www.theice.com

 

Intercontinental Exchange

353 North Clark, Suite 3100

Chicago, IL 60654

Olivia Bazor

Staff Attorney

April 21, 2023

Re: ICE Clear Credit LLC Advance 

Notice of Proposed Rule Change 

Pursuant to Commission Regulation 40.10

VIA ELECTRONIC PORTAL

Mr. Christopher Kirkpatrick 

Secretary

Commodity Futures Trading Commission 

Three Lafayette Centre

1155 21st Street, NW

Washington, D.C. 20581 

Dear Mr. Kirkpatrick: 

ICE Clear Credit LLC (“ICC”) hereby submits, pursuant to Section 5c(c)(1) of the Commodity 

Exchange Act and Commodity Futures Trading Commission (“Commission”) Regulation 40.6, a 

self-certification of changes to the ICC Rulebook (the “Rules”) to adopt a new Subchapter 26S 

of its Rules, which will set out the contract terms and specifications for Standard Subordinated 

European Insurance Corporate (“STSEIC”) Single Name Contracts. ICC is registered with the 

Commission as a derivatives clearing organization (“DCO”). ICC intends to make the amended 

Rules effective no sooner than the tenth business day following the filing of this submission with 

the Commission at its Washington, D.C. headquarters and with its Chicago regional office. 

This submission includes the amended Rules. A description of the principal changes contained in 

the amended Rules follows. Certification of the amended Rules pursuant to Section 5c(c)(1) of 

the Act (the “Act”) and Commission Regulation 40.6 is also provided below. 

The purpose of the proposed rule change is to adopt rules that will provide the basis for ICC to 

clear an additional category of credit default swap contracts. Specifically, ICC proposes 

amending Chapter 26 of the ICC Rules to add Subchapter 26S to provide for the clearance of 

STSEIC Contracts. ICC believes the addition of these contracts will benefit the market for credit 

default swaps by providing market participants the benefits of clearing, including the reduction 

in counterparty risk, and safeguarding of margin assets pursuant to clearing house rules. The 

clearing of STSEIC Contracts will not require any changes to ICC’s Risk Management 

Framework. 

ICC proposes amendments to its Rules, to adopt a new Subchapter 26S of its Rules. This 

submission includes a description of the changes to the Rules. Certification of the changes 

pursuant to Section 5c(c)(1) of the Act and Commission Regulation 40.10 is also provided 

below. 
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STSEIC Contracts have similar terms to Standard European Corporate Single Name CDS 

contracts (“STEC Contracts”) currently cleared by ICC and governed by Subchapter 26G of the 

ICC Rules. Accordingly, the proposed rules found in Subchapter 26S mirror the ICC Rules for 

STEC Contracts in Subchapter 26G, with certain modifications that reflect differences in terms 

and market conventions between STEC Contracts and STSEIC Contracts. STSEIC contracts will 

be denominated in Euro. 

In new Subchapter 26S, Rule 26S-102 (Definitions) sets forth the definitions used for STSEIC 

Contracts. The definitions are substantially the same as the definitions found in Subchapter 26G, 

other than certain conforming changes. ICC Rules 26S-203 (Restrictions on Activity), 26S-206 

(Notices Required of Participants with respect to STSEIC Contracts), 26S-303 (STSEIC Contract 

Adjustments), 26S-309 (Acceptance of STSEIC Contracts by ICE Clear Credit), 26S-315 (Terms 

of the Cleared STSEIC Contract), 26S-316 (Relevant Physical Settlement Matrix Updates), 26S502 (Specified Actions), and 26S-616 (Contract Modifications) reflect or incorporate the basic 

contract specifications for STSEIC Contracts and are substantially the same as under Subchapter 

26G of the ICC Rules. 

Core Principle Review: 

ICC reviewed the DCO core principles (“Core Principles”) as set forth in the Commodity 

Exchange Act. During this review, ICC identified the following Core Principles as being 

impacted:

Participant and Product Eligibility: ICC has set appropriate standards in ICC’s policies and 

procedures for determining the eligibility of contracts. The additional STSEIC Contracts fulfill 

ICC’s standards regarding product eligibility. 

Risk Management: ICC will apply its established margin and pricing methodology to the 

additional STSEIC Contracts.

Settlement Procedures: The additional STSEIC Contracts are subject to ICC’s current physical 

settlement rules under Chapter 22: CDS Physical Settlement. 

Amended Rules: 

The proposed changes consist of changes to the ICC Rules. 

Annexed as an Exhibit hereto is the following: 

A. Proposed amendments to the ICC Rules 

Certifications: 

ICC hereby certifies that the changes comply with the Act and the regulations thereunder. The 

changes were unanimously recommended for approval by the ICC Risk Committee and 

unanimously approved by the ICC Board of Managers. There were no substantive opposing 

views to the changes. 
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ICC further certifies that, concurrent with this filing, a copy of the submission was posted on 

ICC’s website, and may be accessed at: https://www.theice.com/clear-credit/regulation. 

ICC would be pleased to respond to any questions the Commission or the staff may have 

regarding this submission. Please direct any questions or requests for information to the attention 

of the undersigned at (904) 855-5580. 

Sincerely,

Olivia Bazor

Staff Attorney