ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

November 30, 2022

VIA CFTC PORTAL

Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st St., N.W.

Washington, D.C. 20581

Re: Amendment to ICE NGX Canada Inc. Rules - Submission Pursuant to Section 

5c(c)(1) of the Commodity Exchange Act and CFTC Regulation § 40.6(a): Same-Day 

Guarantee Fund and Change in Escrow Agent (CPA and RMF Amendments)

Dear Mr. Kirkpatrick:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended, (“Act”) and 

Commodity Futures Trading Commission (“Commission”) Regulation 40.6(a), ICE NGX Canada 

Inc. (“ICE NGX”) is submitting this self-certification relating to changes to 

 the ICE NGX Contracting Party Agreement (“CPA”) - the CPA functions as the rulebook 

for ICE NGX’s exchange and clearinghouse operations and is a “rule” as that term is 

defined under Commission Regulation 40.1(i); and 

 the ICE NGX Risk Management Framework (“RMF”) - the RMF is a “rule” as that term is 

defined under Commission Regulation 40.1(i).

ICE NGX intends to implement the amendments to the CPA (the “CPA Amendments”) and the 

amendments to the RMF (the “RMF Amendments” and, together with the CPA Amendments, the 

“Amendments”) on or about December 15, 2022. 

On September 20, 2022, ICE NGX submitted a self-certification of CPA and RMF amendments 

relating to changing the deadline for making settlement payments to ICE NGX, to noon Mountain 

Prevailing Time (the “Noon Settlement Payment Deadline Amendments”). As the noon settlement 

payment deadline is a necessary component of the same-day availability for the ICE NGX 

guarantee fund, ICE NGX is hereby updating the Commission that it intends to implement the 

Noon Settlement Payment Deadline Amendments concurrently with the Amendments described 

herein.

1. Overview 

ICE NGX’s default fund comprises:

 a US $200 million letter of credit (the “ICE NGX Letter of Credit”) issued for the benefit of 

the Escrow Agent (as defined in the CPA) and held in escrow for all ICE NGX Contracting 

Parties under the terms of an agreement between ICE NGX and the Escrow Agent (the 
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

“Deposit Agreement”), backed by default insurance in the same amount provided by 

Export Development Canada, and

 US $15 million held as restricted cash to fund the first loss amount under the default 

insurance.

ICE NGX is making this submission to implement the following changes relating to the ICE NGX 

default fund:

 a change in the Escrow Agent, to Royal Trust Corporation, 

 an amended and restated Deposit Agreement governing the ICE NGX Letter of Credit, 

entered into with the new Escrow Agent and replacing the current Deposit Agreement, 

and

 an additional process for drawing on the ICE NGX Letter of Credit, to facilitate same-day 

availability of the proceeds of the ICE NGX Letter of Credit.

The Amendments are designed to enhance ICE NGX’s liquidity resources, thereby further 

mitigating settlement and liquidity risk.

The text of the amended CPA provisions is attached as the Appendix to this letter. Concurrently 

with this submission, ICE NGX is submitting the text of the RMF Amendments, for which ICE NGX 

has respectfully requested confidential treatment. Finally, ICE NGX is also providing the 

Commission with a copy of the new Deposit Agreement with the new Escrow Agent, a copy of 

which will also be provided to each Contracting Party prior to implementation of the Amendments.

2. Details of Rule Changes

The CPA describes the Deposit Agreement and sets out the two current types of draw-downs on 

the ICE NGX Letter of Credit. No changes are contemplated to the two current draw-down types.

The additional draw-down type to facilitate same-day availability of the ICE NGX Letter of Credit

is reflected in the CPA Amendments and is described in more detail in the amended and restated

Deposit Agreement. 

The RMF Amendments reflect the change in Escrow Agent and the re-classification of the ICE 

NGX Letter of Credit as a liquid resource.

ICE NGX intends to implement the Amendments on or about December 15, 2022.

3. Compliance with Core Principles

ICE NGX reviewed the Amendments and determined that they comply with the rules and 

regulations of the Commission. In this regard, ICE NGX reviewed the derivatives clearing 

organization (“DCO”) core principles (each a “Core Principle”) and determined that the 
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

Amendments are potentially relevant to the following Core Principles and applicable regulations 

of the Commission thereunder.

Compliance (Core Principle A): The Amendments are consistent with Core Principle A -

Compliance and Commission Regulation 39.10, as the Amendments clarify and enhance ICE 

NGX’s policies and procedures for complying with Commission regulations and internal policies.

Financial Resources (Core Principle B): The Amendments are consistent with Core Principle B -

Financial Resources and Commission Regulations 

 § 39.11(e)(1)(i), as the Amendments and the new Deposit Agreement minimize the risk of 

delay in accessing ICE NGX’s liquid resources;

 § 39.11(e)(1)(iii), as the Amendments and the new Deposit Agreement facilitate reclassifying the ICE NGX Letter of Credit as a liquid resource, increasing ICE NGX’s overall 

liquid resources; and

 § 39.11(e)(3), as the ICE NGX Letter of Credit is allocated to meeting ICE NGX’s 

obligations as a central counterparty during a one-day settlement cycle, and not to meeting 

ICE NGX’s operating expenses.

Risk Management (Core Principle D): The Amendments are consistent with Core Principle D -

Risk Management and Commission Regulations 

 § 39.13(a), as the Amendments further mitigate ICE NGX’s liquidity risk on settlement 

days; and 

 § 39.13(b), as the RMF Amendments update ICE NGX’s risk management framework to 

reflect the enhanced liquidity resources. 

4. Certifications

ICE NGX certifies that the proposed Amendments discussed in this submission comply with the 

Commodity Exchange Act, including the Core Principles and the Regulations of the Commission 

thereunder. ICE NGX is not aware of opposing views expressed regarding the Amendments. ICE 

NGX further certifies that, concurrent with this filing, a copy of this submission was posted to ICE 

NGX’s website.

Yours truly,

__________________________

By: Greg Abbott

Title: President & COO 

Date: November 30, 2022
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

APPENDIX

AMENDMENTS TO THE ICE NGX CONTRACTING PARTY AGREEMENT

TERMS AND CONDITIONS

[Note: Insertions are underscored; deletions are struck through.]

ARTICLE 1 - INTERPRETATION

1.2 Definitions

...

“Deposit Agreement” means the agreement amended and restated as of December 11, 

2008 made effective December 15, 2022 between Exchange and the Escrow Agent, as 

amended or restated from time to time;

...

ARTICLE 5 - RECOURSE AND LIABILITY

...

5.11 Deposit Agreement 

a. Failure to Pay by Contracting Party –

(i) In the event of a Failure to Pay by a Contracting Party, Exchange may immediately 

file with the Escrow Agent a Direction to Pay Same-Day pursuant to, and as 

defined in, the Deposit Agreement, for the sole purpose of satisfying one or more 

Invoices owing by Exchange to one or more Contracting Parties that would 

otherwise be subject to a Failure to Pay by Exchange.

(ii) Upon verification of the Direction to Pay Same-Day, the Escrow Agent will forthwith 

provide sufficient proceeds from the Exchange Letter of Credit to Exchange to, and 

Exchange will forthwith use such proceeds solely to, satisfy the Invoice(s) that 

would otherwise be subject to a Failure to Pay by Exchange.

b.a. Exchange Failure to Pay by Exchange – In the event of an Exchange Failure to Pay by 

Exchange which that is not rectified by Exchange within three (3) Business Days from 

receipt of a notice of Failure to Pay by Exchange, Exchange shall immediately file with the 

Escrow Agent a Direction to Pay pursuant to, and as defined in, the Deposit Agreement 

and shall notify Contracting Party Payee(s) (as defined in the Deposit Agreement) of such 

Direction to Pay having been filed. 
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

c.b. Exchange Failure to Pay Resulting from a Failure to Deliver, Failure to Take or Exchange 

DefaultContracting Party’s Demand – The Contracting Party will be entitled in the event of 

an Exchange Failure to Pay resulting from an a Failure to Take, Failure to Deliver or 

Exchange Default to file with the Escrow Agent the Contracting Party’s Demand pursuant 

to, and as defined in, the Deposit Agreement after the expiry of five (5) Business Days 

from the occurrence of such event. 

d. Exchange Notice Not To Pay – In the event that the Contracting Party files with the Escrow 

Agent the Contracting Party’s Demand, Exchange will be entitled to file with the Escrow 

Agent the a Notice Not To Pay pursuant to, and as defined in, the Deposit Agreement in 

the event that:

(i) five (5) Business Days have not elapsed from the occurrence of the Exchange 

Default, as the case may be; 

(ii) either the Contracting Party or Exchange has initiated Mediation in respect of a 

dispute, controversy, difference or question in respect of the Exchange Default, as 

the case may be, and twenty (20) days have not expired from the date of initiation 

of such Mediation; 

(iii) either the Contracting Party or Exchange has initiated Arbitration in respect of a 

dispute, controversy, difference or question in respect of the Exchange Default, as 

the case may be, and the Arbitrator or the Arbitral Tribunal, as the case may be, 

has not issued a decision in respect of such matter; or 

(iv) the amount in respect of the Contracting Party’s Demand has been satisfied. 

e. Contracting Party May Re-File – In the event that Exchange files with the Escrow Agent 

the a Notice Not To Pay, the Contracting Party is entitled to refile with the Escrow Agent 

the Contracting Party’s Demand with: 

(i) a statement indicating the passage of five (5) Business Days; 

(ii) if Mediation is agreed to, a statement from the mediator as to the passage of twenty 

(20) days from the initiation of Mediation or a joint direction from the Contracting 

Party and Exchange as to the resolution of the Mediation; or 

(iii) if Arbitration is agreed to, a statement from the Arbitrator or the Arbitral Tribunal, 

as the case may be, as to the decision in respect of the matter.

f. Escrow Agent Undertaking – Exchange hereby agrees to provide the Escrow Agent with 

the Contracting Party’s name and address for notices from the Escrow Agent and will 

provide the Contracting Party with an executed copy of the Escrow Agent’s cause the 

Escrow Agent to give the Undertaking to the Contracting Party in respect of the Deposit 

Agreement.
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

e.c. Deposit Agreement Prevails – In the event of any conflict between the provisions of this 

Agreement and the Deposit Agreement, the rights of Exchange and the Contracting Party 

under this Agreement will be deemed to be amended and interpreted in accordance with 

the provisions of the Deposit Agreement.