a heading to each paragraph in this 
Rule to summarize its content. OCC proposes to add the following 
headings: ``Cybersecurity Confirmation Submission'' to paragraph (a), 
which relates to the submission of the Cybersecurity Confirmation; 
``Representations in the Cybersecurity Confirmation'' to paragraph (b), 
which relates to the representations in the Cybersecurity Confirmation; 
and ``Execution of the Cybersecurity Confirmation'' to paragraph (c), 
which relates to the execution of the Cybersecurity Confirmation. OCC 
also proposes a minor edit to replace ``OCC'' with ``the Corporation'' 
in paragraphs (a) and (b) for consistency. Additionally, under the 
proposed rule change, existing Rule 219 would be renumbered as Rule 
213.\8\
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    \8\ OCC proposes to renumber existing Rule 219 to Rule 213 
following on proposed changes to OCC's clearing membership 
standards, which includes removal of current rules 213 through 218. 
See Exchange Act Release No. 34-97150 (Mar. 15, 2023), 88 FR 17046 
(Mar. 21, 2023) (File No. SR-OCC-2023-002).
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Occurrence of a Security Incident
    The proposed changes would address the occurrence of a Security 
Incident in the Rules by: (i) requiring a Clearing Member to 
immediately notify OCC of a Security Incident; (ii) memorializing OCC's 
ability to take actions reasonably necessary to mitigate any effects to 
its operations; and (iii) requiring such Clearing Member to provide a 
Reconnection Attestation and Checklist. Each of these proposed changes 
is described in greater detail below.
(i) Notification of a Security Incident
    The proposed rule change would adopt a new paragraph (d) to amended 
Rule 213, titled ``Occurrence of a Security Incident,'' to address the 
occurrence of a Security Incident. Proposed Rule 213(d) would define 
Security Incident as a cyber-related disruption or intrusion of the 
Clearing Member, including, but not limited to, any disruption or 
degradation of the normal operation of the Clearing Member's systems or 
any unauthorized entry into the Clearing Member's systems. Proposed 
Rule 213(d) would require a Clearing Member to immediately notify OCC 
if there has been a Security Incident or if a Security Incident is 
occurring and to promptly confirm such notice in writing.
(ii) Memorialization of OCC's Ability To Take Action
    Proposed paragraph (d) to amended Rule 213 would also memorialize 
OCC's ability to take actions reasonably necessary to mitigate any 
effects to its operations in the case of a Security Incident. The 
proposed language specifies that upon notice from a Clearing Member of 
a Security Incident, or if OCC has a reasonable basis to believe that a 
Security Incident has occurred, or is occurring, OCC may take actions 
reasonably necessary to mitigate any effects to its operations. Such 
actions would include the right to disconnect access, or to modify the 
scope and specifications of access, of the Clearing Member to OCC's 
information and data systems, consistent with the Agreement for OCC 
Services.
(iii) Requirement To Provide Reconnection Attestation and Checklist
    The proposed rule change would adopt new paragraph (e) to amended 
Rule 213, titled ``Procedures for Connecting Following a Security 
Incident,'' to incorporate procedures for Clearing Members to follow in 
the case of a Security Incident, including in order to resume 
connectivity to OCC. Proposed Rule 213(e) would require a Clearing 
Member to complete and submit, upon OCC's request, the Reconnection 
Attestation and Checklist after reporting a Security Incident, both as 
provided by OCC from time to time. The Reconnection Attestation and 
Checklist would facilitate OCC's ability to determine whether the risk 
or threat to OCC has been mitigated sufficiently, including whether to 
resume connectivity to a Clearing Member if connectivity was 
disconnected or modified. The proposed Reconnection Attestation and 
Checklist are set out in more detail below.
    Each Reconnection Attestation would be required to be in writing on 
a form provided by OCC and signed by a designated senior executive of 
the Clearing Member who is authorized to attest to these matters, as 
specified in proposed Rule 213(e)(1). Each Reconnection Attestation 
would contain representations addressing the incident and attesting to 
certain security requirements. In addition, Clearing Members would be 
required to describe the Security Incident. OCC is proposing to require 
that the following representations be included in the Reconnection 
Attestation in proposed Rule 213(e)(1)(A) through (E):
    First, the Reconnection Attestation would include a representation 
that the Clearing Member has provided full, complete and accurate 
information in response to all requests made by OCC regarding the 
Security Incident, including all requests contained in the Reconnection 
Checklist, on a good faith, best efforts basis.

[[Page 20198]]

    Second, the Reconnection Attestation would include a representation 
that the Clearing Member has provided full, complete and accurate 
information regarding any OCC data or systems that were potentially 
compromised during the Security Incident, including any potential 
exposure of credentials used to access OCC's systems, and will 
immediately notify OCC if it later becomes aware of a previously 
undetected or unreported compromise of OCC data or systems during the 
Security Incident.
    Third, the Reconnection Attestation would include a representation 
that the Clearing Member has determined whether the Security Incident 
resulted, directly or indirectly, from any controls that failed or were 
circumvented by its employees, contractors or agents (``Failed 
Controls''). The proposed language would further specify that the 
Clearing Member has communicated Failed Controls to OCC and is 
remediating or has remediated all Failed Controls.
    Fourth, the Reconnection Attestation would include a representation 
that the Clearing Member has implemented, or will implement promptly, 
technical and operational changes, both preventative and detective, 
with the intent to prevent a recurrence of the Security Incident and 
has provided written summaries of such changes to OCC.
    Fifth, the Reconnection Attestation would include a representation 
that the Clearing Member has complied and will continue to comply with 
all applicable laws in connection with its response to the Security 
Incident, including any notifications required to be provided to 
government agencies, OCC, and third parties.
    Furthermore, each Reconnection Checklist would be required to be in 
writing on a form provided by OCC. A Clearing Member would describe its 
remediation efforts as part of the Reconnection Checklist, including 
relevant information related to the Security Incident and the Clearing 
Member's response thereto. To account for the evolving nature of 
Security Incidents, OCC proposes flexibility regarding the information 
requirements under proposed Rule 213(e)(2). Namely, the Reconnection 
Checklist may require information including, but not limited to, the 
following under this Rule:
     whether the disconnection was the result of a 
cybersecurity-related incident;
     the nature of the incident;
     the steps taken to contain the incident;
     the OCC data, if any, that was compromised during the 
incident;
     the OCC systems, if any, that were impacted during the 
incident;
     whether there was any risk of exposure of credentials used 
to access OCC systems, and if so, whether the credentials were 
reissued;
     the controls that were circumvented or failed that led to 
the incident occurring;
     the changes, preventative and detective, that were 
implemented to prevent a reoccurrence;
     details on how data integrity has been preserved and what 
data checks have been performed; \9\
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    \9\ OCC notes that the Reconnection Checklist would specifically 
request details on how data integrity has been preserved and what 
data checks have been performed ``prior to reconnecting to and 
sending/receiving data to/from OCC.'' See Exhibit 3 to File No. SR-
OCC-2023-003.
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     whether third-parties, including government agencies, have 
been notified; and
     any additional details relevant to reconnection.
    Together, the required representations and information in the 
Reconnection Attestation and Checklist are designed to provide OCC with 
evidence related to a Clearing Member's response to a Security 
Incident, including whether the Clearing Member has appropriate 
security requirements and carried out suitable remediation measures, to 
enable OCC to better understand and manage Security Incidents. By 
requiring such representations and information from a Clearing Member, 
the Reconnection Attestation and Checklist would provide OCC with key 
information to make decisions about risks and threats, perform 
additional monitoring, and determine whether to resume connectivity to 
a Clearing Member, as applicable, in order to protect OCC's information 
and data systems.
(2) Statutory Basis
    OCC believes the proposed rule changes are consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a registered clearing agency. In particular, OCC believes 
that the proposed rule changes are consistent with Section 17A(b)(3)(F) 
of the Act,\10\ and Rules 17Ad-22(e)(17)(i) and (e)(17)(ii), each 
promulgated under the Act,\11\ for the reasons described below.
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    \10\ 15 U.S.C. 78q-1(b)(3)(F).
    \11\ 17 CFR 240.17Ad-22(e)(17)(i) and (e)(17)(ii).
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    Section 17A(b)(3)(F) of the Act requires that the rules of OCC be 
designed to, among other things, promote the prompt and accurate 
clearance and settlement of securities transactions and assure the 
safeguarding of securities and funds which are in the custody or 
control of the clearing agency or for which it is responsible.\12\ As 
described above, the proposed amendments are designed to help OCC 
assess and take appropriate action to manage the cybersecurity risks 
that may be introduced to OCC's information and data systems due to a 
Security Incident. OCC proposes edits to existing Rule 219, including 
to titles and headings, to expand the scope to address the occurrence 
of a Security Incident. Existing Rule 219 would be renumbered as Rule 
213 and would clearly set out the obligation of Clearing Members to 
notify OCC of a Security Incident and the right of OCC to take actions 
reasonably necessary to mitigate any effects to its operations, thereby 
centralizing relevant information pertaining to cybersecurity in the 
Rules and promoting transparency. Moreover, the proposal would 
implement a standardized approach to assess and manage the 
cybersecurity risks that OCC may face through its interconnections to 
Clearing Members. The proposal would include procedures for Clearing 
Members to follow in the case of a Security Incident, including in 
order to resume connectivity to OCC. The proposed changes would require 
a Clearing Member to submit, upon OCC's request, the Reconnection 
Attestation and Checklist after reporting a Security Incident, both as 
provided by OCC from time to time. OCC proposes to set forth specific 
representations and information required of Clearing Members in the 
Reconnection Attestation and Checklist, which are designed to provide 
OCC with evidence related to a Clearing Member's response to a Security 
Incident, including whether the Clearing Member has appropriate 
security requirements and carried out suitable remediation measures, to 
enable OCC to better understand and manage Security Incidents. The 
Reconnection Attestation and Checklist would provide OCC with key 
information to make decisions about risks and threats, perform 
additional monitoring, and determine whether to resume connectivity to 
a Clearing Member, as applicable, to protect OCC's information and data 
systems. Risks, threats, and potential vulnerabilities could impact 
OCC's ability to clear and settle securities transactions, or to 
safeguard the securities and funds which are in its custody or control, 
or for which it is responsible. Therefore, by enhancing its processes 
to mitigate these risks, OCC believes the proposal would promote the 
prompt and accurate

[[Page 20199]]

clearance and settlement of securities transactions and assure the 
safeguarding of securities and funds which are in the custody or 
control of the clearing agency or for which it is responsible, 
consistent with the requirements of Section 17A(b)(3)(F) of the 
Act.\13\
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    \12\ 15 U.S.C. 78q-1(b)(3)(F).
    \13\ Id.
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    Rule 17Ad-22(e)(17)(i) under the Act requires that each covered 
clearing agency establish, implement, maintain and enforce written 
policies and procedures 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.\14\ The proposed Reconnection Attestation and 
Checklist would reduce the cybersecurity risks to OCC by requiring a 
Clearing Member to provide written representations addressing the 
incident and attesting to certain security requirements and an 
associated checklist describing remediation efforts. The proposed 
Reconnection Attestation and Checklist would filter the requested 
information and representations into a standardized format, which would 
better enable OCC to review and identify areas of interest, concern, or 
heightened risk in respect of a Security Incident. The representations 
and information in these forms would help OCC mitigate its exposure to 
cybersecurity risk and, thereby, decrease the operational risks to OCC. 
The proposed Reconnection Attestation and Checklist would identify to 
OCC potential sources of external operational risks that may be 
introduced through its interconnections to Clearing Members and enable 
OCC to mitigate these risks and possible impacts to OCC's operations. 
Based on this information, OCC would make a determination regarding the 
resumption of connectivity to a Clearing Member if connectivity was 
disconnected or modified. As a result, OCC believes the proposal is 
consistent with the requirements of Rule 17Ad-22(e)(17)(i) under the 
Act.\15\
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    \14\ 17 CFR 240.17Ad-22(e)(17)(i).
    \15\ Id.
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    Rule 17Ad-22(e)(17)(ii) under the Act requires that each covered 
clearing agency establish, implement, maintain and enforce written 
policies and procedures reasonably designed to manage the covered 
clearing agency's operational risks by ensuring, in part, that systems 
have a high degree of security, resiliency, and operational 
reliability.\16\ The proposed Reconnection Attestation and Checklist 
would help enhance the security, resiliency, and operational 
reliability of OCC's information and data systems. Namely, these forms 
would help OCC determine whether to take action against a Clearing 
Member, including preventing the reconnection of a Clearing Member, 
that may pose an increased cyber risk to OCC by not having appropriate 
security requirements or taking suitable remediation measures. Clearing 
Members that have not adequately addressed Security Incidents may 
present increased risk to OCC. For example, weaknesses within a 
Clearing Member's environment could allow for exploitation by a 
malicious actor of the link between a Clearing Member and OCC. By 
better enabling OCC to identify these risks, the proposed rule change 
would allow OCC to more effectively secure its environment against 
potential vulnerabilities. The required representations and information 
in the Reconnection Attestation and Checklist would provide OCC with 
key information to make decisions about risks and threats, perform 
additional monitoring, and determine whether to resume connectivity to 
a Clearing Member, as applicable, to protect OCC's information and data 
systems. As a result, OCC believes the proposal would improve OCC's 
ability to ensure that its systems have a high degree of security, 
resiliency, and operational reliability, and, as such, is consistent 
with the requirements of Rule 17Ad-22(e)(17)(ii) under the Act.\17\
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    \16\ 17 CFR 240.17Ad-22(e)(17)(ii).
    \17\ Id.
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(B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Act \18\ 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 Act. OCC does not 
believe that the proposed rule changes would impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act. As discussed above, OCC proposes to amend certain 
provisions in the Rules relating to Clearing Member cybersecurity 
obligations to address the occurrence of a Security Incident. The 
proposed changes would (i) require a Clearing Member to immediately 
notify OCC of a Security Incident; (ii) memorialize OCC's ability to 
take actions reasonably necessary to mitigate any effects to its 
operations; and (iii) require such Clearing Member to provide a 
Reconnection Attestation and Checklist. While the proposed changes 
would require Clearing Members to incur additional costs, including to 
complete and submit the Reconnection Attestation and Checklist, OCC 
does not believe the proposed changes would present an undue burden on 
Clearing Members. Clearing Members are already subject to the 
notification and reporting requirements in OCC's By-Laws and the Rules 
that require, among other things, that Clearing Members provide OCC 
with such documents and information as OCC may require from time to 
time.\19\ Standardizing the form and contents of the proposed 
submissions would reduce the potential uncertainty and time required to 
demonstrate an acceptable response to a Security Incident. 
Additionally, the proposed changes would not unfairly inhibit access to 
OCC's services or disadvantage or favor any particular user in 
relationship to another user. Such changes would apply to all Clearing 
Members consistently and thus would not provide any Clearing Member 
with a competitive advantage over any other Clearing Member as the 
requirements would be uniform. As described above, given OCC's position 
in the marketplace, OCC believes it is prudent to enhance its 
management of Security Incidents as detailed in the proposal, so that 
OCC's own information and data systems remain protected against 
cyberattacks. For the foregoing reasons, OCC believes that the proposed 
rule change is in the public interest, would be consistent with the 
requirements of the Act applicable to clearing agencies, and would not 
impact or impose a burden on competition.
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    \18\ 15 U.S.C. 78q-1(b)(3)(I).
    \19\ See Article V, Section 1, Interpretation and Policy .07 of 
the By-Laws and Rules 201(b), 215, 216, 217(b), 303, 306, 308 and 
310(a)-(c).
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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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    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

[[Page 20200]]

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.
    The proposal shall not take effect until all regulatory actions 
required with respect to the proposal are completed.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-OCC-2023-003 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-OCC-2023-003. 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/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street, NE, Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filing also will be available for inspection 
and copying at the principal office of OCC and on OCC's website at 
https://www.theocc.com/Company-Information/Documents-and-Archives/By-Laws-and-Rules.
    All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-OCC-2023-003 and 
should be submitted on or before April 26, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-07004 Filed 4-4-23; 8:45 am]
BILLING CODE 8011-01-P


