ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

1

FOIA CONFIDENTIAL TREATMENT REQUESTED

October 6, 2023

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)

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 of amendments to 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 these amendments on November 1, 2023 or 

on such later date as ICE NGX may designate.

1. Overview 

ICE NGX is making this submission to implement certain changes (the “Amendments”) to the ICE 

NGX RMF, designed to enhance descriptions relating to:

• financial resources evaluation procedures;

• ICE NGX’s accrual variation margin methodology; and

• management of risks relating to accepting letters of credit as collateral.

ICE NGX has requested confidential treatment over the Amendments.

2. Details of Rule Changes

As part of continuous review and enhancement of the RMF, ICE NGX is seeking to enhance the 

descriptions of the following procedures.
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

2

• Procedures relating to monthly calculation of financial resources - The Amendments 

reflect ICE NGX’s current practices relating to the monthly calculation of financial 

resources requirements, and the related responsibilities and interaction of different staff 

teams.

• Procedures describing ICE NGX’s accrual accounting methodology for variation margin -

The Amendments enhance the documentation of the variation accrual methodology, 

including to explicitly state that the near real-time calculation of mark-to-market and 

posting of variation amounts to collateral accounts is fully automated.

• Managing risk related to Collateral Letters of Credit (“LCs”) - The Amendments enhance 

the identification and description of ICE NGX’s approach to managing the risks related to 

accepting LCs as collateral. Specifically, the amendments address the credit, market, 

liquidity and legal risks associated with accepting LCs, and the controls and mitigations 

implemented by ICE NGX to manage these risks.

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, enhance and 

update 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 Regulation § 39.11(d)(1), as the Amendments relating to 

monthly calculation of financial resources specify the frequency and staff responsible for the 

monthly evaluation of the equity component of ICE NGX’s financial resources.

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

Risk Management and the following Commission Regulations:

• § 39.13(b), as the Amendments relating to managing Collateral LC risks more thoroughly 

identify and document the risks to which ICE NGX is exposed and the ways in which ICE 

NGX monitors and manages those risks; and

• § 39.13(b) and (e), as the Amendments describing ICE NGX’s accrual accounting 

methodology more clearly describe and document, in ICE NGX’s Risk Management 

Framework, its systems-based processes relating to the near real-time marking to market
 

ICE NGX Canada Inc.

Suite 2610, 225 – 6

th Avenue SW

Calgary, AB

Canada T2P 1N2

ngx.com

ice.com

3

of each clearing participant’s open positions and the posting of such mark-to-market to the 

clearing participant’s collateral account.

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 these amendments. 

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

ICE NGX’s website.

If you have any questions or require further information, please do not hesitate to contact me at 

403-974-1740 or martin.mcgregor@ice.com, or Greg Abbott, ICE NGX President & COO at 

403-974-1701 or. 

Yours truly,

__________________________

Martin McGregor

General Counsel & CCO

ICE NGX Canada Inc.