Self-Regulatory Organizations; ICE Clear Credit LLC; Order Granting Approval of Proposed Rule Change To Formalize the ICC Operational Risk Management Framework, 12224-12225 [2015-05155]
Download as PDF
<![CDATA[
12224
Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices
the estimated total annual cost burden
allocated to Form N 4 would be
$36,308.889 ((210 × $23,013) + (1,443 ×
$21,813)).
Providing the information required by
Form N–4 is mandatory. Responses will
not be kept confidential. Estimates of
average burden hours are made solely
for the purposes of the Paperwork
Reduction Act, and are not derived from
a comprehensive or even a
representative survey or study of the
costs of Commission rules and forms.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a currently valid control
number.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
Please direct your written comments
to Pamela Dyson, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Remi
Pavlik-Simon, 100 F Street NE.,
Washington, DC 20549; or send an email
to: PRA_Mailbox@sec.gov.
Dated: March 2, 2015.
Brent J. Fields.
Secretary.
[FR Doc. 2015–05218 Filed 3–5–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
mstockstill on DSK4VPTVN1PROD with NOTICES
[Release No. 34–74399; File No. SR–ICC–
2014–19]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Order Granting
Approval of Proposed Rule Change To
Formalize the ICC Operational Risk
Management Framework
March 2, 2015.
I. Introduction
On November 18, 2014, ICE Clear
Credit LLC (‘‘ICC’’) filed with the
Securities and Exchange Commission
VerDate Sep<11>2014
18:59 Mar 05, 2015
Jkt 235001
(‘‘Commission’’) the proposed rule
change SR–ICC–2014–19 pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder.2 The proposed rule
change was published for comment in
the Federal Register on December 2,
2014.3 The Commission received no
comment letters regarding the proposed
change. On January 16, 2015, the
Commission extended the time period
in which to either approve, disapprove,
or institute proceedings to determine
whether to disapprove the proposed
rule change to March 2, 2015.4 For the
reasons discussed below, the
Commission is granting approval of the
proposed rule change.
II. Description of the Proposed Rule
Change
ICC is proposing to update and
formalize ICC’s Operational Risk
Management Framework. According to
ICC, the Operational Risk Management
Framework is designed to create a
program of risk assessment and
oversight to identify, monitor, and
manage plausible sources of operational
risk,5 and to timely manage and report
operational performance measures. ICC
further states that the operational risk
program is designed to evaluate and
mitigate operations risk presented to
ICC by its partners, related entities, and
vendors. According to ICC, the
Operational Risk Management
Framework is overseen by the ICC
Board, ICC department heads and the
Chief Compliance Officer, and internal
audit performs reviews of the
operational risk management processes.
Under the Operational Risk
Management Framework, the
Operational Risk Manager has the
responsibility and authority to develop
and enforce, in consultation with the
ICC Board and appropriate members of
senior management, the operational risk
program, which applies to all ICC
activities, groups, functions and
locations. The Operational Risk
Management Framework further
provides that the Operational Risk
Manager is the owner of the Operational
Risk Management Framework
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Securities Exchange Act Release No. 34–73684
(Nov. 25, 2014), 79 FR 71495 (Dec. 2, 2014) (SR–
ICC–2014–19).
4 Securities Exchange Act Release No. 34–74082
(Jan. 16, 2015), 80 FR 3687 (Jan. 23, 2015) (SR–ICC–
2014–19).
5 ‘‘Operational risk’’ is defined in the ICC
Operational Risk Management Framework as the
risk that deficiencies in information systems,
internal processes, personnel, or disruptions from
external events will result in the reduction,
deterioration, or breakdown of services.
2 17
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
document, that the initial document and
any material amendments require
review and approval by the appropriate
members of senior management and the
ICC Board, and that the Operational
Risk Manager reports to the Chief
Compliance Officer who reports directly
to the ICC Board.
There are several components to the
ICC Operational Risk Management
Framework. ICC states that the
Operational Risk Management
Framework establishes clearly defined
operational performance objectives that
serve as benchmarks to evaluate
efficiency and effectiveness, promote
confidence among management and
participants, and evaluate operational
performance against expectations. The
Operational Risk Management
Framework states ICC’s goals of
identifying, monitoring, and managing
all plausible sources of operational risk
and establishing clear policies and
procedures to address presented risk
scenarios. For example, the Operational
Risk Management Framework
incorporates ICC’s risk assessment
methodology to identify and evaluate
potential operational risks in each of its
major clearing processes, as well as
procedures for recommending controls
to mitigate risks identified in the risk
assessment. The Operational Risk
Management Framework also contains
information regarding how ICC
leverages certain shared infrastructures
within the Intercontinental Exchange,
Inc. family as part of its operational risk
management program.
Additionally, the Operational Risk
Management Framework details the
Operational Risk Manager’s
responsibilities in terms of business
continuity planning, vendor risk
management, and the release of new
products, processes, and initiatives.
Under the Operational Risk
Management Framework, the
Operational Risk Manager is responsible
for operational risk reporting, which
includes reporting and addressing
significant operational risk weaknesses
or failures timely and appropriately
(including escalation to the appropriate
members of senior management and the
ICC Audit Committee and the Board
when necessary), and providing ongoing
reporting to appropriate members of
senior management and periodic
reporting to the ICC Board and the ICC
Audit Committee on the operational risk
program and significant control matters.
E:\FR\FM\06MRN1.SGM
06MRN1
mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 44 / Friday, March 6, 2015 / Notices
III. Discussion and Commission
Findings
Section 19(b)(2)(C) of the Act 6 directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if the Commission finds
that such proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to such selfregulatory organization. Section
17A(b)(3)(F) of the Act 7 requires, among
other things, that the rules of a clearing
agency are designed to promote the
prompt and accurate clearance and
settlement of securities transactions
and, to the extent applicable, derivative
agreements, contracts, and transactions,
to assure the safeguarding of securities
and funds which are in the custody or
control of the clearing agency or for
which it is responsible and, in general,
to protect investors and the public
interest. In addition, Rule 17Ad–
22(d)(4) 8 requires registered clearing
agencies, among other things, to
establish, implement, maintain, and
enforce written policies and procedures
reasonably designed to identify sources
of operational risk and minimize them
through the development and
implementation of appropriate systems,
controls, and procedures and have
business continuity plans that allow for
timely recovery of operations and
fulfillment of a clearing agency’s
obligations.
The Commission finds that the
proposed rule change is consistent with
Section 17A of the Act 9 and the rules
thereunder applicable to ICC. ICC’s
Operational Risk Management
Framework establishes clear policies
and procedures to identify and evaluate
potential operational risks in each of its
major clearing processes, and to
recommend controls to mitigate
identified risks, each of which are
reasonably designed to identify,
monitor, and manage of all plausible
sources of operational risk.
Furthermore, the Operational Risk
Management Framework establishes
clearly defined operational performance
objectives that are expected to serve as
benchmarks for evaluating operational
efficiency and effectiveness, and to
evaluate operational performance
measurements against such objectives,
each of which are expected to enhance
ICC’s ability to mitigate operational risk.
Finally, the Operational Risk
Management Framework incorporates a
business continuity plan that is
6 15
U.S.C. 78s(b)(2)(C).
U.S.C. 78q–1(b)(3)(F).
8 17 CFR 240.17Ad–22(d)(4).
9 15 U.S.C. 78q–1.
7 15
VerDate Sep<11>2014
18:59 Mar 05, 2015
Jkt 235001
expected to allow for timely recovery of
operations and fulfillment of ICC’s
obligations upon disruption. The
Commission therefore believes that the
proposed rule change is reasonably
designed to identify sources of
operational risk and minimize them
through the development and
implementation of appropriate systems,
controls, and procedures and have
business continuity plans that allow for
timely recovery of operations and
fulfillment of a clearing agency’s
obligations, consistent with the
requirements of Rule 17Ad–22(d)(4).10
Accordingly, the Commission believes
that the proposed rule change is
designed to promote the prompt and
accurate settlement of securities and
derivatives transactions, consistent with
Section 17A(b)(3)(F) of the Act.11
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposal is
consistent with the requirements of the
Act and in particular with the
requirements of Section 17A of the
Act 12 and the rules and regulations
thereunder.
IT IS THEREFORE ORDERED,
pursuant to Section 19(b)(2) of the
Act,13 that the proposed rule change
(File No. SR–ICC–2014–19) be, and
hereby is, approved.14
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Brent J. Fields,
Secretary.
[FR Doc. 2015–05155 Filed 3–5–15; 8:45 am]
BILLING CODE 8011–01–P
12225
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74408; File No. SR–
NYSEMKT–2015–11]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Specifying in Exchange
Rules the Exchange’s Use of Certain
Data Feeds for Order Handling and
Execution, Order Routing, and
Regulatory Compliance
March 2, 2015.
Pursuant to section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on February
24, 2015, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to specify in
Exchange rules the Exchange’s use of
certain data feeds for order handling
and execution, order routing, and
regulatory compliance. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
10 17
CFR 240.17Ad–22(d)(4).
U.S.C. 78q–1(b)(3)(F).
12 15 U.S.C. 78q–1.
13 15 U.S.C. 78s(b)(2).
14 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
15 17 CFR 200.30–3(a)(12).
11 15
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
In its filing with the Commission, the
self-regulatory organization 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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
E:\FR\FM\06MRN1.SGM
06MRN1
]]>Agencies
[Federal Register Volume 80, Number 44 (Friday, March 6, 2015)]
[Notices]
[Pages 12224-12225]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-05155]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74399; File No. SR-ICC-2014-19]
Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Granting Approval of Proposed Rule Change To Formalize the ICC
Operational Risk Management Framework
March 2, 2015.
I. Introduction
On November 18, 2014, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change SR-ICC-2014-19 pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder.\2\ The
proposed rule change was published for comment in the Federal Register
on December 2, 2014.\3\ The Commission received no comment letters
regarding the proposed change. On January 16, 2015, the Commission
extended the time period in which to either approve, disapprove, or
institute proceedings to determine whether to disapprove the proposed
rule change to March 2, 2015.\4\ For the reasons discussed below, the
Commission is granting approval of the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 34-73684 (Nov. 25,
2014), 79 FR 71495 (Dec. 2, 2014) (SR-ICC-2014-19).
\4\ Securities Exchange Act Release No. 34-74082 (Jan. 16,
2015), 80 FR 3687 (Jan. 23, 2015) (SR-ICC-2014-19).
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
ICC is proposing to update and formalize ICC's Operational Risk
Management Framework. According to ICC, the Operational Risk Management
Framework is designed to create a program of risk assessment and
oversight to identify, monitor, and manage plausible sources of
operational risk,\5\ and to timely manage and report operational
performance measures. ICC further states that the operational risk
program is designed to evaluate and mitigate operations risk presented
to ICC by its partners, related entities, and vendors. According to
ICC, the Operational Risk Management Framework is overseen by the ICC
Board, ICC department heads and the Chief Compliance Officer, and
internal audit performs reviews of the operational risk management
processes.
---------------------------------------------------------------------------
\5\ ``Operational risk'' is defined in the ICC Operational Risk
Management Framework as the risk that deficiencies in information
systems, internal processes, personnel, or disruptions from external
events will result in the reduction, deterioration, or breakdown of
services.
---------------------------------------------------------------------------
Under the Operational Risk Management Framework, the Operational
Risk Manager has the responsibility and authority to develop and
enforce, in consultation with the ICC Board and appropriate members of
senior management, the operational risk program, which applies to all
ICC activities, groups, functions and locations. The Operational Risk
Management Framework further provides that the Operational Risk Manager
is the owner of the Operational Risk Management Framework document,
that the initial document and any material amendments require review
and approval by the appropriate members of senior management and the
ICC Board, and that the Operational Risk Manager reports to the Chief
Compliance Officer who reports directly to the ICC Board.
There are several components to the ICC Operational Risk Management
Framework. ICC states that the Operational Risk Management Framework
establishes clearly defined operational performance objectives that
serve as benchmarks to evaluate efficiency and effectiveness, promote
confidence among management and participants, and evaluate operational
performance against expectations. The Operational Risk Management
Framework states ICC's goals of identifying, monitoring, and managing
all plausible sources of operational risk and establishing clear
policies and procedures to address presented risk scenarios. For
example, the Operational Risk Management Framework incorporates ICC's
risk assessment methodology to identify and evaluate potential
operational risks in each of its major clearing processes, as well as
procedures for recommending controls to mitigate risks identified in
the risk assessment. The Operational Risk Management Framework also
contains information regarding how ICC leverages certain shared
infrastructures within the Intercontinental Exchange, Inc. family as
part of its operational risk management program.
Additionally, the Operational Risk Management Framework details the
Operational Risk Manager's responsibilities in terms of business
continuity planning, vendor risk management, and the release of new
products, processes, and initiatives. Under the Operational Risk
Management Framework, the Operational Risk Manager is responsible for
operational risk reporting, which includes reporting and addressing
significant operational risk weaknesses or failures timely and
appropriately (including escalation to the appropriate members of
senior management and the ICC Audit Committee and the Board when
necessary), and providing ongoing reporting to appropriate members of
senior management and periodic reporting to the ICC Board and the ICC
Audit Committee on the operational risk program and significant control
matters.
[[Page 12225]]
III. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \6\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if the
Commission finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such self-regulatory organization. Section 17A(b)(3)(F)
of the Act \7\ requires, among other things, that the rules of a
clearing agency are designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions, to
assure the safeguarding of securities and funds which are in the
custody or control of the clearing agency or for which it is
responsible and, in general, to protect investors and the public
interest. In addition, Rule 17Ad-22(d)(4) \8\ requires registered
clearing agencies, among other things, to establish, implement,
maintain, and enforce written policies and procedures reasonably
designed to identify sources of operational risk and minimize them
through the development and implementation of appropriate systems,
controls, and procedures and have business continuity plans that allow
for timely recovery of operations and fulfillment of a clearing
agency's obligations.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(2)(C).
\7\ 15 U.S.C. 78q-1(b)(3)(F).
\8\ 17 CFR 240.17Ad-22(d)(4).
---------------------------------------------------------------------------
The Commission finds that the proposed rule change is consistent
with Section 17A of the Act \9\ and the rules thereunder applicable to
ICC. ICC's Operational Risk Management Framework establishes clear
policies and procedures to identify and evaluate potential operational
risks in each of its major clearing processes, and to recommend
controls to mitigate identified risks, each of which are reasonably
designed to identify, monitor, and manage of all plausible sources of
operational risk. Furthermore, the Operational Risk Management
Framework establishes clearly defined operational performance
objectives that are expected to serve as benchmarks for evaluating
operational efficiency and effectiveness, and to evaluate operational
performance measurements against such objectives, each of which are
expected to enhance ICC's ability to mitigate operational risk.
Finally, the Operational Risk Management Framework incorporates a
business continuity plan that is expected to allow for timely recovery
of operations and fulfillment of ICC's obligations upon disruption. The
Commission therefore believes that the proposed rule change is
reasonably designed to identify sources of operational risk and
minimize them through the development and implementation of appropriate
systems, controls, and procedures and have business continuity plans
that allow for timely recovery of operations and fulfillment of a
clearing agency's obligations, consistent with the requirements of Rule
17Ad-22(d)(4).\10\ Accordingly, the Commission believes that the
proposed rule change is designed to promote the prompt and accurate
settlement of securities and derivatives transactions, consistent with
Section 17A(b)(3)(F) of the Act.\11\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78q-1.
\10\ 17 CFR 240.17Ad-22(d)(4).
\11\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \12\ and the
rules and regulations thereunder.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the
Act,\13\ that the proposed rule change (File No. SR-ICC-2014-19) be,
and hereby is, approved.\14\
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(2).
\14\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
Brent J. Fields,
Secretary.
[FR Doc. 2015-05155 Filed 3-5-15; 8:45 am]
BILLING CODE 8011-01-P
