Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing of Proposed Rule Change Relating to the ICE Clear Europe Articles of Association, 31348-31351 [2021-12247]
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Federal Register / Vol. 86, No. 111 / Friday, June 11, 2021 / Notices
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the week of June 14, 2021.
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Tuesday, June 22, 2021
9:00 a.m. Briefing on Transformation
at the NRC—Midyear Review
(Public Meeting); (Contact: Maria
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The NRC is holding the meetings
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in the Sunshine Act, 5 U.S.C. 552b.
Dated: June 9, 2021.
For the Nuclear Regulatory Commission.
Wesley W. Held,
Policy Coordinator, Office of the Secretary.
[FR Doc. 2021–12449 Filed 6–9–21; 4:15 pm]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92120; File No. SR–ICEEU–
2021–013]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
of Proposed Rule Change Relating to
the ICE Clear Europe Articles of
Association
June 7, 2021.
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 25,
2021, 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.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
ICE Clear Europe Limited (‘‘ICE Clear
Europe’’ or the ‘‘Clearing House’’)
proposes to modify its Articles of
Association (the ‘‘Articles’’). The
revisions would not involve any
changes to the ICE Clear Europe
Clearing Rules or Procedures.
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.
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change, Security-Based
Swap Submission or Advance Notice
(a) Purpose
The purpose of the amendments is to
update the Articles to reflect certain
changes in the composition of the ICE
Clear Europe Board and the composition
and structure of Board committees, to
clarify certain director independence
standards, to clarify certain superquorum standards applicable to certain
actions relating to CDS clearing, to
revise certain provisions regarding
directors and to reflect the use of
gender-neutral language, as discussed in
more detail herein.
In article 3,3 definitions of certain
specific committees would be deleted,
including the Audit Committee, Board
Risk Committee, Compensation
Committee and Nomination Committee,
and the definition of Committee would
be revised to generally reference any
committee constituted by the Board
under the Articles. Although ICE Clear
Europe is not proposing to change its
current committee structure at this time,
it does not believe the committees need
to be defined in the Articles. Since the
Board is authorized to create, modify or
dissolve committees as it determines to
be appropriate, the amendments would
facilitate future changes to the
committee structure by the Board
without need to amend the Articles. The
definition of Product Risk Committee,
however, would not be removed from
the Articles because there are references
to this committee throughout the
Articles in light of certain specific
requirements relating to the CDS
Director.
In addition, the amendments would
modify certain other definitions,
including CDS Director, Committees,
Independent Director, Risk Committee
and Super-Quorum Matters. These
definitions would be updated as
follows:
• CDS Director—a sentence would be
added to the definition to clarify that
the CDS Director may also meet the
criteria required of an Independent
Director, however, for the avoidance of
doubt they will continue to be classified
only as a CDS Director.
• Independent Director—this
definition would be updated such that
instead of describing this person as
independent of the Company and of the
Clearing House (without further
definition of independence), the
definition would require the director to
3 References herein to the numbering of particular
articles will be to the articles as amended.
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meet the independence criteria for a
director, as defined under relevant
applicable legislation.4
• Risk Committee—this definition
would be renamed Product Risk
Committee, and references to this
committee would be updated
throughout the Articles. This change
reflects the correct current name and
function of this committee (and
distinguishes the Product Risk
Committee from other existing risk
committees). Further, the statement that
it is composed of directors would be
deleted as it does not reflect the
composition of the committee under its
terms of reference (which includes
clearing member representatives, among
others).
• Super-Quorum Matters—this
definition would be updated to clarify,
as a matter of drafting, that such matters
include the criteria for CDS Clearing
Membership. A reference to the terms of
reference for the CDS Risk Committee
would be updated to the terms of
reference for the Product Risk
Committee with responsibility for CDS
(which is the current name for the
relevant committee). The amendments
would also resolve a drafting ambiguity
by removing the subject and content of
the Board Resolution as a SuperQuorum Matter as, by current practice,
not all Board resolutions are SuperQuorum Matters.
A new article 11 would provide that
a member shall be deemed present at a
general meeting if participating by
telephone or other electronic means and
all participating members can hear each
other.
The amendments would make certain
revisions to the composition of the
board and board committees. Amended
article 26 would provide that one third
of directors appointed to the board
should be classed as Independent
Directors (instead of at least two and not
more than four), and at least one CDS
Director would be required to be
appointed to serve in such a capacity at
any one time (instead of two). The
proposed change to the required number
of CDS Directors follows the retirement
of one of the previous CDS Directors
and the determination by the Clearing
House that it is not necessary to appoint
a minimum of two CDS Directors to
serve in such capacity in order to
4 Specifically, such legislation would include the
definition of ‘‘independent member’’ pursuant to
Article 2(28) of the European Market Infrastructure
Regulation (EMIR), Regulation (EU) No 648/2012 of
the European Parliament and of the Council of 4
July 2012 on OTC derivatives, central
counterparties and trade repositories as
incorporated into UK law under the European
Union (Withdrawal) Act 2018 (UK EMIR).
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adequately address the interests of
Clearing Members in Clearing House
governance. In addition to the
remaining CDS Director, Clearing
Members would continue to be
represented through the CDS Product
Risk Committee which, other than the
Chair, is composed entirely of
representatives of Clearing Members.
The change was approved by the CDS
Product Risk Committee, and no
Clearing Members objected to the
change in the required number of CDS
Directors.
In article 27, consistent with the
changes to the definitions of
Committees described above, the
reference to the Nomination Committee
would be deleted and replaced with
language referring to a committee
appointed by the board which would be
responsible for appointing directors by
ordinary resolution. Article 28 would be
amended to reflect the change in article
26 to require only a single CDS Director.
Article 30A would be amended to
delete certain language pertaining to a
CDS Director’s retirement date that is no
longer necessary with a single CDS
Director. In article 32, the reference to
the Nomination Committee would be
deleted and replaced with language
referring to a committee of the board
appointed to consider retirement of
directors under the Articles. Likewise,
article 33 would be amended to delete
the reference to the Nomination
Committee and replaced such reference
with language referring to a committee
appointed by the board to considering
the reappointment of an Independent
Director.
Article 44, which discusses the
delegation of directors’ power to certain
committees, would be amended to
delete references to the specific
committees that were deleted from
article 3 (i.e., the Risk Committee(s), an
Audit Committee, a Board Risk
Committee, a Nominations Committee
and a Compensation Committee).
Amended Article 49 would clarify
that directors may be paid certain
expenses that are reasonable and the
amendments would remove the
requirement that this be subject to board
approval as such expenses would be
approved by the ICE Clear Europe
President.
Amendments to article 59(a) would
clarify the operation of the superquorum requirement for Super-Quorum
Matters, which relate to CDS Contracts
including to reflect the requirement to
only have one CDS Director. For such
matters, if a CDS Director has been
appointed, such director must be
present at the meeting, together with the
normal quorum of a majority of the
PO 00000
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31349
directors serving on the board at the
time. The amendments would add a
defined term for ‘‘Super-Quorum’’ and
make revisions throughout the Articles
to use such term as appropriate. The
amendments also clarify that the CDS
director must be present at the present
for a super-quorum meeting, but need
not vote in favor of the resolution.
Amendments to article 59(b) would
state explicitly that in order for a
quorum to be met for non-super-quorum
matters, the required directors must be
present at the meeting. Article 59(c)
would be amended to clarify that for
super-quorum matters that need to be
resolved in an emergency, the presence
of a CDS Director is not necessary. The
amendments would also clarify that
whether an emergency exists for this
purpose is to be determined by the
President or their delegate.
Similarly, article 59A, would be
revised to clarify that where SuperQuorum matters have to be adjourned to
a subsequent meeting because no CDS
Director is present, the subsequent
meeting must have a quorum present at
the meeting but need not include a CDS
Director.
Throughout the Articles, various
provisions would be amended to use
gender-neutral language. Certain nonsubstantive typographical and similar
corrections would also be made.
Various articles would be renumbered
due to the changes discussed above.
(b) Statutory Basis
ICE Clear Europe believes that the
proposed amendments to the Articles
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. The proposed changes
are designed to clarify and update
certain aspects of ICE Clear Europe’s
Articles, particularly around board
committees, the number of CDS
Directors, and the application of certain
super-quorum requirements applicable
to matters relating to CDS Contracts.
The amendments are intended to
facilitate use of board committees where
5 15
6 15
E:\FR\FM\11JNN1.SGM
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
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appropriate, without need to update the
Articles. The amendments reduce the
required number of CDS Directors to
one, and clarify the operation of the
CDS super-quorum requirements in
light of that change. In ICE Clear
Europe’s view, these amendments
would enhance and streamline the
clearing house’s overall governance
framework, and thus facilitate the
efficient operation of the clearing house
and the prompt and accurate clearance
and settlement of transactions and the
public interest, within the meaning of
the Act. For these reasons, the
amendments would also promote
governance arrangements that are clear
and transparent to fulfill the public
interests requirements in Section 17A of
the Act 7 applicable to clearing agencies,
support the objectives of owners and
participants and promote the
effectiveness of the clearing agency’s
risk management procedures.
Further, Section 17A(b)(3)(C) of the
Act 8 requires that the rules of a clearing
agency ‘‘assure a fair representation of
its shareholders (or members) and
participants in the selection of its
directors and administration of its
affairs.’’ Following the proposed
amendments, Clearing Members will
continue to be represented on the Board
by the existing CDS Director and the
Articles will continue to require the
appointment of at least one CDS
Director to the Board. In addition, the
interests of Clearing Members will
continue to be represented through the
F&O and CDS Product Risk Committees
and the Client Risk Committee. The
majority of the members of all the three
committees are Clearing Member
representatives.9 As such, ICE Clear
Europe believes its governance
arrangements, as modified by the
amendments to the Articles, will
continue to provide a fair representation
of its shareholders and participants in
the selection of its directors and
administration of its affairs, within the
meaning of Section 17A(b)(3)(C).10
Rule 17Ad–22(e)(2)(i) 11 requires
clearing agencies to establish reasonably
designed policies and procedures to
provide for governance arrangements
that are clear and transparent. The
proposed amendments to the Articles
more clearly set out the composition of
the board and board committees, the
appointment of directors, delegation of
7 15
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(C).
9 Under UK EMIR Article 28, ICE Clear Europe is
required to ensure that the Client Risk Committee
maintains Clearing Member and client
representation.
10 15 U.S.C. 78q–1(b)(3)(C).
11 17 CFR 240.17 Ad–22(e)(2)(i).
8 15
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directors’ powers and requirements
relating to a quorum and super-quorum.
ICE Clear Europe believes that the
amendments to the Articles are
therefore consistent with the
requirements of Rule 17Ad–22(e)(2).12
(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 further strengthen
Clearing House governance
arrangements by more clearly setting out
requirements relating to the
composition of the board and board
committees, the appointment of
directors, delegation of directors’
powers and meeting quorum and superquorum requirements. The amendments
do not affect any terms or conditions of
cleared contracts, and are not intended
to affect directly Clearing Members or
market participants, or the markets for
cleared products. As a result, ICE Clear
Europe does not otherwise believe the
amendments would affect the costs of or
access to clearing, or the market for
clearing services generally. Therefore,
ICE Clear Europe does not believe the
proposed rule change imposes any
burden on competition that is
inappropriate in furtherance of the
purposes of the Act.
(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, Security-Based
Swap Submission and Advance Notice
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
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
12 17
PO 00000
CFR 240.17 Ad–22(e)(2).
Frm 00086
Fmt 4703
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(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, security-based swap submission
or advance notice 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–2021–013 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–2021–013. 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, security-based swap submission
or advance notice that are filed with the
Commission, and all written
communications relating to the
proposed rule change, security-based
swap submission or advance notice
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
information from comment submissions.
You should submit only information
that you wish to make available
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Federal Register / Vol. 86, No. 111 / Friday, June 11, 2021 / Notices
publicly. All submissions should refer
to File Number SR–ICEEU–2021–013
and should be submitted on or before
July 2, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–12247 Filed 6–10–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92122; File No. SR–
NYSEAMER–2021–30]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Modify the NYSE
American Options Fee Schedule
June 7, 2021.
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 June 2,
2021, NYSE American LLC (‘‘NYSE
American’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory 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 modify the
NYSE American Options Fee Schedule
(‘‘Fee Schedule’’) regarding the charges
applicable to Manual transactions by
NYSE American Options Market
Makers, Specialists, and e-Specialists.
The Exchange proposes to implement
the fee change effective June 2, 2021.4
The proposed rule change is available
on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
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13 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 The Exchange originally filed to amend the Fee
Schedule on May 3, 2021 (SR–NYSEAmer–2021–
25), then withdrew and refiled on May 12, 2021
(SR–NYSEAmer–2021–27) and May 21, 2021 (SR–
NYSEAmer–2021–28), which latter filing the
Exchange withdrew on June 2, 2021.
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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
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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to modify
Section I.A. of the Fee Schedule
regarding the charges for Manual
transactions by NYSE American Options
Market Makers, Specialists, and eSpecialists. Currently, NYSE American
Options Market Makers (‘‘Market
Makers’’) are charged $0.25 per contract
for Manual transactions; Specialists and
e-Specialists (collectively, ‘‘Specialists’’)
are charged $0.18 per contract for
Manual transactions. The Exchange
proposes to modify the rates charged for
Manual transactions to $0.35 per
contract for Market Makers and $0.30
per contract for Specialists. The
proposed rate for Market Makers is
competitive and intended to align the
Exchange’s fees for Manual transactions
by Market Makers with those charged by
other markets.5 The proposed rate for
Specialists would reduce the existing
disparity between rates charged to
Specialists and Market Makers from
seven cents ($0.07) to five ($0.05),
which disparity the Exchange believes
continues to be justified given the
additional fees imposed on Specialists.6
The Exchange also proposes to modify
Footnote 6 to Section 1.A. of the Fee
Schedule, which provides that
participants in the Prepayment
Program 7 will pay reduced rates for
5 See, e.g., Nasdaq PHLX LLC (‘‘Phlx’’) Pricing
Schedule, available at: https://
listingcenter.nasdaq.com/rulebook/phlx/rules/
Phlx%20Options%207 (providing $0.35 per
contract rate for manual transactions by market
makers); Cboe Exchange, Inc. (‘‘Cboe’’) Fee
Schedule, available at: https://cdn.cboe.com/
resources/membership/Cboe_FeeSchedule.pdf
(providing $0.35 per contract rate for manual
transactions by market makers).
6 See Fee Schedule, Section III.C. (setting forth
the Rights Fee assessed on each issue in a
Specialist’s allocation, with rates based on the
Average National Daily Customer Contracts).
7 See Fee Schedule, Section I.D.
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31351
Manual transactions. Specifically, the
Exchange proposes to modify Footnote
6 to clarify that Market Makers and
Specialists who participate in the
Prepayment Program will receive a per
contract discount on Manual
transactions, instead of setting forth a
specific per contract charge. Currently,
Footnote 6 provides that Market Makers
who participate in the Prepayment
Program are charged $0.23 per contract
for Manual transactions (representing a
$0.02 discount on the current $0.25 per
contract rate applicable to Market
Makers), and Specialists who participate
in the Prepayment Program are charged
$0.17 per contract for Manual
transactions (which represents a $0.01
discount on the current $0.18 per
contract rate applicable to Specialists).
The Exchange proposes to revise this
footnote to specify that Market Makers
that participate in the Prepayment
Program will receive a $0.02 discount
on the per contract rate for Manual
transactions, and Specialists that
participate in the Prepayment Program
will receive a $0.01 discount on the per
contract rate for Manual transactions.8
The Exchange proposes this
modification to the Fee Schedule to
clarify the nature of the discount
available to Market Makers and
Specialists who participate in the
Prepayment Program and to simplify the
Fee Schedule in the event of any future
changes to the rates applicable to
Manual transactions by Market Makers
and/or Specialists.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Sections
6(b)(4) and (5) of the Act,10 in particular,
because it provides for the equitable
allocation of reasonable dues, fees, and
other charges among its members,
issuers and other persons using its
facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
The Proposed Rule Change Is
Reasonable
The Exchange operates in a highly
competitive market. The Commission
has repeatedly expressed its preference
8 Based on the proposed $0.35 and $0.30 per
contract rates for Market Maker and Specialist
Manual transactions, respectively, Market Makers
who participate in the Prepayment Program would,
as proposed, receive a discounted rate of $0.33 per
contract on Manual transactions, and Specialists
who participate in the Prepayment Program would
receive a discounted rate of $0.29 per contract on
Manual transactions.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4) and (5).
E:\FR\FM\11JNN1.SGM
11JNN1
]]>Agencies
[Federal Register Volume 86, Number 111 (Friday, June 11, 2021)]
[Notices]
[Pages 31348-31351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12247]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92120; File No. SR-ICEEU-2021-013]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change Relating to the ICE Clear Europe
Articles of Association
June 7, 2021.
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 25, 2021, 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.
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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
ICE Clear Europe Limited (``ICE Clear Europe'' or the ``Clearing
House'') proposes to modify its Articles of Association (the
``Articles''). The revisions would not involve any changes to the ICE
Clear Europe Clearing Rules or Procedures.
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, Security-Based Swap Submission or
Advance Notice
(a) Purpose
The purpose of the amendments is to update the Articles to reflect
certain changes in the composition of the ICE Clear Europe Board and
the composition and structure of Board committees, to clarify certain
director independence standards, to clarify certain super-quorum
standards applicable to certain actions relating to CDS clearing, to
revise certain provisions regarding directors and to reflect the use of
gender-neutral language, as discussed in more detail herein.
In article 3,\3\ definitions of certain specific committees would
be deleted, including the Audit Committee, Board Risk Committee,
Compensation Committee and Nomination Committee, and the definition of
Committee would be revised to generally reference any committee
constituted by the Board under the Articles. Although ICE Clear Europe
is not proposing to change its current committee structure at this
time, it does not believe the committees need to be defined in the
Articles. Since the Board is authorized to create, modify or dissolve
committees as it determines to be appropriate, the amendments would
facilitate future changes to the committee structure by the Board
without need to amend the Articles. The definition of Product Risk
Committee, however, would not be removed from the Articles because
there are references to this committee throughout the Articles in light
of certain specific requirements relating to the CDS Director.
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\3\ References herein to the numbering of particular articles
will be to the articles as amended.
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In addition, the amendments would modify certain other definitions,
including CDS Director, Committees, Independent Director, Risk
Committee and Super-Quorum Matters. These definitions would be updated
as follows:
CDS Director--a sentence would be added to the definition
to clarify that the CDS Director may also meet the criteria required of
an Independent Director, however, for the avoidance of doubt they will
continue to be classified only as a CDS Director.
Independent Director--this definition would be updated
such that instead of describing this person as independent of the
Company and of the Clearing House (without further definition of
independence), the definition would require the director to
[[Page 31349]]
meet the independence criteria for a director, as defined under
relevant applicable legislation.\4\
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\4\ Specifically, such legislation would include the definition
of ``independent member'' pursuant to Article 2(28) of the European
Market Infrastructure Regulation (EMIR), Regulation (EU) No 648/2012
of the European Parliament and of the Council of 4 July 2012 on OTC
derivatives, central counterparties and trade repositories as
incorporated into UK law under the European Union (Withdrawal) Act
2018 (UK EMIR).
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Risk Committee--this definition would be renamed Product
Risk Committee, and references to this committee would be updated
throughout the Articles. This change reflects the correct current name
and function of this committee (and distinguishes the Product Risk
Committee from other existing risk committees). Further, the statement
that it is composed of directors would be deleted as it does not
reflect the composition of the committee under its terms of reference
(which includes clearing member representatives, among others).
Super-Quorum Matters--this definition would be updated to
clarify, as a matter of drafting, that such matters include the
criteria for CDS Clearing Membership. A reference to the terms of
reference for the CDS Risk Committee would be updated to the terms of
reference for the Product Risk Committee with responsibility for CDS
(which is the current name for the relevant committee). The amendments
would also resolve a drafting ambiguity by removing the subject and
content of the Board Resolution as a Super-Quorum Matter as, by current
practice, not all Board resolutions are Super-Quorum Matters.
A new article 11 would provide that a member shall be deemed
present at a general meeting if participating by telephone or other
electronic means and all participating members can hear each other.
The amendments would make certain revisions to the composition of
the board and board committees. Amended article 26 would provide that
one third of directors appointed to the board should be classed as
Independent Directors (instead of at least two and not more than four),
and at least one CDS Director would be required to be appointed to
serve in such a capacity at any one time (instead of two). The proposed
change to the required number of CDS Directors follows the retirement
of one of the previous CDS Directors and the determination by the
Clearing House that it is not necessary to appoint a minimum of two CDS
Directors to serve in such capacity in order to adequately address the
interests of Clearing Members in Clearing House governance. In addition
to the remaining CDS Director, Clearing Members would continue to be
represented through the CDS Product Risk Committee which, other than
the Chair, is composed entirely of representatives of Clearing Members.
The change was approved by the CDS Product Risk Committee, and no
Clearing Members objected to the change in the required number of CDS
Directors.
In article 27, consistent with the changes to the definitions of
Committees described above, the reference to the Nomination Committee
would be deleted and replaced with language referring to a committee
appointed by the board which would be responsible for appointing
directors by ordinary resolution. Article 28 would be amended to
reflect the change in article 26 to require only a single CDS Director.
Article 30A would be amended to delete certain language pertaining
to a CDS Director's retirement date that is no longer necessary with a
single CDS Director. In article 32, the reference to the Nomination
Committee would be deleted and replaced with language referring to a
committee of the board appointed to consider retirement of directors
under the Articles. Likewise, article 33 would be amended to delete the
reference to the Nomination Committee and replaced such reference with
language referring to a committee appointed by the board to considering
the reappointment of an Independent Director.
Article 44, which discusses the delegation of directors' power to
certain committees, would be amended to delete references to the
specific committees that were deleted from article 3 (i.e., the Risk
Committee(s), an Audit Committee, a Board Risk Committee, a Nominations
Committee and a Compensation Committee).
Amended Article 49 would clarify that directors may be paid certain
expenses that are reasonable and the amendments would remove the
requirement that this be subject to board approval as such expenses
would be approved by the ICE Clear Europe President.
Amendments to article 59(a) would clarify the operation of the
super-quorum requirement for Super-Quorum Matters, which relate to CDS
Contracts including to reflect the requirement to only have one CDS
Director. For such matters, if a CDS Director has been appointed, such
director must be present at the meeting, together with the normal
quorum of a majority of the directors serving on the board at the time.
The amendments would add a defined term for ``Super-Quorum'' and make
revisions throughout the Articles to use such term as appropriate. The
amendments also clarify that the CDS director must be present at the
present for a super-quorum meeting, but need not vote in favor of the
resolution. Amendments to article 59(b) would state explicitly that in
order for a quorum to be met for non-super-quorum matters, the required
directors must be present at the meeting. Article 59(c) would be
amended to clarify that for super-quorum matters that need to be
resolved in an emergency, the presence of a CDS Director is not
necessary. The amendments would also clarify that whether an emergency
exists for this purpose is to be determined by the President or their
delegate.
Similarly, article 59A, would be revised to clarify that where
Super-Quorum matters have to be adjourned to a subsequent meeting
because no CDS Director is present, the subsequent meeting must have a
quorum present at the meeting but need not include a CDS Director.
Throughout the Articles, various provisions would be amended to use
gender-neutral language. Certain non-substantive typographical and
similar corrections would also be made.
Various articles would be renumbered due to the changes discussed
above.
(b) Statutory Basis
ICE Clear Europe believes that the proposed amendments to the
Articles 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. The proposed
changes are designed to clarify and update certain aspects of ICE Clear
Europe's Articles, particularly around board committees, the number of
CDS Directors, and the application of certain super-quorum requirements
applicable to matters relating to CDS Contracts. The amendments are
intended to facilitate use of board committees where
[[Page 31350]]
appropriate, without need to update the Articles. The amendments reduce
the required number of CDS Directors to one, and clarify the operation
of the CDS super-quorum requirements in light of that change. In ICE
Clear Europe's view, these amendments would enhance and streamline the
clearing house's overall governance framework, and thus facilitate the
efficient operation of the clearing house and the prompt and accurate
clearance and settlement of transactions and the public interest,
within the meaning of the Act. For these reasons, the amendments would
also promote governance arrangements that are clear and transparent to
fulfill the public interests requirements in Section 17A of the Act \7\
applicable to clearing agencies, support the objectives of owners and
participants and promote the effectiveness of the clearing agency's
risk management procedures.
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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.
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Further, Section 17A(b)(3)(C) of the Act \8\ requires that the
rules of a clearing agency ``assure a fair representation of its
shareholders (or members) and participants in the selection of its
directors and administration of its affairs.'' Following the proposed
amendments, Clearing Members will continue to be represented on the
Board by the existing CDS Director and the Articles will continue to
require the appointment of at least one CDS Director to the Board. In
addition, the interests of Clearing Members will continue to be
represented through the F&O and CDS Product Risk Committees and the
Client Risk Committee. The majority of the members of all the three
committees are Clearing Member representatives.\9\ As such, ICE Clear
Europe believes its governance arrangements, as modified by the
amendments to the Articles, will continue to provide a fair
representation of its shareholders and participants in the selection of
its directors and administration of its affairs, within the meaning of
Section 17A(b)(3)(C).\10\
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\8\ 15 U.S.C. 78q-1(b)(3)(C).
\9\ Under UK EMIR Article 28, ICE Clear Europe is required to
ensure that the Client Risk Committee maintains Clearing Member and
client representation.
\10\ 15 U.S.C. 78q-1(b)(3)(C).
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Rule 17Ad-22(e)(2)(i) \11\ requires clearing agencies to establish
reasonably designed policies and procedures to provide for governance
arrangements that are clear and transparent. The proposed amendments to
the Articles more clearly set out the composition of the board and
board committees, the appointment of directors, delegation of
directors' powers and requirements relating to a quorum and super-
quorum. ICE Clear Europe believes that the amendments to the Articles
are therefore consistent with the requirements of Rule 17Ad-
22(e)(2).\12\
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\11\ 17 CFR 240.17 Ad-22(e)(2)(i).
\12\ 17 CFR 240.17 Ad-22(e)(2).
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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 further strengthen Clearing House governance
arrangements by more clearly setting out requirements relating to the
composition of the board and board committees, the appointment of
directors, delegation of directors' powers and meeting quorum and
super-quorum requirements. The amendments do not affect any terms or
conditions of cleared contracts, and are not intended to affect
directly Clearing Members or market participants, or the markets for
cleared products. As a result, ICE Clear Europe does not otherwise
believe the amendments would affect the costs of or access to clearing,
or the market for clearing services generally. Therefore, ICE Clear
Europe does not believe the proposed rule change imposes any burden on
competition that is inappropriate in furtherance of the purposes of the
Act.
(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, Security-Based
Swap Submission and Advance Notice 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 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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, security-based swap submission or advance notice 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-2021-013 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-2021-013. 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, security-based
swap submission or advance notice that are filed with the Commission,
and all written communications relating to the proposed rule change,
security-based swap submission or advance notice 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 information from comment submissions. You should
submit only information that you wish to make available
[[Page 31351]]
publicly. All submissions should refer to File Number SR-ICEEU-2021-013
and should be submitted on or before July 2, 2021.
For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-12247 Filed 6-10-21; 8:45 am]
BILLING CODE 8011-01-P
