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ICE Clear Europe Limited

Registered in England No.06219884

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

July 3, 2023

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, NW

Washington, DC 20581

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

– Collateral and Haircut Procedures Amendments

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, amendments 

to its Collateral and Haircut Procedures to modify the type of gold that may be accepted 

as collateral.

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 revising Appendix A to the Collateral and Haircut Procedures to 

modify the eligibility criteria for accepting gold as collateral. As revised, to be eligible, 

gold will have to be held on an “allocated” basis2by the relevant custodian in the name 

of the Clearing House. Specifically, the change will provide that for the purposes of 

margin, gold transferred by a Clearing Member will first be held in an unallocated 

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

Haircut Procedures or, if not defined therein, the ICE Clear Europe Clearing Rules. 

2 Allocated gold held by a custodian is specifically identified for a particular owner. Unallocated gold 

represents a claim against the relevant custodian for an amount of metal held in bulk.
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ICE Clear Europe Limited

Registered in England No.06219884

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

account and in the name of the Clearing House. Such gold will only be recognized as 

Permitted Cover or eligible collateral when it is transferred from the unallocated 

accounts to an allocated account of the custodian held in the name of the Clearing House 

and thereupon deemed allocated pure gold bullion of recognized good delivery. 

The amendments will remove existing provisions that permit unallocated gold to serve 

as eligible collateral. Although such unallocated gold is technically permitted as margin 

under the existing Collateral and Haircut Procedures, ICE Clear Europe has not in 

practice accepted gold as collateral, as the demand from Clearing Members has not been 

sufficient to justify the completion of certain operational testing procedures required to 

make the process technically live. As a result, ICE Clear Europe does not believe the 

amendment will require any Clearing Members to change their current margin postings. 

The amendment is intended to further clarify that only allocated pure gold bullion is 

considered collateral, as opposed to unallocated, in line with certain requirements under 

the European Market Infrastructure Regulation (EMIR) that gold collateral be held in 

allocated form.3 

Compliance with the Act and CFTC Regulations

The amendments to the Collateral and Haircut Procedures are potentially relevant to 

the following core principles: (D) Risk Management and (R) Legal Risk Considerations

and the applicable regulations of the Commission thereunder. 

• Risk Management. A set forth above, the amendments will require that any 

gold posted as margin be in allocated form, rather than unallocated form. 

Limiting margin to allocated gold (which is generally viewed as being subject 

to reduced risks from custodian failure) is consistent with the requirement to 

limit collateral to assets with minimal credit, market, and liquidity risks, and 

accordingly the amendments would not increase the risk of the Clearing House 

from such collateral. The amendments would not otherwise change the 

Clearing House’s current application of haircuts or concentration limits for 

Permitted Cover. As a result, the amendments are consistent with managing

the risks associated with discharging its responsibilities as a DCO and thus 

comply with the requirements of Core Principle D and Commission Rule 

39.13.

• Legal Risk Considerations. As discussed above, the amendments aim to ensure 

compliance with the requirements of the EMIR RTS, which limits gold 

accepted as margin to gold held in allocated form. As a result, the amendments 

will support the Clearing House’s compliance with applicable law in all 

relevant jurisdictions and maintenance of its authorization by the appropriate 

licensing authority in relevant jurisdictions. As such, the amendments are 

consistent with the requirements of Core Principle R and Commission Rule 

39.27. 

3 Commission Delegated Regulation (EU) No 153/2013 of 19 December 2012 supplementing 

Regulation (EU) No 648/2012 of the European Parliament and of the Council with regard to regulatory 

technical standards on requirements for central counterparties, Annex I, Section 3 (the “EMIR RTS”).
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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 amendments to the Collateral and 

Haircut Procedures. 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. 

Very truly yours,

George Milton

Head of Regulation & Compliance