Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating to the ICE Clear Credit Operating Agreement and Governance Playbook, 51391-51393 [2021-19863]

Download as PDF Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File Number SR–NASDAQ–2021–040). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–19850 Filed 9–14–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–92918; File No. SR–ICC– 2021–017] Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change Relating to the ICE Clear Credit Operating Agreement and Governance Playbook September 9, 2021. I. Introduction On July 20, 2021, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities and Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b– 4 thereunder,2 a proposed rule change to amend and restate ICC’s Fifth Amended and Restated Operating Agreement (the ‘‘Operating Agreement’’) and make changes to the ICE Clear Credit LLC Governance Playbook (the ‘‘Governance Playbook’’). The proposed rule change was published for comment in the Federal Register on July 30, 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 khammond on DSKJM1Z7X2PROD with NOTICES A. Operating Agreement The proposed rule change would amend and restate the Operating Agreement to (i) reduce the number of managers on ICC’s Board of Managers (the ‘‘Board’’) designated by its parent company, ICE US Holding Company L.P. (‘‘Parent’’); (ii) remove certain outdated provisions; and (iii) 6 17 CFR 200.30–3(a)(31). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 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, Exchange Act Release No. 92504 (July 26, 2021); 86 FR 41123 (July 30, 2021) (SR–ICC–2021–017) (‘‘Notice’’). 1 15 VerDate Sep<11>2014 17:08 Sep 14, 2021 Jkt 253001 incorporate certain prior amendments and make other non-substantive updates. After making such amendments with the proposed rule change, ICC would adopt the amended Operating Agreement as the Sixth Amended and Restated Operating Agreement.4 i. Reduction in the Number of Managers Designated by Parent Currently, the Operating Agreement provides that the Board will consist of, among other managers, four managers elected by Parent and at all times be independent in accordance with the requirements of each of the New York Stock Exchange listing standards, the Act, and ICE’s Board of Director Governance Principles (collectively, the ‘‘Parent Independent Managers’’). The proposed rule change would reduce the number of Parent Independent Managers from four to three. Similarly, the Operating Agreement currently provides that the Board will consist of, among other managers, three other managers elected by Parent (collectively, the ‘‘Parent NonIndependent Managers’’). The proposed rule change would reduce the number of Parent Non-Independent Managers from three to two. As part of these changes, the proposed rule change would also remove the names of the Parent Independent Managers and Parent Non-Independent Managers. The Operating Agreement currently lists out the names of the individual Parent Independent Managers and Parent Non-Independent Managers. The proposed rule change would remove the names of these individuals and instead would refer to the Parent Independent Managers and Parent Non-Independent Managers only. Finally, consistent with these changes, the proposed rule change would reduce the total number of managers on the Board from eleven to nine, reflecting one less Parent Independent Manager and one less Parent Non-Independent Manager. ii. Removal of Outdated Provisions The proposed rule change would next remove outdated provisions related to the conversion of ICC from a New York trust company to a Delaware limited liability company in 2011 and ICC’s operation prior to the conversion. The Operating Agreement currently describes how ICC made such a conversion and how ICC operated prior 4 This description is substantially excerpted from the Notice. Capitalized terms not otherwise defined herein have the meanings assigned to them in the Operating Agreement or ICE Clear Credit Rulebook, as applicable. PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 51391 to the 2011 conversion. The proposed rule change would remove these provisions as they are outdated and no longer need to be included in the Operating Agreement. The proposed rule change would update related defined terms and references as needed. iii. Prior Amendments and Other Updates Finally, the proposed rule change would make certain other amendments and updates to the Operating Agreement. First, the proposed rule change would update Section 3.03 to reflect prior amendments that ICC made to the Operating Agreement without filing a proposed rule change or restating the Operating Agreement. Section 3.03 provided that the Board shall meet (i) in person no less frequently than quarterly and (ii) telephonically no less frequently than two times per calendar year. ICC previously amended this provision to provide instead that the Board will meet no less frequently than quarterly at such time and place as the Chair shall determine, and may meet more frequently (either in person or telephonically) as circumstances dictate. ICC also previously amended this provision to remove the requirement that the Board meet telephonically no less than twice per calendar year. Although ICC previously amended the Operating Agreement to make these changes, it did not file a proposed rule change or restate the Operating Agreement at such time. Thus, the proposed rule change would reflect these prior amendments and ensure their inclusion in the Sixth Amended and Restated Operating Agreement. Second, throughout the Operating Agreement, the proposed rule change would correct outdated references to the name, jurisdiction of organization, and governing document of Parent and certain related legal entities and would replace references to the Chief Executive Officer of ICC with references to the President (which is the correct title). ICC previously amended the Operating Agreement to include these changes but, like the changes to Board meetings described immediately above, did not file a proposed rule change and did not restate the Operating Agreement after making these changes. Thus, the proposed rule change would reflect these prior amendments and ensure their inclusion in the Sixth Amended and Restated Operating Agreement. Third, the proposed rule change would update the contact information and addresses listed in Section 7.01 that are used for providing notice to ICC and Parent under the Operating Agreement. E:\FR\FM\15SEN1.SGM 15SEN1 51392 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices khammond on DSKJM1Z7X2PROD with NOTICES Fourth, the proposed rule change would update the contact information and address for ICC’s registered office and agent in Delaware listed in Section 2.06. Fifth, the proposed rule change would update references throughout the Operating Agreement to refer to the Sixth Amended and Restated Operating Agreement or the Fifth Amended and Restated Operating Agreement, as needed in the context of the section. Sixth, the proposed rule change would update the definition of ICE’s Board of Director Governance Principles to refer to the current Independence Policy of the Board of Directors of ICE. Finally, the proposed rule change would correct minor typographical and grammatical errors. B. Governance Playbook The proposed rule change would update the Governance Playbook to reflect the changes to the Operating Agreement described above. First, the proposed rule change would update Section III.A to reflect the revised composition of the Board—nine total managers with three Parent Independent Managers and two Parent NonIndependent Managers. The proposed rule change would make a similar change to Section III.F. Second, the proposed rule change would update certain references found in Footnote 1. Footnote 1 describes an aspect of the partnership agreement of ICC’s Parent. The proposed rule change would update the name of the partnership agreement to reflect the current name of that agreement and would correct the description of Parent’s jurisdiction of organization. Third, the proposed rule change would update Footnote 5 to link to the current Independence Policy of the Board of Directors of ICE, similar to the change to the Operating Agreement discussed above amending the definition of ICE’s Board of Director Governance Principles to refer to the current Independence Policy of the Board of Directors of ICE. Finally, the proposed rule change would make a minor revision to Section III.C. That section currently provides that upon the resignation of a manager, ICC’s legal group is responsible for obtaining a resignation letter. The proposed rule change would revise this provision to provide that ICC’s legal group is responsible for reviewing a resignation letter if received, rather than obtaining one. While it is common practice for a resigning manager to submit a resignation letter, there is no overall requirement that a resigning manager submit a resignation letter, and VerDate Sep<11>2014 17:08 Sep 14, 2021 Jkt 253001 thus the legal group would no longer be responsible for obtaining one. III. Discussion and Commission Findings Section 19(b)(2)(C) of the Act directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that such proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization.5 After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to ICC. In particular, the Commission finds that the proposed rule change is consistent with Section 17A(b)(3)(F) of the Act 6 and Rules 17Ad–22(e)(2)(i) and (v).7 A. Consistency With Section 17A(b)(3)(F) of the Act Section 17A(b)(3)(F) requires, among other things, that the rules of ICC be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions, as well as to assure the safeguarding of securities and funds which are in the custody or control of ICC or for which it is responsible.8 The Commission believes that the changes discussed in Part II.A.i above would improve the operation of the Board and clarity of the Operating Agreement. In particular, the Commission believes that reducing the overall number of managers from eleven to nine, by reducing the number of Parent Independent Managers from four to three and reducing the number of Parent Non-Independent Managers from three to two, would help to ensure the efficient operation of the Board and clarify the extent of Parent’s ability to appoint managers. Moreover, the Commission believes that removing the names of the individual Parent Independent Managers and Parent NonIndependent Managers would help to ensure that ICC is not required to amend the Operating Agreement due to changes in such managers, thereby helping to ensure the efficiency and flexibility of the Operating Agreement. Similarly, the Commission believes that removal of the outdated provisions related to the conversion of ICC and its operation prior to 2011, as discussed in 5 15 U.S.C. 78s(b)(2)(C). U.S.C. 78q–1(b)(3)(F). 7 17 CFR 240.17Ad–22(e)(2)(i), (v). 8 15 U.S.C. 78q–1(b)(3)(F). 6 15 PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 Part II.A.ii above would help to promote the promote consistency and readability of the Operating Agreement. Moreover, the Commission believes that the other changes to the Operating Agreement discussed in Part II.B.iii above would help to ensure the clarity and efficient operation of the Operating Agreement. Specifically, the Commission believes that requiring the Board to meet no less frequently than quarterly at such time and place as determined by the Chair and authorizing the Board to meet more frequently (either in person or telephonically) as circumstances dictate, would help to ensure the efficient operation of the Board and provide flexibility as to how and when the Board meets. Similarly, the Commission believes that correcting (i) outdated references to the name, jurisdiction of organization, and governing document of Parent and certain related legal entities; (ii) references to the Chief Executive Officer of ICC so they refer instead to the President; (iii) references to the Sixth Amended and Restated Operating Agreement and the Fifth Amended and Restated Operating Agreement; (iv) the definition of ICE’s Board of Director Governance Principles to refer to the current Independence Policy of the Board of Directors of ICE; and (v) minor typographical and grammatical errors would help to ensure that the Operating Agreement is clear, understandable, free of errors, and correctly applied. Updating the contact information and addresses that are used for providing notice to ICC and Parent and the contact information and address for ICC’s registered office and agent in Delaware would similarly help to ensure that the Operating Agreement is clear and correctly applied. For similar reasons, the Commission believes that updating the Governance Playbook to reflect these changes to the Operating Agreement, as discussed in Part II.B above, would help to ensure the clarity and efficient operation of the Governance Playbook. In particular, the Commission believes that updating Section III.A to reflect the revised composition of the Board—nine total managers with three Parent Independent Managers and two Parent NonIndependent Managers—would, for the reasons discussed above, help to ensure the efficient operation of the Board. Moreover, the Commission believes that updating the description related to Parent in Footnote 1 and the link to the current Independence Policy of the Board of Directors of ICE in Footnote 5 would help to ensure that the Governance Playbook is clear, understandable, and correctly applied. E:\FR\FM\15SEN1.SGM 15SEN1 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices Finally, the Commission believes that revising Section III.C to specify that ICC’s legal group is responsible for reviewing a resignation letter if received, rather than obtaining one, would clarify the role of ICC’s legal group. Thus, the Commission believes that all of these changes, as discussed above, would help to ensure the efficient operation of the Board, Operating Agreement, and Governance Playbook and help to ensure the Operating Agreement and Governance Playbook are clear, free of errors, understandable, and correctly applied. Because ICC operates pursuant to Board oversight and the governance set forth in the Operating Agreement and Governance Playbook, the Commission believes that these improvements would thereby generally help to improve the efficiency and consistency of ICC’s operations. The Commission also believes that in so doing, these improvements would thereby help to ensure that ICC is able to promptly and accurately clear and settle securities transactions and assure the safeguarding of securities and funds in ICC’s custody or control or for which it is responsible. Therefore, the Commission finds the proposed rule change is consistent with Section 17A(b)(3)(F) of the Act.9 khammond on DSKJM1Z7X2PROD with NOTICES B. Consistency With Rule 17Ad– 22(e)(2)(i) and (v) U.S.C. 78q–1(b)(3)(F). 10 17 CFR 240.17Ad–22(e)(2)(i), (v). VerDate Sep<11>2014 17:08 Sep 14, 2021 Jkt 253001 IV. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act, and in particular, with the requirements of Section 17A(b)(3)(F) of the Act 12 and Rules 17Ad–22(e)(2)(i) and (v).13 It is therefore ordered pursuant to Section 19(b)(2) of the Act 14 that the proposed rule change (SR–ICC–2021– 017) be, and hereby is, approved.15 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–19863 Filed 9–14–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–92916; File No. SR–C2– 2021–013] Self-Regulatory Organizations; Cboe C2 Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Certain Corrections to the Rules September 9, 2021. Rules 17Ad–22(e)(2)(i) and (v) require that ICC establish, implement, maintain and enforce written policies and procedures reasonably designed to provide for governance arrangements that are clear and transparent and specify clear and direct lines of responsibility.10 As discussed above, the Commission believes that the changes to the Operating Agreement and Governance Playbook would help to ensure that both documents are clear, understandable, and free from error. Because ICC’s governance operates pursuant to the Operating Agreement and Governance Playbook, the Commission therefore believes the proposed rule change would help to ensure that ICC’s governance arrangements are clear. Moreover, the Commission believes that revising Section III.C of the Governance Playbook to specify that ICC’s legal group is responsible for reviewing a resignation letter if received, rather than obtaining one, would specify a clear and direct responsibility of the legal group. Therefore, the Commission finds the 9 15 proposed rule change is consistent with Rule 17Ad-22(e)(2)(i) and (v).11 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 September 7, 2021, 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 ‘‘noncontroversial’’ 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. 11 17 CFR 240.17Ad–22(e)(2)(i), (v). U.S.C. 78q–1(b)(3)(F). 13 17 CFR 240.17Ad–22(e)(2)(i), (v). 14 15 U.S.C. 78s(b)(2). 15 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 16 17 CFR 200.30–3(a)(12). 1 15 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). 12 15 PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 51393 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 make certain corrections to the Rules. 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 The Exchange proposes to make nonsubstantive cleanup changes to its Cboe C2 Exchange Rulebook (‘‘Rulebook’’) in order to remove inapplicable and obsolete terms. Specifically, the proposed rule change deletes the definition of ‘‘L’’ Capacity code from Rule 1.1, which currently provides that L Capacity code applies to the account of non-Trading Permit Holder affiliate. The Exchange notes that this Capacity code is not applicable to trading on C2 and only applicable to trading on the Exchange’s affiliated options exchange, Cboe Exchange, Inc. (‘‘Cboe Options’’), from which the Exchange’s current definition of ‘‘L’’ Capacity code was inadvertently copied.5 Further, the proposed rule change deletes the term ‘‘Voluntary Professional Customer’’ from Rule 6.5. As of 2019, that Capacity designation is no longer available on C2 Exchange and the Exchange removed the term from its Rulebook. The proposed rule change merely removes the term from Rule 6.5, 5 See Securities Exchange Release No. 83214 (May 11, 2018), 83 FR 22796 (May 16, 2018) (SR–C2– 2018–005). E:\FR\FM\15SEN1.SGM 15SEN1

Agencies

[Federal Register Volume 86, Number 176 (Wednesday, September 15, 2021)]
[Notices]
[Pages 51391-51393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19863]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92918; File No. SR-ICC-2021-017]


Self-Regulatory Organizations; ICE Clear Credit LLC; Order 
Approving Proposed Rule Change Relating to the ICE Clear Credit 
Operating Agreement and Governance Playbook

September 9, 2021.

I. Introduction

    On July 20, 2021, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission''), pursuant to 
Section 19(b)(1) of the Securities and Exchange Act of 1934 (the 
``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
amend and restate ICC's Fifth Amended and Restated Operating Agreement 
(the ``Operating Agreement'') and make changes to the ICE Clear Credit 
LLC Governance Playbook (the ``Governance Playbook''). The proposed 
rule change was published for comment in the Federal Register on July 
30, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 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, Exchange Act Release 
No. 92504 (July 26, 2021); 86 FR 41123 (July 30, 2021) (SR-ICC-2021-
017) (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

A. Operating Agreement

    The proposed rule change would amend and restate the Operating 
Agreement to (i) reduce the number of managers on ICC's Board of 
Managers (the ``Board'') designated by its parent company, ICE US 
Holding Company L.P. (``Parent''); (ii) remove certain outdated 
provisions; and (iii) incorporate certain prior amendments and make 
other non-substantive updates. After making such amendments with the 
proposed rule change, ICC would adopt the amended Operating Agreement 
as the Sixth Amended and Restated Operating Agreement.\4\
---------------------------------------------------------------------------

    \4\ This description is substantially excerpted from the Notice. 
Capitalized terms not otherwise defined herein have the meanings 
assigned to them in the Operating Agreement or ICE Clear Credit 
Rulebook, as applicable.
---------------------------------------------------------------------------

i. Reduction in the Number of Managers Designated by Parent
    Currently, the Operating Agreement provides that the Board will 
consist of, among other managers, four managers elected by Parent and 
at all times be independent in accordance with the requirements of each 
of the New York Stock Exchange listing standards, the Act, and ICE's 
Board of Director Governance Principles (collectively, the ``Parent 
Independent Managers''). The proposed rule change would reduce the 
number of Parent Independent Managers from four to three.
    Similarly, the Operating Agreement currently provides that the 
Board will consist of, among other managers, three other managers 
elected by Parent (collectively, the ``Parent Non-Independent 
Managers''). The proposed rule change would reduce the number of Parent 
Non-Independent Managers from three to two.
    As part of these changes, the proposed rule change would also 
remove the names of the Parent Independent Managers and Parent Non-
Independent Managers. The Operating Agreement currently lists out the 
names of the individual Parent Independent Managers and Parent Non-
Independent Managers. The proposed rule change would remove the names 
of these individuals and instead would refer to the Parent Independent 
Managers and Parent Non-Independent Managers only.
    Finally, consistent with these changes, the proposed rule change 
would reduce the total number of managers on the Board from eleven to 
nine, reflecting one less Parent Independent Manager and one less 
Parent Non-Independent Manager.
ii. Removal of Outdated Provisions
    The proposed rule change would next remove outdated provisions 
related to the conversion of ICC from a New York trust company to a 
Delaware limited liability company in 2011 and ICC's operation prior to 
the conversion. The Operating Agreement currently describes how ICC 
made such a conversion and how ICC operated prior to the 2011 
conversion. The proposed rule change would remove these provisions as 
they are outdated and no longer need to be included in the Operating 
Agreement. The proposed rule change would update related defined terms 
and references as needed.
iii. Prior Amendments and Other Updates
    Finally, the proposed rule change would make certain other 
amendments and updates to the Operating Agreement. First, the proposed 
rule change would update Section 3.03 to reflect prior amendments that 
ICC made to the Operating Agreement without filing a proposed rule 
change or restating the Operating Agreement. Section 3.03 provided that 
the Board shall meet (i) in person no less frequently than quarterly 
and (ii) telephonically no less frequently than two times per calendar 
year. ICC previously amended this provision to provide instead that the 
Board will meet no less frequently than quarterly at such time and 
place as the Chair shall determine, and may meet more frequently 
(either in person or telephonically) as circumstances dictate. ICC also 
previously amended this provision to remove the requirement that the 
Board meet telephonically no less than twice per calendar year. 
Although ICC previously amended the Operating Agreement to make these 
changes, it did not file a proposed rule change or restate the 
Operating Agreement at such time. Thus, the proposed rule change would 
reflect these prior amendments and ensure their inclusion in the Sixth 
Amended and Restated Operating Agreement.
    Second, throughout the Operating Agreement, the proposed rule 
change would correct outdated references to the name, jurisdiction of 
organization, and governing document of Parent and certain related 
legal entities and would replace references to the Chief Executive 
Officer of ICC with references to the President (which is the correct 
title). ICC previously amended the Operating Agreement to include these 
changes but, like the changes to Board meetings described immediately 
above, did not file a proposed rule change and did not restate the 
Operating Agreement after making these changes. Thus, the proposed rule 
change would reflect these prior amendments and ensure their inclusion 
in the Sixth Amended and Restated Operating Agreement.
    Third, the proposed rule change would update the contact 
information and addresses listed in Section 7.01 that are used for 
providing notice to ICC and Parent under the Operating Agreement.

[[Page 51392]]

    Fourth, the proposed rule change would update the contact 
information and address for ICC's registered office and agent in 
Delaware listed in Section 2.06.
    Fifth, the proposed rule change would update references throughout 
the Operating Agreement to refer to the Sixth Amended and Restated 
Operating Agreement or the Fifth Amended and Restated Operating 
Agreement, as needed in the context of the section.
    Sixth, the proposed rule change would update the definition of 
ICE's Board of Director Governance Principles to refer to the current 
Independence Policy of the Board of Directors of ICE.
    Finally, the proposed rule change would correct minor typographical 
and grammatical errors.

B. Governance Playbook

    The proposed rule change would update the Governance Playbook to 
reflect the changes to the Operating Agreement described above. First, 
the proposed rule change would update Section III.A to reflect the 
revised composition of the Board--nine total managers with three Parent 
Independent Managers and two Parent Non-Independent Managers. The 
proposed rule change would make a similar change to Section III.F.
    Second, the proposed rule change would update certain references 
found in Footnote 1. Footnote 1 describes an aspect of the partnership 
agreement of ICC's Parent. The proposed rule change would update the 
name of the partnership agreement to reflect the current name of that 
agreement and would correct the description of Parent's jurisdiction of 
organization.
    Third, the proposed rule change would update Footnote 5 to link to 
the current Independence Policy of the Board of Directors of ICE, 
similar to the change to the Operating Agreement discussed above 
amending the definition of ICE's Board of Director Governance 
Principles to refer to the current Independence Policy of the Board of 
Directors of ICE.
    Finally, the proposed rule change would make a minor revision to 
Section III.C. That section currently provides that upon the 
resignation of a manager, ICC's legal group is responsible for 
obtaining a resignation letter. The proposed rule change would revise 
this provision to provide that ICC's legal group is responsible for 
reviewing a resignation letter if received, rather than obtaining one. 
While it is common practice for a resigning manager to submit a 
resignation letter, there is no overall requirement that a resigning 
manager submit a resignation letter, and thus the legal group would no 
longer be responsible for obtaining one.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a 
proposed rule change of a self-regulatory organization if it finds that 
such proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to such 
organization.\5\ After careful review, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to ICC. In particular, 
the Commission finds that the proposed rule change is consistent with 
Section 17A(b)(3)(F) of the Act \6\ and Rules 17Ad-22(e)(2)(i) and 
(v).\7\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(2)(C).
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
    \7\ 17 CFR 240.17Ad-22(e)(2)(i), (v).
---------------------------------------------------------------------------

A. Consistency With Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) requires, among other things, that the rules 
of ICC be designed to promote the prompt and accurate clearance and 
settlement of securities transactions and, to the extent applicable, 
derivative agreements, contracts, and transactions, as well as to 
assure the safeguarding of securities and funds which are in the 
custody or control of ICC or for which it is responsible.\8\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission believes that the changes discussed in Part II.A.i 
above would improve the operation of the Board and clarity of the 
Operating Agreement. In particular, the Commission believes that 
reducing the overall number of managers from eleven to nine, by 
reducing the number of Parent Independent Managers from four to three 
and reducing the number of Parent Non-Independent Managers from three 
to two, would help to ensure the efficient operation of the Board and 
clarify the extent of Parent's ability to appoint managers. Moreover, 
the Commission believes that removing the names of the individual 
Parent Independent Managers and Parent Non-Independent Managers would 
help to ensure that ICC is not required to amend the Operating 
Agreement due to changes in such managers, thereby helping to ensure 
the efficiency and flexibility of the Operating Agreement.
    Similarly, the Commission believes that removal of the outdated 
provisions related to the conversion of ICC and its operation prior to 
2011, as discussed in Part II.A.ii above would help to promote the 
promote consistency and readability of the Operating Agreement.
    Moreover, the Commission believes that the other changes to the 
Operating Agreement discussed in Part II.B.iii above would help to 
ensure the clarity and efficient operation of the Operating Agreement. 
Specifically, the Commission believes that requiring the Board to meet 
no less frequently than quarterly at such time and place as determined 
by the Chair and authorizing the Board to meet more frequently (either 
in person or telephonically) as circumstances dictate, would help to 
ensure the efficient operation of the Board and provide flexibility as 
to how and when the Board meets. Similarly, the Commission believes 
that correcting (i) outdated references to the name, jurisdiction of 
organization, and governing document of Parent and certain related 
legal entities; (ii) references to the Chief Executive Officer of ICC 
so they refer instead to the President; (iii) references to the Sixth 
Amended and Restated Operating Agreement and the Fifth Amended and 
Restated Operating Agreement; (iv) the definition of ICE's Board of 
Director Governance Principles to refer to the current Independence 
Policy of the Board of Directors of ICE; and (v) minor typographical 
and grammatical errors would help to ensure that the Operating 
Agreement is clear, understandable, free of errors, and correctly 
applied. Updating the contact information and addresses that are used 
for providing notice to ICC and Parent and the contact information and 
address for ICC's registered office and agent in Delaware would 
similarly help to ensure that the Operating Agreement is clear and 
correctly applied.
    For similar reasons, the Commission believes that updating the 
Governance Playbook to reflect these changes to the Operating 
Agreement, as discussed in Part II.B above, would help to ensure the 
clarity and efficient operation of the Governance Playbook. In 
particular, the Commission believes that updating Section III.A to 
reflect the revised composition of the Board--nine total managers with 
three Parent Independent Managers and two Parent Non-Independent 
Managers--would, for the reasons discussed above, help to ensure the 
efficient operation of the Board. Moreover, the Commission believes 
that updating the description related to Parent in Footnote 1 and the 
link to the current Independence Policy of the Board of Directors of 
ICE in Footnote 5 would help to ensure that the Governance Playbook is 
clear, understandable, and correctly applied.

[[Page 51393]]

Finally, the Commission believes that revising Section III.C to specify 
that ICC's legal group is responsible for reviewing a resignation 
letter if received, rather than obtaining one, would clarify the role 
of ICC's legal group.
    Thus, the Commission believes that all of these changes, as 
discussed above, would help to ensure the efficient operation of the 
Board, Operating Agreement, and Governance Playbook and help to ensure 
the Operating Agreement and Governance Playbook are clear, free of 
errors, understandable, and correctly applied. Because ICC operates 
pursuant to Board oversight and the governance set forth in the 
Operating Agreement and Governance Playbook, the Commission believes 
that these improvements would thereby generally help to improve the 
efficiency and consistency of ICC's operations. The Commission also 
believes that in so doing, these improvements would thereby help to 
ensure that ICC is able to promptly and accurately clear and settle 
securities transactions and assure the safeguarding of securities and 
funds in ICC's custody or control or for which it is responsible. 
Therefore, the Commission finds the proposed rule change is consistent 
with Section 17A(b)(3)(F) of the Act.\9\
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    \9\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Consistency With Rule 17Ad-22(e)(2)(i) and (v)

    Rules 17Ad-22(e)(2)(i) and (v) require that ICC establish, 
implement, maintain and enforce written policies and procedures 
reasonably designed to provide for governance arrangements that are 
clear and transparent and specify clear and direct lines of 
responsibility.\10\ As discussed above, the Commission believes that 
the changes to the Operating Agreement and Governance Playbook would 
help to ensure that both documents are clear, understandable, and free 
from error. Because ICC's governance operates pursuant to the Operating 
Agreement and Governance Playbook, the Commission therefore believes 
the proposed rule change would help to ensure that ICC's governance 
arrangements are clear. Moreover, the Commission believes that revising 
Section III.C of the Governance Playbook to specify that ICC's legal 
group is responsible for reviewing a resignation letter if received, 
rather than obtaining one, would specify a clear and direct 
responsibility of the legal group. Therefore, the Commission finds the 
proposed rule change is consistent with Rule 17Ad-22(e)(2)(i) and 
(v).\11\
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    \10\ 17 CFR 240.17Ad-22(e)(2)(i), (v).
    \11\ 17 CFR 240.17Ad-22(e)(2)(i), (v).
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IV. Conclusion

    On the basis of the foregoing, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act, 
and in particular, with the requirements of Section 17A(b)(3)(F) of the 
Act \12\ and Rules 17Ad-22(e)(2)(i) and (v).\13\
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    \12\ 15 U.S.C. 78q-1(b)(3)(F).
    \13\ 17 CFR 240.17Ad-22(e)(2)(i), (v).
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    It is therefore ordered pursuant to Section 19(b)(2) of the Act 
\14\ that the proposed rule change (SR-ICC-2021-017) be, and hereby is, 
approved.\15\
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    \14\ 15 U.S.C. 78s(b)(2).
    \15\ In approving the proposed rule change, the Commission 
considered the proposal's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19863 Filed 9-14-21; 8:45 am]
BILLING CODE 8011-01-P
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