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September 6, 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

Margin Calls (CPA 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 (the Amendments”) 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).

ICE NGX intends to implement the Amendments in the first quarter of 2023. The delayed

implementation is to provide ICE NGX’s Contracting Parties with sufficient time to adopt or

improve processes to comply with the amended requirements, specifically to meet a margin call

within the same business day if the conditions are met.

1. Overview

ICE NGX is making this submission to implement a requirement that margin calls be met within

the same business day when certain conditions are met.

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

ICE NGX intends to implement corresponding amendments to the ICE NGX Risk Management

Framework (“RMF”), self-certification of which was submitted by ICE NGX to the Commission on

the date of this submission.

2. Details of Rule Changes

Currently, the CPA provides that a Contracting Party is required to meet a request for additional

eligible collateral support by the end of the next business day following the request, unless a

shorter timeframe is specified by ICE NGX.
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The Amendments require that a Contracting Party provide additional eligible collateral support

within the same business day (rather than the current next-business-day timing), if the following

conditions are met:

 the Contracting Party’s Initial Margin Requirement is at or above 100% of its Net Equity

(each as defined in the CPA), and

 ICE NGX makes the request for additional collateral at or before 11:00 AM Eastern Time

on a business day that is not a recognized banking holiday.

ICE NGX intends to implement the Amendments in the first quarter of 2023.

The extended implementation is designed to afford ICE NGX and its Contracting Parties with

sufficient time to implement processes to meet the same-day margin call timing.

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

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.

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

Risk Management and Commission Regulation § 39.13(g)(9), as the Amendments tighten the

time deadlines for clearing participants to provide additional collateral if certain conditions are

met.

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: Martin McGregor

Title: General Counsel and Chief Compliance Officer

Date: September 6, 2022
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

AMENDMENTS TO THE ICE NGX CONTRACTING PARTY AGREEMENT

SCHEDULE “C” - RISK MANAGEMENT POLICY

8. Request by Exchange for Eligible Collateral Support 

a. If the Initial Margin for a Contracting Party is equal to or greater than eighty percent (80%) 

of the Contracting Party's Net Equity, Exchange may request that additional Eligible 

Collateral Support be provided to Exchange. 

b. If 

(i) the Initial Margin for a Contracting Party is equal to or greater than ninety percent 

(90%) of the Contracting Party's Net Equity, or

(ii) the Available Margin for the Contracting Party is less than the applicable Minimum 

Available Margin Requirement,

Exchange 

(iii) may request that additional Eligible Collateral Support be provided to Exchange, 

and

(iv) may halt the Contracting Party from entering orders for Products which will 

increase its Margin Requirement until the Contracting Party provides additional 

Eligible Collateral Support to the satisfaction of Exchange. 

c. If the Initial Margin for a Contracting Party is equal to or greater than one hundred percent 

(100%) of the Contracting Party's Net Equity, Exchange 

(i) may request that additional Eligible Collateral Support be provided to Exchange, 

and

(ii) will be entitled to, without limitation to any of its other rights or remedies, invoke 

the Liquidation Procedure pursuant to Section 5.6 of the Terms and Conditions 

and the Close-out Procedure pursuant to Section 8.3 of the Terms and Conditions. 

d. Except as provided under subsection 8.e. of this Section “C”, upon Upon a request by 

Exchange for additional Eligible Collateral Support from a Contracting Party in accordance 

with this Agreement that is made on a Business Day for the Contracting Party, the 

Contracting Party agrees to provide such additional Eligible Collateral Support to 

Exchange within the next Business Day or, if the next Business Day is a Recognized 

Banking Holiday, then on the first Business Day that is not a Recognized Banking Holiday 

following any such request.
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

e. Upon a request by Exchange for additional Eligible Collateral Support from a Contracting 

Party in accordance with subsection 8.c. of this Schedule “C” or as otherwise required by 

Exchange that is made 

(i) at or before 11:00am Eastern Time on a Business Day that is not a Recognized 

Banking Holiday for the Contracting Party, the Contracting Party agrees to provide 

such additional Eligible Collateral Support to Exchange within that Business Day;

(ii) after 11:00am Eastern Time on a Business Day is a Recognized Banking Holiday 

for the Contracting Party, then on the first Business Day that is not a Recognized 

Banking Holiday following any such request.

f.e. Notwithstanding anything else in this Agreement, including all Schedules, whenever the 

Exchange determines, in its sole discretion, that unstable conditions relating to one or 

more Products exist, or that the maintenance of an orderly market or the preservation of 

the fiscal integrity of the Exchange requires additional Eligible Collateral Support, or that 

any Contracting Party is carrying positions in Products or incurring risks in its account(s) 

that are larger than is justified by the financial and/or operational condition of the 

Contracting Party, the Exchange may require additional Eligible Collateral Support to be 

deposited with the Exchange within such time(s) as may be specified by the Exchange, 

and/or may limit withdrawals of any Eligible Collateral Support on deposit from the 

Contracting Party for such time as may be specified by the Exchange.