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ICE Clear Europe Limited

Registered in England No.06219884

Registered office: Milton Gate, 60 Chiswell Street, London EC1Y 4SA

February 03, 2023

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

U.S. Commodity Futures Trading Commission

77 West Jackson Blvd Suite 800

Chicago, IL 60604

Re: ICE Clear Europe Self-Certification Pursuant to Commission Rule Rule 40.6 

– Capital Replenishment Plan

Dear Mr. Kirkpatrick:

ICE Clear Europe Limited (“ICE Clear Europe” or the “Clearing House”), a registered 

derivatives clearing organization under the Commodity Exchange Act, as amended (the 

“Act”), hereby submits to the Commodity Futures Trading Commission (the 

“Commission”), pursuant to Commission Rule 40.6 for self-certification, the Capital 

Replenishment Plan discussed herein.

1 The amendments will become effective on the 

first business day following the tenth business day after submission, or such later date 

as ICE Clear Europe may determine. 

Concise Explanation and Analysis

ICE Clear Europe is adopting a new Capital Replenishment Plan (the “Plan”) to 

document certain tools, procedures and arrangements that the Clearing House may use 

to replenish its capital, when necessary. The Plan2addresses replenishment of both ICE 

Clear Europe’s own resources contribution to its guaranty funds and capital required 

under applicable law, including the capital requirement under EMIR as incorporated 

into UK law following the Brexit transition (the “EMIR capital requirement”).3 The 

1 Capitalized terms used but not defined herein have the meanings specified in the Capital 

Replenishment Plan or, if not defined therein, the ICE Clear Europe Clearing Rules. 

2 The Plan consolidates and replaces a pre-existing capital requirement framework and related 

practices.

3 Commission Delegated Regulation (EU) No. 152/2013 of 19 December 2012 supplementing 

Regulation (EU) No. 648/2012 of the European Parliament and of the Council with regard to regulatory 
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ICE Clear Europe Limited

Registered in England No.06219884

Registered office: Milton Gate, 60 Chiswell Street, London EC1Y 4SA

Plan recognizes that a need to replenish capital may arise because of a Clearing Member 

default, the occurrence of sudden extraordinary one-off losses, net losses resulting from 

custody or investment risks, or from recurring losses which may arise from general 

business risks.4

The Plan sets out the overall purposes of the Plan and the Clearing House’s overall 

approach to capital management and maintaining capital resources. The Plan is 

intended, among other purposes, to set out for senior management, the audit committee 

and the Board actions they may consider to replenish capital and to identify stakeholders 

and their respective responsibilities with respect to ICE Clear Europe’s continued 

compliance with relevant laws and regulations covering regulatory capital. This Plan 

takes into account both the minimum legal capital requirements, including under the 

EMIR capital requirement, as well as a higher target capital requirement (which 

includes a voluntary capital contribution as well as a notification buffer). The 

replenishment tools and actions under the Plan have been developed so as to prioritize 

replenishing the legal capital requirement first. Replenishment of additional capital to 

the target amount can be addressed once the legal requirement has been restored, (or at 

the same time at the discretion of the Board, resources permitting). 

The Plan outlines the general steps the Clearing House expects to take to replenish 

capital, including (1) first assessing and using available accumulated financial 

resources, (2) then looking to use reasonably calculated forecasts as to future profits, 

(3) if those resources are insufficient to restore capital to the legal requirement, by 

seeking resources from its parent company in the ICE group, and (4) thereafter, with 

the approval of its parent and subject to the rights of existing shareholders, by seeking 

additional capital from third parties. ICE Clear Europe may also bypass the first two 

steps outlined above and immediately request capital from its parent company. 

The Plan also states that overall accountability for the plan lies with the Finance 

Director, President, and the Board. The Plan is subject to annual review, and capital 

replenishment will be included in the annual default management test schedule. The 

Plan identifies specific internal control and governance responsibilities for the Finance 

Director, President, the Board and Board Risk Committee relating to monitoring capital 

compliance and replenishment. The Finance Director is responsible for monitoring ICE 

Clear Europe’s compliance with the applicable regulatory capital requirements, 

reporting capital adequacy internally and to regulators, escalating matters relating to 

capital adequacy to the President where appropriate, and contributing to the 

development of plans to increase and/or replenish Eligible Capital as required for ICE 

Clear Europe to continue to meet its regulatory capital requirements. The President is

responsible for ensuring ICE Clear Europe meets its capital adequacy obligations under 

relevant laws and regulations. The Board Risk Committee is responsible for reviewing 

and recommending to the Board the principles underlying the capital planning process, 

as well as the Plan, itself, and the Board itself is responsible for approving the principles 

and the Plan. The Board is also responsible for holding the President accountable for 

technical standards on capital requirements for central counterparties, as on-shored into UK law 

following the end of the Brexit transition period.

4 The Plan also serves as a recovery tool and would be part of ICE Clear Europe’s overall recovery 

plan. 
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ICE Clear Europe Limited

Registered in England No.06219884

Registered office: Milton Gate, 60 Chiswell Street, London EC1Y 4SA

demonstrating adherence to ICE Clear Europe’s capital policies and for reviewing and 

approving any capital transactions. 

The Plan addresses the determination of the target capital amount in excess of the legal 

minimum capital requirement. ICE Clear Europe seeks to maintain excess capital above 

the threshold at which notification would be required to the Bank of England (which is 

generally 10% above the required capital level). In addition, ICE Clear Europe 

endeavors to maintain additional capital, on a voluntary basis, approximately equal to 

an additional 10% of the required capital level plus the 10% buffer referenced above. 

The Plan also provides further detail as to the use of the capital replenishment tools 

referenced above in different default loss and non-default loss scenarios and related 

actions to be taken for each tool, including as to the key individuals and departments 

involved and approvals required, the estimated timing for various actions, relevant 

documentation requirements, the procedure for determination of the relevant amount of 

additional resources to be sought or applied from the relevant sources, and the process 

for consultation with Clearing Members and regulators, among other matters. Annexes 

to the Plan also set out relevant templates for documentation. 

Compliance with the Act and CFTC Regulations

The Capital Replenishment Plan is potentially relevant to the following core principles:

(B) Financial Resources and (O) Governance, and the applicable regulations of the 

Commission thereunder. 

• Financial Resources. As set forth above, the Plan is designed to document 

procedures for replenishing capital, for both the Clearing House’s own 

resources contribution to the guaranty funds and the EMIR capital 

requirements for the Clearing House. The Plan is intended to facilitate the 

continued operation of the Clearing House following a significant loss from 

one or more Clearing Member defaults or a non-default loss by replenishing 

needed financial resources. The Plan address replenishment to both the 

minimum legal capital requirements and the higher target level intended to 

provide additional resources as an operation buffer. The Plan thus supports

maintenance of adequate financial resources to discharge the obligations of the 

Clearing House, both to cover its exposures with a high degree of confidence

and to have sufficient resources to cover its operating costs, consistent with the 

requirements of Core Principle B and Commission Rule 39.11.

• Governance. The Plan identifies responsibilities of key ICE Clear Europe

personnel, the Board and other stakeholders with respect to ongoing 

compliance with capital requirements and for capital replenishment when 

necessary. The Plan also provides for annual review by ICE Clear Europe’s 

President, Finance Director, and Board to ensure that it remains up-to-date and 

is reviewed in accordance with the Clearing House’s internal governance 

processes. ICE Clear Europe believes that the amendments are therefore 

consistent with the governance requirements of Core Principle O and CFTC 

Rule 39.24.
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ICE Clear Europe Limited

Registered in England No.06219884

Registered office: Milton Gate, 60 Chiswell Street, London EC1Y 4SA

As set forth herein, the amendments consist of the Capital Replenishment Plan. ICE 

Clear Europe has requested confidential treatment with respect to the amendments, 

which have been submitted concurrently with this self-certification submission.

ICE Clear Europe hereby certifies that the amendments comply with the Act and the 

Commission’s regulations thereunder. 

ICE Clear Europe received no substantive opposing views in relation to the 

amendments.

ICE Clear Europe has posted a notice of pending certification and a copy of this 

submission on its website concurrent with the filing of this submission. 

If you or your staff should have any questions or comments or require further 

information regarding this submission, please do not hesitate to contact the undersigned 

at George.milton@theice.com or +44 20 7429 4564. 

Very truly yours,

George Milton

Head of Regulation & Compliance