Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change Relating to the ICC CDS Instrument On-Boarding Policies and Procedures, 55037-55039 [2021-21615]
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Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Notices
Rule 22c–2(a)(3) requires funds to
maintain records of all informationsharing agreements for 6 years in an
easily accessible place. Commission
staff understands that most shareholder
information agreements are stored at the
fund group level and estimates that
there are currently approximately 840
fund groups.20 Commission staff
understands that information-sharing
agreements are generally included as
addendums to distribution agreements
between funds and their intermediaries,
and that these agreements would be
stored as required by the rule as a matter
of ordinary business practice. Therefore,
Commission staff estimates that
maintaining records of informationsharing agreements requires 10 minutes
of time spent by a general clerk (at a rate
of $64 per hour) 21 per fund, each year.
Accordingly, Commission staff
estimates that all funds will incur 140
hours at a cost of $8,960 22 in complying
with the recordkeeping requirement of
rule 22c–2(a)(3).
Therefore, Commission staff estimates
that to comply with the information
sharing agreement requirements of rule
22c–2(a)(2) and (3), it requires a total of
26,620 hours at a cost of $11,262,960.23
The Commission staff estimates that
on average, each fund group requests
shareholder information once a week,
and gives instructions regarding the
restriction of shareholder trades every
day, for a total of 417 responses related
to information sharing systems per fund
group each year, and a total 350,280
responses for all fund groups
annually.24 In addition, as described
above, the staff estimates that funds
make 36 responses related to board
determinations, 2,520 responses related
to new intermediaries of existing fund
groups, 4,100 responses related to new
fund group information sharing
agreements, and 840 responses related
to recordkeeping, for a total of 7,496
responses related to the other
requirements of rule 22c–2. Therefore,
lotter on DSK11XQN23PROD with NOTICES1
20 ICI,
2020 Investment Company Fact Book at Fig
2.12 (2020) (https://www.ici.org/research/stats/
factbook).
21 The $64 per hour figure for a general clerk is
derived from SIFMA’s Office Salaries in the
Securities Industry 2013 modified to account for an
1800-hour work-year and inflation, and multiplied
by 2.93 to account for bonuses, firm size, employee
benefits, and overhead.
22 This estimate is based on the following
calculations: (10 minutes × 840 fund groups = 8,400
minutes); (8,400 minutes/60 = 140 hours); (140
hours × $64 = $8,960).
23 This estimate is based on the following
calculations: (10,080 hours + 16,400 hours + 140
hours = 26,620 hours); ($4,284,000 + $6,970,000 +
$8,960 = $11,262,960).
24 This estimate is based on the following
calculations: (52 + 365 = 417); (417 × 840 fund
groups = 350,280).
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18:56 Oct 04, 2021
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the Commission staff estimates that the
total number of responses is 357,776
(350,280 + 7,496 = 357,776).
The Commission staff estimates that
the total hour burden for rule 22c–2 is
27,088 hours at a cost of $11,645,460.25
Responses provided to the Commission
will be accorded the same level of
confidentiality accorded to other
responses provided to the Commission
in the context of its examination and
oversight program. Responses provided
in the context of the Commission’s
examination and oversight program are
generally kept confidential. Complying
with the information collections of rule
22c–2 is mandatory for funds that
redeem their shares within 7 days of
purchase. An agency may not conduct
or sponsor, and a person is not required
to respond to a collection of information
unless it displays a currently valid
control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to (i) www.reginfo.gov/public/do/
PRAMain and (ii) David Bottom,
Director/Chief Information Officer,
Securities and Exchange Commission,
c/o Cynthia Roscoe, 100 F Street NE,
Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov.
Dated: September 29, 2021.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–21583 Filed 10–4–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93177; File No. SR–ICC–
2021–019]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Notice of Filing of
Proposed Rule Change Relating to the
ICC CDS Instrument On-Boarding
Policies and Procedures
September 29, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934,1 and
25 This estimate is based on the following
calculations: (468 hours (board determination) +
26,620 hours (information sharing agreements) =
27,088 total hours); ($382,500 (board determination)
+ $11,262,960 (information sharing agreements) =
$11,645,460).
1 15 U.S.C. 78s(b)(1).
PO 00000
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Fmt 4703
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55037
Rule 19b–4,2 notice is hereby given that
on September 22, 2021, ICE Clear Credit
LLC (‘‘ICC’’) 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 ICC. 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
The principal purpose of the
proposed rule change is to revise the
CDS Instrument On-boarding Policies
and Procedures (‘‘Instrument Onboarding Policy’’). These revisions do
not require any changes to the ICC
Clearing Rules (‘‘Rules’’).
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, ICC
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, securitybased swap submission, or advance
notice. The text of these statements may
be examined at the places specified in
Item IV below. ICC 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
ICC proposes to amend the Instrument
On-boarding Policy. This document
provides an overview of ICC’s onboarding process for new instruments,
which includes selecting new
instruments for clearing, configuring
internal systems, notifying and
receiving feedback from stakeholders,
and ensuring operational readiness by
ICC and its Clearing Participants
(‘‘CPs’’). The proposed changes amend
the guiding principles that ICC
maintains for instrument selection. ICC
believes that such changes will facilitate
the prompt and accurate clearance and
settlement of securities transactions and
derivative agreements, contracts, and
transactions for which it is responsible.
ICC proposes to make such changes
effective following Commission
approval of the proposed rule change.
The proposed rule change is described
in detail as follows.
2 17
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CFR 240.19b–4.
05OCN1
55038
Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1
ICC proposes amendments to the
Subsection III.A which discusses the
guiding principles that ICC maintains
for considering instruments for clearing.
Such principles are designed to ensure
that ICC proceeds in a prudent manner
with respect to instrument selection
while also providing the best
opportunity for CPs to minimize their
risk. The proposed changes incorporate
an additional guiding principle to
consider instruments that are
constituents of the currently clearable
On-The-Run (‘‘OTR’’) indices to become
clearing eligible in order to provide
additional instruments to hedge and
mitigate indirect risk exposure from the
OTR indices. For other instruments that
are not constituents of currently
clearable OTR indices, the current
guiding principles would remain and
ICC would continue to consider
instrument open interest and volume.
For all instruments, ICC would continue
to consider instruments that can be
cleared through ICC’s systems and
processes and to support industry wide
initiatives and protocols.
(b) Statutory Basis
ICC believes that the proposed rule
change is consistent with the
requirements of Section 17A of the Act 3
and the regulations thereunder
applicable to it, including the applicable
standards under Rule 17Ad–22.4 In
particular, Section 17A(b)(3)(F) of the
Act 5 requires that the rule change be
consistent with the prompt and accurate
clearance and settlement of securities
transactions and derivative agreements,
contracts and transactions cleared by
ICC, the safeguarding of securities and
funds in the custody or control of ICC
or for which it is responsible, and the
protection of investors and the public
interest. As described above, the
proposed changes incorporate an
additional guiding principle that ICC
consider instruments that are
constituents of the currently clearable
OTR indices to become clearing eligible
in order to provide additional
instruments to hedge and mitigate
indirect risk exposure from the OTR
indices. ICC believes that such changes
would support and enhance the guiding
principles and ensure that ICC
continues to proceed in a prudent
manner with respect to instrument
selection while also providing CPs the
best opportunity to minimize their risk.
Moreover, the Instrument On-boarding
Policy will continue to ensure that ICC’s
risk models adequately capture the risks
associated with proposed new
instruments and that the end-of-day
price discovery process operates
effectively and provides reliable prices
for proposed new instruments,
including through the risk management
and pricing configuration and
evaluation and the dress rehearsal. The
proposed rule change is therefore
consistent with the prompt and accurate
clearing and settlement of the contracts
cleared by ICC, the safeguarding of
securities and funds in the custody or
control of ICC or for which it is
responsible, and the protection of
investors and the public interest, within
the meaning of Section 17A(b)(3)(F) of
the Act.6
The amendments would also satisfy
relevant requirements of Rule 17Ad–
22.7 Rule 17Ad–22(e)(2)(i) and (v) 8
requires each covered clearing agency to
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. The
Instrument On-boarding Policy
continues to describe the roles and
responsibilities of relevant stakeholders
with respect to instrument selection and
subject new instruments to ICC’s
governance process. As such, in ICC’s
view, the proposed rule change
continues to ensure that ICC maintains
policies and procedures that are
reasonably designed to provide for clear
and transparent governance
arrangements and specify clear and
direct lines of responsibility, consistent
with Rule 17Ad–22(e)(2)(i) and (v).9
Rule 17Ad–22(e)(4)(ii) 10 requires
each covered clearing agency to
establish, implement, maintain, and
enforce written policies and procedures
reasonably designed to effectively
identify, measure, monitor, and manage
its credit exposures to participants and
those arising from its payment, clearing,
and settlement processes, including by
maintaining additional financial
resources at the minimum to enable it
to cover a wide range of foreseeable
stress scenarios that include, but are not
limited to, the default of the two
participant families that would
potentially cause the largest aggregate
credit exposure for the covered clearing
agency in extreme but plausible market
conditions. The proposed changes
distinguish a category of instruments
that are constituents of the currently
6 Id.
7 17
3 15
U.S.C. 78q–1.
4 17 CFR 240.17Ad–22.
5 15 U.S.C. 78q–1(b)(3)(F).
VerDate Sep<11>2014
18:56 Oct 04, 2021
8 17
CFR 240.17Ad–22.
CFR 240.17Ad–22(e)(2)(i) and (v).
9 Id.
10 17
Jkt 256001
clearable OTR indices to provide
additional instruments to hedge and
mitigate indirect risk exposure from the
OTR indices. New instruments will
continue to be subject to the risk
management and pricing configuration
and evaluation and the dress rehearsal
under the Instrument On-boarding
Policy to ensure that ICC’s risk models
adequately capture the risks associated
with new instruments and that the endof-day price discovery process operates
effectively, thereby supporting ICC’s
ability to maintain its financial
resources and withstand the pressures
of defaults, consistent with the
requirements of Rule 17Ad–
22(e)(4)(ii).11
Rule 17Ad–22(e)(17) 12 requires, in
relevant part, each covered clearing
agency to establish, implement,
maintain, and enforce written policies
and procedures reasonably designed to
manage its operational risks by (i)
identifying the plausible sources of
operational risk, both internal and
external, and mitigating their impact
through the use of appropriate systems,
policies, procedures, and controls; and
(ii) ensuring that systems have a high
degree of security, resiliency,
operational reliability, and adequate,
scalable capacity. The Instrument Onboarding Policy continues to describe
the process, including testing and
preparation, for the introduction of new
instruments to ensure that ICC and its
CPs are operationally ready and that ICC
proceeds in a controlled manner,
thereby supporting ICC’s ability to
identify the plausible sources of
operational risk and mitigate their
impact and ensure that systems have a
high degree of security, resiliency,
operational reliability, and adequate,
scalable capacity, consistent with the
requirements of Rule 17Ad–22(e)(17).13
Rule 17Ad–22(e)(21) 14 requires,
among other things, that each covered
clearing agency establish, implement,
maintain, and enforce written policies
and procedures reasonably designed to
be efficient and effective in meeting the
requirements of its participants and the
markets it serves. The proposed changes
are designed to provide additional
instruments to hedge and mitigate
indirect risk exposure from the OTR
indices. Such changes would support
and enhance the guiding principles by
ensuring that ICC continues to proceed
in a prudent manner with respect to
instrument selection while also
providing CPs the best opportunity to
PO 00000
11 Id.
12 17
CFR 240.17Ad–22(e)(17)(i) and (ii).
13 Id.
CFR 240.17Ad–22(e)(4)(ii).
Frm 00123
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14 17
E:\FR\FM\05OCN1.SGM
CFR 240.17Ad–22(e)(21).
05OCN1
Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Notices
minimize their risk, thereby allowing
ICC to be efficient and effective in
meeting the requirements of its
participants and the markets it serves,
consistent with Rule 17Ad–22(e)(21).15
(B) Clearing Agency’s Statement on
Burden on Competition
ICC does not believe the proposed
amendments would have any impact, or
impose any burden, on competition not
necessary or appropriate in furtherance
of the purpose of the Act. The proposed
changes to the Instrument On-boarding
Policy will apply uniformly across all
market participants. Therefore, ICC does
not believe the proposed rule change
imposes 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 rule change have not been
solicited or received. ICC will notify the
Commission of any written comments
received by ICC.
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
(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:
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–2021–019. 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–2021–019 and
should be submitted on or before
October 26, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–21615 Filed 10–4–21; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
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Paper 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–2021–019 on the subject line.
15 Id.
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Jkt 256001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93195; File No. SR–OCC–
2021–009]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Revise
the Options Clearing Corporation’s
Schedule of Fees
September 29, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule
19b–4 thereunder,2 notice is hereby
given that on September 28, 2021, The
Options Clearing Corporation (‘‘OCC’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared primarily by OCC.
OCC filed the proposed rule change
pursuant to Section 19(b)(3)(A)(ii) 3 of
the Act and Rule 19b–4(f)(2) 4
thereunder so that the proposal was
effective upon filing with the
Commission. 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
The proposed rule change by OCC
would revise OCC’s schedule of fees to
implement a fee holiday for the period
beginning November 1, 2021, and
ending December 31, 2021. OCC’s
schedule of fees is included as Exhibit
5 to File No. SR–OCC–2021–009.
Material proposed to be added to OCC’s
schedule of fees as currently in effect is
underlined and material proposed to be
deleted is marked in strikethrough text.
All capitalized terms not defined herein
have the same meaning as set forth in
the OCC By-Laws and Rules.5
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
OCC 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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 OCC’s By-Laws and Rules can be found on
OCC’s public website: https://www.theocc.com/
Company-Information/Documents-and-Archives/
By-Laws-and-Rules.
2 17
16 17
PO 00000
CFR 200.30–3(a)(12).
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55039
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]]>Agencies
[Federal Register Volume 86, Number 190 (Tuesday, October 5, 2021)]
[Notices]
[Pages 55037-55039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21615]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93177; File No. SR-ICC-2021-019]
Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing of Proposed Rule Change Relating to the ICC CDS Instrument On-
Boarding Policies and Procedures
September 29, 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 September
22, 2021, ICE Clear Credit LLC (``ICC'') 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 ICC. 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 revise the
CDS Instrument On-boarding Policies and Procedures (``Instrument On-
boarding Policy''). These revisions do not require any changes to the
ICC Clearing Rules (``Rules'').
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, ICC 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. ICC 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
ICC proposes to amend the Instrument On-boarding Policy. This
document provides an overview of ICC's on-boarding process for new
instruments, which includes selecting new instruments for clearing,
configuring internal systems, notifying and receiving feedback from
stakeholders, and ensuring operational readiness by ICC and its
Clearing Participants (``CPs''). The proposed changes amend the guiding
principles that ICC maintains for instrument selection. ICC believes
that such changes will facilitate the prompt and accurate clearance and
settlement of securities transactions and derivative agreements,
contracts, and transactions for which it is responsible. ICC proposes
to make such changes effective following Commission approval of the
proposed rule change. The proposed rule change is described in detail
as follows.
[[Page 55038]]
ICC proposes amendments to the Subsection III.A which discusses the
guiding principles that ICC maintains for considering instruments for
clearing. Such principles are designed to ensure that ICC proceeds in a
prudent manner with respect to instrument selection while also
providing the best opportunity for CPs to minimize their risk. The
proposed changes incorporate an additional guiding principle to
consider instruments that are constituents of the currently clearable
On-The-Run (``OTR'') indices to become clearing eligible in order to
provide additional instruments to hedge and mitigate indirect risk
exposure from the OTR indices. For other instruments that are not
constituents of currently clearable OTR indices, the current guiding
principles would remain and ICC would continue to consider instrument
open interest and volume. For all instruments, ICC would continue to
consider instruments that can be cleared through ICC's systems and
processes and to support industry wide initiatives and protocols.
(b) Statutory Basis
ICC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \3\ and the regulations
thereunder applicable to it, including the applicable standards under
Rule 17Ad-22.\4\ In particular, Section 17A(b)(3)(F) of the Act \5\
requires that the rule change be consistent with the prompt and
accurate clearance and settlement of securities transactions and
derivative agreements, contracts and transactions cleared by ICC, the
safeguarding of securities and funds in the custody or control of ICC
or for which it is responsible, and the protection of investors and the
public interest. As described above, the proposed changes incorporate
an additional guiding principle that ICC consider instruments that are
constituents of the currently clearable OTR indices to become clearing
eligible in order to provide additional instruments to hedge and
mitigate indirect risk exposure from the OTR indices. ICC believes that
such changes would support and enhance the guiding principles and
ensure that ICC continues to proceed in a prudent manner with respect
to instrument selection while also providing CPs the best opportunity
to minimize their risk. Moreover, the Instrument On-boarding Policy
will continue to ensure that ICC's risk models adequately capture the
risks associated with proposed new instruments and that the end-of-day
price discovery process operates effectively and provides reliable
prices for proposed new instruments, including through the risk
management and pricing configuration and evaluation and the dress
rehearsal. The proposed rule change is therefore consistent with the
prompt and accurate clearing and settlement of the contracts cleared by
ICC, the safeguarding of securities and funds in the custody or control
of ICC or for which it is responsible, and the protection of investors
and the public interest, within the meaning of Section 17A(b)(3)(F) of
the Act.\6\
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\3\ 15 U.S.C. 78q-1.
\4\ 17 CFR 240.17Ad-22.
\5\ 15 U.S.C. 78q-1(b)(3)(F).
\6\ Id.
---------------------------------------------------------------------------
The amendments would also satisfy relevant requirements of Rule
17Ad-22.\7\ Rule 17Ad-22(e)(2)(i) and (v) \8\ requires each covered
clearing agency to 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. The Instrument On-boarding Policy
continues to describe the roles and responsibilities of relevant
stakeholders with respect to instrument selection and subject new
instruments to ICC's governance process. As such, in ICC's view, the
proposed rule change continues to ensure that ICC maintains policies
and procedures that are reasonably designed to provide for clear and
transparent governance arrangements and specify clear and direct lines
of responsibility, consistent with Rule 17Ad-22(e)(2)(i) and (v).\9\
---------------------------------------------------------------------------
\7\ 17 CFR 240.17Ad-22.
\8\ 17 CFR 240.17Ad-22(e)(2)(i) and (v).
\9\ Id.
---------------------------------------------------------------------------
Rule 17Ad-22(e)(4)(ii) \10\ requires each covered clearing agency
to establish, implement, maintain, and enforce written policies and
procedures reasonably designed to effectively identify, measure,
monitor, and manage its credit exposures to participants and those
arising from its payment, clearing, and settlement processes, including
by maintaining additional financial resources at the minimum to enable
it to cover a wide range of foreseeable stress scenarios that include,
but are not limited to, the default of the two participant families
that would potentially cause the largest aggregate credit exposure for
the covered clearing agency in extreme but plausible market conditions.
The proposed changes distinguish a category of instruments that are
constituents of the currently clearable OTR indices to provide
additional instruments to hedge and mitigate indirect risk exposure
from the OTR indices. New instruments will continue to be subject to
the risk management and pricing configuration and evaluation and the
dress rehearsal under the Instrument On-boarding Policy to ensure that
ICC's risk models adequately capture the risks associated with new
instruments and that the end-of-day price discovery process operates
effectively, thereby supporting ICC's ability to maintain its financial
resources and withstand the pressures of defaults, consistent with the
requirements of Rule 17Ad-22(e)(4)(ii).\11\
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\10\ 17 CFR 240.17Ad-22(e)(4)(ii).
\11\ Id.
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Rule 17Ad-22(e)(17) \12\ requires, in relevant part, each covered
clearing agency to establish, implement, maintain, and enforce written
policies and procedures reasonably designed to manage its operational
risks by (i) identifying the plausible sources of operational risk,
both internal and external, and mitigating their impact through the use
of appropriate systems, policies, procedures, and controls; and (ii)
ensuring that systems have a high degree of security, resiliency,
operational reliability, and adequate, scalable capacity. The
Instrument On-boarding Policy continues to describe the process,
including testing and preparation, for the introduction of new
instruments to ensure that ICC and its CPs are operationally ready and
that ICC proceeds in a controlled manner, thereby supporting ICC's
ability to identify the plausible sources of operational risk and
mitigate their impact and ensure that systems have a high degree of
security, resiliency, operational reliability, and adequate, scalable
capacity, consistent with the requirements of Rule 17Ad-22(e)(17).\13\
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\12\ 17 CFR 240.17Ad-22(e)(17)(i) and (ii).
\13\ Id.
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Rule 17Ad-22(e)(21) \14\ requires, among other things, that each
covered clearing agency establish, implement, maintain, and enforce
written policies and procedures reasonably designed to be efficient and
effective in meeting the requirements of its participants and the
markets it serves. The proposed changes are designed to provide
additional instruments to hedge and mitigate indirect risk exposure
from the OTR indices. Such changes would support and enhance the
guiding principles by ensuring that ICC continues to proceed in a
prudent manner with respect to instrument selection while also
providing CPs the best opportunity to
[[Page 55039]]
minimize their risk, thereby allowing ICC to be efficient and effective
in meeting the requirements of its participants and the markets it
serves, consistent with Rule 17Ad-22(e)(21).\15\
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\14\ 17 CFR 240.17Ad-22(e)(21).
\15\ Id.
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(B) Clearing Agency's Statement on Burden on Competition
ICC does not believe the proposed amendments would have any impact,
or impose any burden, on competition not necessary or appropriate in
furtherance of the purpose of the Act. The proposed changes to the
Instrument On-boarding Policy will apply uniformly across all market
participants. Therefore, ICC does not believe the proposed rule change
imposes 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 rule change have not been
solicited or received. ICC will notify the Commission of any written
comments received by ICC.
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
(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-2021-019 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-2021-019. 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-2021-019 and should be
submitted on or before October 26, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21615 Filed 10-4-21; 8:45 am]
BILLING CODE 8011-01-P
