Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change Relating to the ICE Clear Credit Operating Agreement and Governance Playbook, 41123-41125 [2021-16233]
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Federal Register / Vol. 86, No. 144 / Friday, July 30, 2021 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–16232 Filed 7–29–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92504; File No. SR–ICC–
2021–017]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Notice of Filing of
Proposed Rule Change Relating to the
ICE Clear Credit Operating Agreement
and Governance Playbook
July 26, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 1 and
Rule 19b–4,2 notice is hereby given that
on July 20, 2021, ICE Clear Credit LLC
(‘‘ICE Clear Credit’’ or the ‘‘Clearing
House’’) filed with the Securities and
Exchange Commission the proposed
rule change as described in Items I, II
and III below, which Items have been
prepared primarily by ICE Clear Credit.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
lotter on DSK11XQN23PROD with NOTICES1
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The principal purpose of the
proposed rule change is to amend and
restate ICE Clear Credit’s Fifth Amended
and Restated Operating Agreement
(such amended and restated document,
the Sixth Amended and Restated
Operating Agreement or ‘‘Sixth A&R
Operating Agreement’’) to (i) reduce the
number of managers on its Board of
Managers (the ‘‘Board’’) designated by
its Parent, ICE US Holding Company
L.P., (‘‘ICE-designated managers’’), and
(ii) remove outdated provisions and
make certain other non-substantive
amendments.3 ICE Clear Credit proposes
corresponding changes to the
Governance Playbook to update the
composition of the Board and to make
other non-substantive amendments.
These revisions do not require any
changes to the ICE Clear Credit Clearing
Rules (the ‘‘Rules’’).
33 17
CFR 200.30–3(a)(12).
U.S.C 78s(b)(1).
2 17 CFR 240.19b–4.
3 Capitalized terms used but not defined herein
have the meanings specified in the Sixth A&R
Operating Agreement.
1 15
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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 Credit included statements
concerning the purpose of and basis for
the proposed rule change, securitybased swap submission, or advance
notice and discussed any comments it
received on the proposed rule change,
security-based swap submission, or
advance notice. The text of these
statements may be examined at the
places specified in Item IV below. ICE
Clear Credit has prepared summaries,
set forth in sections (A), (B), and (C)
below, of the most significant aspects of
these statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
(a) Purpose
ICE Clear Credit proposes to adopt the
Sixth A&R Operating Agreement, which
would amend and restate its Fifth
Amended and Restated Operating
Agreement, and to make corresponding
changes to the Governance Playbook.
The proposed revisions are described in
detail as follows.
I. Sixth A&R Operating Agreement
ICE Clear Credit is proposing to adopt
the Sixth A&R Operating Agreement to
reduce the number of ICE-designated
managers on the Board and to remove
outdated provisions and make other
non-substantive amendments.
Board of Managers
Proposed amendments to Section
3.02(a)(i) would reduce the number of
Parent Independent Managers (those
independent managers designated by
the Parent with no material
relationships with ICE Clear Credit or its
affiliates) from four to three managers. It
would also remove all references to
names of such Parent Independent
Managers, as such persons have been
appointed and need not be named in the
operating agreement. Section 3.02(a)(ii)
would reduce the number of Parent
Non-Independent Managers (those nonindependent managers designated by
the Parent) from three to two managers.
It would also similarly remove all
references to names of such Parent NonIndependent Managers. The
amendments would not change the
numbers of Risk Committee
Independent Managers or Risk
Committee Non-Independent Managers
(those independent and nonindependent managers designated by
the Risk Committee under the Rules,
rather than by the Parent).
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41123
The amendments also update Section
3.03 to reflect prior amendments to the
operating agreement that the Board will
meet no less frequently than quarterly at
such time and place as may be
determined by the chair and may meet
more frequently (either in person or
telephonically) as circumstances dictate,
and to remove a requirement that the
Board meet telephonically no less than
twice per calendar year.
Removal of Outdated Information
Related to Conversion
Sections 2.01 and 2.02 would be
revised to remove outdated provisions
of the Fifth Amended and Restated
Operating Agreement relating to the
operation of the Clearing House prior to
its conversion in 2011 to a Delaware
limited liability company and to reflect
the occurrence of that conversion.
Related defined terms would be
removed and/or updated as necessary to
reflect these changes.
General Drafting Clarifications and
Improvements
ICE Clear Credit additionally proposes
other general drafting clarifications and
improvements. The proposed changes
revise outdated references to the name,
jurisdiction of organization, and/or
governing document of certain
Intercontinental Exchange, Inc. entities
and replace references to the Chief
Executive Officer with references to the
President (which is the correct title of
the relevant officer) to reflect prior
amendments to the operating agreement.
The other changes that would be made
throughout the Sixth A&R Operating
Agreement include updating the
Clearing House’s and the Parent’s notice
information as presented in Section
7.01(a) and (b), updating the Clearing
House’s registered office and agent in
Delaware, referencing the Fifth
Amended and Restated Operating
Agreement where necessary, updating
the definition of ICE’s Board of Director
Governance Principles to refer to the
current Independence Policy of the
Board of Directors of ICE as well as
other typographical and grammatical
updates.
II. Governance Playbook
ICE Clear Credit proposes conforming
changes to update the composition of
the Board and to make other nonsubstantive amendments to the
Governance Playbook, which
consolidates governance arrangements
set forth in ICE Clear Credit’s Rules,
operating agreement, and other ICE
Clear Credit policies and procedures.
The changes to Section III.A would
similarly reduce the number of Parent
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Federal Register / Vol. 86, No. 144 / Friday, July 30, 2021 / Notices
Independent Managers from four to
three managers and the number of
Parent Non-Independent Managers from
three to two managers. Footnote 1
would reference an amended version of
the limited partnership agreement of the
Parent and update the jurisdiction of
organization of the Parent.4 In Section
III.C, ICE Clear Credit proposes a minor
clarification with respect to the receipt
and review of resignation letters from
managers. Additionally, the proposed
changes to Section III.F update the
number of independent managers on the
Board as well as a link to ICE’s Board
of Director Governance Principles.
lotter on DSK11XQN23PROD with NOTICES1
(b) Statutory Basis
ICE Clear Credit believes that the
proposed rule change is 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
amendments to the number of ICEdesignated managers are intended to
promote efficient operation of the Board
while maintaining appropriate diversity
of viewpoints, representation of the
interests of Participants and
independence standards for managers.
Specifically, as noted above, the
amendments will not affect the number
of managers designated by the Risk
Committee under the Rules. ICE Clear
Credit believes a board of 9 managers
(rather than 11) remains an appropriate
size for oversight of its ongoing
operations. The other proposed
clarifications and changes enhance
readability and ensure that the Sixth
A&R Operating Agreement and the
Governance Playbook are clear and up
to date, including by removing outdated
provisions, incorporating prior
amendments, or making other general
clarifications and improvements, which
would further ensure that relevant
individuals carry out their
responsibilities under the documents. In
ICE Clear Credit’s view, the
amendments will thus enhance the
overall governance of the Clearing
House and are consistent with the
prompt and accurate clearance and
settlement of cleared contracts, the
safeguarding of securities and funds in
the custody or control of ICE Clear
Credit or for which it is responsible, and
the protection of investors and the
public interest. Accordingly, the
amendments satisfy the requirements of
Section 17A(b)(3)(F).7
Further, Section 17A(b)(3)(C) of the
Act 8 requires that the rules of the
clearing agency assure a fair
representation of its shareholders (or
members) and participants in the
selection of its directors and
administration of its affairs. The Sixth
A&R Operating Agreement and the
Governance Playbook will continue to
set out the composition of the Board,
with five managers (three independent
and two non-independent) designated
by the Parent and four managers (two
independent and two non-independent)
designated by the Risk Committee
following the proposed amendments.
The amendments will not affect the
number of managers designated by the
Risk Committee, the majority of whose
members (9 of 12) are Participant
representatives, and Participants will
continue to be represented on the Board.
As such, ICE Clear Credit believes that
its governance arrangements, as
modified by the proposed amendments,
will continue to provide a fair
representation of its shareholders and
participants in the selection of its
directors and administration of its
affairs and are thus consistent with the
requirements of Section 17A(b)(3)(C) of
the Act.9
Rule 17Ad–22(e)(2) 10 requires
clearing agencies to establish reasonably
designed policies and procedures to
provide for governance arrangements
that, among other matters, establish that
the board of directors have appropriate
experience and skills to discharge their
duties and responsibilities and consider
the interests of relevant stakeholders of
the clearing agency. As noted above, ICE
Clear Credit believes the reduction in
the number of ICE-designated managers
is consistent with the ongoing effective
oversight of the Clearing House by the
Board. The amendments will not affect
the number of managers designated by
the Risk Committee, and thus will not
adversely affect representation of
Participants on the Board. Moreover, a
majority of the Board will continue to be
independent and have no material
4 See SR–ICC–2021–010 for more information on
the change in the jurisdiction of organization of the
Parent.
5 15 U.S.C. 78q–1.
6 15 U.S.C. 78q–1(b)(3)(F).
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7 15
U.S.C. 78q–1(b)(3)(F).
U.S.C. 78q–1(b)(3)(C).
9 15 U.S.C. 78q–1(b)(3)(C).
10 17 CFR 240.17 Ad–22(e)(2).
8 15
Frm 00123
Fmt 4703
Sfmt 4703
relationships with ICE Clear Credit and
its affiliates. As such, ICE Clear Credit
believes that the amendments set out in
the Sixth A&R Operating Agreement and
Governance Playbook are consistent
with the requirements of Rule 17Ad–
22(e)(2).11
(B) Clearing Agency’s Statement on
Burden on Competition
ICE Clear Credit 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 update ICE Clear
Credit’s operating agreement and
Governance Playbook, and specifically
the number of managers designated by
the Parent. As a result, ICE Clear Credit
does not expect that the proposed
changes will adversely affect access to
clearing or the ability of Participants,
their customers or other market
participants to continue to clear
contracts. ICE Clear Credit also does not
believe the amendments would
materially affect the cost of clearing or
otherwise impact competition among
market participants or limit market
participants’ choices for selecting
clearing services. Accordingly, ICE Clear
Credit does not believe the amendments
would impose any burden on
competition not necessary or
appropriate in furtherance of the
purpose 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 Credit.
ICE Clear Credit 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 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
such proposed rule change, or
11 17
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CFR 240.17 Ad–22(e)(2).
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Federal Register / Vol. 86, No. 144 / Friday, July 30, 2021 / Notices
(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 is consistent with the Act.
Comments may be submitted by any of
the following methods:
lotter on DSK11XQN23PROD with NOTICES1
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–
ICC–2021–017 on the subject line.
Paper Comments
Send paper comments in triplicate to
Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to File
Number SR–ICC–2021–017. 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 Credit and on ICE
Clear Credit’s website at https://
www.theice.com/clear-credit/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
publicly. All submissions should refer
to File Number SR–ICC–2021–017 and
should be submitted on or before
August 20, 2021.
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Jkt 253001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–16233 Filed 7–29–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92492; File No. SR–ICEEU–
2021–013]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Order Approving
Proposed Rule Change Relating to the
ICE Clear Europe Articles of
Association
July 26, 2021.
I. Introduction
On May 25, 2021, ICE Clear Europe
Limited (‘‘ICE Clear Europe’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ‘‘Act’’),1 and
Rule 19b–4,2 a proposed rule change to
amend its Articles of Association (the
‘‘Articles’’). The proposed rule change
was published for comment in the
Federal Register on June 11, 2021.3 The
Commission did not receive comments
regarding the proposed rule change. For
the reasons discussed below, the
Commission is approving the proposed
rule change.
II. Description of the Proposed Rule
Change
As discussed further below, the
proposed rule change would amend the
Articles to: (i) Update definitions related
to the ICE Clear Europe Board of
Directors (the ‘‘Board’’) and references
to Board committees; (ii) modify the
composition and structure of the Board
and Board committees; (iii) revise the
provisions regarding Super-Quorum
Matters; (iv) add an article regarding
presence at a Board meeting and amend
an article related to expenses for
directors; and (v) adopt gender-neutral
language and make non-substantive
typographical edits throughout the
Articles.4
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Self-Regulatory Organizations; ICE Clear Europe
Limited; Notice of Filing of Proposed Rule Change
Relating to the ICE Clear Europe Articles of
Association, Exchange Act Release No. 92120 (June
7, 2021); 86 FR 31348 (June 11, 2021) (SR–ICEEU–
2021–013) (‘‘Notice’’).
4 The description that follows is excerpted from
the Notice, 86 FR at 31348. Capitalized terms not
otherwise defined herein have the meanings
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12 17
1 15
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41125
A. Definitions Related to the Board and
Board Committees
Beginning in the defined terms found
in Article 3, the proposed rule change
would change the name of the Risk
Committee to Product Risk Committee
and update references to this committee
throughout the Articles accordingly.
This change would reflect the correct
current name and function of this
committee (and distinguish the Product
Risk Committee from other existing risk
committees). Further, the proposed rule
change would delete from the definition
of Product Risk Committee the
statement that it is composed of the
directors, to reflect that the committee is
comprised of directors as well as
representatives of Clearing Members.
The proposed rule change would next
delete definitions of, and references to,
Board committees other than the
Product Risk Committee. The proposed
rule change would delete from article 3 5
the definitions of Audit Committee,
Board Risk Committee, Compensation
Committee, and Nomination Committee.
In addition, the proposed rule change
would also amend the defined term
Committees. Currently that term is
defined to mean certain committees of
the Board (Audit Committee, Board Risk
Committee, etc.). The proposed rule
change would revise this definition to
mean 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. Given
that 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.6 The proposed rule change
would retain the definition of, and
references to, the Product Risk
Committee, however, because that
Committee plays a specific role relating
to the CDS Director, as discussed
below.7
B. Composition and Structure of the
Board and Board Committees
The proposed rule change also would
make certain revisions to the
composition of the Board and Board
committees. Currently, the Articles
provide that the number of directors
shall be not less than six and not more
assigned to them in the ICE Clear Europe Clearing
Rules or the Articles, as applicable.
5 References herein to the numbering of particular
articles will be to the articles as amended.
6 Notice, 86 FR at 31348.
7 Notice, 86 FR at 31348.
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]]>Agencies
[Federal Register Volume 86, Number 144 (Friday, July 30, 2021)]
[Notices]
[Pages 41123-41125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16233]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92504; File No. SR-ICC-2021-017]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing of Proposed Rule Change Relating to the ICE Clear Credit
Operating Agreement and Governance Playbook
July 26, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
\1\ and Rule 19b-4,\2\ notice is hereby given that on July 20, 2021,
ICE Clear Credit LLC (``ICE Clear Credit'' or the ``Clearing House'')
filed with the Securities and Exchange Commission the proposed rule
change as described in Items I, II and III below, which Items have been
prepared primarily by ICE Clear Credit. 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
The principal purpose of the proposed rule change is to amend and
restate ICE Clear Credit's Fifth Amended and Restated Operating
Agreement (such amended and restated document, the Sixth Amended and
Restated Operating Agreement or ``Sixth A&R Operating Agreement'') to
(i) reduce the number of managers on its Board of Managers (the
``Board'') designated by its Parent, ICE US Holding Company L.P.,
(``ICE-designated managers''), and (ii) remove outdated provisions and
make certain other non-substantive amendments.\3\ ICE Clear Credit
proposes corresponding changes to the Governance Playbook to update the
composition of the Board and to make other non-substantive amendments.
These revisions do not require any changes to the ICE Clear Credit
Clearing Rules (the ``Rules'').
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\3\ Capitalized terms used but not defined herein have the
meanings specified in the Sixth A&R Operating Agreement.
---------------------------------------------------------------------------
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 Credit included
statements concerning the purpose of and basis for the proposed rule
change, security-based swap submission, or advance notice and discussed
any comments it received on the proposed rule change, security-based
swap submission, or advance notice. The text of these statements may be
examined at the places specified in Item IV below. ICE Clear Credit has
prepared summaries, set forth in sections (A), (B), and (C) below, of
the most significant aspects of these statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
(a) Purpose
ICE Clear Credit proposes to adopt the Sixth A&R Operating
Agreement, which would amend and restate its Fifth Amended and Restated
Operating Agreement, and to make corresponding changes to the
Governance Playbook. The proposed revisions are described in detail as
follows.
I. Sixth A&R Operating Agreement
ICE Clear Credit is proposing to adopt the Sixth A&R Operating
Agreement to reduce the number of ICE-designated managers on the Board
and to remove outdated provisions and make other non-substantive
amendments.
Board of Managers
Proposed amendments to Section 3.02(a)(i) would reduce the number
of Parent Independent Managers (those independent managers designated
by the Parent with no material relationships with ICE Clear Credit or
its affiliates) from four to three managers. It would also remove all
references to names of such Parent Independent Managers, as such
persons have been appointed and need not be named in the operating
agreement. Section 3.02(a)(ii) would reduce the number of Parent Non-
Independent Managers (those non-independent managers designated by the
Parent) from three to two managers. It would also similarly remove all
references to names of such Parent Non-Independent Managers. The
amendments would not change the numbers of Risk Committee Independent
Managers or Risk Committee Non-Independent Managers (those independent
and non-independent managers designated by the Risk Committee under the
Rules, rather than by the Parent).
The amendments also update Section 3.03 to reflect prior amendments
to the operating agreement that the Board will meet no less frequently
than quarterly at such time and place as may be determined by the chair
and may meet more frequently (either in person or telephonically) as
circumstances dictate, and to remove a requirement that the Board meet
telephonically no less than twice per calendar year.
Removal of Outdated Information Related to Conversion
Sections 2.01 and 2.02 would be revised to remove outdated
provisions of the Fifth Amended and Restated Operating Agreement
relating to the operation of the Clearing House prior to its conversion
in 2011 to a Delaware limited liability company and to reflect the
occurrence of that conversion. Related defined terms would be removed
and/or updated as necessary to reflect these changes.
General Drafting Clarifications and Improvements
ICE Clear Credit additionally proposes other general drafting
clarifications and improvements. The proposed changes revise outdated
references to the name, jurisdiction of organization, and/or governing
document of certain Intercontinental Exchange, Inc. entities and
replace references to the Chief Executive Officer with references to
the President (which is the correct title of the relevant officer) to
reflect prior amendments to the operating agreement. The other changes
that would be made throughout the Sixth A&R Operating Agreement include
updating the Clearing House's and the Parent's notice information as
presented in Section 7.01(a) and (b), updating the Clearing House's
registered office and agent in Delaware, referencing the Fifth Amended
and Restated Operating Agreement where necessary, updating the
definition of ICE's Board of Director Governance Principles to refer to
the current Independence Policy of the Board of Directors of ICE as
well as other typographical and grammatical updates.
II. Governance Playbook
ICE Clear Credit proposes conforming changes to update the
composition of the Board and to make other non-substantive amendments
to the Governance Playbook, which consolidates governance arrangements
set forth in ICE Clear Credit's Rules, operating agreement, and other
ICE Clear Credit policies and procedures. The changes to Section III.A
would similarly reduce the number of Parent
[[Page 41124]]
Independent Managers from four to three managers and the number of
Parent Non-Independent Managers from three to two managers. Footnote 1
would reference an amended version of the limited partnership agreement
of the Parent and update the jurisdiction of organization of the
Parent.\4\ In Section III.C, ICE Clear Credit proposes a minor
clarification with respect to the receipt and review of resignation
letters from managers. Additionally, the proposed changes to Section
III.F update the number of independent managers on the Board as well as
a link to ICE's Board of Director Governance Principles.
---------------------------------------------------------------------------
\4\ See SR-ICC-2021-010 for more information on the change in
the jurisdiction of organization of the Parent.
---------------------------------------------------------------------------
(b) Statutory Basis
ICE Clear Credit believes that the proposed rule change is
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
amendments to the number of ICE-designated managers are intended to
promote efficient operation of the Board while maintaining appropriate
diversity of viewpoints, representation of the interests of
Participants and independence standards for managers. Specifically, as
noted above, the amendments will not affect the number of managers
designated by the Risk Committee under the Rules. ICE Clear Credit
believes a board of 9 managers (rather than 11) remains an appropriate
size for oversight of its ongoing operations. The other proposed
clarifications and changes enhance readability and ensure that the
Sixth A&R Operating Agreement and the Governance Playbook are clear and
up to date, including by removing outdated provisions, incorporating
prior amendments, or making other general clarifications and
improvements, which would further ensure that relevant individuals
carry out their responsibilities under the documents. In ICE Clear
Credit's view, the amendments will thus enhance the overall governance
of the Clearing House and are consistent with the prompt and accurate
clearance and settlement of cleared contracts, the safeguarding of
securities and funds in the custody or control of ICE Clear Credit or
for which it is responsible, and the protection of investors and the
public interest. 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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Further, Section 17A(b)(3)(C) of the Act \8\ requires that the
rules of the clearing agency assure a fair representation of its
shareholders (or members) and participants in the selection of its
directors and administration of its affairs. The Sixth A&R Operating
Agreement and the Governance Playbook will continue to set out the
composition of the Board, with five managers (three independent and two
non-independent) designated by the Parent and four managers (two
independent and two non-independent) designated by the Risk Committee
following the proposed amendments. The amendments will not affect the
number of managers designated by the Risk Committee, the majority of
whose members (9 of 12) are Participant representatives, and
Participants will continue to be represented on the Board. As such, ICE
Clear Credit believes that its governance arrangements, as modified by
the proposed amendments, will continue to provide a fair representation
of its shareholders and participants in the selection of its directors
and administration of its affairs and are thus consistent with the
requirements of Section 17A(b)(3)(C) of the Act.\9\
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\8\ 15 U.S.C. 78q-1(b)(3)(C).
\9\ 15 U.S.C. 78q-1(b)(3)(C).
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Rule 17Ad-22(e)(2) \10\ requires clearing agencies to establish
reasonably designed policies and procedures to provide for governance
arrangements that, among other matters, establish that the board of
directors have appropriate experience and skills to discharge their
duties and responsibilities and consider the interests of relevant
stakeholders of the clearing agency. As noted above, ICE Clear Credit
believes the reduction in the number of ICE-designated managers is
consistent with the ongoing effective oversight of the Clearing House
by the Board. The amendments will not affect the number of managers
designated by the Risk Committee, and thus will not adversely affect
representation of Participants on the Board. Moreover, a majority of
the Board will continue to be independent and have no material
relationships with ICE Clear Credit and its affiliates. As such, ICE
Clear Credit believes that the amendments set out in the Sixth A&R
Operating Agreement and Governance Playbook are consistent with the
requirements of Rule 17Ad-22(e)(2).\11\
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\10\ 17 CFR 240.17 Ad-22(e)(2).
\11\ 17 CFR 240.17 Ad-22(e)(2).
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(B) Clearing Agency's Statement on Burden on Competition
ICE Clear Credit 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 update ICE Clear Credit's operating agreement and
Governance Playbook, and specifically the number of managers designated
by the Parent. As a result, ICE Clear Credit does not expect that the
proposed changes will adversely affect access to clearing or the
ability of Participants, their customers or other market participants
to continue to clear contracts. ICE Clear Credit also does not believe
the amendments would materially affect the cost of clearing or
otherwise impact competition among market participants or limit market
participants' choices for selecting clearing services. Accordingly, ICE
Clear Credit does not believe the amendments would impose any burden on
competition not necessary or appropriate in furtherance of the purpose
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 Credit. ICE Clear Credit 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 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 such proposed rule change, or
[[Page 41125]]
(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 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-ICC-2021-017 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities and
Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to File Number SR-ICC-2021-017. 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 Credit and on ICE
Clear Credit's website at https://www.theice.com/clear-credit/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 publicly. All
submissions should refer to File Number SR-ICC-2021-017 and should be
submitted on or before August 20, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-16233 Filed 7-29-21; 8:45 am]
BILLING CODE 8011-01-P
