Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing of Proposed Rule Change Relating to the ICE Clear Europe Operational Risk Management Policy (“ORM Policy”), 20671-20673 [2019-09632]
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Federal Register / Vol. 84, No. 91 / Friday, May 10, 2019 / Notices
is too slow and thus slows down the
discovery process.39 The Commission
agrees that by requiring forum users to
serve or transmit discovery-related
documents through overnight mail
service, overnight delivery, hand
delivery, email, or facsimile, the
proposal would help forum users
confirm and expedite discovery, and
therefore expedite the arbitration
process.
Finally, the Commission supports the
proposal’s codification of the current
practice that the Director sends, at the
same time, objections and responses to
the panel after the reply date has
elapsed, unless otherwise directed by
the panel. This ensures that all members
on the panel receive all the parties’
advocacy positions at the same time.
The Commission agrees that the
proposed rule change will enhance
forum users’ understanding of existing
case administration procedures and will
improve transparency concerning forum
operations.40
V. Conclusion
It is therefore ordered pursuant to
Section 19(b)(2) of the Exchange Act 41
that the proposal (SR–FINRA–2019–
004), be and hereby is approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.42
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–09633 Filed 5–9–19; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–85782; File No. SR–ICEEU–
2019–009]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
of Proposed Rule Change Relating to
the ICE Clear Europe Operational Risk
Management Policy (‘‘ORM Policy’’)
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 1,
39 See
FINRA Notice at 3519.
FINRA Notice at 3519 (FINRA notes that
the proposed rule change would impact all
members, including members that are funding
portals or have elected to be treated as capital
acquisition brokers (‘‘CABs’’), given that the
funding portal and CAB rule sets incorporate the
impacted FINRA rules by reference).
41 15 U.S.C. 78s(b)(2).
42 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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40 See
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I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
ICE Clear Europe proposes to
formalize its Operational Risk
Management Policy (‘‘ORM Policy’’),
which consolidates its practices with
respect to management of operational
risk. The revisions do not involve any
changes to the ICE Clear Europe
Clearing Rules or Procedures.3
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, ICE
Clear Europe 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. ICE
Clear Europe has prepared summaries,
set forth in sections (A), (B), and (C)
below, of the most significant aspects of
such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
SECURITIES AND EXCHANGE
COMMISSION
May 6, 2019.
2019, ICE Clear Europe Limited (‘‘ICE
Clear Europe’’ or the ‘‘Clearing House’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule changes described in
Items I, II, and III below, which Items
have been prepared primarily by ICE
Clear Europe. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
(a) Purpose
ICE Clear Europe is proposing to
formalize its ORM Policy which sets out
the Clearing House’s processes for
managing operational risks, the
stakeholders responsible for executing
those processes, the frequency of review
of the policy and the governance and
reporting lines for the policy.
The ORM Policy addresses
operational risk, which it defines as the
risk of an event occurring which
negatively impacts the achievement of
business objectives resulting from
inadequate or failed internal operational
controls, people, systems or external
events.4 The ORM Policy establishes an
3 Capitalized terms used but not defined herein
have the meanings specified in the ICE Clear
Europe Clearing Rules (the ‘‘Rules’’).
4 The ORM Policy notes several non-exhaustive
examples of operational risk, including risks from
internal and external fraud, employment practices
and workplace safety, clients, products and
business practices, damage to physical assets and
business disruption and system failures.
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20671
overall process that identifies, assesses,
responds to, monitors and reports
operational risk.
Risk Identification: Risk identification
is performed by the business areas and
lines exposed to the risk (referred to as
‘‘risk owners’’) at least once each year,
and is overseen by the Risk Oversight
Department. Risk owners must map
their existing processes, linking them to
business objectives and identify
operational risks where an event might
negatively impact the achievement of a
business objective. Risk sources must
also be identified.
Risk Assessment: Risk assessment is
conducted by the risk owners at least
once per year in conjunction with risk
identification. The potential impact of
the risk, including its potential severity
and likelihood, are to be evaluated.
More frequent ad hoc assessments may
be necessary if risks emerge or
disappear between annual reviews. For
most operational risks, control
mechanisms may already exist, in
which case uncontrolled and controlled
impacts are measured. Risk owners
must also assess the sufficiency of
existing control mechanisms on a
quarterly or, if necessary, a more
frequent ad hoc basis.
Risk Response: Risk owners are
responsible for proposing and
implementing remedial actions, which
must be approved by the ICE Clear
Europe Executive Risk Committee (the
‘‘ERC’’). Depending upon the potential
expected impact of the operational risk
and the Clearing House risk appetite,
the four possible responses to a risk are
to treat or mitigate the risk, tolerate or
accept the risk, transfer the risk to
another party (such as through
insurance) or terminate the activity
carrying the risk.
Risk Monitoring: Risk owners must
monitor the identified operational risk
daily through the use of key
performance indicators, key risk
indicators and other risk indicators such
as their own management limits. The
Risk Oversight Department itself
monitors risks daily through risk
appetite metrics and management
thresholds as well as operational
incidents raised by the risk owners. Risk
owners and the Risk Oversight
Department also must monitor the
performance of control mechanisms on
a regular and frequent basis.
Risk Reporting and Oversight: Overall
oversight of the policy rests with the
Audit Committee and Risk Oversight
Department. Specifically, the results of
risk assessments must be reported to the
Audit Committee and the Board Risk
Committee (the ‘‘BRC’’) when material
changes are observed. Control
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20672
Federal Register / Vol. 84, No. 91 / Friday, May 10, 2019 / Notices
assessments and operational incidents
must be regularly reported to senior
management, the Audit Committee and
the BRC for appropriate action. The BRC
and Board will also be informed of
relevant incidents as part of routine
reporting. Operational metrics will be
provided to the Board and BRC monthly
and the ERC daily. The product Risk
Committees shall also have access to
operational metrics following their
schedule of meetings. Unexpected
results of operational metrics require
escalation and notification to the Board
immediately following the event.
Identified operational risks must also be
compared against established thresholds
and reported to the ERC daily and
monthly. The ORM Policy itself is
subject to review on a biennial basis or
in the event of a material change.
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(b) Statutory Basis
ICE Clear Europe believes that the
proposed amendments are consistent
with the requirements of Section 17A of
the Act 5 and the regulations thereunder
applicable to it. In particular, Section
17A(b)(3)(F) of the Act 6 requires, among
other things, that the rules of a clearing
agency be designed to promote the
prompt and accurate clearance and
settlement of securities transactions
and, to the extent applicable, derivative
agreements, contracts, and transactions,
the safeguarding of securities and funds
in the custody or control of the clearing
agency or for which it is responsible,
and the protection of investors and the
public interest. By formalizing ICE Clear
Europe’s operational risk management
and governance process, the
amendments are intended to enhance
ICE Clear Europe’s ability to identify
and respond to operational risks
presented by its clearing activities. The
amendments will thus promote the
prompt and accurate clearing of cleared
contracts and protects investors and the
public interest in the sound operations
of the clearing house. Increasing the
ability of ICE Clear Europe to identify
and respond to operational risks may
also enhance the safeguarding of
securities and funds in the custody or
control of the Clearing House or for
which it is responsible, and avoid
potential disruption of access to such
assets as a result of operational risks.
Accordingly, the amendments satisfy
the requirements of Section
17A(b)(3)(F).7
The policy is also consistent with the
requirements of Rule 17Ad–
5 15
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
7 15 U.S.C. 78q–1(b)(3)(F).
6 15
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Jkt 247001
22(e)(17)(i).8 The ORM Policy is
designed to enhance the ability of ICE
Clear Europe to identify relevant
sources of operational risk, monitor
them on an ongoing basis and take
appropriate action to respond to such
risks. The amendments will therefore
facilitate the ongoing identification and
mitigation of operational risk, within
the meaning of Rule 17Ad–22(e)(17)(i).9
(B) Clearing Agency’s Statement on
Burden on Competition
ICE Clear Europe does not believe the
proposed amendments would have any
impact, or impose any burden, on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. The amendments
are being adopted to strengthen the
Clearing House’s internal operational
risk management processes and
governance and should not affect the
rights or obligations of Clearing
Members. As a result, ICE Clear Europe
does not believe the amendments will
affect the cost of clearing for Clearing
Members or other market participants,
the market for cleared services generally
or access to clearing by Clearing
Members or other market participants,
or otherwise affect competition among
Clearing Members or market
participants.
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants or Others
Written comments relating to the
proposed amendments have not been
solicited or received by ICE Clear
Europe. ICE Clear Europe will notify the
Commission of any written comments
received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change
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
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
8 17 CFR 240.17Ad–22(e)(17)(i). The rule states
that ‘‘[e]ach covered clearing agency shall establish,
implement, maintain and enforce written policies
and procedures reasonably designed to, as
applicable: Manage the covered clearing agency’s
operational risks by:
(i) 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.
9 17 CFR 240.17Ad–22(e)(17)(i).
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(A) By order approve or disapprove
the 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 (https://www.sec.gov/
rules/sro.shtml) or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
ICEEU–2019–009 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–ICEEU–2019–009. 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 (https://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
filings will also be available for
inspection and copying at the principal
office of ICE Clear Europe and on ICE
Clear Europe’s website at https://
www.theice.com/clear-europe/
regulation.
All comments received will be posted
without change. Persons submitting
comments are cautioned that we do not
redact or edit personal identifying
E:\FR\FM\10MYN1.SGM
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Federal Register / Vol. 84, No. 91 / Friday, May 10, 2019 / Notices
information from comment submissions.
You should submit only information
that you wish to make available
publicly. All submissions should refer
to File Number SR–ICEEU–2019–009
and should be submitted on or before
May 31, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–09632 Filed 5–9–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85788; File No. SR–C2–
2019–009]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the
Exchange’s Opening Process and Add
a Global Trading Hours Session for
DJX Options
May 6, 2019.
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Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 24,
2019, Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) 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 Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 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
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) proposes to amend
the Exchange’s opening process, add a
global trading hours session (‘‘Global
Trading Hours’’ or ‘‘GTH’’) for options
on the Dow Jones Industrial Average
(‘‘DJX options’’) and make
corresponding changes, update its rule
related to trading hours for index
options that may be listed for trading on
the Exchange, and make other
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
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17:03 May 09, 2019
Jkt 247001
conforming and nonsubstantive
changes. The text of the proposed rule
change is provided in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
at the Exchange’s Office of the
Secretary, 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
In its filing with the Commission, the
Exchange 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. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In 2016, the Exchange’s parent
company, Cboe Global Markets, Inc.
(‘‘Cboe Global’’), which is also the
parent company of Cboe Exchange, Inc.
(‘‘Cboe Options’’), acquired Cboe EDGX
Exchange, Inc. (‘‘EDGX’’), Cboe EDGA
Exchange, Inc. (‘‘EDGA’’), Cboe BZX
Exchange, Inc. (‘‘BZX or BZX Options’’),
and Cboe BYX Exchange, Inc. (‘‘BYX’’
and, together with C2, Cboe Options,
EDGX, EDGA, and BZX, the ‘‘Cboe
Affiliated Exchanges’’). The Cboe
Affiliated Exchanges are working to
align certain system functionality,
retaining only intended differences
between the Cboe Affiliated Exchanges,
in the context of a technology migration.
Cboe Options intends to migrate its
technology to the same trading platform
used by the Exchange, BZX Options,
and EDGX Options in the fourth quarter
of 2019. The proposal set forth below is
intended to add certain functionality to
the Exchange’s System that is more
similar to functionality offered by Cboe
Options in order to ultimately provide
a consistent technology offering for
market participants who interact with
the Cboe Affiliated Exchanges. Although
the Exchange intentionally offers certain
features that differ from those offered by
its affiliates and will continue to do so,
the Exchange believes that offering
similar functionality to the extent
PO 00000
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20673
practicable will reduce potential
confusion for Users.
Global Trading Hours
The proposed rule change adds a GTH
trading session to the Rules. Currently,
transactions in equity options (which
the proposed rule change clarifies
includes options on individual stocks,
exchange-traded funds (‘‘Units’’ or
‘‘ETFs’’), exchange-traded notes
(‘‘Index-Linked Exchangeable Notes’’ or
‘‘ETNs’’), and other securities) may
occur from 9:30 a.m. to 4:00 p.m.,5
except for options on ETFs, ETNs, Index
Portfolio Shares, Index Portfolio
Receipts, and Trust Issued Receipts the
Exchange designates to remain open for
trading beyond 4:00 p.m. but no later
than 4:15 p.m.6 Transactions in index
options may occur from 9:30 a.m. to
4:15 p.m.7 As proposed, these hours are
referred to as ‘‘Regular Trading
Hours.’’ 8 Regular Trading Hours are
consistent with the regular trading
hours of most other U.S. options
exchanges. Cboe Options has a global
trading hours session during which
trading in certain option classes, which
trading session occurs from 3:00 a.m. to
9:15 a.m.9 Additionally, many U.S.
stock and futures exchanges, which
allow for trading in some of their listed
products for various periods of time
outside of Regular Trading Hours.10
5 All times are Eastern time unless otherwise
noted.
6 See proposed Rule 6.1(b)(1). The proposed rule
changes makes nonsubstantive changes to proposed
Rule 6.1(b)(1), including adding defined terms and
moving the provision from current paragraph (b)
regarding the Exchange’s ability to determine that
options on individual stocks will trade during
different hours under unusual conditions or as
otherwise set forth in the Rules to proposed
subparagraph (b)(1). The proposed rule change also
adds an applicable heading to proposed paragraphs
(a) and (d). Additional changes to Rule 6.1 are
discussed below.
7 See proposed Rule 6.1(b)(2).
8 See also proposed Rule 1.1, definition of Regular
Trading Hours or RTH (the trading session
consisting of the regular hours during which
transactions in options may be effected on the
Exchange, as set forth in Rule 6.1); and Cboe
Options Rule 1.1 (definition of Regular Trading
Hours).
9 See Cboe Options Rule 6.1.
10 See, e.g., BZX Rule 1.5(c), (r), (w), and (ee)
(regular trading hours from 9:30 a.m. until 4:00 p.m.
Eastern time, two early trading sessions (Early
Trading Session and Pre-Opening Session) from
7:00 a.m. until 9:30 a.m. and an After Hours
Trading Session from 4:00 p.m. to 8:00 p.m. Eastern
time); NASDAQ Stock Market LLC Rule 4617
(regular trading hours from 9:30 a.m. until 4:00 p.m.
Eastern time and extended trading hours from 4:00
a.m. until 9:30 a.m. and 4:00 p.m. to 8:00 p.m.
Eastern time); and New York Stock Exchange LLC
Series 900 (providing for an off-hours trading
facility to operate outside of the regular 9:30 a.m.
to 4:00 p.m. Eastern time trading session); see also,
e.g., Chicago Board of Trade Extended Trading
Hours for Grain, Oilseeds and Ethanol—Frequently
E:\FR\FM\10MYN1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 91 (Friday, May 10, 2019)]
[Notices]
[Pages 20671-20673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09632]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85782; File No. SR-ICEEU-2019-009]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change Relating to the ICE Clear Europe
Operational Risk Management Policy (``ORM Policy'')
May 6, 2019.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 1, 2019, ICE Clear Europe Limited (``ICE Clear Europe'' or the
``Clearing House'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule changes described in Items I, II,
and III below, which Items have been prepared primarily by ICE Clear
Europe. The Commission is publishing this notice to solicit comments on
the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
ICE Clear Europe proposes to formalize its Operational Risk
Management Policy (``ORM Policy''), which consolidates its practices
with respect to management of operational risk. The revisions do not
involve any changes to the ICE Clear Europe Clearing Rules or
Procedures.\3\
---------------------------------------------------------------------------
\3\ Capitalized terms used but not defined herein have the
meanings specified in the ICE Clear Europe Clearing Rules (the
``Rules'').
---------------------------------------------------------------------------
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, ICE Clear Europe 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. ICE Clear Europe has prepared summaries,
set forth in sections (A), (B), and (C) below, of the most significant
aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
(a) Purpose
ICE Clear Europe is proposing to formalize its ORM Policy which
sets out the Clearing House's processes for managing operational risks,
the stakeholders responsible for executing those processes, the
frequency of review of the policy and the governance and reporting
lines for the policy.
The ORM Policy addresses operational risk, which it defines as the
risk of an event occurring which negatively impacts the achievement of
business objectives resulting from inadequate or failed internal
operational controls, people, systems or external events.\4\ The ORM
Policy establishes an overall process that identifies, assesses,
responds to, monitors and reports operational risk.
---------------------------------------------------------------------------
\4\ The ORM Policy notes several non-exhaustive examples of
operational risk, including risks from internal and external fraud,
employment practices and workplace safety, clients, products and
business practices, damage to physical assets and business
disruption and system failures.
---------------------------------------------------------------------------
Risk Identification: Risk identification is performed by the
business areas and lines exposed to the risk (referred to as ``risk
owners'') at least once each year, and is overseen by the Risk
Oversight Department. Risk owners must map their existing processes,
linking them to business objectives and identify operational risks
where an event might negatively impact the achievement of a business
objective. Risk sources must also be identified.
Risk Assessment: Risk assessment is conducted by the risk owners at
least once per year in conjunction with risk identification. The
potential impact of the risk, including its potential severity and
likelihood, are to be evaluated. More frequent ad hoc assessments may
be necessary if risks emerge or disappear between annual reviews. For
most operational risks, control mechanisms may already exist, in which
case uncontrolled and controlled impacts are measured. Risk owners must
also assess the sufficiency of existing control mechanisms on a
quarterly or, if necessary, a more frequent ad hoc basis.
Risk Response: Risk owners are responsible for proposing and
implementing remedial actions, which must be approved by the ICE Clear
Europe Executive Risk Committee (the ``ERC''). Depending upon the
potential expected impact of the operational risk and the Clearing
House risk appetite, the four possible responses to a risk are to treat
or mitigate the risk, tolerate or accept the risk, transfer the risk to
another party (such as through insurance) or terminate the activity
carrying the risk.
Risk Monitoring: Risk owners must monitor the identified
operational risk daily through the use of key performance indicators,
key risk indicators and other risk indicators such as their own
management limits. The Risk Oversight Department itself monitors risks
daily through risk appetite metrics and management thresholds as well
as operational incidents raised by the risk owners. Risk owners and the
Risk Oversight Department also must monitor the performance of control
mechanisms on a regular and frequent basis.
Risk Reporting and Oversight: Overall oversight of the policy rests
with the Audit Committee and Risk Oversight Department. Specifically,
the results of risk assessments must be reported to the Audit Committee
and the Board Risk Committee (the ``BRC'') when material changes are
observed. Control
[[Page 20672]]
assessments and operational incidents must be regularly reported to
senior management, the Audit Committee and the BRC for appropriate
action. The BRC and Board will also be informed of relevant incidents
as part of routine reporting. Operational metrics will be provided to
the Board and BRC monthly and the ERC daily. The product Risk
Committees shall also have access to operational metrics following
their schedule of meetings. Unexpected results of operational metrics
require escalation and notification to the Board immediately following
the event. Identified operational risks must also be compared against
established thresholds and reported to the ERC daily and monthly. The
ORM Policy itself is subject to review on a biennial basis or in the
event of a material change.
(b) Statutory Basis
ICE Clear Europe believes that the proposed amendments are
consistent with the requirements of Section 17A of the Act \5\ and the
regulations thereunder applicable to it. In particular, Section
17A(b)(3)(F) of the Act \6\ requires, among other things, that the
rules of a clearing agency be designed to promote the prompt and
accurate clearance and settlement of securities transactions and, to
the extent applicable, derivative agreements, contracts, and
transactions, the safeguarding of securities and funds in the custody
or control of the clearing agency or for which it is responsible, and
the protection of investors and the public interest. By formalizing ICE
Clear Europe's operational risk management and governance process, the
amendments are intended to enhance ICE Clear Europe's ability to
identify and respond to operational risks presented by its clearing
activities. The amendments will thus promote the prompt and accurate
clearing of cleared contracts and protects investors and the public
interest in the sound operations of the clearing house. Increasing the
ability of ICE Clear Europe to identify and respond to operational
risks may also enhance the safeguarding of securities and funds in the
custody or control of the Clearing House or for which it is
responsible, and avoid potential disruption of access to such assets as
a result of operational risks. Accordingly, the amendments satisfy the
requirements of Section 17A(b)(3)(F).\7\
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\5\ 15 U.S.C. 78q-1.
\6\ 15 U.S.C. 78q-1(b)(3)(F).
\7\ 15 U.S.C. 78q-1(b)(3)(F).
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The policy is also consistent with the requirements of Rule 17Ad-
22(e)(17)(i).\8\ The ORM Policy is designed to enhance the ability of
ICE Clear Europe to identify relevant sources of operational risk,
monitor them on an ongoing basis and take appropriate action to respond
to such risks. The amendments will therefore facilitate the ongoing
identification and mitigation of operational risk, within the meaning
of Rule 17Ad-22(e)(17)(i).\9\
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\8\ 17 CFR 240.17Ad-22(e)(17)(i). The rule states that ``[e]ach
covered clearing agency shall establish, implement, maintain and
enforce written policies and procedures reasonably designed to, as
applicable: Manage the covered clearing agency's operational risks
by:
(i) 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.
\9\ 17 CFR 240.17Ad-22(e)(17)(i).
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(B) Clearing Agency's Statement on Burden on Competition
ICE Clear Europe does not believe the proposed amendments would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The amendments
are being adopted to strengthen the Clearing House's internal
operational risk management processes and governance and should not
affect the rights or obligations of Clearing Members. As a result, ICE
Clear Europe does not believe the amendments will affect the cost of
clearing for Clearing Members or other market participants, the market
for cleared services generally or access to clearing by Clearing
Members or other market participants, or otherwise affect competition
among Clearing Members or market participants.
(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others
Written comments relating to the proposed amendments have not been
solicited or received by ICE Clear Europe. ICE Clear Europe will notify
the Commission of any written comments received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change
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 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 the 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 (https://www.sec.gov/rules/sro.shtml) or
Send an email to [email protected]. Please include
File Number SR-ICEEU-2019-009 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-ICEEU-2019-009. 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 (https://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 filings will also be available for inspection
and copying at the principal office of ICE Clear Europe and on ICE
Clear Europe's website at https://www.theice.com/clear-europe/regulation.
All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying
[[Page 20673]]
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-ICEEU-2019-009 and should be submitted
on or before May 31, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-09632 Filed 5-9-19; 8:45 am]
BILLING CODE 8011-01-P
