1

6351-01-P

COMMODITY FUTURES TRADING COMMISSION

Proposed Order and Request for Comment on Application for Exemption from 

Certain Provisions of the Commodity Exchange Act Regarding Investment of

Customer Funds and from Certain Related Commission Regulations

AGENCY: Commodity Futures Trading Commission.

ACTION: Notice of proposed order and request for comment.

SUMMARY: The Commodity Futures Trading Commission (“CFTC” or 

“Commission”) is requesting comment on a proposed exemption issued in response to an 

application from ICE Clear Credit LLC, ICE Clear US, Inc., and ICE Clear Europe 

Limited (collectively, “the ICE DCOs” or “the Petitioners”) to grant an exemption to 

permit the investment of futures and swap customer funds in certain categories of eurodenominated sovereign debt. The ICE DCOs are also requesting exemptive relief to 

expand the universe of counterparties and depositories they may use in connection with 

these investments given the structure of the market for repurchase agreements in eurodenominated sovereign debt.

DATES: Comments must be received on or before [INSERT DATE 30 DAYS AFTER 

DATE OF PUBLICATION IN THE FEDERAL REGISTER].

ADDRESSES: You may submit comments by any of the following methods:

• CFTC website: http://comments.cftc.gov. Follow the instructions for 

submitting comments through the Comments Online process on the website.
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• Mail: Christopher Kirkpatrick, Secretary of the Commission, Commodity 

Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, DC 20581.

• Hand Delivery/Courier: Same as Mail, above.

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the 

instructions for submitting comments.

Please submit your comments using only one of these methods.

All comments must be submitted in English, or if not, accompanied by an English 

translation. Comments will be posted as received to http://www.cftc.gov. You should 

submit only information that you wish to make available publicly. If you wish the 

Commission to consider information that you believe is exempt from disclosure under the 

Freedom of Information Act (“FOIA”), a petition for confidential treatment of the exempt 

information may be submitted according to the established procedures in Commission 

Regulation 145.9, 17 CFR 145.9.

The Commission reserves the right, but shall have no obligation, to review, prescreen, filter, redact, refuse or remove any or all of your submission from 

http://www.cftc.gov that it may deem to be inappropriate for publication, such as obscene 

language. All submissions that have been redacted or removed that contain comments on 

the merits of this action will be retained in the public comment file and will be considered 

as required under the Administrative Procedure Act and other applicable laws, and may 

be accessible under the FOIA.

FOR FURTHER INFORMATION CONTACT: Eileen A. Donovan, Deputy Director, 

(202) 418-5096, edonovan@cftc.gov, Division of Clearing and Risk, Commodity Futures 
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Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, DC 

20581; or Tad Polley, Associate Director, (312) 596-0551, tpolley@cftc.gov, or Scott 

Sloan, Attorney-Advisor, (312) 596-0708, ssloan@cftc.gov, Division of Clearing and 

Risk, Commodity Futures Trading Commission, 525 West Monroe Street, Chicago, 

Illinois 60661.

SUPPLEMENTARY INFORMATION:

I. Background

By application dated June 22, 2017, the Petitioners, all registered derivatives 

clearing organizations (“DCOs”), requested an exemptive order under section 4(c) of the 

Commodity Exchange Act (“CEA” or “Act”) permitting the ICE DCOs to invest futures 

and cleared swap customer funds in certain categories of euro-denominated sovereign 

debt.

Section 4d of the Act1 and Commission Regulation 1.25(a)2 set out the permitted 

investments in which DCOs may invest customer funds.3

 Section 4d limits investments 

of customer money to obligations of the United States (“U.S. Government Securities”), 

general obligations of any State or of any political subdivision thereof, and obligations 

fully guaranteed as to principal and interest by the United States.

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 Regulation 1.25

 1 7 U.S.C. 6d.

2 17 CFR 1.25(a) (2017).

3 Although Regulation 1.25 by its terms applies only to futures customer funds, Regulation 

22.3(d) requires that a DCO investing cleared swap customer funds comply with the requirements 

of Regulation 1.25.

4 See 7 U.S.C. 6d(a)(2) (futures), (f)(4) (cleared swaps).
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expands the list of permitted investments but does not permit investment of customer 

funds in foreign sovereign debt.5

Regulation 1.25 previously included foreign sovereign debt as a permitted 

investment for customer funds.

6 In 2011, the Commission removed this option from 

Regulation 1.25, but also acknowledged that “the safety of sovereign debt issuances of 

one country may vary greatly from those of another,” and stated that it was amenable to 

considering requests for section 4(c) exemptions from this restriction.

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 Specifically, the 

Commission stated that it would consider permitting foreign sovereign debt investments 

(1) to the extent that the petitioner has balances in segregated accounts owed to customers 

or clearing member futures commission merchants in that country’s currency and (2) to 

the extent that the sovereign debt serves to preserve principal and maintain liquidity of 

customer funds as required for all other investments of customer funds under Regulation 

1.25.8

 5 Regulation 1.25 permits investment of customer funds in: (i) Obligations of the United States 

and obligations fully guaranteed as to principal and interest by the United States (U.S. 

government securities); (ii) General obligations of any State or of any political subdivision 

thereof (municipal securities); (iii) Obligations of any United States government corporation or 

enterprise sponsored by the United States government (U.S. agency obligations); (iv) Certificates 

of deposit issued by a bank (certificates of deposit) as defined in section 3(a)(6) of the Securities 

Exchange Act of 1934, or a domestic branch of a foreign bank that carries deposits insured by the 

Federal Deposit Insurance Corporation; (v) Commercial paper fully guaranteed as to principal 

and interest by the United States under the Temporary Liquidity Guarantee Program as 

administered by the Federal Deposit Insurance Corporation (commercial paper); (vi) Corporate 

notes or bonds fully guaranteed as to principal and interest by the United States under the 

Temporary Liquidity Guarantee Program as administered by the Federal Deposit Insurance 

Corporation (corporate notes or bonds); and (vii) Interests in money market mutual funds.

6 See 17 CFR 1.25(a) (2005).

7 Investment of Customer Funds and Funds Held in an Account for Foreign Futures and Foreign 

Options Transactions, 76 FR 78776, 78782 (Dec. 19, 2011).

8 Id.
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In connection with their proposal to invest customer funds in foreign sovereign 

debt, the ICE DCOs have also requested an exemption from Regulations 1.25(d)(2) and 

(7). Regulation 1.25(d)(2) limits the counterparties with which a DCO can enter into a 

repurchase agreement involving customer funds to a bank as defined in section 3(a)(6) of 

the Securities Exchange Act of 1934, a domestic branch of a foreign bank insured by the 

Federal Deposit Insurance Corporation, a securities broker or dealer, or a government 

securities broker or government securities dealer registered with the Securities and 

Exchange Commission or which has filed notice pursuant to section 15C(a) of the 

Government Securities Act of 1986. Regulation 1.25(d)(7) requires a DCO to hold the 

securities transferred to the DCO under a repurchase agreement in a safekeeping account 

with a bank as referred to in Regulation 1.25(d)(2), a Federal Reserve Bank, a DCO, or 

the Depository Trust Company in an account that complies with the requirements of 

Regulation 1.26.

II. The ICE DCOs’ Petition

The ICE DCOs specifically seek to invest euro-denominated customer funds in 

sovereign debt issued by the French Republic and the Federal Republic of Germany

(“Designated Foreign Sovereign Debt”) through both direct investment and repurchase 

agreements.

9 In the petition, the ICE DCOs argue that French and German sovereign 

debt is comparable to U.S. Government Securities in terms of creditworthiness, liquidity, 

and volatility. The Petitioners note that facing the credit risk of these financially stable 

sovereigns is preferable from a risk management perspective to holding euro at a 

 9 A copy of the petition is available on the Commission’s website at

http://www.cftc.gov/idc/groups/public/@requestsandactions/documents/ifdocs/icedcos4cappl6-

22-17.pdf.
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commercial bank. In the case of investments through reverse repurchase agreements (as 

opposed to direct investments), the ICE DCOs still face a commercial counterparty but

receive the additional benefit of receiving securities as collateral against that 

counterparty’s credit risk. The ICE DCOs have also represented that in the event a 

securities custodian enters insolvency proceedings, they would have a claim to specific 

securities rather than a general claim against the assets of the custodian.

The Petitioners further request an exemption from Regulation 1.25(d)(2) that

would permit them to enter into reverse repurchase agreements with certain foreign 

banks, certain regulated securities dealers, or the European Central Bank and the central 

banks of Germany and France.10 The ICE DCOs have represented that the principal 

participants in the European sovereign debt repurchase markets are non-U.S. banks, nonU.S. securities dealers, and foreign branches of U.S. banks. As a result, the counterparty 

requirements under Regulation 1.25(d)(2) would significantly constrain the use of eurodenominated sovereign debt repurchase agreements.

The ICE DCOs also request an exemption from Regulation 1.25(d)(7) that would 

permit them to hold the securities purchased through reverse repurchase agreements in a 

safekeeping account with a non-U.S. bank. The ICE DCOs seek this exemption based on 

their representation that it is impractical and inefficient to hold such securities at a U.S. 

custodian. Rather than seeking an open-ended exemption from Regulation 1.25(d)(7), the 

ICE DCOs propose that they be permitted to only use a foreign bank that qualifies as a 

depository under the requirements of Regulation 1.49.

 10 The ICE DCOs have indicated they may not currently be able to enter into repurchase 

agreements with these central banks.
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III. Section 4(c) of the Act

Section 4(c)(1) of the Act empowers the Commission to “promote responsible 

economic or financial innovation and fair competition” by exempting any transaction or 

class of transactions (including any person or class of persons offering, entering into, 

rendering advice or rendering other services with respect to, the agreement, contract, or 

transaction), from any of the provisions of the Act, subject to exceptions not relevant 

here.

11 In enacting section 4(c), Congress noted that its goal “is to give the Commission 

a means of providing certainty and stability to existing and emerging markets so that 

financial innovation and market development can proceed in an effective and competitive 

manner.”12 The Commission may grant such an exemption by rule, regulation, or order, 

after notice and opportunity for hearing, and may do so on application of any person or 

on its own initiative.

Section 4(c)(2) of the Act provides that the Commission may grant exemptions

under section 4(c)(1) only when it determines that the requirements for which an 

exemption is being provided should not be applied to the agreements, contracts, or 

transactions at issue; that the exemption is consistent with the public interest and the 

purposes of the Act; that the agreements, contracts, or transactions will be entered into 

solely between appropriate persons; and that the exemption will not have a material 

adverse effect on the ability of the Commission or any contract market or derivatives 

transaction execution facility to discharge its regulatory or self-regulatory responsibilities 

under the Act.

 11 7 U.S.C. 6(c)(1).

12 House Conf. Report No. 102–978, 1992 U.S.C.C.A.N. 3179, 3213.
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IV. Order

A. Discussion of the Proposed Order

The Commission is proposing to permit the ICE DCOs to invest futures and 

cleared swap customer funds in sovereign debt issued by the French Republic and the 

Federal Republic of Germany, through either direct investment or repurchase agreements,

pursuant to an exemption under section 4(c) of the Act. The Commission is proposing

the order below, which includes certain conditions on the permitted investments, in 

response to the ICE DCOs’ argument that permitting investment in the Designated 

Foreign Sovereign Debt furthers responsible risk management. Based on the analysis 

below, the Commission has preliminarily determined that the exemption provided in the 

proposed order meets the requirements of section 4(c)(2) of the Act, including in that it is 

consistent with the public interest and the purposes of the Act, and in that it will not have 

a material adverse effect on the ability of the Commission to discharge its regulatory 

responsibilities.

Through their petition, the ICE DCOs have demonstrated that the Designated 

Foreign Sovereign Debt has credit, liquidity, and volatility characteristics that are 

comparable to U.S. Government Securities, which are permitted investments under the 

Act and Regulation 1.25. For example, as evidence of the creditworthiness of France and 

Germany, the ICE DCOs provided data demonstrating that credit default swap spreads of 

France and Germany have historically been similar to those of the United States. To 

demonstrate the liquidity of the markets, the ICE DCOs point to, for example, the 

substantial amount of outstanding marketable French and German debt and the daily 

transaction value of the repo markets for their debt. And with respect to volatility, the 
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ICE DCOs provided data on daily changes to sovereign debt yields demonstrating that 

the price stability of French and German debt is comparable to that of U.S. Government 

Securities. The ICE DCOs have thus argued that the Designated Sovereign Debt serves 

to preserve principle and maintain liquidity of customer funds as is required for 

investments permitted under Regulation 1.25. To ensure that permitted investments are 

limited to those with an appropriate risk profile, the proposed order limits investments in 

Designated Foreign Sovereign Debt to instruments of a shorter duration, as is discussed 

below.

Further, the ICE DCOs have demonstrated that investing in the Designated 

Foreign Sovereign Debt poses less risk to customer funds than the current alternative of 

holding the funds at a commercial bank, arguing that exposure to high-quality sovereign 

debt is preferable to facing the credit risk of commercial banks through unsecured bank 

demand deposit accounts. And finally, the Commission does not believe that any of the 

section 4(c)(2) exceptions would prevent a grant of the requested exemption.

The Commission is also proposing certain conditions to the exemption, including 

that the ICE DCOs may only use customer euro cash to invest in the Designated Foreign 

Sovereign Debt. This restriction was included in Regulation 1.2513 when the rule 

permitted the investment of customer funds in foreign sovereign debt, and the

Commission believes it is still an appropriate restriction on the amount that may be 

invested in these instruments.

 13 See 17 CFR 1.25(b)(4)(D) (2005) (providing that sovereign debt is subject to the following 

limits: a futures commission merchant may invest in the sovereign debt of a country to the extent 

it has balances in segregated accounts owed to its customers denominated in that country's 

currency; a DCO may invest in the sovereign debt of a country to the extent it has balances in 

segregated accounts owed to its clearing member futures commission merchants denominated in 

that country's currency).
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The Commission is further proposing to permit the ICE DCOs to invest in the 

Designated Foreign Sovereign Debt only so long as the two-year credit default spread of 

the issuing sovereign is 45 basis points (“BPS”) or less. Because the Commission does 

not intend in this proposed order to expand the universe of permitted investments beyond 

instruments with a risk profile similar to those that are currently permitted, the 

Commission believes it is appropriate to use U.S. Government Securities as a benchmark 

to confine permitted investments in foreign sovereign debt. The Commission is 

proposing the cap of 45 BPS based on a historical analysis of the two-year credit default 

spread of the United States (“U.S. Spread”). Forty-five BPS is approximately two 

standard deviations above the mean U.S. Spread over the past eight years and represents a 

risk level that the U.S. Spread has exceeded approximately 5% of the time over that 

period.

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Under the proposal, if the spread exceeds 45 BPS, the ICE DCOs would not be 

permitted to make new investments in the relevant debt. They would not, however, be

required to immediately divest all current investments, due to risks associated with 

selling assets into a potentially volatile market. The Commission believes that

prohibiting new investments, together with the length to maturity condition discussed 

immediately below, will sufficiently protect customer funds in the event that a country’s 

Designated Foreign Sovereign Debt were to exceed the 45 BPS spread limit.

 14 The Commission reviewed the daily U.S. Spread from July 3, 2009 to July 3, 2017. Over this 

time period, the U.S. Spread had a mean of approximately 26.5 BPS and a standard deviation of 

approximately 9.72 BPS. Over this same period, the two-year German spread exceeded 45 BPS 

approximately 6% of the time, and the two-year French spread exceeded 45 BPS approximately 

25% of the time. Neither the German nor the French two-year spread has exceeded 45 BPS since 

September 2012.
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The Commission is also proposing to limit the length to maturity of direct 

investments in Designated Foreign Sovereign Debt, to limit permitted investments to 

those with a lower risk profile. Specifically, the proposed order requires each of the ICE 

DCOs to ensure that the dollar-weighted average of the time-to-maturity of their portfolio 

of direct investments in each type of Designated Foreign Sovereign Debt does not exceed 

60 days. This restriction is consistent with Securities and Exchange Commission

requirements for money market mutual funds15 and ensures that the ICE DCOs will not 

hold Designated Foreign Sovereign Debt investments on a long-term basis, and that the 

investments will mature relatively quickly, providing the ICE DCOs with access to euro 

cash. The Commission believes that the liquidity timing needs of money market mutual 

funds are an appropriate analogue to those of a DCO in this instance and that the 60-day 

time-to-maturity limit will further limit the risks of investments in Designated Foreign 

Sovereign Debt.

To provide the ICE DCOs with the ability to invest customer funds in the 

Designated Foreign Sovereign Debt, the Commission is also proposing to exempt the ICE 

DCOs from the counterparty and depository requirements of Regulation 1.25(d)(2) and 

(7), subject to conditions. As a practical matter, complying with these requirements 

would severely restrict the ICE DCOs’ ability to enter into repurchase agreements for 

Designated Foreign Sovereign Debt. As a result, the Commission proposes to exempt the 

ICE DCOs from the counterparty restrictions of Regulation 1.25(d)(2), subject to the 

condition that counterparties be limited to certain categories that are intended to limit the 

risk associated with reverse repurchase transactions. Similarly, the Commission is 

 15 See 17 CFR 270.2a-7.
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proposing to condition the ICE DCOs’ exemption from Regulation 1.25(d)(7) on its use 

of depositories that qualify as permitted depositories under Regulation 1.49. This 

approach is designed to ensure that the counterparties and depositories used by the ICE 

DCOs will be regulated entities comparable to those currently permitted under 

Regulation 1.25(d)(2) and (7).

B. Proposed Order

The Commission proposes an exemptive order that includes the following 

substantive provisions:

(1) The Commission, pursuant to its authority under section 4(c) of the 

Commodity Exchange Act (“Act”) and subject to the conditions below, hereby grants 

registered derivatives clearing organizations (“DCOs”) ICE Clear Credit LLC, ICE Clear 

US Inc., and ICE Clear Europe Limited (“ICE DCOs”) a limited exemption to section 4d 

of the Act and to Commission Regulation 1.25(a) to permit the ICE DCOs to invest eurodenominated futures and cleared swap customer funds in euro-denominated sovereign 

debt issued by the French Republic and the Federal Republic of Germany (“Designated 

Foreign Sovereign Debt”).

(2) The Commission, subject to the conditions below, additionally grants:

(a) A limited exemption to Commission Regulation 1.25(d)(2) to permit the ICE 

DCOs to use customer funds to enter into repurchase agreements with foreign banks and 

foreign securities brokers or dealers; and

(b) A limited exemption to Commission Regulation 1.25(d)(7) to permit the ICE 

DCOs to hold securities purchased under a repurchase agreement in a safekeeping 

account at a foreign bank.
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(3) This order is subject to the following conditions:

(a) Investments of customer funds in Designated Foreign Sovereign Debt by each

ICE DCO must be limited to investments made with euro customer cash.

(b) The ICE DCOs may only invest customer funds in Designated Foreign 

Sovereign Debt if the two-year credit default spread of the issuing sovereign is 45 basis 

points or less.

(c) The dollar-weighted average of the time-to-maturity of each ICE DCO’s 

portfolio of direct investments in each sovereign’s Designated Foreign Sovereign Debt 

may not exceed 60 days. Direct investment refers to purchases of Designated Foreign 

Sovereign Debt unaccompanied by a contemporaneous agreement to resell the securities.

(d) The ICE DCOs may use customer funds to enter into repurchase agreements 

for Designated Foreign Sovereign Debt with a counterparty that does not meet the 

requirements of Commission Regulation 1.25(d)(2) only if the counterparty is:

(i) A foreign bank that qualifies as a permitted depository under Commission 

Regulation 1.49(d)(3) and that is located in a money center country (as defined in 

Commission Regulation 1.49(a)(1)) or in another jurisdiction that has adopted the euro as 

its currency;

(ii) A securities dealer located in a money center country as defined in 

Commission Regulation 1.49(a)(1) that is regulated by a national financial regulator such 

as the UK Prudential Regulation Authority or Financial Conduct Authority, the German 

Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), the French Autorité Des 

Marchés Financiers (AMF) or Autorité de Contrôle Prudentiel et de Résolution (ACPR), 

or the Italian Commissione Nazionale per le Società e la Borsa (CONSOB); or
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(iii) The European Central Bank, the Deutsche Bundesbank, or the Banque de 

France.

(e) The ICE DCOs may hold customer securities purchased under a repurchase 

agreement with a depository that does not meet the requirements of Commission 

Regulation 1.25(d)(7) only if the depository meets the location and qualification 

requirements contained in Commission Regulation 1.49(c) and (d) and if the account 

complies with the requirements of Commission Regulation 1.26.

(4) The ICE DCOs must continue to comply with all other requirements in 

Commission Regulation 1.25, including but not limited to the counterparty concentration 

limits in Commission Regulation 1.25(b)(3)(v), and other applicable Commission 

regulations.

V. Request for Comment

The Commission requests comment on all aspects of Petitioners’ exemption 

request, including the specific provisions and issues highlighted in the discussion above 

and the issues presented in this section. For each comment submitted, please provide a 

detailed rationale supporting the response.

The purposes of the CEA include “promot[ing] responsible innovation and fair 

competition among boards of trade, other markets, and market participants.”16 It may be 

consistent with these and the other purposes of the CEA, and with the public interest, to 

grant the exemption requested by the Petitioners. Accordingly, the Commission is 

requesting comment as to whether an exemption from the requirements of the CEA 

 16 Section 3(b) of the CEA, 7 U.S.C. 5(b). See also Section 4(c)(1) of the CEA, 7 U.S.C. 6(c)(1) 

(purpose of exemptions is ‘‘to promote responsible economic or financial innovation and fair 

competition’’).
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should be granted in this context. The Commission also is requesting comment as to 

whether this exemption would affect its ability to discharge its regulatory responsibilities 

under the CEA.

VI. Related Matters

A. Paperwork Reduction Act

The Paperwork Reduction Act (“PRA”) imposes certain requirements on federal 

agencies (including the Commission) in connection with their conducting or sponsoring 

any collection of information as defined by the PRA. This exemptive order does not 

involve a collection of information. Accordingly, the PRA does not apply.

B. Cost-Benefit Analysis

Section 15(a) of the CEA requires the Commission to consider the costs and 

benefits of its action before issuing an order under the CEA. By its terms, section 15(a) 

does not require the Commission to quantify the costs and benefits of an order or to 

determine whether the benefits of the order outweigh its costs. Rather, section 15(a) 

simply requires the Commission to “consider the costs and benefits” of its action.

1. Baseline for the Proposal

The Commission’s proposed baseline for consideration of the costs and benefits 

of the proposed exemptive order are the costs and benefits that the ICE DCOs and the 

public would face if the Commission does not grant the order, or in other words, the 

status quo. In that scenario, the ICE DCOs would be limited to investing customer funds 

in the instruments listed in Regulation 1.25.
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2. Costs and Benefits

The costs and benefits of the proposed order are not presently susceptible to 

meaningful quantification. Therefore, the Commission discusses proposed costs and 

benefits in qualitative terms.

The Commission does not believe granting the exemption would impose 

additional costs on the ICE DCOs. The proposed order would permit but not require the 

Petitioners to invest customer funds in Designated Foreign Sovereign Debt. The ICE 

DCOs may therefore choose whether to accept any costs and benefits of an investment. 

The Commission also does not expect the proposed order to impose additional costs on 

other market participants or the public, which do not face any direct costs from the 

proposed order. While other market participants or the public could potentially face costs 

from riskier investment activity leading to financial instability at an ICE DCO, the 

flexibility to hold customer funds in Designated Foreign Sovereign Debt rather than in

euro cash at a commercial bank provides risk management benefits as described above.

The Commission believes that the ICE DCOs would benefit from the proposed 

order. The exemption would provide the ICE DCOs additional flexibility in how they

manage and hold customer funds and would allow them to improve the risk management 

of their customer accounts. Further, as described above, it is safer from a risk 

management perspective to hold Foreign Sovereign Debt in a safekeeping account than to 

hold euro cash at a commercial bank. Therefore, market participants and the public may 

also benefit from the proposed exemption.
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3. Section 15(a) Factors

Section 15(a) of the CEA further specifies that costs and benefits shall be 

evaluated in light of five broad areas of market and public concern: protection of market 

participants and the public; efficiency, competitiveness, and financial integrity of futures 

markets; price discovery; sound risk management practices; and other public interest 

considerations. The Commission could in its discretion give greater weight to any one of 

the five enumerated areas and could in its discretion determine that, notwithstanding its 

costs, a particular order was necessary or appropriate to protect the public interest or to 

effectuate any of the provisions or to accomplish any of the purposes of the CEA. The 

Commission is considering the costs and benefits of this exemptive order in light of the 

specific provisions of section 15(a) of the CEA, as follows:

1. Protection of market participants and the public. As described above, 

investing in the Designated Foreign Sovereign Debt as requested by the Petitioners can 

provide risk management benefits relative to the current alternative of holding euro 

collateral in a commercial bank. Granting the exemption thus serves to protect market 

participants and the public.

2. Efficiency, competition, and financial integrity. Granting the exemption may 

increase efficiency by providing the Petitioners additional flexibility in how they manage 

customer funds. Making the investments permitted by the proposed order is elective, 

within the discretion of the ICE DCOs, and thus does not impose additional costs. 

Further, as discussed above, the ICE DCOs plan to exercise prudent risk management by 

investing in the Designated Foreign Sovereign Debt, which may enhance the financial 

integrity of the ICE DCOs.
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3. Price discovery. The exemption is unlikely to impact price discovery.

4. Sound risk management practices. As described above, the ICE DCOs’ plan 

to invest customer funds in the Designated Foreign Sovereign Debt is intended to 

advance sound risk management practices.

5. Other public interest considerations. The Commission believes that the 

relevant cost-benefit considerations are captured in the four factors above.

The Commission invites public comment on its application of the cost-benefit 

provisions of section 15.

Issued in Washington, DC, on December 12, 2017, by the Commission.

Christopher J. Kirkpatrick,

Secretary of the Commission.

Appendix to Proposed Order and Request for Comment on Application for

Exemption from Certain Provisions of the Commodity Exchange Act Regarding 

Investment of Customer Funds and from Certain Related Commission Regulations

– Commission Voting Summary

On this matter, Chairman Giancarlo and Commissioners Quintenz and Behnam

voted in the affirmative. No Commissioner voted in the negative.