48778 Federal Register / Vol. 86, No. 166 / Tuesday, August 31, 2021 / Notices 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Self-Regulatory Organizations; ICE Clear Credit 

LLC; Notice of Filing of Proposed Rule Change 

Relating to the ICC Governance Playbook, ICC Risk 

Management Framework, and ICC Treasury 

Operations Policies and Procedures; Exchange Act 

Release No. 92402 (July 14, 2021); 86 FR 38370 

(July 20, 2021) (SR–ICC–2021–015) (‘‘Notice’’). 

4Capitalized terms not otherwise defined herein 

have the meanings assigned to them in the ICC 

Rules, as applicable. 

5The description of the proposed rule change is 

excerpted substantially from the Notice. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18677 Filed 8–30–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92753; File No. SR–ICC– 

2021–015] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Order Approving 

Proposed Rule Change Relating to the 

ICC Governance Playbook, ICC Risk 

Management Framework, and ICC 

Treasury Operations Policies and 

Procedures 

August 25, 2021. 

I. Introduction 

On June 30, 2021, ICE Clear Credit 

LLC (‘‘ICC’’) filed with the Securities 

and Exchange Commission, pursuant to 

Section 19(b)(1) of the Securities 

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

Rule 19b–4,2 a proposed rule change to 

amend the Governance Playbook, Risk 

Management Framework, and Treasury 

Operations Policies and Procedures 

(‘‘Treasury Policy’’) (together, the 

‘‘Documents’’). The proposed rule 

change was published for comment in 

the Federal Register on July 20, 2021.3

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 

The proposed rule change would 

amend the ICC Governance Playbook, 

Risk Management Framework, and 

Treasury Policy to update descriptions 

of certain internal committees and make 

other clarification or clean-up changes.4

ICC maintains the Participant Review 

Committee (‘‘PRC’’) and the Credit 

Review Subcommittee of the PRC 

(‘‘CRS’’) (together, the ‘‘Committees’’), 

which are internal committees that 

assist in fulfilling counterparty review 

responsibilities with respect to ICC’s 

Clearing Participants (‘‘CPs’’) and 

financial service providers (‘‘FSPs’’). 

The proposed changes would amend 

descriptions related to membership 

composition, meeting frequency, and 

responsibilities of the Committees in the 

Documents to reflect recent changes to 

the Committees’ charters.5

A. Governance Playbook 

The proposed rule change would 

amend Section IV of the Governance 

Playbook (Committees) to (i) simplify 

the description of the membership 

composition of the PRC by eliminating 

unnecessary prefatory language and (ii) 

add the ICC Risk Oversight Officer as a 

member. The proposed rule change 

would also amend the description of the 

CRS to remove the authority to approve 

FSPs and specify that the CRS has an 

advisory role and may make 

recommendations to the PRC with 

respect to matters of creditworthiness of 

CPs and creditworthiness and 

performance of FSPs. These changes 

would place FSP approval authority 

with the PRC and have its 

subcommittee, the CRS, assists it in 

fulfilling its counterparty review and 

approval responsibilities. 

The proposed changes would also 

update the membership composition of 

the CRS to include the Risk Oversight 

Officer (similar to the PRC), remove the 

ICC Risk Management representative as 

a voting member of the CRS, and state 

that Risk Management representatives 

will participate as non-voting members 

and present materials to allow the CRS 

to perform its responsibilities and 

duties. These changes would thus 

change Risk Management’s role at the 

subcommittee level. 

The proposed rule change would also 

make a grammatical edit to refer to 

‘‘financial services providers’’ as 

‘‘financial service providers’’ in the 

description of the PRC and throughout 

the document. 

B. Risk Management Framework 

The proposed rule change would 

amend Section II of the Risk 

Management Framework (Governance 

and Organization) to update a chart that 

details the governance and committee 

structure at ICC. The updated chart 

would indicate the current practice that 

the Intercontinental Exchange, Inc. 

(‘‘ICE, Inc.’’) Enterprise Risk 

Management Department (‘‘ERM’’) 

reports to the Board and corrects a 

typographical error to replace the ‘‘BCP 

Oversight Committee’’ with the ‘‘BCP & 

DR Oversight Committee.’’ 

In Section II.A (Committees), the 

proposed changes would clarify current 

practice that, in addition to the overall 

Risk Management Framework and its 

associated policies and procedures 

being subject to Risk Committee review 

on at least an annual basis, the policies 

and procedures that comprise ICC’s 

overall risk management framework are 

further subject to full Board review and 

approval at least annually. 

The proposal would also make a 

grammatical edit to refer to ‘‘financial 

services providers’’ as ‘‘financial service 

providers’’ and add a footnote to specify 

that the types of entities included as 

FSPs are those to which ICC has actual 

or potential credit exposure, such as 

settlement banks, custodians, and other 

entities. Additionally, the proposal 

would specify that the PRC meets at 

least quarterly and more frequently as 

needed. 

The proposed changes would 

distinguish PRC and CRS 

responsibilities with respect to FSPs. 

The changes remove the authority from 

the CRS to approve FSPs and specify 

that it has only an advisory role, which 

is similar to its role in monitoring CPs’ 

ongoing compliance with the standards 

and requirements of membership. The 

changes note that the PRC is responsible 

for overseeing the assessments and 

ultimate approval of FSPs. The CRS, as 

a subcommittee of the PRC, is 

responsible for assessing the 

creditworthiness and performance of 

would-be FSPs by conducting initial 

due diligence, performing ongoing 

credit monitoring of FSPs, and then 

making recommendations to the PRC for 

its approval. 

Finally, the proposed rule change 

would amend Appendix 1 to the 

document to update language 

(consistent with the remainder of the 

document) related to the membership 

composition of the PRC, including the 

addition of the President, Chief 

Operating Officer, and Risk Oversight 

Officer as members of the PRC, as well 

as to clarify current practice that the 

PRC would meet at least quarterly, and 

more frequently as needed. 

C. Treasury Policy 

To reflect the CRS’s new advisory 

role, the proposed rule change would 

amend Section IV (Cash Settlement) of 

the Treasury Policy by removing the 

required approval of the CRS before ICC 

may begin using a bank’s services and 

replacing it with the required approval 

of the PRC. Consistent with the CRS’s 

advisory role as a subcommittee, 

Section IV would be further amended to 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 166 / Tuesday, August 31, 2021 / Notices 48779 

6 15 U.S.C. 78s(b)(2)(C). 

7 15 U.S.C. 78q–1(b)(3)(F). 

8 17 CFR 240.17Ad–22(e)(2)(i) and (v). 

9 15 U.S.C. 78q–1(b)(3)(F). 10 17 CFR 240.17Ad–22(e)(2)(i) and (v). 

11 Id. 

12 15 U.S.C. 78q–1(b)(3)(F). 

13 17 CFR 240.17Ad–22(e)(2)(i) and (v). 

14 15 U.S.C. 78s(b)(2). 

15 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). 

16 17 CFR 200.30–3(a)(12). 

indicate that the CRS would be 

authorized to make recommendations to 

the PRC regarding approval of the bank 

prior to accepting such services. 

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.6 For the 

reasons given below, the Commission 

finds that the proposed rule change is 

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

the Act 7 and Rules 17Ad–22(e)(2)(i) and 

(v).8

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 ICC be designed to promote the 

prompt and accurate clearance and 

settlement of securities transactions 

and, to the extent applicable, derivative 

agreements, contracts, and transactions, 

as well as to assure the safeguarding of 

securities and funds which are in the 

custody or control of ICC or for which 

it is responsible.9 As discussed above, 

the proposed rule change would change 

the roles of the CRS and PRC internal 

committees in approving financial 

services providers and making 

recommendations with respect to 

matters of creditworthiness of CPs and 

the creditworthiness and performance of 

FSPs, with FSP approval being reserved 

for the PRC. The proposed changes also 

add the Risk Oversight Officer to both 

committees and remove representatives 

from Risk Management from voting 

participation in the CRS. The 

Commission believes that changing the 

roles of the internal committees in this 

way would enhance ICC’s ability to 

efficiently manage the risks associated 

with assessment and approval of CP and 

FSP counterparties by centering 

decision making and support amongst 

distinct committees. Further, the 

Commission believes that by changing 

voting representation in the CRS, the 

proposed changes would support its 

changed support role by clearly 

specifying how participation on the CRS 

works. The Commission believes that 

these changes would thus enhance ICC’s 

ability to maintain the appropriate 

financial resources necessary for the 

prompt and accurate clearance and 

settlement of securities transactions and 

the safeguarding of securities and funds 

which are in the custody or control of 

ICC or for which it is responsible. 

The Commission also believes that 

clarifying current practices related to 

the reporting line for the ERM, the 

frequency that the PRC meets, and the 

frequency with which the review and 

approval process of the policies and 

procedures that comprise ICC’s overall 

risk management framework occurs, 

strengthens the Documents by ensuring 

that users are aware of reporting lines 

and when policies and procedures 

should be reviewed and approved. The 

Commission believes that this in turn 

enhances ICC’s ability to promptly and 

accurately settle transactions and 

safeguard funds and securities by 

ensuring regular Document review 

intervals. Similarly, the grammatical 

changes noted above enhance the 

overall clarity of the Documents. 

For the reasons stated above, the 

Commission therefore believes that the 

proposed rule change is consistent with 

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

B. Consistency With Rule 17Ad– 

22(e)(2)(i) and (v) 

Rules 17Ad–22(e)(2)(i) and (v) 

requires each covered clearing agency to 

establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed to, as applicable, 

provide for governance arrangements 

that are clear and transparent and 

specify clear and direct lines of 

responsibility.10

As described above, the proposed rule 

changes would revise the specific role of 

the PRC and CRS regarding counterparty 

review and approval by making the PRC 

solely responsible for approval and 

oversight of FSPs and placing the CRS 

in a supporting position to make 

recommendations to the PRC after 

assessing and monitoring 

counterparties. The proposed changes 

also change the membership 

composition of the CRS to include the 

Risk Oversight Officer and remove the 

ICC Risk Management representative as 

a voting member while continuing to 

present materials to allow the CRS to 

perform its responsibilities and duties. 

The Commission believes that by 

differentiating the responsibilities of the 

various committees, subcommittees, and 

their participants as noted above, these 

proposed changes provide for clear and 

transparent governance arrangements 

and specify clear and direct lines of 

responsibility to those serving on those 

committees and utilizing the 

Documents. 

The proposed changes would also 

revise a governance chart in the 

Documents to clarify that the ERM 

reports to the Board of ICC, which the 

Commission believes provides 

transparent governance and specify 

clear and direct lines of responsibility 

between the ERM and the Board. 

Lastly, by clarifying the review and 

approval process of the policies and 

procedures that comprise ICC’s overall 

risk management framework, which 

consists of review by the Risk 

Committee and review and approval by 

the Board at least annually, the 

proposed rule change helps ensure that 

the risk management policies and 

procedures are subject to clear 

governance and specific direct lines of 

responsibility. 

For the reasons stated above, the 

Commission believes the proposed rule 

changes are consistent with Rules 

17Ad–22(e)(2)(i) and (v).11

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 12 and 

Rules 17Ad–22(e)(2)(i) and (v).13

It is therefore ordered pursuant to 

Section 19(b)(2) of the Act 14 that the 

proposed rule change (SR–ICC–2021– 

015), be, and hereby is, approved.15

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18675 Filed 8–30–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–216; OMB Control No. 

3235–0243] 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 


khammond on DSKJM1Z7X2PROD with NOTICES