[Federal Register Volume 89, Number 176 (Wednesday, September 11, 2024)]
[Notices]
[Pages 73734-73739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-20460]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100935; File No. SR-ICC-2024-005]


Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of 
Filing of Proposed Rule Change Relating to ICC's Treasury Operations 
Policies and Procedures

September 5, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ 15 U.S.C. 78s(b)(1) and Rule 19b-4,\2\ notice is hereby given 
that on August 22, 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. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 the 
ICC Treasury Operations Policies and Procedures (``Treasury Policy''). 
These revisions do not require any changes to the ICC Clearing Rules 
(the ``Rules'').

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

    In its filing with the Commission, ICC included statements 
concerning the purpose of and basis for the proposed rule change, 
security-based swap submission, or advance notice and discussed any 
comments it received on the proposed rule change, security-based swap 
submission, or advance notice. The text of these statements may be 
examined at the places specified in Item IV below. ICC has prepared 
summaries, set forth in sections (A), (B), and (C) below, of the most 
significant aspects of these statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

(a) Purpose
    ICE Clear Credit is proposing to amend its Treasury Policy. The 
purpose of the Treasury Policy is to articulate the policies and 
procedures used to support the ICC Treasury Department (the ``Treasury 
Department''), which is responsible for daily cash and collateral 
management of margin and guaranty fund assets. The purpose of the 
proposed changes is to make various updates and clarifications, 
including to further explain the goals and the responsibilities of the 
ICC Treasury Department in performing treasury functions for cleared 
contracts, as well as safeguarding securities and funds in custody. The 
amendments also clarify the timing of the return of a withdrawing 
Clearing Participant's (``CP'') guaranty fund (``GF'') deposit to be 
consistent with the Rules, as discussed herein. The amendments would 
clarify the ICC investment policy with respect to ICC's own operating 
capital to provide greater flexibility to make direct investments, as 
discussed below, and update various references to SWIFT messaging so as 
not to become outdated. Various non-substantive drafting changes and 
improvements would also be made throughout the Treasury Policy, such as 
updating the use of defined terms, correcting typographical errors and 
similar changes. The amendments do not represent a change in ICC's 
practices relating to treasury management, but rather are intended to 
improve and clarify the documentation and descriptions of such 
practices.
    ICC proposes to update the treasury department section of the 
Treasury Policy.\3\ The amendments would update the statement of the 
overall responsibilities of ICC, aided by the Treasury Department, to 
specifically reference facilitating the prompt and accurate clearing 
and settlement of securities transactions and derivatives, and 
safeguarding securities and funds in ICC's custody or control for which 
it is responsible. Additionally, the amendments would remove the 
reference to the ICC Risk Management Framework when developing 
investment and collateral management strategies. The amendments would 
clarify certain references and terms throughout this section, such as 
referencing the ``General Guaranty Fund'' as defined in ICC Rule 102, 
as well as referencing cash and non-cash collateral (which was 
previously phrased as ``cash and collateral'' or ``cash or 
collateral'') throughout the Treasury Policy. With respect to the 
Treasury Departments responsibilities to manage Guaranty Fund 
requirements and ``posting'' by Clearing Participants, the amendments 
would change the reference from ``posting'' to ``collateral postings'' 
to provide a clearer and more accurate description of Treasury's 
responsibilities. Certain references to margin accounts, margin 
payments and margin requirements or processes (and words of similar 
effect) will be revised to refer more generally to accounts, payments 
and related clearing or processes requirements (or requirements), in 
order to more broadly reference overall payment requirements from the 
clearing process (which include but are not limited to margin). The 
amendments would highlight that ICE Clear Credit, rather than ICE Clear 
Credit's Risk Department, generates daily requirements for all Clearing 
Participants (including requirements for indirect participants i.e., 
Client-Related requirements) because such requirements are generated 
automatically by ICE Clear Credit's clearing systems as opposed being 
generated specifically by ICE Clear Credit's Risk Department. Further, 
the amendments note that such daily requirements are based on the 
Clearing Participants' cleared ``positions'' rather than their cleared 
``trades'' as positions is a more accurate description of a Clearing 
Participants cleared activity at ICE Clear Credit. The amendments also 
clarify the Treasury Departments responsibility in ensuring that 
payments are received from Clearing Participants by removing an 
incorrect reference to ensuring that payments are honored by Clearing 
Participants' banking relationships. Under ICC's existing direct 
settlement model, as discussed below, Clearing Participants are 
responsible to ensure that ICC timely receives all required payments; 
completion of settlement is not based on whether a Clearing 
Participant's bank honors a payment direction. Similarly, references to 
settlement issues have been generalized to reference treasury 
management related issues, and

[[Page 73735]]

references to substitution of collateral for cash have been replaced by 
the more general description of performing collateral substitutions. 
These changes do not reflect a substantive change in practice, but 
rather are intended to provide a more comprehensive overall description 
of relevant payment practices. In the statement of the Treasury 
Departments role in developing of investment and collateral management 
strategies, the amendments would remove an outdated reference to such 
activities being done within the ICC Risk Management Framework, as the 
relevant investment and collateral management policies are now set out 
in the Treasury Policy rather than in the framework. The amendment 
would also generalize a reference to cash management to the broader 
term collateral management to more fully describe the scope of this 
activity and for consistency throughout the Treasury Policy. The 
amendments also clarify the organizational structure of the Treasury 
Department function, as overseen by the ICC Treasury Director who 
reports to the ICC Chief Operating Officer (``COO'') (and clarifies 
that the ICC Treasury Department is not and has never been a part of 
the operations department).
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    \3\ Treasury Policy Section ``II. The Treasury Department.''
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    ICC also proposes to update the funds management section of the 
Treasury Policy.\4\ The amendments would add conforming references to 
``requirements'' in certain places for consistency in referring to 
margin and Guaranty Fund requirements. In addition, the amendments 
would clarify or add various defined terms relating to margin, 
including a defined term for ``Margin'' covering both initial and mark-
to-market margin. A definitional footnote relating to the Guaranty Fund 
would be removed as unnecessary in light of prior references to that 
term in the Treasury Policy. Additionally, the amendments would clarify 
that the funds would include both cash and non-cash collateral. For 
completeness and consistency with the existing Rules and other 
procedures of ICC, the amendments would state that ICC maintains and 
manages ``House Margin'' and ``Client Margin'' separately. The 
amendments also clarify that required initial margin and GF 
contributions are held in a manner that minimizes the risk of loss or 
delay in access, consistent with regulatory requirements (which 
reflects the standard under applicable regulations), rather than 
referring only to highly liquid and short-term investments. Under 
Section III.B., Investment Strategy, various conforming and non-
substantive drafting changes would be made, including to the use of 
appropriate defined terms and consistent references to cash collateral 
(instead of cash). References in the existing Treasury Policy to 
certain investments to be made by the Director of Treasury would be 
revised to simply refer to the Treasury Department as a whole, 
reflecting actual practice that investments are made by Treasury 
Department personnel subject to the supervision of the Director of 
Treasury. In the discussion of investment of US dollar cash, additional 
clarifying language would be added to this section such as describing 
the role of the Federal Reserve Bank of Chicago (``FRB'') as a 
depository and noting that US dollar cash may be invested in US 
Treasury/Agency reverse repurchase agreements rather than just 
Treasury/Agency reverse repurchase agreements. The amendments would 
also reflect that ICC currently maintains multiple accounts (rather 
than a single account) at the FRB, as discussed below. For reverse repo 
transactions, the amendments would also remove an unnecessary 
description of certain settlement arrangements and unnecessary 
statements regarding steps ICC would take to ensure replacement 
securities are eligible and valued correctly when a substitution of 
securities becomes necessary (as ICC does not believe such matters are 
relevant to the level of detail of the description contained in the 
Treasury Policy). The amendments would revise the description of the 
calculation of the minimum cash required to be invested in bilateral 
reverse repos to reflect 45% of the top two Clearing Participants' 
Margin requirements (taking into account specifically both initial and 
mark-to-market margin requirements, as opposed to referencing the 
generalized phrase ``risk margin''), as ICC believes that this is the 
more detailed and accurate description of ICC's current practices. 
Additionally, the amendments would acknowledge that bilateral reverse 
repo transactions may be settled through alternative counterparties 
that may be added in the future to account for the possibility that ICE 
Clear Credit's financial service provider relationships may change in 
the future. The amendments would also clarify that ICC in practice uses 
more than one outside investment manager to facilitate its investment 
of Guaranty Fund and margin cash.
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    \4\ Treasury Policy Section ``III. Funds Management.''
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    ICC also proposes revisions to the Tables of collateral liquidity 
requirements contained in Section III of the Treasury Policy \5\ to 
update various defined terms and references (both in the text of the 
Tables and the titles of the Tables) to be consistent with the other 
amendments being made to the Treasury Policy, such as to use the 
defined term Margin and to conform the terminology for the currencies 
and collateral (US Dollar Cash, EUR Cash, and US Treasury Securities). 
An amendment will also change a reference from ``assets'' to 
``collateral'', to more precisely describe the collateral being 
described. A statement relating to additional margin that may be called 
where a clearing participant does not meet the required liquidity 
requirements has been clarified to refer more precisely to initial 
margin. In addition, ICC proposes revising the participant withdrawals' 
sub-section of Section III of the Treasury Policy \6\ to reflect that 
the requirements described are based on the ICC Rules and to add a 
statement that Guaranty Fund deposits will not be returned until after 
all positions of the withdrawing participant have been closed out and 
all liabilities of the participant to ICC have been satisfied, in order 
to be consistent with the requirements of existing Rule 807. The 
amendments would also remove a statement that if a participant provides 
notice of withdrawal less than 60 days from the end of the calendar 
quarter, its withdrawal will not be effective until the end of the 
following quarter, as this requirement is not set forth in the Rules.
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    \5\ Table 1 Collateral Liquidation Assumptions (US Dollar 
denominated requirements); Table 2 Collateral Liquidation 
Assumptions (Euro denominated requirements); Table 3 House Initial 
Margin & Guaranty Fund Liquidity Requirements (Non-Client US Dollar 
denominated requirements); and Table 4 House Initial Margin & 
Guaranty Fund Liquidity Requirements (Non-Client Euro denominated 
requirements) (collectively, the ``Tables'').
    \6\ Treasury Policy Section III, Sub-Section ``D. Participants' 
Withdrawal.''
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    The discussion of ICC's use of committed repo facilities would 
clarify that any expenses (including but not limited to interest 
expenses) incurred through such facilities following a Clearing 
Participant default will be attributed to the account of that CP, 
consistent with the general approach for allocation of close-out costs 
to a defaulter under the Rules.
    ICC proposes revising the cash settlement section of the Treasury 
Policy.\7\ Under the cash settlement section, the examples of types of 
transaction payments have been expanded to include options premia and 
interest on Mark-to-Market Margin, reflecting current practice. The 
amendments would also add further

[[Page 73736]]

explanation of the existing ICC direct settlement model used to manage 
cash movements, for consistency and to provide greater clarity as to 
settlement operations. As described, the direct settlement requires the 
Clearing Participants to establish settlement bank arrangements and 
make requested payments to ICC in the required timeframe. ICC maintains 
direct debit authority over the settlement bank accounts of Clearing 
Participants.
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    \7\ Treasury Policy Section ``IV. Cash Settlement.''
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    In addition, the amendments to Section IV would add to the current 
criteria for ICE Clear Credit's settlement banks (which include 
requirements as to regulation and supervision, capital requirements for 
non-US institution, absence of majority sovereign ownership, internal 
ICC credit requirements and operational capability) a requirement that 
the bank provide specific liquidity information, in order to facilitate 
management by ICC of liquidity risk from settlement arrangements. This 
would include providing information as to the bank's liquidity coverage 
ratio, and if that is not reported by the bank, ICC would use other 
criteria (e.g., requesting a description of the bank's liquidity risk 
management policy and/or requesting the liquidity coverage ratio of the 
bank's affiliated reporting entity within the bank's group) based on 
ICC's discretion, to assess the liquidity risks arising from settlement 
banks. In addition, as revised, the Treasury Policy would no longer 
specify particular backup settlement banks for ICC but reference a 
general requirement for ICC to maintain appropriate backup 
relationships. ICC believes this approach is preferable and avoids the 
need to amend the Treasury Policy if backup arrangements change.
    The amendments would add further description of the daily 
settlement process (including as to cases where no net settlement is 
owed and bank holidays), as set forth below. Consistent with the added 
description of the direct settlement model as noted above, the 
amendments would state the responsibility of Clearing Participants to 
ensure that ICC timely receives all requested payments and note that 
failure to make timely payments may be a default. This proposed change 
provides greater clarity as to ICC's current practices. In the 
discussion of routine settlement procedures, an erroneous reference to 
contacting an agent bank in the event of a late payment would be 
removed (as the Clearing Participant would be contacted directly). The 
amendments would also add statements describing the daily settlement 
process as being conducted every business day and regarding the timing 
of settlement finality under the direct settlement model. Consistent 
with current practice, settlement would be deemed final and irrevocable 
at the earlier of the time when ICC received the relevant payment, or a 
financial institution used by ICC sends a confirmation message that 
payment has been made. As noted above, the amendments would also remove 
references to various specific types of SWIFT messages (in light of the 
possibility that specific SWIFT message types may be modified, renamed 
or changed from time to time by SWIFT), and describe such messages more 
generally. In the case of non-routine settlement, the amendments would 
remove an unnecessary reference to a specific SWIFT settlement 
instruction, since ICC and the Clearing Participant in question would 
be expected to separately confirm the particulars of the settlement.
    In the discussion of a SWIFT outage, the amendments would clarify 
that the relevant scenario arises where ICC is unable to send SWIFT 
messages to the Clearing Participants' settlement banks (correcting an 
erroneous reference to ICC's direct settlement banks). The amendments 
would revise certain procedures for communicating directly with CP's in 
the event of a SWIFT outage (removing an incorrect reference to 
communicating with ICC's direct settlement banks as above). The 
amendments would also address correcting or re-issuing a SWIFT message 
in the event of a non-payment for certain technical reasons and remove 
certain references to specific types of SWIFT messages or reports that 
ICC believes are unnecessary, and such specific message types may be 
modified, renamed or changed from time to time (as noted above). The 
amendment would also remove a requirement that certain emails be 
password protected (as ICC does not believe email security measures 
need to be set out in the Treasury Policy). With respect to the 
discussion of bank-to-bank messages, the amendments would remove 
references to specific settlement banks and instead refer to the 
applicable ICC settlement bank generally (to avoid the need to amend 
the Treasury Policy in the event of any change in settlement banks). 
With respect to the scenario where a bank rejects a SWIFT debt message 
because of a technical defect, the amendments will remove a specific 
requirement to manually update the transaction summary report and 
manually initiate a specific reversal or correction message and add 
instead a general obligation to correct the prior message or reissue a 
corrected message.
    ICC proposes revisions to settlement bank failure sub-section of 
Section IV of the Treasury Policy.\8\ In the event that a settlement 
bank fails to perform, ICE Clear Credit would instruct the CP to wire 
the funds to the ICE Clear Credit accounts at an alternate settlement 
bank. The amendments broaden the list of such alternate settlement 
banks that may be designated by ICC.
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    \8\ Treasury Policy Section IV. Sub-Section ``A.7. Failure of 
Settlement Bank to Perform.''
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    In the discussion of ICC's use of the FRB Accounts for depository 
purposes, the amendments would update the Treasury Policy to reflect 
that ICC currently maintains separate FRB Accounts for house and client 
margin in light of applicable segregation requirements (removing and 
updating certain outdated language that contemplated a scenario where 
ICC might only have one FRB account). Other amendments in this section 
make non-substantive changes to the use of defined terms (including new 
terms House Account and Client Account as well as replacing FRB 
customer cash account and FRB House cash account with FRB House Account 
and replacing FRB Client cash account with FRB Client Account). Certain 
conforming changes would also be made to consistently refer to Guaranty 
Fund and House Accounts in this section.
    Further, ICC proposes revisions to the custodial assets section of 
the Treasury Policy.\9\ The amendments would reference ongoing 
monitoring according to ICE Clear Credit's Counterparty Monitoring 
Procedures (rather than identifying only a specific annual report that 
is no longer required to be submitted as ICC Counterparty Monitoring 
Procedures contain detailed procedures regarding the monitoring of the 
operational capabilities of the custodial banks). Outdated language 
that contemplated a scenario where ICC might have only one FRB 
securities account has also been removed. Amendments would identify 
market risk management as well as liquidity risk management as goals of 
ICC's policies relating to acceptable forms of collateral and 
associated haircuts. Certain typographical and other non-substantive 
drafting changes would be made in the discussion of collateral 
valuation.
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    \9\ Treasury Policy Section ``V. Custodial Assets.''
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    ICC proposes revisions to the collateral ``haircut'' sub-section of 
Section V of the Treasury Policy.\10\ The

[[Page 73737]]

discussion of the collateral haircut methodology would be revised to 
refer to cash and non-cash collateral generally, rather than just US 
Treasuries and non-USD currencies (as the current list of eligible 
collateral is not limited to those specific assets). Other conforming 
non-substantive changes will be made consistent with the rest of the 
Treasury Policy. Amendments would also require that the Treasury 
Department provide a report of current haircuts to the ICC Risk 
Department at a minimum once a month (as opposed to only once a month) 
and require that the report be provided whether or not changes were 
made during the month. This approach reflects ICC's current practices. 
The amendments would also reflect current practice that haircuts are 
made publicly available, and any haircut changes are notified to CP's 
(and not only on a monthly basis). In the excess collateral sub-
section, ICC proposes noting that requests by Clearing Participants to 
transfer excess collateral must be completed prior to 9:00 a.m. ET for 
both EUR and British pound sterling (``GBP'') denominated collateral 
rather than only for EUR denominated collateral as this sub-section did 
not contain the applicable GBP deadline for the transfer of excess GBP 
denominated collateral.
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    \10\ Treasury Policy Section V, Sub-Section ``B.3. Collateral 
``Haircut'' Methodology.''
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    In the section of the Treasury Policy relating to treasury 
management of client business,\11\ various non-substantive drafting 
changes would be made, including to use the defined terms House 
Account, Client Account and Client Positions and Margin and conform 
references to various types of cash and non-cash collateral. An 
unnecessary reference to daily payment processes would also be removed.
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    \11\ Treasury Policy Section ``VI. Treasury Management for 
Client Business.''
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    ICC also proposes revisions to the treasury reconciliations section 
of the Treasury Policy.\12\ As amended, the Treasury Policy will 
clarify that the Treasury Department conducts a daily reconciliation 
process for its cash and non-cash collateral accounts in accordance 
with its internal procedures, which include cite checks for validating 
status of margin payments, a check of prior-day cash balances, 
withdrawals, and/or deposits, and a comparison of current and expected 
balances. With respect to the cite checks description, ICC proposes to 
replace the vague and undefined phrase ``ISG requests'' with the 
generalized and descriptive phrase ``transaction activity'' to improve 
clarity.
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    \12\ Treasury Policy Section ``VII. Treasury Reconciliations.''
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    Other amendments would correct the identification of ICC's SWIFT 
BIC code and update cross-references to ICC's Counterparty Monitoring 
Procedures (which was formerly referred to as the CDS Clearing 
Counterparty Monitoring Procedures).
    ICC also proposes changes to Appendix 1: ICE Clear Credit Operating 
Capital Investment Policy. The amendments provide that the use of 
direct investments in US Treasury securities is not limited to cases 
where other investments (e.g., reverse repo investments) are 
unavailable; rather, the revised guidelines would contemplate the use 
of direct investments primarily for stable balances (such as amounts 
held for regulatory capital purposes). ICC believes the change provides 
greater flexibility for investment of such balances while preserving 
the credit quality of investments. Revisions to the guidelines for 
reverse repo investments in Appendix 2 would reflect that the value of 
collateral must be 102% of the invested amount (rather than within a 
range of 100.5% to 102%). This change reflects current market practice 
and provides greater protection to ICC. References to certain specific 
banks in key contacts in Appendix 2 also will be removed as 
unnecessary; ICC does not believe such contacts need to be maintained 
in the Treasury Policy, given the likelihood of changes in contact 
details.
    ICC proposes a number of other drafting clarifications and 
conforming changes, such as updating names and uses of relevant defined 
terms, deleting outdated references and other non-substantive drafting 
improvements, would also be made throughout the Treasury Policy 
document. Various provisions and footnotes would also be relabeled or 
renumbered in the Treasury Policy.
(b) Statutory Basis
    ICE Clear Credit believes that the proposed amendments to the 
Treasury Policy are consistent with the requirements of Section 17A of 
the Securities Exchange Act of 1934 (the ``Act'') \13\ and the 
regulations thereunder applicable to it. In particular, Section 
17A(b)(3)(F) of the Act \14\ 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 generally improve the clarity of the 
Treasury Policy and make certain related enhancements, including 
clarifying the investment guidelines for investment of ICC's own 
capital, clarifications to the roles and responsibilities of the ICC 
Treasury Department function and clarifications concerning SWIFT 
messaging procedures. ICC believes the changes to the investment 
guidelines will facilitate stable investment of ICC's own capital and 
provide useful flexibility for the clearing house. The changes will not 
result in a change to current ICC Treasury Department practices. ICC 
therefore believes the amendments will help ensure that the Treasury 
Policy remain up-to-date and clearly articulate ICC's Treasury 
Department practices, and as such will promote the prompt and accurate 
clearance and settlement of securities transactions and derivatives 
agreements, contracts and transactions, contribute to the safeguarding 
of securities and funds which are in the custody or control of ICC or 
for which it is responsible, and generally promote 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.\15\
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    \13\ 15 U.S.C. 78q-1.
    \14\ 15 U.S.C. 78q-1(b)(3)(F).
    \15\ 15 U.S.C. 78q-1(b)(3)(F).
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    The amendments also comply with relevant provisions of Rule 17Ad-
22.\16\ In particular, Rule 17Ad-22(e)(5) provides that ``[e]ach 
covered clearing agency shall establish, implement, maintain and 
enforce written policies and procedures reasonably designed to, as 
applicable . . . [l]imit the assets it accepts as collateral to those 
with low credit, liquidity and market risks, and set and enforce 
appropriately conservative haircuts and concentration limits if [it] 
requires collateral to manage its or its participants' credit exposure, 
and require a review of the sufficiency of its collateral haircuts and 
concentration limits to be performed not less than annually.'' \17\ As 
set forth above, the amendments to the Treasury Policy would make 
clarifying changes to the responsibilities of the Treasury Department 
and procedures relating to the management of funds constituting 
operating capital as well as GF contributions and margin, banking 
relationships, and acceptable collateral and haircuts, among other 
matters. As such, the amendments would facilitate the ability of ICC to 
limit the assets it

[[Page 73738]]

accepts as collateral to those with low credit, market and liquidity 
risks, consistent with the requirements of Rule 17Ad-22(e)(5).\18\
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    \16\ 17 CFR 240.17Ad-22.
    \17\ 17 CFR 240.17Ad-22(e)(5).
    \18\ 17 CFR 240.17Ad-22(e)(5).
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    Rule 17Ad-22(e)(8) provides that ``[e]ach covered clearing agency 
shall establish, implement, maintain and enforce written policies and 
procedures reasonably designed to, as applicable [. . .] define the 
point at which settlement is final to be no later than the end of the 
day on which the payment or obligation is due and, where necessary or 
appropriate, intraday or in real time.'' \19\ The amendments would 
state clearly the time at which settlement of daily payments is deemed 
final, as the earlier of (i) when ICC receives the payment or (ii) when 
a financial institution used by ICC sends a relevant confirmation 
message that the payment has been made, which is consistent with ICC 
practice and is within the timeframe required under Rule 17Ad-
22(e)(8).\20\
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    \19\ 17 CFR 240.17Ad-22(e)(8).
    \20\ 17 CFR 240.17Ad-22(e)(8).
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    Rule 17Ad-22(e)(9) requires that ``[e]ach covered clearing agency 
shall establish, implement, maintain and enforce written policies and 
procedures reasonably designed to, as applicable [. . .] conduct its 
money settlements in central bank money, where available and determined 
to be practical . . . and minimize and manage credit and liquidity risk 
arising from conducting its monetary settlements in commercial bank 
money if central bank money is not used by the covered clearing 
agency''.\21\ As set forth above, the amendments make certain 
clarifications to the descriptions ICC's settlement banking 
arrangements (through FRB accounts and with settlement banks) to more 
clearly reflect current practice by the clearing house. As such, in 
ICC's view, the amendments are consistent with the requirements of Rule 
17Ad-22(e)(9).\22\
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    \21\ 17 CFR 240.17Ad-22(e)(9).
    \22\ 17 CFR 240.17Ad-22(e)(9).
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    Rule 17Ad-22(e)(16) provides that ``[e]ach covered clearing agency 
shall establish, implement, maintain and enforce written policies and 
procedures reasonably designed to, as applicable [. . .] safeguard the 
covered clearing agency's own and its participants' assets, minimize 
the risk of loss and delay in access to these assets, and invest such 
assets in instruments with minimal credit, market and liquidity 
risks.'' \23\ As noted above, the amendments would provide greater 
flexibility for ICC to invest its own capital through direct 
investments in US treasury securities, particularly in the case where 
it is investing stable balances. In that context, and given the 
maturity limitations that will nonetheless apply, ICC believes that 
such investments would have minimal credit, market and liquidity risks 
for ICC, and accordingly would be consistent with Rule 17Ad-
22(e)(16).\24\
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    \23\ 17 CFR 240.17Ad-22(e)(16).
    \24\ 17 CFR 240.17Ad-22(e)(16).
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    Rule 17Ad-22(e)(3)(i) provides that ``[e]ach covered clearing 
agency shall establish, implement, maintain and enforce written 
policies and procedures reasonably designed to, as applicable [. . .] 
identify, measure, monitor, and manage the range of risks that arise in 
or are borne by the covered clearing agency''.\25\ The Treasury Policy 
is intended to assist ICC, among other matters, in accurately assessing 
and managing certain of its investment risks, collateral risks and 
liquidity risks relating to margin, GF and other assets held by ICC. As 
set forth above, the amendments are generally intended to update the 
Treasury Policy and make various drafting improvements for purposes of 
clarifications. In keeping the relevant policies up-to-date, ICC 
believes the amendments are consistent with the risk management 
requirements of Rule 17Ad-22(e)(3)(i).\26\
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    \25\ 17 CFR 240.17 Ad-22(e)(3)(i).
    \26\ 17 CFR 240.17 Ad-22(e)(3)(i).
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    Rule 17Ad-22(e)(2) provides that ``[e]ach covered clearing agency 
shall establish, implement, maintain and enforce written policies and 
procedures reasonably designed to, as applicable [. . .] [p]rovide for 
governance arrangements that are [c]lear and transparent'' \27\ and 
``[s]pecify clear and direct lines of responsibility.'' \28\ As 
proposed to be revised, the Treasury Policy would clearly state certain 
responsibilities of the Treasury Department, among other parts of ICC, 
in relation to oversight of its practices regarding treasury functions 
and collateral management. The amendments would make certain 
clarifications and drafting improvements that will keep these aspects 
of the Treasury Policy up-to-date and effective for their purposes. In 
ICE Clear Credit's view, the amendments to the Treasury Policy are 
therefore consistent with the requirements of Rule 17Ad-22(e)(2).\29\
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    \27\ 17 CFR 240.17 Ad-22(e)(2)(i).
    \28\ 17 CFR 240.17 Ad-22(e)(2)(v).
    \29\ 17 CFR 240.17 Ad-22(e)(2).
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(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 update and clarify the Treasury Policy. As set 
forth above, the proposed amendments are not expected to materially 
change the treasury operations of ICC but rather update general 
language to more clearly describe existing practices. Accordingly, ICE 
Clear Credit does not believe the amendments would affect the rights 
and obligations of CP's or 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.

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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking); 
or

[[Page 73739]]

    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#b6c4c3dad39bd5d9dbdbd3d8c2c5f6c5d3d598d1d9c0"><span class="__cf_email__" data-cfemail="6012150c054d030f0d0d050e1413201305034e070f16">[email protected]</span></a>. Please include 
file number SR-ICC-2024-005 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-2024-005. 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 that are filed with the Commission, 
and all written communications relating to the proposed rule change 
between the Commission and any person, other than those that may be 
withheld from the public in accordance with the provisions of 5 U.S.C. 
552, will be available for website viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10 a.m. and 3 
p.m. Copies of such filings will also be available for inspection and 
copying at the principal office of ICE Clear Credit and on ICE Clear 
Credit's website at https://www.theice.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-2024-005 and should 
be submitted on or before October 2, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-20460 Filed 9-10-24; 8:45 am]
BILLING CODE 8011-01-P


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