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ICE Clear Europe Limited

Registered in England No.06219884

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

March 7, 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 

– Delivery 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 Delivery Procedures (the “Delivery Procedures” or “Procedures”)1discussed 

herein. 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 Limited (“ICE Clear Europe” or the “Clearing House”) is amending

its Delivery Procedures (“Delivery Procedures” or “Procedures”) to add a new Part N2 

thereto (“Part N2”), which will apply to certain ICE Futures Europe Deliverable Carbon 

Credit Contracts (together the “Contracts”), for which delivery will be made through a 

registry account of the Clearing House.

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

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

Registered in England No.06219884

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

ICE Clear Europe will announce by Circular the specific Contracts to which Part N2 of 

the Delivery Procedures will apply. ICE Clear Europe currently expects that Part N2 

will apply to all ICE Futures Europe physically deliverable carbon credit contracts. 

Pursuant to Part N2, delivery under the Contracts, in the case of the Seller, will be 

effected upon the transfer of the relevant Carbon Credits from the Registry Account of 

the Seller into the Registry Account of the Clearing House and acceptance of the Carbon 

Credits by the Clearing House. In the case of the Buyer, delivery will be effected upon 

transfer of the relevant Carbon Credits from the relevant Registry Account of the 

Clearing House to the relevant Registry Account of the Buyer, and there will not be a 

prerequisite for the Buyer to accept the Carbon Credits. Part N2 willset out the Clearing 

House’s ability not to accept a transfer from the Seller in the event the transferred 

carbon credits are not in accordance with the contract specifications. Delivery will take 

place during the Delivery Period for the relevant Contracts in accordance with the 

contract specifications, and neither delivery by Seller nor receipt by Buyer will require 

performance by the other to occur simultaneously. 

The amendments set out relevant definitions related to delivery under the contract, 

including as to the underlying deliverable Carbon Credits. The amendments provide 

that the Carbon Credits must conform to the specification described in the Contract and 

the specifications of the Registry to and from which delivery may be made under the 

relevant Contract. The amendments further specify certain details of the delivery 

process for the Contracts including quantity, settlement price, and timing of cessation 

of trading. 

The amendments state that the Contracts will be based on Open Contract Positions after 

expiration of the relevant Contract Set and the delivery process will occur over a three 

consecutive Business Day period. In addition, the amendments include delivery 

timetables with detailed timeframes and descriptions of the processes for delivery under 

Contracts. Such timetables set out, among other processes, the time for cessation of 

trading, provision of Buyer’s and Seller’s security, submission of delivery intentions, 

confirmation reports, confirmations of delivery position/expiry, payment by the Buyer, 

payment and return of delivery margin, Seller’s delivery to the Clearing House, 

payment to Seller, and Clearing House delivery to the Buyer. 

The amendments also address the responsibilities of the Clearing House and relevant 

parties for delivery under Contracts, as well as certain limitations of liability for the 

Clearing House. Specifically, the Clearing House will not be responsible for the 

performance or non-performance of, or any delay or error in performance by any 

Registry or Registry Operator; the compliance or lack of compliance of any Seller or 

Buyer or their respective Transferors or Transferees with any rules of the relevant 

Registry or any laws applicable to it; any errors in the Registry Account details entered 

into the relevant Registry systems or provided to the Clearing House by a Seller, 

Transferor, Buyer or Transferee in respect of a delivery; closure of any Registry 

Accounts; or the compliance with the contractual obligations owed to the Registry in 

respect of any Clearing House Registry Accounts, among other matters. Additionally, 

neither the Buyer or Seller will have any claim against the Clearing House for any loss, 

cost, damage or expense incurred or suffered as a result of the condition or operation of 

any Registry Operator. 
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ICE Clear Europe Limited

Registered in England No.06219884

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

The amendments provide details related to delivery contract security, which is the 

delivery margin to be provided by Buyer and Seller, and which will take into account 

the Finance Procedures. The Clearing House will retain the Seller’s security until the 

full contract value is released to the Seller following the delivery timetables. 

The amendments outline the use of the relevant Registry. Clearing Members will have 

to ensure their Transferors/Transferees have established the appropriate Registry 

Accounts at the relevant Registry for the Contracts in question and provide necessary 

instructions or confirmations to the Registry. Furthermore, Clearing Members taking 

delivery of the Contracts for their own account will be required to have established 

Registry Accounts in the relevant Registry for the Contract in question. In addition, it 

will be the responsibility of the Clearing Members to comply, and ensure their 

Transferors/Transferees also comply, with the rules, regulations and laws applicable to 

the Registry. The Clearing Members will also have to provide, and ensure their 

respective Transferors/Transferees also provide, correct Registry account details at all 

times. 

The amendments also provide for the use of an Alternative Delivery Procedure (“ADP”) 

in the event of a failure to transfer carbon credits in the manner and on the terms 

specified in the Contract. In such case, a Clearing Member may request agreement of 

the Clearing House to enter into an ADP to provide for delivery outside the terms of 

the Contract. In such case, settlement of the Contract will be dealt with in the manner 

specified in the ADP, and the affected parties and the Clearing House will be released 

from their rights and obligations in respect of the existing Contract. Any Clearing 

Member that enters in an ADP agreement will be deemed to have agreed to indemnify 

the Clearing House in respect of all and any of the Clearing House’s costs, losses, 

charges and expenses incurred by the Clearing House in connection with the ADP. If a 

Clearing Member and the Clearing House are unable to enter into an ADP Agreement 

or effect delivery under an ADP within a reasonable time period after the failed 

delivery, the Clearing House may refer the matter to ICE Futures Europe and it will 

consider in its discretion what other reasonable next steps it should take, if any, under 

applicable exchange rules. 

Compliance with the Act and CFTC Regulations

The amendments to the Delivery Procedures are potentially relevant to the following 

core principles: (C) Product Eligibility and (E) Settlement Procedures, and the 

applicable regulations of the Commission thereunder. 

• Product Eligibility. ICE Clear Europe is adopting a new Part N2 of the 

Delivery Procedures to facilitate clearing of the Contracts, under which 

delivery will be made through a Registry Account of the Clearing House. The 

amendments set out delivery specifications for the Contracts as set forth 

herein. The Contracts are similar to carbon credit futures contracts that have 

been settled bilaterally rather than through a Clearing House Registry 

Account, and therefore ICE Clear Europe believes that its existing financial 

resources, risk management, systems and operational arrangements are 
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ICE Clear Europe Limited

Registered in England No.06219884

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

sufficient to support clearing of the Contracts (and to address physical delivery 

under the Contracts) and to manage the risks associated with the Contracts. 

As such, ICE Clear Europe believes the amendments are consistent with the 

requirements of Core Principle C and Commission Rule 39.12(b).

• Settlement Procedures. As discussed above, the amendments establish a new 

set of procedures applicable to the delivery and settlement of the Contracts

through a Clearing House Registry Account. The procedures address, among 

other matters, delivery specifications, the obligations and roles of Clearing 

Members and the Clearing House, certain limitations of liability for the 

Clearing House, and certain other documentation and timing matters. 

Clearance of the Contracts will otherwise be supported by ICE Clear Europe’s 

existing financial resources, risk management, systems and operational 

arrangements. The amendments thus appropriately set out the role and 

responsibilities of the Clearing House and Clearing Members with respect to 

physical delivery. As a result, ICE Clear Europe believes the amendments are 

consistent with the requirements of Core Principle E and Commission Rule 

39.14. 

As set forth herein, the amendments consist of the amendments to the Delivery 

Procedures, a copy of which is attached hereto. 

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