Federal Register / Vol. 86, No. 166 / Tuesday, August 31, 2021 / Notices 48775 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

to be subject to the GSD margin 

methodology. 

FICC does not believe that the 

proposed changes described in Item 

II(A)1(3) above to make technical 

changes to the Rules would have any 

impact on competition because these 

proposed changes would better ensure 

that the Rules remain clear and 

accurate, and would facilitate Members’ 

understanding of the Rules and their 

obligations thereunder. Having 

transparent, accessible, clear, and 

accurate provisions in the Rules would 

improve the readability and clarity of 

the Rules regarding fees that Members 

would incur by participating in GSD. 

These proposed changes would apply 

equally to all Members and would not 

affect Members’ rights and obligations. 

In addition, FICC does not believe 

that the proposed changes described in 

Item II(A)1(3) above to make technical 

changes to the QRM Methodology 

Document would have any impact on 

competition because these proposed 

changes would enhance the clarity and 

accuracy of the QRM Methodology 

Document and would not affect the 

substantive rights of Members. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

FICC has not received or solicited any 

written comments relating to this 

proposal. If any written comments are 

received, they will be publicly filed as 

an Exhibit 2 to this filing, as required by 

Form 19b–4 and the General 

Instructions thereto. Persons submitting 

comments are cautioned that, according 

to Section IV (Solicitation of Comments) 

of the Exhibit 1A in the General 

Instructions to Form 19b–4, the 

Commission does not edit personal 

identifying information from comment 

submissions. Commenters should 

submit only information that they wish 

to make available publicly, including 

their name, email address, and any 

other identifying information. 

All prospective commenters should 

follow the Commission’s instructions on 

how to submit comments, available at 

https://www.sec.gov/regulatory-actions/ 

how-to-submit-comments. General 

questions regarding the rule filing 

process or logistical questions regarding 

this filing should be directed to the 

Main Office of the Commission’s 

Division of Trading and Markets at 

tradingandmarkets@sec.gov or 202– 

551–5777. FICC reserves the right to not 

respond to any comments received. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form 

(http://www.sec.gov/rules/sro.shtml); 

or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

FICC–2021–007 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–FICC–2021–007. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE, 

Washington, DC 20549 on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of FICC and on DTCC’s website 

(http://dtcc.com/legal/sec-rulefilings.aspx). All comments received 

will be posted without change. Persons 

submitting comments are cautioned that 

we do not redact or edit personal 

identifying information from comment 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–FICC– 

2021–007 and should be submitted on 

or before September 21, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18678 Filed 8–30–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92755; File No. SR–BOX– 

2021–18] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend IM–7240–1 

August 25, 2021. 

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 August 

13, 2021, BOX Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend IM– 

7240–1. The text of the proposed rule 

change is available from the principal 

office of the Exchange, at the 

Commission’s Public Reference Room 

and also on the Exchange’s internet 

website at http://boxoptions.com. 


khammond on DSKJM1Z7X2PROD with NOTICES
48776 Federal Register / Vol. 86, No. 166 / Tuesday, August 31, 2021 / Notices 

3See Securities Exchange Release No. 34–83163 

(May 3, 2018), 83 FR 21320 (May 9, 2018) (SR– 

BOX–2018–13 Noticed for Immediate 

Effectiveness). 4 IM–7240–1(a). 5BOX IM–7240–1(a) Debit/Credit Check. 

6See IM–7240–1(a)(1)(ii). 

7See IM–7240–1(a)(4). 

8See IM–7240–1(a)(1)(i). 

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

10 15 U.S.C. 78f(b)(5). 

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 

self-regulatory organization 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 self-regulatory organization 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 purpose of the proposed rule 

change is to amend IM–7240–1. In May 

2018, the Securities and Exchange 

Commission (‘‘SEC’’) noticed for 

immediate effectiveness BOX’s filing to 

adopt protections for Complex Orders.3

As background, the Exchange 

implemented its Debit/Credit Check 

which helps prevent the execution of 

Complex Orders at erroneous prices.4

Specifically, the system will reject a 

Complex Limit Order for a credit 

strategy with a net debit price or a 

Complex Limit Order for a debit strategy 

with a net credit price. The Debit/Credit 

Check mechanism is designed to value 

strategies using options pricing theory. 

At its simplest, options pricing theory 

refers to estimating the fair value of an 

options contract. Pricing models take 

into account variables such as current 

market price, strike price, and time to 

expiration. All else equal, longer-dated 

options are more valuable because of 

their greater time to expiration. 

Additionally, holding everything 

constant, including expiration date, a 

put option with a higher strike price 

will be more valuable than a put option 

with a lower strike price because the 

higher strike price allows the holder to 

sell the underlying security at a higher 

price. Conversely, a call option with a 

lower strike price is more expensive 

than a call option with a higher strike 

price because the lower strike price 

allows the holder to buy the underlying 

security at a lower price. Taking these 

principles into account, the Exchange 

designed the Debit/Credit Check as a 

way to identify strategies as credit or 

debit and only accept appropriate prices 

based on that determination. 

The Exchange notes that it included 

text in its Debit/Credit Check rule that 

does not completely reflect how the 

price protection mechanism functions.5

In particular, IM–7240–1(a)(1) provides 

that ‘‘the trading system will attempt to 

identify a strategy as a debit or credit 

based on the potential profit or loss of 

the Complex Order. The system first 

groups the legs of a Complex Order by 

expiration date. The system then 

calculates the potential profit or loss of 

each group for a range of price levels of 

the underlying security. Specifically, 

the system calculates the profit or loss 

for each group at price levels equal to 

the strike price of each leg in the 

group.’’ As such, the rule as it is 

currently reads, suggests that the system 

only calculates the profit or loss for each 

group of price levels equal to the strike 

price of each leg in the group for a 

particular strategy. 

Through internal review, the 

Exchange came to the conclusion that 

the system’s Debit/Credit Check does 

not only utilize price levels equal to the 

strike price of each leg in the groups of 

a Complex Order, but instead employs 

a broader range of prices for the 

underlying security to make a more 

accurate determination as to whether a 

particular strategy is a debit or credit. 

As such, the Exchange is proposing to 

delete the following language from the 

rule text: ‘‘Specifically, the system 

calculates the profit or loss for each 

group at price levels equal to the strike 

price of each leg in the group.’’ The 

Exchange believes this removes the 

contradiction within its current rule text 

and accurately reflects the current 

operation of its Debit/Credit Check 

mechanism by stating that the system 

will calculate a debit or credit strategy 

by using a ‘‘range of price levels.’’ 

The following example illustrates the 

situation that the Exchange is 

remedying with this proposed rule 

change. 

Example 

Assume a Complex Order to buy 2 

JAN 2990 puts and sell 1 JAN 3000 put. 

Evaluating the strategy at only the strike 

prices (i.e., 2990 and 3000) would yield 

a result that the strategy is a credit 

strategy and therefore the system should 

not accept net debit prices. This is 

because if the underlying security had a 

price of 2990 or 3000 the potential profit 

or loss for the strategy would be: 

• When the price of the underlying 

security is 2990, the first leg (buy 2 JAN 

2990 puts) would yield an estimated 

profit or loss of $0 (i.e., break-even) and 

the second leg (sell 1 JAN 3000 put) 

would yield an estimated loss of $10. 

• Alternatively, when the price of the 

underlying security is 3000, the first leg 

would yield an estimated profit or loss 

of $0, and the second leg would yield 

an estimated profit or loss of $0. 

If the system only evaluated 

underlying prices equal to the strike 

prices, then the profit or loss for the 

group would be break-even or loss 

because when the underlying price is 

2990 the strategy has a potential loss of 

$10 and when the underlying price is 

3000, the potential profit or loss is 

break-even. Therefore, the system would 

consider the strategy a credit strategy 

and reject any net debit prices.6

However, when you consider a wider 

range of prices for the underlying 

security, specifically those that are less 

than 2990 you conclude that the strategy 

has a tendency to be a debit strategy 

when the underlying price is less than 

2990 and, in turn, net debit prices 

should be accepted for the strategy. As 

such, the strategy is neither a credit nor 

debit strategy and any price should be 

accepted.7 To illustrate this, using an 

underlying price of 2970, the system 

would evaluate the strategy as follows: 

• The first leg would yield an 

estimated profit of $40, and the second 

leg would yield an estimated loss of 

$30. 

• This would yield a net profit of $10 

for the strategy meaning it is a debit 

strategy at this underlying price.8

This means that that depending on 

the underlying security price the 

strategy may be a credit or debit strategy 

so the system should accept credit and 

debit prices for the strategy. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,9

in general, and Section 6(b)(5) of the 

Act,10 in particular, the Exchange 

believes that the proposed rule change 

will remove impediments to and perfect 

the mechanisms of a free and open 

market by clarifying the operation of the 

Debit/Credit Check for Complex Orders, 

which would assist Participants in 

calibrating their systems with the 

Exchange’s, and thereby enable 

Participants to make full use of the price 

protection mechanisms offered by the 

Exchange. The Exchange believes this 

proposal removes a potential 


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Federal Register / Vol. 86, No. 166 / Tuesday, August 31, 2021 / Notices 48777 

11 15 U.S.C. 78s(b)(3)(A)(iii). 

12 17 CFR 240.19b–4(f)(6). 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6)(iii). 

17For purposed only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

impediment to, and would contribute to 

perfecting, the mechanism for a free and 

open market and a national market 

system, and, in general, would protect 

investors and the public interest. 

The Exchange believes that the 

proposed rule change would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

ensuring that market participants can 

understand the Exchange’s rulebook. 

The Exchange believes that the 

proposed rule change enables the 

Exchange to continue to enforce the 

Exchange’s rules. The Exchange does 

not believe that the proposed change 

discussed herein alters the application 

of any rules, or how the trading system 

currently functions. The proposed 

change merely clarifies the operation of 

the Debit/Credit Check for Complex 

Orders. As such, the proposed rule 

change will foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities and 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national exchange 

system. Further, the Exchange believes 

that, by ensuring the rulebook 

accurately reflects the operation of the 

Exchange’s rules, the proposed rule 

change reduces potential investor or 

market participant confusion. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. In this regard 

and as indicated above, the Exchange 

notes that the proposed changes will not 

alter the substance or application of any 

of the Exchange’s rules. Therefore, the 

proposed change will have no impact on 

competition as it is not designed to 

address any competitive issues but 

rather is designed to make clarifying 

changes to the existing BOX rules. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has 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 Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 11 and Rule 

19b–4(f)(6) thereunder.12 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

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

of the Act 13 and Rule 19b–4(f)(6)(iii) 

thereunder.14

A proposed rule change filed under 

Rule 19b–4(f)(6) 15 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),16 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange believes the 

proposed rule change adds clarity to the 

Exchange’s rulebook. The Commission 

believes that waiver of the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest because the proposal revises 

BOX’s rules to more accurately describe 

the operation of the Debit/Credit Check 

for Complex Orders, which should help 

investors understand how BOX’s Debit/ 

Credit Check will apply to their orders. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.17

At any time within 60 days of the 

filing of this 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BOX–2021–18 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BOX–2021–18. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BOX–2021–18, and should 

be submitted on or before September 21, 

2021. 


khammond on DSKJM1Z7X2PROD with NOTICES
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