Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67445 

16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Model Changes include new and enhanced risk 

modeling components of ICC’s risk management 

system. Depending on how substantially the Model 

Change affects the system’s assessment of risk for 

the related risk driver(s), it is classified as 

Materiality A (i.e., substantial impact) or Materiality 

B (i.e., no substantial impact). 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BOX–2018–39 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–BOX–2018–39. 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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BOX–2018–39 and should 

be submitted on or before January 18, 

2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28199 Filed 12–27–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84889; File No. SR–ICC– 

2018–011] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change Relating to 

ICC’s New Initiatives Approval Policy 

and Procedural Framework 

December 20, 2018. 

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 December 

18, 2018, ICE Clear Credit LLC (‘‘ICC’’) 

filed with the Securities and Exchange 

Commission the proposed rule change 

as described in Items I, II and III below, 

which Items have been prepared by ICC. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The principal purpose of the 

proposed rule change is to revise the 

ICC New Initiatives Approval Policy 

and Procedural Framework (‘‘NIA 

Policy’’). These revisions do not require 

any changes to the ICC Clearing Rules 

(‘‘Rules’’). 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, ICC 

included statements concerning the 

purpose of and basis for the proposed 

rule change 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. ICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

(a) Purpose 

ICC proposes to formalize its NIA 

Policy. ICC believes that such a change 

will facilitate the prompt and accurate 

clearance and settlement of securities 

transactions and derivative agreements, 

contracts, and transactions for which it 

is responsible. The proposed rule 

change is described in detail as follows. 

The NIA Policy sets forth ICC’s 

policies and procedures for the review 

and approval of certain new initiatives 

to be offered or implemented by ICC. 

The NIA Policy clarifies and harmonizes 

the policies, procedures, and 

documentation for the review and 

approval of new initiatives that involve 

potentially significant changes. The 

intention of the NIA Policy is to notify 

all relevant departments of the 

introduction of the new initiative, 

provide for information sharing between 

departments and ensure a thorough 

understanding of the new initiative, and 

establish requirements for the prelaunch verification and testing of the 

new initiative. 

The NIA Policy includes a list of 

definitions that serves to clarify and 

recognize the projects, key participants, 

and documents that are subject to the 

NIA Policy. New projects that are 

approved by the Steering Committee, a 

management committee responsible for 

prioritizing the implementation of 

initiatives and monitoring and guiding 

delivery, and meet the following criteria 

are defined as New Initiatives that are 

subject to the NIA Policy: (1) Involve 

new and material modifications to the 

risk or pricing methodology; (2) involve 

potential significant changes to the 

processing system, ICC Clearing Rules, 

or clearing operating procedures; (3) 

involve new and material modifications 

to existing and significant capabilities 

provided by ICC; or (4) involve Model 

Changes 3 classified as Materiality A 

under ICC’s Model Validation 

Framework. The New Initiative 

Approval Committee (the ‘‘NIAC’’) 

identifies, reviews, and approves New 

Initiatives and is composed of ICC 

management, including department 

heads, and representatives from 


amozie on DSK3GDR082PROD with NOTICES1
67446 Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 

4 15 U.S.C. 78q–1(b)(3)(F). 

5 Id. 

6 Id. 

7 17 CFR 240.17Ad–22. 

8 17 CFR 240.17Ad–22(d)(4). 

Enterprise Risk, Quality Systems, and 

Systems Operations. The NIAC also 

determines any conditions, limitations, 

restrictions or pre-conditions 

(‘‘Stipulations’’) with respect to a New 

Initiative. The NIAC utilizes several 

templates in carrying out its 

responsibilities, such as a matrix 

evidencing that all necessary approvals 

have been obtained (‘‘Approvals 

Matrix’’); an assessment describing key 

risks, mitigation plans, and residual 

impact ratings and comments (‘‘Risk 

Assessment’’); a verification form 

evidencing that Stipulations have been 

met and testing has been completed 

(‘‘New Initiative Pre-Launch 

Verification Form’’); and a log tracking 

the NIAC’s identification and review of 

New Initiatives (‘‘New Initiative Log’’). 

The NIA Policy describes the roles of 

key participants involved in the 

identification, review, and approval of 

New Initiatives. Key participants 

include various departments and their 

department heads, who are responsible 

for completing certain templates, 

reviewing proposals for and providing 

sign-off of New Initiatives, and/or 

evaluating New Initiatives for 

compliance with applicable regulations. 

The NIA Policy provides the NIAC with 

the responsibility and the authority to 

identify projects approved by the 

Steering Committee as New Initiatives; 

review New Initiatives with 

consideration of the risks, financial 

impact, legal and regulatory concerns, 

and strategic direction of ICC; approve, 

with Stipulations if appropriate, New 

Initiatives; and review New Initiatives 

post-implementation to determine 

compliance with Stipulations. The 

Chair of the NIAC ensures compliance 

with the NIA Policy and is responsible 

for, among other things, ensuring 

appropriate communication and 

coordination between the NIAC and the 

Steering Committee. 

The NIAC’s identification, review, 

and approval of New Initiatives is 

divided into five steps: Submission, 

identification, review, pre-launch 

verification, and log. The NIA Policy 

sets out the procedures for each step 

and notes the template and standard for 

review to be used by the NIAC. The five 

steps include: (1) Submission of a 

project proposal approved by the 

Steering Committee to the NIAC; (2) 

identification of a project as a New 

Initiative by the NIAC; (3) review of the 

New Initiative by the NIAC, (4) prelaunch verification with evidence of 

completed testing and implemented 

Stipulations, along with a statement of 

any outstanding post-launch 

Stipulations; and (5) documentation of 

the New Initiative in the New Initiative 

Log. 

The NIA Policy is owned and 

maintained by the Chair of the NIAC. 

Material changes to the NIA Policy, as 

determined by the Chair of the NIAC, 

must be reviewed and approved by the 

ICC Board. Relevant templates utilized 

in the identification, review, and 

approval of New Initiatives are attached 

to the end of the NIA Policy, such as the 

Approvals Matrix, Risk Assessment, 

New Initiative Identification Form 

evidencing the identification of a project 

as a New Initiative by the NIAC, Charter 

of the NIAC, New Initiative Log, and 

New Initiative Pre-Launch Verification 

Form. 

(b) Statutory Basis 

Section 17A(b)(3)(F) of the Act 4

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; to assure the 

safeguarding of securities and funds 

which are in the custody or control of 

the clearing agency or for which it is 

responsible; in general, to protect 

investors and the public interest; and to 

comply with the provisions of the Act 

and the rules and regulations 

thereunder. ICC believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to ICC, in particular, to 

Section 17(A)(b)(3)(F),5 because ICC 

believes that the proposed rule change 

establishes sound policies, practices, 

and procedures with respect to the 

offering or implementation of New 

Initiatives. Such sound policies, 

practices, and procedures are an 

important component of ICC’s ability to 

comply with these requirements 

because disruptions to operations 

resulting from a new offering or 

implementation can impair the prompt 

and accurate clearance and settlement of 

securities transactions, derivatives 

agreements, contracts, and transactions; 

safeguarding of securities and funds 

which are in the custody or control of 

ICC or for which it is responsible; and 

protection of investors and the public 

interest. Moreover, the NIA Policy 

improves ICC’s ability to assess and 

manage risk, including by notifying all 

relevant departments of the introduction 

of the New Initiative, providing for 

information sharing between 

departments and ensuring a thorough 

understanding of the New Initiative, and 

establishing procedures related to prelaunch verification and testing, thereby 

enhancing ICC’s ability to promote the 

prompt and accurate clearance and 

settlement of securities transactions, 

derivatives agreements, contracts, and 

transactions; safeguarding of securities 

and funds which are in the custody or 

control of ICC or for which it is 

responsible; and protection of investors 

and the public interest. As such, the 

proposed rule change is designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions, derivatives agreements, 

contracts, and transactions; to 

contribute to the safeguarding of 

securities and funds associated with 

security-based swap transactions in 

ICC’s custody or control, or for which 

ICC is responsible; and, in general, to 

protect investors and the public interest 

within the meaning of Section 

17A(b)(3)(F) of the Act.6

In addition, the proposed rule change 

is consistent with the relevant 

requirements of Rule 17Ad–22.7 Rule 

17Ad–22(d)(4) 8 requires ICC to 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to, in relevant part, 

identify sources of operational risk and 

minimize them through the 

development of appropriate systems, 

controls, and procedures. The proposed 

rule change to formalize the NIA Policy 

sets forth ICC’s procedures for the 

identification, review, and approval of 

New Initiatives to be offered or 

implemented by ICC. By establishing 

procedures that provide for notification 

to all relevant departments, information 

sharing between departments to ensure 

a thorough understanding, 

establishment of Stipulations, and 

establishment of requirements for prelaunch verification and testing with 

respect to a New Initiative, ICC believes 

that it will reduce the likelihood of a 

disruption in operations from a New 

Initiative. Moreover, the establishment 

of Stipulations and the review of a New 

Initiative by the NIAC, including review 

of the Risk Assessment and Approvals 

Matrix and with consideration of, 

among other things, the risks, financial 

impact, legal and regulatory concerns, 

and the strategic direction of ICC, will 

reduce the risk that a new offering or 

implementation disrupting system 

operations is launched, thereby 

improving ICC’s ability to identify 

sources of operational risk and 

minimize them through the 


amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 248 / Friday, December 28, 2018 / Notices 67447 

9 Id. 

10 17 CFR 240.17Ad–22(d)(8). 11 15 U.S.C. 78q–1. 12 17 CFR 240.17Ad–22(d)(8). 

13 17 CFR 200.30–3(a)(12). 1Employees, officers and employee directors, 

together the ‘‘Employee Participants’’ and each an 

‘‘Employee Participant.’’ The Employee Participants 

and the Non-Employee Directors, together the 

‘‘Participants’’ and each, a ‘‘Participant.’’ 2Restricted Stock and Restricted Stock Units are 

collectively referred to herein as Restricted Stock. 

development of appropriate systems, 

controls, and procedures, consistent 

with the requirements of Rule 17Ad22(d)(4).9

Rule 17Ad–22(d)(8) 10 requires ICC to 

establish, implement, maintain and 

enforce written policies and procedures 

reasonably designed to have governance 

arrangements that are clear and 

transparent to fulfill the public interest 

requirements in Section 17A of the 

Act.11 The NIA Policy clearly assigns 

and documents responsibility and 

accountability for the identification, 

review, and approval of New Initiatives 

by the NIAC, the maintenance of the 

NIA Policy by the Chair of the NIAC, 

and the approval of material changes to 

the NIA Policy by the Board. These 

governance arrangements are clear and 

transparent, such that information 

relating to the assignment of 

responsibilities and the requisite 

involvement of department heads, the 

NIAC, and the Board is clearly 

documented, consistent with the 

requirements of Rule 17Ad–22(d)(8).12

(B) Clearing Agency’s Statement on 

Burden on Competition 

ICC does not believe the proposed 

rule change would have any impact, or 

impose any burden, on competition. 

The proposed change to formalize ICC’s 

NIA Policy will apply uniformly across 

all market participants. Therefore, ICC 

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. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

ICC–2018–011 on the subject line. 

Paper Comments 

Send paper comments in triplicate to 

Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–ICC–2018–011. 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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Credit and on ICE 

Clear Credit’s website at https://

www.theice.com/clear-credit/regulation. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make available 

publicly. All submissions should refer 

to File Number SR–ICC–2018–011 and 

should be submitted on or before 

January 18, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–28186 Filed 12–27–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

33341; File No. 812–14910] 

Hercules Capital, Inc. 

December 21, 2018. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

under section 6(c) of the Investment 

Company Act of 1940 (the ‘‘Act’’) for an 

exemption from sections 23(a), 23(b) 

and 63 of the Act; under sections 

57(a)(4) and 57(i) of the Act and rule 

17d–1 under the Act permitting certain 

joint transactions otherwise prohibited 

by section 57(a)(4) of the Act; and under 

section 23(c)(3) of the Act for an 

exemption from section 23(c) of the Act. 

SUMMARY OF THE APPLICATION: Hercules 

Capital, Inc. (‘‘Company’’ or 

‘‘Applicant’’) requests an order that 

would permit Applicant to (i) issue 

restricted shares of its common stock 

(‘‘Restricted Stock’’) as part of the 

compensation package for its nonemployee directors (the ‘‘Non-Employee 

Directors’’) 1 through its 2018 NonEmployee Director Plan (the ‘‘NonEmployee Director Plan’’) for NonEmployee Director Participants, (ii) 

issue Restricted Stock and Restricted 

Stock Units 2 (i.e., the right to receive, 

on the date of settlement, one share of 

common stock or an amount equal to 

the fair market value of one share of 

common stock) as part of the 

compensation package for certain of its 

employees, officers and directors, 

excluding the Non-Employee Directors, 

through its Amended and Restated 2018 

Equity Incentive Plan (the ‘‘Equity 

Incentive Plan’’), (iii) withhold shares of 

the Applicant’s common stock or 

purchase shares of Applicant’s common 

stock from Participants to satisfy tax 


amozie on DSK3GDR082PROD with NOTICES1