Paxos Securities Settlement Company, LLC (PSSC) — Form CA-1 Application and Exhibits

List in Exhibit A any person who either directly or indirectly, through agreement or otherwise, may control or direct the management or policies of registrant. For each person listed, provide the full name and address and attach a copy of each written agreement or, if the agreements are unwritten, describe the agreement or arrangement through which such person exercises or may exercise such control or direction. 

• PSSC CA-1 Exhibit A: Control or Direct the Management of PSSC

List in Exhibit B the registrant’s corporate officers, trust officers, managers or other persons occupying a similar status or performing similar functions who supervise, or are directly responsible for the conduct of, registrant’s clearing agency activities, indicating for each: (a) Name (b) Title (c) Area of responsibility (d) A brief account of the business experience during the last five (5) years. 

• PSSC CA-1 Exhibit B: Corporate Officers and Managers of PSSC

Attach as Exhibit C narrative and graphic descriptions of registrant’s organizational structure. If clearing agency activities are conducted primarily by a division, subdivision, or other segregable entity within the registrant corporation or organization, identify the relationship of such entity to the registrant’s overall organizational structure and limit the descriptions to the division, subdivision or other segregable entity which performs clearing agency activities.

• PSSC CA-1 Exhibit C-1: Organizational Structure of PSSC
• PSSC CA-1 Exhibit C-2: Paxos Group Organizational Structure Chart
• PSSC CA-1 Exhibit C-3: PSSC Organizational Structure Chart
• PSSC CA-1 Exhibit C-4: PSSC Master Intercompany Services Agreement

Previous Filings

• PSSC CA-1 Exhibit C-1: Organizational Structure of PSSC

A list of persons who directly or indirectly, through one or more intermediaries, are controlled by, or are under common control with, the clearing agency and indicate the nature of the control relationship.

• PSSC CA-1 Exhibit D: Persons in Common Control with PSSC

Attach as Exhibit E a copy of the currently effective constitution, articles of incorporation or association, by-laws, rules, procedures and instruments corresponding thereto, of the registrant and a complete list of all dues, fees and other charges imposed by registrant for its clearing agency activities. 

• PSSC CA-1 Exhibit E-1: PSSC LLC Agreement
• PSSC CA-1 Exhibit E-2: PSSC Certificate of Formation
• PSSC CA-1 Exhibit E-3: Bylaws of PSSC
• PSSC CA-1 Exhibit E-4: Mission Statement and Board Charter
• PSSC CA-1 Exhibit E-5: Governance Nominating and Policy Committee Charter
• PSSC CA-1 Exhibit E-6: Audit Committee Charter
• PSSC CA-1 Exhibit E-7: Compliance and Risk Management Committee Charter
• PSSC CA-1 Exhibit E-8: Business Technology and Operations Committee Charter
• PSSC CA-1 Exhibit E-9: Compensation Committee Charter
• PSSC CA-1 Exhibit E-10: Participant Advisory Committee Charter
• PSSC CA-1 Exhibit E-11: PSSC Director Fitness Standards
• PSSC CA-1 Exhibit E-12: PSCC Rules
• PSSC CA-1 Exhibit E-13: Schedule of Fees

Previous Filings

• PSSC CA-1 Exhibit E-7: Compliance and Risk Management Committee Charter
• PSSC CA-1 Exhibit E-12: Rule 1- Definitions
• PSSC CA-1 Exhibit E-13: Rule 1A- References to Time
• PSSC CA-1 Exhibit E-14: Rule 1B- Governing Law
• PSSC CA-1 Exhibit E-15: Rule 2- Participants
• PSSC CA-1 Exhibit E-16: Rule 2A- Initial Participation Standards and Admission Process
• PSSC CA-1 Exhibit E-17: Rule 2B- Ongoing Monitoring and Participation Standards
• PSSC CA-1 Exhibit E-18: Rule 2C- Assurances of Financial and Operational Capability
• PSSC CA-1 Exhibit E-19: Rule 2D- Counterparty Pairs
• PSSC CA-1 Exhibit E-20: Rule 3- Eligible Securities
• PSSC CA-1 Exhibit E-21: Rule 3A- Corporate Actions
• PSSC CA-1 Exhibit E-22: Rule 4- Accounts, Trade Capture and Settlement Services
• PSSC CA-1 Exhibit E-23: Rule 4A- Netting
• PSSC CA-1 Exhibit E-24: Rule 5A- Collateral Management
• PSSC CA-1 Exhibit E-25: Rule 5B- Margin Methodology
• PSSC CA-1 Exhibit E-26: Rule 5C- Margin Procedures
• PSSC CA-1 Exhibit E-27: Rule 6- Settlements, Settlement Failures and Close-Outs
• PSSC CA-1 Exhibit E-28: Rule 7- Cessation of Services and Termination or Withdrawal
• PSSC CA-1 Exhibit E-29: Rule 8- Participant Insolvency
• PSSC CA-1 Exhibit E-30: Rule 9- Disciplinary Actions
• PSSC CA-1 Exhibit E-31: Rule 10- Right to Request Hearing to Appeal Decisions
• PSSC CA-1 Exhibit E-32: Rule 11- Notices of Proposed Rule Changes
• PSSC CA-1 Exhibit E-33: Rule 12- Suspension of Rules in Emergency Circumstances
• PSSC CA-1 Exhibit E-34: Rule 13- Settling Banks
• PSSC CA-1 Exhibit E-35: Rule 14- Orderly Wind-Down or Transfer
• PSSC CA-1 Exhibit E-36: Rule 15- Charges for Services Rendered
• PSSC CA-1 Exhibit E-37: Schedule of Fees

Attach as Exhibit F a brief description of any material pending legal proceeding, other than ordinary and routine litigation incidental to the business, to which the registrant or any of its subsidiaries is a party or to which any of its or their property is the subject. Include the name of the court or agency in which the proceeding is pending, the date instituted, and the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceeding known to be contemplated by governmental agencies. 

• PSSC CA-1 Exhibit F: Legal Proceedings

Attach as Exhibit G copies of all contracts with any national securities exchange, national securities association or clearing agency or securities market for which the registrant acts as a clearing agency or performs clearing agency functions.

• PSSC CA-1 Exhibit G: Contracts with Exchanges

Attach as Exhibit H a balance sheet and statement of income and expenses, and all notes or schedules thereto of registrant, as of registrant’s most recent fiscal year for which such information is available, certified by an independent accountant. (If certified financial information is not available, uncertified financial information should be submitted). 

• PSSC CA-1 Exhibit H: Balance Sheet

Attach as Exhibit I the addresses of all offices in which clearing agency activities are performed by registrant, or for registrant by any person listed in response to item 4, and identify the nature of the clearing activities performed in each office listed. 

• PSSC CA-1 Exhibit I: Addresses

Attach as Exhibit J narrative descriptions of each service or function performed by the registrant. 

• PSSC CA-1 Exhibit J: Service and Function Narrative Descriptions

Previous Filings

• PSSC CA-1 Exhibit J: Service and Function Narrative Descriptions

Attach as Exhibit K a description of the measures or procedures employed by registrant to provide for the security of any system which performs the functions of a clearing agency. Include a general description of any operational safeguards designed to prevent unauthorized access to the system (including unauthorized input or retrieval of information for which the primary record source is not hard copy). Identify any instances within the past year in which the described security measures or safeguards failed to prevent unauthorized access to the system and describe any measures taken to prevent a recurrence of any such incident. Describe also any measures used to verify the accuracy of information received or disseminated by the system.

• PSSC CA-1 Exhibit K: Procedures to Provide for Security of Systems

Attach as Exhibit L a description of the measures or procedures employed by registrant to provide for the safeguarding of securities and funds in its custody or control. Identify any instances within the past year in which the described security measures or safeguards failed to prevent any unauthorized access to securities or funds in possession of registrant and any measures taken to prevent a recurrence of any such incident.

• PSSC CA-1 Exhibit L: Safeguarding of Securities and Funds

If clearing agency functions are performed by automated facilities or systems, attach as Exhibit M a description of all backup systems or subsystems which are designed to prevent interruptions in the performance of any function as a result of technical or other malfunction. Include backups for input or output links to the system and precautions with respect to malfunctions in any areas external to the system. 

• PSSC CA-1 Exhibit M-1: Backup Systems for Automated Clearing Facilities
• PSSC CA-1 Exhibit M-4: Regulation SCI Compliance Policy
• PSSC CA-1 Exhibit M-5: Business Continuity/Disaster Recovery Summary

Attach as Exhibit N a list of the persons who currently participate, or who have applied for participation, in registrant’s clearing agency activities (if registrant performs more than one activity, a columnar presentation may be utilized).

• PSSC CA-1 Exhibit N: Participants

Attach as Exhibit O a description of any specifications, qualifications, or other criteria which limit, are interpreted to limit, or have the effect of limiting access to, or use of, any clearing agency service furnished by the registrant and state the reasons for imposing such specifications, qualifications, or other criteria. 

• PSSC CA-1 Exhibit O: Qualifications and Limitations of Use

Attach as Exhibit P copies of any form of contracts governing the terms on which persons may subscribe to clearing agency services provided by the registrant.

• PSSC CA-1 Exhibit P: Participant Agreement

Attach as Exhibit Q a schedule of any prices, rates or fees fixed by registrant for services rendered by its participants. 

• PSSC CA-1 Exhibit Q: Schedule of Prices Rates or Fees for Services by Participants

Attach as Exhibit R a schedule of any prohibitions or limitations imposed by the clearing agency on access by any person to services offered by any participant. 

• PSSC CA-1 Exhibit R: Prohibitions on Access to Participant Services