Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change, as Modified by Partial Amendment No. 1, Relating to the Clearing Rules, Risk Management Framework, Governance Playbook and Sixth Amended and Restated Operating Agreement, 72538-72542 [2024-19878]

Download as PDF 72538 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices publishes the reasons for such determination. The proposed rule change was published for comment in the Federal Register on March 5, 2024.10 The 180th day after publication of the proposed rule change is September 1, 2024. The Commission is extending the time period for approving or disapproving the proposed rule change for an additional 60 days. The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,11 designates October 31, 2024, as the date by which the Commission shall either approve or disapprove the proposed rule change (File No. SR–CBOE–2024– 008). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–19950 Filed 9–4–24; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100876; File No. SR–ICC– 2024–009] Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of Filing of Proposed Rule Change, as Modified by Partial Amendment No. 1, Relating to the Clearing Rules, Risk Management Framework, Governance Playbook and Sixth Amended and Restated Operating Agreement khammond on DSKJM1Z7X2PROD with NOTICES August 29, 2024. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934,1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 19, 2024, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been primarily prepared by ICC. On August 27, 2024, ICC filed Partial Amendment No. 1 to the proposed rule change.3 The Commission is publishing 10 See supra note 3. U.S.C. 78s(b)(2). 12 17 CFR 200.30–3(a)(57). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Partial Amendment No. 1 amends the Exhibit 5A to correct a typographical error. 11 15 VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 this notice to solicit comments on the proposed rule change, as modified by Partial Amendment No. 1 (hereafter, ‘‘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 its (i) Clearing Rules (the ‘‘Rules’’), (ii) Risk Management Framework (the ‘‘Framework’’), (iii) Governance Playbook (the ‘‘Playbook’’), and (iv) Sixth Amended and Restated Operating Agreement (the ‘‘Operating Agreement’’). II. Clearing Agency’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 The amendments are intended principally to provide for (i) the elimination of the Risk Management Subcommittee, (ii) the establishment of a Risk Advisory Working Group and (iii) expansion of the Risk Committee to include representatives of NonParticipant Parties and clarification of certain other arrangements relating to the operation of the Risk Committee, among other clarifications, as discussed herein. ICC believes that such revisions 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 revisions are described in detail as follows. I. Rules ICC proposes to eliminate its Risk Management Subcommittee, which is currently tasked under the Rules with consulting with the Board and the Risk Committee as to eligible products, PO 00000 Frm 00175 Fmt 4703 Sfmt 4703 standards for ICC Clearing Participants (‘‘Participants’’ or ‘‘CPs’’) and approvals or denials of Participant applications. ICC believes the subcommittee is unnecessary and the relevant consultative and advisory functions can be performed (and in fact are typically performed as a matter of current practice) by the Risk Committee itself. In addition, the newly established Risk Advisory Working Group will support those consultative and advisory functions. Accordingly, ICC is amending the Rules to remove references to the Risk Management Subcommittee throughout the Rules, including the deletion of Rule 510 (which set out the responsibilities of the Risk Management Subcommittee) and Rule 511 (which addresses the membership of Risk Management Subcommittee), among others. Rules 201 and 202 (which cover Qualifications and Applications of Participants) would be amended to remove references to the Risk Management Subcommittee. In addition, Rule 201 would be amended to add references to the Risk Committee’s consultation rights over any proposed amendment to the qualifications for Participants as well as with respect to satisfying or ceasing to satisfy ICC’s internal credit criteria, to reflect current practices. Furthermore, Rule 202 would be amended to add a reference to the Risk Committee’s consultation rights over approvals or denials of Participant applications to reflect current practices. Rule 509 (which currently provides for the establishment of the Risk Management Subcommittee) would be amended to provide for the establishment of the new Risk Advisory Working Group, as a forum to seek riskbased input from a broad array of market participants regarding all matters that could materially affect the risk profile of ICE Clear Credit, consistent with the requirements of Commodity Futures Trading Commission (‘‘CFTC’’) regulations.4 The amendment would clarify that the role of the working group is advisory, such that neither the Board nor the Risk Committee is required to accept or act upon any proposal of the working group. The members of the Risk Advisory Working Group would include a minimum of two representatives of Participants and a minimum of two representatives of Non-Participant Parties. While Rule 509 would provide for a minimum number of Participant and Non-Participant Party members on the Risk Advisory Working Group, Rule 509 provides the flexibility for more 4 See E:\FR\FM\05SEN1.SGM 17 CFR 39.24(b)(12). 05SEN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices than the minimum number of Participants and Non-Participant Parties to participate on the Risk Advisory Working Group, subject to interest and availability of such representatives. The amendments would remove a reference to reporting requirements to the CFTC and SEC, which are inapplicable in the context of the Risk Advisory Working Group. The limitations on liability provided by Rule 512 (which currently apply to the Risk Management Subcommittee) would be revised to apply to the Risk Advisory Working Group and its members. Rule 512 would also provide that the Risk Advisory Working Group would meet when necessary or desirable, but at least twice per year, and that the working group would provide the Risk Committee with a summary of the topics discussed and main points raised at each meeting, as required by CFTC regulations.5 Consistent with the requirements of CFTC regulations,6 ICC would also modify its existing Risk Committee to include representatives of NonParticipant Parties, as discussed below. The amendments would also revise the role of the Risk Committee in Rule 501 to provide generally that the Board would consult with the Risk Committee on any matters that may materially affect the risk profile of ICC (in addition to the specified actions set forth in Rule 502), and to state explicitly that the Board would consider and respond to the proposals, recommendations and other input provided by the Risk Committee. In addition, Rule 502 would be amended to clarify that the specific actions subject to Risk Committee consultation specified therein are not intended to limit the general provisions of Rule 501. Furthermore, Rule 502 would be amended to delete a cross reference to Rule 510 (which sets out the responsibilities of the Risk Management Subcommittee) which is being deleted as discussed herein. With the proposed deletion to the cross reference to Rule 510, Rule 502 would be further amended to directly reference the current consultation rights of the Risk Committee over: (i) any proposed amendments to the qualifications for Participants and (ii) approvals or denials of Participant applications. The amendments would make certain changes to the composition of the Risk Committee in Rule 503(a). The size of the Risk Committee would be increased to fourteen instead of twelve members. The two additional members of the Risk Committee would be representatives of 5 See 6 See 17 CFR 39.24(b)(12). 17 CFR 39.24(b)(11). VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 Non-Participant Parties. The amendments set out the process for selection of these representatives. The two Non-Participant Parties would be selected by a majority vote of the other Risk Committee Members (i.e., the Participant Appointees and the three members appointed by ICC). The NonParticipant Parties must be active in clearing transactions at ICE Clear Credit. The selected Non-Participant Party would select an individual to serve as its Non-Participant Appointee. This person must have risk management experience and expertise and would be subject to both the Risk Committee’s and Board’s approval, neither which would be unreasonably withheld, conditioned, or delayed. This person would also only be eligible if they are an employee of the Non-Participant Party or an Affiliate thereof. The NonParticipant Appointee may be removed at any time without cause by the NonParticipant Party that appointed the individual. If a vacancy were to occur in the position, the Non-Participant Party may appoint another individual in accordance with Rule 503. In addition, under new Rule 503(c), a NonParticipant Party appointing a NonParticipant Appointee to the Risk Committee would have to execute a confidentiality agreement and would have to cause the Non-Participant Appointee to execute an acknowledgment of their confidentiality obligations in a form reasonably prescribed by ICC. Under Rule 505 as amended, a majority of the Risk Committee would constitute a quorum. The amendments would delete an additional requirement in the existing Rule that at least half of the Participant Appointees must be present. ICC believes this requirement is unnecessary in light of the revised size and composition of the Risk Committee. ICC believes that a majority quorum requirement is a well-established and standard business practice and strikes the right balance to ensure a material number of Risk Committee members are present at Risk Committee meetings without being overly burdensome. Furthermore, ICC believes that any additional quorum requirements that would apply either to the Participant Appointees or the Non-Participant Appointees are not necessary or appropriate and may impede the ability of the Risk Committee to achieve a quorum, as attendance by Risk Committee members is largely outside of ICC’s control. The inability to achieve a quorum at Risk Committee meetings (particularly if that occurs regularly) could be detrimental to ICC’s ability to PO 00000 Frm 00176 Fmt 4703 Sfmt 4703 72539 conduct its business given its requirement to consult with the Risk Committee prior to taking the Specified Actions listed in Rule 502. Rule 506, which provides for the elimination of certain fiduciary duties for Risk Committee members and appointing parties, would be revised to reflect that the appointment of members by NonParticipant Parties. The amendments would make certain other clarifications in Rule 507 relating to participation in meetings by audio or video conference to more specifically provide examples of communications equipment used for Risk Committee meetings. In light of the expansion of the requirement to consult with the Risk Committee as described above, the amendments would clarify the consultation process in Rule 601 in the event of an emergency. Specifically, the amendments would reflect that for matters otherwise subject to Risk Committee consultation (in addition to Specified Actions), there would be no obligation to do so where the Board or Eligible Officer determines that the delay caused by consultation would create significant risks to the clearing system and Participants generally, consistent with the existing standard under Rule 601, subject to the requirement to consult as promptly as practicable after taking the relevant action. Moreover, the amendments would revise Rule 703 to provide that the Business Conduct Committee would hear any matter referred to it by the Review Subcommittee 7 (rather than the Risk Management Subcommittee). This change corrects an erroneous reference in the current Rule to the Risk Management Subcommittee. The amendments would also make conforming changes to the form of Confidentiality Agreement for Risk Committee participants to specify Market Participant instead of Clearing House member (to reflect that the Risk Committee would include NonParticipant Appointees). Finally, the amendments would make drafting corrections and clarifications to account for the other changes being made. These would include the deletion of definitions relevant to the Risk Management Subcommittee (i.e., Independent ICE Subcommittee Managers, Risk Management Subcommittee, and Subcommittee 7 Under existing Rule 703(c), the Review Subcommittee is a three-person subcommittee of the Business Conduct Committee that is empaneled from time-to-time by the Business Conduct Committee, as necessary, to receive and review investigation reports of possible ICC Rule violations. E:\FR\FM\05SEN1.SGM 05SEN1 72540 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices Specified Action) as these definitions are no longer necessary or relevant with the elimination of the Risk Management Subcommittee. In addition, the amendments add the definition of NonParticipant Appointees to reflect the new category of Risk Committee members as discussed above, and also adds the definition of Risk Advisory Working Group to define the new Risk Advisory Working Group. khammond on DSKJM1Z7X2PROD with NOTICES II. Risk Management Framework ICC would amend the Framework to reflect the changes being made to the Rules as described above. References to the Risk Management Subcommittee would be deleted and references to the new Risk Advisory Working Group would be added where relevant. As a result, the chart illustrating the governance structure of ICE Clear Credit would be replaced to show the elimination of the Risk Management Subcommittee and the addition of the Risk Advisory Working Group. The amendments would also remove references to an Advisory Committee, which is a committee of Non-Participant Party representatives that would no longer be maintained in light of the changes to the Risk Committee composition discussed above. The Advisory Committee is effectively a dormant committee in that it met only on an as-needed basis and has not met for a number of years. While the primary role of the Advisory Committee was to act as a forum to solicit input from Non-Participant Parties, the Advisory Committee has proven ineffective in achieving its primary role. As a result, ICC believe that it appropriate to discontinue the Advisory Committee. ICC believes the proposed roles for Non-Participant Parties on the Risk Committee and the Risk Advisory Working Group will provide a greater opportunity for meaningful participation by Non-Participant Parties in ICC’s governance process than was afforded by the Advisory Committee in practice (even though it may have had more members and even though the Risk Advisory Working Group does not directly consult with the Board). The subsection on Risk would be updated to reflect the role of the Risk Advisory Working Group, to provide risk-based feedback to ICC on all matters that could materially affect the risk profile of ICC as discussed above. The amendments would also add a revision history section to the Framework (as Section VII) to document revisions made to the Framework on a going forward basis. As a result of the addition of the new section, Section VII. VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 Appendices would be re-numbered as Section VIII. III. Governance Playbook ICE Clear Credit would also amend the Playbook to conform to the amendments to the Rules and Framework discussed above. References to the Risk Management Subcommittee and Advisory Committee would be deleted throughout the Playbook, and references to the Risk Advisory Working Group would be added where relevant. The description of the Steering Committee, which oversees the implementation of all credit default swap (‘‘CDS’’) product launches and initiatives, would be revised to remove references to ICE Clear Europe (‘‘ICEU’’) as ICEU discontinued its CDS clearing offering in late 2023 and therefore no longer participates in the Steering Committee. References to the FCM Executive Council would also be removed, as that council would no longer be maintained. The FCM Executive Council is an obsolete committee in that its primary purpose was to provide Participants a forum to provide feedback to ICC as it proposed Rules, policies and procedures related to the addition of customer clearing to ICC’s clearing offering. As customer clearing is now an established and mature business at ICC, the primary purpose of the committee has been achieved and therefore the FCM Executive Council has not met in a number of years. As a result, ICC believes it is appropriate to discontinue maintaining the FCM Executive Council. The amendments would also delete a requirement that the election of ICC Board members would follow no less than 5 business days after the Risk Committee Reconstitution Date. The elections would still occur after the Risk Committee Reconstitution Date but there would not be a specific timeframe in order to give sufficient time to onboard new Risk Committee members following the Risk Committee Reconstitution Date, and to allow the Risk Committee sufficient time to consider and nominate Risk Committee Board Appointees. Conforming changes would also be made to the description and composition of the Risk Committee consistent with the amendments to the Rules discussed above (including the deletion of all previous language referring to and describing the Risk Management Subcommittee). Specifically, the amendments would add that the Risk Committee would include representatives of customers of ICC CPs and that the Board is required PO 00000 Frm 00177 Fmt 4703 Sfmt 4703 to consult with the Risk Committee with respect to matters that could materially affect the risk profile of ICC. The amendments would state that the Risk Committee would consist of fourteen rather than twelve members and that two of the members would be representatives of customers of CPs and address the procedures for selecting the two representatives of customers of CP members under the Rules. The amendments would also add a reference to Chapter 5 of the Rules, which is the chapter describing the Risk Committee. In addition, the amendments would change the reference to the Chairman of the Risk Committee to the Chairperson to be more gender inclusive. The amendments would add a description of the Risk Advisory Working Group, including its purposes and membership, consistent with the amendments to the Rules discussed above. The amendments provide that the ICC Chief Risk Officer would serve as Chairperson of the Risk Advisory Working Group. Moreover, a minimum of two members would be representatives of CPs and a minimum of two representatives would be customer of CPs. Members of the Risk Advisory Working Group would be appointed by the ICC President, subject to the approval by the Risk Committee. The amendments would also specify that the Risk Advisory Working Group would meet on as-needed basis to consult all matters that could affect ICC’s risk profile but would meet at least two times per year. The amendments would also make clear that the relevant documents to be maintained for the Risk Advisory Working Group include meeting materials and summary of the main points and topics discussed during the meeting. Furthermore, administrative procedures referring to the use of the Diligent account for distributing information to Risk Management Subcommittee Members would be removed, as this procedure would not be needed for Risk Advisory Working Group members as the Diligent information distribution system will not be used for the Risk Advisory Working Group. Certain reference to ICC websites would also be updated. VI. Operating Agreement ICC would amend and restate its Operating Agreement (the Sixth Amended and Restated Operating Agreement would now be the Seventh Amended and Restated Operating Agreement) to conform to the amendments to the Rules, Framework and Playbook as detailed above. The amendments would delete any reference E:\FR\FM\05SEN1.SGM 05SEN1 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices khammond on DSKJM1Z7X2PROD with NOTICES to the Advisory Committee, including Section 3.12 in its entirety (which describes the establishment and composition of the Advisory Committee), as the Advisory Committee is dormant. The Advisory Committee’s former function of soliciting feedback from Non-Participant Parties will now be accomplished by the expansion of the Risk Committee to include representatives of Non-Participant Parties and the creation of the Risk Advisory Working Group (whose members will represent both Participants and Non-Participant Parties), as discussed above. Given the proposed addition of two NonParticipant Party representatives on the Risk Committee, and a minimum of two Non-Participant Party representatives on the Risk Advisory Working Group, ICC believes the proposed revisions will increase the opportunities for NonParticipant Parties to participate in ICC’s formal governance structure as compared to the dormant Advisory Committee (even though the Advisory Committee may have included more members and even though the Risk Advisory Working Group does not directly consult with the Board). Furthermore, the defined ‘‘Buy-Side Firms’’ will also be removed as this was only relevant to Section 3.12. (b) Statutory Basis ICE Clear Credit believes that the proposed amendments to the Rules are consistent with the requirements of Section 17A of the Securities Exchange Act of 1934 (the ‘‘Act’’) 8 and the regulations thereunder applicable to it. In particular, Section 17A(b)(3)(F) of the Act 9 requires, among other things, that the rules of a clearing agency be designed to promote the prompt and accurate clearance and settlement of securities transactions and, to the extent applicable, derivative agreements, contracts, and transactions, the safeguarding of securities and funds in the custody or control of the clearing agency or for which it is responsible, and the protection of investors and the public interest. The proposed amendments are designed to reflect the expansion of the Risk Committee to include representatives of Non-Participant Parties, and the establishment of the newly formed Risk Advisory Working Group, consistent with requirements under CFTC regulations. The amendments would also provide for the elimination of the Risk Management Subcommittee, which ICC believes is U.S.C. 78q–1. 9 15 U.S.C. 78q–1(b)(3)(F). 22:19 Sep 04, 2024 Jkt 262001 transparent’’ 13 and ‘‘[c]onsider the interests of participants’ customers . . . and other relevant stakeholders of the covered clearing agency’’.14 The proposed amendments are intended to enhance the Risk Committee structure to provide for feedback on topics affecting risk management generally and to expand the committee composition to include representatives of NonParticipant Parties, to better facilitate consideration of the interests of participants’ customers. The amendments also establish the Risk Advisory Working Group to provide for further consultation with interested stakeholders on risk matters. The amendments also clarify the responsibilities of the Board with respect to consultation with the Risk Committee and Risk Advisory Working Group with respect to risk matters. In ICE Clear Credit’s view, the amendments to the Rules are therefore consistent with the requirements of Rule 17ad–22(e)(2).15 (B) Clearing Agency’s Statement on Burden on Competition ICE Clear Credit does not believe the proposed amendments would have any impact, or impose any burden, on competition not necessary or appropriate in furtherance of the purposes of the Act. The amendments are being adopted to clarify certain matters relating to the operation of its Risk Committee and related risk advisory arrangements. The amendments do not otherwise change the rights and responsibilities of ICC or its Participants. Accordingly, ICE Clear Credit 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 Credit 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 rule change have not been solicited or received. ICC will notify the Commission of any written comments received by ICC. 10 15 13 17 11 17 14 17 U.S.C. 78q–1(b)(3)(F). CFR 240.17ad–22(e)(3)(i). 12 17 CFR 240.17ad–22(e)(3)(i). 8 15 VerDate Sep<11>2014 unnecessary as the relevant responsibilities can and should be performed by the Risk Committee. In ICC’s view, the amendments will facilitate the ability of ICC to consult with relevant stakeholders and interested parties with respect to matters affecting the risk profile of the clearing house. Thus, the proposed amendments enhance the overall risk management of ICE Clear Credit and are consistent with the prompt and accurate clearance and settlement of securities transactions and derivatives agreements, contracts and transactions, the safeguarding of securities and funds which are in the custody or control of ICC or for which it is responsible, and the protection of investors and the public interest in the operation of clearing services, within the meaning of Section 17A(b)(3)(F) of the Act.10 The proposed amendments are also consistent with relevant provisions of Rule 17ad–22. Rule 17ad–22(e)(3)(i) 11 provides that the ‘‘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 that’’ among other matters identifies, measures, monitors and manages the range of risks that it faces. The amendments ensure that ICC Board continues to receive and consider feedback from the Risk Committee that may materially affect ICC’s risk profile and expands the Risk Committee to include participation by NonParticipant Appointees to provide additional perspectives from stakeholders on such matters. The amendments would also reflect the creation of the Risk Advisory Working Group, including the selection process and governance procedures of the group to ensure that it functions effectively. The Risk Advisory Working Group is intended to provide advice to ICC with respect to matters that could materially affect its risk profile. The amendments would thus strengthen and enhance ICC’s risk management more generally. In ICE Clear Credit’s view, the amendments are therefore consistent with the requirements of Rule 17ad– 22(e)(3)(i).12 Rule 17ad–22(e)(2) provides that the ‘‘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 [c]lear and PO 00000 Frm 00178 Fmt 4703 Sfmt 4703 72541 CFR 240.17ad–22(e)(2)(i). CFR 240.17ad–22(e)(2)(vi). 15 17 CFR 240.17 Ad–22(e)(2). E:\FR\FM\05SEN1.SGM 05SEN1 72542 Federal Register / Vol. 89, No. 172 / Thursday, September 5, 2024 / Notices 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, security-based swap submission, or advance notice is consistent with the Act. Comments may be submitted by any of the following methods: 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 copying at the principal office of ICE Clear Credit and on ICE Clear Credit’s website at https://www.ice.com/clearcredit/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–ICC–2024–009 and should be submitted on or before September 26, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2024–19878 Filed 9–4–24; 8:45 am] BILLING CODE 8011–01–P Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules-regulations/self-regulatoryorganization-rulemaking); or • Send an email to rule-comments@ sec.gov. Please include file number SR– ICC–2024–009 on the subject line. khammond on DSKJM1Z7X2PROD with NOTICES 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–ICC–2024–009. 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-regulations/self-regulatoryorganization-rulemaking). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change, security-based swap submission, or advance notice that are filed with the Commission, and all written communications relating to the proposed rule change, security-based swap submission, or advance notice between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and VerDate Sep<11>2014 22:19 Sep 04, 2024 Jkt 262001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–100882; File No. SR–BOX– 2024–19] Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule Relating to BOX Connectivity Fees and Port Fees for Trading on the BOX Options Market LLC Facility August 30, 2024. 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 August 16, 2024, BOX Exchange LLC (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 1 15 PO 00000 Frm 00179 Fmt 4703 Sfmt 4703 solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of Terms of Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to amend the Fee Schedule to amend the Fee Schedule relating to BOX Connectivity Fees and Port Fees on the BOX Options Market LLC (‘‘BOX’’) options facility. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission’s Public Reference Room and also on the Exchange’s internet website at https:// rules.boxexchange.com/rulefilings. 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 amend the Fee Schedule for trading on BOX to increase BOX Connectivity Fees for 10 gigabit (‘‘Gb’’) Connections, Non-10 Gb Connections, Financial Information Exchange (‘‘FIX’’) Ports, SOLA® Access Information Language (‘‘SAIL’’) Ports, Drop Copy Ports, and High Speed Vendor Feed (‘‘HSVF’’) Ports (collectively ‘‘Connectivity and Ports’’).5 Specifically, the Exchange proposes to increase its fees for Connectivity and Ports in Sections III.A.2 and III.B of the BOX Fee Schedule. By way of background, a physical connection is utilized by a Participant or non-Participant to connect to BOX at the datacenters where BOX’s servers are located. BOX currently assesses the following physical connectivity fees for 5 The Exchange initially filed the proposed pricing change on June 3, 2024 (SR–BOX–2024–13). On June 18, 2024, the Exchange withdrew that filing and submitted SR–BOX–2024–16. The instant filing replaces SR–BOX–2024–16, which was withdrawn on August 16, 2024. E:\FR\FM\05SEN1.SGM 05SEN1

Agencies

[Federal Register Volume 89, Number 172 (Thursday, September 5, 2024)]
[Notices]
[Pages 72538-72542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19878]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100876; File No. SR-ICC-2024-009]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Proposed Rule Change, as Modified by Partial Amendment No. 1, 
Relating to the Clearing Rules, Risk Management Framework, Governance 
Playbook and Sixth Amended and Restated Operating Agreement

August 29, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on 
August 19, 2024, ICE Clear Credit LLC (``ICC'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II and III below, which Items have been 
primarily prepared by ICC. On August 27, 2024, ICC filed Partial 
Amendment No. 1 to the proposed rule change.\3\ The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as modified by Partial Amendment No. 1 (hereafter, ``proposed rule 
change'') from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Partial Amendment No. 1 amends the Exhibit 5A to correct a 
typographical error.
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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 its 
(i) Clearing Rules (the ``Rules''), (ii) Risk Management Framework (the 
``Framework''), (iii) Governance Playbook (the ``Playbook''), and (iv) 
Sixth Amended and Restated Operating Agreement (the ``Operating 
Agreement'').

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, 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
    The amendments are intended principally to provide for (i) the 
elimination of the Risk Management Subcommittee, (ii) the establishment 
of a Risk Advisory Working Group and (iii) expansion of the Risk 
Committee to include representatives of Non-Participant Parties and 
clarification of certain other arrangements relating to the operation 
of the Risk Committee, among other clarifications, as discussed herein. 
ICC believes that such revisions 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 revisions 
are described in detail as follows.
I. Rules
    ICC proposes to eliminate its Risk Management Subcommittee, which 
is currently tasked under the Rules with consulting with the Board and 
the Risk Committee as to eligible products, standards for ICC Clearing 
Participants (``Participants'' or ``CPs'') and approvals or denials of 
Participant applications. ICC believes the subcommittee is unnecessary 
and the relevant consultative and advisory functions can be performed 
(and in fact are typically performed as a matter of current practice) 
by the Risk Committee itself. In addition, the newly established Risk 
Advisory Working Group will support those consultative and advisory 
functions. Accordingly, ICC is amending the Rules to remove references 
to the Risk Management Subcommittee throughout the Rules, including the 
deletion of Rule 510 (which set out the responsibilities of the Risk 
Management Subcommittee) and Rule 511 (which addresses the membership 
of Risk Management Subcommittee), among others.
    Rules 201 and 202 (which cover Qualifications and Applications of 
Participants) would be amended to remove references to the Risk 
Management Subcommittee. In addition, Rule 201 would be amended to add 
references to the Risk Committee's consultation rights over any 
proposed amendment to the qualifications for Participants as well as 
with respect to satisfying or ceasing to satisfy ICC's internal credit 
criteria, to reflect current practices. Furthermore, Rule 202 would be 
amended to add a reference to the Risk Committee's consultation rights 
over approvals or denials of Participant applications to reflect 
current practices.
    Rule 509 (which currently provides for the establishment of the 
Risk Management Subcommittee) would be amended to provide for the 
establishment of the new Risk Advisory Working Group, as a forum to 
seek risk-based input from a broad array of market participants 
regarding all matters that could materially affect the risk profile of 
ICE Clear Credit, consistent with the requirements of Commodity Futures 
Trading Commission (``CFTC'') regulations.\4\ The amendment would 
clarify that the role of the working group is advisory, such that 
neither the Board nor the Risk Committee is required to accept or act 
upon any proposal of the working group. The members of the Risk 
Advisory Working Group would include a minimum of two representatives 
of Participants and a minimum of two representatives of Non-Participant 
Parties. While Rule 509 would provide for a minimum number of 
Participant and Non-Participant Party members on the Risk Advisory 
Working Group, Rule 509 provides the flexibility for more

[[Page 72539]]

than the minimum number of Participants and Non-Participant Parties to 
participate on the Risk Advisory Working Group, subject to interest and 
availability of such representatives. The amendments would remove a 
reference to reporting requirements to the CFTC and SEC, which are 
inapplicable in the context of the Risk Advisory Working Group.
---------------------------------------------------------------------------

    \4\ See 17 CFR 39.24(b)(12).
---------------------------------------------------------------------------

    The limitations on liability provided by Rule 512 (which currently 
apply to the Risk Management Subcommittee) would be revised to apply to 
the Risk Advisory Working Group and its members. Rule 512 would also 
provide that the Risk Advisory Working Group would meet when necessary 
or desirable, but at least twice per year, and that the working group 
would provide the Risk Committee with a summary of the topics discussed 
and main points raised at each meeting, as required by CFTC 
regulations.\5\
---------------------------------------------------------------------------

    \5\ See 17 CFR 39.24(b)(12).
---------------------------------------------------------------------------

    Consistent with the requirements of CFTC regulations,\6\ ICC would 
also modify its existing Risk Committee to include representatives of 
Non-Participant Parties, as discussed below. The amendments would also 
revise the role of the Risk Committee in Rule 501 to provide generally 
that the Board would consult with the Risk Committee on any matters 
that may materially affect the risk profile of ICC (in addition to the 
specified actions set forth in Rule 502), and to state explicitly that 
the Board would consider and respond to the proposals, recommendations 
and other input provided by the Risk Committee. In addition, Rule 502 
would be amended to clarify that the specific actions subject to Risk 
Committee consultation specified therein are not intended to limit the 
general provisions of Rule 501. Furthermore, Rule 502 would be amended 
to delete a cross reference to Rule 510 (which sets out the 
responsibilities of the Risk Management Subcommittee) which is being 
deleted as discussed herein. With the proposed deletion to the cross 
reference to Rule 510, Rule 502 would be further amended to directly 
reference the current consultation rights of the Risk Committee over: 
(i) any proposed amendments to the qualifications for Participants and 
(ii) approvals or denials of Participant applications.
---------------------------------------------------------------------------

    \6\ See 17 CFR 39.24(b)(11).
---------------------------------------------------------------------------

    The amendments would make certain changes to the composition of the 
Risk Committee in Rule 503(a). The size of the Risk Committee would be 
increased to fourteen instead of twelve members. The two additional 
members of the Risk Committee would be representatives of Non-
Participant Parties. The amendments set out the process for selection 
of these representatives. The two Non-Participant Parties would be 
selected by a majority vote of the other Risk Committee Members (i.e., 
the Participant Appointees and the three members appointed by ICC). The 
Non-Participant Parties must be active in clearing transactions at ICE 
Clear Credit. The selected Non-Participant Party would select an 
individual to serve as its Non-Participant Appointee. This person must 
have risk management experience and expertise and would be subject to 
both the Risk Committee's and Board's approval, neither which would be 
unreasonably withheld, conditioned, or delayed. This person would also 
only be eligible if they are an employee of the Non-Participant Party 
or an Affiliate thereof. The Non-Participant Appointee may be removed 
at any time without cause by the Non-Participant Party that appointed 
the individual. If a vacancy were to occur in the position, the Non-
Participant Party may appoint another individual in accordance with 
Rule 503. In addition, under new Rule 503(c), a Non-Participant Party 
appointing a Non-Participant Appointee to the Risk Committee would have 
to execute a confidentiality agreement and would have to cause the Non-
Participant Appointee to execute an acknowledgment of their 
confidentiality obligations in a form reasonably prescribed by ICC.
    Under Rule 505 as amended, a majority of the Risk Committee would 
constitute a quorum. The amendments would delete an additional 
requirement in the existing Rule that at least half of the Participant 
Appointees must be present. ICC believes this requirement is 
unnecessary in light of the revised size and composition of the Risk 
Committee. ICC believes that a majority quorum requirement is a well-
established and standard business practice and strikes the right 
balance to ensure a material number of Risk Committee members are 
present at Risk Committee meetings without being overly burdensome. 
Furthermore, ICC believes that any additional quorum requirements that 
would apply either to the Participant Appointees or the Non-Participant 
Appointees are not necessary or appropriate and may impede the ability 
of the Risk Committee to achieve a quorum, as attendance by Risk 
Committee members is largely outside of ICC's control. The inability to 
achieve a quorum at Risk Committee meetings (particularly if that 
occurs regularly) could be detrimental to ICC's ability to conduct its 
business given its requirement to consult with the Risk Committee prior 
to taking the Specified Actions listed in Rule 502. Rule 506, which 
provides for the elimination of certain fiduciary duties for Risk 
Committee members and appointing parties, would be revised to reflect 
that the appointment of members by Non-Participant Parties. The 
amendments would make certain other clarifications in Rule 507 relating 
to participation in meetings by audio or video conference to more 
specifically provide examples of communications equipment used for Risk 
Committee meetings.
    In light of the expansion of the requirement to consult with the 
Risk Committee as described above, the amendments would clarify the 
consultation process in Rule 601 in the event of an emergency. 
Specifically, the amendments would reflect that for matters otherwise 
subject to Risk Committee consultation (in addition to Specified 
Actions), there would be no obligation to do so where the Board or 
Eligible Officer determines that the delay caused by consultation would 
create significant risks to the clearing system and Participants 
generally, consistent with the existing standard under Rule 601, 
subject to the requirement to consult as promptly as practicable after 
taking the relevant action.
    Moreover, the amendments would revise Rule 703 to provide that the 
Business Conduct Committee would hear any matter referred to it by the 
Review Subcommittee \7\ (rather than the Risk Management Subcommittee). 
This change corrects an erroneous reference in the current Rule to the 
Risk Management Subcommittee. The amendments would also make conforming 
changes to the form of Confidentiality Agreement for Risk Committee 
participants to specify Market Participant instead of Clearing House 
member (to reflect that the Risk Committee would include Non-
Participant Appointees).
---------------------------------------------------------------------------

    \7\ Under existing Rule 703(c), the Review Subcommittee is a 
three-person subcommittee of the Business Conduct Committee that is 
empaneled from time-to-time by the Business Conduct Committee, as 
necessary, to receive and review investigation reports of possible 
ICC Rule violations.
---------------------------------------------------------------------------

    Finally, the amendments would make drafting corrections and 
clarifications to account for the other changes being made. These would 
include the deletion of definitions relevant to the Risk Management 
Subcommittee (i.e., Independent ICE Subcommittee Managers, Risk 
Management Subcommittee, and Subcommittee

[[Page 72540]]

Specified Action) as these definitions are no longer necessary or 
relevant with the elimination of the Risk Management Subcommittee. In 
addition, the amendments add the definition of Non-Participant 
Appointees to reflect the new category of Risk Committee members as 
discussed above, and also adds the definition of Risk Advisory Working 
Group to define the new Risk Advisory Working Group.
II. Risk Management Framework
    ICC would amend the Framework to reflect the changes being made to 
the Rules as described above. References to the Risk Management 
Subcommittee would be deleted and references to the new Risk Advisory 
Working Group would be added where relevant. As a result, the chart 
illustrating the governance structure of ICE Clear Credit would be 
replaced to show the elimination of the Risk Management Subcommittee 
and the addition of the Risk Advisory Working Group. The amendments 
would also remove references to an Advisory Committee, which is a 
committee of Non-Participant Party representatives that would no longer 
be maintained in light of the changes to the Risk Committee composition 
discussed above. The Advisory Committee is effectively a dormant 
committee in that it met only on an as-needed basis and has not met for 
a number of years. While the primary role of the Advisory Committee was 
to act as a forum to solicit input from Non-Participant Parties, the 
Advisory Committee has proven ineffective in achieving its primary 
role. As a result, ICC believe that it appropriate to discontinue the 
Advisory Committee. ICC believes the proposed roles for Non-Participant 
Parties on the Risk Committee and the Risk Advisory Working Group will 
provide a greater opportunity for meaningful participation by Non-
Participant Parties in ICC's governance process than was afforded by 
the Advisory Committee in practice (even though it may have had more 
members and even though the Risk Advisory Working Group does not 
directly consult with the Board).
    The subsection on Risk would be updated to reflect the role of the 
Risk Advisory Working Group, to provide risk-based feedback to ICC on 
all matters that could materially affect the risk profile of ICC as 
discussed above. The amendments would also add a revision history 
section to the Framework (as Section VII) to document revisions made to 
the Framework on a going forward basis. As a result of the addition of 
the new section, Section VII. Appendices would be re-numbered as 
Section VIII.
III. Governance Playbook
    ICE Clear Credit would also amend the Playbook to conform to the 
amendments to the Rules and Framework discussed above. References to 
the Risk Management Subcommittee and Advisory Committee would be 
deleted throughout the Playbook, and references to the Risk Advisory 
Working Group would be added where relevant. The description of the 
Steering Committee, which oversees the implementation of all credit 
default swap (``CDS'') product launches and initiatives, would be 
revised to remove references to ICE Clear Europe (``ICEU'') as ICEU 
discontinued its CDS clearing offering in late 2023 and therefore no 
longer participates in the Steering Committee. References to the FCM 
Executive Council would also be removed, as that council would no 
longer be maintained. The FCM Executive Council is an obsolete 
committee in that its primary purpose was to provide Participants a 
forum to provide feedback to ICC as it proposed Rules, policies and 
procedures related to the addition of customer clearing to ICC's 
clearing offering. As customer clearing is now an established and 
mature business at ICC, the primary purpose of the committee has been 
achieved and therefore the FCM Executive Council has not met in a 
number of years. As a result, ICC believes it is appropriate to 
discontinue maintaining the FCM Executive Council.
    The amendments would also delete a requirement that the election of 
ICC Board members would follow no less than 5 business days after the 
Risk Committee Reconstitution Date. The elections would still occur 
after the Risk Committee Reconstitution Date but there would not be a 
specific timeframe in order to give sufficient time to on-board new 
Risk Committee members following the Risk Committee Reconstitution 
Date, and to allow the Risk Committee sufficient time to consider and 
nominate Risk Committee Board Appointees.
    Conforming changes would also be made to the description and 
composition of the Risk Committee consistent with the amendments to the 
Rules discussed above (including the deletion of all previous language 
referring to and describing the Risk Management Subcommittee). 
Specifically, the amendments would add that the Risk Committee would 
include representatives of customers of ICC CPs and that the Board is 
required to consult with the Risk Committee with respect to matters 
that could materially affect the risk profile of ICC. The amendments 
would state that the Risk Committee would consist of fourteen rather 
than twelve members and that two of the members would be 
representatives of customers of CPs and address the procedures for 
selecting the two representatives of customers of CP members under the 
Rules. The amendments would also add a reference to Chapter 5 of the 
Rules, which is the chapter describing the Risk Committee. In addition, 
the amendments would change the reference to the Chairman of the Risk 
Committee to the Chairperson to be more gender inclusive.
    The amendments would add a description of the Risk Advisory Working 
Group, including its purposes and membership, consistent with the 
amendments to the Rules discussed above. The amendments provide that 
the ICC Chief Risk Officer would serve as Chairperson of the Risk 
Advisory Working Group. Moreover, a minimum of two members would be 
representatives of CPs and a minimum of two representatives would be 
customer of CPs. Members of the Risk Advisory Working Group would be 
appointed by the ICC President, subject to the approval by the Risk 
Committee. The amendments would also specify that the Risk Advisory 
Working Group would meet on as-needed basis to consult all matters that 
could affect ICC's risk profile but would meet at least two times per 
year. The amendments would also make clear that the relevant documents 
to be maintained for the Risk Advisory Working Group include meeting 
materials and summary of the main points and topics discussed during 
the meeting. Furthermore, administrative procedures referring to the 
use of the Diligent account for distributing information to Risk 
Management Subcommittee Members would be removed, as this procedure 
would not be needed for Risk Advisory Working Group members as the 
Diligent information distribution system will not be used for the Risk 
Advisory Working Group. Certain reference to ICC websites would also be 
updated.
VI. Operating Agreement
    ICC would amend and restate its Operating Agreement (the Sixth 
Amended and Restated Operating Agreement would now be the Seventh 
Amended and Restated Operating Agreement) to conform to the amendments 
to the Rules, Framework and Playbook as detailed above. The amendments 
would delete any reference

[[Page 72541]]

to the Advisory Committee, including Section 3.12 in its entirety 
(which describes the establishment and composition of the Advisory 
Committee), as the Advisory Committee is dormant. The Advisory 
Committee's former function of soliciting feedback from Non-Participant 
Parties will now be accomplished by the expansion of the Risk Committee 
to include representatives of Non-Participant Parties and the creation 
of the Risk Advisory Working Group (whose members will represent both 
Participants and Non-Participant Parties), as discussed above. Given 
the proposed addition of two Non-Participant Party representatives on 
the Risk Committee, and a minimum of two Non-Participant Party 
representatives on the Risk Advisory Working Group, ICC believes the 
proposed revisions will increase the opportunities for Non-Participant 
Parties to participate in ICC's formal governance structure as compared 
to the dormant Advisory Committee (even though the Advisory Committee 
may have included more members and even though the Risk Advisory 
Working Group does not directly consult with the Board). Furthermore, 
the defined ``Buy-Side Firms'' will also be removed as this was only 
relevant to Section 3.12.
(b) Statutory Basis
    ICE Clear Credit believes that the proposed amendments to the Rules 
are consistent with the requirements of Section 17A of the Securities 
Exchange Act of 1934 (the ``Act'') \8\ and the regulations thereunder 
applicable to it. In particular, Section 17A(b)(3)(F) of the Act \9\ 
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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1.
    \9\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The proposed amendments are designed to reflect the expansion of 
the Risk Committee to include representatives of Non-Participant 
Parties, and the establishment of the newly formed Risk Advisory 
Working Group, consistent with requirements under CFTC regulations. The 
amendments would also provide for the elimination of the Risk 
Management Subcommittee, which ICC believes is unnecessary as the 
relevant responsibilities can and should be performed by the Risk 
Committee. In ICC's view, the amendments will facilitate the ability of 
ICC to consult with relevant stakeholders and interested parties with 
respect to matters affecting the risk profile of the clearing house. 
Thus, the proposed amendments enhance the overall risk management of 
ICE Clear Credit and are consistent with the prompt and accurate 
clearance and settlement of securities transactions and derivatives 
agreements, contracts and transactions, the safeguarding of securities 
and funds which are in the custody or control of ICC or for which it is 
responsible, and the protection of investors and the public interest in 
the operation of clearing services, within the meaning of Section 
17A(b)(3)(F) of the Act.\10\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The proposed amendments are also consistent with relevant 
provisions of Rule 17ad-22. Rule 17ad-22(e)(3)(i) \11\ provides that 
the ``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 that'' 
among other matters identifies, measures, monitors and manages the 
range of risks that it faces. The amendments ensure that ICC Board 
continues to receive and consider feedback from the Risk Committee that 
may materially affect ICC's risk profile and expands the Risk Committee 
to include participation by Non-Participant Appointees to provide 
additional perspectives from stakeholders on such matters. The 
amendments would also reflect the creation of the Risk Advisory Working 
Group, including the selection process and governance procedures of the 
group to ensure that it functions effectively. The Risk Advisory 
Working Group is intended to provide advice to ICC with respect to 
matters that could materially affect its risk profile. The amendments 
would thus strengthen and enhance ICC's risk management more generally. 
In ICE Clear Credit's view, the amendments are therefore consistent 
with the requirements of Rule 17ad-22(e)(3)(i).\12\
---------------------------------------------------------------------------

    \11\ 17 CFR 240.17ad-22(e)(3)(i).
    \12\ 17 CFR 240.17ad-22(e)(3)(i).
---------------------------------------------------------------------------

    Rule 17ad-22(e)(2) provides that the ``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 [c]lear and transparent'' \13\ and 
``[c]onsider the interests of participants' customers . . . and other 
relevant stakeholders of the covered clearing agency''.\14\ The 
proposed amendments are intended to enhance the Risk Committee 
structure to provide for feedback on topics affecting risk management 
generally and to expand the committee composition to include 
representatives of Non-Participant Parties, to better facilitate 
consideration of the interests of participants' customers. The 
amendments also establish the Risk Advisory Working Group to provide 
for further consultation with interested stakeholders on risk matters. 
The amendments also clarify the responsibilities of the Board with 
respect to consultation with the Risk Committee and Risk Advisory 
Working Group with respect to risk matters. In ICE Clear Credit's view, 
the amendments to the Rules are therefore consistent with the 
requirements of Rule 17ad-22(e)(2).\15\
---------------------------------------------------------------------------

    \13\ 17 CFR 240.17ad-22(e)(2)(i).
    \14\ 17 CFR 240.17ad-22(e)(2)(vi).
    \15\ 17 CFR 240.17 Ad-22(e)(2).
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    ICE Clear Credit does not believe the proposed amendments would 
have any impact, or impose any burden, on competition not necessary or 
appropriate in furtherance of the purposes of the Act. The amendments 
are being adopted to clarify certain matters relating to the operation 
of its Risk Committee and related risk advisory arrangements. The 
amendments do not otherwise change the rights and responsibilities of 
ICC or its Participants. Accordingly, ICE Clear Credit 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 Credit 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 rule change have not been 
solicited or received. ICC will notify the Commission of any written 
comments received by ICC.

[[Page 72542]]

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, security-based swap submission, or advance notice is consistent 
with the Act. Comments may be submitted by any of the following 
methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking); 
or
     Send an email to [email protected]. Please include 
file number SR-ICC-2024-009 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-ICC-2024-009. 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-regulations/self-regulatory-organization-rulemaking). Copies of the 
submission, all subsequent amendments, all written statements with 
respect to the proposed rule change, security-based swap submission, or 
advance notice that are filed with the Commission, and all written 
communications relating to the proposed rule change, security-based 
swap submission, or advance notice between the Commission and any 
person, other than those that may be withheld from the public in 
accordance with the provisions of 5 U.S.C. 552, will be available for 
website viewing and printing in the Commission's Public Reference Room, 
100 F Street NE, Washington, DC 20549, on official business days 
between the hours of 10 a.m. and 3 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.ice.com/clear-credit/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-ICC-2024-009 and should 
be submitted on or before September 26, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-19878 Filed 9-4-24; 8:45 am]
BILLING CODE 8011-01-P
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