By letter dated July 16, 2012, X requested that the Division confirm that it will not recommend enforcement action to the Commission concerning X’s proposed repurchase and reverse repurchase transactions (collectively, “repos”) under Commission Regulation 1.25 (investment of customer funds). X intends to enter into repos, using customer funds, subject to Regulation 1.25(d). The repos will subsequently be submitted for clearing by Y, an SEC-registered securities clearing agency. By clearing the repos, Y will become X’s counterparty. Although Y is not a “permitted counterparty” under Regulation 1.25(d)(2), the Division believes that permitting X to clear repos with Y is consistent with the risk-mitigation purpose of the regulation’s counterparty limitations.