Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 64953 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f). 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 amended and restated in its 

entirety the Form 19b–4 and Exhibit 1A to correct 

the narrative description of the proposed rule 

change. Amendment No. 1 did not change the 

purpose or basis of the proposed rule change. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed fee change will not impact 

intramarket competition because it will 

apply to all similarly situated Members 

equally (i.e., all market participants that 

choose to purchase the 10 Gb physical 

port). Additionally, the Exchange does 

not believe its proposed pricing will 

impose a barrier to entry to smaller 

participants and notes that its proposed 

connectivity pricing is associated with 

relative usage of the various market 

participants. For example, market 

participants with modest capacity needs 

can continue to buy the less expensive 

1 Gb physical port (which cost is not 

changing) or may choose to obtain 

access via a third-party re-seller. While 

pricing may be increased for the larger 

capacity physical ports, such options 

provide far more capacity and are 

purchased by those that consume more 

resources from the network. 

Accordingly, the proposed connectivity 

fees do not favor certain categories of 

market participants in a manner that 

would impose a burden on competition; 

rather, the allocation reflects the 

network resources consumed by the 

various size of market participants— 

lowest bandwidth consuming members 

pay the least, and highest bandwidth 

consuming members pays the most. 

The Exchange’s proposed fee is also 

still lower than some fees for similar 

connectivity on other exchanges and 

therefore may stimulate intermarket 

competition by attracting additional 

firms to connect to the Exchange or at 

least should not deter interested 

participants from connecting directly to 

the Exchange. Further, if the changes 

proposed herein are unattractive to 

market participants, the Exchange can, 

and likely will, see a decline in 

connectivity via 10 Gb physical ports as 

a result. The Exchange operates in a 

highly competitive market in which 

market participants can determine 

whether or not to connect directly to the 

Exchange based on the value received 

compared to the cost of doing so. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 19 and paragraph (f) of Rule 

19b–4 20 thereunder. 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 necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBZX–2023–067 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–CboeBZX–2023–067. 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 the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. 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–CboeBZX–2023–067 and should be 

submitted on or before October 11, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–20312 Filed 9–19–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98387; File No. SR–ICEEU– 

2023–018] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Order Approving 

Proposed Rule Change, as Modified by 

Amendment No. 1 and Partial 

Amendment No. 2, Relating to 

Amendments to the Outsourcing 

Policy 

September 14, 2023. 

I. Introduction 

On July 10, 2023, ICE Clear Europe 

Limited (‘‘ICE Clear Europe’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to amend its Outsourcing Policy 

(to be renamed the Outsourcing and 

Third Party Risk Management Policy) 

(the ‘‘Outsourcing Policy’’). On July 11, 

2023, ICE Clear Europe filed 

Amendment No. 1 to the proposed rule 

change to make certain changes to the 

Form 19b–4 and Exhibit 1A for file no. 

SR–ICEEU–2023–018; 3 and on July 24, 

2023, ICE Clear Europe filed Partial 

Amendment No. 2 to the proposed rule 


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64954 Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 

4Partial Amendment No. 2 amended and restated 

in its entirety Exhibit 5 to correct an inadvertent 

omission of a single word. Partial Amendment No. 

2 did not change the purpose or basis of the 

proposed rule change. 

5Self-Regulatory Organizations; ICE Clear Europe 

Limited; Notice of Filing of Proposed Rule Change, 

as Modified by Amendment No. 1 and Partial 

Amendment No. 2, Relating to Amendments to the 

Outsourcing Policy, Exchange Act Release No. 

97974 (July 25, 2023); 88 FR 49545 (July 31, 2023) 

(File No. SR–ICEEU–2023–018) (‘‘Notice’’). 

6Capitalized terms used but not defined herein 

have the meanings specified in the ICE Clear 

Europe Clearing Rules and the Outsourcing Policy. 

7Self-Regulatory Organizations; ICE Clear Europe 

Limited; Order Approving Proposed Rule Change 

Relating to the ICE Clear Europe Outsourcing 

Policy, Exchange Act Release No. 95685 (Sept. 7, 

2022); 87 FR 56129 (Sept. 13, 2022) (File No. SR– 

ICEEU–2022–014). 

change to make a certain change to 

Exhibit 5 of file no. SR–ICEEU–2023– 

018 4 (together, ‘‘proposed rule 

change’’). The proposed rule change was 

published for comment in the Federal 

Register on July 31, 2023.5 The 

Commission did not receive comments 

regarding the proposed rule change. For 

the reasons discussed below, the 

Commission is approving the proposed 

rule change. 

II. Description of the Proposed Rule 

Change 

ICE Clear Europe is registered with 

the Commission as a clearing agency for 

the purpose of clearing security-based 

swaps.6 In its role as a clearing agency 

for clearing security-based swaps, ICE 

Clear Europe regularly enters into 

arrangements with affiliates and thirdparty service providers to perform 

certain functions or activities. Such 

arrangements often come with a variety 

of risks, including legal, operational, 

general business, and other types of 

risks. To reduce risk exposure from such 

outsourcing arrangements, ICE Clear 

Europe created its Outsourcing Policy to 

describe, in a consolidated document, 

procedures for managing outsourcing 

arrangements with affiliates and thirdparty service providers, including how 

ICE Clear Europe’s Board of Directors 

(‘‘Board’’) maintains oversight of these 

outsourcing arrangements.7

The proposed rule change would 

amend ICE Clear Europe’s Outsourcing 

Policy to extend coverage to third-party 

service provider arrangements that 

technically may not constitute 

outsourcing, to describe in more detail 

third-party risk management, to add the 

execution of risk assessments, and to 

update the Document Governance and 

Exception Handling language, among 

other changes. 

As proposed, the purpose of the 

Outsourcing Policy would clarify that it 

would extend to arrangements in which 

services are provided by third parties to 

ICE Clear Europe, regardless of whether 

such services are considered 

outsourcing, including to assessing the 

risks of such services. The definition of 

‘‘outsourcing’’ would be clarified as the 

use of third-party service providers, 

either an external party or an affiliate, 

and either directly or through suboutsourcing, to provide a service that 

would otherwise be performed by ICE 

Clear Europe itself and is therefore 

subject to the Board’s oversight. The 

proposed rule change would more 

clearly distinguish outsourcing from a 

purchasing arrangement, which would 

not involve an arrangement otherwise 

performed by ICE Clear Europe and 

therefore typically would not be subject 

to Board oversight. Regarding 

outsourced activities, the Outsourcing 

Policy would explicitly state that ICE 

Clear Europe would remain responsible 

for discharging its obligations, the 

outsourcing arrangement would not 

result in the delegation of ICE Clear 

Europe’s responsibility, and the 

outsourced activities would conform to 

the same standards that would be 

required if the activities were completed 

internally. 

Under the proposed rule change, the 

Outsourcing Policy would more clearly 

distinguish between affiliates and 

external third-party service providers by 

adding a definition of the term ‘‘third 

party,’’ which would include any 

organization (whether or not affiliated) 

that has entered into a business 

relationship or contract with ICE Clear 

Europe to provide products, services, 

processes, activities or business 

functions. The use of external third 

parties (i.e., those not affiliated with ICE 

Clear Europe in any way) would be 

managed consistently at the group level 

through the existing Vendor 

Management Policy (‘‘VMP’’). The 

proposed rule change would more 

clearly describe current practice under 

the Outsourcing Policy by stating that 

outsourcing through affiliates typically 

has a lower residual risk profile 

because, among listed reasons in the 

existing Policy, the affiliates would have 

a similar higher standard of operational 

resilience (rather than referring to 

business continuity resilience) and ICE 

Clear Europe would have greater 

influence (not just control) over the 

operation of the affiliate’s services. 

The proposed rule change would add 

detail to existing statements in the 

Outsourcing Policy about the objective 

of and processes for entering into 

different types of contracting 

arrangements. Rather than covering 

solely outsourcing arrangements, the 

objective would extend to utilizing 

service providers more generally. The 

amended Outsourcing Policy would 

clarify the process of making 

assessments of service providers in 

various situations, such as regulated 

parties and parties in different 

jurisdictions; the management of 

outsourcing; and considerations about 

conflicts of interest and independent 

audit rights. The Outsourcing Policy 

would continue to reference ICE Clear 

Europe’s Outsourcing Operating 

Manual, albeit renamed to cover risk 

management of additional third-party 

service providers, rather than just 

outsourcing arrangements. The 

Outsourcing Policy would state that 

contracting with third parties is covered 

consistently at a group level under the 

VMP, and would clarify, consistent with 

current practice, that ICE Clear Europe 

would use the VMP process as an input 

for the risk-based assessment of each 

service provider. ICE Clear Europe, 

where appropriate, would make external 

third parties aware of relevant internal 

policies so that they may gain a better 

understanding of ICE Clear Europe’s 

regulatory obligations and expected 

service levels. When contracting with 

affiliates, ICE Clear Europe’s relevant 

assessment would be made in 

accordance with its ordinary governance 

practices, and not necessarily by the 

senior management. As is current 

practice, ICE Clear Europe follows its 

Conflicts of Interest Policy when 

managing any potential conflicts of 

interests as a result of its service 

arrangements, but the proposed rule 

change would add an explicit reference 

to the Conflicts of Interest Policy. An 

additional assessment would be added 

with respect to cloud outsourcing, 

where ICE Clear Europe would consider, 

understand, and manage any risks 

related to Clearing Members connecting 

to its services via cloud service 

providers. 

The proposed rule change would add 

a new Risk Assessments subsection to 

the processes for entering into different 

types of contracting arrangements that 

would set out the proportional risk 

assessment that would be performed on 

a service provider, regardless of whether 

the proposed arrangement falls within 

the definition of outsourcing, in order to 

identify, measure, and mitigate risks. 

The Risk Assessments subsection would 

include but would not be limited to 

certain considerations, such as whether 

the service is a critical or important 

function or a dependence to the delivery 

of one of ICE Clear Europe’s services, 

whether the activity is outsourcing, 

whether the service relies on cloudbased technology that may pose new or 

additional risks, whether the service 


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Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 64955 

8 15 U.S.C. 78s(b)(2)(C). 

9 15 U.S.C. 78q–1(b)(3)(F). 

10 17 CFR 240.17Ad–22(e)(2)(v) and (e)(3)(i). 

provider is an external third party or an 

affiliate, the legal jurisdiction of the 

service provider, conflicts of interest, 

operational resilience considerations, 

data security, exit plans, contractual 

terms, and availability of alternative or 

back-up providers. For outsourced or 

critical non-outsourced services, the risk 

assessment would be performed at least 

annually, and on an ad-hoc basis 

following a material incident or service 

disruption event or material service 

agreement breach. Such risk 

assessments would be required to 

include a review of the service 

provider’s performance against the 

agreed service levels. The 

responsibilities of executing risk 

assessments and related testing would 

be required to be overseen by ICE Clear 

Europe’s Chief Operating Officer or the 

COO’s delegate, with ownership of each 

service and the related resiliency 

arrangements resting with the relevant 

Head of Department. 

The proposed rule change would 

extend existing provisions about the 

identification of critical or important 

functions to acquired services generally, 

rather than applying only to 

outsourcing, as is currently written. The 

proposed rule change would clarify that 

in identifying critical or important 

functions, ICE Clear Europe would 

consider the continuity of its important 

business services or operation as a CCP 

that could threaten its financial stability 

or impact its resolvability. As proposed, 

a third party would be treated as critical 

if it is contracted to perform such a 

critical function, with the determination 

of criticality to be reassessed on at least 

an annual basis. The Outsourcing Policy 

would clarify that any outsourcing of 

critical or important functions could 

impact ICE Clear Europe’s operational 

resilience measures more generally, 

rather than affecting the narrower 

category of business continuity 

measures. Exit plans for critical and 

important functions would be required 

to be tested periodically. As part of its 

operational resilience framework, ICE 

Clear Europe would examine purchased 

services, as well as outsourced or suboutsourced services, that are a 

dependence for its important business 

services. Additional language would 

require that the operational resilience 

framework shall include extreme but 

plausible test scenarios relating to the 

disruption of critical third-party 

services. 

Under the proposed rule change, the 

Outsourcing Policy would amend the 

discussion of additional considerations 

of particular importance to ICE Clear 

Europe to ensure that considerations 

would be given to important business 

services and critical functions that are 

affected by third party service 

arrangements, including with respect to 

business continuity arrangements, 

incident management responsiveness 

and reporting, independent assurances, 

redundancies, and notice periods and 

exit strategies. A new subsection 

detailing Contractual Agreements would 

be added, specifying that for 

outsourcing arrangements in particular, 

ICE Clear Europe’s Legal team would 

review any written service agreements 

to confirm the inclusion of all relevant 

contractual safeguards so that ICE Clear 

Europe could monitor relevant risks, 

regulatory requirements, and 

expectations. ICE Clear Europe would 

look to ensure that the agreements 

outline the rights, obligations, and 

responsibilities of all the parties, and 

include provisions associated with data 

security; access, audit and information 

rights; sub-outsourcing; service 

resilience; service levels; incident 

management; termination; and exit 

plans. Arrangements for purchased 

services would be similarly reviewed, 

but the Outsourcing Policy would 

acknowledge that some purchased 

services may be subject to nonnegotiable terms set by the third party, 

which would be considered during the 

pre-execution risk assessment phase. 

The new Contractual Agreements 

subsection also would require that ICE 

Clear Europe periodically exercise its 

audit rights, as appropriate, regarding 

critical outsourcing arrangements, and 

that this may include on-site visits. 

The proposed rule change would 

revise provisions related to Board 

oversight to provide that the Board must 

approve new or materially amended 

outsourcing arrangements. Certain 

clarifications would be made to the 

requirements for the annual outsourcing 

assessment report to be prepared by the 

Chief Operating Officer, including the 

addition of a summary of critical nonoutsourcing services received. The 

proposed rule change would add a new 

subsection on regulatory engagement, 

setting out that ICE Clear Europe shall 

engage with regulatory authorities 

before executing or materially amending 

a critical service arrangement, regardless 

of whether it falls within the definition 

of outsourcing, with due regard to 

relevant regulatory requirements or 

expectations. 

Lastly, the proposed rule change 

would revise provisions related to 

document governance, breach 

management, and exception handling, 

to ensure consistency with other ICE 

Clear Europe policies. As proposed, the 

document owner identified by ICE Clear 

Europe would be responsible for 

ensuring that the Outsourcing Policy 

remains up-to-date and reviewed in 

accordance with the internal governance 

processes. Document reviews would be 

conducted by the document owner and 

related staff, with sign off by the head 

of department and the Chief Risk 

Officer, or their respective delegates. 

Document reviews would encompass at 

the minimum regulatory compliance, 

documentation and purpose, 

implementation, use and open items 

from previous validations or reviews. 

Results of the review would be reported 

to the Executive Risk Committee or, in 

certain cases, to the Model Oversight 

Committee. The document owner would 

aim to remediate the findings, complete 

internal governance, and receive 

regulatory approvals before the next 

annual review is due. The document 

owner also would be responsible for 

reporting any material breaches or 

deviations to the Head of Department, 

Chief Risk Officer and Head of 

Regulation and Compliance in order to 

determine if further escalation is 

required. The Outsourcing Policy would 

state explicitly that changes to it would 

have to be approved in accordance with 

ICE Clear Europe’s governance process 

and would take effect following 

completion of required internal and 

regulatory approvals. Exceptions to the 

Outsourcing Policy likewise would be 

approved according to the governance 

processes for approvals of changes to 

the Outsourcing Policy. 

III. Discussion and Commission 

Findings 

Section 19(b)(2)(C) of the Act directs 

the Commission to approve a proposed 

rule change of a self-regulatory 

organization if it finds that such 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to such organization.8 For the 

reasons discussed below, the 

Commission finds that the proposed 

rule change is consistent with Section 

17A(b)(3)(F) of the Act,9 and Rules 

17Ad–22(e)(2)(v) and (e)(3)(i) 

thereunder.10

A. Consistency With Section 

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

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

requires, among other things, that the 

rules of ICE Clear Europe be designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions and, to the extent 

applicable, derivative agreements, 


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64956 Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 

11 15 U.S.C. 78q–1(b)(3)(F). 

12 15 U.S.C. 78q–1(b)(3)(F). 

13 17 CFR 240.17Ad–22(e)(2)(v). 

14 17 CFR 240.17 Ad–22(e)(2)(v). 

15 17 CFR 240.17 Ad–22(e)(3)(i). 

16 17 CFR 240.17Ad–22(e)(3)(i). 

17 15 U.S.C. 78q–1(b)(3)(F). 

18 17 CFR 240.17Ad–22(e)(2)(i) and (v) and 17 

CFR 240.17Ad–22(e)(3)(i). 

contracts, and transactions.11 As noted 

above, the proposed rule change would 

revise ICE Clear Europe’s Outsourcing 

Policy to expand its application to a 

wider variety of affiliated and third 

party service arrangements, rather than 

solely covering outsourcing, as well as 

clarify and add to existing provisions 

that govern agreements for performing 

certain functions and activities. Some of 

these functions and activities relate to 

ICE Clear Europe’s operations and 

business, while others may have to do 

with its clearance and settlement 

obligations. As proposed, the 

Outsourcing Policy would provide 

greater clarity as to the processes for 

entering into different types of 

contracting arrangements; and add 

detailed and, where applicable, annual 

risk assessments of potential service 

providers. Such detailed risk 

assessments would include 

considerations of whether the service is 

a critical or important function or a 

dependence to the delivery of one of ICE 

Clear Europe’s services, among other 

things. The proposed rule change also 

would clarify provisions about the 

identification of critical or important 

functions, including that in identifying 

such functions, ICE Clear Europe would 

consider the continuity of its important 

business services or operation as a CCP 

that could threaten its financial stability 

or impact its resolvability. Additional 

language on Contractual Agreements 

would more clearly guide ICE Clear 

Europe in making sure that service 

agreements outline the rights, 

obligations, and responsibilities of all 

involved parties, and include provisions 

regarding service levels, service 

resilience, and incident management, 

among others. Taken together, these 

amendments would clarify how ICE 

Clear Europe can continue to meet its 

security-based swap obligations and 

help prevent service interruptions 

through carefully drafted and managed 

service agreements with third parties or 

affiliates, thus promoting the prompt 

and accurate clearance and settlement of 

securities transactions and, to the extent 

applicable, derivative agreements, 

contracts, and transactions. 

For these reasons, the Commission 

believes that the proposed rule change 

is consistent with Section 17A(b)(3)(F) 

of the Act.12

B. Consistency With Rule 17Ad– 

22(e)(2)(v) Under the Act 

Rule 17Ad–22(e)(2)(v) requires, in 

relevant part, that ICE Clear Europe 

establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed, as applicable, to 

provide for governance arrangements 

that specify clear and direct lines of 

responsibility.13

As amended, the Outsourcing Policy 

would clarify, in various provisions 

throughout the document, the 

responsibilities, ownership, and 

reporting obligations of certain 

personnel and departments in relation 

to risk management of service 

arrangements. For example, the 

proposed rule change would more 

clearly distinguish between outsourcing, 

which is subject to Board oversight, and 

purchasing arrangements, which are 

not. The Board would additionally and 

explicitly be responsible for the 

approval of new or materially amended 

outsourcing arrangements. When 

contracting with affiliates, ICE Clear 

Europe’s relevant assessment would be 

made in accordance with its ordinary 

governance practices, and not 

necessarily by the senior management. 

The responsibilities of executing 

detailed risk assessments and related 

testing would be overseen by ICE Clear 

Europe’s Chief Operating Officer or 

delegate, with ownership of each service 

and the related resiliency arrangements 

resting with the relevant Head of 

Department. The proposed Outsourcing 

Policy specifies that the Legal team 

would be responsible for drafting and/ 

or reviewing written service agreements 

to ensure that relevant contractual 

safeguards are in place. New provisions 

would be added to ensure appropriate 

document governance and exception 

handling. Overall, the proposed rule 

change inserted and clarified the 

decision-making responsibilities and 

reporting chains of command with 

respect to a variety of aspects of the 

Outsourcing Policy, thus providing for 

governance arrangements that specify 

clear and direct lines of responsibility. 

For these reasons, the Commission 

believes that the proposed rule change 

is consistent with Rule 17Ad– 

22(e)(2)(v).14

C. Consistency With Rule 17Ad– 

22(e)(3)(i) Under the Act 

Rule 17Ad–22(e)(3)(i) requires that 

ICE Clear Europe establish, implement, 

maintain, and enforce written policies 

and procedures reasonably designed to, 

as applicable, maintain a sound risk 

management framework for 

comprehensively managing legal, credit, 

liquidity, operational, general business, 

investment, custody, and other risks 

that arise in or are borne by ICE Clear 

Europe, which includes risk 

management policies, procedures, and 

systems designed to identify, measure, 

monitor, and manage the range of risks 

that arise in or are borne by ICE Clear 

Europe, that are subject to review on a 

specified periodic basis and approved 

by ICE Clear Europe’s board of directors 

annually.15

The Commission believes that the 

proposed revisions to the existing 

Outsourcing Policy not only would 

extend the scope of its application 

beyond traditional outsourcing 

arrangements to more comprehensively 

capture other types of service 

agreements with similar risks, but also 

would detail the factors against which 

risk assessments and contractual 

agreements are to be made and 

monitored, with existing relevant 

provisions for the Board’s annual review 

of the Outsourcing Policy. As noted 

above, the new Risk Assessments 

subsection would require ICE Clear 

Europe to consider, among other things, 

whether the service is a critical or 

important function or a dependence to 

the delivery of one of ICE Clear Europe’s 

services, whether the service relies on 

cloud-based technology that may pose 

new or additional risks, conflicts of 

interest, and data security. Likewise, the 

newly added Contractual Agreements 

subsection requires such contracts 

address data security; access, audit and 

information rights; and incident 

management, among other things. 

Overall, these considerations touch 

upon the various risks that may emerge 

when contracting with affiliates or third 

parties for services and by addressing 

them in detail in the proposed revisions 

to the Outsourcing Policy, the 

Commission believes that ICE Clear 

Europe is strengthening its ability to 

identify, monitor, and measure the risks 

related to such arrangements. 

For these reasons, the Commission 

believes that the proposed rule change 

is consistent with Rule 17Ad– 

22(e)(3)(i).16

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act, and in 

particular, with the requirements of 

Section 17A(b)(3)(F) of the Act,17 and 

Rules 17Ad–22(e)(2)(v) and 17Ad– 

22(e)(3)(i).18


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19 15 U.S.C. 78s(b)(2). 

20 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on July 3, 2023 (SR–CboeBZX–2023–047). 

On September 1, 2023, the Exchange withdrew that 

filing and submitted this proposal. 

4See e.g., The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’), General 8, Connectivity to the 

Exchange. Nasdaq and its affiliated exchanges 

charge a monthly fee of $15,000 for each 10Gb Ultra 

fiber connection to the respective exchange, which 

is analogous to the Exchange’s 10Gb physical port. 

See also New York Stock Exchange LLC, NYSE 

American LLC, NYSE Arca, Inc., NYSE Chicago 

Inc., NYSE National, Inc. Connectivity Fee 

Schedule, which provides that 10 Gb LX LCN 

Circuits (which are analogous to the Exchange’s 10 

Gb physical port) are assessed $22,000 per month, 

per port. 

5The Affiliate Exchanges are also submitting 

contemporaneous identical rule filings. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 Id. 

9 15 U.S.C. 78f(b)(4). 

10See Securities and Exchange Release No. 83429 

(June 14, 2018), 83 FR 28685 (June 20, 2018) (SR– 

CboeBZX–2018–038). 

It is therefore ordered pursuant to 

Section 19(b)(2) of the Act 19 that the 

proposed rule change (SR–ICEEU–2023– 

018), be, and hereby is, approved.20

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–20306 Filed 9–19–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98389; File No. SR– 

CboeBZX–2023–068] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fees Schedule Related to Physical 

Port Fees 

September 14, 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 

September 1, 2023, Cboe BZX Exchange, 

Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) 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 Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX Options’’) 

proposes to amend its Fees Schedule. 

The text of the proposed rule change is 

provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule for its equity options 

platform (‘‘BZX Options’’) relating to 

physical connectivity fees.3

By way of background, a physical port 

is utilized by a Member or non-Member 

to connect to the Exchange at the data 

centers where the Exchange’s servers are 

located. The Exchange currently 

assesses the following physical 

connectivity fees for Members and nonMembers on a monthly basis: $2,500 per 

physical port for a 1 gigabit (‘‘Gb’’) 

circuit and $7,500 per physical port for 

a 10 Gb circuit. The Exchange proposes 

to increase the monthly fee for 10 Gb 

physical ports from $7,500 to $8,500 per 

port. The Exchange notes the proposed 

fee change better enables it to continue 

to maintain and improve its market 

technology and services and also notes 

that the proposed fee amount, even as 

amended, continues to be in line with, 

or even lower than, amounts assessed by 

other exchanges for similar 

connections.4 The physical ports may 

also be used to access the Systems for 

the following affiliate exchanges and 

only one monthly fee currently (and 

will continue) to apply per port: the 

Exchange’s equities platform (BZX 

Equities), Cboe EDGX Exchange, Inc. 

(options and equities platforms), Cboe 

BYX Exchange, Inc., Cboe EDGA 

Exchange, Inc., and Cboe C2 Exchange, 

Inc. (‘‘Affiliate Exchanges’’).5

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.6 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 7 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(4) 9 of the Act, which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Members and other persons using its 

facilities. 

The Exchange believes the proposed 

fee change is reasonable as it reflects a 

moderate increase in physical 

connectivity fees for 10 Gb physical 

ports. Further, the current 10 Gb 

physical port fee has remained 

unchanged since June 2018.10 Since its 

last increase 5 years ago however, there 

has been notable inflation. Particularly, 

the dollar has had an average inflation 

rate of 3.9% per year between 2018 and 

today, producing a cumulative price 

increase of approximately 21.1% 

inflation since the fee for the 10 Gb 


lotter on DSK11XQN23PROD with NOTICES1