Self-Regulatory Organizations; ICE Clear Europe Limited; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Relating to Amendments to Its Operational Risk and Resilience Policy, 60727-60730 [2023-19011]
Download as PDF
<![CDATA[
Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 / Notices
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
Rajib Chanda, Esq., Simpson Thacher &
Bartlett LLP, at Rajib.Chanda@
stblaw.com; Steven Grigoriou, Esq.,
Simpson Thacher & Bartlett LLP, at
Steven.Grigoriou@stblaw.com; and
William J. Kennedy, Jr., Onex Falcon
Investment Advisors, LLC, 21 Custom
House Street, 10th Floor, Boston, MA
02110.
FOR FURTHER INFORMATION CONTACT:
Stephan N. Packs, Senior Counsel, or
Terri Jordan, Branch Chief, at (202) 551–
6825 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: For
Applicants’ representations, legal
analysis, and conditions, please refer to
Applicants’ first amended and restated
application, dated July 20, 2023, which
may be obtained via the Commission’s
website by searching for the file number
at the top of this document, or for an
Applicant using the Company name
search field, on the SEC’s EDGAR
system.
The SEC’s EDGAR system may be
searched at https://www.sec.gov/edgar/
searchedgar/legacy/
companysearch.html. You may also call
the SEC’s Public Reference Room at
(202) 551–8090.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Sherry R. Haywood,
Assistant Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given,
pursuant to the provisions of the
Government in the Sunshine Act, Public
Law 94–409, that the Securities and
Exchange Commission will hold an
Open Meeting on Wednesday,
September 6, 2023 at 10:00 a.m.
PLACE: The meeting will be webcast on
the Commission’s website at
www.sec.gov.
STATUS: This meeting will begin at 10:00
a.m. (ET) and will be open to the public
via webcast on the Commission’s
website at www.sec.gov.
MATTERS TO BE CONSIDERED:
1. The Commission will consider
whether to approve a proposed
amendment to the National Market
ddrumheller on DSK120RN23PROD with NOTICES1
VerDate Sep<11>2014
18:02 Sep 01, 2023
Jkt 259001
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed, please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: August 30, 2023.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023–19137 Filed 8–31–23; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98237; File No. SR–ICEEU–
2023–021]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
of Proposed Rule Change, as Modified
by Amendment No. 1, Relating to
Amendments to Its Operational Risk
and Resilience Policy
August 29, 2023.
[FR Doc. 2023–19088 Filed 9–1–23; 8:45 am]
TIME AND DATE:
System Plan Governing the
Consolidated Audit Trail (‘‘CAT NMS
Plan’’) to implement a revised funding
model (‘‘Executed Share Model’’) for the
consolidated audit trail (‘‘CAT’’) and to
establish a fee schedule for CAT fees for
the self-regulatory organizations that are
participants to the CAT NMS Plan in
accordance with the Executed Share
Model.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on August
15, 2023, ICE Clear Europe Limited
(‘‘ICE Clear Europe’’ or the ‘‘Clearing
House’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule changes described in
Items I, II and III below, which Items
have been prepared primarily by ICE
Clear Europe. On August 24, 2023, ICE
Clear Europe filed Amendment No. 1 to
the proposed rule change to make
certain changes to the Exhibit 5.3 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as modified by Amendment No.
1 (hereafter ‘‘the proposed rule
change’’), from interested persons.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amendment No. 1 corrects the presentation of
changes in Exhibit 5 by reflecting the deletion of the
prior ‘‘Oversight of the Policy’’ section as part of the
updated governance and oversight provisions.
60727
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
ICE Clear Europe Limited (‘‘ICE Clear
Europe’’ or the ‘‘Clearing House’’)
proposes to modify its Operational Risk
and Resilience Policy (the ‘‘Operational
Risk and Resilience Policy’’ or
‘‘Policy’’).4 The amendments would
modify the Policy to enhance scenario
analysis and testing relating to
operational risk and resilience,
introduce an element for emerging risks,
and update the review process for the
document, among other changes
discussed herein.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, ICE
Clear Europe included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. ICE
Clear Europe has prepared summaries,
set forth in sections (A), (B), and (C)
below, of the most significant aspects of
such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
(a) Purpose
ICE Clear Europe is proposing to
amend its Operational Risk and
Resilience Policy to incorporate
enhanced procedures for analysis and
testing of operational risk and resilience
scenarios into the policy, among other
amendments discussed herein. The
description of the Clearing House’s
overall operational risk and resilience
framework would update a reference to
the Outsourcing Policy to reflect its new
name, the Outsourcing and Third Party
Risk Management Policy (and reflect
that the updated policy has been
approved by the Board and is pending
regulatory approval).
With respect to scenario analysis and
testing relating to operational risk and
resilience, the amendments would add
that the Clearing House must maintain
an inventory of scenarios for the
purposes of scenario analysis and
testing. The amendments would clarify
that testing must include scenarios that
take into account both internal and
external dependencies. The
amendments would also state that a
2 17
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
4 Capitalized terms used but not defined herein
have the meanings specified in the ICE Clear
Europe Clearing Rules and the Operational Risk and
Resilience Policy.
E:\FR\FM\05SEN1.SGM
05SEN1
ddrumheller on DSK120RN23PROD with NOTICES1
60728
Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 / Notices
portion of the scenarios should be
identified and selected for reverse stress
testing (through a practical test where
possible or desk top exercise). Over a
three year cycle all scenarios would
have to be tested at least once by a
practical test or a desk top exercise. The
inventory would also be reviewed on at
least an annual basis in order to
determine if the scenarios are still fit for
purpose and if updates are required.
The annual review of the inventory
would be the responsibility of the First
Line with Second Line review and
would be approved by the Executive
Risk Committee (ERC). The Executive
Risk Committee would also be
responsible for approving any changes
to the list of scenarios outside of the
annual review cycle. The detailed scope
of the testing based on the scenarios in
the inventory and the results of testing
and assessment against the risk register
would be shared with the Second Line
for review. The amendments would also
specify that the scenario analysis and
testing results would be submitted to
the ERC or relevant Board subcommittee (instead of the ERC and
Board), which ICE Clear Europe believes
is the most appropriate governance level
for review of such matters.
A new section on Control Validation
and Assessment would be added,
outlining that upon entry to the risk
register or when a material change is
made to a Key Control, Enterprise Risk
Management (ERM) will confirm that
validation of Key Controls is carried out.
Additionally, the amendments would
state that Validation may be verified
directly by ERM or through ERM’s
oversight of validations performed by
the First Line. The amendments would
also replace references to control testing
with control validation throughout the
Policy to be consistent with the new
section.
In the Risk Assessment section, the
amendments would address Emerging
Risks. The amendments would specify
that there should be an assessment of
the Velocity for Emerging Risks.
Velocity would be defined as an
estimate of the time frame within which
impact of a risk may be realized.
Velocity would be considered as an
additional factor utilized in prioritizing
Emerging Risks, as further detailed in
the Appendix G. Certain other nonsubstantive drafting clarifications would
be made in this section.
In the Government and Oversight
section, the amendments would add
provisions relating to Reviews of the
Policy that are consistent with other
Clearing House policies. The
amendments would provide that the
document owner identified by the
VerDate Sep<11>2014
18:02 Sep 01, 2023
Jkt 259001
Clearing House would be responsible for
ensuring that the Policy remains up-todate and reviewed in accordance with
the Clearing House’s governance
processes. Generally, review of the
Policy would be conducted by the
document owner and/or relevant staff as
appropriate, with sign off being
provided by the head of the department
and the CRO (or their delegates). The
amendments would detail the key
aspects of document reviews, including
at minimum, regulatory compliance,
documentation and purpose,
implementation, use, and open items
from previous validations or reviews
(where appropriate). The results of the
review, including priority of findings,
proposed remediations and target due
date to remediate the findings would be
reported to the ERC and in certain cases
to the Model Oversight Committee. The
amendments would add the Head of
Regulation and Compliance (or their
respective delegates) to the parties to
whom the document owner would
report any material breaches or
deviations from the Policy.
The amendments would modify and
update the table on Assessment of
Expected Level of Risk (Appendix D).
The column labeled Mitigation would
be renamed to Rating. The updated
chart would also add examples for each
level of rating.
The amendments would slightly
modify and update the table on Control
Effectiveness Ratings (Appendix E). The
column labeled Effectiveness would be
renamed to Rating and the column
labeled Guidelines would be renamed to
the more specific Control Assessment
Guidelines. Moreover, an additional
bullet point would be added to the
guidelines under Unsatisfactory,
specifying that this rating would apply
where the control validation and/or
assessment and audit programs result in
major findings.
The amendments would update the
table on Control Remediation
Recommendation & Timelines
(Appendix F). The heading labeled
Control Effectiveness would be renamed
to Control Effectiveness Rating and,
likewise the heading labeled Mitigation
would be renamed to Level of Risk
Mitigation. In the scenario with a
Control Effectiveness Rating of Needs
Improvement and a High Level of Risk
Mitigation, the recommended would be
changed from Medium to High.
A new appendix, labeled Appendix
G—Velocity Assessment Guidance
would be added to the Policy in
connection with the amendments
discussed above relating to Velocity of
emerging risks. This section would
include a chart separating the Velocity
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
Rating into categories of Immediate (<6
months), Short Term (>6 months <18
months), and Medium Term (>18
months). The chart would also include
a description for each Velocity Rating.
Finally, the amendments would
remove the section labeled Control
Testing Scope following the chart on
Risk Mitigation (Appendix H), to
conform to the change in the Policy to
refer to control validation rather than
control testing.
Various provisions would be
renumbered or relabeled throughout the
Policy.
(b) Statutory Basis
ICE Clear Europe believes that the
amendments to the Operational Risk
and Resilience Policy are consistent
with the requirements of Section 17A of
the Securities Exchange Act of 1934 (the
‘‘Act’’) 5 and the regulations thereunder
applicable to it. In particular, Section
17A(b)(3)(F) of the Act 6 requires, among
other things, that the rules of a clearing
agency be designed to promote the
prompt and accurate clearance and
settlement of securities transactions
and, to the extent applicable, derivative
agreements, contracts, and transactions,
the safeguarding of securities and funds
in the custody or control of the clearing
agency or for which it is responsible,
and the protection of investors and the
public interest.
The proposed changes to the Policy
are designed to strengthen ICE Clear
Europe’s policies and procedures to
manage operational risk and enhance
resilience. The amendments in
particular would enhance scenario
analysis and testing relating to
operational risk and resilience,
including through a framework for
maintaining an inventory of relevant
scenarios and ongoing review and
testing of those scenarios. The
amendments would provide for
validation of key controls, and also
introduce velocity as an additional
factor when analyzing and prioritizing
Emerging Risks. Various other drafting
clarifications and similar enhancements
would be made in the Policy and related
appendices. As proposed to be revised,
the Policy will facilitate the Clearing
House’s ability to manage operational
risk and enhance its operational
resilience. The proposed amendments
would thus promote the stability of the
Clearing House and the prompt and
accurate clearance and settlement of
cleared contracts and the safeguarding
of securities and funds in ICE Clear
Europe’s custody or control or for which
5 15
6 15
E:\FR\FM\05SEN1.SGM
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
05SEN1
ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 / Notices
it is responsible. The enhanced risk
management is therefore also generally
consistent with the protection of
investors and the public interest in the
safe operation of the Clearing House.
Accordingly, the amendments satisfy
the requirements of Section
17A(b)(3)(F).7
The amendments to the Policy are
also consistent with relevant provisions
of Rule 17Ad–22.8 Rule 17Ad–22(e)(3)
provides that ‘‘[e]ach covered clearing
agency shall establish, implement,
maintain and enforce written policies
and procedures reasonably designed to,
as applicable [. . .] [m]aintain a sound
risk management framework for
comprehensively managing . . .
operational . . . and other risks that
arise in or are borne by the covered
clearing agency’’.9 As set forth above,
the amendments are intended to
enhance the Clearing House’s risk
management framework as it relates to
operational risks. Among other changes,
the amendments would add an
additional factor for assessing emerging
risks and provide for inventory, review
and testing of relevant scenarios used in
evaluating operational risk and
resilience. The amendments would thus
strengthen the management of
operational risks and risk management
more generally. In ICE Clear Europe’s
view, the amendments are therefore
consistent with the requirements of Rule
17Ad–22(e)(3).10
Rule 17Ad–22(e)(2) provides that
‘‘[e]ach covered clearing agency shall
establish, implement, maintain and
enforce written policies and procedures
reasonably designed to, as applicable
[. . .] [p]rovide for governance
arrangements that are clear and
transparent’’ 11 and ‘‘[s]pecify clear and
direct lines of responsibility’’.12 The
amendments to the Policy would add a
more detailed review process for
updating and reviewing the Policy, in a
manner generally consistent with other
Clearing House policies and procedures.
The amendments would also clarify the
reporting of material breaches or
unapproved deviations. In ICE Clear
Europe’s view, the amendments are
therefore consistent with the
requirements of Rule 17Ad–22(e)(2).13
The proposed amendments are also
consistent with Rule 17Ad–22(e)(17)(i),
which provides that ‘‘[e]ach covered
clearing agency shall establish,
7 15
U.S.C. 78q–1(b)(3)(F).
CFR 240.17 Ad–22.
9 17 CFR 240.17 Ad–22(e)(3).
10 17 CFR 240.17 Ad–22(e)(3).
11 17 CFR 240.17 Ad–22(e)(2)(i).
12 17 CFR 240.17 Ad–22(e)(2)(v).
13 17 CFR 240.17 Ad–22(e)(2).
8 17
VerDate Sep<11>2014
18:02 Sep 01, 2023
implement, maintain and enforce
written policies and procedures
reasonably designed to, as applicable
[. . .] [m]anage the clearing agency’s
operational risks by 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’’.14 The
amendments to the Policy enhance
scenario analysis and testing relating to
operational risk and resilience,
including through inventory and review
of relevant scenarios. The amendments
would also expand the factors used in
evaluating emerging risks with the
addition of Velocity as a factor, and
provide for validation of key controls. In
ICE Clear Europe’s view, the
amendments are therefore consistent
with the requirements of Rule 17Ad–
22(e)(17)(i).15
(B) Clearing Agency’s Statement on
Burden on Competition
ICE Clear Europe does not believe the
proposed amendments would have any
impact, or impose any burden, on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. The amendments
are being adopted to update and
enhance the Clearing House’s
Operational Risk and Resilience Policy,
which relates to the Clearing House’s
internal processes for operational risk
management. The amendments would
not change the Rules or Procedures, or
the rights or obligations of Clearing
Members or the Clearing House. ICE
Clear Europe does not believe the
amendments would affect the costs of
clearing, the ability of market
participants to access clearing, or the
market for clearing services generally.
Therefore, ICE Clear Europe does not
believe the proposed rule change
imposes any burden on competition that
is inappropriate in furtherance of the
purposes of the Act.
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants or Others
Written comments relating to the
proposed amendments have not been
solicited or received by ICE Clear
Europe. ICE Clear Europe will notify the
Commission of any written comments
received with respect to the proposed
rule change.
14 17
15 17
Jkt 259001
PO 00000
CFR 240.17 Ad–22(e)(17)(i).
CFR 240.17 Ad–22(e)(17)(i).
Frm 00098
Fmt 4703
Sfmt 4703
60729
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 rule-comments@
sec.gov. Please include File Number SR–
ICEEU–2023–021 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–ICEEU–2023–021. 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
a.m. and 3 p.m. Copies of such filings
will also be available for inspection and
E:\FR\FM\05SEN1.SGM
05SEN1
60730
Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 / Notices
copying at the principal office of ICE
Clear Europe and on ICE Clear Europe’s
website at https://www.ice.com/cleareurope/regulation.
Do not include personal identifiable
information in submissions; you should
submit only information that you wish
to make available publicly. We may
redact in part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection. All submissions should refer
to File Number SR–ICEEU–2023–021
and should be submitted on or before
September 26, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Sherry R. Haywood,
Assistant Secretary.
Resolution of litigation claims; and
Other matters relating to examinations and
enforcement proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting agenda items that
may consist of adjudicatory,
examination, litigation, or regulatory
matters.
CONTACT PERSON FOR MORE INFORMATION:
For further information; please contact
Vanessa A. Countryman from the Office
of the Secretary at (202) 551–5400.
Authority: 5 U.S.C. 552b.
Dated: August 31, 2023.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023–19163 Filed 8–31–23; 4:15 pm]
DEPARTMENT OF STATE
[Public Notice: 12167]
2:00 p.m. on Thursday,
September 7, 2023.
PLACE: The meeting will be held via
remote means and/or at the
Commission’s headquarters, 100 F
Street NE, Washington, DC 20549.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
In the event that the time, date, or
location of this meeting changes, an
announcement of the change, along with
the new time, date, and/or place of the
meeting will be posted on the
Commission’s website at https://
www.sec.gov.
The General Counsel of the
Commission, or her designee, has
certified that, in her opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
The subject matter of the closed
meeting will consist of the following
topics:
ddrumheller on DSK120RN23PROD with NOTICES1
TIME AND DATE:
Institution and settlement of injunctive
actions;
Institution and settlement of administrative
proceedings;
16 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
18:02 Sep 01, 2023
Jkt 259001
Notice is hereby given of the
following determinations: I hereby
determine that certain objects being
imported from abroad pursuant to
agreements with their foreign owners or
custodians for temporary display in the
exhibition ‘‘Degas and the Laundress:
Women, Work, and Impressionism’’ at
The Cleveland Museum of Art,
Cleveland, Ohio, and at possible
additional exhibitions or venues yet to
be determined, are of cultural
significance, and, further, that their
temporary exhibition or display within
the United States as aforementioned is
in the national interest. I have ordered
that Public Notice of these
determinations be published in the
Federal Register.
FOR FURTHER INFORMATION CONTACT:
Reed Liriano, Program Coordinator,
Office of the Legal Adviser, U.S.
Department of State (telephone: 202–
632–6471; email: section2459@
state.gov). The mailing address is U.S.
Department of State, L/PD, 2200 C Street
NW (SA–5), Suite 5H03, Washington,
DC 20522–0505.
SUPPLEMENTARY INFORMATION: The
foregoing determinations were made
pursuant to the authority vested in me
by the Act of October 19, 1965 (79 Stat.
985; 22 U.S.C. 2459), Executive Order
12047 of March 27, 1978, the Foreign
Affairs Reform and Restructuring Act of
1998 (112 Stat. 2681, et seq.; 22 U.S.C.
6501 note, et seq.), Delegation of
SUMMARY:
Frm 00099
Fmt 4703
BILLING CODE 4710–05–P
[Public Notice: 12165]
Notice is hereby given of the
following determinations: I hereby
determine that certain objects being
imported from abroad pursuant to
agreements with their foreign owners or
custodians for temporary display in the
exhibition ‘‘Camille Claudel’’ at The Art
Institute of Chicago, in Chicago, Illinois;
the J. Paul Getty Museum at the Getty
Center, Los Angeles, California; and at
possible additional exhibitions or
venues yet to be determined, are of
cultural significance, and, further, that
their temporary exhibition or display
within the United States as
aforementioned is in the national
interest. I have ordered that Public
Notice of these determinations be
published in the Federal Register.
SUMMARY:
Notice of Determinations; Culturally
Significant Objects Being Imported for
Exhibition—Determinations: ‘‘Degas
and the Laundress: Women, Work, and
Impressionism’’ Exhibition
PO 00000
[FR Doc. 2023–19105 Filed 9–1–23; 8:45 am]
Notice of Determinations; Culturally
Significant Objects Being Imported for
Exhibition—Determinations: ‘‘Camille
Claudel’’ Exhibition
BILLING CODE 8011–01–P
BILLING CODE 8011–01–P
Sunshine Act Meetings
Nicole L. Elkon,
Deputy Assistant Secretary for Professional
and Cultural Exchanges, Bureau of
Educational and Cultural Affairs, Department
of State.
DEPARTMENT OF STATE
[FR Doc. 2023–19011 Filed 9–1–23; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
Authority No. 234 of October 1, 1999,
Delegation of Authority No. 236–3 of
August 28, 2000, and Delegation of
Authority No. 523 of December 22,
2021.
Sfmt 4703
FOR FURTHER INFORMATION CONTACT:
Reed Liriano, Program Coordinator,
Office of the Legal Adviser, U.S.
Department of State (telephone: 202–
632–6471; email: section2459@
state.gov). The mailing address is U.S.
Department of State, L/PD, 2200 C Street
NW (SA–5), Suite 5H03, Washington,
DC 20522–0505.
The
foregoing determinations were made
pursuant to the authority vested in me
by the Act of October 19, 1965 (79 Stat.
985; 22 U.S.C. 2459), Executive Order
12047 of March 27, 1978, the Foreign
Affairs Reform and Restructuring Act of
1998 (112 Stat. 2681, et seq.; 22 U.S.C.
6501 note, et seq.), Delegation of
Authority No. 234 of October 1, 1999,
Delegation of Authority No. 236–3 of
August 28, 2000, and Delegation of
SUPPLEMENTARY INFORMATION:
E:\FR\FM\05SEN1.SGM
05SEN1
]]>Agencies
[Federal Register Volume 88, Number 170 (Tuesday, September 5, 2023)]
[Notices]
[Pages 60727-60730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19011]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98237; File No. SR-ICEEU-2023-021]
Self-Regulatory Organizations; ICE Clear Europe Limited; Notice
of Filing of Proposed Rule Change, as Modified by Amendment No. 1,
Relating to Amendments to Its Operational Risk and Resilience Policy
August 29, 2023.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 15, 2023, ICE Clear Europe Limited (``ICE Clear Europe'' or
the ``Clearing House'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule changes described in
Items I, II and III below, which Items have been prepared primarily by
ICE Clear Europe. On August 24, 2023, ICE Clear Europe filed Amendment
No. 1 to the proposed rule change to make certain changes to the
Exhibit 5.\3\ The Commission is publishing this notice to solicit
comments on the proposed rule change, as modified by Amendment No. 1
(hereafter ``the proposed rule change''), from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 corrects the presentation of changes in
Exhibit 5 by reflecting the deletion of the prior ``Oversight of the
Policy'' section as part of the updated governance and oversight
provisions.
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
ICE Clear Europe Limited (``ICE Clear Europe'' or the ``Clearing
House'') proposes to modify its Operational Risk and Resilience Policy
(the ``Operational Risk and Resilience Policy'' or ``Policy'').\4\ The
amendments would modify the Policy to enhance scenario analysis and
testing relating to operational risk and resilience, introduce an
element for emerging risks, and update the review process for the
document, among other changes discussed herein.
---------------------------------------------------------------------------
\4\ Capitalized terms used but not defined herein have the
meanings specified in the ICE Clear Europe Clearing Rules and the
Operational Risk and Resilience Policy.
---------------------------------------------------------------------------
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, ICE Clear Europe included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. ICE Clear Europe has prepared summaries,
set forth in sections (A), (B), and (C) below, of the most significant
aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
(a) Purpose
ICE Clear Europe is proposing to amend its Operational Risk and
Resilience Policy to incorporate enhanced procedures for analysis and
testing of operational risk and resilience scenarios into the policy,
among other amendments discussed herein. The description of the
Clearing House's overall operational risk and resilience framework
would update a reference to the Outsourcing Policy to reflect its new
name, the Outsourcing and Third Party Risk Management Policy (and
reflect that the updated policy has been approved by the Board and is
pending regulatory approval).
With respect to scenario analysis and testing relating to
operational risk and resilience, the amendments would add that the
Clearing House must maintain an inventory of scenarios for the purposes
of scenario analysis and testing. The amendments would clarify that
testing must include scenarios that take into account both internal and
external dependencies. The amendments would also state that a
[[Page 60728]]
portion of the scenarios should be identified and selected for reverse
stress testing (through a practical test where possible or desk top
exercise). Over a three year cycle all scenarios would have to be
tested at least once by a practical test or a desk top exercise. The
inventory would also be reviewed on at least an annual basis in order
to determine if the scenarios are still fit for purpose and if updates
are required. The annual review of the inventory would be the
responsibility of the First Line with Second Line review and would be
approved by the Executive Risk Committee (ERC). The Executive Risk
Committee would also be responsible for approving any changes to the
list of scenarios outside of the annual review cycle. The detailed
scope of the testing based on the scenarios in the inventory and the
results of testing and assessment against the risk register would be
shared with the Second Line for review. The amendments would also
specify that the scenario analysis and testing results would be
submitted to the ERC or relevant Board sub-committee (instead of the
ERC and Board), which ICE Clear Europe believes is the most appropriate
governance level for review of such matters.
A new section on Control Validation and Assessment would be added,
outlining that upon entry to the risk register or when a material
change is made to a Key Control, Enterprise Risk Management (ERM) will
confirm that validation of Key Controls is carried out. Additionally,
the amendments would state that Validation may be verified directly by
ERM or through ERM's oversight of validations performed by the First
Line. The amendments would also replace references to control testing
with control validation throughout the Policy to be consistent with the
new section.
In the Risk Assessment section, the amendments would address
Emerging Risks. The amendments would specify that there should be an
assessment of the Velocity for Emerging Risks. Velocity would be
defined as an estimate of the time frame within which impact of a risk
may be realized. Velocity would be considered as an additional factor
utilized in prioritizing Emerging Risks, as further detailed in the
Appendix G. Certain other non-substantive drafting clarifications would
be made in this section.
In the Government and Oversight section, the amendments would add
provisions relating to Reviews of the Policy that are consistent with
other Clearing House policies. The amendments would provide that the
document owner identified by the Clearing House would be responsible
for ensuring that the Policy remains up-to-date and reviewed in
accordance with the Clearing House's governance processes. Generally,
review of the Policy would be conducted by the document owner and/or
relevant staff as appropriate, with sign off being provided by the head
of the department and the CRO (or their delegates). The amendments
would detail the key aspects of document reviews, including at minimum,
regulatory compliance, documentation and purpose, implementation, use,
and open items from previous validations or reviews (where
appropriate). The results of the review, including priority of
findings, proposed remediations and target due date to remediate the
findings would be reported to the ERC and in certain cases to the Model
Oversight Committee. The amendments would add the Head of Regulation
and Compliance (or their respective delegates) to the parties to whom
the document owner would report any material breaches or deviations
from the Policy.
The amendments would modify and update the table on Assessment of
Expected Level of Risk (Appendix D). The column labeled Mitigation
would be renamed to Rating. The updated chart would also add examples
for each level of rating.
The amendments would slightly modify and update the table on
Control Effectiveness Ratings (Appendix E). The column labeled
Effectiveness would be renamed to Rating and the column labeled
Guidelines would be renamed to the more specific Control Assessment
Guidelines. Moreover, an additional bullet point would be added to the
guidelines under Unsatisfactory, specifying that this rating would
apply where the control validation and/or assessment and audit programs
result in major findings.
The amendments would update the table on Control Remediation
Recommendation & Timelines (Appendix F). The heading labeled Control
Effectiveness would be renamed to Control Effectiveness Rating and,
likewise the heading labeled Mitigation would be renamed to Level of
Risk Mitigation. In the scenario with a Control Effectiveness Rating of
Needs Improvement and a High Level of Risk Mitigation, the recommended
would be changed from Medium to High.
A new appendix, labeled Appendix G--Velocity Assessment Guidance
would be added to the Policy in connection with the amendments
discussed above relating to Velocity of emerging risks. This section
would include a chart separating the Velocity Rating into categories of
Immediate (<6 months), Short Term (>6 months <18 months), and Medium
Term (>18 months). The chart would also include a description for each
Velocity Rating.
Finally, the amendments would remove the section labeled Control
Testing Scope following the chart on Risk Mitigation (Appendix H), to
conform to the change in the Policy to refer to control validation
rather than control testing.
Various provisions would be renumbered or relabeled throughout the
Policy.
(b) Statutory Basis
ICE Clear Europe believes that the amendments to the Operational
Risk and Resilience Policy are consistent with the requirements of
Section 17A of the Securities Exchange Act of 1934 (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.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78q-1.
\6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The proposed changes to the Policy are designed to strengthen ICE
Clear Europe's policies and procedures to manage operational risk and
enhance resilience. The amendments in particular would enhance scenario
analysis and testing relating to operational risk and resilience,
including through a framework for maintaining an inventory of relevant
scenarios and ongoing review and testing of those scenarios. The
amendments would provide for validation of key controls, and also
introduce velocity as an additional factor when analyzing and
prioritizing Emerging Risks. Various other drafting clarifications and
similar enhancements would be made in the Policy and related
appendices. As proposed to be revised, the Policy will facilitate the
Clearing House's ability to manage operational risk and enhance its
operational resilience. The proposed amendments would thus promote the
stability of the Clearing House and the prompt and accurate clearance
and settlement of cleared contracts and the safeguarding of securities
and funds in ICE Clear Europe's custody or control or for which
[[Page 60729]]
it is responsible. The enhanced risk management is therefore also
generally consistent with the protection of investors and the public
interest in the safe operation of the Clearing House. Accordingly, the
amendments satisfy the requirements of Section 17A(b)(3)(F).\7\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
The amendments to the Policy are also consistent with relevant
provisions of Rule 17Ad-22.\8\ Rule 17Ad-22(e)(3) provides that
``[e]ach covered clearing agency shall establish, implement, maintain
and enforce written policies and procedures reasonably designed to, as
applicable [. . .] [m]aintain a sound risk management framework for
comprehensively managing . . . operational . . . and other risks that
arise in or are borne by the covered clearing agency''.\9\ As set forth
above, the amendments are intended to enhance the Clearing House's risk
management framework as it relates to operational risks. Among other
changes, the amendments would add an additional factor for assessing
emerging risks and provide for inventory, review and testing of
relevant scenarios used in evaluating operational risk and resilience.
The amendments would thus strengthen the management of operational
risks and risk management more generally. In ICE Clear Europe's view,
the amendments are therefore consistent with the requirements of Rule
17Ad-22(e)(3).\10\
---------------------------------------------------------------------------
\8\ 17 CFR 240.17 Ad-22.
\9\ 17 CFR 240.17 Ad-22(e)(3).
\10\ 17 CFR 240.17 Ad-22(e)(3).
---------------------------------------------------------------------------
Rule 17Ad-22(e)(2) provides that ``[e]ach covered clearing agency
shall establish, implement, maintain and enforce written policies and
procedures reasonably designed to, as applicable [. . .] [p]rovide for
governance arrangements that are clear and transparent'' \11\ and
``[s]pecify clear and direct lines of responsibility''.\12\ The
amendments to the Policy would add a more detailed review process for
updating and reviewing the Policy, in a manner generally consistent
with other Clearing House policies and procedures. The amendments would
also clarify the reporting of material breaches or unapproved
deviations. In ICE Clear Europe's view, the amendments are therefore
consistent with the requirements of Rule 17Ad-22(e)(2).\13\
---------------------------------------------------------------------------
\11\ 17 CFR 240.17 Ad-22(e)(2)(i).
\12\ 17 CFR 240.17 Ad-22(e)(2)(v).
\13\ 17 CFR 240.17 Ad-22(e)(2).
---------------------------------------------------------------------------
The proposed amendments are also consistent with Rule 17Ad-
22(e)(17)(i), which provides that ``[e]ach covered clearing agency
shall establish, implement, maintain and enforce written policies and
procedures reasonably designed to, as applicable [. . .] [m]anage the
clearing agency's operational risks by 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''.\14\ The amendments to the Policy enhance
scenario analysis and testing relating to operational risk and
resilience, including through inventory and review of relevant
scenarios. The amendments would also expand the factors used in
evaluating emerging risks with the addition of Velocity as a factor,
and provide for validation of key controls. In ICE Clear Europe's view,
the amendments are therefore consistent with the requirements of Rule
17Ad-22(e)(17)(i).\15\
---------------------------------------------------------------------------
\14\ 17 CFR 240.17 Ad-22(e)(17)(i).
\15\ 17 CFR 240.17 Ad-22(e)(17)(i).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
ICE Clear Europe does not believe the proposed amendments would
have any impact, or impose any burden, on competition not necessary or
appropriate in furtherance of the purposes of the Act. The amendments
are being adopted to update and enhance the Clearing House's
Operational Risk and Resilience Policy, which relates to the Clearing
House's internal processes for operational risk management. The
amendments would not change the Rules or Procedures, or the rights or
obligations of Clearing Members or the Clearing House. ICE Clear Europe
does not believe the amendments would affect the costs of clearing, the
ability of market participants to access clearing, or the market for
clearing services generally. Therefore, ICE Clear Europe does not
believe the proposed rule change imposes any burden on competition that
is inappropriate in furtherance of the purposes of the Act.
(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others
Written comments relating to the proposed amendments have not been
solicited or received by ICE Clear Europe. ICE Clear Europe will notify
the Commission of any written comments received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change 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-ICEEU-2023-021 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-ICEEU-2023-021. 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
a.m. and 3 p.m. Copies of such filings will also be available for
inspection and
[[Page 60730]]
copying at the principal office of ICE Clear Europe and on ICE Clear
Europe's website at https://www.ice.com/clear-europe/regulation.
Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to File Number SR-ICEEU-2023-021 and
should be submitted on or before September 26, 2023.
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-19011 Filed 9-1-23; 8:45 am]
BILLING CODE 8011-01-P
